While investors are watching job reports, new Federal Reserve rhetoric and shifting interest rate expectations, Peter Schiff says they’re looking in the wrong place.
In a recent interview, Schiff, perhaps the most famous precious metal bull, argued that short-term market moves obscure the larger force driving precious metals – the U.S. fiscal position, which is incompatible with a strong dollar and restrictive monetary policy.
"The investors are being fooled by the Fed’s rhetoric, by [Kevin] Warsh’s tough talk about inflation fighting. I don’t believe that he can walk the walk," Schiff said.
"Inflation is a choice, and I agree — and it’s exactly what he’s going to choose."
The constraint, in Schiff’s view, is a national debt closing in on $40 trillion, rising interest costs, and entrenched deficits. The result, as he sees it, is either explicit nonpayment (of debt), forced changes to bond terms, or massive inflation through money creation.
