But in his podcast, Peter Schiff argues that you can't rely on this bond market to tell you anything. The bond market is broken, thanks to the Federal Reserve. It's rigged and it's sending false signals.
US stocks continue to make new highs as the markets anticipate not only an effective coronavirus vaccine, but also a new round of fiscal stimulus.
Even if the vaccine works, we're going to keep getting monetary stimulus and fiscal stimulus, and that is really what is driving the stock market."
This, coupled with dollar weakness, has also pushed gold prices back up over the last several days.
Inflation is the driver. It's what's driving the stock market. Because the stimulus is inflation. That is what it's all about. It's printing money to monetize government debt to artificially prop up asset prices. And that is what is driving investors into gold and will drive them into gold in a bigger way in 2021."
In his previous podcast, Peter talked about the fact that the Fed is trying to fight inflation with inflation.
Maybe you can fight fire with fire, but you can't fight inflation by creating more inflation. And the markets still haven't come to grips with this. Even though you're hearing a lot of talk about inflation, it's mostly to dismiss the concerns."
Many mainstream analysts insist we don't need to be concerned about inflation because the bond market isn't signaling a problem. Interest rates remain relatively low. Even though the yield on the 10-year Treasury has gone up a good bit in recent weeks, it remains below 1%.
So, it's hard to say a 10-year yield below 1% is a warning sign for inflation. After all, if investors were concerned about inflation, why would they be willing to loan money to the US government for 10 years at 1%? Therefore, the bond market is not showing any signs, any worries, about inflation. Therefore, we don't have to worry because the bond market gets it right."