The Greek Sideshow Distracts from a Looming US Crisis (Audio)

In yesterday’s podcast, Peter Schiff reviews the latest news from the Greek debt drama, as well as the most recent economic data in the United States. Peter argues that the best thing for Greece’s economy would be to leave the eurozone and give up its dependence on cheap money from the European member nations. However, he knows the politicians don’t have the will to do this. So it won’t be a Grexit that ultimately exposes the devastating effects of modern central banking, but rather a crisis in the United States.

Highlights from Peter’s podcast:

“It looks like there’s going to be some kind of a deal with Greece to avoid the Grexit, where Greece exits the eurozone, [and] abandons the euro currency for some resurrected form of the drachma, and of course, defaults on debt. I’ve said many times that’s probably the best thing to happen to Europe – is to kick out the weakest link of the chain. But I also didn’t think that would happen, because there wouldn’t be the political motivation to do that either in Europe or in Greece…

“The markets are higher. There was a big reflex rally in the DAX [German stock index]… The euro [is] down big. Not so much yesterday, but today. A big down day in the euro. The reason being, if Greece is going to stay in the eurozone and there is going to be more bailouts and more loans, that means more cheap money. That’s what the markets want. They don’t want default and restructuring, which is what you would get from a Grexit. They just want bailouts. They don’t want anyone who loaned money to Greece to lose money…

“I think the sell-off in gold, which has dropped both yesterday – Monday, gold was down maybe 15 bucks – and now it’s down today. Now we’re below $1180. We rose above $1200, maybe $1202, $1203 based on the dovish statements that I spoke about last week following the FOMC decision not to raise interest rates. They downwardly revised their GDP forecasts. Janet Yellen went out of her way to say, ‘Look, even if we do raise interest rates, it’s not going to be a big deal, because we’re not going to raise them again. And if we do, it’s going to be by tiny amounts…’

“Durable goods now have missed estimates for five out of the last seven months. Year-over-year, durable goods orders are down over 5%. That is the largest drop since December 2009 in a year-over-year basis. Even ex transportation and cap-ex spending. Those are both down year-over-year for the fourth month in a row. Also, we got Chicago PMI Manufacturing Index came out to today. That was weaker than expected. Last month we were at 53.8. The consensus was for a bump to 54.2. Instead, we got a decrease to 53.4. Remember, last month was also a decline… We’re now at the lowest level since October of 2013 on the PMI Manufacturing Index. This month’s miss versus expectations was the biggest miss since August of 2013…”

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