Schiff Predicts Quantitative Easing Will Return

On a recent X Spaces event, Peter Schiff discussed the Federal Reserve's recent decision, the implications of the upcoming election, and Bitcoin, among other topics. He spent most of his time interacting with followers and answering their questions.

Fed Announces Rate Cuts

Schiff began by discussing the significant news from the previous week: the Federal Reserve's announcement of a 50 basis point rate cut. This move signals a return to the monetary policy from the Great Recession era. Schiff believes that quantitative easing will likely return by the first quarter of 2025, if not sooner, depending on the state of the economy after the election. He views the rate cuts as just the beginning.

Inflation Concerns

Despite the Federal Reserve's insistence that inflation is under control, it remains above the typical 2% target. Schiff argues that the Fed is prematurely claiming victory over inflation. He warns that inflation could skyrocket, citing a recent spike to 9% followed by a pullback to around 3%.

Delaying Recessions and Increasing Debt

Schiff warns that every time the Fed tries to delay a recession, it only increases national debt and ensures a larger, more devastating crash in the future. He predicts a severe economic crisis in the United States, which he believes should have occurred a decade or two ago. The postponement of this crisis will only make its impact worse due to the deteriorating state of the economy and the increasing deficits.

Call for Government Reduction

In response to a question about his preferred economic reforms, Schiff advocates for a significant reduction in the size of the government. He argues that many functions currently performed by the federal government would be better handled at the state and local level. He also criticizes the inefficiency of the federal government and opposes the creation of new agencies, such as the Space Force.

Bitcoin Investment Mindset

When asked about Jack Mallers, the CEO of crypto company Strike, and the mindset behind investing in Bitcoin, Schiff expresses his belief that crypto investors like Mallers and Michael Saylor fail to consider the possibility of a Bitcoin crash. He compares this mindset to the housing bubble of the early 2000s, where homeowners refused to accept the possibility of their homes decreasing in value.

Gold Stocks and Deregulation

At the end of the event, Schiff answered questions about gold stocks and shared his experience as a stock broker. He argues that there is a need for deregulation in the financial sector, suggesting the abolition of the SEC and FINRA. He believes this would not only save money by eliminating bureaucratic positions but also benefit the country and its capital markets.

Bottom Line

Peter Schiff's views on the Federal Reserve's rate cuts, the potential return of quantitative easing, and the need for government reduction and financial sector deregulation offer a thought-provoking perspective on the current state of the US economy. Do you agree with his predictions and proposed solutions? Share your thoughts and discuss this article with your friends. Don't forget to sign up for the Daily Briefing, available every day at 6pm.