GOLD is the money of the KINGS, SILVER is the money of the GENTLEMEN, BARTER is the money of the PEASANTS, but DEBT is the money of the SLAVES!!!
Saturday, February 18, 2017
Peter Schiff : The Economy Handed Off To Trump Is Like A Hand Grenade & It's Getting Ready To Go Off
Transcript : today we have a returning 0:26 guest Peter Schiff peter is the chairman 0:28 of ship gold CEO and chief global 0:30 strategies of your pacific capital here 0:32 is one of the few forecasters who 0:34 accurately predicted the 2007 0:36 housing-market collapse and subsequent 0:38 2008 financial crisis and peers with us 0:40 today to talk about what is happening in 0:42 the economy Peter welcome back to the 0:44 exponential report spotlight 0:46 oh and thanks for having me back and 0:49 thanks for being here 0:50 I wanted to start off with the economy 0:51 of one Obama was leaving office he said 0:54 he was handing Trump this strong 0:56 incredible economy when you look at the 0:59 economy with retail gdp employment has 1:02 you really actually handed him a strong 1:04 economy know he is handed him a bubble 1:07 or maybe a hand ready 1:09 that's the power to you about to go off 1:11 here I mean this is the biggest bubble I 1:13 think anybody has ever had any president 1:16 did you guys think that George Bush has 1:18 a misfortune of inheriting the bubble 1:21 that we had under clinton and of course 1:23 the the manufacturer that bubble was 1:26 more Alan Greenspan and Clinton himself 1:28 but the prosperity that we enjoy under 1:32 Clinton was phony and the bubble burst 1:35 shortly after bush change in town and 1:38 then what happened was the Federal 1:40 Reserve inflated a larger bubble in the 1:42 real estate market to numb the pain from 1:45 the bursting of the dot-com bubble and 1:48 that bubble burst while trunk was 12 1:52 Bush was still in office and so it 1:54 looked as if I Obama had inherited a 1:58 mess and made it better but what he did 2:01 is he inherited a mess and now made a 2:03 bigger mess right he we have the biggest 2:05 bubble ever being reckless monetary 2:07 policy that we pursued under Bernanke 2:09 and under Yellen is far worse than 2:12 anything done under under Greenspan and 2:16 so the prosperity as bad as it was under 2:19 obama was completely phony it was all 2:22 artificial based on inflated asset 2:25 prices but it really didn't trickle down 2:27 to the average guy with the average 2:29 American software under the Obama 2:31 didn't see that's why trunk and the 2:33 current president because this was just 2:35 they say is financial recovery rather 2:38 than a recovery in the real economy but 2:42 this bubble is about to burst you have 2:43 inflation out really starting to 2:45 accelerate today we got the CPI 2:48 year-over-year we have a two-and-a-half 2:50 percent increase and that's what the 2:52 government will admit if they're 2:54 admitting two-and-a-half believe me it's 2:55 a lot higher than that but inflation is 2:58 is rising and defendants way behind the 3:01 curve and we have so much debt now if 3:03 they can't raise interest rates to fight 3:05 inflation so it's going to keep on 3:07 getting higher wages are going nowhere 3:09 so real wait you're going to be falling 3:11 and eventually you're going to start to 3:13 see a big off to uptick in unemployment 3:15 as this all mirage advantages and people 3:19 see this so-called recovery for what it 3:21 is so Trump wants to try to fix all of 3:24 this he wants to spend more money he 3:27 wants to borrow to create jobs to help 3:30 the infrastructure will this actually 3:32 help the economy by borrowing more money 3:35 no we can't fix this by going deeper 3:37 into debt we can't fix it with more 3:40 government spending what we need to do 3:42 is cut government spending dramatically 3:45 and a lot of the debt needs to be 3:47 defaulted on because it's impossible to 3:49 repay it and you know because we need 3:51 higher interest rates that is the must 3:54 we're never going to have a recovery 3:55 unless we have higher rates and i'm not 3:57 talking about the Fed raising rates from 3:59 a half percent to record the percent we 4:02 need normal interest rates we need five 4:04 six seven percent we need a interest 4:07 rates that reflects the true amount of 4:09 savings indebtedness economy we need 4:11 interest rates high end up to encourage 4:14 people to save money in the bank so that 4:17 small business can actually get capital 4:20 that it needs to expand and grow and so 4:23 with chocolate talking about is trying 4:25 to preserve the bubble we need to let 4:28 the bubble pop I mean he's also talking 4:30 about bringing jobs back here and 4:33 manufacturing at this time when he's 4:35 he's out there talking to many different 4:37 corporations and their promising to 4:40 bring all these jobs back to the US I 4:43 mean is it really possible