There is alot in this interview with Peter Schiff that should be taken note of. This manseems to be a money saint to so many people. I have my own reservations abouthim and cannot get past his last name. Expect some investigation into Mr.Schiff to come. After all, Jacob Schiff was his ancestor and we all know howthat man funded and helped organize the Bolshevik revolution of Russia.
In the past Peter Schiffhas blamed the global financial crisis on American laziness andover-consumption. He has never mentioned the Jewish banking cartel that isbankrupting individual Americans and their own government. Nor does Peter blameillegal immigration or free trade agreements, courtesy of the multinationalcorporations, which have deprived hardworking American citizens of their jobs. In Peter Schiff’s anti-American worldview, the human race will be better offwithout the United States.
The LearnedElders disclosed that there will be those who appear to oppose their agenda,but are secretly their agents.
To gain the trust of the Gentile masses,these controlled opposition agents assume false identities which appeal to awide range of political persuasions. Today, great numbers of these agents areseductively leading the Gentile masses to the Learned Elders predeterminedend…their own destruction.
I havefound, alas, that prominent Jews, even the “pro-goys” almost always end upbeing proven part of the Zionist agenda. The fact that a man in his positionwas not aware of the Bilderberg Group really does make me question him.However, you be the judge of his financial savvy below.
By Lars Schall
In this month’s MATTERHORN INTERVIEW, theUS-American investment broker, author and financial commentator Peter Schifftalks with German journalist Lars Schall about the failed policies of the U.S.Federal Reserve; the unsustainable American consumer economy; his expectationsfor the gold price; and what he would do if he was heading the DeutscheBundesbank.
PeterSchiff, born 1963, is the President & Chief Global Strategist of EuroPacific Capital and CEO of Euro Pacific Precious Metals, LLC. He began his investmentcareer as a financial consultant with Shearson Lehman Brothers, after havingearned a degree in finance and accounting from U.C. Berkeley in 1987. He joinedEuro Pacific in 1996 and has served as its President since January 2000.
Heis a highly recommended broker by many leading financial newsletters andinvestment advisory services as well as many major media outlets such as TheWall Street Journal, Barron’s, Forbes, The Financial Times, The New York Times,The Washington Post, etc. and appears regularly on CNBC, CNN, Fox News, FBN andBloomberg.
Heis the author of five books. His best-selling book, “Crash Proof: How to Profitfrom the Coming Economic Collapse” was published in February of 2007. In thatbook he wrote that the economic policies of the United States werefundamentally unsound, that the U.S. dollar would lose much of its value, andthat the market would crash. Peter Schiff used for his predictions hisunderstanding of the Austrian School, a heterodox school of economic thought. (1) His latest book, “The Real Crash: America’s Coming Bankruptcy” is dueout in May.
Mr.Schiff is known for his bullish views on investment in tangible assets as wellas foreign stocks and currencies. He is one of the few non-biased investmentadvisors (not committed solely to the short side of the market) to havecorrectly called the current bear market before it began and to have positionedhis clients accordingly. You can find Mr. Schiff’s regular commentsin relation to gold under: http://goldscams.com/.
Mr. Schiff, let’s start with a joke: Thefinancial crisis is over. Good joke?
Peter Schiff: Yes, that’s a good joke, because the crisis is farfrom over ~ especially with Ben Bernanke in charge. He is a very dangerous andvery foolish man.
Well, I hear sometimes that he’s the biggestgold bug out there. (2)
Peter Schiff: Who, Ben Bernanke?! (laughs.) I mean, if you wantthe price of gold to go up, Ben Bernanke is your guy. He’s very good at that.But he’s not a gold bug personally, in the sense that he advocates gold.
No, nevertheless: when you analyze it positivelyfrom a gold bug perspective, what would you say about Mr. Bernanke’s policies?
Peter Schiff: Disaster. I think he’s the worst Fed Chairmanever, he is worse than Alan Greenspan, which is a very difficultaccomplishment. There are one or two things that are hard to say because he iseither a complete incompetent fool or he’s a liar. Those are the only optionsthere are.
He just gave us recently some lectures. He said that the Fed’slow interest rates under the Greenspan period didn’t even play a part in thehousing bubble. He said it was completely unrelated to it and that the lowinterest rates didn’t even contribute in any way to the housing bubble. Inother words, Ben Bernanke is saying that interest rates don’t affect houseprices, which is a complete lie.
In fact, Ben Bernanke’s current policy of zero percent interestrates and Quantitative Easing where the Fed buys bonds and mortgages – thespecific goal of that is to keep interest rates lower to prop up the housingmarket. That is an admission by the Fed that low interest rates make housingprices higher than they otherwise would be. So the Fed is acknowledging thatinterest rates can determine house prices, yet the Fed is saying that interestrates had no effect on house prices during the bubble – which is nonsense: ifit wasn’t for the low interest rates, there would not have been a housingbubble.
