Transcription
Gold this week traded below 4,000. The low on gold was $3,970. In fact, silver dropped 11.3% on the week, $55.99.
Alan Greenspan, who really was the architect of the housing bubble, passed away this week. He was the Fed chairman. He was the maestro well before the dot-com bubble. He inflated the dot-com bubble. When he was testifying before Congress and asked about the gold standard, he said that he used gold as his main indicator. If $400 gold meant the Fed needed to hike rates, what does $4,000 gold mean now? They're way behind the curve. The Fed needs, uh, you know, massive rate hikes, quantitative tightening.
This is a great buying opportunity. Yes, this week both gold and silver went down, but they're totally different assets. One of them is a buy: gold and silver. Bitcoin is just air coming out of a bubble. Do expect oil prices, uh, to reverse and go up. In the meantime, hey, that's still good news for the gold and silver mining stocks.
It wasn't just Fools Digital Gold that had a rough week. Uh, it was gold itself. Real gold also went down quite a bit. In fact, gold this week traded below 4,000. The low on gold was $3,970. Now, we didn't close below 4,000. We had a little bit of a recovery the past couple of days. So, all of that decline took place Monday through Wednesday. That's how bad it was. Gold closed today up about $62 at $4,088.60. Uh, silver down even more. In fact, silver dropped 11.3% on the week, but it closed significantly off the low. Silver got as low as $55.99. So, a penny below $56. It closed at $59.05. So, still below $60, but it was a big shakeout in gold and silver. I think we hit a lot of stops because I think some people might have had stops not just below the low, but below 4,000. And when gold was below 4,000, it spent two days during the week where it traded below 4,000. Um, Wednesday and Thursday. Um, sentiment got very, very negative on gold. And it's as oversold as it's been in many, many years. It's as more as fact, I think it's more oversold now than it was overbought when it was at 5,600. So, I think that that negative sentiment hitting those stops, you know, there's a good chance that that's been it. That that's the bottom of this of this decline.
Silver, you know, never got back down to 50. I don't expect it to get down to 50. And honestly, I didn't think it would get this low, uh, but it did. But, given the context of the bull market, $59 silver compared to where it was a year ago, this is a huge bull market. It is a big breakout. Yes, silver is down more than 50% from its peak, but it tripled before the drop. So, silver went on a rally that I've never seen in my career where, in a very short period of time, it went from 30 to 120. So, the fact that it pulled back, and again, remember the catalyst for the pullback was the war. The war started, and it was a buy the rumor, sell the fact because part of the reason for the rally in precious metals was the anticipation of the war. Then the war started, and it was already overbought, and we had a buy the rumor, sell the fact.
Markets fell, but the real damage may have been psychological rather than fundamental. As Peter Schiff points out here, gold briefly slipping below $4,000 triggered widespread stop-loss selling. Yet, the rapid rebound hints that forced liquidation, not deteriorating fundamentals, drove much of the decline. That's exactly when institutional buyers often step in, while retail investors panic. Next, Peter Schiff reveals why extreme bearish sentiment has historically marked the beginning, not the end, of major precious metals advances.
And by the way, I want to mention that Alan Greenspan, who really was the architect of the housing bubble, uh, passed away this week at the old age of 100. So, he lived a long time, but unfortunately, I guess not long enough to really see the consequences of what he set off. Because he wrote this playbook. He was the Fed chairman. He was the maestro, uh, from before the, well before the dot-com bubble. He inflated the dot-com bubble. He inflated the housing bubble. He left town and handed it over to Bernanke before the housing bubble popped, but I always blamed it on him. When I talked about all of the players, and you know, I blamed, you know, congressmen, 'cuz I was blaming Fannie and Freddie. I was blaming, uh, blaming, uh, HUD. I was blaming, um, government guarantees, guaranteed mortgages, uh, guaranteed bank house. There were all sorts of ways government created moral hazard and directly contributed to the housing bubble or inflated the housing bubble, and that's why I knew that we were going to have a crisis when it popped. But I would talk about various people, but I always said that Greenspan was the ace of spades in the deck. He was the number one guy that bore the most responsibility. And he was the most knowledgeable Fed chairman we've had. You know, he was a smart guy.
The biggest financial bubbles rarely begin with reckless investors. They usually begin with policies that quietly reward excessive risk. Peter Schiff's argument suggests that Alan Greenspan's legacy cannot be separated from the environment of artificially cheap money that fueled both the dot-com and housing booms. When policymakers repeatedly cushion markets from short-term pain, they often encourage even larger imbalances beneath the surface. For wealth-preserving investors, understanding those incentives matters more than following political headlines. Next, Peter Schiff unravels why Greenspan's own beliefs about sound money ultimately conflicted with the policies he chose to implement.
