All sorts of crazy talk in this video. Lots of bad economics and crazy predictions. Raising interest rates will trigger a financial crisis? Really? hahahahahahaha
Unless the US government is going to default on the trillions of dollars of debt it owes - which I wouldn't rule out - rising interest rates will make servicing that debt eat up more and more of the budget. I forget what the "magic percentage" is, but that is the interest rate where servicing the national debt eats up the entire federal budget. Add to that the unfunded entitlements and you have the makings for a good old meltdown. Naturally the Fed will try to keep rates as low as possible for as long as possible. (To bail out their cronies they created a monster they don't know how to kill.) But that assumes the Fed can keep in unilateral control of interest rates indefinitely.
People like Peter Schiff will be one of the new billionaires after the current ones go bankrupt by putting all their investments in dollar denominated assets that are doomed to go to 0.
I like the way you think, but the current crop of crony banksters will not go quietly. They will get the government to confiscate the savings of the middle class so they themselves can minimize their losses. Privatized profits and socialized losses. What could be sweeter?
Peter often times using his analogy of QE as a drug (heroin). While it's a good analogy, I think a more apt analogy would be steroids. QE is steroids for the economy. Sure, while you're on steroids you will get bigger, stronger, leaner, and perform better than you would without them. However, all of those gains are a direct result from taking the steroids. To think that you can stop taking the steroids and remain as big, and lean, and as strong as you were when you were taking them is nonsensical. But this is basically what economists think that the economy can do without QE. Of course, you can't take steroids forever... as you will eventually run into all kinds of health problems, and ultimately die of heart failure (or something else).
All sorts of crazy talk in this video. Lots of bad economics and crazy predictions. Raising interest rates will trigger a financial crisis? Really? hahahahahahaha
ReplyDeleteRe: Mak Muk,
Delete--"Raising interest rates will trigger a financial crisis?"--
Yes, that will trigger a recession.
--"Really?"--
Yes, really.
@Mak Mum
DeleteUnless the US government is going to default on the trillions of dollars of debt it owes - which I wouldn't rule out - rising interest rates will make servicing that debt eat up more and more of the budget. I forget what the "magic percentage" is, but that is the interest rate where servicing the national debt eats up the entire federal budget. Add to that the unfunded entitlements and you have the makings for a good old meltdown. Naturally the Fed will try to keep rates as low as possible for as long as possible. (To bail out their cronies they created a monster they don't know how to kill.) But that assumes the Fed can keep in unilateral control of interest rates indefinitely.
QE is like a drug that keeps you going even though you are very ill and should be getting treatment. The result will be death.
ReplyDeletePeople like Peter Schiff will be one of the new billionaires after the current ones go bankrupt by putting all their investments in dollar denominated assets that are doomed to go to 0.
ReplyDeleteI like the way you think, but the current crop of crony banksters will not go quietly. They will get the government to confiscate the savings of the middle class so they themselves can minimize their losses. Privatized profits and socialized losses. What could be sweeter?
DeleteWhat we all want to know more about is the elephant in the room and by elephant I mean that hot amazon woman.
ReplyDeletePeter often times using his analogy of QE as a drug (heroin). While it's a good analogy, I think a more apt analogy would be steroids. QE is steroids for the economy. Sure, while you're on steroids you will get bigger, stronger, leaner, and perform better than you would without them. However, all of those gains are a direct result from taking the steroids. To think that you can stop taking the steroids and remain as big, and lean, and as strong as you were when you were taking them is nonsensical. But this is basically what economists think that the economy can do without QE. Of course, you can't take steroids forever... as you will eventually run into all kinds of health problems, and ultimately die of heart failure (or something else).
ReplyDelete