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November
25
2020

The Real Villain Is The Fed
Peter Schiff

On his podcast, Peter Schiff talked about the big stock market rally. He said it’s not really about the presidential election, or the COVID vaccine, or excitement about Joe Biden. The rally is all about the Federal Reserve. And it always has been.

Pres. Donald Trump took the opportunity to call a press conference to tout the Dow record. “The stock market’s just broken 30,000 — never been broken, that number. That’s a sacred number, 30,000, and nobody thought they’d ever see it,” Trump said.

Peter reminds us that Trump said a Biden win would tank the market.

How can Donald Trump claim credit for those gains? Because the markets are forward-looking and the markets are looking forward to President Biden. Yet they’re rallying anyway. So, how can the rally be attributable to Trump?”

After Trump beat Hillary Clinton, he took credit for the rise in the stock market right after the election, saying the markets we’re optimistic about a Trump presidency. By that reasoning, wouldn’t this stock market rise in the wake of a Biden win mean the markets are optimistic about a Biden presidency? As Peter put it, Trump wants to have his cake and eat it too.

He wants to claim credit for the gains after he won and he also wants to claim credit for the gains that happened after he lost.”

But the reality is Trump is not the reason the market went up.

The real reason the market went up is the Fed. The market went up because of the Fed when Obama was president, and the market continued to go up on Trump’s watch because of the Fed.”

Peter said one of the reasons he thinks the markets are rallying this week is the announcement that former Fed chair Janet Yellen will be the next Treasury secretary.

It doesn’t matter whether it’s Trump or Biden. It’s that we have the continuation of this reckless monetary policy.”

Yellen heading up the Treasury Department strips away all pretense of Federal Reserve independence and will ensure that the Treasury will have close ties with the Fed and the two institutions can work closely together.

So, this is exactly what the market wants to hear. Janet Yellen is a super dove.”

Peter said that Yellen is perfect for the position which should really be called the “Secretary of the Debt.”

The Treasury is bare. We’ve got nothing in there buy IOUs. So, her real job is to manage the debt and to help America go deeper into debt by helping us sell our bonds to lenders around the world. But that’s going to be a very difficult thing to do right now because people are smartening up. They don’t want to buy our bonds. So, the buyer is going to be the Fed. And that’s why this cozy relationship is that much more dangerous because the Treasury is going to be selling its debt directly to the Federal Reserve because the Federal Reserve is the only one dumb enough to buy it.”

So, this is what the markets are celebrating. It’s not that Biden won or Trump lost.

They don’t care that Biden’s president. They care about the Fed as long as that money machine keeps going. And in fact, anything that Biden does to weaken the economy just guarantees more monetary stimulus to supposedly deal with the weakness in the economy, and what’s supposedly bad for Main Street is great news for Wall Street, and that’s what’s being celebrated.”

In simplest terms – the real villain is the Federal Reserve.

And it needs to be held accountable for the fallout from the explosion of the bubbles they inflate.”

Peter also spent some time in this podcast comparing the 1920s with the 2020s. He argues that the 2020s are not going to be like the boom of the 1920s. It’s going to be more like a combination of the 1930s with low economic growth and the 1970s with high inflation.

Peter is an economic forecaster and investment advisor influenced by the free-market Austrian School of economics. He is one of the few forecasters who accurately and publicly predicted the 2007 housing market collapse and subsequent 2008 financial crisis. His latest best-selling book, The Real Crash: America’s Coming Bankruptcy – How to Save Yourself and Your Country, warns that the 2008 crisis was just the prelude to a larger sovereign debt crisis in the United States that may lead to a collapse of the US dollar. Peter recommends long-term investment in foreign markets with sound fiscal policies, as well as global commodities including buying gold, silver and other physical precious metals.

Peter Schiff’s investment career began with Shearson Lehman Brothers in the early 1990s. In 1996, he and a partner started Euro Pacific Capital in Los Angeles, later moving the headquarters to Connecticut. The firm has since expanded, with offices in Scottsdale, Arizona, Boca Raton, Florida, Newport Beach, California, Los Angeles and New York City. Euro Pacific Capital’s investment strategy focuses on long-term wealth savings in the face of a declining US dollar with an emphasis on emerging market and commodity-focused investments.

Peter is best known for accurately forecasting the 2008 financial crisis. During a Fox News debate in December 2006, Schiff said, “What’s going to happen in 2007 is that real estate prices are going to come crashing back down to Earth.” Business news journals reported that Schiff accurately predicted the crisis, while “nearly all [macroeconomists] failed to foresee the recession despite plenty of warning signs.”

Peter has also worked in the political arena, first serving as an economic advisor for Ron Paul’s 2008 presidential campaign and later running for United States Senate in Connecticut in 2010 as a Republican. Politically, he leans Libertarian, with an emphasis on fiscal conservatism.

Peter started SchiffGold in 2010 after recommending for decades that investors allocate 10-20% of their portfolios to physical precious metals. Peter became concerned that some of his Euro Pacific Capital clients were being misled into purchasing overpriced “numismatic” gold and silver products from gold dealers with unsavory business practices. Peter started SchiffGold to provide a trustworthy alternative that would sell only the most liquid physical bullion products at the lowest possible prices. SchiffGold is backed by Peter Schiff’s Guarantee that it will only sell the most liquid physical bullion products at the lowest possible prices.

Peter’s expertise on money, economic theory, and international investing makes him a highly sought after as a speaker and analyst. He has been quoted and interviewed hundreds of times by media outlets around the world, including The Wall Street Journal, Barron’s, Die Zeit, Tokyo Shinbun, South China Morning Post, Investor’s Business Daily, The Financial Times, The New York Times, The Los Angeles Times, and The Washington Post. He regularly appears on CNBC, CNN, CBC, Al Jazeera, Fox News, and Fox Business Network.

 

www.europac.com