Santelli And Schiff On Bernanke's "Roach Motel Of Monetary Policy"

Tyler Durden's picture

From the government-induced structural unemployment malaise to the implosion of our entire 'artificial economy', Peter Schiff and Rick Santelli explore the dark side of monetary policy in this brief clip. On the Fed's new policy and potential exit strategy, Schiff notes that "the Fed is constructing goalposts so it never actually hits them; the Fed is never going to tighten." While Santelli tends to agree with Schiff on the eventual collapse of the USD under this never-ending Fed easing scenario, he notes that getting a fix on that USD weakness is hard given everyone is racing to debase. Schiff notes, oil prices, gold prices, food inflation, and real assets all send the signal that Bernanke chooses to ignore and on the topic of 'monetization' which Bernanke seemed so 'put off' by during the press conference last week, Sch-antelli both seemingly (obviously) conclude that the mere mention of an exit at some point in the future by the great and powerful Oz does not preclude the fact that 90% of current Treasury issuance ends up on the Fed's books... leaving the fact that selling any of this "would make 2008 look like a Sunday picnic."


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ekm's picture

"Roach motel" is from Seth Klarman's Margin of Safety book.


I call it straigtly "insect trap". This is what I've been preaching so far, gents.

It's an insect trap. You can get in, you can't get out.


One more proof that the Fed is tool, not the boss. If Fed were the boss, they wouldn't done things to self destruct.

economics9698's picture

When this shit hits confiscate all banker assets.  Then hang eh high.

Pladizow's picture

So Peter has burnt through all the CNBC puppets and now they have him talk to the only one that sides with him!

redpill's picture

All the rest are worried about showing up on future installments of "Peter Schiff was right" videos in a few years...

Dr Paul Krugman's picture

I'm not worried.  The boobs at cnbc only have one goal - to make as much money as their grubby hands can get ahold of.

Finance will be upset with politics and economics when the latter dares to question the motives of making money in the face of a a stricken system.  Doomsday preppers will cling to their guns while innocent lives are lost daily.  Gold bugs scream at the top of their lungs for a standard for finance as barbaric as the daily shooting sprees.  When will people see it is not about them, it is about the greater good.

Also, note that the above men have been wrong on their calls for a collapse due to increased debt.  Wrong.

Bay of Pigs's picture

Big Blue, McDonalds and Travelers all leading the market higher.

What could possibly go wrong?

Dr Paul Krugman's picture

I am pleased that Bernanke has decided to set precise targets with the economic stimulus because it shows that the Fed is making progress learning that they shouldn't do anything stupid - like raise rates, like the ECB.  At the same time the policy is a flatline continuation of past policy:  it isn't a game changer.  What is needed is a major policy that will end this depression now!

Michaelwiseguy's picture

So now everyone agrees with me and what I said many yeas ago. Peter Shiff articulated it beautifully.

There is going to be a complete and total worldwide economic collapse at some time in the not too distant future.

Complete and total bond market collapse. Check

Complete and total derivatives market collapse. Check

Complete and total dollar collapse. Check

Any questions?



Al Gorerhythm's picture

Yes. What's the December rainfall average for Monrovia?

pods's picture

What is the air speed velocity of an unladened swallow?

Al Gorerhythm's picture

I don't know, but will it carry me to Monrovia fully laden?

Michaelwiseguy's picture

Four foot one.

6.8 liters.



Harry Dong's picture

I was re-reading one of Shiff's book last night. This is before ZIRP. I like how all of his "there's no way the FED will do x, y and z 'cause it'll destroy the dollar" have come and gone. 

Now it's getting so easy, I can even understand it. 

Disclosure: I'm long nickels.



Texas Ginslinger's picture

Does Schiff ever talk about federal taxes..??

The non-payment of the same is why his dad chooses to live in prison..

Odd choice... 

SmallerGovNow2's picture

nebbish like no true Texan i know....

Landotfree's picture


Schiff is an idiot.  The Fed could hike the overnight rate up to 10% and their will be the equilavent of financial mushroom clouds tomorrow morning when none of the ATMs work.  The problem is simple, the system is no longer growing at an exponential rate, yet you need exponential rate for it to sustain itself.   

Yes, it will collapse but certainly not for the reason specified by Schiff.   Heck, love his dad, but his dad was a legal idiot, had no idea how sustain his God given rights.

SmallerGovNow2's picture

you are not very bright michael....

Michaelwiseguy's picture

The Fed will not hike rates for the rest of their history.

The Fed will not stop buying US Treasuries for the rest of their history.

The Fed will be history.

All Risk No Reward's picture

Folks, you have to do the research first - then you can identify contradictions and fallacies.  You aren't on to reality until there are no contradictions.

Here are some key information points that believe to be facts:

1. The international banking cartel controls the biggest banks in the world, including in the US.

2. The Federal Reserve Board is made up of people who represent the interests of the international banking cartel.

3. The international banking cartel created Debt Money Tyranny to loot host nations in a way that most won't understand they are being looted. 

Debt Money Tyranny

4. The MAJORITY OWNERS of the big money center banks use the Federal Reserve to protect their own self interests.

5. The MAJORITY OWNERS and their corporate fronts own trillions in debt olbigations and trillions in cash.

6. The MAJORITY OWNERS' front banking corporations are lending 30 year money at 3.2% right now.

7. The MAJORITY OWNERS control monetary policy NOT GOVERNMENT.

8. "Government" has been a "monetary beggar to MAJORITY OWNERS for 100 years.  The borrower is SERVANT to the lender.  Duh.  The hand that giveth is greater than the hand that receiveth.  Duh.

9.  The MAJORITY OWNERS out finance and out promote any and all competititon to their political operative class. 

If you believe each of these points...  it is NOT in the self interest of the MAJORITY OWNERS to hyperinflate UNTIL they bankrupt everyone they can and roll up REALITY undeer their front corporation control.

That means it is in their interests to allow the Ponzie to collapse while using their control over government to protect their trillions in cash and debt assets.  They will then convert it all, for pennies on the dollar, into ownership of REALITY - and the fact your family will be starving doesn't bother them a bit.  Remember, 3rd world Africa and 30 million malnutrition and starvation deaths are the result of their POLICY DECISION.  No, America is not better, we were just allowed to have resources and the policy was to deny resources to much of Africa.

Turn off the electricity in America and leave it off - third world Africa will look like the height of civilation compared to what America would devolve into.

The end result will likely be hyperinfation.  That will balance the books, as it were.

But before they do, a RESOURCE GRAB is almost assuredly going to take place.  Bailing out debtors won't do it.  Busting debtors will.




analyzer_66's picture

Sorry Kruggy, you got us here and you cant get us out.  Only a matter of time before foreign holders of our debt refuse to tolerate the negative real interest rates on our bonds and the USD is kicked aside as world reserve currency and petro dollar.  Zero interest rate policies have never produced any jobs, and after 4 years, no one at the Fed seems to have noticed.

People with large Cd's have tho and soon they will go overseas for returns or stack more gold and silver and take back their money from the greedy banks paying a fraction of negative interest on savings.

Al Gorerhythm's picture

Even his namesake is an idiot. Does the Name Krugman have a gravitational pull of its own, where the core of idiocy resides?

Al Gorerhythm's picture

   'Also, note that the above men have been wrong on their calls for a collapse due to increased debt.  Wrong.'

What's your numeraire or yardstick that you apply to measure collapse?  The US dollar, no doubt.

hairball48's picture

"Also, note that the above men have been wrong on their calls for a collapse due to increased debt. Wrong."

up to ain't over till it's over. Like him or not, Schiff has made a lot more correct calls than incorrect over the last 5-10 years.

All Risk No Reward's picture

Schiff has made some good calls and some bad calls.  Is he better than bankster propaganda "news" channels?  Absolutely.  I don't think Schiff lies for aliving like almost all the MSM.  Lie to benefit Big Finance Capital that ultimately pays their check and owns/funds their networks.

But I think his "straight to hyperinflation" argument is patently and obviously wrong when one understands the basics of the system.

Let me break society into two camps - the DECISION MAKERS and everyone else.

The DECISION MAKERS control Fed policy.  Everyone else lives with the results.

WHO are the decision makers?  WHAT are the interests of these decision makers?

My research yields the following to answers...

WHO - the private international banking cartel

WHAT - to increase their true wealth and control over society

So, this international banking cartel or, if you will, Big Finance Capital, owns trillions in cash and trillions in debt instruments.  They are also the DECISION MAKERS.

Would you go straight to hyperinflation when you own more cash and debt instruments than any other similar group on the planet - BY A LOT?

Would you be telling your front banking corporations to lend 30 year money at 3.2% just ahead of your decision to hyperinflate?

Do you really think these people who own and control the world to a large degree are so STUPID that they don't know lending 3.2% money for 30 years ahead of thewir hyperinflation will hurt them badly?

If so, you've been had - the propaganda has worked.

I think I need to buy a gun's picture

depends on your definition of hyperinflation, you don't have to lose your currency albeit it values at a lot less, schiff cannot say everything he wants to on financial tv,,,,absolutley not he knows where we are going (aka argentina not zimbabwe) he has to talk his austrian book or he wouldn't be allowed on period i even think he knows gold is going higher than some of his predictions but would never be allowed to say what's really going on and how it finally ends but he has slipped little things in there and he is just an awesome teacher,,,,,,,,,

chump666's picture

I only listen to traders, market players (or used to be) like the "above men". We are doomed, the market is showing that with disconnect trades all over the place.  More so with equities and inflated FX via GBP, CAD, AUD and of course your friend Abe just selling off the YEN, as Japan is literally finished as a economic country. 

