Features

Peter Schiff: the buck is heading for bust

America is slipping into a recession and yet everybody is blind to it.

913-Schiff-634

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".

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.

Recommended

Warren Buffett: things are looking bleak for bond investors
Bonds

Warren Buffett: things are looking bleak for bond investors

Warren Buffett, America’s best-known investor, has warned shareholders in his investment vehicle Berkshire Hathaway that “bonds are not the place to b…
5 Mar 2021
Are we heading for another bond market tantrum?
Government bonds

Are we heading for another bond market tantrum?

The last time the US central bank tried tightening the purse strings, the bond markets threw a tantrum. With yields now rising, could we be about to s…
25 Feb 2021
James Henderson: buy banks
Bank stocks

James Henderson: buy banks

James Henderson, director of UK investment trusts at Janus Henderson Investors, is a fan of British banking stocks.
22 Feb 2021
Cathie Wood: the superstar investor shooting for the stars
People

Cathie Wood: the superstar investor shooting for the stars

Cathie Wood has quietly built a reputation for picking the unloved and misunderstood stocks that go on to thrive. She has just launched a new ETF that…
21 Feb 2021

Most Popular

A beginner’s guide to bitcoin: where to store your bitcoins
Bitcoin

A beginner’s guide to bitcoin: where to store your bitcoins

Once you've got hold of some bitcoins, you need somewhere secure to keep them. Dominic Frisby outlines some of the best options, from exchanges to col…
4 Mar 2021
A beginner’s guide to bitcoin: the technical genius behind bitcoin and the blockchain – and how it all works
Bitcoin

A beginner’s guide to bitcoin: the technical genius behind bitcoin and the blockchain – and how it all works

In the second in his series on bitcoin, Dominic Frisby looks at the blockchain – bitcoin’s unique underlying architecture – and what makes it and the …
2 Mar 2021
The great rotation is firmly underway – what does it mean for you?
Stockmarkets

The great rotation is firmly underway – what does it mean for you?

As investors move away from “jam tomorrow” stocks and back into “old economy” stocks that should benefit from the post-pandemic recovery, the tech-hea…
5 Mar 2021