Wednesday, October 29, 2014

Central Banks Got It All Wrong on Inflation

Friday, October 17, 2014

Biggest Crisis Ever Looms


This year has seen plenty of political turmoil - the waves of instability seem to do little to the world’s economy. Will that remain so for long? And if not - is there an another crisis looming, like the one that left thousands if not millions helpless and in poverty in 2008? And, finally, what does tomorrow hold for dollar? We ask these questions to leading financial analyst and CEO of Euro Pacific Capital Peter Schiff.

- Source, Russia Today

Wednesday, October 15, 2014

America is the most dependant country on the planet

I think America is the most dependant country on the planet. We depend on the rest of the world, like no other country does. We don’t have the ability anymore to produce the consumer goods that we require and so we count on the rest of the world to fill the void, to send us all the goods that they produce in exchange for nothing - because we don’t have the exports to pay for our imports. We count on the world to lend us the money to buy the products that they produce. We have the world’s biggest trade deficits, the biggest current account deficits, we’re the worlds’ biggest indebted nation. So, in a way, we’re like a global economic parasite - we feed off the rest of the world and we need to maintain the illusion that the world depends on America instead of the other way around. Of course, in the long run, I think this relationship is doing far more damage to America than to the global economy, because eventually the world is going to figure out what we’re doing, and they’re not going to support us anymore, and the world will pull the plug on america and then, of course, because this has gone on for so many years and our economy has been able to evolve in such an unsustainable bubble fashion - it’s going to be very, very painful when we have to live within our means again and start to produce and save rather than borrow and consume.



- Source, Peter Schiff via Russia Today

Monday, October 13, 2014

Coming Collapse Becoming More Evident to Investors


Peter Schiff believes that a coming collapse is on the way. Are investors waking up to this reality? Finally?

Saturday, October 11, 2014

Stock Market Going Up For Wrong Reasons


Peter Schiff discusses why he thinks stocks are going up for the wrong reasons. Interest rates are also discussed. The FED has it all wrong when it comes to inflation according Peter Schiff.

Thursday, October 9, 2014

The FED CAN'T Raise Interest Rates

I think a lot of people are delusional. They believe in this false narrative, they have confidence in what the Federal Reserve has done, the believe the forecasts of many of the economists about vibrant growth in the U.S. economy in years ahead, and of how Fed will raise interest rates, and the economy continues to expand. All that is impossible. The Federal Reserve has placed itself into position where they can never raise any interest rates - in fact, I don’t think they’re going to be able to go very long without launching another round of quantitative easing, because our bubble economy is completely dependant on the continuation of that policy. When the Fed takes it away, we’re headed for a massive economic collapse.

- Source, Peter Schiff via Russia Today

Tuesday, October 7, 2014

The FED is Doing a Lot of Damage

Right now, a lot of people don’t appreciate how much damage the Federal Reserve is actually doing, because there’s a lot of false optimism right now regarding the success of the Federal Reserve's QE program, and its 0% interest rates. People believe that it’s been successful at reviving the U.S. economy, and that’s why there's some interest in the dollar in our markets - but all what Fed has succeeded in doing is exacerbating all of the problems that caused the 2008 financial crisis and they’ve inflated a much bigger bubble - so I think the crisis that we have coming is unfortunately going to be much worse that the one we passed.

- Source, Peter Schiff via RT

Sunday, October 5, 2014

Gold Videocast: Peter Schiff Answers Questions from You!


In his latest Gold Videocast from Euro Pacific Precious Metals, Peter takes the time to answer some of the trickier questions he gets from his clients and subscribers.

Friday, October 3, 2014

Fed Haters vs. Fed Cheerleaders


FED Hater, Peter Schiff and FED Cheerleaders go face to face in this battle on CNBC.

Wednesday, October 1, 2014

Ron Paul and Peter Schiff Talk Iraq, Perry, Rand, Fed, IRS


Peter Schiff and the legendary Ron Paul discuss current events in the United States and around the world. Peter brings up the unfolding situation in Iraq, his son Rand, the FED and the IRS.

Wednesday, August 27, 2014

Yellen: Where No Man Has Gone Before

Although Fed Chairwoman Janet Yellen said nothing new in her carefully manicured semi-annual testimony to Congress last week, her performance there, taken within the context of a lengthy profile in the New Yorker (that came to press at around the same time), should confirm that she is very different from any of her predecessors in the job. Put simply, she is likely the most dovish and politically leftist Fed Chair in the Central Bank's history.

