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Peter Schiff On Blind Faith In The Magical 'Monetary Policy' Elixir

Tyler Durden's picture


Submitted by Peter Schiff of Euro Pacific Capital,

Most economic observers are predicting that 2014 will be the year in which the United States finally shrugs off the persistent malaise of the Great Recession. As we embark on this sunny new chapter, we may ask what wisdom the five-year trauma has delivered. Some big thinkers have declared that the episode has forever tarnished freewheeling American capitalism and the myth of Wall Street invincibility. In contrast, I believe that the episode has, for the moment, established supreme confidence in the powers of monetary policy to keep the economy afloat and to keep a floor under asset prices, even in the worst of circumstances. This represents a dramatic change from where we were in the beginning of 2008, and unfortunately gives us the false confidence needed to sail blindly into the next crisis.

Although the media likes to forget, there was indeed a strong minority of bearish investors who did not drink the Goldilocks Kool-Aid of the pre-crisis era. As the Dow moved up in 2006 and 2007 so did gold, even though a rising gold price was supposed to be a sign of economic uncertainty. The counter intuitive gold surge in those years resulted from growing concern among a committed minority that an economic crisis was looming. In the immediate aftermath of the crisis in 2009 and 2010, gold shifted into an even higher gear when those investors became doubly convinced that the extraordinary monetary measures devised by the Fed to combat the recession would fail to stop the economic free fall and would instead kick off a new era of inflation and dollar weakness. This caused many who had been gold naysayers and economic cheerleaders to reluctantly jump on the gold band wagon as well. 

But three years later, after a period of monetary activism that went far beyond what most bears had predicted, the economy has apparently turned the corner. The Dow has surged to record levels, inflation (at least the way it is currently being measured) and interest rates have stayed relatively low, and the dollar has largely maintained its value.  Ironically, many of those former Nervous Nellies, who correctly identified the problems in advance, have thrown in the towel and concluded that their fears of out of control monetary policy were misplaced. While many of those who had always placed their faith in the Fed (but who had failed - as did Fed leadership - from seeing the crisis in advance) are more confident than ever that the Central Bank can save us from the worst.

A primary element of this new faith is that the Fed can sustain any number of asset bubbles if it simply supplies enough air in the form of freshly minted QE cash and zero percent interest.  It's as if the concept of "too big to fail" has evolved into the belief that some bubbles are too big to pop. The warnings delivered by those of us who still understand the negative consequences of such policy have been silenced by the triumphant Dow.

The proof of this shift in sentiment can be seen in the current gold market. If the conditions of 2013 (in which the Federal Government serially failed to control a runaway debt problem, while the Federal Reserve persisted with an $85 billion per month bond buying program and signaled zero interest rates for the foreseeable future) could have been described to a 2007 investor, their conclusions would have most likely been obvious: back up the truck and buy gold. Instead, gold tumbled more than 27% over the course of the year. And despite the fact that 2013 was the first down year for gold in 13 years, one would be hard pressed now to find any mainstream analyst who describes the current three year lows as a buying opportunity. Instead, gold is the redheaded stepchild of the investment world.

This change can only be explained by the growing acceptance of monetary policy as the magic elixir that Keynesians have always claimed it to be. This blind faith has prevented investors from seeing the obvious economic crises that may lay ahead. Over the past five years the economy has become increasingly addicted to low interest rates, which underlies the recent surge in stock prices. Low borrowing costs have inflated corporate profits and have made possible the wave of record stock buybacks. The same is true of the real estate market, which has been buoyed by record low interest rates and a wave of institutional investors using historically easy financing to buy single-family houses in order to rent to average Americans who can no longer afford to buy.

But somehow investors have failed to grasp that the low interest rates are the direct result of the Fed's Quantitative Easing program, which most assume will be wound down in this year. In order to maintain the current optimism, one must assume that the Fed can exit the bond buying business (where it is currently the largest player) without pushing up rates to the point that these markets are severely impacted. This ascribes almost superhuman powers to the Fed. But that type of faith is now the norm.

Market observers have taken the December Fed statement, in which it announced its long-awaited intention to begin tapering (by $10 billion per month), as proof that the dangers are behind us, rather than ahead. They argue that the QE has now gone away without causing turmoil in the markets or a spike in rates. But this ignores the fact that the taper itself has not even begun, and that the Fed has only committed to a $10 billion reduction later this month.  In fact, it is arguable that monetary policy is looser now than it was before the announcement.

