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Peter Schiff: the buck is heading for bust
America is slipping into a recession and yet everybody is blind to it.
Peter Schiff, chief executive of Euro Pacific Capital
The US economy is headed for "the biggest bust ever", Euro Pacific Capital's CEOPeter Schiff told Kitco News last week. People are oblivious to signs that the USeconomy is slipping into recession, says Schiff. "As this reality rears its head, gold prices are going to start to rise" and the dollar "is going to fall into a vacuum... the only buyer is going to be the Federal Reserve". The resulting inflationary environment could create "the perfect storm for gold".
For now, things might look just fine after all, last month the Nasdaq stock exchange enjoyed its biggest gain since 2000. But as Schiff puts it in a recent episode of The Peter Schiff Podcast, investors need to be aware of what happened right after that peak 18 years ago: the Nasdaq declined by around 80% from peak to trough. This lesson from history "should give people pause", says Schiff.
Yet there is none. US stockmarkets have now been in a bull market for an extremely long period, and this is also now the second-longest economic expansion on record. Yet rather than take this as a sign that we could be near the end, instead "people are betting that we're not going to have another recession and we're not going to have another bear market maybe ever".
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This is worrying. Not every market is currently running with the bulls. Manyemerging markets are getting clobbered some are even at decade lows. Rather than believe everything is rosy, a more sensible bet would be to assume, says Schiff, that we will have another recession and bear market and relatively soon.
Join more than 165,000 subscribers and keep yourself informed with the latest financial news, insights and expert analysis to help you understand what really matters when it comes to your finances.
Alice grew up in Stockholm and studied at the University of the Arts London, where she gained a first-class BA in Journalism. She has written for several publications in Stockholm and London, and joined MoneyWeek in 2017.
Alice is now Consumer Editor at The Sun and covers everything from energy bills to Social Security.
