Via Peter Schiff

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Markets have been yo-yoing and analysts have been debating what it all means. Peter Schiff appeared on RT Boom Bust on Aug 19 to talk about what’s going on in the global economy and more specifically in the gold market. Peter said now is an ideal time to get into gold.

Peter started out the interview asserting that all of these interest rates that we’re seeing from central banks around the world aren’t going to help the economic situation.

The problem in the global economy is not that interest rates are too high. It’s that the amount of debt is too high. And the reason there is so much debt is because central banks have already kept interest rates too low. And lowering them even more doesn’t solve the problem. It actually makes the problem bigger because it encourages even more debt. So, this is counter-productive.”

Peter said he thinks the US economy is in the worst shape.

I think we are on the verge of finishing the Great Recession that we started in 2008, only the problems are much larger today than they were then, and I think the back half of this recession is going to be far more severe than the front half.”

Bubba Horwitz also appeared on the segment with Peter. He said global economies are in “dire straits” and also expressed concern about the rush to the basement in interest rates, along with the massive amount of global debt. He said he thinks the US is in the early stages of a recession and he anticipates a big stock market sell-off in the near future.

I would not be surprised to see a 25 to 40 percent haircut in equities, because right now, the Fed continues to kick the can down the road instead of addressing the real problems and letting your free markets trade and letting the interest rate markets trade where they’re supposed to, because if they wanted a free market, interest rates would be naturally higher.”

Christi Ai noted that the rally in gold seems to be taking a pause as investors take a more “risk-on” mindset to capture the stimulus boost. She asked Peter how he was handling this rotation.

I’m not rotating out of gold. In fact, people should be buying more gold on this dip. I think anything below $1,500 now is a good entry point to buy into gold. Especially when people realize, or traders, that the only reason that we’ve saved the market from collapse is because the central banks have capitulated, particularly the Fed. We are now cutting interest rates; we’re headed back to zero. They have ended quantitative tightening. The next move is back to quantitative easing. This is all designed to help the stock market, but it’s going to help gold even more than the stock market. Because all the money that they have to print to prop up these stock bubbles is going to be better for gold than it is for stocks. And of course, the stocks that will benefit the most are gold stocks. So, if you want to buy stocks, and you’re a speculator, that’s where you should be looking.”

Bubba agreed with Peter, saying $1,500 is a great level to get into gold. He also said that the rising level of debt will eventually catch up with the American consumer.

Americans are typically a ‘by the month’ society. So, as long as they have a job and they can afford to pay for it by the month, they’re going to keep buying. Well, who’s going to pay for all this debt when we have some slowdown, which we’re already starting to see?”


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