Based on nothing but pure optimism, the market believes that the Fed can somehow contract its $4 trillion balance sheet without pushing up rates to the point where asset prices are threatened, or where debt service costs become too big a burden for debtors to bear.  Such faith would have been impossible to achieve in the time before the crash, when most assumed that the laws of supply and demand functioned in the market for mortgage and government debt. Now we "know" that the demand is endless. This mistakes temporary geo-political paralysis and financial sleepwalking for a fundamental suspension of reality.

The more likely truth is that this widespread mistake will allow us to drift into the next crisis. Now that the European Union has survived its monetary challenge, (the surging euro was one of the surprise stories of 2013), and the developing Asian economies have no immediate plans to stop their currencies from rising against the dollar, there is little reason to expect that the dollar will rally in the coming years. In fact, there has been little notice taken of the 5% decline in the dollar index since a high in July. Similarly, few have sounded alarm bells about the surge in yields of Treasury debt, with 10-year rates flirting with 3% for the first time in two years.

If interest rates rise much further, to perhaps 4% or 5%, the stock and real estate markets will be placed under pressure, and the Fed and the other "Too Big to Fail" banks will see considerable losses on their portfolios of Treasury and mortgage-backed bonds. Such developments could trigger widespread economic turmoil, forcing the Fed to expand its QE purchases. Such an embarrassing reversal would add to selling pressure on the dollar, and might potentially trigger an exodus of foreign investment and an increase in import prices. I believe that nothing can prevent these trends from continuing to the point where a crisis will be reached. It's extremely difficult to construct a logical argument that avoids this outcome, but that hasn't stopped our best and brightest forecasters from doing just that.

So while the hallelujah chorus is ringing in the New Year with a full-throated crescendo, don't be surprised by sour notes that will bubble to the top with increasing frequency. Ultimately the power of monetary policy to engineer a real economy will be proven to be just as ridiculous as the claims that housing prices must always go up.


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Mon, 01/06/2014 - 21:54 | 4306384 TheManWithNoName
TheManWithNoName's picture

F*** this guy...he's full of it.

Mon, 01/06/2014 - 22:00 | 4306401 jcaz
jcaz's picture

Yeah, you're right-  asset prices will rise with interest rates,  and we'll all eat big pink fluffy money clouds every day- we'll all grow to the sky, and nothing will come of this silly idea that a price has to be paid for all this financial malfeasance.... 

Why, we should just solve it all by the Fed buying BitCoins and paying off the debt once they hit $2M each......... YAY!!!!

Mon, 01/06/2014 - 22:30 | 4306506 economics9698
economics9698's picture

Schiff has a lot of really good insights.  I always pay attention to this guy.

Mon, 01/06/2014 - 22:36 | 4306530 satoshi101
satoshi101's picture

So does fonestar, I get all my information from fonestar and schiff, between these two, I don't need to know anything else.


Mon, 01/06/2014 - 22:47 | 4306577 akak
akak's picture

Now that is one messy and stinky non sequiturd.

Tue, 01/07/2014 - 01:16 | 4306993 buyingsterling
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Schiff's got the best (high profile) show on radio, IMO. He's a genuine libertarian, it's second nature to him. He plays the most recent show on a loop on his site, and this fellow posts each show on youtube (lots of great add-ons exist to download youtube and other videos).

Tue, 01/07/2014 - 11:02 | 4307907 Woodhippie
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I would like to know which add on is good for downloading youtube videos please.  I looked around and couldn't find one.

Mon, 01/06/2014 - 22:01 | 4306409 epicurious
epicurious's picture

Okay hot shot so why is he full of it?  You blasting out full retard more likely fits the bill!

Mon, 01/06/2014 - 22:28 | 4306494 satoshi101
satoshi101's picture

The guy is a family fraud,

Everything that ZH pretends to hate, is this guy, like paper-gold,


I know its all for snide, but honestly you POST this shit, and then folks go to the trouble of marking negative, and I really do think there are some tylers here with the power to make 10x, ... or mores negatives in one click.

But yes, SCHIFF is the worst of the flimflam men that ZH brings to this on a daily,

I concur schiff is full it, and its been said why so many times, that we don't need to repeat ourselves,

The same people who defend BTC, defend schiff, and that should tell you all you need to know.


Tue, 01/07/2014 - 07:16 | 4307394 negative rates
negative rates's picture

No dude, it's called always wrong but never in doubt, and has a very large following in this country.

Tue, 01/07/2014 - 09:11 | 4307528 StychoKiller
StychoKiller's picture

Time to make some sense out of this...oops, FAILURE!  My bad!

Allow me to explain this so that you understand:  NOTHING HAS BEEN FIXED, NOOOOTHINNNNG!

Mon, 01/06/2014 - 22:30 | 4306507 Skid
Skid's picture

Your mom is full of it. 

