Jim Grant told Fox Business that the Federal Reserve has kept itself in emergency mode for too long, with interest rates near zero for almost 7 years. In fact, remaining in emergency mode has only made the next emergency more likely. Grant fears that central banks (the Fed in particular) have become far too powerful in their ability to bail out irresponsible bankers by destroying the wealth of savers.
The Fed, the government… are instituting a de facto nationalization of essential banking activities… It can’t be that the single purpose of banking is to prevent banks from going bankrupt. Yet this has become in effect the policy of our minders at the Federal Reserve. They are becoming quite all-powerful…”
Jim Rickards spoke to ABC News Australia about the long-term costs of devaluing currency. Sustained economic growth cannot come from devaluation when the entire world is cheapening their currency at once. Instead, people just lose their purchasing power and global inflation is the long-term result. Like Peter Schiff, he warned that the Federal Reserve won’t be raising rates any time soon and that the world faces a fiscal crisis bigger than the crash in 2008.
John Tamny, Political Economy Editor at Forbes, spoke to the Austrian Economics Research Conference about the roots of the Great Depression, the financial crisis, and the Great Recession. He explained how most modern economists ignore important economic fundamentals, or simply misunderstand them. For example, contrary to popular belief, governments cannot stimulate demand by simply spending more. He also focused on the beauty of recessions, which allow an economy to cleanse itself of bad business practices. Like Peter Schiff, Tamny argues that the US needs to experience a painful, but necessary recession sooner than later to truly heal its economy.
Alasdair Macleod, head of research for GoldMoney, explained to USAWatchdog that America is losing influence in international banking. China is steadily gaining more support for a new bank that would finance major infrastructure projects in developing countries.
The Asia Infrastructure Investment Bank (AIIB) represents enormous investment potential by creating an Asian market enveloping more than half the world’s population. China already has support for the AIIB from countries throughout Asia, the Middle East, and the eurozone. However, it is doubtful that China will ever invite the United States to be a member. In fact, it would probably prefer the US dollar to play no part in the what would be the largest market the world has ever seen.
The US is being left in the dust in other ways as well. While China continues to buy up gold, Macleod warned that almost all Western traders fail to understand the value of the commodity. To compete with the growing economic powerhouses in Asia, the US should adopt a similar strategy of gold accumulation and simultaneously stop flooding the world with dollars that will have to return home one day.
In his latest podcast, Peter Schiff reviews the latest economic data that indicates how poorly the economy is doing. Financial forecasts continue to be completely off-base, and many important data points have seen downward revisions. Meanwhile, the cost of basic necessities has gone up thanks to inflation. Peter expects the employment data is the outlier and will eventually catch up to the rest of these indicators.
Fox Business’ Kennedy spoke with Peter Schiff about President Obama’s praise for a mandatory voting system. Peter argued that mandatory voting doesn’t automatically lead to better government, because people won’t necessarily be making informed decisions. What’s worse, mandatory voting could only be enforced with monetary penalties, which would just become another tax burden. Kennedy and Peter also discussed why the United States needs to experience a recession for the economy to truly grow out of the problems created by the Federal Reserve’s monetary policy.
David Stockman told Fox Business that the United States’ biggest economic priority should be getting the Federal Reserve under control. With a balance sheet that has quadrupled in just a few years, the Fed is incapable of sustaining its fiscal policy. Raising the Fed funds rate will add billions more to the already ballooning debt. The only way out of this perilous scenario, according to Stockman, is to get out of blind currency printing and back to sound money.
In another interview on Yahoo! Finance, Peter Schiff contradicted the conventional narrative of the dollar’s future. He argued that the dollar’s brief, but dramatic dip this week is only a taste of what’s to come. Just like those who invested in subprime mortgages, people will get caught in the reversal and implosion of the dollar. This will likely come on the heels of massive consumer inflation thanks to the endless money-printing of global central banks. When this happens, investors will return to gold as a store of wealth. Peter pointed out that gold has no ceiling because there’s no limit to how low the dollar can sink.
Appearing on Yahoo! Finance, Peter Schiff underscored that the Federal Reserve has been bluffing about raising interest rates. In fact, they will continue to bluff for as long as possible until they’re forced to deal with a deflating asset bubble. He also pointed out the arbitrariness of the Fed’s supposed goal posts: previously they had said they would raise rates when unemployment officially got below 6.5%, it is now at 5.5% and they want to keep waiting. Peter said the Fed has the same confused attitude about inflation:
I think they’re going to be just as tolerant on inflation when inflation is 2.5 or 3%. They’re still not going to raise rates, but believe me, when it’s officially at 3%, it’s going to be a lot higher than that, and consumers are really going to be feeling the pain.”
Laurence Kotlikoff, Professor of Economics at Boston University, appeared before Congress last month and called them out on phony accounting. He told Greg Hunter of USAWatchdog that despite his best attempts, he could not make senators see how the fiscal situation of the country is not as rosy as official numbers would have us believe. In his interview with Hunter, Kotlikoff talked a lot about social security, but he ultimately underscores what Peter Schiff has been saying for a long time: another financial collapse is coming.
Some of Kotlikoff’s key points include: