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