Mon, 01/06/2014 - 22:47 | 4306576 Uber Vandal
Uber Vandal's picture

It does appear that there are just a few more "Peter Schiff was right" (About 4,370,000 results) videos on youtube than "Jim Cramer was right" (About 17,500 results) videos.

Just to be fair, there are "Peter Schiff was wrong" (About 126,000 results) and "Jim Cramer was wrong" (About 6,080 results) videos.

Tue, 01/07/2014 - 00:54 | 4306948 Greenskeeper_Carl
Greenskeeper_Carl's picture

Me thinks that is because there is a powerful need to make schiff and other like him appear to be both wrong and stupid. Cramer kinda does that to himself. And by posting content like that of Peter schiff kinda puts out a "Cramer was wrong" sort of message without actually saying it.

Tue, 01/07/2014 - 09:46 | 4307615 JuicedGamma
JuicedGamma's picture

The stock market is discounting a great recovery.  I'll bet on that rather than the track record of Peter Schiff.


Tue, 01/07/2014 - 09:51 | 4307639 akak
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And what was the stock market "discounting" in September of 1987, or in January of 2000, or in October of 2007?

Tue, 01/07/2014 - 11:43 | 4308066 ATM
ATM's picture

I think the stock market is just reflecting the trillions of newly issued Federal reserve notes that need a place to reside. Much like the awesome returns earned on Venezuelan stocks last year! Up 480%. In Venezuela I guess stocks are really discounting an amazing recovery! Unless of course Venezuela is the next Zimbabwe where you could have attained incredible returns on stocks each year for a decade yet when you cashed out all you could afford were three eggs.

Mon, 01/06/2014 - 21:55 | 4306389 Obchelli
Obchelli's picture

Bullish for stocks!!!

No matter what!!!

Tue, 01/07/2014 - 08:20 | 4307442 wagthetails
wagthetails's picture

BFSNMW.....I like it.

Mon, 01/06/2014 - 22:05 | 4306420 CrashisOptimistic
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To see what's happening, look up Home Depot over the last several years.

Revenue down.  Profit down.  EPS up.  Stock up.

How?  Financed share buybacks.

This economy is shrinking.  The companies are getting smaller.  But it's invisible.

Mon, 01/06/2014 - 23:28 | 4306732 NoDebt
NoDebt's picture

Absolutely.  Well said.  Couldn't agree more.  

But the debt never goes away, does it?  Invisible perhaps, but with very real consequences.

Mon, 01/06/2014 - 23:30 | 4306739 Spungo
Spungo's picture

The debt goes away when you declare bankruptcy. I've met people who have declared bankruptcy, and it's a hell of a lot better than struggling to keep your head above water for another 10 or 20 years, drowning in debt. If you're fucked, just admit you're fucked and go bankrupt. It sucks, but it's better than the alternative.

Tue, 01/07/2014 - 11:49 | 4308100 ATM
ATM's picture

And force the lenders to actually incur losses on the risks they took? NEVER! Lnders are not allowed to take losses any longer because their balance sheets cannot tolerate a loss. The lenders all all bankrupt but they cannot be allowed to fail because that exposes the total gutting of the current monetary and financial system.

The whole fucking thing is bankrupt and the only thing that keeps the illlusion alive is the theft of the little real wealth still in private hands via inflation, dilution, theft and confiscation. When that's over then it's really over. 

Tue, 01/07/2014 - 07:18 | 4307396 negative rates
negative rates's picture

Pretty soon they will only need one guy to stock the shelves and ring the registers.

Mon, 01/06/2014 - 22:16 | 4306453 TideFighter
TideFighter's picture

Marc Faber is better, Peter. Your wine is plonk by comparison.

Tue, 01/07/2014 - 11:50 | 4308101 ATM
ATM's picture

Faber is cooler. He may or may not be better but he is one cool mofo IMO.

Mon, 01/06/2014 - 22:19 | 4306467 Seize Mars
Seize Mars's picture

Paper money has a 100% batting average. It always fails, and it always causes poverty misery and death. Every time, every where.

The weird and getting weirder fracture of rising stock and apparent prosperity versus unemployment and hunger is a symptom. It's going to get worse, and by degrees; there will be no "kaboom," there will be a slow descent into poverty.

Tue, 01/07/2014 - 07:18 | 4307399 negative rates
negative rates's picture

And poverty sucks!

Mon, 01/06/2014 - 22:20 | 4306470 DOGGONE
DOGGONE's picture

Peter, Get this in everybody's face, ongoingly:

Mon, 01/06/2014 - 22:20 | 4306471 oncefired
oncefired's picture

Fuck You Bulldiker Yellen!

