Economist slams Fed for selling inflation under control narrative

Core Viewpoint - Peter Schiff argues that the recent surge in gold prices reflects economic weakness rather than prosperity, contradicting the U.S. Federal Reserve's inflation narrative [1][2]. Group 1: Gold Market Insights - The rising gold price indicates that investors and central banks are seeking refuge from the declining value of fiat currencies, suggesting concerns about inflation [2]. - Schiff emphasizes that if there were no worries about inflation, there would be no demand for gold, highlighting a shift in central bank strategies towards gold as a hedge against inflation [2]. Group 2: Economic Indicators - The consumer price index (CPI) rose at a 2.7% annualized rate in November, slightly below the forecast of 3.1%, indicating that inflation remains a concern [3]. - Despite the Dow Jones index appearing significantly higher than at the start of the century, it has decreased by about 70% when measured in gold terms, illustrating a loss of purchasing power [3]. Group 3: Market Reactions and Expectations - Wall Street economists have raised concerns about the reliability of the inflation report due to missing data from the recent government shutdown, which could affect market expectations [4]. - Inflation and employment data are crucial as they influence Federal Reserve rate decisions, impacting the U.S. dollar and global liquidity, which in turn affects risk assets like Bitcoin [5].