Contact us
CALL US NOW 1-888-GOLD-160
(1-888-465-3160)

US Currency Crisis Coming in 2017

  by    0   2

In his latest podcast, Peter Schiff lays out why optimism for the US dollar in 2017 is just wishful thinking. Trump’s tax cuts and increased spending are likely to create only a fraction of the stimulus most people expect, given the budget deficits and national debt we face. Investor hopes also reside with Trump’s tax plan to include an import tax that would correct US trade deficits with China. However, taxing imported goods will only drive up the cost of consumer goods, negate any increase in consumer spending, and diminish the purchasing power of the dollar. Peter explains:

“When the cost of importing goes up, it’s not like Americans are just going to switch from buying goods made in China to goods make in America. No, they’re just going to have to pay more to buy the goods made in China. If they don’t have the extra money, they just won’t buy as much.  So, what’s going to happen as a result of increasing the cost of importing is that consumers will spend less and the bubble economy will deflate. There will be less consumer spending because consumers won’t have as much money or won’t be able to afford the higher prices. It’s going to have a negative effect on GDP.”


Highlights from the show:

“Everything goes up when you’re measuring in terms of US dollars. Of course, it’s inevitable the Dow will get to 20,000. The question is will it get there right away, and if it doesn’t and it goes down first and we eventually get there because of massive inflation, what will a Dow 20,000 be worth in terms of purchasing power? That’s a whole different story. It’s easy to go up in nominal terms. It’s a whole different thing to go up in real terms.”

“Donald Trump has come out and said ‘the market is going up because of me’ … So he owns it, which means when the rally goes away and we have a bear market, he owns that too. Donald Trump sometimes is able to wiggle out of the things he says, but I think he’s put himself in a tough box here. I don’t know if he can go back to the ‘big ugly bubble’ talk when he’s been tweeting up a storm about how great the stock market rally is. When it goes down … he’s going to own the decline.”

“Gold had an OK year. It lost half its gains in the back end of the year, mostly because of Trump, but it was still up 8.5% this year. It was the first winning year in 4. It was down 3 years in a row, so it was a positive year. It did beat the NASDAQ, which was only up 7.5%. Not many people thought gold was going to beat the NASDAQ this year.”

“I own a lot of energy stocks myself, and I think this energy rally has legs. But I think this financial rally is a massive suckers rally. Nobody really understands what higher interest rates actually mean for the financial systems, what larger budget deficits actually mean. This is a short covering rally. I think people just don’t understand what they’re doing. So the honeymoon is going to end on the financials. They’re not going to have a repeat in 2017. So I would stick with the energy sector, stick with the mining sector, but I would be bailing on the financials.”

“All these people who are optimistic about the dollar in 2017 think we’re going to have lower trade deficits, which I think is ridiculous … They think the trade deficit is going to go down so they think this is going to be good for the dollar. There’s some expectation that when Trump changes the tax code, that one of the things he’s going to do is tax imports and give credits for exports so that it will be a lot more expensive to import goods into the United States, so therefore, we won’t import as much and so the trade deficit will come down.”

“We’re going to get tax cuts and increased spending, but not as big as the market thinks because we’re too broke to afford big tax cuts and big increases in government spending.  That doesn’t mean we’re not going to get some, but we probably won’t get as much as people think. Of course, it’s not going to stimulate the economy. It’s going to be another sedative to the economy, but it will stimulate imports just like it did when Bush came in. We cut taxes and Americans took the money and bought imported products. What else are they going to buy? We don’t make the products ourselves.”

Get Peter Schiff’s latest gold market analysis – click here for a free subscription to his exclusive monthly Gold Videocast.
Interested in learning how to buy gold and buy silver?
Call 1-888-GOLD-160 and speak with a Precious Metals Specialist today!


Related Posts

West Virginia Legislature Approves Measure to Repeal Sales Tax on Gold and Silver Bullion

The West Virginia legislature has approved a bill that would take an important first step towards treating gold and silver like money instead of a commodity by repealing sales and use taxes on bullion. Related

READ MORE →

Consumer Debt Breaks Yet Another Record in January

Total consumer debt broke another record in January, according to the latest report by the Federal Reserve. Borrowing increased by $17.05 billion in the first month of 2019. The increase pushed overall consumer borrowing to a new $4.03 trillion record. That compares with $3.84 trillion in January 2018. That represents a 5.1% annual increase. Related

READ MORE →

China Increases Official Gold Reserves for Third Straight Month as Anti-Dollar Push Continues

the country of china shown on a globeChina added to its official gold reserves for the third straight month in February as the country continues efforts to minimize its exposure to the US dollar. The People’s Bank of China added 10 tons of gold to its horde last month. It has accumulated an additional 32 tons of the yellow metal since the […]

READ MORE →

Powell Pause for the Masses: Fed Chair Talks to 60 Minutes

Federal Reserve Chairman Jerome Powell took his dovish message to the masses during a recent 60 Minutes interview. Powell continued to talk about “patience” and reiterated that the Fed “does not feel any hurry” to push rates any higher. He also said the interest rate is “roughly neutral” at this point, calling the current 2.25-2.5% […]

READ MORE →

Modern Monetary Theory and the Green New Deal: A Match Made in Hell?

How will America pay for Alexandria Ocasio-Cortez’s Green New Deal? After all, as Peter Schiff said a few weeks ago, you can’t print wealth. But there is a growing number of people who seem to believe you actually can – at least indirectly. And they have an economic theory they claim backs them up. It’s […]

READ MORE →

Comments are closed.

Call Now