NEGATIVE INTEREST RATES | GOODBYE ECONOMY: Peter Schiff

Negative Interest Rates have hit the economy hard and Peter Schiff says this could be goodbye!

"A dollar crisis is looming that will make the financial crisis look like a Sunday Picnic"

The federal reserve had raised interest rates in December 2018 and people believed the fed would raise interest rates - but instead of hiking interest rates, they cut the rates.

What exactly changed? Why did they lower rates and not raise them?
Nothing changed.

The markets started to react to the prior rate hikes. And then the fed pricked its own bubble, but it took a while for the air to come out for people to realize it. Had the Fed continued on its trajectory, America would be in a worse recession than 2008.

And now they have postponed this yet again recession again.
Normal rates are not possible when you have abnormal rates of interest. The Fed is smart enough to know that if they ever attempted to normalize rates it would be highly problematic.

Had Hillary Clinton won the election, the Fed would have never raised interest rates. America would have gone back to zero and the Fed would have started QE.

Donald Trump created a lot of false optimism for the market, by cutting taxes and government spending which created massive enthusiasm among small business owners and entrepreneurs.

America is now operating using Keynsian Fiscal Stimulus. Where Government spending has increased dramatically since Donald Trump was appointed. This is essentially borrowed money for social spending and military spending.

Which is continuing the same failed policies of the last several presidents.

The only difference between Trump from other presidents is his style of talking and taking action.

The federal reserve is back to quantitative easing but they don’t want to admit it. And the balance sheet is growing faster and this is the largest QE in history and monetizing the short term debt means they're going to have to remonetize the debt when it matures. This is very bad news-

“The fed helped create an economy that was addicted to cheap money”
Instead of allowing the debt to be liquidated in the crisis, America has more debt than ever before.
The fed now has to keep the monetary spigot open forever.

When it comes to politics, nobody wants pain now. They want to push it off to the next candidate down the path. This is why these failed policies keep getting passed.

And Central banks are dumb enough to buy negative bonds - which is bad economics and terrible monetary policy.

The Fed can’t prevent the dollar from collapsing. The coming currency crisis will make the finical crisis look like a sunday school picnic. Everyone followed the herd. They bought the dollar and sold gold based not he ridiculous belief that the fed can do the impossible.

It is not okay and the Fed can’t reduce the balance sheet. Once the dollar starts to fall on the fact that rates will never normalize, a dollar crisis will begin. As the inflation rate takes off, there will be a sovereign debt crisis and only the Fed will be buying negative real yields. Gold will take off and propel to new highs.

The Polical ramifications of this: Trump is popular with tea party republicans. Trump is running even bigger deficits when supposedly the economy is at its all-time high? What does that mean for deficits when times are bad?

The Democratic party and socialist party are all that's left of the American political system. With the Republicans becoming the new Democrats and the Democrats becoming the socialist party.

No matter how many bonds the US government prints we can't pay for it. The fed won’t be able to bail everyone out from a dollar crisis. Otherwise we lose our purchasing power.

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