Pinnacle Activity Ticker
QE3 Truth: The Reality You Don't Want to Hear
Pinnacle Digest writes: Schiff has proved year after year to be ahead of the curve when it comes to predicting a weakening USD and strength in the metals market. He reminds investors, when, last month he presented the case for why Fed Chairman Bernanke would have strong motivation to launch another round of quantitative easing (QE) before the election. The reason, in short, is that it would save him his job.
Many pundits and market commentators have dubbed QE3 - QE Infinity. But rather than going on for eternity, Schiff explains this third round of QE is only hastening the day when there is a flight of confidence from the dollar and US Treasuries. This will cause a sharp rise in market interest rates and surging consumer prices across America.
When prices start rising fast enough for the average person to figure out he's being screwed, then there will be riots in the streets.
Schiff explains that at this point, the Fed Chairman will have a choice to make: keep printing, which will push the dollar into uncontrollable hyperinflation, or begin tightening, which will bankrupt the US government and banking system.
Schiff references past crises such as Argentina in the '90s and Hungary in the '40s, when the banking system freezes, hard assets trade at a premium. Our team at Pinnacle, strongly believes the threat of hyper-inflation is real enough to allocate a portion of one's portfolio to precious metals.
Schiff concludes by stating, "Bernanke and his Wall Street supporters see cheap money until the horizon - but that horizon is really a painted brick wall. So it's not QE-Infinity, it's QE until the Fed either recognizes the brick wall and slams on the brakes, or doesn't and crashes into it. Either way, the only way to get off this locomotive is to invest in hard assets."
Read this article...