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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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Mon, 12/17/2012 - 18:28 | 3072891 hairball48
hairball48's picture

agreed, but we're working on it

Tue, 12/18/2012 - 11:15 | 3074645 TruthHunter
TruthHunter's picture

"We have not hit peak insanity yet."

All in on insanity?

Mon, 12/17/2012 - 16:12 | 3072320 auric1234
auric1234's picture

But I'm already short on Bernank.


Mon, 12/17/2012 - 17:26 | 3072646 TheSilverJournal
TheSilverJournal's picture

The best way to short the Bernank is to go long silver. He can literally create as many dollars as he pleases and can and will keep rates low straight into hyperinflation.

Mon, 12/17/2012 - 16:14 | 3072331 buzzsaw99
buzzsaw99's picture

He just now figured that out? LMAO!

Mon, 12/17/2012 - 16:24 | 3072376 Central Bankster
Central Bankster's picture

You either have a listening or reading problem. Schiff has been a gold bug for over a decade and he was one of the first to say the fed will never exit, back in 2009.

Mon, 12/17/2012 - 16:57 | 3072523 buzzsaw99
buzzsaw99's picture

gold bugs will get crushed and all of schiff's funds have under-performed the bond market and every other market there is.


snake oil salesman imo

Mon, 12/17/2012 - 18:16 | 3072845 jerry_theking_lawler
jerry_theking_lawler's picture

as of when...state your time frame (past and future)....

Mon, 12/17/2012 - 21:30 | 3073400 SmallerGovNow2
SmallerGovNow2's picture

Buzz, you have one hell-of-a-buzz, what you smokin?

Mon, 12/17/2012 - 16:17 | 3072344 EscapeKey
EscapeKey's picture

Meh, a bit tired of Schiff, he's bit of a broken record.

Oh ok then, I'll give it a listen.

Mon, 12/17/2012 - 16:55 | 3072526 DaveyJones
DaveyJones's picture

what else can you sound like when you're recording a broken system?

Mon, 12/17/2012 - 18:35 | 3072913 hairball48
hairball48's picture

Schiff's message is the same because the problem hasn't changed. Too much consumption, too little production, too many regulations, taxes increasing, Gov't spending out of control, and too much intervention by the Fed. etc. etc.

What do you want fom him? Want him to keep changing his story like that liar Bernanke? :)


Mon, 12/17/2012 - 16:17 | 3072345 fonzannoon
fonzannoon's picture

Schiff is maybe the last man standing who just tells it like it is.

Mon, 12/17/2012 - 16:26 | 3072388 FL_Conservative
FL_Conservative's picture

It caught my attention to have both Santelli and Schiff in the same video.  The only thing better would be for Lauren Lyster to interview both of them.  Then I'd both listen AND watch.

Mon, 12/17/2012 - 16:23 | 3072373 1100-TACTICAL-12
1100-TACTICAL-12's picture

schiff was right and will be again.

Mon, 12/17/2012 - 16:23 | 3072375 youngman
youngman's picture

It is wierd that Bernanke denies monitization......just what does he think he is doing in his mind??????

Mon, 12/17/2012 - 16:26 | 3072387 Bay of Pigs
Bay of Pigs's picture

Providing liquidity?

Mon, 12/17/2012 - 16:30 | 3072403 aka Gil
aka Gil's picture

For the next derivative meltdown?

Mon, 12/17/2012 - 16:33 | 3072423 nope-1004
nope-1004's picture

No, for yesterdays debt binge.  The Fed acts in response, not in anticipation.  This is Crisis Management at its finest.


Mon, 12/17/2012 - 16:36 | 3072433 Redhotfill
Redhotfill's picture

Oh thats what that yellow stuff running down his leg is!

Mon, 12/17/2012 - 16:56 | 3072531 Catullus
Catullus's picture

He's covering Geithner's ass who said we were not monetizing the debt.

Mon, 12/17/2012 - 16:58 | 3072536 DaveyJones
DaveyJones's picture

 criminals can be hard to decipher

Mon, 12/17/2012 - 16:27 | 3072392 Dr. Engali
Dr. Engali's picture

Reason number 5 why I'm dropping the iPhone. ..... No flash player. I can't watch 1/2 the videos Tyler puts up.

Mon, 12/17/2012 - 17:42 | 3072716 TWSceptic
TWSceptic's picture

Jailbreak >  Cydia > install Frash

Mon, 12/17/2012 - 16:29 | 3072402 VonManstein
Mon, 12/17/2012 - 16:42 | 3072468 Winston Churchill
Winston Churchill's picture

Looking like the corzining of allocated gold amd silver could only keep the

basketball underwater for so long.Local gold dealers are reporting no

inventory.Delivery is soon going to be a real issue ,and the paper market is

going to be exposed as the sham it is.

