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!!!

Thursday, February 9, 2017

Peter Schiff - Real Estate Will Crash Massively (#RealEstate #USAEconomy #Money #Investments)

Peter Schiff : first of all when it comes to you know 0:12 explaining the fed a lot of people are 0:15 already criticizing job Donald Trump's 0:18 critique because they say well on the 0:20 one hand he says the economy is weak but 0:23 then he says the Fed should raise raids 0:25 and then the one had he says that if we 0:28 raise raise a lot of bad things are 0:30 going to happen but then he criticizes 0:32 the Fed for keeping rates low so which 0:34 is it right he's trying to have trying 0:36 to have his cake and Andy to what Trump 0:39 has to explain is that low interest 0:42 rates don't help the economy low 0:45 interest rates are one of the biggest 0:46 headwinds for the economy because all 0:49 they do is inflate asset bubbles and 0:51 prevent legitimate economic growth and 0:54 Donald Trump has to explain that even 0:57 though the rates have to go up that when 1:00 they do it's going to burst the bubble 1:02 and it's not going to be fun 1:05 it's going to be another financial 1:06 crisis only words but the problem is if 1:10 we're ever going to have a real recovery 1:12 that's going to produce a higher 1:14 standard of living and the good paying 1:16 jobs that everybody claims they want 1:19 we're not going to get there unless we 1:21 let this bubble deflate and that means 1:23 raising interest rates and having to 1:25 live with the consequences which are 1:27 going to be a collapsing stock market a 1:30 collapsing bond market of collapsing 1:32 real estate market failing banks a 1:35 repeat of the OS financial crisis only 1:38 worse and all Janet Yellen is succeeding 1:41 in doing by keeping rates artificially 1:43 low is exacerbating the problem and 1:46 delaying the day of reckoning if you 1:48 remember with so many people worried 1:50 about when it came to bank failures we 1:53 would have had that had the Federal 1:55 Reserve not veiled everybody out as we 1:57 not add the quantitative easing and we 1:59 not had zero percent interest rates so 2:01 the next time around we're going to have 2:04 to deal with the full consequences of 2:06 the mistakes that have been made in the 2:07 past but these mistakes are consequence 2:10 of the said keeping interest rates 2:12 artificially low because they've done 2:14 that we have much too much debt with 2:16 Donald Trump pointed out that under 2:19 Barack Obama the national debt double 2:22 but he didn't point out that it also 2:24 doubled under George Bush and the reason 2:27 it doubled under both presidents is 2:29 because the Fed made it all possible but 2:32 the Fed let everybody lever up not only 2:34 the government but households 2:36 corporations we've all borrowed money 2:38 that is impossible to repay and the only 2:41 thing between us and the crisis is 2:43 interest rates that are practically zero 2:45 but they can't stay there indefinitely 2:47 without destroying the dollar and I 2:50 think ultimately that might be what 2:51 gives is because they try to keep rates 2:54 low so log because they realize how 2:56 painful the correct the process is going 2:58 to be that they destroy the dollar in 3:00 the process and would ultimately causes 3:03 the federal raise raids is because they 3:05 don't want the dollar to become monopoly 3:07 money they want to make sure it doesn't 3:08 lose all of its value adjust the 3:10 considerable portion of its value and 3:13 reluctantly and and eventually they're 3:15 going to have to raise interest rates 3:16 and not just a little but a lot and then 3:19 this whole house of cards is going to 3:21 come falling down and we're going to 3:22 have to deal with the consequences of 3:24 these mistakes i think it's gonna be 3:26 heavy inflation I hope it's not 3:28 hyperinflation i hope we ultimately get 3:30 the rate ice that we need to prevent 3:32 that from happening but then we're going 3:35 to have the complete collapse and we're 3:37 going to have to deal with these 3:38 problems you know one of the things that 3:40 Donald Trump is backing away from and I 3:43 think you should embrace it is his idea 3:45 that we need to restructure the national 3:48 debt and we absolutely must because it 3:50 is impossible for us to repay the 20 3:53 trillion dollars of Treasury debt in 3:56 fact it's impossible to service the debt 3:58 is interest rates rise to a market level 4:01 certainly if they rise to a high level 4:03 to combat inflation there is no way we 4:06 can honor these commitment and I would 4:08 rather restructure and ask our creditors 4:11 many of them are very wealthy many of 4:13 them are far and many of them are 4:14 foreign government 4:16 why should we have massive tax sites on 4:18 the American middle class so that the 4:20 Chinese can be repaid in full for the 4:23 money they were dumb enough to lend the 4:24 US government so we've got to come to 4:27 terms with the fact that we are broke 4:29 that we've borrowed with more money than 4:31 we can ever repay and in the process we 4:34 have created a phony economy 4:35 we have created a service sector economy 4:37 we have enormous trade deficit and they 4:40 don't result from bad trade deals 4:43 it's not NASA that's the reason we have 4:45 these trade deficits it's the Fed it's 4:47 the artificially low interest rates to 4:49 the fact that we don't have our own 4:51 savings to invest in capital it's 4:53 because of excess regulation and excess 4:56 taxation that Hillary Clinton's promise 4:58 to double down on we need less 5:00 government we need free or market we 5:03 need to produce again but none of that 5:05 is going to be accomplished until we 5:06 raise interest rates and we can't raise 5:09 interest rates without breaking the 