While her tenure thus far may feel like a seamless extension of the Greenspan/Bernanke era, investors should understand how much further Yellen is likely to push the stimulus envelope into unexplored territory. She does not seem to see the Fed's mission as primarily to maintain the value of the dollar, promote stable financial markets, or to fight inflation. Rather she sees it as a tool to promote progressive social policy and to essentially pick up where formal Federal social programs leave off.
Despite her good intentions, the Fed's blunt instrument policy tools of low interest rates and money supply expansion can do nothing to raise real incomes, lift people out of poverty, or create jobs. Instead these moves deter savings and capital investment, prevent the creation of high paying jobs, and increase the cost of living, especially for the poor (They are also giving rise to greater international financial tensions, which I explore more deeply in my just released quarterlynewsletter). On the "plus" side, these policies have created huge speculative profits on Wall Street. Unfortunately, Yellen does not seem to understand any of this. But she likely has a greater understanding of how the Fed's monetization of government debt (through Quantitative Easing) has prevented the government from having to raise taxes sharply or cut the programs she believes are so vital to economic health.

But as these policies have also been responsible for pushing up prices for basic necessities such as food, energy, and shelter, these "victories" come at a heavy cost. Recent data shows that consumers are paying more for the things they need and spending less on the things they want. But Yellen simply brushes off this evidence as temporary noise.

In her Congressional appearances, Yellen made clear that the end of the Fed's six-year experiment with zero percent interest rates is nowhere in sight. In fact, the event is less identifiable today than it was before she took office and before the economy supposedly improved to the point where such support would no longer be needed. The Bernanke Fed had given us some guidance in the form of a 6.5% unemployment rate that could be considered a milestone in the journey towards policy normalization. Later on these triggers became targets, which then became simply factors in a larger decision-making process. But Yellen has gone farther, disregarding all fixed thresholds and claiming that she will keep stimulating as long as she believes that there is "slack" in the economy (which she defines as any level of unemployment above the level of "full employment.") Where that mythical level may be is open for interpretation, which is likely why she prefers it.

The Fed's traditional "dual mandate" seeks to balance the need for job creation and price stability. But Yellen clearly sees jobs as her top priority. Any hope that she will put these priorities aside and move forcefully to fight inflation when it officially flares up should be abandoned.

These sentiments are brought into focus in the New Yorker piece, in which she unabashedly presents herself as a pure disciple of John Maynard Keynes and an opponent of Milton Friedman, Ronald Reagan, and Alan Greenspan, figures who are widely credited with having led the rightward movement of U.S. economic policy in the last three decades of the 20th Century. (Yellen refers to that era as "a dark period of economics.")

Perhaps the most telling passage in the eleven-page piece is an incident in the mid-1990s (related by Alan Blinder who was then a Fed governor along with Janet Yellen). The two were apparently successful in nudging then Fed Chairman Alan Greenspan into a more dovish position on monetary policy. When the shift was made, the two agreed "...we might have just saved 500,000 jobs." The belief that central bankers are empowered with the ability to talk jobs in and out of existence is a dangerous delusion. As her commitment to social justice and progressivism is a matter of record, there is ample reason to believe that extremist monetary policy will be in play at the Yellen Fed for the duration of her tenure.

For the present, other central bankers have helped by taking the sting out of the Fed's bad policy. On July 16 the Wall Street Journal reported that the Chinese government had gone on a torrid buying spree of U.S. Treasury debt, adding $107 billion through the first five months of 2014. This works out to an annualized pace of approximately $256 billion per year, or more than three times the 2013 pace (when the Chinese government bought "just" $81 billion for the entire calendar year). The new buying pushed Chinese holdings up to $1.27 trillion.

At the same time, Bloomberg reports that other emerging market central banks (not counting China) bought $49 billion in Treasuries in the 2nd Quarter of 2014, more than any quarter since 3rd Quarter of 2012. These purchases come on the heels of the mysterious $50 billion in purchases made by a shadowy entity operating out of Belgium in the early months of this year (see story).

So it's clear that while the Fed is tapering its QE purchases of Treasury bonds, other central banks have more than picked up the slack. Not only has this spared the U.S economy from a rise in long-term interest rates, which would likely prick the Fed-fueled twin bubbles in stocks and real estate, but it has also enabled the U.S. to export much of its inflation.As long as this continues, the illusion that Yellen can keep the floodgates open without unleashing high inflation will gain traction. She may feel that there is no risk to continue indefinitely.

But as the global economic status quo is facing a major crisis (as is examined in this newsletter), there is reason to believe that we may be on the cusp of a major realignment of global priorities. Despite her good intentions, if Yellen and her dovish colleagues do not receive the kind of open-ended international support that we have enjoyed thus far in 2014, the full inflationary pain of her policies will fall heaviest on those residents of Main Street for whom she has expressed such deep concern.

- Source, Peter Schiff, via Schiff Radio

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