Contact us
CALL US NOW 1-888-GOLD-160
(1-888-465-3160)

Peter Schiff: Look for Fed to Return to QE with Trump’s Economic Plans

  by    0   0

Peter Schiff recently appeared on CNBC’s “Future’s Now” program to discuss what the Federal Reserve will likely do during a Donald Trump presidency. Peter said he sees a rate hike in December as too little too late given the ineffectual level of interest the economy has seen over the last several years, and because of the accelerated rate of inflation that’s taking place.

dollar bill

While the Fed is likely to raise the nominal funds rates in December, real interest rates will continue to fall because they’re being outpaced by inflation. Also thrown into the mix are other countries’ central banks, which will also likely raise their rates as well.

“Not only are we going to get higher inflation in America, but we’re going to get higher inflation worldwide,” Peter said. “It’s not just the Fed that’s going to be raising rates; it’s other central banks as well. So, on a relative basis, our rates aren’t going to go up if all the other central banks are hiking too.”

In the end, December is likely to be a repeat of last year, when markets tanked after the Fed hiked rates a quarter point.

“I still think we’re going to go back to the well of QE and that we’re going to get more stimulus. We’re going to get another round of quantitative easing. I still believe the Fed might reverse course and start cutting rates again even as inflation accelerates.”

Highlights from the interview:

“The Federal Reserve is going to have to step up to the plate big league if Donald Trump is going to want to move forward with the tax cuts and spending increases that he has promised the electorate. That’s where the markets have it wrong. They somehow think that fiscal stimulus is a substitute for monetary stimulus. It’s not. If we’re going to have larger deficits, it’s impossible to finance them unless the Federal Reserve does it. That means they’re going to have to be launching another round of quantitative easing that is much larger than the ones we’ve had in the past. Rather than being dollar positive, this is a negative for the dollar … If currency traders actually understood what was happening, higher inflation is very bad for the dollar because the Fed cannot fight it.”

“It doesn’t even matter whether we get [a rate hike] or not, but if it happens, it’s still too little too late. Rates are still very, very low. We’re still not even at 1%, even if the Fed raises rates in December. Even if they raise them again in 2017, it’s still not going to be enough. Inflation is accelerating at a much faster pace than the Fed is nudging up interest rates. Real interest rates are falling despite the Fed’s nominal increases.”

“Not only are we going to get higher inflation in America, but we’re going to get higher inflation worldwide. It’s not just the Fed that’s going to be raising rates; it’s other central banks as well. So on a relative basis, our rates aren’t going to go up if all the other central banks hiking too.”

“I think [the Fed] is going to go back to the same monetary stimulus that failed and is the reason Donald Trump is elected.  A lot of people believe that simply electing Donald Trump solves all of the economic problems that are the reason that he was elected. The problems haven’t been solved, and they can’t be solved unless we’re willing to bite the bullet and allow a painful economic restructuring that is going to be necessary for to pave the way for real economic growth.”

Get Peter Schiff’s latest gold market analysis – click here – for a free subscription to his exclusive weekly email updates.
Interested in learning how to buy gold and buy silver?
Call 1-888-GOLD-160 and speak with a Precious Metals Specialist today!


Related Posts

Peter Schiff: Gold is the Canary in the Economic Coal Mine

This weekend, Todd Sachs interviewed Peter on the state of the economy. They discuss the parallels between now and the 2007-2008 housing crisis, the role of economic sentiment in voters’ opinions, and why foreign central banks are losing faith in the dollar.

READ MORE →

Gold Hits New All-Time Record High

Gold hit a new all-time nominal high, surpassing the previous record set in December of the previous year. The precious metal’s price reached approximately $2,140, indicating a robust and continuing interest in gold as a safe-haven asset, despite a rather peculiar lack of fanfare from the media and retail investors. This latest peak in gold […]

READ MORE →

New Peter Schiff Video: Inflation Rises, Bitcoin ETFs, and the Final Gold Shakeout

Peter released a brief video addressing the looming resurgence of inflation. Ironically, on the back of disappointing inflation numbers, gold witnessed a dip below $2000 on Tuesday due to higher-than-expected CPI data.

READ MORE →

Peter Schiff: A Buying Opportunity as Gold Pulls Back from Record High (Video)

Gold surged to a new record high of $2135 early Sunday morning before pulling back sharply Monday. In this video, Peter Schiff explains why this is a buying opportunity. After setting the record, gold quickly sold off and consolidated, dropping over $100 back to around $2,020. Some people see the quick selloff as a bearish […]

READ MORE →

Marc Faber: Inflation Is Here to Stay

During a recent interview at the 2023 Precious Metals Summit Zurich event, Doom, Boom & Gloom Report publisher Marc Faber says now is the time to buy gold, silver and platinum because inflation is here to stay.

READ MORE →

Comments are closed.

Call Now