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[video] Quick Take: Schiff: The Fed Is Lying

NEW YORK (TheStreet) --'s Peter Schiff told TheStreet's Joe Deaux that Wall Street has priced gold incorrectly.

While Washington is shut down, Schiff said, Congress will likely raise the debt ceiling when the debate comes up later this month. Although there's the slim chance it might not happen, the Congress has approved an increase in the debt ceiling every time so far, which has been positive for gold prices.

He added that gold has performed extraordinarily well over the last decade as the nation's debt continues to rise and as money printing continues to expand.

Although gold has had a rough 2013, he said it was because a lot of bandwagon speculators piled on after the huge run higher, before being shaken earlier this year. Many analysts are negative on gold prices, but Schiff said they are basing their judgements on three false ideas: the Federal Reserve is stopping quantitative easing, the U.S. economy is in a viable recovery and inflation is not a concern.

Instead, he argues the Fed will actually increase quantitative easing, the economy is on the verge of a recession and inflation remains a large problem.

As for the Fed, he said it is lying when it says inflation has not been an issue. Schiff claimed the central bank had to create the false impression that there's no inflation in order to validate its monetary policy.

He concluded that inflation is obvious in the rising costs of everyday goods that Americans purchase. Schiff added that he's surprised Wall Street has bought into this no-inflation jabber and remains bullish on gold.

-- Written by Bret Kenwell in Petoskey, Mich.