Brexit Vote Manna From Heaven For Janet Yellen (Podcast)

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By Samuel Bryan

According to Peter Schiff, the Brexit vote is just what the doctor ordered for Janet Yellen.

Stocks plunged and gold surged in the wake of Brexit. As of Monday morning, gold was up more than 5%. Most analysts think gold went up because of the UK's decision to leave the European Union, but Peter said even before the vote that he thought it didn't really matter. In fact, he called the Brexit vote a "non-event" as far as its long-term impact on the gold market.

In his latest podcast, Peter reiterated the point. Yes, gold is going up, but he said it was going up regardless of the outcome of the referendum:

You know, a lot of people think the reason gold is up is because Brexit. I mean, that was a catalyst for the rally today, but it was going up anyway... I think even if they had voted to remain, I believe gold would have gone up. I don't think it mattered. But this is an easy excuse for people who don't understand why the gold is going up; they can just chalk it up to the uncertainty and not look at all the things we're actually certain of in the US economy, and with the Fed and the dollar that are the real driving force behind gold."

Peter went on to look at some recent economic news lost in all of the Brexit talk, and said the outcome of the vote was great news for Janet Yellen:

As far as Janet Yellen is concerned, this is manna from heaven. I mean, this is just what the doctor ordered. Because Janet Yellen has been in a bit of a quandary, because she's been talking about how great the economy is, but she hasn't been raising rates. She's been saying higher rates are appropriate given the recovery, yet she won't raise rates. Why? Well, because I think she knows there is no recovery. It's just a bubble, and she doesn't want to put any more holes in it by raising rates again. I mean, she tried that once, and it was a disaster... Now she's got an excuse."

Highlights from the Podcast:

"A lot of people over there are experiencing the same type of problems we're experiencing on this side of the pond. They have a falling standard of living, they have a rising cost of living and they're getting desperate. Here we're reaching for straws like Donald Trump or Bernie Sanders, and the straw that they had was Brexit - leaving the EU."

"One of the reasons Switzerland is probably the most prosperous country in Europe is because it had the good sense not to get into the EU."

"There is no safety in the US dollar. But people are buying it anyway. The only asset that is actual safety is gold, because nobody is funding their risk-on trades by shorting gold... Everybody bought gold because gold went up in every single currency on the planet. But a better way to look at it: it's not that gold went up. It's that every fiat currency went down."

"I think this is a good breakout in the price of gold, and I think we're going to see a whole lot more upside in the days and weeks ahead."

"You know, a lot of people think the reason gold is up is because Brexit. I mean, that was a catalyst for the rally today, but it was going up anyway. In fact, the reason gold sold off over the past couple of weeks is because people were pretty sure Brexit wasn't going to happen... I think even if they had voted to remain, I believe gold would have gone up. I don't think it mattered. But this is an easy excuse for people who don't understand why the gold is going up; they can just chalk it up to the uncertainty and not look at all the things we're actually certain of in the US economy, and with the Fed and the dollar that are the real driving force behind gold."

"So, as the financials are getting crushed, the antitheses of the financials - gold - is going higher and higher, and I think this trend is going to continue."

That's 17 consecutive year-over-year declines in core capital goods. I mean, 17 months in a row. This has never happened in the US economy unless the US economy is in a recession. And I still think it hasn't happened outside of a recession, because I think we're in one. It's just that nobody wants to admit we're in one."

"As far as Janet Yellen is concerned, this is manna from heaven. I mean, this is just what the doctor ordered. Because Janet Yellen has been in a bit of a quandary, because she's been talking about how great the economy is, but she hasn't been raising rates. She's been saying higher rates are appropriate given the recovery, yet she won't raise rates. Why? Well, because I think she knows there is no recovery, it's just a bubble, and she doesn't want to put any more holes in it by raising rates again. I mean, she tried that once, and it was a disaster."

"Now she's got an excuse. All hell is breaking lose now. The markets are tanking, the dollar went up, there's all this uncertainty now..."

"We've got our own political revolution coming in the United States. I have no idea what's lurking on the other side of it, just like we don't really know for sure what's on the other side of this Brexit... Are they going to vote to make themselves the next Switzerland, or are they going to vote to make themselves the next Greece?"