Many of you who are reading this - not the average Joe the Plumber on the street - have certainly been paying attention to the markets and the actions of the Federal Reserve over the last couple of years. Peter Schiff, CEO of Euro Pacific Capital, has been one who has ket an eagle eye on all of it and has become one of the go-to analysts of the gold market and where it's going and how it has been affected by the rise of the stock market, the quantitative easing and what it has been doing with the economy.
Schiff was a guest on CNBC for "Futures Now" and was asked his view about the markets and the current economic recovery. And after the bottom fell out of the gold price over the past year - trading at nearly $2,500 an ounce about 18 months ago to about $1,250 now - he said that he see a great bull run on gold coming, simply because the Fed 's monetary policy is actually maskig the economy, which is actually as bad or worse than it was in 2008. He highlights this in the following clip:
Schiff maintained that the stock and housing markets recoveries are propped up solely by the Fed's current stimiulus program and are not a sign of actual economic recovery. He said the same fundamentals were in place before the 2008 financial crisi, and gold then also had a nice bull run in prices. He said that he believes that the Fed is stuck in its stimulus and does not buy the current whispers that the ed will be lowering its bond purchases from the current $75 billion per month to $65 billion.
"The Fed is not going to let the stock market collapse," Schiff claimed. "That's why it can't taper. That's why it can't raise interest rates. If the Fed did those things, the stock market would collapse. So they will actually have to provide more liquidity to keep the stock market propped up. But that is great for gold."
Schiff said this current recovery is "false" and is based soleyly on the current easy-money policy of the Fed, and that usually means a bull run on gold and other precious metals. He expects gold to take off in the coming months as the Fed's stimulus continues because he says the Fed can't afford to end it anytime soon.
Additionally, Schiff was asked about the price of gold in regards to the Fed's tapering plan. Is the price of gold accounting for the current Fed taper?
"It think (gold) is priced at taper, but it has been too aggressive in pricing it in because I don't think the Fed will actually follow through on its taper timetable," Schiff said. "I thin that if the Fed were to really withdraw the stimulus, we would be in a worse recession that the one we had in 2008. .. The Fed will talk about it, but I don't think the will actually do it. The gold market has already factored in a complete tapering and somehow a shrinking of the Fed's balance sheet, which the Fed can't do without destroying the economy." Check out this clip below:
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