He was an Ayn Rand disciple. I mean, he wrote this great essay, "Gold and Economic Freedom," that was included in her book, "Capitalism, the Unknown Ideal." And if you haven't read that essay, read it. In fact, Ron Paul, you know, used to confront him, or he confronted him at one point, you know, walking around Congress, and he asked him if he would, you know, change anything in that essay now. And he said, "I wouldn't change a word." And in that essay, he basically blamed, uh, the entire, uh, stock market bubble and crash in 1920, 1929, on the Fed. And for printing too much money and for keeping interest rates too low. And he advocated for a gold standard. Uh, he said that, you know, gold and economic freedom are inseparable. They go hand in hand. He was a very big critic of the Federal Reserve. And that meant, meant he was still a critic. The, the, the arrogance of Greenspan was that he believed that he could use his own judgment to create a de facto gold standard. And that's what he said he was doing when he was testifying before Congress and asked about the gold standard. He said that he used gold as his main indicator. He said that if gold is up to $400 an ounce, it means I'm too loose, and I got to raise rates. If gold goes below 300, I'm too tight, and I got to cut rates. So, he was claiming that even though we weren't officially on a gold standard, unofficially we were because he was using gold as a way to know whether he had the interest rates right or wrong.
The most revealing contradiction is when policymakers understand the rules, yet decide they no longer apply to themselves. This is where Peter Schiff's thesis shifts, arguing that Greenspan acknowledged gold as a reliable monetary signal while believing his personal judgment could replace the discipline of a formal gold standard. History repeatedly shows that discretionary policy becomes increasingly political as financial pressures mount. Investors should pay closer attention whenever actions drift away from principles because that's often when systemic risks quietly begin building. Next, Peter Schiff reveals why today's gold price sends a message that policymakers appear unwilling to acknowledge.
Because how are you supposed to know? You just can't guess. You need some kind of market indication. And Greenspan said the best indicator of whether or not you have interest rates too high or too low is the price of gold. Well, if 4,000 meant he was too loose, what is—I mean, if 400—if $400 gold meant the Fed needed to hike rates, what does $4,000 gold mean now? It means they really need to hike. They're way behind the curve, right? Based on Greenspan's, uh, criteria, the Fed needs, uh, you know, massive rate hikes, quantitative tightening. Uh, so, he was the best one as far as understanding. Yet, he still made these mistakes. He still chose inflation over the alternative. When the stock market crashed in 1987, Greenspan chose inflation. Right? So, if a guy like Greenspan, a gold bug, when push comes to shove, if he chooses inflation, why is Warsh going to be any different? He's not. And so, the markets, gold and silver, are pricing in rate cuts that are probably never going to happen. We're going to have—I mean, rate hikes. The market is pricing in rate hikes that aren't going to happen. And, and so, this is a great buying opportunity. Yes, this week both gold and silver went down, but they're totally different assets, and one of them is a buy: gold and silver. Bitcoin is just air coming out of a bubble. And so, what are the opportunities that people have who are still in Bitcoin or in strategy or stretch? You can sell.
Markets often price the policy they hope for, rather than the policy history suggests will actually arrive. Peter Schiff notes that if gold once served as a warning signal for loose monetary conditions, today's dramatically higher prices imply a far greater imbalance than officials publicly acknowledge. Yet, markets continue reacting to every Fed headline while overlooking the broader monetary trend beneath the surface. Investors who separate short-term volatility from long-term monetary signals are usually better positioned than those chasing policy expectations. Next, Peter Schiff exposes what today's sell-off could become tomorrow's most misunderstood buying opportunity.
And then you can take your money, and you can buy gold and silver that have also gone down. Because Bitcoin's not going back up to make a new high at 120,000 from 60,000, but silver can easily go from 60 bucks to 120 bucks. So, you'll make your money back even if you bought, um, Bitcoin at 120,000. You don't have to make that money back in Bitcoin. You can get out of Bitcoin, take a tax loss, put that in your pocket, and maybe even file a lawsuit if—if it, well, if you just bought Bitcoin, I don't know, but if you bought strategy, you can. But you, you take your tax loss, and now you buy some silver, and when silver doubles back to its old high, now you're even, right? Instead of losing more money. And I don't think silver's going to stop there. I think silver's got a long way to go. I think 120 will just be a stop on the way to 200 over time. Uh, so, uh, you can make back your, your, your losses from crypto, uh, and fool's gold by getting into the real thing. Uh, anyway, oil prices, big drop this week. Uh, oil back down actually below, uh, $60. Uh, or was it below? Let me see. Below, rather, below $70. Excuse me, $69 is where oil closed. So, I didn't think it would fall this much. Uh, I don't think it's going to stay down here though. Yes, the war supposedly is over, but who knows? It could restart at any minute. Uh, but there is a ceasefire. There are ships that are going through the strait for now. But I think this is just a short-term overshoot on the way down.
