Peter Schiff: We’re In the Eye of an Economic Storm; Take Advantage and Buy Gold (Video)
During the recent interview at International Metal Writers Conference, Peter Schiff said we are in the eye of an economic hurricane right now. Investors need to take advantage of the relative calm and buy gold.
But many Americans who typically invest in gold have been lulled into a false sense of security with the election of Donald Trump. Peter said that’s a mistake. Despite his intentions, Trump won’t be able to change the course we’re already on.
Stocks have continued to surge higher since the election. You’ve probably heard the rise in stock prices referred to as the “Trump bump.” During the campaign, Trump called the stock market a “big, fat, ugly bubble.” Now that he owns the bubble, it’s just a bull market. But as Peter pointed out, it’s the same bubble, only bigger. Peter went on say that Trump’s election has had the opposite effect on gold, creating a sort of anti-bubble.
You have the opposite of a bubble in gold. Certainly, if you look at the United States, Americans are buying less gold now than they’ve done since the bull market began in 1999 – 2000. Sales from the US Mint have collapsed. At SchiffGold, we just had our weakest quarter since the company has been in existence. And it’s not just my firm. It’s industry-wide. Americans are not buying gold, even though gold prices year-to-date are up more than the S&P 500. But the people who typically buy gold in America voted for Trump, and they’re no longer worried about the economy. So they’re not buying gold. They’re buying stocks instead, and I think they’re making a big mistake. They should be selling their stocks and buying even more gold.”
Peter threw a bucket of cold water on the notion that Pres. Trump is going to be able to turn things around.
I think there’s too much false optimism out there on the part of people who voted for Trump … I think a lot of people actually believe this is a game-changer, that he’s going to drain the swamp, that he’s going to solve all the problems, and people are now optimistic. Unfortunately, none of this is true. Nothing that Trump is likely to do is going to make any difference as far as the course we are on.”
Peter pointed out that despite some proposed cuts in the federal budget, it doesn’t do anything to slow the growth of entitlements and defense spending. On top of that, we have increasing interest payments on the national debt. In fact, entitlements and debt service alone exceed federal tax revenue. By the time Congress whittles down the proposed budget cuts, we’ll be left with pretty much the status quo.
Government is going to continue to grow. The Fed is going to keep printing money. We are continuing to head off the edge of an economic cliff.”
Peter wasn’t pinning the blame on Trump. He said Hillary would have been a worse president, and her policy agenda would be more destructive. But the real problem is the policy mistakes of the past are already here, and we can’t get rid of them.
Look, we can’t even get rid of Obamacare. We’re stuck with it … So nothing is changing. The government, again, is getting bigger. The Fed continues to keep interest rates artificially low. They’re getting ready to go back to zero. Forget about all the rate hikes. We’re nearing the end of the cycle. They’re going to go back to zero. We’re going to get QE4 – whatever they’re going to call it. It’s going to be bigger than QE 1,2, and 3. We’re headed for another recession in the US. We’re going to have $2 trillion-per-year budget deficits next time. Not just $1 trillion. We’re going to hit $2 trillion.”
But Peter emphasized all of this is good news for gold
If people just understood how good the news is for gold! But I think once people start figuring out, the price of gold is going to start to rise in $50 to $100 increments. But, before that happens, you just want to take advantage of his lull in the storm. We’re in the eye of an economic hurricane right now. People think that 2008 was the end of it – that was when we entered the storm. Now we’re in the eye. We’re coming to the rest of the storm shortly. So, for now, it’s just a good time to buy gold while there’s so much complacency.”
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