Tuesday, October 18, 2016

Money Show 2016 - Peter Schiff

The Peter Schiff's talk was entitled "How Long Can the Zombie Economy Last? Will the Fed's Next Stimulus be Fatal?" Peter Schiff is CEO of Euro Pacific Capital Inc. Peter Schiff is extremely negative on the US and feels that currencies are on their way out.

The zombie economy is the continuation of 2008 and 2000. The problem of 2000 was an asset bubble in Tech and dot com stocks. In 1990 he bought old economy while everyone else was buying new economy. No one wanted gold. Countries were selling their gold. The stocks he bought in the 1990's cost him nothing now because developments have covered his stock price.

The Fed (Yellen and Bernanke) have done more harm to the economy than anyone else. The lower interest rates policy funded the housing bubble. Interests around 0 for 8 years have fed into the doubling of the national debt. People have multiple low paying jobs. Generally people think that the economy is fine. They are making the same mistake again.

Bernanke in an interview said that he could not be honest. So we cannot believe the Fed. It is all politics. Bernanke said they were buying treasury bonds only temporarily, so not to monetize the debt. If the Fed had confidence in the economy they would be raising rates. Investments are missed priced today just like the dot com stocks were missed priced. People are delusional today. Today both the bond market and the dollar are missed priced. The easy part is lowering interest rates. The hard part is to raise them. This is why they have not done it yet.

Obama said that Yellen had called the recession. She had not. She thought the Real Estate bubble was not happening. She was very wrong. Buy Assets that others do not want. Lowered rates and rate to zero will stay. We are at the end of the recovery so they are not going to raise rates.

This has been the worse recovery in history. If you had bet on QE ending it you bet wrong. They cannot raise rates no matter what inflation gets to. They cannot raise interest rates because of the high debt. He is buying stocks in New Zealand, Norway and Singapore. In these places interest rates are going up. You should buy stocks that are cheaper compared to other stocks. Buy stocks in places where dividend yields are good.

The US economy is in worse shape than Japan and Europe. The US dollar is going to go down. This will cause inflation in the rest of the world. The US cannot raise rates because of their massive debt.

The crisis did not occur in Greece when they had a big debt. They could still borrow at good rates. It was just when people lost confidence in getting their money back that the crisis occurred. He is buying small companies in those countries that do not depend on the US consumer. He does not think that Canada is in bad shape compared to the US. The Canadian Dollar will go up. Places like New Zealand will do better.

The EU and Japan will raise rates before the US. EU and Japan have savings. Americans do not have savings. There is a bubble in car loans in the US. Everyone in the US is in debt. If they raise interest rates the economy will implode. The Fed will lose control. People assume that debt can go on forever and lower interest rates can go on forever. It cannot. People are going to abandon currency and go to gold.

Peter Schiff is on YouTube.

On my other blog I wrote yesterday about Teck Resources Ltd. (TSX-TCK.B, NYSE-TCK)... learn more. Tomorrow, I will write about Kombat Copper Inc. (TSX-KBT, OTC-PNTZF)... learn more on Wednesday, October 19, 2016 around 5 pm.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

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