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Some others thought Chief was mistaken when I increased my prediction to 5,000 and it fell short. Regarding the timing, I was correct. Even if it took us a long time to reach 5,000, we will eventually reach 10,000 or 20,000. The reason behind this is the additional inflation that has been generated after the original projection of 5,000 gold had been made.
Not only the inflation that has already occurred, but also the inflation that is soon to be released. This is due to the fact that my second forecast will be made following the Fed's rate cuts has been released and the Fed is showing that it is prepared to devalue the dollar with each cut in order to save financial markets and employment.
Here is where bond market participants are most at danger. Global investors find US debt to be significantly less appealing due to dwindling rewards caused by lower rates and increasing inflation. On the other hand, debasement resistant assets like gold and silver are attractive to both individuals and central banks.
So they stand to gain directly. Famous economist, author, and Europacific capital CEO Peter Schiff has spent decades sounding the alarm about the perils of unbridled monetary expansion, massive government debt, and the unavoidable devaluation of fiat currencies. He is seen as a steadfast voice in the hard money camp due to his many predictions that gold will serve as the best protection against currency debasement and inflation.
The current setting is not the conclusion of the gold and silver rise as Schiff stresses. This is only the first step. Precious metal prices are poised to soar to new heights as the Federal Reserve gets ready to lower interest rates against an inflationary backdrop. Here are snippets from the interview with Peter Schiff.
In order to stay uptodate on our discussions, make sure to subscribe to our channel and click the bell icon. Please take pleasure in watching the video alongside the Federal Reserve. Now, you might argue that gold is currently experiencing a rally. The price of silver finally reached a fresh 14-year high today.
Gold was wrong. I mean, gold prices have been quite quiet over the past 2 days. It is currently selling at approximately 3,635. In other news, gold finally reached an all-time high when adjusted for inflation just this week. Not actual inflation, but the CPI adjustment, whatever it may be. We were able to remove the $825 peak from 1980 at last.
There is yet more to come. Something is starting to happen here. The gold and silver market is in its infancy. Coincident with this rate drop, however, are the prices of gold and silver. You can argue that if bonds are going to be a case of buy the rumor, sell the fact, then why shouldn't gold and silver be as well.
The rate cut can cause a decline in the value of gold and silver. Very much so. Sure, it's doable. However, I do not believe it is very likely for the simple reason that I do not believe the recent rallies in gold and silver have been quite sufficient. Additionally, the bond market and the gold market are very different.
Bonds are expected to decline in value in the event of rate decreases. Budget cuts lead to price increases. In other words, the Federal Reserve is abandoning its goal of a 5% inflation rate. Rather than risk falling victim to inflation, that is opting to die on the hill of employment. It's likely that it will become six or seven.
Consequently, you should sell all of your bonds as soon as the Fed accomplishes that. Correct? Simply put, inflation eats away at bond values the most. And naturally, a weaker currency is the result of rate decreases. If we are going to pay back our bond buyers with dollars that are worth less in their currency than what they gave us, especially considering that we are cutting the interest rate, then why would they want to buy our bonds?
Interest rate reduction have a negative impact on bond prices. The bond market has surged in anticipation of the cuts. Yet, the event that has boosted bond prices is also terrible for bonds. Rallying behind them would be a mistake. Thus, that is still another justification for their impending sale. But the best possible news for gold would be rate decreases coupled with increasing inflation.
Therefore, gold prices should go up before these cuts and continue to go up once they take effect. Since consumers are looking to unload their dollars from treasuries, mortgage backed securities, and anything else with a dollar coupon and a dollar principal payment attached, what will they purchase with those dollars?
For one thing, gold is the sole viable option for central banks. So, while selling off dollars and treasury bonds, central banks will be buying gold. Even if there is a small buy the rumor, sell the fact move on a rate decrease, gold and silver should continue climbing. I wouldn't even bother to wait for it, though.
Try not to be deceitful in any way. You must purchase gold and silver as I have been advising. You are quick. Simply purchase it. Without it, you are unable to function. Plus, you probably require additional if you already have some. Therefore, you must go to sell gold. To be honest, I enjoy a repetitive melody.
Others may ask, "Well, Peter, don't you earn money when we buy some gold and silver?" More than once. I do, in fact, earn a modest living. I am really wealthy. I think it's important for people to get shift gold because it's a necessity. For the past quarter of a century, I've been stressing the importance of owning gold.
