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

Blame Market Volatility on the Fed, Not Commodities (Video)

  by    1   0

Peter Schiff spoke with CNBC World last night. Just like Futures Now and Yahoo! Finance, the anchor questioned whether or not the Fed is really to blame for market volatility. He thought commodity volatility – particularly oil – played a big role. Peter disabused him of this theory and explained why he expects the Fed to launch QE4 in 2016.

Why are commodities falling in price? It’s because of the Fed… Everybody believes that the Fed is going to be raising interest rates. That is strengthening the dollar, and it is the strength of the dollar that is undermining commodities, because commodities are priced in dollars. If the dollar goes up, commodities become more expensive for everybody who has to pay in a currency other than the dollar. This is the source of all this instability and volatility.”

SchiffGoldSilverReport590

Highlights from the interview:

“This morning, Jim Bullard came out again and threw the market a lifeline. He hinted at maybe a more dovish outlook from the Fed for rate hikes. But rather than acknowledging the weakening US economy, I think Bullard wants to preserve the phony narrative that we have a real recovery. So he really couched his dovishness by saying it was the low oil price that caused the Fed to rethink its monetary policy and maybe slow down the pace of tightening until the oil market turns around. I think that’s what rallied the market…

“I think the volatility in the markets has been created by the Fed. The Federal Reserve is the reason the market is so high in the first place. They inflated it. They did it deliberately to engineer a wealth effect. It’s phony wealth, unfortunately. When you create phony wealth with a stock market bubble, the result is substantial malinvestment. You encourage all sorts of uneconomic activity to take place. You get rampant speculation. Of course, when the artificial high wears off – and that’s what’s happening now, particularly now that the Fed has raised interest rates and is posturing as if it’s going to raise them some more – the air is coming out of this bubble. And that is where the volatility is coming from…

“You have to realize, why are commodities falling in price? It’s because of the Fed. It’s because the Fed is threatening to raise interest rates. Everybody believes that the Fed is going to be raising interest rates. That is strengthening the dollar, and it is the strength of the dollar that is undermining commodities, because commodities are priced in dollars. If the dollar goes up, commodities become more expensive for everybody who has to pay in a currency other than the dollar. This is the source of all this instability and volatility. It is the widespread belief that the dollar is going to keep rising. But the reality is the dollar is not going to keep rising, because the US economy is either already in a recession or rapidly heading to one. The Fed is not going to be able to continue with rate hikes. It’s going to have to reverse course. It’s going to have to go back to zero, maybe negative. It’s going to launch QE4, and that’s going to be a game changer for the currency markets and the commodity markets…”

Blame Stock Volatility on the Fed, Not Commodities (Video)

Peter Schiff spoke with CNBC World last night. Just like Futures Now and Yahoo! Finance, the anchor thought volatility in commodities was a major factor for market volatility and instability. Peter disabused him of this theory and explained why he expects the Fed to launch QE4 in 2016.

Why are commodities falling in price? It’s because of the Fed… Everybody believes that the Fed is going to be raising interest rates. That is strengthening the dollar, and it is the strength of the dollar that is undermining commodities, because commodities are priced in dollars. If the dollar goes up, commodities become more expensive for everybody who has to pay in a currency other than the dollar. This is the source of all this instability and volatility.”

Highlights from the interview:

“This morning, Jim Bullard came out again and threw the market a lifeline. He hinted at maybe a more dovish outlook from the Fed for rate hikes. But rather than acknowledging the weakening US economy, I think Bullard wants to preserve the phony narrative that we have a real recovery. So he really couched his dovishness by saying it was the low oil price that caused the Fed to rethink its monetary policy and maybe slow down the pace of tightening until the oil market turns around. I think that’s what rallied the market…

“I think the volatility in the markets has been created by the Fed. The Federal Reserve is the reason the market is so high in the first place. They inflated it. They did it deliberately to engineer a wealth effect. It’s phony wealth, unfortunately. When you create phony wealth with a stock market bubble, the result is substantial malinvestment. You encourage all sorts of uneconomic activity to take place. You get rampant speculation. Of course, when the artificial high wears off – and that’s what’s happening now, particularly now that the Fed has raised interest rates and is posturing as if it’s going to raise them some more – the air is coming out of this bubble. And that is where the volatility is coming from…

“You have to realize, why are commodities falling in price? It’s because of the Fed. It’s because the Fed is threatening to raise interest rates. Everybody believes that the Fed is going to be raising interest rates. That is strengthening the dollar, and it is the strength of the dollar that is undermining commodities, because commodities are priced in dollars. If the dollar goes up, commodities become more expensive for everybody who has to pay in a currency other than the dollar. This is the source of all this instability and volatility. It is the widespread belief that the dollar is going to keep rising. But the reality is the dollar is not going to keep rising, because the US economy is either already in a recession or rapidly heading to one. The Fed is not going to be able to continue with rate hikes. It’s going to have to reverse course. It’s going to have to go back to zero, maybe negative. It’s going to launch QE4, and that’s going to be a game changer for the currency markets and the commodity markets…

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


Related Posts

Peter Schiff vs. A Marxist Professor: Is Socialism the Problem or the Solution?

Peter Schiff debated Marxist professor Richard Wolff on RT Boom Bust. Wolff just can’t grasp that socialism isn’t the solution to America’s problems. Socialism is America’s problem.

READ MORE →

Peter Schiff: Double-Barrel Inflation Is Locked and Loaded

The Consumer Price Index blew past expectations in October as the “transitory” inflation narrative continues to unwind. CPI was up 0.9%. On an annual basis, the inflation rate was 6.2% compared with a 5.9% estimate. It was the highest annual CPI gain since 1990. The CPI stole the headlines, but the Producer Price Index also […]

READ MORE →

Peter Schiff With Megyn Kelly: Inflation Robs Working and Middle-Class Americans

Despite government officials and central bankers continuing to peddle the “transitory” inflation narrative, the average American isn’t buying it. They feel the squeeze of rising prices in their wallets. And it’s the average American who is hurt particularly hard by the skyrocketing cost of living. Peter Schiff appeared on the Megyn Kelly show to talk […]

READ MORE →

Artificially Low Interest Rates? So what?

The Federal Reserve has held interest rates artificially low for decades. Even after pushing rates to zero in the wake of the 2008 financial crisis, “normalization” only managed to raise rates to 2.5% — hardly “normal.”  The central bank began cutting rates in 2019, even before the coronavirus pandemic. But what difference does it make? […]

READ MORE →

Peter Schiff: What’s Going on With the Price of Gold?

Gold has been rangebound of late, bouncing between $1,750 and $1,800 an ounce for several months. Given the inflationary environment, one would expect gold to be soaring. So, what’s going on with the yellow metal? And when will the price of gold go up? Peter Schiff tackled this question during a recent Q&A session on […]

READ MORE →

One thought on “Blame Market Volatility on the Fed, Not Commodities (Video)

  1. […] What we have is what Peter Schiff has called a “phony wealth effect.” […]

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Call Now