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Peter Schiff: Investors Must Brace for Long-Term Pain 

(Dollar Photo Club)

By    |   Tuesday, 10 April 2018 03:43 PM

Economic guru Peter Schiff doesn’t quite agree with President Donald Trum’s advice to investors that they prepare for “a little pain” amid the ongoing trade drama between the U.S. and China.

Trump said Friday the U.S. markets could face some “pain’’ from the trade standoff with China and other countries but claimed that Americans would be better off in the long-run due to his protectionist actions, Bloomberg reported.

“I’m not saying there won’t be a little pain,” Trump said Friday during an interview on WABC Radio’s “Bernie & Sid in the Morning’’ program. “ So we might lose a little of it but we’re going to have a much stronger country when we’re finished, and that’s what I’m all about,” Trump said.

However, Schiff isn’t buying any of it.

“We're going to have short-term pain and then the pain is going to get worse in the long run,” Schiff said on his most recent podcast.

“There would be some short-term pain that would deliver some long-term gain. How about if the Fed normalizes interest rates and lets the bubbles collapse, lets people lose money, lets the markets restructure? That is short-term pain for long-term gain. That is what a real free-market recession is like. Let the government get out of the way. Let the central bankers get out of the way, and let the free market correct the imbalances and create a good foundation where we can build a lasting, sustainable, viable recovery,” he said.

However, he doesn’t approve of the current administration’s economic strategy.

“This is a time bomb. The debt keeps going up. Every day we're closer to the crisis. Every day there is more and more debt, right? And so, every day that goes by, we're one day closer to the debt imploding,” he said.

To be sure, the the nonpartisan Congressional Budget Office said on Monday that the U.S. budget deficit will balloon over the next few years mainly because of deep tax cuts approved in December by congressional Republicans and Trump.

The deficit - the amount that Washington's spending exceeds its revenues - will grow to $804 billion in fiscal 2018, which ends on Sept. 30, up from $665 billion in fiscal 2017, the CBO said, despite expectations of stronger near-term economic growth than the agency previously forecast, Reuters reported.

“Normally the markets are forward-looking. They discount things that they think are going to happen. Well, if you don't think something is going to happen, how can it be discounted? So, it's when the markets are blindsided, when they're surprised, that's when you see the biggest moves because they didn't get discounted in advance,” Schiff said.

“You can't buy the rumor and sell the fact if you've never bought the rumor because you don't know there's a rumor or you don't believe it. So when the fact happens, nobody is positioned for it. Nobody is prepared for it. And that's where we are in the gold market. That's where we are in the gold stock market, in the bond market, in the US stock market. Nobody is prepared for any of the things that are going to happen because nobody believes that they are going to happen.”

(Newsmax wire services contributed to this report).

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Economic guru Peter Schiff doesn't quite agree with President Donald Trum's advice to investors that they prepare for "a little pain" amid the ongoing trade drama between the U.S. and China.Trump said Friday the U.S. markets could face some "pain'' from the trade standoff...
peter schiff, pain, investor, markets, trump
Tuesday, 10 April 2018 03:43 PM
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