As wildfires sweep through US West Coast states, causing millions of dollars in damage and disrupting countless lives, economist Peter Schiff says the Federal Reserve has set an even fiercer wildfire: inflation.
According to Schiff, the nation is in danger of inflation burning out of control through the entire US economy.
Speaking about the stock market in his latest podcast, the financial commentator said that he doesnât think the bulls are out of the woods yet. âI still think the charts look like there is a lot of potential that we can see a bigger decline. Of course, youâve got the backstop of the Federal Reserve â¦ The reason we didnât have more follow-through is because people expect the Fed to come to the rescue. In fact, if the Fed wasnât there, the market never would have been at the levels that it just dropped from.â
Schiff pointed out that the technicals on gold look incredible. âIt is building this new support, or consolidating rather, above the support level that used to be the resistance level,â he said. âThe spike-high that we had in 2011 of about 1,900 â thatâs now the support. And the longer the old high can remain the new low, the new resistance, I think the stronger this next rally is going to be.â
According to Schiff, the biggest factors that are going to be driving gold and gold stocks are inflation and the weakening dollar. âThe dollar is going to lose value, not only against other fiat currencies, but itâs going to lose even more value against real money â gold and silver,â he said.
The governmentâs latest price inflation numbers, which showed the Producer Price Index (PPI) at 0.3 percent (higher than the projected 0.2 percent), are actually much higher in reality, Schiff explained. âThe consumers are paying prices that are rising at rates that are faster than what we get from these official numbers,â he said, adding: âOf course, this is exactly what the Fed wants. Theyâve even come out and confessed they are pushing for more price inflation.â
âEverybody at the Fed was a closet inflationist. They just didnât want to come out of the closet and admit it. â¦ Because people think theyâre the firemen,â the veteran stock broker said. âThey donât think theyâre lighting the fires. But now you have the Fed coming out and telling you, âWeâre going to light the fires. Weâre a bunch of arsonists. And weâre going to go out and set fires.â And people donât think thatâs a problem.â
The only person who does think itâs a problem is former Federal Reserve Chair Alan Greenspan, said Schiff. Ironically, the current chair, Jerome Powell, also says heâs worried about inflation but for the opposite reason. While Greenspan is worried about inflation because he thinks there is too much of it and it is going to get too high, Powell is worried about inflation being too low. âIf Greenspan gets it, why didnât he do something when he had the chance?â said Schiff.
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Originally posted on https://www.rt.com/business/500625-us-fed-set-fiercest-wildfire/?utm_source=rss&utm_medium=rss&utm_campaign=RSS