Peter Schiff

Damn The Torpedoes

Peter Schiff
8 June 2012
Euro Pacific Capital Research

 

 

 http://www.gold-eagle.com/editorials_12/schiff060812.html

 

 

The same "damn the torpedoes" mentality dominates economic thinking with respect to the U.S. economy as well. Years of artificially low interest rates, and government subsidies that direct capital towards certain sectors and away from others, has created an economy with too little savings and production, and too much borrowing and consumption. The ultra-low interest rates currently supplied by the Fed serve to perpetuate this unsustainable artificial economy. Higher rates would work quickly to redirect capital to the more productive sectors. But high rates could bring deflation and liquidation, which few economists are prepared to risk.

 

Ten Ways the US Is Worse Than It Was In 1947

An excellent article here by the Dollar Vigilante.  As everyone waits...and waits...and waits...for an economic recovery, this article explains why there will be none.  There are also very good links if you have some time.

"Raising rates, which is the only thing that can squelch the impending inflation that is currently building, is not an option this time around.  This time around the choice will be allowing interest rates to rise dramatically and bankrupting the government or keeping rates low until the dollar hyperinflates into worthlessness.  Ben Bernanke has kept interest rates at 0% since 2008 and has publicly stated that he will keep them at zero until 2014.  Ben Bernanke has drunk of the Keynesian koolaid so deeply and for so long that he will keep rates at zero until the economy recovers.  The thing is, the economy can never recover until rates rise.  It’s a Catch 22... and it all ends in tears.'