The bearest of all bears is out with his 2016 forecast for the United States economy, gold and the Federal Reserve.
Peter Schiff, CEO of Euro Pacific Capital and a gold bug permabull, thinks the yellow metal is about to set itself up for the “mother of all rallies” as the U.S. and global stock markets will plummet.
This year, according to Schiff, the Fed will reverse its latest trends and slash interest rates and even bring in another round of quantitative easing. Schiff presents the case that QE3 came to an end last year, but it has led to all sorts of destruction in stocks.
In other words, the stock market can’t succeed on its own accord without the training wheels, or a spiked punch bowl.
“It had no choice but to raise rates because failure to do so would be perceived in a lack of confidence in the economy and the markets,” he said in a videocast Thursday. “The only thing that’s going to stop this correction from turning into a bear market is for the Fed to capitulate and admit that the economy is weaker than they thought, that they had made a mistake raising rates.”
The bestselling author of “Crash Proof” explained that this is the end of the tightening cycle, and the rate hike was proof of that.
“The next move by the Fed is going to be to launch a new easing cycle, which I think will take interest rates to negative territory. So, the rally in gold that began after the Fed hiked rates is going to continue and accelerate,” he said.
What about gold prices? Gold hasn’t had a great year in quite sometime. It has just stagnated, trading anywhere from $1,050 to $1,200 per ounce. But this is the bottom, says Schiff.
Right now, “gold is an incredible buy,” and could inch higher over the coming months.
In the end, the idea that the Fed ramped up the economic recovery and saved everyone from the 2008 economic collapse is “false.”
“Everybody believed that what the Fed did [in response to the financial crisis], worked…This entire narrative is a fantasy,” he said. “The Fed didn’t solve our problems, it exasperated our problems.”
Just another infomercial from Peter Schiff. Better buy gold now before we run out. B.S. Flag on this one. I am sure he still has gold he paid $400 per oz.
Great analysis until Peter got to the point about where the Fed is going to find gold. The Fed doesn’t need gold; we’re no longer on the gold standard. I agree with JRATT, this is just another infomercial. Peter, you better be careful or you will lose your loyal followers.
They will see that you are right Peter.l have been buying silver , l started when it was 3.00 per ounce,l tried to pass this on to family and friends and they laugh at me . ..we will see who laughs last ….sad to say most people are stupid. Sound money will always prevail. My grand father was right