The question often comes up: with all of the loosey-goosey monetary policy, historically low interest rates, liquidity injections and quantitative easing, why haven’t we seen huge bouts of price inflation?
Some people then take the next step and suggest that since we haven’t had huge bouts of inflation, this kind of loosey-goosey monetary policy should become the standard. With unlimited money at our fingertips, we can all have the proverbial free lunch.
Wolf Richter says there is a fatal flaw in this plan. Despite what the pundits tell you there have been huge bouts of inflation — “Pernicious, dangerous inflation.”
The price of gold is up over 9.5% since the beginning of the year. One strategist who appeared on CNBC yesterday says he sees it going even higher – as high as $2,000 by the end of the year.
David Roche heads London-based Independent Strategy. During an interview on CNBC’s Squawk Box, he said he sees bad things to come in the stock markets but gold will shine.
I actually believe financial markets are now poised to crumble like a sand pile.”
SchiffGold’s own Mike Maharrey recently appeared on RT to talk about the potential consequences of US policies that effectively weaponize the dollar.
We’ve been reporting extensively on efforts by Russia, China and other countries to minimize their exposure to the dollar. Russia and China recently agreed to increase trade using their own national currencies. This is another in a series of moves globally to reduce dependence on the US dollar. Currently, about 10% of trade between Russia and China is conducted in yuan and rubbles. Under the new deal, it will increase to about 50%.
Although it has given back some of its gains with news of a ceasefire and a resumption of talks in the trade war between the US and China, gold has surged over the last couple of weeks driven by global instability and turmoil – not only from the ongoing trade conflict, but also with the saber-rattling between the US and Iran. Gold broke through the $1,400 mark and hit six-year highs last week.
Peter Schiff appeared on RT’s Boom Bust to talk about it along with the recent bitcoin rally.
Back in December, Peter Schiff said the Federal Reserve’s was about to do the last rate hike of the cycle. He went further and said the “Powell Pause” wouldn’t be enough and the next step would be rate cuts and another round of quantitative easing. Fast forward to today and nearly everybody expects that the Fed will cut rates at least once this year.
Jim Grant appeared on CNBC Markets Now on June 17 and shocked the panel when he said he thinks the Fed will actually cut rates during this week’s meeting. Most analysts expect the central bank to hold pat during this meeting and then possibly cut in July.
Whether or not he’s right about the timing, Grant offers a good explanation as to why the Fed will cut and the likely results. He says the central bank is pursuing a dual mandate of arsonist and fireman.
As we’ve been reporting, central banks around the world are aggressively adding to their gold reserves. During an interview on RT’s Boom Bust, Peter Schiff talked about this move toward gold and said these central banks are preparing for a dollar crisis. The world is looking for an alternative to the dollar and the best alternative is gold.
In December, Peter Schiff predicted that the Federal Reserve was about to hike rates for the last time and that the next step would be rate cuts. Yesterday, Jerome Powell made comments widely interpreted to signal the rising likelihood of a rate cut. The Fed chair dropped the word “patient” from his vocabulary, saying the central bank would respond as “as appropriate” to the perceived economic impacts of tariffs and other economic data.
Peter appeared on Fox Business Countdown to the Closing Bell with Liz Claman to talk about what’s next up for the Fed and how it will impact the economy.
Peter Schiff nailed it.
Just days before the Federal Reserve met for its December 2018 FOMC meeting, Peter appeared on Fox Business and said we were about to see the last interest rate hike.
When Peter made this prediction, virtually nobody thought the Fed was about to end its tightening policy. In fact, most financial experts were talking about three or four additional rate hikes in 2019.
Well, Peter was right. After that December increase, we got the Powell Pause.
As we’ve been reporting, a number of central banks have been aggressively adding gold to their reserves over the last several years. Globally, central banks accumulated 651.5 tons of gold last year. It was the highest level of annual net central bank gold purchases since the suspension of dollar convertibility into gold in 1971, and the second highest annual total on record. Last week, Serbia and the Philippines joined the race for gold.
A move to minimize dependence on the US dollar, especially by countries like Russia and China, is driving this central bank gold-buying spree. Peter Schiff recently appeared on RT’s News with Rick Sanchez to talk about it.