Well, it seems that Peter Schiff was right again. For months he has been harping on his contention that the Fed never had the intention of raising rates, and he never budged from that viewpoint, other than to say a one-off rate hike was possible and qualifying that he still thought they were not going to hike even a small 25 basis points.

The reaction to the decision was expected, except for the the effect on stocks. Gold (NYSEARCA:GLD) and silver (NYSEARCA:SLV) surged higher along with the accompanying mining stocks (NYSEARCA:GDX). Bonds surged (NYSEARCA:TLT) as interest rates plummeted, and the dollar index (NYSEARCA:UUP) fell just as fast.

The only move that raised some eyebrows is the effect the surprise lack of an interest rate hike had on stocks. The Dow (^DJI) Nasdaq (^IXIC) and the S&P 500 (^GSPC) all sold off on the announcement and then surged, only to sell off again and end the day marginally down. Equities traders clearly do not know what to think from here, given rates have been near zero for the longest time in history. The question on everyone’s mind is, if not now, when? And nobody seems to know the answer.

But the answer, after today, does seem clear to those who understand the Fed’s main fear, which is price inflation. When the consumer price index came in at negative 0.1% yesterday, the chances of a rate hike shrank. It seems likely that the only thing that will get the Fed to raise rates even a tiny bit is higher price inflation. Short of that, there is just no reason to risk cutting fragile economic growth.

The problem is, with rates so low for so long, when inflation finally does start to show up in the CPI, it may be too late for monetary policy to do anything. If the CPI begins to climb in earnest, the economy may not be ready for a rate hike aggressive enough to tame it.

If the Fed broadcast anything today to Wall Street, it is that as long as economic numbers are at least decent and inflation is low, zero interest rates will continue, if not even negative ones. One Federal Open Market Committee member even predicted negative interest rates for 2016.

The other fly in the ointment though is that China is still dumping treasuries at a record pace. China is said to have dumped $300B in foreign exchange reserves in 3 months with the latest figures showing that forex has plummeted from $4 trillion to $3.5 trillion in little over a year. At some point, this will raise interest rates regardless of what the Fed does.

One wonders if Yellen and company are ready for that. Something tells me they aren’t.