A Federal Reserve committed to ultra-easy monetary policy poses an even greater challenge to the U.S. economy than “fiscal cliff,” investor Peter Schiff said Tuesday.
A sharp critic of the Fed’s quantitative easing, or QE, Schiff told CNBC’s “Futures Now” that the Fed Chairman Ben Bernanke was “a much bigger threat to the U.S. economy than the fiscal cliff.”
Even as Bernanke shied away from outlining new stimulus despite what he called a “disappointingly slow” recovery, Schiff insisted that “if it wasn’t for all his accommodation, all the QEs, we wouldn’t have to go over the fiscal cliff. If fact, ultimately because of what the fed has done, we’re going to have to go over a much bigger cliff.”
Schiff, who insists that QE will lead to runaway inflation, is a booster of gold [GCCV1 1729.50 5.90 (+0.34%) ] as an alternative to paper money and stocks. He stuck by his call that bullion would surge to $5,000 per ounce once the Fed’s policy eroded the value of the dollar [.DXY 80.93 -0.03 (-0.03%) ]. (Read More: Think Gold’s Pricey Now? Wait Until It Hits $5,000: Schiff.)
“If we avoid the cliff, that is very bullish for the gold market because that means that trillion dollar-plus deficits will perpetuate, and these big deficits are what’s undermining the dollar because the Fed has to print money to finance them,” Schiff said.
Read More at cnbc.com . By Javier E. David.