Schiff on VRIC Media: Expect QE, Higher Long-Term Rates

Peter recently joined Darrell from VRIC Media to discuss a brewing contradiction in monetary policy, the political risks to Fed independence, the nonsense of tariff “dividends,” and why gold remains the only reliable monetary asset. He warns that even if the Federal Reserve cuts short-term rates, a return to quantitative easing and rising long-term rates are likely — a toxic mix for an economy swimming in debt.  

On the interest-rate picture and the likely policy response, he warns the Fed can’t paper over the problem with cuts alone and sees inflation and QE on the horizon again:

And even if the Fed continues to cut short-term rates, I believe that long-term rates will rise. And that’s gonna be very problematic for the US government, for the housing market, for the overall economy with so much debt out there. And I think it’s a problem for the financial sector. And in order to alleviate that, I think we’re gonna get a return to quantitative easing. And that just means much more inflation, higher consumer prices, and ultimately higher long-term interest rates too, because higher inflation erodes away the value of bonds.

Peter connects central-bank credibility directly to political risk, noting that attacks on the Fed’s independence — like the “Lisa Cook situation” — would weaken the dollar and undermine trust in monetary policy: