Tags: Peter Schiff | Federal Reserve | tapering | stocks

Euro Pacific's Schiff: Fed Will Reverse Tapering, Buoying Stocks

By    |   Tuesday, 03 June 2014 02:47 PM

Peter Schiff, CEO of Euro Pacific Capital, has been saying for months that the Federal Reserve will ultimately reverse the tapering of its bond purchases. And he's sticking to his guns.

"If the Fed actually did what it's threatening to do — to completely remove all the monetary props beneath the [stock] market, to wind down QE [quantitative easing] to zero and eventually begin to increase interest rates — then I think the market will head substantially lower," he tells Yahoo.

"But I don't believe they'll do that. I still think the Fed is going to end up aborting the taper, which will support the market and prevent it from really collapsing."

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The Fed has curbed its monthly bond purchases to $45 billion from $85 billion last year. Its federal funds rate target has stood at a record low of zero to 0.25 percent since December 2008.

Schiff hasn't turned bullish on U.S. stocks. Even as the Fed hasn't finished its tapering, "the air is already coming out of the [stock] bubble," he notes.

"I don't think there's going to be a big drop in the averages but I still think a lot of these momentum stocks . . . will continue to trend lower," Schiff adds.

"The rally is going to be more in commodities, precious metals and foreign currencies when the Fed has to admit it was wrong and do more QE."

Schiff remains bullish on gold, which he thinks will benefit from an increase in QE.

Meanwhile, French economist Thomas Piketty, who has created a global stir with his new book, "Capital in the Twenty-First Century," says the Fed's massive easing program is disproportionately helping the wealthy.

"Those who are gaining from all this printing of money are not the people that you'd like to gain," he tells CNBC.

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Peter Schiff, CEO of Euro Pacific Capital, has been saying for months that the Federal Reserve will ultimately reverse the tapering of its bond purchases. And he's sticking to his guns.
Peter Schiff, Federal Reserve, tapering, stocks
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2014-47-03
Tuesday, 03 June 2014 02:47 PM
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