Mon, 01/06/2014 - 22:23 | 4306481 kragsquest
kragsquest's picture

He's still trying to rescue his old man out of prison for tax evasion.  

Mon, 01/06/2014 - 22:25 | 4306490 erkme73
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And what?   You'd let your old man rot in jail?  You say it like it's a dishonerable thing to try and help.

Mon, 01/06/2014 - 22:30 | 4306509 satoshi101
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10's of 1,000's of people  are rotting in jail, because they followed his old mans advice back in the 1970's and 1980's,

I'm surprised that this guy is not on BTC's most valuable kill list

Guy's in jail can't bid hits I guess? I dunno

Tue, 01/07/2014 - 08:35 | 4307458 jcaz
jcaz's picture

10's of 1000's, eh?   Name 2.


Hyperbole much?

Mon, 01/06/2014 - 22:33 | 4306520 economics9698
economics9698's picture

God bless Schiff for trying to help his dad.

Mon, 01/06/2014 - 22:28 | 4306497 Carl Popper
Carl Popper's picture

Anything wrong with that?  


Tax evasion, that is?

Mon, 01/06/2014 - 22:59 | 4306622 JungleCat
JungleCat's picture

Tax evasion is a non-violent crime, which according to the potheads makes it OK to let them out of prison. Let the embezzlers, fraud artists out while we are at it. Dennis Kozlowski and Jeff Skilling, too.

Mon, 01/06/2014 - 22:31 | 4306513 Confundido
Confundido's picture

In a world of central planning and financial repression, tax evasion is an act of patriotism! Non-violent, non-cooperative civil disobedience!

Mon, 01/06/2014 - 22:40 | 4306553 satoshi101
satoshi101's picture

Yelling 'fire' in a crowded theatre is free-speech, but it will get you 10-20 in a place where other men will have their way with you.

Schiff's dad got rich leading other men to the living hell, like all roads to idealism, ... "We told you our ideas would take you places, we didnt' say they would be good places"

The problem with the apologists here is that they have no idea of concern of the 'real world', and ramifications, its not about right or wrong, its about what is, and if you follow the advice of schiff's father you get a one way ticket to a place where other men make your their bitch.


Mon, 01/06/2014 - 23:42 | 4306779 Carl Popper
Carl Popper's picture

I agree it is about "what is"


We choose our own destiny. I find it repugnant how government has become repressive and confiscatory and I vehemently disagree with how they spend the money they take from us.  


Fight them any way you can. tax evasion is one way.  Just be smart about it. 

Tue, 01/07/2014 - 00:16 | 4306866 satoshi101
satoshi101's picture

Run like fucking hell, to this day I never look back on my decision to escape from the prison known as USA.


Mon, 01/06/2014 - 23:43 | 4306781 Seize Mars
Seize Mars's picture


You fucked up your own counterexample, you dipshit. Yelling "fire" in a crowded theater is not protected free speech, nor should it be.

Schiff's dad is guilty of telling the truth.



Tue, 01/07/2014 - 01:48 | 4307056 Anusocracy
Anusocracy's picture

It's not an issue of free speech, you are on private property.

It is a violation of the contract between the theater owner and the movie goers to see a movie.

Tue, 01/07/2014 - 21:24 | 4309973 Seize Mars
Seize Mars's picture


I just said it isn't protected speech. Understand?

It has nothing to do with private property dill-snip. It has nothing to do with contracts.

Thu, 01/09/2014 - 00:08 | 4314245 Anusocracy
Anusocracy's picture

Who gives a shit if it is or isn't your lord and master government's protected free speech, it is on private property.

That's all that matters

Tue, 01/07/2014 - 02:29 | 4307131 Jam
Jam's picture

Is that you Mike Norman?

Tue, 01/07/2014 - 11:11 | 4307943 Woodhippie
Woodhippie's picture

He didn't evade taxes.  There is no law that states you have to pay tax on labor.  Six Supreme Court decisions point this out.


Stop promoting dis-info.


Educate yourself:  America: Freedom to Fascism

Mon, 01/06/2014 - 22:34 | 4306522 satoshi101
satoshi101's picture

What SCHIFF is missing, cuz he can't see the real world, cuz his mind is on selling paper to morons.

But what he's missing is that the USA now permanently like JAPAN, its print ot the moon, and no end in sight.

