As I have mentioned, I have been reading Peter Schiff’s The Real Crash.
Although spotted with a few typos and grammatical errors, Peter Schiff does a great job of explaining the insurmountable financial obstacles that face the United States–and most of the world’s economies.
In a very brief summation: the government is plagued by programs that are inherently unconstitutional and financially insolvent. These programs are being financed with debt and central bank monopoly money that is created out of thin air. Essentially, politicians keep kicking the proverbial can down the road. In The Real Crash Schiff argues (and has been for years) that we are about to run out of asphalt.
Since the Fed has continued to “fix” our recessions by artificially holding interest rates too low and flooding the economy with fake money (quantitative easing), the dollar itself is teetering on financial abyss.
Right now, the Fed is backed into a corner. Since the 2008 financial crisis, Ben Bernake—and now Janet Yellen, have kept interest rates at zero for about seven years. These seven years have seen little to no real economic growth. If the economy had recovered from 2008, the January 2016 rate hike would have been a non-issue. Instead, it triggered the deepest January plunge that stock market has ever seen.
Schiff further argues that the government is manipulating economic numbers—for instance, changing the way that the consumer price index is calculated in order to hide inflation. Other methods include downward revisions to critical economic data. These revisions are released a few months after the fact, usually after investor confidence has already pervaded the markets.
No matter how hard the government tries to hide poor data, the public can feel it. It is obvious that the economy is sick—people all over America are struggling. Nowhere is this better exemplified than the outright bizarre populist movements that are sweeping this nation. I mean, for Christ’s sake—Hillary Clinton, Donald Trump and Bernie Sanders (who, before 2015 was described, as a political outcast by his constituents) were/are all serious presidential candidates.
At this point in time, the government has two choices, it can either default on the national debt and restructure (hopefully massively reforming everything about our country and government) or, we could continue down the path we are on, which will eventually lead to hyperinflation. Obviously, I support massive secession.
As you can imagine, politicians probably won’t default on the debt, because it would be political suicide. The latter is the most likely path. Either way, it will mean bad news bears for a lot of people.
In the wake of the Brexit decision, the instability of the global financial markets has been lain bare (for instance, Europe’s biggest commercial bank, Deutsche Bank is on the verge of insolvency). As a result, the world’s central banks have unleashed massive rounds of quantitative easing. Why are the markets posting record highs? It certainly doesn’t feel like the economy is doing well.
Perhaps, this is all just hoopla, but the natural conclusions of the economic principles that we ascribe to predict eventual insolvency. Hopefully, we are not in for disaster, but if we are–look out below. It will be a long way down.
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