We’re Getting to the End of it – Peter Schiff
The day of reckoning could be closer than people expect, according to Peter Schiff. Donald Trump offered may pain-free solutions to the US economy when on the campaign trail, but the recent US budget is showing that big government spending has not been reined in like many conservatives had hoped. Schiff says the bond market and the dollar could be facing new lows with rising interest rates and unsustainable debt levels.
The consequences of what the Federal Reserve did from 2009 onward was predicted to cause a dollar crisis according to Schiff. All the quantitative easing and zero % interest rates have finally gotten to the end of the road. The stock market, dollar, and bond market (and housing market) are all in a bubble, Peter Schiff pointed out at a recent economic conference in Vancouver.
US Treasuries have recently been downgraded by China because of the fact that they are de facto junk bonds. The US government is not going to be able to tax the average citizen to pay off the federal debt, which is per capita around $62,000. With the dollar losing power and steam, the costs of living are also set to rise which means rises in price for the average consumer.
Federal Reserve will bring more QE when faced with a looming recession
“You can’t create an entire economy based on cheap money” says Peter Schiff. When the Federal Reserve tries more stimulus in the face of potential economic uncertainty, with the dollar tanking and interest rates rising, it could be the straw that breaks the camel’s back because the inability to repay holders of US Treasuries becomes the focal point of the US government.
This type of scenario is likely to happen swiftly and lead to chaos in the markets and the economy. Schiff encourages people to get out of US stocks, bonds, and the Dollar and escape the inflation and devaluation of currency and financial instruments and into things like gold and silver. This is why a gold IRA or 401k rollover is going to be a real retirement-saver for Americans who are smart enough to see which way the wind is blowing before the hurricane comes ashore.
US Economy is a Giant Ponzi Scheme
When interest rates rise, Americans will no longer be able to spend on a debt and credit-based system. Schiff says 70% of the economy is based on Americans spending money that they don’t have. This is why it’s so important for investors and Americans to position themselves to be able to ride this coming transfer of wealth properly without losing everything.