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Monthly Archives: December 2012
Peter Schiff’s latest commentary is a scathing critique of the Federal Reserve’s limitless quantitative easing and Ben Bernanke’s claim that the Fed is not engaged in debt monetization:
“For as long as I can remember (and I can remember for quite some time) the Fed has stripped out “volatile” increases in food and energy, preferring the “core” inflation readings. But in the overwhelming majority of cases, the headline numbers are significantly higher than the core. In other words, Bernanke simply prefers to look at lower numbers. In his press conference, he made it clear that the Fed will avoid looking at price changes in “globally traded commodities,” that are all highly influenced by inflation.
These subjective and attenuated criteria give Fed officials far too much leeway to ignore the guidelines that they are putting into place. If the Fed will not react to what inflation is, but rather to what it expects it to be, what will happen if their expectations turn out to be wrong? After all, their track record in forecasting the events of the last decade has been anything but stellar.”
Peter Schiff spoke with Rick Santelli on CNBC earlier today about the Fed’s monetary policy. Of course, the Fed has no intention of actually hitting the unemployment and inflation goal posts it has established, and ultimately the dollar is going to suffer:
“The dollar is actually going down against the euro. Pull up a chart, look at the dollar index. Look at the British pound: it’s almost at a fifty-two week high today. We’re going down against the pound…Look at the price of gold. Look at oil prices. Look at food prices. Ben Bernanke said he doesn’t care how high oil prices go, how high food prices go. He’s going to look beyond that to the value of falling prices that reside somewhere in his fantasy land.”
Peter Schiff made an appearance in the documentary Default America produced by KSLA in Shreveport, Louisiana. The collection of short videos examines America’s disastrous monetary policy, and the future of American prosperity. Peter is one of many notable guests, including Ron Paul, Gary Johnson, and various economics experts.
In his latest video blog post, Peter Schiff dissects the inflation and unemployment figures Ben Bernanke said the Fed will look for to determine when to raise interest rates. Of course, Bernanke’s supposed benchmarks have a lot of wiggle room, and that ultimately means the continued debasement of the dollar.
“But given all the money that has been printed, not only by the Fed, but by central banks around the world, and all the money that is about to be printed, they’re going to unleash a tidal wave of inflation, and the best way to float to the surface and avoid being dragged under with the tide is to have a life raft of precious metals…”
As expected, today the Fed announced it will expand its balance sheet by continuing to purchase long-term Treasuries after Operation Twist expires. The Fed remains committed to buying government debt and keeping interest rates near zero until unemployment drops to 6.5%, which it admits probably won’t happen until 2015. Surprise, surprise, gold prices rose on the news, and the dollar fell. More news sources are noting the record sales of American Eagle gold coins in November, and alongside some other recent articles, it’s a good time to think of what the future holds for precious metals:
Peter Schiff appeared on Fox Business yesterday, discussing the future of the bond market and the dollar in relation to the value of gold.
“In 1971, when we went off the gold standard, in the next seven or eight years, the dollar lost two thirds of its value. That’s why oil prices went from three dollars to thirty dollars. That’s why we had all the inflation in the 1970s. I think the decline that’s coming from the dollar is going to be much bigger than what we saw in the 1970s. The fundamentals are much worse. Meanwhile, over the last five years, ten years, the dollar has been going down.”
In the December edition of Peter Schiff’s Gold Letter, Peter examines the booming sales of physical bullion and how wise investors can prepare for the real fiscal cliff:
“The figures are astounding. For US Gold Eagle coins, mint sales are up some 150% from the QE3 announcement on September 13th. Despite what the spot prices show, there has been a tremendous surge in people buying physical gold.
But why hasn’t this translated into higher spot prices?”
On Friday, Peter appeared on CNBC’s Closing Bell to talk about his recent commentary in The Wall Street Journal, explaining why raising taxes on the wealthy will do nothing to solve the debt problems of the US. Read his full op-ed here.
“You know what the wealthy are going to do? They’re going to invest more abroad, they’re not going to work as hard, they’re not going to pay as much in taxes, they’re not going to employ as many people, their employees aren’t going to pay the taxes…”
Metals Analyst Kira Brecht published an incisive commentary on Kitco yesterday on the long-term gold trend, examining the relationship between gold and the quantitative easing of central banks:
“But, what will it take to kill the long-term bull market in gold? Listen up folks and listen good. There is nothing on the near or medium term horizon that could kill the long-term bull market in gold.
Why? The answer is quite simple and lies in the hands of global central banks, with their pedals still pressed to the floor with unusual and historic monetary policy accommodation and easing.”
Peter Schiff spoke on Yahoo Finance’s Daily Ticker yesterday about the bullish case for gold in relation to the looming fiscal cliff.
“The price of gold has barely gone down. The uptrend is still intact, and I think gold is going to go a lot higher. Particularly if we avoid the fiscal cliff. Avoiding the fiscal cliff is actually bearish for the dollar, bearish for the US economy, and bullish for gold.”