Neither Trump nor Biden will wave a magic wand to fix America’s economic destruction – Peter Schiff

Stocks rallied before the election on expectations of a Joe Biden victory and Democrat control of the Congress. But the markets don’t seem to be particularly concerned about the actual economy, says economist Peter Schiff.

“It’s all about fiscal stimulus. And most people believe we’ll get the biggest stimulus package the quickest if Democrats control everything in Washington DC,” he said.

According to the CEO of Euro Pacific, “the reality is we’ll almost certainly get stimulus no matter who wins. This economy is built on stimulus. The powers that be will ensure the stimulus spigot stays open.”

Donald Trump has already said he wants a stimulus package even bigger than Democrats were calling for. And if for some reason they can’t work out a post-election stimulus plan, the Fed will remain poised to inject printed money into the economy, Schiff said.

That is good for gold, he noted said, adding: “Whether the stimulus comes from Congress, or the Fed, or both, the end result is more quantitative easing. That means more inflation. And ultimately inflation is better for gold than it is for stocks.”

Nevertheless, the economic dynamics in play won’t shift significantly with the outcome of the presidential election.

“Neither Trump nor Biden will wave a magic wand and fix the economic destruction inflicted by government actions in response to the Covid-19 pandemic. The wounds are deep,” Schiff explained.

“Neither man will stop overleveraged companies from shutting down. Neither man will put people back to work. All they can do is borrow and spend money – which we’ve already shown is good for gold.”

The economist noted that the US central bank will continue QE infinity, as the Fed has made it clear it plans to ignore any inflation threat. And there is no exit strategy from that extraordinary monetary policy.

Schiff added: “The printing presses in the Eccles Building will continue to churn out dollar bills. It is setting the stage for a major collapse in the dollar and neither Biden nor Trump will change that.”

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