Peter Schiff: Fed easing will raise inflation, gold $20,000

Peter Schiff, chairman of Euro Pacific Asset Management, said in a recent interview that Federal Reserve easing and a balance-sheet expansion of more than $200 billion this year will drive higher U.S. inflation and boost demand for gold.

Schiff cited a year-over-year Consumer Price Index reading of 3.8% and stated that April’s annualized figure is running nearer 7.2%. He noted oil prices were higher than when those inflation figures were calculated and warned markets are pricing in rate cuts he does not expect. “The markets are really set up for a major disappointment,” he said.

He reported the Fed’s balance sheet has increased by over $200 billion so far this year and described the money supply as growing at a rate of at least 5%, which he called inconsistent with a 2% inflation target. He said the central bank would likely increase Treasury purchases if the 10-year yield breaks decisively above 4.5%, a move he expects would expand the balance sheet further and add upward pressure on prices. He also raised the possibility that 30-year Treasury yields could rise above 8%, which he said would harm U.S. government finances given current debt levels.

On federal obligations, he argued the official debt figure of about $39.2 trillion omits unfunded Social Security, Medicare and pension commitments and estimated total liabilities nearer $150 trillion. He described the nation as insolvent in that context and criticized Social Security’s structure, saying the trust fund holds mainly Treasury bonds and younger Americans should not rely on the program for retirement income.

He addressed trade policy and fiscal comparisons, saying tariffs act as a cost to U.S. consumers and referencing comments that lowering beef tariffs would cut prices. He asserted that federal deficits under the current administration are larger than under the prior administration and cited GDP growth of 2.1% in the first year of the earlier administration, which he said was below each year of the subsequent term.

Schiff restated a long-standing bullish outlook for gold, comparing an ounce priced at $35 in 1971 to roughly $5,000 today, and projected gold could reach $20,000 within the next decade. He recommended physical gold and silver for most investors and said mining stocks could offer greater upside for those willing to accept more risk. He manages the Euro Pacific Gold Fund and offers physical metal services through his firm.

He also criticized Strategy Inc.’s perpetual preferred stock, STRC, which pays about 11.5% annually, and targeted the company’s chairman, Michael Saylor. After Saylor suggested the firm might sell bitcoin to cover STRC dividends, Schiff called the security “a pure Ponzi” on social media and warned retirees could lose principal if dividends were suspended or the company sold assets to pay holders. He accused Saylor of making statements that could raise questions under Securities and Exchange Commission marketing rules and said those comments might support legal claims by harmed investors.

Schiff said foreign central banks are reallocating into gold and questioning the dollar’s strength, a trend he linked to rising metal prices. He framed these views in his capacity as an investor and manager of gold-focused funds.