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article imagePeter Schiff: Bernanke has done a terrible job as Fed Chairman

By Andrew Moran     Jan 24, 2010 in Business
Peter Schiff, President of Euro Pacific Capital and Republican Senatorial candidate, spoke on CNBC on Friday to discuss the current financial state of China and Ben Bernanke's performance as Chairman of the Federal Reserve.
Peter Schiff, author of “Crash Proof 2.0” and “The Little Book of Bull Moves in a Bear Market,” was interviewed on CNBC’s “Fast Money” on Friday to discuss the current financial state of China and the reconfirmation of Federal Reserve Chairman Ben Bernanke, according to Benzinga.
There have been many speculations that China is in a real estate bubble, such as the piece written by Jim Chanos who said China could possibly collapse in 2010 because of its major credit bubble and an economy driven by stimulus. Also the Chinese government may begin to raise interest rates, which has caused commodity stocks to decline slightly.
However, Schiff is not worried and just thinks it will be bad for the United States when China starts raising rates because that means it will put a lot of pressure on the US Dollar, “As the RMB goes up that’s going to cause more money to flow out of Dollars into RMB and, of course, the Chinese aren’t going to be expanding their money supply as much and they don’t have to buy as many Treasuries, and that means the Fed is going to be printing even more Dollars to buy what the Chinese don’t want.”
The Connecticut Republican Senatorial candidate later added that China cannot tighten its money supply and tighten interest rates without not buying Dollars because when they keep their money supply loose and expanding that’s when their buying, “They don’t have any real tightening until they stop expanding money supply and when they stop expanding money supply they stop buying Treasuries. That’s how it works.”
Gold has pulled back a lot since its record high of $1,220 and is currently trading at $1,090. However, Schiff has been long in gold and further emphasized his long-term investment on gold by telling CNBC viewers that he bought another gold stock for his own personal account and buys every pullback in gold, “I think gold is going a lot higher in the near term and long term. Gold stocks are going to go up and whenever they go down it’s an opportunity to buy.”
Bloomberg reported that Senate Majority Leader Harry Reid is backing Federal Reserve Chairman Ben Bernanke for his second-term but Schiff was laughing at that news on CNBC and stated that Bernanke has done a terrible job as Fed Chairman and prior to his promotion, therefore, he would not vote, if he was Senator, to reconfirm him as Chairman.
“We’re going to get somebody worse. I don’t like Ben Bernanke because he was too easy and Congress doesn’t like him because he wasn’t easy enough.” Schiff added, “I would be a much better Fed Chairman than Ben Bernanke...hands down. My 7-year-old son would be better.”
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