Mon, 12/17/2012 - 16:32 | 3072413 john_connor
john_connor's picture

Roach motel is the analogy that John Hussman used in his recent newsletter

Mon, 12/17/2012 - 16:32 | 3072415 Silverhog
Silverhog's picture

This video is like opening a window for fresh air.

Mon, 12/17/2012 - 16:32 | 3072417 q99x2
q99x2's picture

Schiff repeated old ZH info and CNBC is agreeing. I'd say that was different when compared to the old days.

Mon, 12/17/2012 - 16:35 | 3072435 azzhatter
azzhatter's picture

Fuck You Bernanke

Mon, 12/17/2012 - 16:37 | 3072446 TonyCoitus
TonyCoitus's picture

Schantelli.....I like that.


Sounds like a perfume.  "Collapse" by Schantelli, only at fine retail stores.

Mon, 12/17/2012 - 16:44 | 3072481 Sutton
Sutton's picture

If Ben sells but ONE bond, the whole thing collapses.

Mon, 12/17/2012 - 16:50 | 3072509 VonManstein
VonManstein's picture

You wont have to wait that long

Mon, 12/17/2012 - 16:47 | 3072499 Nothing To See Here
Nothing To See Here's picture

Anyone noticed the spide in 10Y yield this pm? Like +3,8%?

Something brewing or just a bump?

Mon, 12/17/2012 - 16:51 | 3072512 VonManstein
VonManstein's picture

.... 30YR ?

Mon, 12/17/2012 - 17:20 | 3072625 inevitablecollapse
inevitablecollapse's picture

i've seen it mentioned here to keep an eye on bond yields - is the yield begins to go up, does this mean inflation is rising?  what bond yields should a person keep an eye on?  

Mon, 12/17/2012 - 17:40 | 3072705 busted by the b...
busted by the bailout's picture

Bonds are always central to reading the economic tea leaves.  Watch all the Ts. 

I think they are moving up now because,

1) "they" expect we will not cliff dive and so the economy will continue to improve slowly, leading to rising prices / inflation / interest rates.


2)  the recent decrease in foreign buying interest is driving down bond prices.

The trouble is, as soon as rates increase about 1/2 point on the long end, the housing market will dry up again, as will other borrowing, thus slowing the economy further.  I.e. rates can't go up for long in this economy.  Unless, of course, there is a Schiff style collapse and then all bets are off.  In the meantime the Fed is trapped by zirp and monetization to keep the boat afloat.  We, of course, are just pawns in their game and have no choice in the matter.


Mon, 12/17/2012 - 18:30 | 3072898 inevitablecollapse
inevitablecollapse's picture

must appreciated, thanks for the insight

Mon, 12/17/2012 - 18:44 | 3072933 Orly
Orly's picture

Not only that but bonds just got an $85B/month guarantee on their prices.  With the Fed gobbling up 90% available, don't expect bonds to waver very much.  With that comes a backstop under the equity markets, which they can let down gradually over the next two years.

No fear, no rush to safety, bond prices go down.


Mon, 12/17/2012 - 16:54 | 3072510 debtor of last ...
debtor of last resort's picture

9:30 pm The Netherlands, tv programme on a well watched channel, about the debt system, AND, a physical bullion dealer talking about physical gold and silver. 1971, debt, dollars, crisis, you know the drill. But many minutes about phizz..... And i have seen in rather busy shopping streets little shops purchasing silver and gold. Casino markets etc etc. Signs!

Mon, 12/17/2012 - 16:58 | 3072540 helping_friendl...
helping_friendly_book's picture

His Great-Grandfather, Jacob shipped all the Eastern European Jews emigrating to New York on to Galveston Texas.


I wonder why? Something different about Eastern European Jews w/ respect to Western European Jews?

Quite racist!

Were the Eastern European Jews even Jewish?


See for yourself. 

Mon, 12/17/2012 - 17:23 | 3072634 the grateful un...
the grateful unemployed's picture

at the end of the day UST buys the bonds back from the Fed. in the meantime the banks have the benefits of free collateral, or capital, but the roach motel idea works the other way, its collateral which can't be touched. consumers get some of it too, zero APR car loans, zero down mortgages, lots of good stuff.

Mon, 12/17/2012 - 17:48 | 3072742 hooligan2009
hooligan2009's picture

agreed...exactly what does happen if the Fed and the Treasury go one step further after monetizing the debt...that is..just cancel it?

let's see how this works..the treasury borrows the money at a few percent so it can fund half its spending...the fed buys back the debt issued by thte treasury by printing money at zero coupon (bank notes/fed funds rate)...result..the treausry injects the amount of money into the economy and the Fed doubles this down by printing cash...

what happens if you cancel the Fed's holdings of Treasuries?

the cash issued by the Fed stays in the economy and the Treasury doesn't have to pay back its borrowings, so what's the big deal? the Fed belongs to the Government (implicit guarantee and return of profits/losses to/by the Treasury).

this is the Ponzi scheme. it doesn't matter if one government department buys another government departments debt. remember there is 6 trillion of treasuries not in private hands (trust funds), leaving just ten trillion in debt "out there" of which the Fed owns around 16-20%. 

any ideas?