Behold the origin. When I started, 1 ounce didn't cost more than $300. Do you see where it is? Gold and silver should be owned by my followers for a purpose. For that reason, I established Shift Gold. I created it up because whenever I would recommend buying gold or silver, people would follow my advice and end up getting scammed.
So, I'm not only trying to make a little more cash by suggesting that people buy their gold and silver from me. I also want to assure you that you will not be taken advantage of in any way, shape, or form. Although my earnings are little each transaction, they more than compensate for this when I deal in large quantities.
But I don't want my followers to be poor. Therefore, I advocate owning precious metals like gold and silver. I would prefer it if those who pay attention to me were well off. Unfortunately, there are far more people who refuse to listen to me than there are who will listen to me, and we will need that money to assist them out in the future.
Stocks will do well since the Fed is going to decrease rates, the thinking goes. There is a counterargument that the rate reduction will be good for business. The housing market will benefit from them. They will stimulate because they remember other instances when the Fed began a cycle of rate cuts such as in 2001 and 2002 following the dotcom bubble bust in 2008 and 2009 during the financial crisis or in 2020 due to co.
It seems like every time that the Fed has cut rates and printed more money, doesn't it? A considerable improvement has been noted. Thankfully, things seem to have improved and the markets even rose. So, everyone is crossing their fingers that it will work again though I believe they are mistaken. Okay, I'll confess that the CO 19 pandemic made me doubt that it would work.
Plus, it failed to do so since the CPI finally showed a significant increase in inflation. Thus, I succeeded, didn't I? While most people were claiming that CO was deflationary, I was arguing that it was the most harmful or inflationary mix of government spending and interest rates ever. I believe the next major economic and bond market crisis will occur when inflation has broken out.
Therefore, I anticipate that this stimulus will have a seditive effect this time. Looking at the rate on a 10-year Treasury, it has dropped back down to approximately 4%. We reached a peak of approximately 4.5%. Nearly 4.65% is the yield on a 30-year Treasury bond that was above 5% at its highest point.
We are poised to get rate cuts and the bond market is rallying in anticipation of them. Again, I'm of the opinion that the bond market will fall and long-term interest rates, particularly mortgage rates, will rise once those much anticipated rate cuts become official. that will annoy the Trump administration and the Federal Reserve immensely.
The wider market still ignores gold despite its exact barometer of value despite the fact that it has been outperforming for decades. Despite rising stock indices in nominal terms, a closer look at their performance relative to real money reveals a consistent downward trend. The present arrangement is reminiscent of the 1970s, but the financial underpinnings are far weaker.
At the time, America's trade surpluses and manageable debt load made it a creditor nation. The government's balance sheet is dominated by short-term liabilities, and deficits reach into the trillions. The national debt is close to 38 trillion. With such background, monetary easing and expansive fiscal policy will likely have an even more disastrous effect than the previous inflationary decade.
Those who are well positioned may reap rewards as governments put an emphasis on growth rather than stability. Commodities, international stocks, and particularly precious metals are expected to flourish. In light of the possibility that gold prices may considerably outstrip past predictions, goals that were formerly considered ambitious now look cautious.
More fuel is added to the fire as capital continues to rush into hard assets due to the probability of more quantitative easing. Return to the interview. However, I believe we will be in a year or two. Over the next two decades, I believe we will outperform. Remember how gold has been doing for the past quarter of a century.
The gold stocks, meanwhile, have been falling behind. Even after accounting for dividends, the investment in gold, which I advised you to do 25 years ago, has outperformed the SNP 500. That's the increase in the price of gold or the decrease in the real worth of the US stock market. Isn't it the message the gold is trying to convey?
It's an accurate gauge. This is actual cash. In terms of silly money, stock values are rising, but when measured against actual money, they are falling. Additionally, they will descend even further. What we're about to do will likely involve the Federal Reserve pursuing the most inflationary mix of monetary and fiscal policies since the 1970s, especially with the Trump administration stacking its ranks.
Perhaps much more disastrous than the 70s. However, it need not be worse. Our fiscal situation is worse and that is the problem. Did you know that we were still maintaining trade deficits in the 1970s? Even if our trade imbalances are in the trillions of dollars, we weren't engaged in a hopeless trade war.