It don't fucking matter, already the USD is 'safe haven' which means no volcker, and the FED can print infiinte USD's to cover interest rates,

Japan has pulled this off over 20 years now, ... and the USA will do it for generations,


The sky is falling bullshit, is just schiff's gig to real morons into his biz,

Mon, 01/06/2014 - 22:53 | 4306602 AUD
AUD's picture

The $US is a Ponzi scheme. Just because the USA has done it for generations doesn't mean it will continue for generations, nor Japan.

The sky could fall tomorrow, or in 50 years. You don't know, neither do I.

Mon, 01/06/2014 - 22:58 | 4306618 GrinandBearit
GrinandBearit's picture

Reel morons into his biz

Tue, 01/07/2014 - 01:30 | 4307022 Greenskeeper_Carl
Greenskeeper_Carl's picture

I think we have a pretty good idea who the 'reel' moron is here, ithankyou...

Tue, 01/07/2014 - 09:46 | 4307620 therover
therover's picture

Isn't the big difference between Japan and the US, is that most of the debt in Japan is owned by it's citizens, where as most of the debt in the US is owned by others ?

Mon, 01/06/2014 - 22:41 | 4306556 forwardho
forwardho's picture

This is the third ZH article to be posted in less than one hour in which "Majic" plays a central role.

Majic in these posts is a synonym for make believe. The whole world seems to have its feet firmly planted in mid-air.

The jobless can pretend they are "working hard"

Corperations can pretend they are producing "goods of value"

We can all pretend the economy is in "recovery"

Reality is going to smack us upside the head because pretending is a game for children.


Mon, 01/06/2014 - 22:59 | 4306620 Yardfarmer
Yardfarmer's picture


"With the weakening of the  U.S. dollar has come the promotion of gold coins and gold bullion as ‘real money’ and a hedge against hyperinflation. On You Tube, Peter Schiff is esteemed as the omniscient divine of the ‘Gold Bug’ cult, whose prophets and disciples actually boast that they worship, not God, but Gold, along with Silver. Not a few Gold and Silver bugs are armed to the teeth with high-powered guns and ammunition, which they declare they fully intend to use to protect their stash from thieves and the Feds. These misguided souls will be shocked to learn that the present ‘gold rush’ is the end game of the international banking conspiracy they oppose.


 Peter Schiff recommends purchasing gold and converting stock portfolios and retirement funds to gold and Gold IRAs. Gold bullion should be purchased in large quantities, advises Schiff, but not held in the United States. Euro Pacific Capital has a contract with the Perth Mint, a government-owned depository in Australia, for this client service. The rationale for holding gold in the Perth Mint is that, following a currency collapse, it would be difficult if not impossible for owners of physical gold and gold certificates held in the U.S. depositories to take delivery of their gold bullion.


Regarding the storage of gold in the Perth Mint, Peter Schiff assures his prospective clients: “Safety, which can be another concern with other certificate programs, is assured here because the metals remain on the premises and cannot be lent out. Another safety factor, the risk of confiscation, is also minimal.” (Crash Proof, pp. 226-227)  Despite its claims, the Perth Mint does not have enough physical gold in its vaults and is issuing certificates for gold it does not have on location. Furthermore, although the Perth Mint is bound by Australian law to deliver its customers’ gold bullion, it is in partnership with a government entity, Gold Corporation (GC), that may default on its promises to protect Australia’s currency, which is also undergoing devaluation in the current crisis:


Warning About Perth Mint Gold Certificates


“Evidence shows that the Perth Mint is selling paper gold. After all, a certificate, by nature, is nothing more than a promise to the bearer. Owning a gold certificate is someone’s promise to pay gold to you. According to James Turk, doing business with Perth Mint means you are a general creditor of Gold Corporation. For instance, in 2002, its financial statement showed that the Mint had approximately 4.5 times more debt than equity ($96.2 million of gold on hand against $234 million of liabilities). In 2006, the leverage ratio had increased above 18. For details feel free to read Is the Perth Mint telling me the whole truth?...

“There are numerous warnings from others, such as Jim Sinclair and Jason Hommel, regarding the Perth Mint selling paper promises."


Mon, 01/06/2014 - 23:14 | 4306682 Professorlocknload
Professorlocknload's picture

If the Perth Mint has an address, the Revenue Department Swat Team has enough gas to get there.

Tue, 01/07/2014 - 04:14 | 4307249 PhilofOz
PhilofOz's picture

A year ago I visited the original Perth Mint in Hay Street, Perth. It was an interesting experience to say the least....