Mon, 12/17/2012 - 19:05 | 3072993 the grateful un...
the grateful unemployed's picture

i think it was machievelli who proposed "private debt for public good", that is individuals have to carry the debt which benefits the public (which is the opposite of how most people think about it, most people think that its public debt for private benefit) when you consider the word for as an indication of the direction of flow, money from personal debt flows into the economy, which represents the public good, and the only way to create more personal debt, is to create new (phantom) collateral.

a baby born this moment might earn 50K a year for 50 years, which is two and half million dollars. so the Fed has to hand this new child a trusseau, and create 2.5M dollars for him or her to use. according to the above axiom the nature of that money has to be defined as debt, which is why they run deficits. the struggle for success is a climb out of the pit of indentured servitude, which was the condition most of the first americans knew quite well.


Mon, 12/17/2012 - 17:47 | 3072734 Super Broccoli
Super Broccoli's picture

it's like a kid that comes home saying "look there is another guy that got an F-" ;-)

Mon, 12/17/2012 - 18:00 | 3072771 besnook
besnook's picture

anything the fed buys will become de facto infinity bonds. the fed will hold them forever.

Mon, 12/17/2012 - 18:28 | 3072893 GreatUncle
GreatUncle's picture

Take 3 currencies A, B and C. Debase A so B and C then follow. As A no longer has what it needs so it must debase again.

Just repeat it over and over please Mr Central Banker "what does this mean" as you fight in the here and now a battle you can never win? Can't they not see how obvious this as other currencies fight to survive. That really futile battle is pointless when you end up after repeating enough times with this ...

You lost the war as all currencies are now rendered totally useless and your position with it at the same time.

Somebody better start talking soon, especially with the words comig out of Japan and I can see India and China feeling they are not cheap enough contemplating the same action.

If they start to devalue, then the levels elsewhere reset upwards.

Mon, 12/17/2012 - 18:45 | 3072935 Remington IV
Remington IV's picture

Schiff and Santelli ... have either of these two CHIMPS ever been right ???

Tue, 12/18/2012 - 07:16 | 3074161 bunnyswanson
bunnyswanson's picture
Take it from a form IMF chief economist and MIT professor - US is under seige, a Quiet coup is unfolding.  1.4 million people are going to fall off Unemployment all on the same day, in a few weeks.  Then, it's 26 weeks and then you are on your own.  12/29/12 is the real end of the world for many.  14 February 2009
America vs. the Oligarchs Bill Moyers has an interview with former IMF Chief Economist and MIT professor Simon Johnson that is excerpted and linked below.

Simon Johnson's premise is that the big Wall Street banks represent an oligarchy that is exerting undue influence and control on our government and the economy. They are turning this crisis to their advantage, and circumventing the democratic process.

What we are seeing looks to Simon Johnson like a financial coup d'etat.

Now is the time to break up the big money center banks. Now is the time to reinstate Glass-Steagall. We must demand the reforms for which we elected the Obama Administration.

Watch this interview. Think about it. Let other people know. Write your congressmen.

And be prepared to act on a larger scale in a peaceful way to get the point across that we value our liberty and we will stand for justice. We are not optimistic that the government will do the right thing without more prodding and significant support from the public. "I think I'm signaling something a little bit shocking to Americans, and to myself, actually. Which is the situation we find ourselves in at this moment, this week, is very strongly reminiscent of the situations we've seen many times in other places.

But they're places we don't like to think of ourselves as being similar to. They're emerging markets. It's Russia or Indonesia or a Thailand type situation, or Korea. That's not comfortable. America is different. America is special. America is rich. And, yet, we've somehow find ourselves in the grip of the same sort of crisis and the same sort of oligarchs...

But, exactly what you said, it's a small group with a lot of power. A lot of wealth. They don't necessarily - they're not necessarily always the names, the household names that spring ...   http://jessescrossroadscafe.blogspot.com/2009/02/american-vs-wall-street-banking.html    

Mon, 12/17/2012 - 20:51 | 3073276 myptofvu
myptofvu's picture

Eureka I just figured out how they're gonna make it work. I had the same problem hearing Ben saying he's going to sell the Notes in the future. Who in their right mind would buy them knowing that he has trillions to sell that will just keep reducing the value of them? Answer no one will buy them. So how do they get around that problem? Easy they will make pensions, IRA, 401k HAVE TO buy them.

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