Peter Schiff has been saying that even though the stock market is on a slow downward slide, the biggest problem is actually in the bond market. Last week, Schiff warned us to be wary of the calm before the storm, and this week, he said most, including the Federal Reserve, are oblivious to the upcoming crash.
Yields have risen to levels not seen since before the 2008 crash. More significantly, the yield curve is flattening, according to Schiff.
According to Seeking Alpha, Schiff pointed out, if you go back to the Second World War and look at average bond yields, these low rates are an aberration. They’ve been low for a long time, but they aren’t going to stay low forever. And yet the market seems to think it’s going to go on for another 30 years.
“Clearly, the market assumes that interest rates on 10-year government bonds are going to stay just barely over 3% for the next 20 or 30 years. I mean, that is crazy. Why would anybody think that?”
Just consider the deficits as well. The federal government is running $100 billion per month budget deficits – and this is during a supposed economic expansion. What’s going to happen when we hit a recession? And of course, rising interest rates just compound the problem. As Treasuries come due, the government has to replace them with higher interest rate bonds. This expands the deficit even further.
Also compounding the problem is the money printing scheme the Federal Reserve has taken to. Why in the world would any rational person assume inflation will remain low?
We also have interest rates at around 3% and there is already some handwringing and nervousness. But as Peter said, they could easily blow through four or even 5%. The Fed keeps saying it plans to reduce its balance sheet, but it hasn’t sold very many bonds to date. What happens if they follow through with tightening plans and start dumping bonds on the market?
If [the Fed] continues to stay on this path, or at least the rhetoric is on this path, rates could blow through 3% like a hot knife through butter.”
Schiff then discussed Minneapolis Fed President Neel Kashkari, who said they [the elite globalists that run the Federal Reserve] can’t find any signs of an impending crisis. He said there are no warning signs at all.
“Well, of course, that’s exactly what they said in 2007 and 2008. In fact, even when there was the mother of all warning signs – the crash of the subprime market – the Fed looked at that and said, ‘That’s nothing. It’s contained.’ We’re not worried about that.’ So the Fed has already proved when it comes to warning signs and seeing them in advance, they’re like Mr. Magoo. They have no idea what’s going on. And in fact, just like Mr. Magoo, they create all kinds of havoc all around them as they blindly move through the economy having no idea what’s going on, and there’s just all kinds of carnage.We are headed for a massive financial crisis.”
Schiff has yet to change his mind: we are headed for some major problems in the economy and most are unaware and unprepared.
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And been saying…and been saying…..and been saying…..and been saying…..I’m sure that one day this “saying” may prove true; what I’m not certain of is whether Mr. Schiff will still be alive when it happens, if it happens.
AC,
Yep, he can keep singing, to all those who will listen.
I don’t know it all… I’m not a very “learned” man.
But Mr. Shill, err… Schiff, really screwed the pooch when he said that the Fed is oblivious to the upcoming crash.
My question is, How can you be oblivious to a crash that you have planned? DUH HUH!!! This train wreak is their creation. Even if it moves slower than molasses in January (up hill).
Smoke and Mirrors, Shuck and Jive, just to continue to screw the Lil’ people who have to work to produce the wealth. Which in full disclosure… I don’t have any.
Just my 2 copper flashed zinc pieces. 🙂
Y’all play nice now.
And been saying…and been saying…..and been saying…..and been saying…..I’m sure that one day this “saying” may prove true; what I’m not certain of is whether Mr. Schiff will still be alive when it happens, if it happens.
Schiff’s tombstone will read, “See, I was right!”
The Fed is not blind as to what is happening. Everything that is being done is done by design. It is a ponzi scheme to enslave ignorant Amerikans with debt and steal their wealth.
I see two books written by Peter Schiff and one by Ron Paul and “The Creature From Jekyll Island”.
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I read “The Creature from Jekyll Island”. Griffiths has taken off on the research, lectures, and writings of Eustace Mullins.
A good book.
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Secrets Of The Federal Reserve was good. The Creature From Jekyll Island was difficult to follow at times.