There were extras. In the 1970s, America remained the leading creditor nation in the world. We are no longer merely the nation with the largest national debt. Our national debt exceeds that of any other debtor or country in the world put together. Our financial situation is dire, isn't it? Hundreds of billions of dollars was the size of the national debt in the 1970s.
Even reaching 1 trillion didn't happen until the early 1980s. At this point, it's getting close to $ 38 trillion. Every year, the operating budget amounts to $3 trillion, which is $2.5 trillion. Also, there was no pile of short-term debt like the one we have now. So, things have taken a turn for the worst since then.
Therefore, I believe the policies we will receive will have far-reaching consequences. Thus, ordinary Americans will endure greater hardship compared to the 1970s. There was a great deal of pain. In other words, people saw a decline in the purchasing power of their wages. It wasn't because women in the 1980s felt liberated to go out and get jobs.
That wasn't the reason many of them did. Their freedom came when they realized they didn't have to work. Because of the inflation that hit in the 1970s, their husband's salary lost so much of its purchasing value that he was unable to leave the house and provide for his family. I take it that they had to look for work.
Huh? because you know living expenses went increased so high many people who were planning to retire were unable to do so. However, the current situation is only going to deteriorate. On the other hand, successful bettors in the 1970s amassed substantial fortunes. If you wanted to gamble well in the 60s, you had to avoid betting on the Nifty50, the SNP 500, the decision stocks, Xerox, Polaroid, and so on.
The 1960s were a bubble, you know. Plus, many failed to see that the 1970s marked a turning point in the game. In the 1970s, what was profitable? Here is the precise portfolio we now have for our clients. Gold, silver, oil, commodities, foreign stocks. I could see this train crash coming a mile away.
So, yes, I started making these portfolios too early. But the train has been off these lines for such a long time that the accident will be more severe. Our overseas stocks and especially our gold holdings are going to produce even more money than I initially thought. Back in 2010, 2011 or whatever, I predicted $5,000 in gold and it never materialized.
So people teased me about it. They seem to have forgotten that I predicted $1,000 in gold when it was under $300. People laughed at me and we went through a lot of that. Many thought that shift was mistaken when I increased my prediction to $5,000 and it still didn't materialize. Regarding the timing, I was correct.
We will reach $5,000, but due to the length of time it took us to get $5,000, we will reach $5,000. $10,000 or $20,000. This is due to the fact that there has been an abundance of inflation from the time when the $5,000 gold prediction was made until the present day, as well as future inflation as well.
Because my second forecast is that the Federal Reserve will resume quantitative easing once rate cuts have taken effect. I was hoping they would have returned to QE by now. They've managed to put that off, which is something I had been mentioning. But they will return, won't they? They resisted for a longer period than I anticipated, but I still expect them to give in in the end.
The rate reduction won't be effective in the long run, and that will be the breaking point. Indeed, quantitative easing is ramped up when the tables turn and lower short-term rates lead to higher long-term rates. The semi-sanctioned privatization of Fanny and Freddy along with Trump's other policies will saturate the economy with low interest loans and credit for home purchases.
The inflation rate is zero. The gap between what people see and what actually exists is growing at an alarming rate in the market. Policy makers continue to grow debt at an unsustainable rate and the same patterns persist. They turned to rate reduction and liquidity injections as if they were a magic bullet for every setback.
A deeper structural imbalance is being hinted at by the bond rally, the stock surge, and the quiet but persistent rise of gold and silver. There seems to be progress and hope at first glance, the gradual but steady realization that the dollar's importance is dwindling along with the eroding purchasing power and hollowing out of actual value are the underlying causes.
Global central banks are cognizant of this change and are responding by boosting their holdings of gold and decreasing their exposure to US bonds. That pattern will persist. People's faith in the United States ability to maintain strict fiscal and monetary policies is eroding. While short-term fluctuations in inflation are possible, the measures being implemented guarantee that it will remain stable in the long run.
The credibility of the system is eroded with each cycle of easing, leading to increased volatility rather than stability. A considerably bigger shift is just getting underway. Despite the stock market's enthusiasm, gold and silver are sending signals of structural stress. According to past events, these differences do not persist indefinitely, and the reversal of fortunes will occur quickly.
Therefore, it is essential to keep an eye on these signals and figure out what they mean in the bigger picture. Leave a comment below with your take on Peter Schiff's opinion. Please consider subscribing to our channel and enabling notifications so you never miss a video if you enjoyed this one and find the information it contains useful.
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