Peter Schiff recently did a presentation at the Endeavour Silver Town Hall Webinar. He talked about the state of the economy, the US dollar, and gold and silver. Peter said he thinks we’re about to see a gold bull market rivaling the 1970s because the world is going to reject the dollar standard and go back to a gold standard.
Peter said we had a peak in gold and silver prices in 2011 because the Federal Reserve managed to convince the world that it could “do the impossible.”
“That it could actually normalize interest rates after having kept them at zero for many many years, and it could shrink its balance sheet back down to normal after blowing it up to four-and-a-half trillion.”
The Fed made an effort to normalize monetary policy, but it had to reverse course in the fall of 2018. From there, we saw three rate cuts and a return to QE last year. The debt-ridden bubble economy couldn’t bear 2.5% interest rates.
“That’s the problem. When the Fed creates a phony recovery by levering everybody up with debt, they can’t remove the debt. You can’t prop the economy up and then remove the prop.”
When COVID came, the Fed went straight to zero and launched QE infinity.
This backs the Fed into a corner. At this point, there’s no way anybody is going to believe the central bank even if it tries to bluff that it’s going to raise rates or shrink its balance sheet.
“So, that is what saved the dollar and put a short-term top on gold. Well, we’ve now built a huge bottom in gold over the last decade and we’re about to explode higher. And the dollar is about to get killed – not only agianst gold, but against all the other world’s fiat currencies. And there’s nothing that’s going to stop it. Because unlike 1980, when that bull market stopped with $800 gold, interest rates were allowed to go to 20% to stop that. They can’t even go to 2% now. We already proved that. Two percent is too high. How are we going to go to 20? So, the Fed is never going to be able to allow rates to rise because of all the debt it enabled everybody to accumulate by keeping them so low for so long.”
The Fed has effectively taken fighting inflation off the table.
“The Fed has to surrender to inflation. Inflation wins. It’s a knockout.”
Peter said the dollar will be sacrificed to prop everything else up.
“What is about to happen is the world is going to reject the dollar standard and go back to the gold standard. That’s where we’re going. Gold beats all of these fiat currencies hands-down. And so gold was the reserve before the dollar and it will be the reserve after the dollar. That’s the only monetary system that works.”
Peter goes on to explain how this is going to happen.
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