Guided Talk

Make the most of your visit to the historic Perth Mint by joining one of our regular hourly guided talks.  The grand heritage building, the heavily secured vault and the original melting house provide the cues for many extraordinary stories about Western Australia's golden history and the Mint's prolific output of priceless gold bars and coins.   Watch A Gold Pour

Your visit includes the amazing spectacle of a traditional gold pour, during which pure gold is heated to molten temperatures and transformed into a solid gold bar.  The nineteenth century brick walls of the melting house are literally embedded with gold dust, accumulated over many decades of continuous refining.   Record Breaking Coin

Take a look at the largest and most valuable coin in the world! Tipping the scale at a massive one tonne of 99.99% pure gold, this colossal coin measures nearly 80cms wide and is more than 12cms deep. Awarded a prestigious Guinness World Record in 2012, this Australian Kangaroo gold coin is valued at more than $50 million.   World's Largest Gold Bar Exhibition*

The Perth Mint is the permanent home of the world's greatest collection of investment gold bars.  The huge collection includes many unique bars from around the world that have been artistically crafted into a myriad of unusual shapes, sizes and glittering designs.   Australia's Largest Natural Nugget Collection*

Early prospectors often spent years of backbreaking work in arid outback areas of Australia in search of gold nuggets.  Marvel at this breathtaking collection of natural gold nuggets, wafers and crystals, including Newmont's Normandy Nugget, the second largest gold nugget in existence, weighing in at a whopping 25.5 kilograms (820 ounces).

Historic Perth Mint Coin Exhibition*

Among the historic coins struck by The Perth Mint are:

  • An 1899 gold sovereign - the very first coin produced in Perth
  • The first copper decimal coin made in Australia - a 1966-dated 1 cent piece
  • Two of the largest legal tender coins in the world – the 10 kilo Australian Lunar Gold and Silver Bullion Coins


Worth Your Weight In Gold?*

Ever wondered what your weight is worth in gold? Hop onto our special weigh scales to find out!

Engrave Your Own Medallion

Design a special message or choose your favourite saying to go on either a gold-plated, pure silver or even pure gold medallion.  Ready to take away in minutes.  From AUS $19.50.

The Perth Mint Shop

The Perth Mint Shop, is located in the Mint's original gold receiving room.  Inside you'll discover a treasure trove of gold, silver and platinum coins, natural gold nuggets, unique jewellery, precious stones and an exclusive range of gifts and souvenirs. Authorised stockist of Kailis Jewellery, Argyle Pink Diamonds and Pandora.


Yeah like everywhere, they are always trying to sell you something!

Mon, 01/06/2014 - 23:11 | 4306672 Professorlocknload
Professorlocknload's picture

And it will all remain irrational longer than we can remain critical.

Fucking Theater of the Absurd.

Tue, 01/07/2014 - 03:34 | 4307207 satoshi101
satoshi101's picture

That's right, and I have been writing about this for months here, and its still not sinking in,

It's 1000% absurd, and the US-MIL has the NUKE-GUN to the worlds head,

If anybody in 2008 would have predicted INFINITE USD's everybody would have laughed, but  its now reality. ABE has said so, the guy's running the USA just don't have the balls to talk truth, but in real the FED is printing unlimited off-book USD's for everyone, including the NSA.


Most absurd is that soon the SDR will come from the IMF, and bring RUSSIA/CHINA/USA closer than in all history, absurd? fuck yes,

But now liar and fools are running everything, case in point the BTC folk here, they don't give a flying fuck about reality, and have said so,

The IMF-SDR & YELLEN-INC, FED 2.0, they have said "we don't give a fuck about reality"

Mark my words, the USD/SDR will go to 1,000's of trillions ...

Mon, 01/06/2014 - 23:16 | 4306687 Spungo
Spungo's picture

Satoshi101 is Mike Norman.

Mon, 01/06/2014 - 23:21 | 4306706 GrinandBearit
GrinandBearit's picture

Certainly seems that way.

Mike Norman is a psychopath... watch any of his YT vids... look at his eyes.  Probably a coke-head too.

Mon, 01/06/2014 - 23:24 | 4306719 Spungo
Spungo's picture

I actually feel bad for Mike Norman. He obviously has some serious self esteem problems because his schittreport videos have filtered comments with the ratings disabled, and a video posted of himself includes the words "acclaimed economist Mike Norman"

Mon, 01/06/2014 - 23:31 | 4306741 GrinandBearit
GrinandBearit's picture

How can you feel bad for a moronic asshole?

Mon, 01/06/2014 - 23:40 | 4306770 Spungo
Spungo's picture

He probably grew up without a dad or something, so he's desperately seeking approval. LOOK AT ME. I AM AN ACCLAIMED ECONOMIST! Look at his behavior when he's on TV. After his famous "I have no idea what Peter is talking about" moment, you can see him fake laughing then looking at the other guys to see if they are laughing with him. It's so incredibly awkward.  The guy really needs a hug.

