Fed Commitment to Let Inflation Run Isn’t a Promise; It’s a Threat

According to a recent CNBC report, the Federal Reserve is set to make a major commitment to “ramping up inflation.”

According to the report, the Fed will pivot to “average inflation targeting.” With this strategy “inflation above the central bank’s usual 2% target would be tolerated and even desired.”

Practically speaking, the Federal Reserve would not raise interest rates until both its employment and inflation targets are met, meaning the central bank would likely keep interest rates at zero for years.

The central bankers have actually been hinting at this for quite a while, using the term “symmetrical inflation target” in FOMC statements and press conferences. Peter Schiff talked about this in a podcast last December.

Despite Big July Gains Silver Still Historically Undervalued

Silver futures were up 25% in July, the second-biggest monthly gain for the white metal on record.

And silver is still significantly undervalued compared to gold.

The spot price of the white metal gained even more than silver futures last month. When gold pushed above its previous record price last week, silver went along for the ride, rising to nearly $26 an ounce. It has settled back and is currently trading in the $24 range. On June 29, silver closed at just over $18 an ounce. That’s a 33% gain on the month. Going back to March, the white metal was below $12.

Former US Mint director Ed Moy told MarketWatch silver is going up for the same reason as gold.

What is driving gold prices now are mainly the fear of inflation due to the magnitude of the monetary and fiscal stimulus worldwide, and the flight to safety due to the uncertainty around how and when the global economy will recover.”

Yale Economist Warns of Dollar Crash

Peter Schiff has been warning that that real crash will be a dollar crash. Now, some people in the mainstream are starting to sound that alarm as well.

Even before the coronavirus pandemic, Peter was warning about the dollar’s demise. During an interview on RT last September, he warned that America’s “fiscal profligacy” was going to sink the dollar.

What has enabled this over the years has been the world’s willingness to hold US dollars as the primary reserve currency and to continue to loan money to Americans and to the US government so we can continue to live beyond our means. We can have enormous government programs that we don’t pay for and we can consume all kinds of goods that we don’t manufacture, and we can live in an economy based on consumption and debt without having to save or produce. The world has done that for us. And I think this is what’s going to come to an end. I think we’re going to see a collapse in the value of the dollar, and when the dollar does collapse, America’s power is going to dissipate. And Americans are going to have to deal with the reality that we’ve hollowed out our infrastructure; we’ve been living beyond our means. And there’s going to be a day of reckoning for these years of excesses.”

The unprecedented Federal Reserve money printing and the massive borrowing and spending binge by the US government in response to COVID-19 have only accelerated the process. In March, Peter said during his podcast, “I think we’re very, very close to a major collapse of the dollar, a major breakout in the price of gold, to a breakdown in the bond market.”