to 4:45 bring all these jobs back when they've 4:47 been you know offshoring them all this 4:49 time 4:49 no I mean not now back to what there's 4:52 no factories for them to work in the 4:55 whole supply chain has been dismantled 4:56 and we don't even have workers who are 5:00 qualified to do the work show in the 5:03 long run 5:04 can we resurrect our manufacturing 5:06 industry and and bring jobs back 5:08 yeah we can but it's going to take a 5:10 long hot it's not like gonna happen 5:12 during the trump presidency 5:14 maybe he can lay the foundation to 5:16 enable that to happen over a longer 5:18 period of time but this is going to be a 5:19 process but we can't even begin the 5:21 process until we start dismantling much 5:24 a government we need to shrink 5:25 government so we can have a lower tax 5:27 environment that we need to rebuild our 5:31 savings so we can make the capital 5:33 investment that are necessary to bring 5:35 these jobs back so we we need higher 5:37 interest rates we need to allow asset 5:39 prices to call calm down 5:41 stock prices have to go down whilst a 5:43 price that we go down bond prices have 5:45 to go down we have to go through a 5:47 cleansing recession without the 5:49 government interfering in the market n 5:51 to rebalance the economy so they can 5:54 have a healthy real economic growth not 5:57 just another bubble so you talked a lot 6:00 about the debt I mean that the United 6:02 States worried about 20 trillion 6:04 continually moving up we have about 200 6:07 trillion of unfunded liabilities and you 6:10 know everyone keeps talking about you 6:12 know can we sustain this debt 6:14 I mean how much longer can we go 6:16 sustaining this debt as it continually 6:19 moves up 6:20 I mean can we go any further than this 6:22 well you know the reason that the Fed or 6:24 one of the reasons that interest rates 6:26 have been so low is because we could not 6:28 sustain the debt were not for these low 6:31 interest rates the debt is so large that 6:33 servicing it would be impossible if the 6:36 Fed were to normalize rates which is why 6:39 that hasn't happened and that's why you 6:41 don't even though inflation is well 6:42 above their so-called two percent target 6:44 the set is not out raising rates or if 6:48 they do it's going to be by a tiny 6:49 amount because they recognize this but 6:52 at some point even a tiny interest rate 6:55 is going to be too large for our common 6:58 to bear 6:58 you know and meanwhile other costs are 7:00 going to be going up as a result of all 7:02 the money that's already been printed 7:03 energy costs are going to go back up 7:06 you promise you're going back up 7:07 insurance taxes the cost of living is 7:09 already rising even without the cost of 7:12 dexter is rising but as interest rates 7:14 rise that is going to crush this economy 7:17 because of the added cost of servicing 7:20 the debt and and then I also think if we 7:23 get any kind of physical stimulus under 7:25 the Trump administration if we do get a 7:27 tax cut if we do get additional 7:30 government spending on infrastructure 7:31 the military or the border which sends 7:35 our deficits much higher that's going to 7:37 accelerate the collapse because i don't 7:40 think the appetite is there you know 7:42 among our foreign creditors to finance 7:45 all this to loan us the money is back to 7:47 anything if you look at countries like 7:49 China like Japan like Russia I like 7:53 Saudi Arabia these have been our biggest 7:55 lenders they want their money back 7:58 they're shrinking they're letting their 7:59 Treasury portfolios are the qualities so 8:03 the set is gonna have to step off if 8:06 unless unless they want interest rates 8:08 skyrocket they're going to have to print 8:10 a lot of money and buy a lot of bonds 8:12 and you know that's the beginning of the 8:13 end now in Europe we see there's many 8:15 countries out there like the UK France 8:19 Italy and others who are looking to most 8:22 likely leave the EU if these countries 8:25 start to leave the EU will this what 8:27 happened effect will have on the US on 8:29 the dollar 8:30 i meanwhat look we'll just be a ripple 8:32 effect that will hit the United States 8:34 well i don't know i mean you know and at 8:37 some point there may be a number of 8:39 states that want to leave the united 8:40 states that mean you know just about any 8:42 state would be better off if it were 8:44 independent because it would no longer 8:46 be obligated for each share of the 8:48 national debt i was down you know and it 8:51 would no longer be obligated to pay 8:52 federal income tax or any any taxes but 8:55 you know a lot of the European nations 8:57 think they'd be better off without the 8:59 European Union you know what 9:01 pretty soon Germany might be among that 9:03 because the Germans are going to be 9:05 complaining