PETER SCHIFF - " WE WILL DESTROY THE CURRENCY COMPLETELY " / KING WORLD NEWS ( VERY HIGHLY RECOMMENDED READING )

Peter Schiff - “We Will Destroy the Currency Completely”


June 6, 2011

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With the stock market continuing to weaken while gold holds near $1,550, today King World News interviewed Peter Schiff, CEO and Chief Global Strategist of Europacific Capital. When asked what he sees ahead Schiff responded, “The stimulus is wearing off and the much anticipated hangover is starting to set in. The economy is now in worse shape because the government stimulated it. The stimulus merely interfered with the corrective process. So instead of resolving some of our economic imbalances, the government has made them worse. Now we are on the precipice of a bigger economic decline than the one the stimulus interrupted back in 2009.”


When asked about the US dollar Schiff remarked, “It’s going lower, last Friday the US dollar closed at a new low against the Swiss Franc. You need a $1.18 to buy a single Swiss Franc. I think you are going to see much more of the safe haven money going into other currencies or precious metals and the dollar is going to lose that bid, especially if the Fed launches QE3...If you look at the economic relapse that’s going on right now, look at Friday’s abysmal job numbers, look at the housing numbers, understand that all of this is taking place with record monetary and fiscal stimulus. What happens if we remove those supports?


When asked if we are headed for another financial crisis Schiff replied, “I think it’s a certainty. The financial crisis in our future is bigger than the financial crisis in our past. We are more vulnerable as a nation, we are more heavily leveraged now than we have been at any other time. We are more vulnerable to an increase in interest rates or a run on the dollar and either of things or both of things could happen soon.


It (the Fed’s balance sheet) just hit a record size on Friday. It’s $2.77 trillion, almost $2.8 trillion. We’re approaching a $3 trillion balance sheet, but the thing is in order for the Fed to keep this phony economy on life support that balance sheet has to continue to grow. We don’t want to keep this Frankenstein monster of an economy alive, we want it to let it die so that a real economy can arise to take its place.. 
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“Once that happens we can build a lasting and sustainable period of prosperity. The one we have now is doomed, it’s an abomination, it can’t survive. It depends on ever and ever greater injections of credit so that we can keep on borrowing to consume and import. If we try to do that indefinitely we will destroy the economy completely because we will destroy the currency completely.


In that environment gold and silver flourish. The more mistakes the Fed makes, the more stimulus the government pours into the economy, the brighter gold and silver are going to shine. Since I am optimistic that the government will keep doing the wrong thing, I’m optimistic that gold and silver prices will keep rising.


When asked about the stock market Schiff had this to say, “I think it’s going to go lower. I mean in terms of gold the Dow Jones now is worth just about eight ounces of gold which pretty much matches the absolute lows (for this cycle) of March of 2009. So in real terms, the US stock market is on the lows, even though in nominal terms it has had a pretty good rally. I think that’s going to continue, you are going to see stocks losing value priced in gold. I think gold and the Dow Jones could get closer to one to one.


We are going to be in this bear market for at least another decade if not more, as the Dow continues to surrender value measured in gold.”