Economist and gold bug Peter Schiff has warned that something big is happening that very few investors are prepared for. “More importantly, governments and central banks are not prepared for it either,” he stressed. Schiff explained that Fed rate cuts will make the inflation problem worse.
Peter Schiff’s Warnings
Economist and gold bug Peter Schiff issued multiple warnings about the health of the U.S. market and economy in a series of posts on social media platform X over the past few days.
He wrote on Sunday: “It’s very rare for gold to be trading over $30 higher on a Sunday night. Rarer still is for it to be doing so on no news.” He warned:
Something big is happening that very few investors are prepared for. More importantly, governments and central banks are not prepared for it either.
“It’s going to be entertaining watching commodity prices explode higher while the Fed continues to claim that inflation remains on a glide path to return to 2% and that interest rate cuts are coming soon. When will Wall Street or the financial media finally see through the BS?” the gold bug opined.
On Monday, Schiff explained on X why gold is rising. “Gold isn’t rising just because the Fed is poised to cut interest rates. It’s rising because cutting interest rates is a mistake. If inflation was falling with rates, real rates would be unchanged. But since inflation is rising, real rates are falling. That’s why gold is rising,” he detailed.
In a follow-up post, he wrote: “It’s game over for the Fed. Bonds yields and gold prices are both rising. Despite expectations of Fed interest rate cuts, long-term interest rates are rising anyway. That’s because rate cuts will make the inflation problem worse. That’s bullish for gold but bearish for bonds.”
Schiff has repeatedly warned about the U.S. economy. In December last year, he said: “The big surprise in 2024 will not only be that the economy crashes into recession, but that high inflation returns with a vengeance.” He has also cautioned: “The U.S. dollar is on the verge of a historic crash. This will be a game changer for the Fed and the economy, as it will send inflation, interest rates, and unemployment soaring. Forget about a soft-landing. It’s crash & burn.”
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