During a podcast last week, Peter Schiff asked a key question: Who is going to buy all of this US debt?
The US Treasury Department plans to auction off around $1.4 trillion in Treasuries this year. And it won’t end there. The department expects that pace of borrowing to continue over the next several years.
That’s a lot of bonds. Who will buy them? Because the biggest purchasers of US debt aren’t in a buying mood.
The Babylon Bee captured the current state of the Republican Party in all of its hypocritical glory. The satirical website proclaimed “Republicans announce plan to pretend to be fiscally conservative again the moment a Democrat takes office.”
The GOP said it would begin to decry deficit spending and the $20 trillion debt in order to win votes as soon as political power swung back to the opposing party.
“‘The second a Democrat is back in the White House, we will once again start yelling about fiscal responsibility,’ Speaker Paul Ryan said in an address to the House of Representatives Friday. ‘For now, we will continue to vote for unsustainable and irresponsible budgets that your children’s children’s children will pay for for centuries to come.’”
They call it the business “cycle” for a reason. Cycles repeat.
As Peter Schiff pointed out in a recent podcast, the financial crisis was triggered by rising interest rates on the debt that had been accumulated in the years prior as a result of the Federal Reserve keeping interest rates at 1% for a year-and-a-half and then slowly raising them back up over the course of another year-and-a-half.
Friday, the Dow Jones fell more than 600 points. It was the third big drop in a week. Most analysts mention nervousness about sharply rising bond yields as one of the reasons for the selloff. And what do rising bond yields reflect? Rising interest rates. So, are we seeing the beginning of the next big downturn in the business cycle?
Over the last two years, the Federal Reserve has been nudging interest rates higher and their efforts are starting to bear fruit in the marketplace. Bond yields are beginning to climb.
The question is how high can rates go before the house of cards the central bankers built comes tumbling down?
Global wealth increased to a new record of $280 trillion in 2017, according to Credit Suisse Global Wealth Report 2017. That seems like pretty good news until you consider global debt is increasing nearly three times as fast.
Stock market mania continues unabated. But in the latest episode of the Schiff Report, Peter Schiff warns that twin deficits may soon doom the stock market boom.
If we have a return of the twin deficits as a problem in 2018 – I’m talking about the budget deficit and the trade deficit – twin deficits. You know the last time that was a big problem? It was in 1987. What happened in 1987? We got a stock market crash. I know that was just over 20 years ago, but what was happening then reminds me a lot of what’s happening now. We had the stock market roaring. Everybody was confident. But people were overlooking these gigantic problems until they couldn’t overlook them anymore and then it ended in a spectacular crash.”
On Dec. 31, 2016, the price of gold stood at 1,156.00. Today, it is knocking on the $1,300 mark. The yellow metal is on track to gain about 12% in 2017, its best year since 2010. Gold has made these gains despite a number headwinds that we would expect to put a significant drag on gold.
Here are seven major themes that have driven gold news over the past year.