Again, the guy is either a moron or a liar. And it wasn’t eventhat interest rates played a part, it was the most important part. If interestrates had never been lowered, we wouldn’t have had a housing bubble. That wasthe fuel that kept the fire burning. So the guy seems to be completelyincompetent. It is amazing that he can have that position.
And he also says that Fannie Mae and Freddie Mac didn’t play apart. He blames the entire housing crisis on Wall Street greed, and the onlything he says is that the government should have had more regulation. Helearned nothing. It is the complete opposite. And in fact, Ben Bernanke deniedthat there was a housing bubble even after it burst, whereas I was out theretalking about the bubble in 2002, 2003, 2004.
I basically gave a play-by-play, and I specifically saidthat the monetary policy of the Fed is blowing up a housing bubble, and thatthe Fed needed to raise rates to stop it – and by waiting so long, it let thebubble get much bigger, and I was talking about what was going to happen afterthe bubble would burst. The guy could potentially destroy this economy,because he is destroying the dollar.
You see the collapse of the dollar coming?
Peter Schiff: Yes.
Why, for what reasons?
Peter Schiff: Look, Ben Bernanke and the Federal Reserve willkeep printing money to try to get Americans to spend. Ben Bernanke said thatthe problem with the economy is that Americans are not borrowing and spendingas much as they were before the crisis. Well, where were Americans getting allthe money from to borrow and spend? It was from a real estate bubble.
And it was bad spending, it was phony, it was debt. But BenBernanke says that America needs to go deeper into debt, that we have to spendmore, that we have to act like there was a housing bubble, even though thereisn’t. He wants to create some sort of bubble. His goal is to get Americans tospend, and he’s going to do that. By that he will destroy the dollar.
We can never have a recovery until interest rates go up, but hewon’t let them go up. We don’t need more spending, we have too much spending.We need less spending, we need savings, we need investments and we needproduction. But we won’t get any of that as long as the Fed keeps interestrates at zero and stimulates the government rather than the economy.
Aren’t you a quite lonesome critic of theconsumer economy in the United States?
Peter Schiff: Well, I am certainly outnumbered by the fools, whoare cheerleading the consumer economy, but these are the same people who weredoing that in 2004, 05, 06, 07 – the same people who thought everything wasjust great, who didn’t see the housing bubble, who didn’t see thefinancial crisis. The same people who got it completely wrong are the ones whoare defending the Fed today. It’s the people who got it right who arecriticizing the Fed.
Since three is a magic number, what are in youropinion the three most important lessons to be learned from this crisis?
Peter Schiff: You don’t want the government involved in thehousing market, you don’t want the government setting interest rates, and thethird one would probably be that you want sound money – you need to be on agold standard which relates to the accurate setting of interest rates, becausethe Fed was setting the interest rates, not the market. The government wassubsidizing housing prices. You don’t want that. You don’t want the governmentguarantee mortgages and loans; you want mortgages to be based on the market andloans to be based on the ability of the borrower to repay.
So get the government out of housing, get the government out ofthe economy, get the government out of money and setting interest rates – butinstead we’ve done the opposite: we have more government involvement, moreregulation, more central banking, more central planning, more support for thereal estate market. They’re preventing the economy from restructuring in amanner that is required to have a real recovery. So when Bernanke is talkingthese days about structural unemployment – the reason there is structuralunemployment is because of Bernanke, and also because of Congress and the rulesof regulations that are making it for people so hard to find jobs. But we willnever solve those structural problems until interest rates go up.
But Mr. Bernanke is not alone. Do you think thatthe Federal Reserve has a plan or follows some kind of vision?
Peter Schiff: No, the only plan that I can see is that they’recreating inflation. Their only plan is to try to postpone the collapse. Theywill not stop it, they will not prevent it from happening. In postponing, itmeans that it is going to be much worse when it happens. But they don’t careabout that. And again, I don’t know whether it is incompetence or they’re justlying. Either Ben Bernanke is grossly incompetent or he is a flat-out liar.Those are the only two things that could be.
So you think they are buying time. But for what?
Peter Schiff: They are buying time so that they can have newelections and so that politicians can get re-elected without having to dealwith the crisis.
And one essential condition for that is thedollar demand internationally?
Peter Schiff: As long as the world is willing to hoard dollarsand prop up the US economy, they can keep it going for a while, yes. But themore money the world lends America, the more money the world will lose, becausewe are not going to pay anybody back.
What are your thoughts in this respect thatIndia is willing to pay for Iranian oil with gold?