inflation in Germany is now 9:07 the highest and 45 years and in going 9:09 higher and the Germans don't like this 9:12 they don't like this kind of monetary 9:13 policy so I don't know how things are 9:15 going to play out in the short run but i 9:17 do think the euro is headed higher 9:19 against the dollar because i do think 9:21 that the european central bank is going 9:23 to have to abandon its quantitative 9:25 easing program much sooner than the 9:27 markets expect and I also think that the 9:29 u.s. is going to go back to the easy 9:32 I'll when the markets don't expect that 9:34 at all i think that that is going to be 9:36 boarding it's great hiking campaign even 9:38 in the face of rising inflation and even 9:41 if it doesn't aboard it even if he keeps 9:43 raising race he's not going to raise 9:46 them enough to cause real interest rates 9:48 to actually rise I think real 9:50 inscription going to fall in fact if you 9:52 look at real interest rates today they 9:54 are lower right now than they were 9:56 before the first rate I so that is not 9:59 actually moved up race because they've 10:01 risen baby bump them up so slowly that 10:03 they've actually you further into 10:05 negative territory on a real base now I 10:08 want to talk about the set in a minute 10:09 but I eat mentioned germany and that 10:11 just brought I just thought of the 10:12 Bundesbank where their repatriating the 10:14 gold about 300 times from the Fed and 10:16 they just completed that and they 10:18 repatriated the gold faster than 10:20 expected 10:21 why do you think they wanted their gold 10:24 back and why did they accelerate the 10:25 process 10:26 well I think they wanted it within their 10:28 own border just so they have I mean the 10:30 United States has a checkered history 10:32 when it comes to the goal and we made it 10:34 illegal for our own citizens to own gold 10:36 we also default it on our obligations to 10:39 table because up until 1971 if you were 10:43 in Germany and you have $35 said owes 10:47 you an ounce of gold that gold was on 10:50 deposit in Fort Knox 10:52 but if you brought them $35 out to the 10:55 Federal Reserve rates they had to give 10:56 you announce the goal that was our 10:58 commitment and then we default on that 11:00 promise and we pay no goal for our notes 11:03 so i think that Germany appreciates the 11:06 financial predicament the United States 11:07 is in and doesn't want to leave its 11:09 goals you because what if things get so 11:12 bad in the united states that need to 11:13 see that goal was a national emergency 11:15 we just so you know we needed you know 11:17 and and what is what is Germany could do 11:19 about I mean acha and then academia 11:21 declare war on us so they would just be 11:24 you know Sol 11:25 so I think to not have that problem they 11:28 just decided you know what this is our 11:30 goal and this is you know we need this 11:32 gold and we're not gonna take any 11:33 chances so let's bring it back to 11:35 Germany where we can protect it and know 11:37 that we own it now when the Germans had 11:39 received the gold there was some talk 11:41 about how the labeling on the gold was 11:44 different suggesting that maybe the Fed 11:46 really didn't actually have the gold and 11:48 they were getting it from other areas 11:50 well again is the US government that has 11:52 the goal i don't know that i don't know 11:54 that the Fed has goals as the component 11:57 of its balance sheet i think pretty much 11:58 the only thing defend has his treasuries 12:01 and mortgage-backed securities but the 12:03 United States government supposedly owns 12:05 a substantial gold reserve our and the 12:10 question is do we actually have all that 12:12 goal that we claim to have and you know 12:15 I don't know right i mean i don't know 12:17 if you can trust the numbers i'm not 12:18 sure the last time there was an 12:20 independent audit of our gold exactly 12:22 never been one you wrote an article 12:24 about the stock market and the US dollar 12:27 and you wrote that one is going to crash 12:30 can you just explain what you mean by 12:31 that well I mean the stock market is 12:34 extremely overvalued and it will crash 12:36 eventually unless the dollar crashes 12:39 instead right because the only way that 12:41 the Federal Reserve can prevent a 12:43 substantial decline in the stock market 12:44 is to you print a lot of money 12:48 I just make sure that the dollars 12:49 declines instead of the stock market but 12:51 that means that the real value of US 12:53 stocks is going to come crashing down 12:56 one way or another either it's because 12:59 the Fed does the right thing and 13:01 aggressively raises interest rates and 13:04 allows the stock market crash or because 13:07 the Fed does the wrong thing and doesn't 13:09 raise rates on wrestler doesn't raise 13:11 him at all or cut rates and launches qe4 13:13 and so instead of the stock market 13:16 crashing the dollar crashes but that 13:18 means that the real value of stocks go 13:20 down and a good way to measure the stock 13:22 market is in the price of gold and you 13:24 let's say right now the Dallas were a 13:26 16-ounce the bold somebody that really 13:28 stood out was 20,000 and goals about 13:32 1,200 about 16 ounces 13:34 well let's say the stock market 13:38 I get cut in half then it's worth eight 13:41 ounces of gold or you know the stock 13:43 market state of saying that the price of 13:44 gold could double and now it's worth it 13:46 out 13:46 alright so you know in terms of gold its 13:49 markets going wait out and believe me i 13:51 think it's going a lot lower than 80 I 13:53 think we're going to see he 13:54 unprecedented decline in the the gold 13:59 price of the doubt maybe not 14:00 unprecedented but maybe as big as a 14:02 decline in the nineteen thirties or the 14:05 nineteen seventies when the Dow went 14:07 down to about one ounce of gold having 14:09 been as high as 20 outs the golden teeth 14:11 then having fallen to one else it's just 14:13 that you know shoes thought I remember 14:16 watching them and listening to you back 14:18 in 2006-7 and you talked about the 14:21 economy coming down and here we are in 14:24 2017 and when this economy finally 14:28 collapses 14:29 what is the everyday person going to 14:32 experience because we saw what happened 14:34 in 2008 what's going to happen with jobs 14:38 and the the credit industry and and food 14:41 what do you see coming well I think 14:43 you're going to see a substantial 14:44 increase in the cost of living 14:47 I mean that's coming so Americans are 14:49 really going to feel this in a way that 14:52 they have in the past it's not just know 14:54 the value of our house going out it's 14:56 going to be the cost of heating the 14:58 house going up that this be love the 15:00 electric bill of making repairs obtain 15:03 your your homeowners insurance 15:05 I mean everything is going to get more 15:07 expensive I and you know this is going 15:10 to be a big problem for average 15:13 Americans relation with jobs for those 15:15 who were retired and trying to live off 15:17 some kind of fixed income business going 15:20 to be a very disruptive economic 15:22 downturn it is going to deliver a 15:25 substantial decline in the standard of 15:29 living of the vast majority of america 15:31 in a way that we have an experienced 15:33 before 15:34 so when you say the increase of course 15:36 of living i mean you're talking about a 15:37 couple dollars or you are you talking 15:39 about prices of like bread going up to 15:41 thirty forty fifty dollars 15:43 who well I don't know about that would 15:45 be hyper inflation but I i can see that 15:48 even under a better case scenario i can 15:51 see 15:51 over a period of a few short years 15:53 because of living rising fifty to a 15:57 hundred percent as far as you know your 15:59 basic necessity you know food energy 16:02 stuff like that you know and you know 16:04 the price of goods that you might be on 16:06 the shelves in walmart has the things 16:08 that we import you know whether it's 16:10 because we impose tariffs and help you 16:12 know help you and poses hardship on 16:15 ourselves or just because the dollar 16:18 falls significantly at so that's the 16:21 import prices go off but in for prices 16:23 if they rise by fifty percent or hundred 16:26 percent over a period of a few years 16:28 that is anesthetist substantial increase 16:31 in in the cost of those products so what 16:34 will be said to at this point when 16:36 things start to deteriorate in the 16:39 economy what actions do they have 16:41 well i think its first they'll just 16:42 throw gasoline on the fire because 16:44 that's all they know right they will 16:45 respond weekend economy by printing more 16:48 money but that's just going to make 16:49 things worse but at some point hopefully 16:52 they'll get religion 16:54 it probably won't be Janet Yellen let's 16:56 see who we were 16:58 Trump points to replace her but if we 17:00 get the right kind of guy you know maybe 17:03 we'll do the right thing but you know 17:04 doing the right thing is going to be 17:06 very problematic a very painful very 17:09 difficult politically I you know it 17:12 never is I mean swallowing 17:13 bitter-tasting medicine is not going to 17:15 be popular you know with the people who 17:17 are asked to swallow you know even in 17:19 their promise that eventually it's going 17:21 to work you know nobody knows that's for 17:23 sure 17:24 all we know is you know they don't want 17:25 this bad taste in their mouth right now 17:27 they found the promise that maybe in the 17:29 long run it it will be better if you 17:31 know there are many individuals out 17:33 