Peter Schiff: the buck is heading for bust
America is slipping into a recession and yet everybody is blind to it.
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".
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
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.
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.
-
UK sold house prices fall again amid mortgage rates uncertainty, ONS House Price Index shows
News The latest Office for National Statistics (ONS) analysis of UK sold house prices data showed they remained down year-on-year.
By Henry Sandercock Published
-
UK inflation slowed again in March – but a rate cut could be some months away
The latest Consumer Price Index (CPI) data came in at 3.2% for March. This was slightly higher than some economists expected, but takes us closer to the Bank of England’s 2% inflation target.
By Katie Williams Published