Loading ...Peter reiterated that the Fed is going to go back to 0% interest rates, and he pointed out that there isn’t a lot of room between the current rates and that zero level. He said the real “stimulus” is going to be QE 4, which will be bigger than the first three rounds combined.
“The Fed is going to go back to QE. They are going to do whatever they can to try to stop the bear market and to try to prevent the recession. But they’re going to fail. They are going to make it worse this time.”
During his remarks, Powell said that this isn’t unconventional policy anymore. He called it “business as usual.” Peter said the reason we didn’t have a dollar collapse and inflation didn’t take off in the aftermath of the Great Recession was because everybody thought the Fed’s monetary policy was temporary. They thought it was an emergency measure, that the central bank would eventually normalize rates, and that it would shrink its balance sheet.
“But when the markets realize what they should have realized from the beginning – that this is a permanent expansion of the balance sheet; this is debt monetization, that there is no end in sight, that it’s going to be zero percent forever, then the bottom is going to drop out of the dollar and then we’re going to get all the inflation that we should have had, only more.”
Liz asked Peter what people should do to prepare. One of the things he emphasized was to buy gold. Even above $1,300 an ounce, the yellow metal is a bargain.
“Remember, we got as high as $1,900 back in 2011 when people were actually worried about QE. Well, they were right to worry. The mistake was in thinking that everything was OK. So, when we go back to QE and zero percent interest rates, gold is not stopping at $1,900. We’re going to $5,000 to $10,000.”
https://www.zerohedge.com/news/2019-06-05/schiff-warns-fed-going-stimulate-inflation-not-economy