The precious metals have been having a hard time recently, especially following Janet Yellen’s press conference last week. While Yellen was extremely vague about when the Federal Reserve would raise interest rates, the financial media latched on to her theoretical discussion of how rates would be raised when the time came. This turned out to be the only part of Yellen’s statement the markets seemed to care about. Even unbiased, legitimate new agencies like Reuters reported that “…the Federal Reserve indicated in its policy statement it could raise borrowing costs faster than expected when it starts moving.” This is the explanation for gold and silver’s latest downturn. Talk about not seeing the forest for the trees.
In his latest Schiff Report video, Peter Schiff dissects Yellen’s press conference and the Fed’s statement to explain why the Fed will never raise interest rates. In fact, Peter thinks the United States is overdue for another cyclical recession. Physical gold and silver investors should be focusing on this big picture view instead of the deliberately confusing hypotheticals presented by Yellen and the financial media. The economy is getting worse, and this latest news is just another opportunity to stock up on more gold at discounted prices before the markets wake up to the reality of the Fed’s predicament. Here are some excerpts from the video, which you can watch below.
“What the Fed really means by ‘considerable period’ is indefinitely, or forever. Because I don’t think the Fed can raise interest rates. In fact, I don’t even think they could end QE without precipitating a recession, and I think they’ve already set those balls in motion. I think the economy is careening towards recession right now, the Fed just hasn’t figured that out yet. But the Fed certainly doesn’t want to help push it over the edge by raising rates. So it has to stall with this ‘considerable period.’ … If Janet Yellen claims that she has no idea what that means, why even insert the words? Why even include it in your official communique? … I think the reason it’s there is because they want to talk about raising rates, but not actually do it…
Interest rates have to stay at zero. They can never go up, and the only thing the Fed does is adjust the amount of QE… We’re now so broke, we have so much debt, that we cannot possibly afford interest rates above zero… But all this talk now about how soon the Fed is going to raise rates and when is the Fed going to raise rates belies the point that they can’t! Because not only can we not afford higher rates, I don’t even think the economy can sustain itself without the QE… Currency traders [and] metals traders [believe] that yes, the Fed is closer to a rate hike, just because they’re talking about it…”
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