5:10 bubble so it's like you know that we can 5:13 have the game without the short-term 5:15 pain but politically speaking nobody has 5:18 the stomach for that pain and so we 5:20 never get the game because we keep 5:21 making the problem worse politicians of 5:25 promised voters something for nothing 5:28 a lot of government workers have been 5:30 promised tension but the taxpayers have 5:32 never been asked to fund the pension and 5:35 neither have the workers and so they're 5:37 empty promises and there's no way they 5:39 can get kept that is the bad news 5:42 so there are two possible scenarios we 5:45 come clean and we tell people that 5:47 they're not going to get everything 5:49 they've been promised or we try to 5:51 pretend that everyone's going to get 5:52 paid and we pay off all the promises 5:55 with worthless money I think it's better 5:57 to be honest and restructure these 6:00 obligations in a way that we can 6:02 actually afford to pay them rather than 6:04 just pretend that we can afford it and 6:07 we print a bunch of money destroy the 6:09 value of the dollar and then everybody 6:11 gets their pension but their pensions 6:13 are worthless because you can't buy 6:14 anything with the money I think you want 6:17 is is going to have a substantial rise 6:20 against the dollar you know you have a 6:21 lot of hedge funds that are short that 6:23 currency and I think they're going to 6:25 lose a lot of money on that trade on 6:27 wine i think some of the same people are 6:29 short the yin and the euro I think those 6:31 currencies are going to rise against the 6:33 dollar as well I think they're all going 6:34 to fall against gold and maybe against 6:37 some other currencies but they're gonna 6:39 rise against the dollar and that has 6:41 serious implications for America you 6:44 know one of the things that nobody seems 6:45 to understand or Trump doesn't even 6:47 point out is that in this 6:49 short run the Chinese have been 6:51 supplying a massive subsidy to the 6:54 American economy in the long run they're 6:57 not doing us any favors but in the short 6:59 run they're making our lives better in 7:03 that they supply us with the consumer 7:06 goods that we need and we want and they 7:08 loan us the money to buy them because we 7:11 have this huge trade deficit with china 7:13 that means we're getting a lot of stuff 7:15 from the Chinese that we're not paying 7:17 for so we get all sorts of products that 7:20 make our lives better and they just get 7:22 little pieces of paper that they can't 7:23 do very much with and in fact more 7:25 recently they've been waking up if you 7:28 look at what's been happening to chinese 7:30 holdings of us treasuries they've been 7:32 going down while Chinese holdings of 7:35 gold have been going way up so they can 7:38 obviously read the writing on the wall 7:40 even if we can't but eventually you know 7:43 in the the idea of being careful what 7:45 you wish for 7:46 when we talk about hey we need to look 7:49 kinda has to stop manipulating its 7:51 currency I that means the Chinese 7:54 currency goes up and that means our 7:56 standard of living comes crashing down 7:57 because now all the products that we've 8:00 been buying so cheaply at walmart all 8:02 the sudden a triple in price and nobody 8:05 can afford them 8:06 so this is going to be a rude awakening 8:08 for the average american when he finds 8:10 out just how broke he really is 8:13 prices are going to go way up I mean 8:15 eventually going to walmart is gonna be 8:18 like going to neiman marcus i mean the 8:20 prices are going to be very very high 8:22 and and that means walmart is not going 8:24 to sell as many products in America 8:26 which also means they're not going to 8:27 have to employ as many Americans and so 8:29 it's gonna be a lot of layoffs but in 8:31 the meantime the products that China 8:33 used to ship to walmart in America those 8:36 products are still going to be made 8:38 they're just going to be on a shelf in 8:40 some Chinese walmart and now the Chinese 8:42 people are going to get the byproducts 8:44 that before they didn't have because 8:46 Americans were buying them because 8:48 Americans were richer but when the night 8:50 when the US dollar crashes and their 8:52 currency goes up the Chinese gain the 8:55 purchasing power that we lose 8:57 look there are a lot of problems in the 9:00 financial sector not just deutsche bank 9:02 and Deutsche Bank 9:03 I only have the normal problems but you 9:05 have the US government trying to find 9:07 out what 13 14 billion dollars or 9:10 something like that but i have avoided 9:12 the financials for years that's one of 9:14 the reasons that the funds that I manage 9:17 the mutual funds that are separately 9:18 managed accounts are so outperforming 9:21 the benchmarks this year is because the 9:23 benchmarks have a lot of financial and 9:26 we have none and you know what 9:27 really yeah i think is crazy is you see 9:30 all these animal is talking about how 9:32 higher interest rates are going to be 9:34 good for the banks right because they're 9:36 going to have better margins on their 9:38 loans so we want to see these spreads go 9:40 up these analysts have no clue what 9:42 they're talking about because the banks 9:44 have these toxic balance sheet and 9:46 higher interest rates are going to be 9:49 like a bomb that's going to go off 9:51 because when rates go up the value of 9:53 their portfolios going to collapse 9:56 you've got banks that own the long-dated 9:58 ask that and the collateral for their 10:00 loans is going to lose value and rates 10:02 go up real estate prices are going to 10:04 come down there is going to be all sorts 10:06 of problems that the banks are going to 10:09 be confronted with when interest rates

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