Peter Schiff & Chris Waltzek (Podcast)
Peter Schiff & Chris Waltzek Podcast
With a quarter point rate hike expected in Dec and possibly 2 more in 2017, policymakers are concerned that prices are moving up to quickly.
Inflation is typically a positive for the PMs markets, e.g., the 1970’s inflation / PMs rally.
Real interest rates will remain negative, constraining the US dollar and encouraging gold / silver purchases.
Bond bears are in control – the sector could crater much further, requiring sizable QE activity by the Fed to contain the toxic debt.
- Dollar bulls may find themselves trapped, as officials are forced to ramp up QE and lower interest rates.
- If bonds continue to decline, the cost of financing stock buyback related debt will soar, reducing demand for US shares and lowering equities prices.
- The liberated funds will fuel the uptrend in the $CRB commodities index despite the dollar breakout, suggesting that PMs could soon find a price floor.
- Additional blowback from higher rates includes the potential for a 20%+ housing price decline, as homedebtors struggle to make payments.
- Until the forward looking housing starts index declines abruptly, the uptrend will remain intact.
- The election shock reaction in the PMs shares may be overdone presenting opportunities in the Euro Pacific Gold fund, EPGFX.