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Economy “must be in grave danger” if rates are still at zero, Wall Street legend says

Chicago Fed VP says hike might not come until 2016

“Gold is an inflation hedge and a chaos hedge.” That’s the opinion of legendary Wall Street trader Vic Sperandeo, otherwise known as “Trader Vic.”

That’s what he noted in a recent interview with King World News. Sperandeo isn’t buying the recent record highs in the stock market. He credits manipulation of interest rates by the Federal Reserve.

“The U.S. economy must be in grave danger, and I want to emphasize that again, grave danger of the system completely collapsing,” he said.

“There is no way we after five years that we should still be at zero interest rates, and allowing markets to do what they are doing with continued Fed manipulation, unless things are very, very dire. … Things must be very alarming behind the scenes because the Fed won’t allow any kind of selloff to occur in stocks.”

And don’t believe the mass media’s recent meme that interest rates are going to be rising next year. “The Fed just might have to maintain its easy policy stance until 2016,” MarketWatch reported in relaying a recent speech by Chicago Fed chief Charles Evans.

“We need to get much, much closer to 2% before we even contemplate liftoff,” Evans said, referring to the Fed’s inflation target. “Whether that’s late 2015 or early 2015 or 2016, it’ll depend on the economy.”

Remember: Gold performs best in a low-interest-rate climate. The Fed keeps changing the goalposts on when it will raise those rates. If you believe the U.S. economy is strong enough right now to digest a rate hike, you might want to sell your gold. Something tells us that the legendary Vic Sperandeo will be taking the other side of that trade.

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