"The greater good" is arrogance personified - every human, crony system has argued that exact point, and if you followed the ebbs and flows of natural systems, arrogance has no place.  The system needs a flush, a painful deflationary flush, but necessary.  What Bernanke is doing is self destruction, I'm betting next year, 2013, the market will cannibalize thanks to HFTs running the whole index trades.  Thus causing the liquidity addicted institutional traders (Wall Street cartel which runs the Fed) to panic like we have never seen before.

The punch bowel should have been taken away...


I am more equal than others's picture

leaving the fact that selling any of this "would make 2008 look like a Sunday picnic."


"Hey Booboo...?"

"Yeah Yogi, looks like picnic season is about to start...."

"Range Smith is going to be really mad if you steal those baskets."

ATM's picture

They shouldn't have to worry about that. All those segments will have been scrubbed from the internet by the Google Nazis.

They control history because they control the content.

Fish Gone Bad's picture

They rewrite history.  Those who control the past control the present, those who control the present control the future.

DaveyJones's picture

it is a sick dark comedy isn't it. I love the Bernanke line that he isn't monetizing cause he intends to sell it back at some point. You honor, my client is not stealing because he intends to give it back at some point which is yet to be determined. 

All Risk No Reward's picture

The monetary system is a fraud. 

Debt Money Tyranny Exposed:

Reviewing that chart, the only way to truly fix this problem is to confiscate those ill gotten gains at the top and use it to pay off the mirror debt imposed upon society.  The international banking cartel's personal monetary wealth and their corporate front monetary wealth IS OUR DEBT.

Read that however many times you need to in order to understand it.

The criminal bankster class Jefferson fought, Jackson fought, Lincoln fought, etc...  rigged the system so that socioety has to rent its money from them and their front corporations.  No debt, no money.  No ever accruing interest to them, no money.  Their money is our inextinguishable debt.


The traitor is the plague...  and the traitor is using its false monetary wealth and societal constraints to control the nation states and bomb or threaten tot bomb all those that they don't control.

While this might appear to be some kind of joke...  so did John Wayne Gacey...  and we will find out what those kids eventually found it...  and it ain't gonna be nice.

The system is working beautifully.  It isn't broken.  It is efficient.  They sinply lie to you about the purpose of the system.

Just like they lie to you and say that Obama is spending the nation when the Republican controlled House is where the national buck stops.

Oh, did I just expose a key Big Finance Capital false narrative to the masses?

They aren't worried - they don't think you will understand.

TruthHunter's picture

"When this shit hits confiscate all banker assets.  Then hang eh high."

The hard ass Stalin types that accomplish it will have you wishing for the good ole' days

eatthebanksters's picture

Hotel can check in anytime you like, but you can never leave!

ekm's picture

I'd like to think that both Schiff and Santelli have read my posts on ZH about roach motel and insect trap during last 3 weeks.


I was reading Margin of Safety and I was posting different quotes from the book here. I finished reading it 3 days ago.

Super outstanding book.


One other quote I'll never forget from Seth Klarman:

If you buy a security to sell it to a greater fool, if there are no greater fools around, then you are the greater fool.

Does it ring a bell?

americanspirit's picture

Hotel California - you can check out but you can never leave.

Remington IV's picture

. Schiff and Santelli ... are either of these CHIMPS ever right ???

Al Gorerhythm's picture

Where have you been all this time, CHUMP, following Snooki on Twitter?

ball-and-chain's picture

I love Schiff.

He's smart and has a great sense of humor.

But there's no collapse coming.

Just a slow bleed till the baby-boomers die off.

We are the new Japan.


Bryan's picture

The video you are trying to access is unfortunately unavailable at the moment.

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zerozulu's picture

You need to enable flash block and no-script options in your browser or right click the video and open it in new tab and allow all to view it. 

NeedtoSecede's picture

Bryan, let me finish that for you:

"Now that we have your position fixed thanks to our NSA database and the drone stationed in your sector, we will "solve" your "problem" shortly. The Hellfire missile is inbound to your location. Have a nice day. Impact in 3, 2, 1..."

We have assumed control! We have assumed control...

economics9698's picture

Schiff notes that "the Fed is constructing goalposts so it never actually hits them; the Fed is never going to tighten."


bagehot99's picture

You can't tighten if tightening requires you to sell shitty debt that nobody wants to buy. And that is where the Fed has put itself. Bernanke is a criminal or a complete fool, I'm not sure which.

His study of depression era Fed policy has taught him all the wrong lessons.

The practical result of this is identical to printing money. Absolutely fucking identical. It's just done with a mouse click and is slightly cheaper than using De La Rue, but the rest is the same.

The idiot in the White House doesn't realize that he's going to end up making Hoover look like a candidate for Mount Rushmore.

Cognitive Dissonance's picture

We have not hit peak insanity yet.

<Not even close.>

Fish Gone Bad's picture

I have said this a few times and its bears repeating.

Just when you think things can't get any more fucked up, just when you think there is no hope in sight, just when you think the financial world is coming to an end...  Things get a little more fucked up.

We all know how this story will end, just not when it will end.

Al Gorerhythm's picture

We all know how this story will end, just not when it will end.

You might try asking Vast Dom.