Tuesday, August 09, 2016

Peter Schiff*: QE Addiction Is Fueling 
The Fire That Sends Gold Higher
Palisade Radio .. There are several reasons the world economy is unsustainable within the current systems. Peter Schiff believes the biggest factor is countries like the U.S which have huge deficits. They have low production rates requiring mass imports of goods in exchange for pieces of paper that are losing their value. This creates imbalances which destabilize the global economy. There are also enormous amounts of bonds & unfunded liabilities which creates vulnerability to a backup in interest rates. If rates go up, they can't afford to pay .. Another key factor is the U.S.$ being rooted as the reserve currency. Emerging markets are sitting on stockpiles of U.S. Treasuries, bought to prevent the dollar from crashing. Many developing countries peg their currencies, or want to limit the value of their own currency relative to the dollar for fear of jeopardizing their export economy. This creates distortions in economies resulting in all sorts of malinvestments from the trade imbalances .. He predicts that the Fed will cut interest rates & go through another period of quantitative easing that's larger in scope than the previous one. QE is a detrimental addiction of the monetary system. To turn things around the Fed would need to quit cold turkey resulting in stock & bond markets crashing, & banks failing- which the Fed doesn't have the stomach for. Instead of a crash, the Fed will do what they can to prevent it with more cheap money .. 23 minutes

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