"I think gold is going to go up against all currencies…central banks around the world are being too loose," Schiff said, arguing that the Dollar Index "is going to be cut in half at a minimum. If we don't change our policies, the dollar index could go much lower."

On Wednesday, gold sank to a seven week low near $1,700 an ounce, only weeks after setting an 11-month high just shy of $1,800.

"One day we're going to look back at $1,700 with nostalgia," Schiff said. "People are going to be shocked at how inexpensive gold was when it could be snapped up for such a bargain price."

Schiff is a relentless critic of U.S. fiscal and monetary policy, with his flagship investment fund being positioned for what he's called a "dollar crash". His somber pronouncements about the global economy in general – and the U.S. economy in particular – place him in a camp similar to the market's reigning "Dr. Doom", Mark Faber. (Read more: West in a 'Colossal Mess' in Five to 10 Years: Marc Faber.)

The dollar bear was skeptical that Washington would find a way to avoid falling over the fiscal cliff, saying that Congress and the White House would only delay the day of reckoning until it became a full fledged calamity.

"I think we're going to have a monetary crisis [and] a dollar crisis," Schiff said, arguing that it was only Europe's debt crisis preventing investors from coming to grips with the U.S.'s own looming debt troubles. "We're going to have a real crisis of confidence."



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