Tue, 01/07/2014 - 03:30 | 4307202 satoshi101
satoshi101's picture

Where is bob?

Tue, 01/07/2014 - 09:01 | 4307498 satoshi101
satoshi101's picture

Fuck yes Mike Norman is a psychopath, its like somebody dug up ronald raygun pumped his dried sack for semen, and inseminated Hillary, and bred a boor.

Thanks for the tip, I have blocked this site from my routers.


Tue, 01/07/2014 - 03:11 | 4307186 satoshi101
satoshi101's picture

Call me Ishmael, whoops I mean call me Mish.


Mon, 01/06/2014 - 23:25 | 4306704 NoDebt
NoDebt's picture

Wow, Pete's really getting his ass whipped in here tonight.

I gotta tell you I like the guy but like all cynics, he's never cynical enough.  Like this:

"This blind faith has prevented investors from seeing the obvious economic crises that may lay ahead."   

Sorry, Pete, you missed it by --><-- THAT much.  Nobody who's even marginally plugged in is suffering delusion.  We are knowingly playing a fake game, basically because it works better than trying to do it the hard way.  We've all been reduced to speculators now, not investors.  Real investment in things like plant & equipment, R&D and other things that make life better in the future are flat on their back and they aren't getting back up anytime soon.

We're being LIED to and we're acting as if it's true, while knowing full well it's not.  Basically because reality is one ugly-ass bitch of an alternative.  

The economy is recovering!  No, it isn't and it's not going to.

Inflation is low!  No, it's not, they're just fiddling with the way they calculate it (hedonic adjustments and other bullshit)

Unemployment is falling!  Yes, but only by turning the unemployed into the non-employed.

Present levels of debt are managable, in fact, we should do more deficit spending!  Only if you think paying one credit card with another is an indication of good financial health.

Our government has no choice but to lie at this point.  The truth would set off a panic.  They'll never tell the truth.  They'll keep telling us things are getting better ALL the way down.  It's the only card they have left before things start getting medieval.  Until that day comes, everyone who depends on the "system" must play along.  And that's a LOT of people.

Mon, 01/06/2014 - 23:45 | 4306791 economics9698
economics9698's picture

lol, that dope is real good shit these days.

Mon, 01/06/2014 - 23:49 | 4306807 Carl Popper
Carl Popper's picture

This happened with assignats during the paper money period following the revolution. john law and all that. 


Commenters noted that the people were becoming debauched and speculating for a living rather than engage in productive enterprise.  It took ever increasing quantitative easing each time the last round of assignat expansion had run its course and the economy started contracting again. 


Then Napoleon plunged all of Europe into war, right?  My french history is a little hazy. 

Tue, 01/07/2014 - 02:43 | 4307156 HL Shancken
HL Shancken's picture

I thought your post was nicely written, except for the juvenile phraseology of one line. That type of language appears to be beneath you, but your mind is ahead of your mouth. It's ok to grow up!

Tue, 01/07/2014 - 12:09 | 4308172 clawsthatscratch
clawsthatscratch's picture

I am quite curious, since the whole world is playing monopoly and no one seems to complain if anyone else prints more money (to my knowledge) how can the game end (provided they all keep pretending)?

Mon, 01/06/2014 - 23:29 | 4306737 drinkin koolaid
drinkin koolaid's picture

Schiff, is like every useless guest poster on ZH, though I love the ZH website itself. Big Pete has no fucking idea how to make money in markets. I don't have the luxury about spouting out BS and pulling in funds from my BS because people think that I'm smart. I have to pull funds out of profitable trading. Virtually every damn poster and commenter on ZH has no idea that on both a short term and on an intermediate term time frame, markets are 100% ruled by technical trading. All of the fundamental claptrap is useless, unless you're going to sit on your ass for 20 years with your position. All the goldbugs look like geniuses watching gold fall from $1921 and they still are not humbled. I was humbled by markets along time ago.

Mon, 01/06/2014 - 23:46 | 4306793 economics9698
economics9698's picture

Year 5+ of the bubble.  Not much further to go.  

Mon, 01/06/2014 - 23:54 | 4306822 Carl Popper
Carl Popper's picture

History suggests you ain't seen nothing yet.  Mr. Yellen is going to blow us a big fat son of bubble.  Turkish style. 


Dow 25,000 in four years. Official inflation 4 percent. gold 1900.


That is sorta goldilocks, isn't it?  




