Economist Peter Schiff Predicts Higher Inflation and Prolonged Recession
Economist Peter Schiff has issued a stark warning about the U.S. economy, predicting an inflationary depression and a prolonged recession. According to Schiff, inflation will remain higher for a longer period of time due to the rapidly increasing national debt and federal budget deficits. He believes that this will eventually lead to a collapse in demand for U.S. dollars, causing the dollar to fall and Treasury yields to rise.
Peter Schiff's Warnings on the U.S. Economy and the U.S. Dollar
Peter Schiff, an economist and well-known advocate for gold, recently took to social media to express his concerns about the state of the U.S. economy and the U.S. dollar. In a series of posts, Schiff stated that the current financial and economic crisis was long overdue and that its arrival was predictable. He criticized the media, government, academia, and the Federal Reserve for claiming that the crisis was unforeseeable. Schiff also highlighted the fact that inflation and interest rates will remain high for an extended period of time, leading to a deeper and more prolonged recession.
The Role of the Federal Reserve and the Federal Government
Schiff criticized Federal Reserve Chair Jerome Powell's remarks about inflation, blaming the pandemic for the rise in prices. According to Schiff, the pandemic did not cause inflation; rather, the Fed and the federal government exacerbated the problem by running large budget deficits and printing excessive amounts of money for stimulus checks. He argued that Powell's statement about not considering fiscal policy when making decisions on monetary policy was reckless and would define Powell's failed legacy.
The Collapse of the U.S. Dollar and Treasury Yields
Schiff emphasized that the primary use of U.S. dollars has been to buy Treasuries. However, with the largest buyers now becoming sellers and the national debt and budget deficits soaring, demand for dollars is expected to collapse. This, in turn, will cause the dollar to weaken and Treasury yields to rise at a faster pace. Schiff pointed out that bond investors have lost confidence in the Fed's ability to bring inflation back down to the desired 2% target, leading to higher yields. He predicted that the Treasury yield curve would soon normalize at higher rates, both in the short-term and long-term, due to the excessive amount of debt in the U.S. economy. He also suggested that quantitative easing (QE) would be implemented in the near future.
No Further Interest Rate Hikes Expected
Schiff believes that there will be no further interest rate hikes, citing the ongoing war in the Middle East and the uncertainty it brings. He even suggested the possibility of rate cuts. Schiff has repeatedly warned about a potential bond market crash and an unprecedented financial crisis. He has expressed concerns about a "tragic ending" and the collapse of the U.S. dollar, stating that the day of reckoning is approaching.
What are your thoughts on economist Peter Schiff's warnings about the U.S. economy and the U.S. dollar? Share your opinions in the comments section below.
Frequently Asked Questions
Should You Buy or Sell Gold?
Gold was once considered an investment safe haven during times of economic crisis. Today, many people are looking to precious metals like gold and avoiding traditional investments like bonds and stocks.
Although gold prices have shown an upward trend in recent years, they are still relatively low when compared to other commodities like oil and silver.
Experts believe this could change soon. According to them, gold prices could soar if there is another financial crisis.
They also note that gold is increasingly popular because of its perceived intrinsic value and potential return.
These are some important things to remember if your goal is to invest in gold.
- First, consider whether or not you need the money you're saving for retirement. You can save money for retirement even if you don't invest in gold. That said, gold does provide an additional layer of protection when you reach retirement age.
- You should also be aware of what you are getting into before you buy gold. There are many types of gold IRA accounts. Each offer varying degrees of security and flexibility.
- Remember that gold is not as safe as a bank account. If you lose your gold coins, you may never recover them.
Do your research before you buy gold. And if you already own gold, ensure you're doing everything possible to protect it.
What are the benefits of a gold IRA
There are many benefits to a gold IRA. It can be used to diversify portfolios and is an investment vehicle. You decide how much money is put in each account and when it is withdrawn.
You can also rollover funds from other retirement accounts to a gold IRA. This allows you to easily transition if your retirement is early.
The best part about gold IRAs? You don't have to be an expert. They are readily available at most banks and brokerages. Withdrawals can happen automatically, without any fees or penalties.
But there are downsides. Gold is known for being volatile in the past. So it's essential to understand why you're investing in gold. Are you seeking safety or growth? Is it for insurance purposes or a long-term strategy? Only by knowing the answer, you will be able to make an informed choice.
If you plan to keep your gold IRA indefinitely, you'll probably want to consider buying more than one ounce of gold. One ounce won't be enough to meet all your needs. Depending on your plans for using your gold, you may need multiple ounces.
You don't have to buy a lot of gold if your goal is to sell it. You can even get by with less than one ounce. But, those funds will not allow you to buy anything.
How much should I contribute to my Roth IRA account?
Roth IRAs allow you to deposit your money tax-free. The account cannot be withdrawn from until you are 59 1/2. You must adhere to certain rules if you are going to withdraw any of your contributions prior. You cannot touch your principal (the amount you originally deposited). No matter how much money you contribute, you cannot take out more than was originally deposited to the account. If you decide to withdraw more money than what you contributed initially, you will need to pay taxes.
The second rule is that you cannot withdraw your earnings without paying income taxes. When you withdraw, you will have to pay income tax. For example, let's say that you contribute $5,000 to your Roth IRA every year. Let's say you earn $10,000 each year after contributing. Federal income taxes would apply to the earnings. You would be responsible for $3500 This leaves you with $6,500 remaining. This is the maximum amount you can withdraw because you are limited to what you initially contributed.
