Financial Media Downplays Inflation Risk – Ep 699

Peter Schiff (0:12)

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Visit expressvpn.com/gold and get an extra three months free on a one year subscription package. Well, inflation continues to be a hot topic in the financial media, although most of the conversation seems to center around the fact that all this inflation talk is overblown and everybody is trying to reassure the public, investors, that there really is no inflation, that it's all transitory like the Fed says, and that those of us who are warning about inflation, well, we're the same chicken littles who warned about inflation following the 2008 financial crisis when the Fed embarked on quantitative easing and zero percent interest rates for the first time.

We were warning about inflation and inflation never turned out to be a problem. There was no inflation.

And so the fact that the same old people like me, although usually they don't mention me by name, although I know a lot of the people are thinking my name, even though they're not saying it. But of course, I wasn't the only person who was worried about inflation. In fact, if you remember, gold went up to 1900 in 2011 because people were worried back then about the consequences of all the money printing.

But the fact that the Fed was able to convince everybody that there was no inflation and the government was able to fool everybody with their highly manipulated consumer price numbers, the people who were concerned about inflation have been discredited, even though we have had quite a bit of inflation beneath the surface. I mean, consumer prices have risen. And in fact, I think they've risen by more than the official measures would indicate. But the inflation manifests itself in different ways.

Asset prices are highly inflated. So what happened in the stock market, what happened in the real estate market, in all sorts of markets is a consequence of inflation. Look at these huge economic imbalances, trade deficits, budget deficits, all of this, a negative consequence of inflation. So inflation has in fact been here.

It's done a lot of damage beneath the surface. But no, it hasn't affected consumer prices to the degree that I and other people initially believed. And I still think those concerns are going to be borne out by reality.

It's just that the lag is going to be many, many years longer than I and other people originally expected.

But everybody who is drawing comfort from the fact that they think the people who were warning about inflation back then were wrong, and somehow the people who said there was going to be no inflation and who were heralding the success of the Fed's policy, that somehow these people were vindicated because the policy was a success, they're completely wrong. The policy was an abysmal failure, which is why the Fed has had to repeat it.

So many times, but now it really seems obvious that all of those inflation chickens are finally coming home to roost, and people like me are about to get vindicated, but the mainstream still is oblivious to this reality, despite all of the overwhelming evidence that they can now see that inflation is rearing its ugly head in a big way.

One indicator of that is what's happening to the price of oil.

Oil today topped $70 a barrel for the first time since Covid. In fact, oil prices are now higher than they were before the initial Covid collapse in early 2020 at $70.02, I believe, was today's close. The high price I saw intraday was about $70.27.

Again, this is West Texas intermediary. Brent prices are higher than that, but I'm talking about West Texas here. But what's more significant than the $70 price that we're looking at for oil now is where the future price is likely to be. Because if you look at a chart, there really is very little upside resistance here to the oil price. I think the next area of resistance is going to be around $100 a barrel.

And I would expect prices to approach, if not exceed, $100 a barrel by the end of the year. I mean, certainly we're going to get above $80, but I think we're going to finish the year probably somewhere between $80 and $100, maybe closer to $100. That is a huge increase in oil prices from where the year began and from where they were at their low point. Of course, they went negative in 2020, so we'll completely disregard that because you cannot actually buy oil for a negative place other than in the futures market at that moment in time. But the trajectory here is very significant. You can't ignore it, but more importantly, where are oil prices likely to be in 2022?