On a day where it looks as though the Fed’s
bullshit “magic potion” may finally be wearing off on the stock market, Peter Schiff joined Chris Irons on the Quoth the Raven Podcast to speak about today’s market move: what it means, whether it can continue and how he would position himself going forward.
Schiff began by talking about the trade war between China and the United States escalating. He talked about why he believes the US dollar was weakening on Monday and why he believes the dollar will continue to weaken for the foreseeable future.
“We’ve been in a recession,” Schiff says.
“The election of Trump just delayed the inevitable for a little,” he continued.
“My thinking is the market was going down regardless of the cut they got,” he said, talking about last week’s rate cut.
“You can’t say the dollar is strong when it’s lost $30 against gold in one trading day. Gold tells you we have a weak dollar.“
He continued, talking about Jerome Powell’s press conference last week:
“Powell contradicted himself several times, which is something that you do when you’re lying. The Fed is not telling the truth.”
Schiff predicts that interest rates are going back to 0% and that the Fed will start QE yet again.
“Powell’s trying to pretend it’s because of concerns about the overseas economy. It is really the US economy that is driving the Fed. That’s why this is just the first step on the road back to zero. And you know, it was a mistake when the Fed went back to zero the last time; it’s going to be an even bigger mistake when they do it next time. And they’re also going to go back to quantitative easing. You know, they announced yesterday the end of quantitative tightening, but the next step is to go back to QE, and QE 4 is going to be bigger than QE 1, 2 and 3 combined.”
But, this time he says the Fed isn’t going to be able to stop the ensuing recession and will ruin the US dollar.
“When you’re inside the bubble, you don’t see the pin,” Schiff says.
He compares today’s market environment to prior to the great recession.
“What’s been happening this past year or so is a lot of my forecasts have been met. Stuff I’ve said that no one else has said is happening. And it validates that I’m right and I’m confident I’ll be right going forward,” he says.
Schiff also predicted that the price of gold is going to move above $2000 quickly and says that small double digit moves in gold are indicative that the metal hasn’t even started to catch on to the fact that we are mired in recession yet. He predicts we will see hundred dollar moves in gold as the true economic landscape becomes clearer moving forward. Schiff previously commented on his preference for gold over cryptos…
“I think that spec money is maybe chasing the bubble in cryptos, but the smart money is buying into gold and buying into silver because those are legitimate stores of value and they are monetary assets and they are going to shine when the dollar crashes.”
From there, Schiff went on to discuss the possibility of Trump losing the 2020 election and what it would mean for a Democratic socialist to take the office.
“What’s going to happen when we have more taxes and more regulation,” he asks?
He postulates what the potential stock market reaction could be to Trump losing the election and talks about what positions he owns personally.
You can listen to the entire podcast here: