Euro Pacific Capital CEO Peter Schiff is more worried about Federal Reserve Chairman Ben Bernanke than the fiscal cliff.
The Fed’s massive easing program of the last five years represents a disaster, he tells CNBC. Bernanke constitutes "a much bigger threat to the U.S. economy than the fiscal cliff."
The Fed has expanded its balance sheet to $2.86 trillion through quantitative easing (QE).
Editor's Note: Economist Unapologetically Calls Out Bernanke, Obama for Mishandling Economy. See What They Did
"If it wasn't for all his accommodation, all the QEs, we wouldn't have to go over the fiscal cliff,” Schiff says. “In fact, ultimately because of what the Fed has done, we're going to have to go over a much bigger cliff."
The result is going to be huge inflation and a devalued dollar, he says. That, in turn, means good times ahead for gold. He recently predicted that the precious metal will reach $5,000 an ounce, declining to specify a date.
Schiff can’t be happy to see Fed officials indicate that the central bank will likely continue QE next year.
“It would be odd for them [Fed officials] to disappoint the expectations that they have created themselves,” Goldman Sachs economist Kris Dawsey wrote in a report obtained by The New York Times.
Continued QE could push the Fed’s balance sheet to $4 trillion by the end of 2013, Bank of America economist Michael Hanson tells Bloomberg.
Editor's Note: Economist Unapologetically Calls Out Bernanke, Obama for Mishandling Economy. See What They Did
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