Temporary market declines often create opportunities that emotional investors completely overlook. According to Peter Schiff, sharp pullbacks in precious metals may deserve more attention than assets that previously captured speculative enthusiasm. Whether or not investors agree with every forecast, rotating capital should always be driven by valuation, risk, and long-term purchasing power rather than recent momentum alone. Markets reward disciplined allocation far more consistently than emotional attachment to any single asset. Next, Peter Schiff reveals why falling energy prices may quietly strengthen the outlook for precious metals producers instead of weakening it.
I do expect oil prices, uh, to reverse and go up. In the meantime, hey, that's still good news for the gold and silver mining stocks, uh, because they, you know, they were having to pay a lot of extra money. That's, uh, their biggest cost is energy, and that's come down. By the way, the GDX and GDXJ on the week, they were down about 5% each, well, well off their highs, but there's a good chance, I think, that they've seen their lows. Uh, bond yields were off a little bit, uh, but not very much. I mean, given the big drop in the price of oil, not much relief in the Treasury bond market. The yield on a 10-year closed at 4.37. You know, the high was about 4 and a half. And the 30-year is 4.86. So, it was just about five, you know, so very little relief there. So, I think we still have a long way to go higher in Treasury yields, which is another reason that the Fed is going to continue to expand its balance sheet. And by the way, it's still expanding. If—if Warsh was real serious, what he would—he would be shrieking about sheet right now. It's still expanding. Money supply is still growing. The Fed is still creating inflation. How are you—how are you going to fight what you're creating? So, again, it's all talk. You got to look at what the Fed does, not at what they say. 'Cuz they're—talk is cheap. They're trying to buy some credibility with tough talk. Because, you know, the Fed also places a lot of stock in expectations. They think that inflation is a function of expectations.
The balance sheet often tells a more honest story than the speeches delivered after policy meetings. What Peter Schiff is highlighting is the gap between aggressive inflation rhetoric and continued monetary expansion. A contradiction that institutional investors watch far more closely than headline sound bites. If liquidity continues growing while officials promise restraint, markets may eventually price the actions rather than the messaging. Savers who ignore that disconnect risk misunderstanding where inflationary pressure truly originates. Next, Peter Schiff exposes why expectations alone cannot override the monetary reality unfolding behind the scenes.
And if they can get people to expect less inflation, then they think we'll get less inflation. By the way, we did get the consumer sentiment numbers out, and, uh, consumers are looking for inflation over the next year at 4.6%. So, way above the 2%, but it is lower than the 4.6%, uh, that they expected the prior month. And the, um, the actual number, the consumer confidence number, is 49 and a half. So, below 50, it's still a very low number, but not quite as bad as the 48.9 from the prior week. In fact, I think the worst economic news that came out today was our trade deficit in goods, which came out at 105.8 billion, uh, which was substantially above what had been expected. I think it was a 28% increase, uh, in from the prior month, uh, for the, um, the trade deficit. And it happened as a result of a decline in exports by 5.4% and an increase in imports. Imports went up by 3.6%. So, this is the worst trade deficit in goods since March of 2025. So, Trump promised that his tariffs were going to reduce our trade deficits. The trade deficits are rising. This is the biggest goods trade deficit in over a year, and it's headed in the wrong direction, and, and, and we lost twice. Imports up, exports down. But, I want to finish this up. I want to talk about, you know, this interview that I heard. I was on CNBC, and I forget the congressman, and he was talking about this about, and he was repeating these, these myths of economics on what we need to do, uh, to, uh, boost the economy. And one of the things that he claimed credit for creating the middle class was the GI Bill. Kind of saying we need something like the GI Bill because there, the GI Bill, the government, you know, gave, uh, uh, you know, got, you know, vets who were in the war money, they sent them to college, uh, gave money for houses, and claimed that that's where the economic growth came from. And no, it's not. Economic growth is not a function of government redistributing wealth. We would have had even more great government growth if we didn't have the GI Bill. But, the government likes to claim credit for what would have happened anyway, and in fact, what would have happened better without what they did. All right, so, uh, it, it wasn't necessary.
Confidence surveys may improve slightly, but deteriorating trade data can reveal a very different economic reality underneath the headlines. Peter Schiff's argument suggested widening trade deficits and stubborn inflation expectations expose structural weaknesses that optimistic political messaging cannot easily conceal. Governments often claim credit for growth while downplaying the private sector forces that actually create lasting prosperity and productive investment. For long-term investors, separating economic narratives from measurable fundamentals remains one of the most valuable disciplines.
