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November 30, 2011

I Think QE3 Is Going To Happen

I think QE3 is going to happen — if it’s not already here in disguise. They will officially acknowledge it. The government just revised downward its estimate for third-quarter growth from 2.5 percent to 2. I think we’re relapsing into recession because we never really fixed our problems—we just added more debt and more government.

I think the Fed will be looking at oil prices, which will be well over $100 a barrel shortly. We’ll be seeing record-high gasoline prices seasonally, and probably we’ll see heating oil prices the highest they’ve ever been in the wintertime.

The Fed will unfortunately react to this thinking: “Oh no! We need cheaper money because higher energy prices are going to be a drag on the economy.” But, of course, the higher energy prices result from all the cheap money.

So I think we’re going to see more easing and more pain, which means higher gas prices, higher food prices and a weaker dollar. - in Index Universe

Related ETFs, SPDR S&P 500 ETF (SPY), SPDR Gold Trust ETF (GLD), United States Oil Fund LP ETF (USO), PowerShares DB Agriculture Fund (DBA)

Peter Schiff`s comments on the economy, stock markets, politics and gold. Schiff is the renowned writer of the bestseller Crash Proof: How to Profit from the Coming Economic Collapse.
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