May 2, 2026
Last week, Peter joined Mark on Resource Talks to walk through how higher energy prices, central-bank policy, and market psychology are shaping the next few years. He argues oil is likely to remain elevated even if a war ends, warns that inflation is driven by monetary responses rather than commodity shocks alone, and urges investors to move out of dollars and Treasuries into gold as a hedge. He also lays out a stark Dow-to-gold forecast for the next few years.
He opens by warning that investors are banking on a quick peace and a collapse in energy prices, and that two mistakes are being made at once: underestimating geopolitical risk and ignoring structural pressures that keep oil high:
But if it turns out that this optimism is unfounded and the war is not over as quickly as people think or hope, the impact on oil prices is going to be greater. But I also think that people are wrong to believe that oil prices are just going to come crashing down as soon as we have a peace deal. I think that oil is going to stay higher for a lot longer and the price was going to go up anyway, even if we didn't have a war.
Peter clarifies a key macro distinction most pundits miss: an energy shock by itself tends to cause recessionary pressures; inflation becomes broad only after central banks respond with loose money. He points out that consumer inflation expectations remain elevated-even as the Fed is not yet easing:
And that's why rising oil prices, they're not inflationary, they're recessionary. What's inflationary is how a central bank responds to that. So if rising oil prices cause recession and then central banks print a lot of money and cut rates, that's what causes the inflation. Now that causes all the prices to go up, not just the energy prices and energy-related prices. And yet we've got consumer inflation expectations running at around 5% in the US, which is well above target, even as the Fed isn't easing.
That leads him to a practical recommendation: exit paper money and interest-bearing government debt and favor a real, monetary hedge. When he talks about consumer inflation here he's referring to measures like the Consumer Price Index (CPI), and he argues that rising inflation expectations act like a rate cut if nominal rates don't move:
I think that's why people need to get out of dollars and out of treasuries and people should be buying gold. Gold was sold in part because the Fed wasn't cutting. But those traders were overlooking the fact that the market was doing the cutting, that inflation going up is the equivalent of rates coming down if rates stay the same. Because it's real rates that are the driver here. And if inflation doubles, then real rates are cut in half.
Peter then turns to the Fed's policy record, blaming Jerome Powell for keeping rates too low for too long and for tolerating above-target inflation rather than acting decisively while the problem was smaller:
Powell left interest rates way too low for way too long. When it was obvious that the inflation genie was out of the bottle, he kept rates at zero. And you should have started raising a lot sooner. And then he even came up with this idea: even when inflation initially got above 2 percent, instead of immediately, "OK, we're above our target, let's cut rates," he was like, "oh, you know, we'll let it stay above two for a while."
Finally, Peter gives a long-term, non-consensus valuation outlook by framing the Dow against gold. He says investors should consider the possibility the Dow-to-gold ratio reverts dramatically, which would imply a very high nominal gold price relative to the S&P/Dow levels many take for granted:
My ultimate forecast is for a bottom somewhere between one and two, where the Dow is worth somewhere between one and two ounces of gold. Now, in order for that to happen with the Dow at 50,000, the price of gold would have to be somewhere between 25,000 and 50,000. So if that happened within those five years, it could happen. Now, it could also happen with the Dow going back to 10,000 and gold just doubling, and now you're at one-to-one.
This article was originally published on SchiffGold.com.