As everyone knows, Peter Schiff is a regular guest on many of the major business news networks. Sometimes he just airs his opinions, and sometimes he gets into shouting matches with the host or other guests (SEE: Peter Schiff gets into shouting match with trader on CNBC).
Since just before the economic collapse a few years ago, he appeared on CNBC and warned about the pending doom that would inflict mass destruction on the United States economy. After his predictions came true, he became a hot commodity in the media. Everyone wanted him on their show. Essentially, Peter Schiff equaled ratings.
Due to the fact that everyone in the media thinks the national economy is on sound footing and getting better every day, Schiff has been vehemently criticized by his opponents. They have ridiculed him, poked fun at him and shot down any other predictions he has made.
This is very apparent with CNBC’s latest piece entitled “The Peter Meter: Assessing Schiff’s predictions,” which was published just before the Christmas break.
One of the projections he is often chastized about is in relation to gold. A few times between 2010 and 2012, Schiff prognosticated that the yellow metal would reach $5,000 (SEE: Peter Schiff: Gold is still reaching $5,000, U.S. heading into a recession) because of a weak economy and rampant inflation.
Here is what CNBC wrote:
“Made when gold was trading about $1,700, this prediction may count among the least prescient ever made on CNBC.”
Another call Schiff has made is that the dollar will crash. CNBC notes that the opposite has happened, ignoring the fact that the greenback has lost 90 percent of its value since the inception of the Federal Reserve System.
Here is what CNBC wrote:
“Actually, dollar strength has turned out to be one of the biggest market themes of the past few years. The dollar index, which compares the U.S. dollar to a basket of other currencies, was trading at 80 that day, and hasn’t fallen lower than 78.90 since. On Friday, that index closed near 99.
“Meanwhile, inflation has hardly run rampant. Instead, several different metrics show that inflation has remained below the Federal Reserve’s 2 percent target, even as the central bank stopped its bond purchasing program, and even more recently has raised its interest rate target.”
There is no doubt that Schiff has been a fierce critic of quantitative easing. He regularly argued that it would not improve the U.S. economy, and any gains would be wiped out during the next financial crash.
Here is what CNBC wrote:
“Either way, Schiff’s frequent predictions that the Fed would not be able to stop purchasing bonds or to begin raising rates without the economy cratering have proven completely unfounded, at least thus far.”
Schiff Fights Back Against the ‘Peter Meter’
What does Schiff think of the so-called “Peter Meter.” Well, he fought back in his podcast the next day. He tackled each point made by the business news network.
Gold
Schiff explained that the yellow metal isn’t even down 40 percent, but the stock market, in the last 15 years, has lost half of its value in the last 15 years. In other words, the stock market is down more than gold.
“If you bought gold at $1,700, you didn’t lose everything, I mean, you’re still in the game. Yeah, maybe you’re down close to 40%, but you still have your gold. But if you bought one of those dot-com stocks that went to zero, you don’t have anything. You got wiped out. What about all the people that bought financials before the 2008 financial crisis that went to zero?”
Dollar collapse and the central bank’s rate hike
It was the general consensus throughout 2014 and most of 2015 that the Fed would raise interest rates. It was repeated regularly that it would be January then March then May and so on that the Fed would introduce a rate hike for the first time since 2006.
During the entire time, Schiff said it wouldn’t happen (SEE: Peter Schiff was right AGAIN – Federal Reserve won’t hike interest rates), which is something he alluded to. He was right, until last month.
“I never said from the beginning that it was impossible that the Fed would raise rates. I said that they could, that they might make that mistake, but that I didn’t think that they would because I thought it’d be too foolish to have to raise rates and then lower [them] back down. But I knew that it was possible that they could be that dumb. And they were that dumb,” said Schiff.
“This is all part of the pretense. This is the Fed just trying to pretend that they have confidence in the economy, so they can pretend that they are actually going to be raising rates four more times next year when they really didn’t even want to raise rates once this year.”
In the end, Schiff noted that everything will simply “blow up in their faces,” which will include the dollar and the bond market.
Quantitative Easing a Lifeboat for U.S. Economy?
Schiff tackled the article head on in regards to the claim that the QE helped the economy. Schiff believes this is balderdash. Here is what he says on the matter:
“They are saying that the economy did revive and it did create jobs. Well, that’s not true. The economy hasn’t been revived. It’s lousy. There are a lot of other people that would agree. They are saying it’s the worst recovery ever. Most of their guests were looking for a strong recovery, including all the Fed officials. I was right to say that the QE wouldn’t work, because it hasn’t worked. Why do you think they did it three times?
“It didn’t create jobs. Yes, the unemployment rate has come down, but not because QE worked, not because QE created jobs. It’s because millions of people left the labor force. That’s why the unemployment rate came down, or because millions more have accepted part-time jobs.”
You can listen to his podcast in the video embedded below.
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