Peter Schiff On Gold, Dollar, Inflation, Fed and China

Peter Schiff is known for his justified criticism of the Federal Reserve and the disastrous policies they've enacted which is the destroying the economic life of the United States and its citizens, and ultimately affects nations around the world.

Although he sees a disaster coming if they don't change course, there are things people can do to protect themselves against the addictive Federal Reserve policy of printing money, which is another way of saying inflating.

Today they've attempted to change the name to quantitative easing to make it sound like they're doing something different. But it's the same thing.

While Schiff sees hope, he doesn't think the government and the Federal Reserve will do the right thing, and they're going to keep on inflating. Which means they're going to print money to acquire bonds. It's only a matter of how much they're going to buy, not whether or not they're going to do it.

The result of all this will be gold prices and many other commodity prices continuing to rise, the U.S. dollar continuing to collapse, and inflation in other areas soaring.

Schiff says the government will attempt to hide the amount of inflation they're creating, but the ongoing rate of unemployment will force them to continue to print money, which will eventually reveal the monster they've created, as they acquire an enormous amount of bonds with each round of quantitative easing.

Another possible scenario, says Schiff, is he sees the possibility of Treasury yields being held back by the Federal Reserve. At that time corporate and municipal bonds would probably surge, which could woo the Fed into acquiring them too. If that happens, in Schiff's view, he sees the potential complete collapse of the U.S. dollar.

Probably the best hedge against all of this happening, or even part of it happening, is to hold gold.

Schiff says he believes gold and the Dow will eventually move to a 1-to-1 relationship. He has no idea what that number will be, but if the Dow were to move to 10,000, he sees gold moving to $10,000. If the Dow is at 3,000, he sees gold at $3,000 an ounce, etc.

According to Schiff, he sees a correlation between the bear markets of 1930s and the 1970s. In 1932 said Schiff, an ounce of gold equaled the value of the Dow. The same happened in 1980 after the bear market of the 1970s.

When the Dow shrinks in value, it tends to line up with the price of an ounce of gold.

If we end up entering into a period of hyperinflation, all bets are off there as far as the value of the dollar, which could lost almost all its value, according to Schiff.

Besides gold, Schiff likes the agricultural sector, energy, commodities in general, and China.

Everyone should own at least some gold says Schiff.

Peter Schiff Bullish on Agriculture

Peter Schiff Likes Agriculture

A number of highly qualified investors have been bullish on agriculture for some time, and the latest maintaining that position is Peter Schiff, who said in a recent interview on CNBC that he is especially bullish on the agricutural industry in general, and also the fertilizer industry within those parameters.

Confirming what we talk a lot about on Commodity Surge, Schiff added that the Chinese will continue to buy up commodities as their standard of living continues to rise, and their growing middle class will create great demand for commodities going forward.

Another interesting insight from Schiff is the reason stock prices are rising at this time isn't because of stocks going up because of increased value, but because the U.S. dollar is going down. The dollar's collapse and decreased value is the determing factor there, according to Schiff.

Talking about Wal-Mart (NYSE:WMT), Schiff made an interesting observation I've never heard before, and that is that Wal-Mart could become the next Saks Fifth Avenue based on their inability to import cheap products from the Chinese any longer.

Investor Jim Rogers has also been bullish on agriculture for years, and looks upon it as the growth vehicle for the future, based primarily on less land available for crops and growing demand.

Peter Schiff Likes Agriculture