The Fed has inflated three stock market bubbles this century, and according to Peter Schiff, the current one is the biggest yet.
The US Federal Reserve has inflated three stock market bubbles this century, and according to Peter Schiff of Euro Pacific Capital, the current one is the biggest yet.
“The only way the government was able to bail out investors [in 2001 and 2008] was because the Fed inflated a bigger bubble to replace the one that just popped,” Schiff said at the New Orleans Investment Conference last week. “I think [the existing] bubble is too big to replace — when it pops, that’s it, the Fed is out of tricks. There’s not going to be a fourth one that they can inflate.”
So what’s an investor to do? Schiff said one option is to look at gold.
“People that own gold will be able to preserve their purchasing power,” he explained, adding, “I think today gold does not really reflect all the potential for inflation, the potential for dollar debasement. I think investors are too complacent, they’re too optimistic about the future … you can see that in the stock market, but you can also see it in the price of gold.”
Schiff said both physical gold and gold stocks are good options, but noted, “gold stocks are very cheap right now, and so I think as long as you can afford to take some risk, and you’re not going to sell them if they happen to drop … if you have a long-term time horizon — which may not be that long actually in the scheme of things — I think there’s tremendous opportunities in that sector.
Watch the video above for more insight from Schiff on gold, the US economy and US President Donald Trump. The transcript for this interview will be added shortly.
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Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.