Greg Hunter of USAWatchdog interviewed Peter Schiff last week about the new highs in the stock market and what the positive financial news really portends for the United States economy. Peter also shares his thoughts about a bottom in the gold price.

Here are some highlights from the interview:

They don’t actually understand the fundamentals. The big disconnect right now is between the real state of the US economy and the fantasy land that a lot of investors believe exists. Everyone is of the opinion that the Federal Reserve’s monetary policy worked. That because they did QEs 1, 2, and 3, and they kept interest rates at zero, the Federal Reserve saved the US economy. They solved all the problems, and because the problems have been solved, we no longer need a Fed. They can end quantitative easing, they can raise interest rates back to normal. They can shrink their balance sheet… Everything is fine. That is a complete fantasy. I think there is a bigger disconnect now than there was just before the 2008 financial crisis…

Rather than raising interest rates next year like everybody expects, I think they’re going to launch QE4, which nobody expects. Because there is no end to this. The Fed has to do this indefinitely, because the minute they stop artificially propping up this phony economy it will implode. What everyone is confusing is a bubble for a genuine recovery. It’s not…

The fact that we’ve been able to postpone the day of reckoning so long, just makes the problems worse. Which means the day of reckoning is worse, because the further back into the future we deal with the consequences, the bigger the problems are… Just because it hasn’t happened yet, doesn’t mean it’s not going to happen…

Maybe [more QE is] going to be the wakeup call. Because the only reason we’ve been able to get away with it is because people believe it’s temporary. They believe it’s going to work. They believe the Fed has an exit strategy. When they realize it didn’t work, it failed, and because it failed, it’s never going to end, it’s going to be repeated indefinitely, it’s QE-infinity. Which is what I said from day one. That once we went down this road, we would never stop. Once we have an economy that lives by QE, it will die by QE…