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More Monetary Disruptions to Come Says Gold Hedge Fund

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Gold’s selloff last week was characteristic of a bull market, said Sean Fieler, president and CIO of Equinox Partners, a value-oriented gold equities hedge fund. Fieler maintains a constructive stance on gold and gold stocks in the long term, owing to abnormal monetary policy from the U.S. Federal Reserve.

“This crisis has taken our fiscal deficits to unprecedented levels, merged monetary and fiscal policy in a way that the academy has long argued should never happen, and given the Fed a free reign, a license, to go back to very aggressive policies that it was pursuing in the last decade,” Fieler told Kitco News. “So, it’s not normal and it doesn’t look to be going back to normal any time soon.”

On the economy, it’s very unlikely we will see deflationary forces, Fieler said.

“We have monetary authorities so intent on preventing any kind of deflation, they’re more likely to err on the other side than they are on inflation, and there’s just not really viable, sound money contingent politically in D.C. The fight over Shelton’s confirmation is really a sign of the division there exists even within the Republican Party,” he said.

While a return gold standard is unlikely at this time, the macroeconomic landscape could see drastic changes in the future, Fieler noted.

“I see a lot of disruption in the monetary system over the next five to 10 years, so I think a lot of things that currently seem difficult to impossible may become more probable in a more volatile situation,” he said.

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