{"id":1436659,"date":"2023-11-01T11:20:00","date_gmt":"2023-11-01T15:20:00","guid":{"rendered":"https:\/\/bugaluu.com\/news\/?p=1436659"},"modified":"2023-11-01T11:20:00","modified_gmt":"2023-11-01T15:20:00","slug":"peter-schiff-a-crisis-is-already-playing-out-under-the-radar","status":"publish","type":"post","link":"https:\/\/bugaluu.com\/news\/peter-schiff-a-crisis-is-already-playing-out-under-the-radar\/1436659\/","title":{"rendered":"Peter Schiff: A Crisis Is Already Playing Out Under The Radar"},"content":{"rendered":"

Peter Schiff: A Crisis Is Already Playing Out Under The Radar<\/span><\/p>\n

\n

Via SchiffGold.com,<\/em><\/a><\/p>\n

The mainstream remains optimistic about the trajectory of the economy.\u00a0Price inflation has supposedly been beaten down<\/a>. GDP growth was even better than expected, and most economists have tabled their recession predictions. But in his podcast, Peter Schiff explained that it\u2019s all an illusion. The financial crisis has already started, and it continues to play out beneath the radar.<\/p>\n

Nobody understands that this crisis has started. But believe me, it has. This was the way the 2008 financial crisis started. It didn\u2019t just happen when Lehman Brothers went bankrupt.\u201d<\/strong><\/em><\/p>\n

<\/a><\/p>\n

By the time Lehman went under, everybody knew there was a crisis. But it was obvious long before that.<\/p>\n

That\u2019s the reason it went under. It didn\u2019t just go out of business out of the dark. It wasn\u2019t just happenstance. The reason that Lehman Brothers, and Bear Sterns, and Fanny and Freddy, and AIG, and all these companies went under was their exposure to the mortgage market.<\/strong> That exposure was obvious to me for years, but particularly in 2007 when the subprime market blew up. That was the point where even the village idiot should have been able to figure out what was coming. The problem was most people on Wall Street weren\u2019t even smart enough to qualify as the village idiot, <\/strong>so they still couldn\u2019t figure it out.\u201d<\/p>\n<\/p>\n

They needed the proverbial anvil to fall on their head. That finally happened in 2008. But even in the summer of \u201908, a lot of people were oblivious.<\/p>\n

So, if you\u2019re wondering, \u2018Peter, how can we be so close to this massive crisis, in fact, how could this crisis have already started if nobody is talking about it?\u2019 Well, just go back to the summer of 2008. Nobody was talking about it.\u201d<\/strong><\/p>\n

Peter emphasized that this crisis is much bigger because the problems driving it are much bigger.<\/p>\n

They\u2019re the same problems. They just dwarf the size of the problems we had before. Because instead of actually dealing with the problems, we kicked the can down the road and made the problems bigger. Now we have to deal with the consequences of that.\u201d<\/strong><\/em><\/p>\n

Fed officials keep saying that the banking system is \u201csound.\u201d But Peter said all of the big banks are insolvent.<\/p>\n

Now, as long as they pretend that all their underwater assets, they\u2019re going to hold them to maturity, well, they can pretend that they don\u2019t have a problem. But eventually, they have to stop pretending because circumstances intervene, and they actually need to sell the securities that they had intended to hold to maturity.\u201d<\/strong><\/em><\/p>\n

Newsweek<\/em>\u00a0recently published an article titled \u201cAmerica Is Heading for an Interest Payment Crisis<\/a><\/em>.\u201d Peter noted that at least they\u2019re writing about that, but they still miss the root of the problem. It\u2019s not just the interest. It\u2019s also the principal.<\/p>\n

A lot of people claim the principal doesn\u2019t matter. As long as the US can make interest payments, everything is fine. But as Peter pointed out,\u00a0the national debt<\/a>\u00a0wasn\u2019t a gift. It\u2019s debt. But it\u2019s nature it has to be paid back.<\/p>\n

So, when they would say, \u2018We don\u2019t have to repay the debt,\u2019 I would say, \u2018Well, did you run that by the Chinese? Did you run it by the Japanese? Do they know that that\u2019s the deal? Do they know that they\u2019re loaning us money but they\u2019re never going to get it back?\u2019 Because that\u2019s not a loan. That is a gift.\u201d<\/strong><\/em><\/p>\n

Of course, the response is always, \u201cWe can just borrow from somebody else to pay it back.\u201d<\/p>\n

In other words, it\u2019s a Ponzi scheme.<\/strong> So, Bernie Madoff never had to worry about paying back money because he would get it from the next sucker who didn\u2019t realize it was a Ponzi scheme. But what happens when people realize it\u2019s a Ponzi scheme? They don\u2019t want to participate. And that\u2019s what\u2019s going on. Our creditors don\u2019t want to loan us more money to pay back other creditors. That is what is happening. That is why bond yields are going up because the people who own the bonds want their money back as they mature and we can\u2019t find new buyers.\u201d<\/p>\n

Rising interest rates impede the solvency of the United States. As rates rise, the Treasury has to borrow even more to keep up with the interest payments. As debt goes up, the US becomes a bigger credit risk. It also becomes more likely that the government and central bank will have to create more\u00a0inflation<\/a>\u00a0to service the debt.<\/p>\n

So, higher interest rates don\u2019t actually make Treasuries more attractive. They make them less attractive. That is a problem. This is a bottomless pit. This is a self-perpetuating collapse that we are witnessing that is going to gather momentum.\u201d<\/strong><\/em><\/p>\n

During an interview, new House Speaker Mike Johnson claimed that during the Trump years, the US had the greatest economy ever. Peter called that \u201ca lie.\u201d<\/p>\n

We didn\u2019t have the greatest economy in the history of the world. It wasn\u2019t even close. We didn\u2019t even have the greatest economy in the history of America. We didn\u2019t have the greatest economy in the 21st century. We had a bubble under Trump. Trump didn\u2019t create the bubble. He inherited the bubble, and he made it bigger. That bubble is now popped.\u201d<\/p>\n

You can trace the origins of the bubble all the way back to the Bill Clinton era and the monetary policy initiated by Alan Greenspan. That bubble popped the first time under Bush 2, was reinflated, popped again in 2008, and then they managed to blow it back up again.<\/p>\n

The idea that people think everything was great just a few years ago and it\u2019s all gone to hell \u2014 that\u2019s wrong because it assumes that we could just fix it, really simple. We just have to go back to the Trump policies and we\u2019re going to be great again. No! This problem is much bigger than just the bad things that Biden has done.\u201d<\/p>\n

Peter explained how the Clinton administration started the trend of using shorter-term financing to lower interest payments. They could do that because rates were so low. Of course, that created more risk because rising rates can quickly make those payments skyrocket. That\u2019s where we are today. Interest rates are soaring and all of that short-term debt is maturing. That means the Treasury has to borrow at a much higher rate to replace that debt.<\/p>\n

It\u2019s going to escalate into this complete sovereign debt and currency crisis, which is already started, but it\u2019s a long way from ending.\u201d<\/p>\n

In this podcast, Peter also explains why the future of the US looks more like Argentina than Japan.<\/strong><\/p>\n<\/div>\n

Tyler Durden<\/a><\/span>
\nWed, 11\/01\/2023 – 07:20<\/span><\/p>\n

\u200bhttps:\/\/www.zerohedge.com\/markets\/peter-schiff-crisis-already-playing-out-under-radar<\/a>\u00a0<\/p>\n

\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"

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