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Peter Schiff Said: There’s no danger the Fed overreacts to inflation and raises rates too much. The danger is that it raises the rates the correct amount, creating a far worse financial crisis than 2008. The greater danger is that it doesn’t raise rates enough, resulting in a worse outcome; runaway inflation.
For clarity, the Fed might likely raise the rates by 3 times in 2022. Peter Schiff is commenting on the steps taken by the Fed by raising rates. He calls this step as over reacting.
Community Response: Exactly the reason why you should finally start getting into the real deflationary asset which is BITCOIN and accumulate as much SATS as humanly possible.
All Ponzi’s have one commonality: The need to sell to a greater fool.
Sorry Peter. I appreciate your thoughts, but how can raising rates too much not be catastrophic? If we think the debt is unsustainable now, what happens if the interest on it goes to 4-5%
He’s right. There are two scenarios. Crushing the economy now via rate hikes to stabilize the dollar (rates up and borrowers’ default) or they can do what they been doing for 13 years (hiding the 2007 derivatives crisis with more money printing), which destroys the USD long-term.
People pay their debt and don’t get everything they want on credit. At some point, society has to get real or it will be destroyed. Fed’s rates right now it’s CERO. Raising 0.25% it’s necessary that is like riding the tiger by its tail.
Because it’s something the Fed won’t do. The most likely course of action given the past 20 years is the Fed will keep rates rock bottom and not raise rates enough.
I’m pretty sure they’ll move forward, at least with a faster tapering, if they even get to adjusting rates is a big question.
So, reward moral hazard? I think the unborn have something to say regarding artificially inflated asset prices. Like houses. Asset prices need to fall for society to function. Otherwise, those without will come for those with.
If inflation is not growth driven, but related to structural supply side issues how does interest rate increases alleviate inflation? Not rhetorical, actually asking.
Increased interest rates pull money out of equity investments and commodities and put them back into government treasuries provided the faith in the government remains strong.
The Fed can’t raise rates, ever .25 bps here and there will happen so they can appear to be useful, but financing our debt, bursting bubbles, and dumb Keynesian philosophy are tremendous headwinds.
So, in your opinion, Fed is damned if they do and damned if they do not? Do you think the ECB will follow the same disastrous path as the FED?
What solves this? A Bitcoin standard. Back the USD by it and reset the economy. Problem is the FED wants all the imaginary money the government owes it.
Nobody is raising rates. Not with the bond population at all time low durations and 30 trillion being constantly rolled. They’re “tapering” (absorbing less government debt on to their balance sheet for sterilization). How thick do you have to be to not realize this?
Listen Peter. Just say it straight up. They’re at the end of their rope dangling on the hangman’s stool. So just buy Bitcoin.
Why everyone are ganging up on bitcoin and other digital currency? It totally bewildering.
Acknowledge the central banks and bullion bank’s role in paper dumps and you might get more respect.
At zero percent interest rate, people are still having payment problems, combined with rising costs. Could be a moral hazard at this point to raise rates.
What about them completely ending their asset purchase program? They’ve been spending $1.5T a year and they’re hoping to scale this to 0 or does this get completely negated by the stimulus from the build back better plan?
Either way, you better be stacking Sats hard right now. Bitcoin.
The real inflation is running at 15%. How high does the Fed have to raise the interest rate to rein-in on the inflation? 20%? The Fed’s purported “strong” economy will come crashing down even in the face of an interest rate of 2%, let alone 20%!