Tue, 01/07/2014 - 00:35 | 4306911 drinkin koolaid
drinkin koolaid's picture

Yes, but the final inning, marketwise, is the explosive acceleration higher. So, timewise things are winding down, but bubblewise in markets, you ain't seen nothin yet. I'm as disgusted as any ZHer as to all that's happening around us. But if the trend is up, buy reactions and if the trend i down, short rallies. I need to make it simple, since I'm such an idiot.

Tue, 01/07/2014 - 03:28 | 4307192 satoshi101
satoshi101's picture

Dude, I have tried so many times to talk about money here and correct investing that I have given up,

While I find ZH interesting because if the diversity of the commenters and the surprising number of humans to bots, ... I do find that most of the commenters here seem to have no notion of finance, investing, or money, and its history.

What I see here is a lot of talk about RPaul, and the way shit should be, if you point out to anybody here that USD is up, that GOLD is down, that the DOW is up they'll tell you to shut up and down-vote,

So personally I have given up talking about 'investing' as its clear nobody here has a nickel to invest, or that kind of thinking.


So at the end of the day this site exists so people can test their ideas or out shout each other about how fucked up america is-is, but intelligent investing comments on this site POST or COMMENT ? Fuck no

[ Oh, and for the owners of this site this site exists for ad click nickels must be working well today I'm seeing lots of facebook ads and btc mining machines ads from butterfly, 300gh for $1k, ... that means you get your money back in a few years :), if BTC is still around and if  the price hasn't plummeted, of course in a year it will take 10 years at 300gh to find one bitcoin ]


Tue, 01/07/2014 - 08:32 | 4307454 Rubbish
Rubbish's picture

Get a clue, I will plant my sweat where "I" like. ZH is a form of my entertainment who happens to do a hell of a lot of leg work for me that I'm just to lazy to do and don't have the skills. There I junked you.

Tue, 01/07/2014 - 09:28 | 4307568 StychoKiller
StychoKiller's picture

"drinkin koolaid", how appropriate!  Sorry, but I ain't gonna play against the killbots running the stawk exchanges.  It's only a question of time before The Great Implosion™ occurs, and knowing my luck, I'd be fully "invested" at the time!  Risk of a corp, going belly-up is a risk I can understand and live with, but there is ONLY one way to hedge against what's coming!

Mon, 01/06/2014 - 23:48 | 4306800 Musashi Miyamoto
Musashi Miyamoto's picture

"If interest rates rise much further, to perhaps 4% or 5%, the stock and real estate markets will be placed under pressure, and the Fed and the other "Too Big to Fail" banks will see considerable losses on their portfolios of Treasury and mortgage-backed bonds."

Read my Lips: "NOT GONNA HAPPEN", Untaper Bitchez

also Check out my new blog:

Mon, 01/06/2014 - 23:59 | 4306829 The_Prisoner
The_Prisoner's picture

I look forward to your blog posts.

Tue, 01/07/2014 - 00:14 | 4306860 dragoneyes74
dragoneyes74's picture

I agree with Schiff in the long-term.  The bond market will eventually checkmate the Fed.  But Japan is likely to go down first.  

At the moment, it's all about whether the dollar breaks out of its rising wedge to the upside or downside.  I think it will be to the upside, but I'll trade what the charts tell me to.  

Tue, 01/07/2014 - 00:37 | 4306916 CactusLand
CactusLand's picture

I say 2014 is the year we see gold break below $960, the banksters  have no choice, it is the only way for them to win

This article explains why:

Tue, 01/07/2014 - 00:54 | 4306951 dunce
dunce's picture

I have heard nearly a dozen liberals over the last few weeks recite the talking point over the the rise in stock market averages were proof positive that obamas policies have put the country in recovery. The economy is stagnant after you compare where we were 5 years ago. I will not go over BS numbers. Any progress has been in spite of the FED, not because of it.

Tue, 01/07/2014 - 02:34 | 4307142 Medieval Man
Medieval Man's picture

That sound you hear? You know, the one that reminds you of a ticking clock.

Tick, tick tick...

That's the sound of $17 trillion gowing dollars, hanging over the head of our betters, just waiting to be noticed.

But they won't notice the sound. Instead, they will 'save' $85 billion over 10 years with their astute budget skills, ignoring the $85 billion (now $75 billion, but really, in the words of that cunt Clinton, what difference does it make?) that it takes each month to keep this federal monstrosity going...

Tue, 01/07/2014 - 09:21 | 4307554 Herdee
Herdee's picture

Here's what actually is happening in the tapering situation,not the lies being told on CNBC.

Thu, 01/09/2014 - 12:05 | 4315462 LaurentDeLyon
LaurentDeLyon's picture

I agree with Peter

Do NOT follow this link or you will be banned from the site!