The coronavirus pandemic isn’t making the US financial system sick, however the entire Federal Reserve’s stimulus and cash printing does, says economist Peter Schiff. And a Covid-19 vaccine isn’t going to make it nicely, he provides.
The concept QE infinity is right here to remain “is the one factor driving inventory costs,” in response to the CEO of Euro Pacific Capital.
He notes in his podcast that JP Morgan just lately projected US GDP within the first quarter of 2021 to be unfavourable. They’re, nevertheless, predicting the financial system to return roaring again in Q2 and Q3 of subsequent 12 months.
“Clearly, it’s due to huge authorities stimulus that they’re anticipating, most likely much more from the Fed than from Congress, as a result of I don’t know the way lengthy it’s going to take the Biden administration and Congress to really enact their preliminary stimulus,” mentioned Schiff.
He added: “So, it’s the anticipation of this stimulus which is driving the market.”
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In response to the veteran stockbroker, the actual burden for the financial system isn’t Covid, however all of the debt the financial system accrued whereas the Fed was attempting to combat Covid.
“It’s the Covid treatment that’s much more dangerous to the financial system than the illness,” mentioned Schiff. “And naturally, the US financial system goes to be much less environment friendly on this post-Covid world as US firms are nonetheless going to should be masking the prices of with the ability to put together for the subsequent lockdown or the subsequent virus that comes up. We already know what the playbook is,” he added.
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