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.