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Gold Has Had a Strong Year Outside the US (Video)

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CNBC’s Futures Now interviewed Peter Schiff yesterday to hear what he expects from the Federal Reserve’s announcement this afternoon. They also spoke at length about gold, which Peter points out hasn’t gone down at all in 2014 contrary to many expert forecasts. In fact, when priced in other global currencies and stock markets, gold has risen significantly.

Peter Schiff: Oil’s decline should worry you from CNBC.

Highlights from Peter’s interview:

“Oil is not the only market that’s been floating on a sea of cheap money. It’s QE that propped the oil price up in the first place. But quantitative easing propped the stock market up in the US, the real estate market, it’s created this phony recovery. Oil prices are going down, but stock prices, real estate prices are going to come down for the same reason. We are headed back to recession. The market is pricing in an end of quantitative easing. All of these assets that the Fed inflated are going to deflate…

“I don’t think crude is the thing to pop that bubble… All of these bubbles are going to burst because of the same thing, which is the Fed withdrawing the stimulus. People are talking about how falling oil prices are going to help the consumer. Well, oil prices fell from $150 a barrel down to $32 a barrel in 2008. That helped the consumer too, but it didn’t stop the financial crisis…

“The same thing is happening now, and you’re whistling past the graveyard if you think what’s happening is good news…

“I’ve been expecting the Fed to backtrack from its talk about rate hikes. I know it’s all bluff. I know they can’t raise rates, or they’ll bring about a worse financial crisis than 2008. But the Fed can’t admit that, so they have to pretend that they can raise rates so they can keep their con game going…

“I’ve been saying all along that if they actually tapered, they’d have to have an excuse to un-taper. Maybe this is going to be it. I don’t know when they’re going to tip their hats, but they’re going to have to come clean about launching QE4. Because if they don’t do it, we’re going to have a much worse recession and a much worse financial crisis than what we had in 2008 and 2009…

“There’s still a lot of negative sentiment in the gold market, but the gold market still hasn’t gone lower. Gold is still higher in 2014 than it began the year. Most experts thought it was going to fall this year. It hasn’t. Of course, in terms of other currencies, gold has had a very, very strong year. It’s just that from a dollar perspective, it hasn’t.

“In fact, if you look at the stock markets around the world… not even a dozen of them have out-performed gold in 2014. So for all the negativity, gold has hung in there, but you have a lot of speculators that are still short this market trying to push it down. I would say that’s probably the most dangerous trade out there. People are going to lose a lot of money on the short side of gold, and silver for that matter. When this market turns, it is going to turn and it’s going to take no prisoners…

“Gold has already come down from $1900, so gold has had a pretty big move from its high. So gold is not on a high like the US stock market, so you’ve had a discount. But we have printed a lot of money, and I believe the Fed is going to come back with QE4. If I didn’t think QE4 was coming, if I actually believed that Janet Yellen was going to raise interest rates and shrink its balance sheet, the way she’s been pretending it’s going to do, then I would be bearish on gold. But I would be more bearish on some of these other assets, which I think would fall even harder than gold. It’s because I know the Fed is bluffing…

“Ultimately, what’s going to collapse is the value of the dollar. The Fed is going to keep printing dollars to prop up assets until nobody will buy the dollar anymore… Looking at the Russian ruble – that’s nothing compared to what’s going to happen when we have a dollar crisis. Think about this. They just raised interest rates to 17% in Russia. How do you think the US economy is going to handle 17% interest rates here, if the Fed is forced to do that because the dollar is collapsing? …

“I have a lot of questions to ask Janet Yellen, but I don’t know that she could answer them. There’s a big difference between Janet Yellen and Alan Greenspan. Alan Greenspan I think actually understood economics and understood sound money. That’s why he’s now saying that QE was a failure and saying people should buy gold. I think Janet Yellen has been so brainwashed in Keynesianism her entire life that she actually thinks what she’s doing is going to work. Alan Greenspan at least knew it wasn’t going to work, but he did it anyway because he wanted to be liked… Janet Yellen doesn’t understand any of these concepts. I think it is very dangerous to have her as the Fed Chairman going into what is going to be a very, very difficult period for America…”

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