Peter Schiff has called the Federal Reserve’s response to the economic “a monetary hail mary.” The central bank has printed trillions of dollars out of thin air through QE infinity, taking the Great Recession quantitative easing programs and putting them on steroids. And the Fed has gone beyond the “standard” extraordinary policy of the 2008 crisis, plunging its hands into the corporate bond market.
Peter has argued that none of this is actually helping the economy. In fact, it’s hurting, furthering distorting an already over-leveraged economy.
Gold just finished Q2 at its highest level in over 8 years, wrapping up its best quarter since 2016. The Fed monetary policy in response to the coronavirus pandemic has put a strong tailwind behind gold. But as host Mike Maharrey details in this week’s Friday Gold Wrap podcast, gold has been on a bull run for quite some time – long before COVID-19 reared its ugly head. Why? And what might this tell us about what’s ahead?
Gold just had its best quarter since 2016 and finished at its highest level in over eight years. But Q2 2020 wasn’t an anomaly. Gold has charted gains for seven consecutive quarters.
That represents the longest quarterly run of gains for the yellow metal since the 2008 financial crisis.
Don’t expect the Federal Reserve to pull back on its monetary Hail Mary anytime soon.
The central bank released the minutes from the June meeting yesterday. There were no big surprises, but they did reaffirm the Fed’s commitment to continuing its unprecedented monetary policy into the foreseeable future.
Q2 was one heck of a quarter for US stock markets. But in his podcast, Peter Schiff called it a “phony rally.” The real bull run to watch is gold.
The Dow Jones just wrapped up its best quarter since 1987. The S&P 500, finished out its best three-month run since 1998 during the dot-com bubble. But as Peter pointed out, you have to put the big gains in perspective. Stocks were coming off an abysmal first quarter, and other than the NASDAQ, the major indexes remain negative on the year.
If history is any guide, we could be heading toward $4,000 gold. This according to analysis by US Global CEO Frank Holmes.
Earlier this month, the Federal Reserve announced it would begin buying individual corporate bonds. Now we have our first glimpse at what that means in practice.
On Saturday, the Fed released a disclosure statement that lists the bonds purchased by the central bank.
A lot of people still have faith in the dollar. Some people even believe the dollar is set to rally. Santiago Capital CEO Brent Johnson is one of those people. He bases his dollar bullishness on what he calls “the milkshake theory.” In his podcast this week, Peter Schiff explained why the milkshake theory is all wet.
Peter Schiff has called it a “monetary Hail Mary,” but virtually nobody in the mainstream questions the wisdom of the Federal Reserve unprecedented response to the economic impacts of the coronavirus pandemic.
And it truly is unprecedented. It’s not just zero percent interest rates and QE infinity. The Fed is buying everything but the kitchen sink. It’s now even become a player in the corporate bond market.