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The Battle Continues: Schiff vs. Nations on Gold & Fed Rate Hike (Video)

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Peter Schiff’s appearance on CNBC’s Futures Now yesterday was quite different from his interview on Fox Business on Wednesday. CNBC anchors more or less scoffed at his suggestion that the Federal Reserve’s rate hike announcement was simply a strategy to cover the fact that the Fed has almost zero confidence in the United States’ economic recovery.

Regular readers of Peter Schiff’s Gold News will enjoy his ongoing argument with Scott Nations in the latter part of the interview. You can watch their past clashes here and here.

This time, Scott challenged Peter Schiff to defend his advice to buy gold over the past few years. Peter reminded Scott he was telling people to buy gold when it was under $300 per ounce. But Scott kept pushing – “Let’s talk about being so wrong,” Scott demanded. Peter silenced Scott with a simple question: “Have you ever told somebody to buy a stock at 19 and then it went to 17?” After stammering for a moment, Scott pressed Peter further on his gold predictions, and Peter stuck to his guns: “[Gold is] still going to go there [to $5,000].”


Highlights from the interview:

“I don’t tell people to put all their money in gold. I tell people to put some of their money in gold – 5 to 10%. I think my advice to have some of your money in gold is much better than almost everybody else’s advice in this industry which is to have none of your money in gold.”

“I don’t think there is that much downside because most of this is already built into the price. Everybody has been anticipating the Fed is going to raise rates. In fact, the thought they would have already raised them a lot more than 25 basis points by now. There are still people who think a lot more rate hikes are coming. I still believe that’s wrong. People are ignoring the inherent weakness in the US economy and the fact that the Fed is going to be back to it’s old tricks. It only has one game plan for recession and that’s printing money…It’s QE4 that they’re going to be relying on.”

“I think the Fed thought they had backed themselves into a corner. Everybody believed if the Fed didn’t raise rates it would show they had no confidence in the economy. So, I think symbolically, just to show they have confidence in an economy they should have no confidence in, they raised rates 25 basis points.”

“They are not going to raise rates four times in 2016, not even close. We’re already almost in a brand new recession. Normally when the Fed will raise rates it’s when an economy is just getting going, so you have a lot of momentum in the economy and a lot of pent-up demand, but this recovery is already over. And now the Fed is trying to raise rates. They are going to have to quickly reverse course next year…and they’re going to do QE4 and it’s going to be bigger than ever.”

“You don’t find out about all the mistakes that were made until the Fed tries to remove the stimulus. We have had seven years of 0% interest rates and the damage that the fed has done to this economy is immense. It’s much greater than what was done under Alan Greenspan and that gave us the 2008 financial crisis. So you can only imagine what lies ahead as a result of what the Federal Reserve has done to us this time.”

“If Janet Yellen had confidence in the economy, she would have raised interest rates years ago. In fact, all of the economic data was much stronger years ago than it is today. If that was the case, why didn’t they raise interest rates a long time ago? Why wait until the data is at its weakest in six years, and then, claiming to be data dependent, raise interest rates anyway? This is all trying to pretend the economy is much stronger than it is. But all of this is going to come back to haunt the Fed in 2016 when they have to deal with the consequences of this, and I think they are going to look a lot more foolish having raised rates and then having to reduce them then if they’d left them at zero the whole time.”

“Once this bubble economy has to deal with a market rate of interest, the whole thing is going to implode because we’ve never had a recovery. We just had a bubble.”

“If they have to go back to zero, if they have to go negative, if they have to launch QE4, then that validates everything I’ve been saying and this symbolic rate hike isn’t going to mean anything.”

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6 thoughts on “The Battle Continues: Schiff vs. Nations on Gold & Fed Rate Hike (Video)

  1. Rex The Invincible says:

    Love this battle and Jackie is a good MC/Referee. Peter doesn’t have to defend himself so vociferously when Scott has the floor – let the old dog speak (respectfully). Has Scott ever recommended a stock that has gone down?
    Scott? Can investments go down before they go up? Scott??
    Keep it up, this will be a great highlight reel @ some point (hopefully soon) when QE4 is announced.

  2. Ron May says:

    Great appearance on CNBC!

  3. Gary Kinnsch says:

    I wonder what they think of your analysis now Peter? Way to go my friend!

  4. Robert says:

    As of the close of business on Dec 18, it would seem the markets are supporting Peter’s argument. Since the rate hike, the DOW has dropped about 500 points while Gold has had a bit of a rally. In listening to Peter, his arguments make much more logical sense over the long term and reinforce while it would be prudent to ensure my portfolio should hold some gold. At this point I see the holding of physical gold as the best insurance policy on the future that I can buy. It is true that no one can predict the future but one can predict probability of future if one pays attention to trends. Peter is following the factual trends of what is happening in the overall broad market and if one listens to and believes these facts then it would seem to be highly probable that this stock market is going to crash and gold is a nice safe place to be until things settle back to a ‘real normal ‘ .

    • nirtlocj says:

      Thank you for the straightforward, no nonsense post. My sentiments exactly. Economics is the complex interplay of simple economic principles. Many naive and/or foolish people think that propserity can be achieved through centralized manipulation. The fundamentals will always win out in the end. In laymans terms, the chickens always come home to roost. Peter Schiff understands this and with his understanding of economics, is able to see the trouble ahead, its causes, and eventual effects. His viewpoints result in a tremendous amount of criticism and even anger. Most people would rather believe that the deficit spending and general economic chicanery is fine. I think the country and the world is about to learn some hard economic lessons.

  5. Richard Hillier says:

    Of course those who have an interest in keeping the financialized economy chugging along will try to discredit any dissenting views. However, a simple calculation of dividing American debt by the number of Americans is an undeniable indicator that something wicket this way comes.

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