The US Economy Looks Great When You Ignore All the Data (Video)

Peter Schiff explains the reality behind the United States’ false recovery to an incredulous anchor on CNBC World.

Follow along with this transcript of Peter’s answers:

“I think there’s a lot of disconnect right now in the markets. I think people have much too much confidence in the legitimacy of the US recovery. They’re expressing that by bidding the dollar higher. But I think people who think that we have a real recovery are going to be very disappointed. And I think people who are buying the dollar are going to suffer losses as a result…

“I think [the recovery] is all a function of the cheap money, the 0% interest rates, the quantitative easing that the Fed has just tapered down. I think as the Fed is no longer propping up the economy to that extent, and now it’s threatening to actually raise interest rates – I don’t think the US economy with the level of debt that we have can actually withstand the higher interest rates that everybody believes the Fed is going to unleash on the economy…

“We haven’t had structural reform either. We’re simply borrowing more money and spending more money. We just posted last week the largest trade deficit in our history in manufactured goods. So to a greater and greater extent, America is relying on production taking place outside the United States, so we can continue to live beyond our means. Meanwhile, even the GDP numbers that came out today – the big reason for the upward revision is the huge increase in health care spending. Americans don’t want to spend all this money on healthcare, but they’re being forced to.

“If you look at all the other economic data points other than GDP or maybe the headline payroll numbers, almost all the data that has been coming out for the past several weeks has been extremely weak. In particular, the new home sales that came out today, the existing home sales that came out yesterday. Real estate sales are tumbling and the Fed still hasn’t raised rates. We’ve got mortgage interest rates at record lows. Now we’ve had the temporary relief of falling gasoline prices, yet consumers still can’t afford to buy houses in this environment. What’s going to happen if the Federal Reserve makes buying houses more expensive by raising rates? …

“Look at the data… The sales are really falling… And this with lots of support. In fact, just recently Fannie Mae and Freddie Mac came out and said that they would now put US taxpayer guarantees behind mortgages with just 3% down. The reason they’re being forced to do that is because fewer and fewer Americans can qualify for a mortgage, because incomes are not rising. Incomes are actually falling. In fact, if you look at this so-called recovery, the average American is earning less today than he was when the recovery began. The average American has a much lower net worth today despite the increase in the stock market…

“Markets are notorious for getting it wrong. Look at how strong the markets were in 1999 leading up to the big decline in 2000. How strong were the markets in 2006, 2007 on the even of the financial crisis and the Great Recession. I think once again the markets are pricing in a prosperity that is more illusion than reality. I think we’re setting ourselves up for a big disappointment. I think when we get the GDP numbers for Q4 and Q1 in 2015 they should be way below expectations. So I think all the talk about tightening is going to be replaced with talk about QE4…”

Get Peter Schiff’s latest gold market analysis – click here – for a free subscription to his exclusive weekly email updates.
Interested in learning more about physical gold and silver?
Call 1-888-GOLD-160 and speak with a Precious Metals Specialist today!