Yellen Could Pave the Way for Hillary with More Easy Money (Video)
Peter Schiff appeared on the Daily Ledger at the beginning of the week to discuss the global economy. Peter refuted the idea that the US stock market is falling thanks to Chinese market troubles. In fact, he argued it’s the other way around – the Federal Reserve is the source of global instability. Peter went on to forecast the Fed’s actions in 2016. He thinks there’s a good chance Janet Yellen might ease again to prevent the US economy from officially dipping into a recession under Obama’s watch:
[Janet Yellen] is going to do whatever she can to deliver it to Hillary Clinton. She remembers what happened when the Alan Greenspan bubble burst while Bush was still in office. That guaranteed that Obama would win and McCain had no chance with that kind of baggage. She doesn’t want to saddle Hillary with the same kind of baggage. She wants Barack Obama to be able to leave, claiming that he saved us.”
Highlights from the interview:
“If anything, the problems in the overseas markets are emanating from the United States. We’re the source of the global instability. It’s the Fed. I said on your program many times that if the Fed made the mistake of pricking its own bubble and actually raised interest rates in 2015, which is what they did in the waning weeks of December, that the stock market was going to drop like a stone. That’s exactly what’s happening, because the air is coming out of this bubble. There’s a lot of air in there. This is the biggest bubble the Fed has ever inflated. At the same time, the Great Recession, which the Fed interrupted with its monetary stimulus, is going to resume in earnest, because now all the problems that the market would have corrected but for the Fed are going to come back with greater pain now, because they’ve all been made worse thanks to the last seven years of Fed policy…
“They were pretending they were going to raise rates all year. They were talking about how the economy was strong enough for a rate hike. I think they felt if they didn’t deliver by December that people would know that they were wrong or they didn’t understand the economy or they would doubt the legitimacy of the recovery. So I think the Fed felt that they had no choice, and maybe they were lulled into a false sense of confidence when they hinted at rate hikes finally in December and the stock market didn’t roll over like it did in August, which is why they couldn’t raise in September. So if they believe the markets were blessing the rate hike, I said from the beginning that was the wrong conclusion to make, because I thought it would be a head fake. Here we are. We had the worst opening week in the history of the stock market, and I think there’s a lot more downside to come both for the market and the economy. It’s amazing that so many people are trying to pretend there’s no problem, or they’re trying to say it’s contained to China, or the problems in the economy are contained to manufacturing, everything else is okay. This is just what they said when the mortgage bubble burst…
“I don’t necessarily believe these [job] number. If you look at all the other numbers that we got last week, including two reports that came out on the same Friday as the job report – all these numbers are awful. To me, if you get a preponderance of data points that say we’re going to a recession or we’re already there, and then we get this lone outlier – the job report – why would the job report be right and everything else be wrong? It’s more likely that everything else is right and there’s something wrong with the jobs numbers. Especially when you consider the fact that jobs are a lagging indicator…
“They [the Fed] may act to try to prevent [a recession] from coming, because it is an election year. The last thing that Janet Yellen wants to do is hand the election to a republican, or maybe even Donald Trump. So she’s going to do whatever she can to deliver it to Hillary Clinton. She remembers what happened when the Alan Greenspan bubble burst while Bush was still in office. That guaranteed that Obama would win and McCain had no chance with that kind of baggage. She doesn’t want to saddle Hillary with the same kind of baggage. She wants Barack Obama to be able to leave, claiming that he saved us; that he inherited a disaster and now the economy has a clean bill of health, and he’s just handing the baton to Hillary to continue the good work. If this thing blows up before he gets out of dodge, and we’re right back in as big a mess if not bigger than when he took the oath of office eight years earlier, then Hillary will have no chance.”
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