Gold’s recent two-day 15 percent surge, Schiff notes, is the equivalent of the Dow being up 1,400 points — and a clear signal that investors fear inflation is just around the corner, says Euro Pacific Capital CEO Peter Schiff.

Schiff says he "gets a kick out of all these experts" pondering why the price of gold is surging.

"They all think there's no inflation," Schiff says.

"They think gold must be going up for some other reason or that there’s no problem with the American economy.”

One commentator, Schiff says, said that gold wouldn’t go up because of inflation, but because of a weak dollar.

“A weak dollar and inflation are the same thing,” Schiff points out.

“If you’re buying gold because you think the dollar’s going to lose value, you’re buying it as an inflation hedge.”

The Chinese government, Schiff notes, is encouraging its citizens to buy gold and silver because officials know the value of these precious metals will rise.

“They know they’re going to try and get rid of the dollar, which means gold and silver have to go up and they want their citizens to have real money.”

“It’s unfortunate our politicians and central bankers haven’t figured it out.”

A gauge of U.S. inflation pressures rose sharply to a ten-month high in August, indicating that deflation is unlikely under current economic conditions, according to a recent report from The Economic Cycle Research Institute.

The gauge, which is designed to anticipate cyclical swings in the rate of inflation, rose to 89.6 in August from 84.6 in July.