But the more recent next leg down was all about Kevin Warsh and the perception that he's some uber hawk, that he's the reincarnation of Paul Volcker. He is not. And all this talk, all this tough talk, is just talk. I don't know if the Fed is going to raise rates at all. The market is now pricing in two or three rate hikes, but they're quarter-point rate hikes. Even if we get them, they're too little, too late to actually bring inflation down to 2%. They need much more aggressive interest rates, which are not going to happen. But I don't even know if these hikes are going to happen. 'Cuz if the Fed really was going to hike rates, why didn't they do it at the last meeting?
The market is pricing certainty, while policymakers continue acting uncertainly, and that mismatch deserves attention. Peter Schiff notes that traders now expect multiple rate hikes despite the Fed declining to act when it had the opportunity. Markets frequently misprice policy transitions because headlines move faster than institutional decisions. Investors betting solely on aggressive tightening may be ignoring how slowly central banks actually respond when economic risks begin mounting. Next, Peter Schiff exposes the contradiction between hawkish rhetoric and real Federal Reserve behavior.
They had plenty of opportunity. No, what did they do? They established these—well, not committees—task forces to staff five task forces now to study. So, they may not do anything until they get the recommendation of these task forces. And by the way, the longer they wait to hike rates, the less likely they are to do it. They might actually cut. And it's not going to be because inflation is coming down. That ain't going to happen. Inflation is going up. If they cut, it's because the economy is weak. It's because the stock market, the real estate market, are weak. It's because the bond market might be weak. That's why they're going to cut. They're going to cut despite inflation going up. In fact, look at the news that we got this week on consumer electronics. Big price increases from Apple on the iPhone, on iPad. I know Microsoft really jacked up the price of the Xbox. These are the biggest price increases percentage-wise I've ever seen. And one of the benefits, ha—you know, has been in consumer electronics. Prices have gone down in many cases over the years. That has offset the increases in food and energy and other things. So, that's been a bright spot. Consumers have had some relief that, yes, I pay more for just about everything, but at least my electronics have gotten cheaper. Now, they're going up faster than ever. Now, you can say, "Well, that's because of the AI raise, uh, and it's, it's because of memory is so expensive now, these chips." Yes, sure, but these prices are still in the CPI. Falling consumer electronic prices were helping to bring down the overall CPI. It offset some of the gains.
Higher prices don't disappear simply because policymakers delay uncomfortable decisions. According to Peter Schiff, forming more task forces instead of acting raises the odds that inflation remains elevated while economic weakness spreads. Investors focused only on interest rates may miss the persistent price pressures steadily erode purchasing power regardless of official explanations. Protecting wealth often means watching policy actions rather than policy promises. Next, Peter Schiff reveals why inflation can accelerate even as the economy loses momentum.
Now, those price increases are going to add to the gains. In fact, make them even bigger because of the magnitude of these increases. So, there's no way inflation is coming down. Inflation is going up. But, that does not mean the Fed is going to hike rates. Again, um, Warsh said it was a choice, and he's right. And I expect him to choose inflation. Yes, he's posturing now that he's not going to choose inflation, but he's going to make the same choice that Greenspan did, that, that, that Bernanke did, that, uh, that Yellen did, and that Powell did. They all made that choice for a reason, because if you choose not to have inflation, then you're choosing to have a recession. Because you have to, uh, you know, to you, you have to take away the punch bowl. You, you, we, we, we have to go through a withdrawal from all this cheap money. We have to contract money supply and credit. The Fed doesn't want to do that, 'cuz it doesn't want a recession, doesn't want a big increase in unemployment, doesn't want stocks to crash, doesn't want real estate to crash, doesn't want to create another financial crisis. These are the things that are going to happen to really get rid of inflation. So, Warsh can talk about it all he wants. He ain't going to do it. And, and, and it would also force fiscal responsibility on the government. It would force the government to cut spending or raise middle-class taxes. And why would Donald Trump, who spent the first part of his presidency calling, um, um, the, uh, um, Powell an idiot, a, a low IQ, a stupid person, "too late, pal," because he refused to cut interest rates? What is he going to do if his replacement raises interest rates? Something that Powell wasn't doing. Powell was—he was just staying pat. And Trump was all over the guy. So, politically, I don't see how this can happen.
Public speeches sound tough, but institutional incentives often point in another direction. What Peter Schiff is highlighting is that every Fed chair ultimately faces the same trade-off between protecting markets and defeating inflation. And history shows which path is usually chosen. Long-term savers bear the cost when policymakers prioritize financial stability over currency stability. Next, Peter Schiff exposes why political pressure may matter more than economic theory in future Fed decisions.