I’m at the point I’m praying Schiff is right. The longer ‘it’ gets put off, the worse it will be. Reminds me of going to a dance when I was 12. Looking across the room at the pretty girls and working up the courage to go and ask one onto the floor… not knowing how to dance myself too. I did. Ya’ll see, the one thought that crossed my mind (and no, it wasn’t the 2 beers I’d snuck in) was that those lovely female wall-flowers cross the room were most likely just as unsure and nervous as I was. I say, to hell with it and let’s dance. Hey, ended up getting a couple of kisses too.
“As Treasuries come due, the government has to replace them with higher interest rate bonds”
I just invested in some TBills. The interest rate is set by auction, not by some arbitrary government action. TBonds are the same way, by auction. You can bid and make an offer they can accept or reject. By law Treasuries get paid first from taxes.
Frankly the interest rates SUX but it is better than a savings account and safer than the stock market these days.
I invest in real estate, and now Treasuries, these two items are basically “free” markets that operate on an auction basis.
I know you are going to pay your taxes and I can defend my land.
but I have no idea what the people that control equities or PM’s
markets are going to do.
Gesus. Peter Schiff. They interviewed Kyle Bass on Wednesday about what was going to happen now that the greatly fears 10-year Treasury crossed the line (gesus, not another line) of 3-percent.
Kyle Bass was remarkably subdued. After years of negative returns for Hayman Capital, you could see Kyle has been worn down. He based all his economic forecasts upon the same good-old fashioned financial common sense that made him hundreds and millions of dollars, and he is failing. His investment firm is failing.
Watching Kyle Bass this past Wednesday, I think he has finally come to the realization that good-old-fashioned financial common sense counts for crap anymore. We are living in the world of the financially surreal. Or something much, much worse.
Peter Schiff could use a little taste of the same reality people like Kyle Bass are beginning to embrace. Okay, maybe a big taste. A drunken jag maybe.
Has this guy ever predicted the market will go up? Every article I’ve ever seen from him is “Peter Schiff predicts a huge crash” Blah blah blah. I’m sure it will crash someday but if this moron knew when the market was going to crash he would short it to the extreme and make billions… but alas, he isn’t betting his own money, if he was he would have been bankrupt 15 years ago when he was predicting the same crash…blah, blah, blah
s0 you people have finally decided Schiff is full of shit as well as most of the other bullshitters on the net the internet is a source of lies and confusion for the most part
Of COURSE hell be right…… SOMEDAY! Just like these “prophets” claiming the end of the world is hear. I can tell you 100% for certain- we ALL die. Does that make me a “prophet”??
This douchebag needs to go away, and people need to stop publishing this garbage.
In my humble opinion, Schiff and all the doomers are correct. Perhaps they have cried wolf too many times, even for me. We all have had time to react and prepare for a big time crash. The reason Schiff and others have been sticking with the Big Thing is Coming narrative, is the nature of the beast he’s describing, the Fed and all TPTB have gone to extraordinary lengths to keep their dishonest game going. Probably unseen in history before. At some point, the rivets will pop, physics being physics, and IT WILL HAPPEN. Schiff, et al have known the key to this is that it is an ongoing tragedy in the making, FedGov being able to keep it up so long that most will not believe the Collapse will ever come. You may have heard the warnings too many times for your patience, but they are true. Just don’t believe that it means panic, it doesn’t. Wise heads prevail with considered, prudent, and thoughtful actions. Timing is everything. Just because the timing of predictions is off, doesn’t mean it’s time to relax. When it does come, you will be gratified to know you prepared, and are ready, and a lot more likely to survive, and thrive.
Schiff’s one prediction right in the past sixty years still makes him an idiot.
He makes money selling metals, so he panics the lemmings into parting with their cash.
It is like all your prepper advertisers that come out with EOTW stories, if the world was truly ending or even a collapse, these advertisers wouldn’t be selling their goods, they would be down in their bunkers hoarding everything except fiatcash.