there where they're saying that the 17:35 dollar will no longer be the world's 17:37 reserve currency anymore do you see a 17:41 currency that will replace the dollar 17:43 some people are saying the SDR now I 17:46 don't see another currency i think that 17:48 the world was foolish to have made the 17:50 dollar reserve in the first place I mean 17:53 goal should be to reserve you don't want 17:56 to make another irredeemable fiat 17:59 currency the reserved for another year 18:02 the interval CI turns it's like it's 18:04 like having over 18:05 deserve it all then we need to be on a 18:07 have a real monetary system which means 18:09 we need actual money not just use fake 18:12 money substitute so I don't think that 18:14 there's another currency that will 18:16 replace the dollar nor do I think there 18:17 should be a currency to replace the 18:19 dollar 18:19 I think reserves should be gold and 18:23 money should paper currency should be 18:25 backed by gold and that's it and no one 18:28 country should have some kind of special 18:30 privilege to be able to write checks 18:33 that nobody ever cash 18:34 I mean we've been able to run these 18:36 massive trade deficits year after year 18:39 after year because we've had the reserve 18:42 currency and we shouldn't have been able 18:44 to do that and yes it is it was 18:47 beneficial in the short run because we 18:48 got to live beyond our means but 18:50 involved allowed our economy to evolve 18:54 in a way that is very unhealthy in the 18:56 long run I mean we are going to suffer 18:57 dramatically for all the past benefits 19:01 that we had as a result of being the 19:03 issue of the reserve currency when we 19:05 could no longer do that then we can no 19:06 longer pay for imports with with with 19:09 training press when we need to export to 19:11 pay for imports 19:13 I mean this is going to be a masterclass 19:15 Peter thank you very much for being on 19:17 the x 22 report spotlight once again how 19:19 can people see your work 19:21 well you know I do my own podcast they 19:24 can listen to a month ship radio.com 19:26 website they can also hear them on my 19:28 youtube channel to look for Peter ship 19:30 and just put them up on youtube as well 19:32 people should go to my company website 19:36 for your pacific capital your packs off 19:38 tom also ship goal.com I put up a lot of 19:42 commentary their people should also be 19:44 invested with me if you want to take 19:46 advantage of these trends if you want to 19:47 stop it from what's going to happen you 19:50 know when you see things in advance we 19:51 if you see the situation where the crowd 19:54 of got laws whether we know like the 19:56 dot-com bubble or he profited from the 19:58 subprime market when that first in the 20:01 housing market when you see its trade 20:03 where everybody's lost consensus is 20:05 wrong 20:05 there's a lot of money to be made when 20:07 you bet against that trade and I think 20:09 the profits are going to be huge for the 20:10 people who actually understand what's 20:12 going to happen and have their money in 20:13 the right country the right assets and 20:16 so people can you talk to my rep 20:18 that is that your pacific capital and 20:21 what everybody should do is listen to 20:22 this everybody should own some gold and 20:25 the easiest way to do that go to a 20:26 website gold money got off a goldmine 20:29 com 20:30 buy yourself some gold using that 20:32 website basically you know you pay half 20:34 percent over spot best deal you're gonna 20:36 find you can take physical delivery 20:38 whenever you want but in the meantime 20:40 they'll give you a free debit card you 20:42 can spend your golden same way you would 20:44 spend your dollars that were sitting it 20:46 in a savings account and more and more 20:49 merchants are going to be signing up 20:51 overtime on this platform it's a country 20:54 ecommerce platform using gold it's like 20:56 a paypal with gold and I think a lot of 20:58 merchants as inflation really heats up 21:00 not only here but all around the world 21:02 people are going to want to get paid in 21:04 gold 21:05 they're going to want to invoice their 21:06 customers are going to want to get gold 21:07 and so that's what's only gonna happen 21:09 here this is going to be commerce and 21:11 people will be able to literally opt out 21:13 of the banking system using gold money 21:15 put themselves on a gold standard you 21:18 can earn gold you can you can spend in 21:20 goals you could save a goal you can just 21:22 get out of banking system and then 21:24 you're not going to have to get 21:25 clobbered with this inflation and it's 21:27 so cold money.com is the website and 21:30 just need to learn about it open up an 21:31 account 21:32 Peter once again thank you very much for 21:34 being on the spotlight in my place
Labels: Peter Schiff