Peter Schiff lays it out for 2024 in his recent podcast.
Perma gold bull investor Peter Schiff believes the 2024 market landscape will feature politics and the Fed’s response to the presidential election year, scheduled for November 2024.
“The unwritten rule is the Fed always favours the incumbent,” he said.
Peter Schiff thinks the Fed chair will always butter up the election candidate most likely to win. “Why, because it is the incumbent who elects the Fed chair,” he said.
“Powell knows that his presidency would end if Trump won, which he believes is another reason to help Biden get elected,” he said.
“Powell knows that his presidency would end if Trump won, which he believes is another reason to help Biden get elected”
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So he thinks the not-so-apolitical Fed will implement a policy that gives Biden tailwinds in the 2024 elections.
If this is the case, Fed politics could be indirectly supporting NATO continuity and the war in Ukraine.
Peter Schiff notes from prior election cycles that what matters is who sits behind the resolute desk in the White House.
“The Fed chairman always wants to play ball with whatever administration is in power,” he said. The Fed is going to try and reelect whoever is in office. If the opposing party wins now, the Fed is on their side,” he said.
“The economy is weak, and the administration will try and make people believe otherwise. The Fed will be part of the deception,” he said.
Improving liquidity; Peter Schiff lays it out for 2024
“The only hope Biden has of pulling this off is with the corporation of the Fed, and if he doesn’t get that cooperation, there is no chance,” he said.
“The economy is weak, and the administration will try and make people believe otherwise. The Fed will be part of the deception”
PETER SCHIFF
Peter Schiff lays it out for 2024, questioning the bull market
“It has been a strong market in the waning weeks of 2023, with markets up nine weeks in a row. Dow was up 13.7%, Rusell 2000 was up 15%, S&P 500 was up 24%, NASDAQ was up 23%, NASDAQ 100, up over 50%, the best year since the 1999 peak of the dot-com bubble,” he said.
But that is incorrect, NASDAQ was up 43% on the year in 2023, and a lot of it was driven by AI mania.
He thinks 2024 could be problematic for the market, which contradicts his view that the Fed will support Biden.
So, we disagree, the final quarter bounce in stocks in 2023 is no big deal compared with stock underperformance in 2022, where NASDAQ lost 33.1%. When factoring in inflation, despite the NASDAQ 100 being up 50% in 2023, over a two-year timeframe, those gains are cancelled out.
Insider buying cheaply on the parroted mainstream false narrative of higher for longer. Our fifty cents, the Fed decided to pivot, believing that the fallout from a collapsing bond market would blow the collateral chains off the global banking system, which would be a worse evil than inflation.
“People are buying Swiss Francs as a safe haven. I think gold is even a safe haven than the Swiss Franc” – Peter Schiff
In other words, the Fed is saving bonds at the cost of putting the dollar under stress, but if you agree with the Milkshake Theory, a Fed pivot is water off a duck’s (the dollars) back.
Gauging where the market is in the investor psychology cycle could give investors a heads-up on the trajectory of risk assets in 2024.
In 1999, at the peak of the Dotcom bubble, enthusiasm, greed and conviction best-described investor sentiment, which is the best time to sell.
What words best describe market sentiment in Q1 2024, contempt, doubt, suspicion and caution?
Gold and gold stocks; Peter Schiff lays it out for 2024
Regarding gold, he said 2023 was a good year, with the precious metal closing above 2000 USD.
“Gold stock had a disappointing year, barely positive with major indexes barely up 1%.
If gold was up 13%, you would expect gold stocks to be triple or at least double that.
Gold climbed a wall of worry the entire year. Investors expected gold to go down.
That was because the Fed was mainly raising rates, which are perceived to be bearish for gold,” he said.
He thinks that means a better opportunity for gold stocks in 2024, believing that the stocks don’t have much downside from here.
Safe haven currency Swiss franc CHF was up around 10% against the dollar in 2023. “People are buying Swiss Francs as a safe haven. I think gold is even a safe haven than the Swiss Franc,” he said.
The yield on the 10-year and 30-year treasuries are only slightly above where they were at the end of 2022 due to the Fed’s recent pivot.
“Growing the debt to stimulate the economy is not a free lunch” – Peter Schiff
“If you own the TLT ETF, a fund with an average maturity of 20 years last year, it was down 33 per cent last year. TLT had a huge rally in Q3, but at its lowest level was down 50%,” he said.
“An instrument that people thought was a haven lost half your money,” he added.
Rising trade deficits and a weakening dollar mean import prices will go back up, and headline CPI will follow.
But is the smart money betting on the dollar weakening in 2024?
Debt the big story; Peter Schiff lays it out for 2024
“Growing the debt to stimulate the economy is not a free lunch.
It was not the economy that grew, it was the debt.
In 2024, all eyes are going to be on the losses of the lender, which I think is going to be a big 2024 story,” he said.
But that was the story in 2023 when five banks failed, the banks squealed, and the Fed shit the bed and pivoted.
So maybe the no reverse gear melt-up BTFD could be traders, short-term investors’ best gig for 2024, at least until POTUS has been selected.
But play with caution, as with wars on nearly all continents, there are enough wild cards that an oversized position could make you into an insomniac.