Peter Schiff: More and more transactions around the world willultimately take place in something other than the dollar, whether it’s gold, orwhether it’s euro, yen, or renminbi. The world is moving away from the dollar,and that should be of major concern for America, because our ability to surviveis based on people accepting dollars, because we don’t have really anything else.We don’t have the production to pay for the things that we want; we have toexchange money we print.
Why is America destroying its industrial power?
Peter Schiff: Unfortunately that’s true, but I don’t think thatthe government is doing this intentionally. They are just trying to keepAmericans spending money so that they can keep pretending that everything isgreat, so that politicians can keep get elected, that’s basically what it’s allabout.
Yes, but people who have to spend something needproductive jobs.
Peter Schiff: Yes, exactly: we need productive jobs, we don’tneed to squander our labor. We have to actually make things, we can’t justpretend to work, and that is what we are basically doing.
Is the current oil price justified?
Peter Schiff: Yes. In fact, it will going a lot higher. All thecentral banks are printing money, and the more money they are printing the morethings will cost, as reflected in the price of oil.
And gold isn’t in a bubble, either?
Peter Schiff: Gold is not in a bubble, it is the opposite of abubble.
Peter Schiff: I’d say it’s under-owned, it’s under-invested,people are so skeptical of it; everybody is expecting the price of gold tofall. Gold stocks are at record lows relative to the price of gold. There isbasically no speculation going on, it’s all skepticism. Everybody is justwaiting for the price to drop, everybody thinks it’s a bubble, and yet no oneis really buying it.
But when lots of people are already now talkingabout a bubble, what will they do in two or three years from now?
Peter Schiff: They will still talking about the bubble.Eventually, the people who are talking about a bubble will have to start buyingsome gold
You think mining stocks in gold are a goodinvestment?
Peter Schiff: Yes, absolutely. I think they are a particulargood investment right now.
And what are your thoughts related to the goldbuying of central banks?
Peter Schiff: They are going to buy a lot more.
Will that be a good fundament for the price?
Peter Schiff. Yes, the central banks have to buy a lot of gold.They don’t have enough relative to the currency reserves. That will put a lotof upward pressure on prices.
Do you think that Western central banksintervene in the gold market?
Peter Schiff: Well, I’m not sure. They might. Sometimes they buygold, sometimes they sell it. I don’t know how strategic they are. But onething I know for sure: the price is going to go up, regardless of what the Fedis trying to do.
What are the advantages of gold, for example inrelation to the dollar?
Peter Schiff: There are lots of advantages. It is real money, ithas intrinsic value, and the government can’t print it. And the gold standardis much better than fiat money.
But is this realistic that a gold standard comesback?
Peter Schiff: Sure.
After the assumed collapse of the dollar?
Peter Schiff: Yes, it is much more realistic that a goldstandard comes back, than that we stay on the fiat standard we have now. Itdoesn’t work. It will collapse.
What kind of consequences will this collapsehave?
Peter Schiff: Hard to tell. It will look pretty bad for mostAmericans when prices will go way up and they can’t afford to buy stuff. Itcould also get very bad as far as loss of individual liberty. A lot of peoplewill blame it on capitalism, on freedom, and they will claim we need moregovernment. It could be used as an impetus for more regulation, which would bea disaster, or it could be an impetus to get rid of all the regulation that wascausing the problem. But whether we will do the right or the wrong thing herein America, there will be a lot of pain first. We got some serious problems wehave to deal with, but we are not dealing with the problems, we only make theproblems worse.
What do you think about Ron Paul’s campaign sofar?
Peter Schiff: Ron Paul understands the problems that we face,but unfortunately his campaign doesn’t get enough support to win.
One thing Mr. Paul likes to talk about is anindependent audit of the gold reserves of the United States of America. Do yousupport this.
Peter Schiff: Sure, it would be interesting to know if westill have the gold that we claim we have.
Roughly 66 percent of the German gold reservesare located at the New York Fed. If you would be the head of the German centralbank, the Deutsche Bundesbank, would you repatriate this gold?
Peter Schiff: I would not hold my gold in the United States. Iwould be afraid that the U.S. might decide to seize it for an emergency. So ifI was Germany, I would ask for all of my gold to be returned from the Fed, andI would buy as much gold as I could in the open market.
Why should Germany buy more gold in the openmarket?
Peter Schiff: Just to have more gold. Germany should get rid ofits dollar reserves and other currency reserves. That would be a much betterway to go.
Thank you very much for taking your time, Mr.Schiff!
(1) Compare for example Dirk J. Bezemer: “No One Saw This Coming:Understanding the Financial Crisis Through Accounting Models.” MPRA Paper No.15892, June 16, 2009, published under:
(2) Compare for example Zero Hedge: “Bernanke Reprises His Role Asa Gold Bug’s Best Friend”, March, 26, 2012 under: