7.9 C
Tuesday, February 27, 2024
HomePeter Schiff: More Economic Pain Ahead In 2023

Peter Schiff: More Economic Pain Ahead In 2023


Related stories

“Absurdly Woke” Gemini AI Causes $90 Billion Google Stock Selloff

Google parent company Alphabet lost $90 billion in market valuation after its Gemini AI chatbot and image generator defended pedophilia and Adolph Hitler. The post “Absurdly Woke” Gemini AI Causes $90 Billion Google Stock Selloff first appeared on Valu...

Disney Exec Behind Live-Action Remakes Resigns

Disney Motion Picture Studios President Sean Bailey resigned from his position after almost 15 years overseeing the studio’s live-action film projects. The post Disney Exec Behind Live-Action Remakes Resigns first appeared on Valuetainment.

Exxon Has Entered The Chat: US Supermajor Threatens To Derail Chevron’s $53 Billion Hess Merger

Exxon Has Entered The Chat: US Supermajor Threatens To Derail Chevron's $53 Billion Hess Merger Exxon has entered the chat... That was the gist of the message Chevron gave to the world earlier this week after warning that its proposed $53...

Yields Slide After Solid 7Y Auction, First Stop Through Since October

Yields Slide After Solid 7Y Auction, First Stop Through Since October After two lousy, record large coupon auctions in Monday's two-for-one special, moments ago the Treasury issued a non-record $42BN in 7 Year paper (we saw far bigger 7Y a...

Kremlin Warns of Escalation if NATO Troops Fight in Ukraine

The Kremlin has warned Kyiv's European allies that sending troops to fight in Ukraine would lead to the "inevitability" of war between Russia and NATO after France said that, despite a current lack of consensus, "nothing," including sending Western for...
Peter Schiff: More Economic Pain Ahead In 2023

Via SchiffGold.com,

Last year was a tough one for investors. In fact, it was the worst year for Wall Street since 2008. The Dow was down about 8.8%. The S&P 500 fell by 19.4%, dropping more than 20% from its high. The Nasdaq took the worst hit, tumbling by 33.1%. Meanwhile, the bond market tanked, bitcoin collapsed, and the air started coming out of the real estate bubble.

Peter Schiff recently did an interview with the Epoch Times. He predicted more pain in 2023, primarily driven by inflation and the Federal Reserve.

While price inflation has cooled a bit, it is still running far above the Fed’s 2% target. Nevertheless, there is talk about a Fed pivot to rate cuts in the year ahead. Peter pointed out that “the last couple of times the Fed was able to orchestrate a pivot, it did it when inflation was 2% or less.” If the central bank makes that move in the near future,  it will “throw gasoline on the fire.”

High inflation gets even higher, and in that environment, I don’t see financial assets as a group doing well.”

Peter said bonds, in particular, will get killed.

That’s bad news for the US government as it continues to borrow and spend. A tanking bond market means higher interest rates – a big problem for a country trying to borrow more and more money.

Peter said that the year ahead could be particularly rocky for unprofitable tech companies that benefited from the Fed’s easy money policies in the past, and he sees a continued rotation into “value” stocks from companies with a proven track record of profitability.

If money is losing value much faster than 2% a year, you don’t want to wait 10–20 years to get your money. … It’s not companies that are promising earnings in the future. It’s companies that have earnings right now.”

More broadly speaking, Peter said inflation will continue to wear down consumers and make it more difficult for companies to maintain revenue streams.

If your customers are spending a lot more money on food, on energy, on insurance, on rent, on taxes, and they have nothing left over, then it doesn’t even matter if you cut your prices. You don’t have any customers.”

Peter said the Fed has turned the markets into “a casino” with artificially low interest rates and money printing. It has distorted markets and created all kinds of malinvestments.

It’s really helped undermine the productivity of the American economy, which is one of the reasons we have huge trade deficits.”

In fact, the central bank has become the dominant factor in investors’ decision-making.

The Fed should be irrelevant. Nobody should be making investment decisions based on the Fed. Right now, the Fed is the only thing anybody cares about. ‘Are they going to raise rates? By how much?’ Everything is riding on the decision of a few guys sitting in a room in Washington, DC That’s not how capitalism is supposed to work.”

Peter questioned why the Fed should have the power to decide the price of money.

That makes no more sense than putting together a bureau to decide the price of oil, or the price of milk, or the price of bread … That’s what the Soviet Union used to do, and it was a disaster.”

Tyler Durden Wed, 01/11/2023 - 10:44


- Never miss a story with notifications

- Gain full access to our premium content

- Browse free from up to 5 devices at once

Latest stories


Please enter your comment!
Please enter your name here