Peter Schiff Thinks The Fed Will Fake It

Peter Schiff thinks the Fed will fake it about beating inflation and will dupe everyone into believing its monetary tightening policy tool has worked in controlling prices.

“People think the Federal Reserve can beat price inflation and guide the economy to a soft landing. 

Most people are wrong,” said Peter Schiff in his latest podcast. “The Fed is actually in a no-win situation,” he said. 

Many of the FOMC members still think the inflation fight is far from over, according to the minutes from the July FOMC meeting last week. 

Moreover, maintenance costs, construction materials, and labour costs are heading higher due to skilled labour shortages.

Shelter is a hot political potato, so expect a wave of rent controls and environmental regulations aimed at squeezing out private landlords. 

The great real estate wealth creator of the last century could become this century’s white elephant in this new era of hyper regulations and expensive capital. The state and their cronies with access to cheap finance and a heads-up on new regulations will soon become landlords where everyone else rents.

Equality does not exist when it comes to the fallout of higher interest rates.  

The club gets access to emergency finance at deeply discounted rates. They are too big to fail. 

Everyone else unable to keep up with servicing interest on their mortgages gets their property foreclosed and is evicted, made homeless.  

The Repo rates for Banks are deeply discounted compared with Joe’s public loan rates, so the wealth divide grows. It is financially engineered to do so where the roadmap leads to neo-feudalism.  

Peter Schiff thinks the Fed will fake it as inflation heads back up again

“I’ve been saying to take your eyes off the rearview mirror and look at everything that’s happening in the windshield. Forget about the fact that the CPI has gone down from new to three. We’re now going back up,” he said. 

“Peter pointed out, if the FOMC members are still concerned about upside inflation, that means the Fed will have to reassess cutting rates next year.

In fact, the Fed might actually have to raise rates more than they thought. In other words, it might not just be one more rate hike. Maybe the Fed has got to go up to 6%. Maybe they’ve got to go higher than that,” he said.

Six-month certificates of deposit carried yields of more than 18 per cent in March 1980.

If rates went that high in 2023 with an economy so leveraged on debt, it would make the 1929 Great Depression look like a picnic.

You could have bought an entire high-rise building for less than the cost of repairing the elevates during the last Great Depression property crash. 

With a US public deficit now over 32 trillion US dollars, interest on the debt is already above one trillion dollars at the current interest rate of just above 5%.  

Peter Schiff thinks the Fed will fake it to control inflation, and they could start buying bonds to suppress yields

What is the alternative, a run on treasuries which would collapse the entire collateral of the Western banking system? 

Gold fell below $1,900 an ounce. Peter called it a buy area.

Bond yields have risen close to the high point in this cycle. Moreover, Peter Schiff believes they should be higher given the elevated debt levels in the economy.

“Tax hikes can’t make it through Congress. Nobody wants to cut spending. So, the fiscal situation that we’re in is far more precarious than it was back then [the last time yields were this high]. Rates should be higher,” he said. 

“This doesn’t look like a soft landing,” he added.  

 “You’re not landing at 5.8%. You’re not even close to the runway,” he said, 

“We have a bubble economy that is based on debt. Everybody is loaded with debt, and it is all based on excess consumption. The American economy is about spending more than you earn. We have elevated that to an art form,” he said.

Peter Schiff believes Americans have a comparative advantage in shopping

“That’s the easy part. The hard part is making all the stuff. Working in the factories; that’s the hard part. Anybody can go to a store and bring stuff home,” he said. 

Peter said the only way to fight inflation is to reduce spending.

You’re not trying to weaken the economy. You’re trying to stop spending.”

“You want the government to cut its spending so demand goes down.

You don’t want the government to give people money to go out and buy stuff.”

You also need consumers to quit borrowing. That’s the whole point of rate hikes. You want borrowing to be too expensive,” he said. 

Peter Schiff thinks Fed will fake it; he sees gold as the answer

But frankly, until the Fed has the market under its claws, the gold price goes nowhere. 

Gold reached 2K USD in the last financial crisis in 2008, making a can of baked beans or a bar of soap a better store of value. 

The market fixer wants you to buy their debt.     

When the Fed cuts rates, risk assets will outperform gold.  

“At some point, the rate hikes are too much for this overly indebted economy to bear,” he said. 

Indeed that is when the Fed fakes it, and the matrix media makes it fashionable to live in a shoebox and eat bugs. 

Own nothing, rent everything and be happy?