Therefore, even if you take $4,000 out of your earnings you still owe taxes on $1,500. Additionally, half of your earnings would be lost because they will be taxed at 50% (half the 40%). You only got back $4,000. Even though you were able to withdraw $7,000 from your Roth IRA,
Two types of Roth IRAs are available: Roth and traditional. Traditional IRAs allow pre-tax contributions to be deducted from your taxable tax income. Your traditional IRA can be used to withdraw your balance and interest when you are retired. You have the option to withdraw any amount from a traditional IRA.
Roth IRAs do not allow you to deduct your contributions. After you have retired, the full amount of your contributions and accrued interest can be withdrawn. There is no minimum withdrawal limit, unlike traditional IRAs. It doesn't matter if you are 70 1/2 or older before you withdraw your contribution.
How much should precious metals make up your portfolio?
First, let's define precious metals to answer the question. Precious metals refer to elements with a very high value relative other commodities. They are therefore very attractive for investment and trading. The most traded precious metal is gold.
There are however many other types, including silver, and platinum. The price of gold fluctuates, but it generally remains stable during times of economic turmoil. It is also relatively unaffected both by inflation and deflation.
As a general rule, the prices for all precious metals tend to increase with the overall market. However, they may not always move in synchrony with each other. When the economy is in trouble, for example, gold prices tend to rise while other precious metals fall. This is because investors expect lower rates of interest, which makes bonds less attractive investments.
Contrary to this, when the economy performs well, the opposite happens. Investors want safe assets such Treasury Bonds and are less inclined to demand precious metals. They become less expensive and have a lower value because they are limited.
Therefore, to maximize profits from investing in precious metals, you must diversify across multiple precious metals. You should also diversify because precious metal prices can fluctuate and it is better to invest in multiple types of precious metals than in one.
What are the fees for an IRA that holds gold?
Six dollars per month is the fee for an Individual Retirement Account (IRA). This fee includes account maintenance fees as well as any investment costs related to your selected investments.
Diversifying your portfolio may require you to pay additional fees. The type of IRA you choose will determine the fees. Some companies offer checking accounts for free, while others charge monthly fees for IRA account.
Most providers also charge an annual management fee. These fees vary from 0% to 11%. The average rate for a year is.25%. However, these rates are typically waived if you use a broker like TD Ameritrade.
Statistics
- This is a 15% margin that has shown no stable direction of growth but fluctuates seemingly at random. (smartasset.com)
- The price of gold jumped 131 percent from late 2007 to September 2011, when it hit a high of $1,921 an ounce, according to the World Gold Council. (aarp.org)
- Indeed, several financial advisers interviewed for this article suggest you invest 5 to 15 percent of your portfolio in gold, just in case. (aarp.org)
- If you accidentally make an improper transaction, the IRS will disallow it and count it as a withdrawal, so you would owe income tax on the item's value and, if you are younger than 59 ½, an additional 10% early withdrawal penalty. (forbes.com)
- Instead, the economy improved, stocks rebounded, and gold plunged, losing 28 percent of its value in 2013. (aarp.org)
External Links
bbb.org
wsj.com
- Saddam Hussein's InvasionHelped Uncage a Bear In 90 – WSJ
- Want to Keep Gold in Your IRA at Home? It's Not Exactly Lawful – WSJ
cftc.gov
forbes.com
- Gold IRA: Add some sparkle to your retirement nest egg
- Understanding China's Evergrande Crisis – Forbes Advisor
How To
The best way to buy gold (or silver) online
Understanding how gold works is essential before you buy it. Gold is a precious metallic similar to Platinum. Because of its resistance to corrosion and durability, it is very rare. It is difficult to use so people prefer to buy jewelry made from it to gold bars.
There are two types today of gold coins. One is legal tender while the other is bullion. The legal tender coins are issued for circulation in a country. They usually have denominations such as $1, $5, $10, and so on.
Bullion coins are only minted to be used for investment purposes. Their value increases over time because of inflation.
They can't be exchanged in currency exchange systems. A person can buy 100 grams of gold for $100. The buyer receives 1 gram of gold for every dollar spent.
You should also know where to buy your gold. You have a few options to choose from if you are looking to buy gold directly through a dealer. First, your local currency shop is a good place to start. Another option is to go through a reputable site like eBay. You can also look into buying gold online from private sellers.
Private sellers are individuals who offer to sell gold at retail or wholesale prices. Private sellers charge a 10% to 15% commission per transaction. This means that you will get less back from a private seller than if you sell it through a coin shop or on eBay. This option can be a good choice for investing in gold because it allows you to control the price.
Another option for buying gold is to invest in physical gold. While physical gold is easier than paper certificates to store, you still need to make sure it is safe. You need to make sure that your physical gold is safe by storing it in an impenetrable container like a vault or safety depositbox.
When buying gold on your own, you can visit a bank or a pawnshop. A bank can offer you a loan for the amount that you need to buy gold. Customers can borrow money from pawnshops to purchase items. Banks tend to charge higher interest rates, while pawnshops are typically lower.
A third way to buy gold? Simply ask someone else! Selling gold is simple too. You can contact a company like GoldMoney.com to set up an account and receive payments right away.
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By: Kevin Helms
Title: Peter Schiff Warns of Inflationary Depression and Recession
Sourced From: news.bitcoin.com/economist-peter-schiff-warns-of-deep-recession-inflationary-depression-and-collapse-of-us-dollar-demand/
Published Date: Sun, 22 Oct 2023 01:30:05 +0000
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