Peter Schiff thinks markets don’t believe the Fed, and maybe they would be wise to do so. Remember July 2005, Fed chair Bernanke supported the bubbly housing market. “Fundamentals are strong, we have got a strong economy, and we have got demographics supporting housing,” said Bernanke. Most recently 2022 the Fed’s inflation is temporary, transitory, sticky narrative which dupped many conservative investors, including banks, to load up on long-maturity treasuries.
“Fundamentals are strong, we have got a strong economy”
PETER SCHIFF
But as inflation persisted interest rates kept rising, which blew up the market value of long maturities treasuries.
Better to view central banks as a kind of unfaithful partner pretending to be loyal but screwing you behind your back.
As public deficits break all records, the money supply will continue to rise and debasement of the currency, which will lead to higher inflation and collapsing living standards.
The big charade is that inflation is high because more people must lose their jobs. But if you are a productive worker, you are adding to the production of goods and services, so when you increase the supply of anything, you reduce its prices.
We could be witnessing the financial-economic decimation of an entire class of people, and it is the degrowth movement road to totalitarianism under the guise of fighting inflation.
“As public deficits break all records, the money supply will continue to rise and debasement of the currency, which will lead to higher inflation and collapsing living standards”
WEALTH TRAINING COMPANY
Peter Schiff thinks markets don’t believe the Fed as the first half risk on rally beat expectations
The strong June helped power stocks higher through the first half of 2022. The S&P 500 was up 15.9% through the first six months of 2023. That was the best start to a year since 2019, during a period when the Federal Reserve was cutting rates.
“Fed hasn’t even started cutting rates yet. It’s still hiking rates and indicating it’s going to hike some more – we still got this big rally. And I think it’s because the markets don’t believe the Fed. They know the Fed is likely near the end or done hiking, and so that is the relief rally,” said Peter Schiff.
“The Fed hasn’t won. The Fed has lost. The markets just haven’t figured that out yet” – Peter Schiff
The Fed, a banking cartel, pivots when the banks start squealing and with the Repo market, a daily emergency funding for banks provided by the Fed at a discount rate nearing a record 2 trillion dollars, their squealing is loud and clear.
The Fed hasn’t won. The Fed has lost. The markets just haven’t figured that out yet,” he said.
“More speculative stocks saw the biggest gains through the first half of 2023. The NASDAQ was up 31.7%. That is the best H1 for the NASDAQ since 1983. The NASDAQ 100 had its best first half ever. The Cathie Wood Ark Innovation ETF gained 42% (although it is still down 72.4% from its peak),” added Peter Schiff.
From transitory inflation to soft landing narrative; Peter Schiff thinks markets don’t believe the Fed
Peter Schiff sees another Great Depression coming, and he believes it is a bear market rally.
He believes this will be confirmed with rapidly deteriorating macro data and corporate profit downgrades.
