Prepare for More QEs than Rocky Movies (Video)

On Friday, Fox Business spoke with Peter Schiff about the latest economic analysis from the Federal Reserve. Richard Fisher, President and CEO of the Federal Reserve Bank of Dallas, believes that the US economy is improving and that interest rates will be raised beginning in 2015. Peter, on the other hand, points out that Fed officials are either incompetent or lying.

Watch the video below and scroll down for a transcript of Peter’s comments.

Remember, at the very beginning I said we’re going to have more QEs than Rocky movies, and they had five Rocky movies, so we got more to come. In fact, when the Fed first announced the taper, I said at that time that if they tapered, they would have to reverse the process. Because you can’t take away the QE without creating a bear market in stocks and real estate and putting the US economy back into recession. So QE4 is coming, it’s going to be bigger than QE3, and it’s going to do more damage to the US economy…

[There’s not going to be a bear market] if the Fed does QE4. But if the Fed doesn’t, then we’re going to have a bear market. Because the only reason we had a bull market was because of the QE. You can’t take away the drugs and expect the market to stay high…

First of all, the Fed can’t do anything about employment. So that’s a phony mandate. The Fed can’t create jobs by creating inflation. Maybe they think they can, but they can’t…

This is Janet Yellen, she’s not Paul Volcker. When Ben Bernanke announced QE3, he said the specific goal of quantitative easing was to raise asset prices, to raise stock prices, to raise real estate prices, to create a wealth effect that he hoped would trickle down to the overall economy. But it didn’t trickle down. It stayed in the hands of a few people who benefited from QE. But this is the only game the Fed knows and it’s going to keep playing it until we have a crisis that is worse than 2008…

[QE] doesn’t promote growth. It undermines legitimate economic growth. It blows bubbles. And that’s what it’s doing. Yes, if the Fed stops QE, we’ll have a recession. We need that recession. The last recession didn’t flow naturally, because the Fed cut it short with the QE and zero percent interest rates. But all that did was exacerbate the problems and delay the day of reckoning, and now we’re staring at a much bigger crisis. Because if the Fed actually did the right thing and normalized interest rates, shrunk its balance sheet, and stopped QE – all the things Janet Yellen said she wants to do – if the Fed did that, we would have a much worse financial crisis.

They’re going to come up with an excuse [for more QE]. Who knows [what that excuse will be]. Maybe it’ll be that inflation is too low… Maybe it’ll be ebola. I don’t know what they’re going to blame it on, but I know they’re going to come up with that excuse, because they can’t end QE, they can’t raise interest rate. The one thing they can’t do is admit that. So they have to keep talking up the economy, pretending things are good. Maybe they’re either incompetent or lying. Either they know how bad things are and they don’t want to say it, or they’re foolish enough to believe it. Because some people actually believe that QE worked and you have a confirmation bias. If you think it works, you expect it to work. But if you actually look at the economic data that has been coming out for the past couple of months, the vast majority of it has been bad or below expectations. So the economy is decelerating as the air has been coming out of the bubble.”

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