Peter Schiff: "The Fed Is Like Mr. Magoo! We Are Headed For A Massive Financial Crisis"

Authored by Mac Slavo via,

Peter Schiff has been saying that even though the stock market is on a slow downward slide, the biggest problem is actually in the bond market. Last week, Schiff warned us to be wary of the calm before the storm, and this week, he said most, including the Federal Reserve, are oblivious to the upcoming crash.

Yields have risen to levels not seen since before the 2008 crash. More significantly, the yield curve is flattening, according to Schiff. 

According to Seeking Alpha, Schiff pointed out, if you go back to the Second World War and look at average bond yields, these low rates are an aberration. They’ve been low for a long time, but they aren’t going to stay low forever. And yet the market seems to think it’s going to go on for another 30 years.

“Clearly, the market assumes that interest rates on 10-year government bonds are going to stay just barely over 3% for the next 20 or 30 years. I mean, that is crazy. Why would anybody think that?”

Just consider the deficits as well. The federal government is running $100 billion per month budget deficits – and this is during a supposed economic expansion. What’s going to happen when we hit a recession? And of course, rising interest rates just compound the problem. As Treasuries come due, the government has to replace them with higher interest rate bonds. This expands the deficit even further.

Also compounding the problem is the money printing scheme the Federal Reserve has taken to.  Why in the world would any rational person assume inflation will remain low?

We also have interest rates at around 3% and there is already some handwringing and nervousness. But as Peter said, they could easily blow through four or even 5%. The Fed keeps saying it plans to reduce its balance sheet, but it hasn’t sold very many bonds to date. What happens if they follow through with tightening plans and start dumping bonds on the market?

If [the Fed] continues to stay on this path, or at least the rhetoric is on this path, rates could blow through 3% like a hot knife through butter.”

Schiff then discussed Minneapolis Fed President Neel Kashkari, who said they [the elite globalists that run the Federal Reserve] can’t find any signs of an impending crisis. He said there are no warning signs at all.

“Well, of course, that’s exactly what they said in 2007 and 2008. In fact, even when there was the mother of all warning signs – the crash of the subprime market – the Fed looked at that and said, ‘That’s nothing. It’s contained.’ We’re not worried about that.’ So the Fed has already proved when it comes to warning signs and seeing them in advance, they’re like Mr. Magoo. They have no idea what’s going on. And in fact, just like Mr. Magoo, they create all kinds of havoc all around them as they blindly move through the economy having no idea what’s going on, and there’s just all kinds of carnage.We are headed for a massive financial crisis.”

Schiff has yet to change his mind: we are headed for some major problems in the economy and most are unaware and unprepared.


any_mouse TheWholeYearInn Fri, 04/27/2018 - 01:18 Permalink

Truth be told, the FED is run by people who take orders from people that are never in the news. They know exactly what they are being asked to do.

This is a bullshit narrative about the FED being clueless or using incorrect models, etc.

Destruction of the Middle Class and the dollar is part of the game plan.

Fraudulent markets without true price discovery is one of their methods.

Peter Schiff is doing his part with distraction and deception.

In reply to by TheWholeYearInn

karenm Thu, 04/26/2018 - 20:30 Permalink

Controlled Opposition guys like Schiff paint the FED as "Incompetent" and "clued out"

No, they know exactly what they're doing.


Oh, and for those who actually want to know the truth, you can dig up Peter's family background. It's an old banking family with extremely close ties to the Rothchilds. So close in fact that the two families lived together in the same mansion for many years.


Yes, so Peter is what's called "Controlled Opposition." He acts like an opponent of the "Evil bankers" but is in fact one of them. Google it, get an education in how complex the control mechanisms are they've developed.

DingleBarryObummer karenm Thu, 04/26/2018 - 20:41 Permalink

I agree about how he doesn't paint the Central Bank in the proper light, but what about Irwin...?  Didn't he die in Jail?

I think maybe they kind of branched off from that Rothschild thing.  Peter is kind of a relatively small fish with regards to being a money manager.  I mean, I don't even think he's a billionaire.  I think he mostly does the podcasts to sell gold.  Any truth or good analysis that comes through is just free icing on the cake for me.

In reply to by karenm

Gusher karenm Fri, 04/27/2018 - 02:01 Permalink

You are either a liar or an idiot. I've personally known the Schiff family for decades. Peter is a smart cocky guy whose focus is, admittedly, on the doom and gloom side of the future. His Father Irwin was a constitutional expert and tax protestor who died in prison, from evading the unconstitutional income tax. Irwin was in his 80's when he died for his cause, incarcerated. Hardly how any one of us wants to spend our last days. Does that sound like the ends days of the typical Rothchild or Rockefellar?  How does someone get so screwed up or stupid as you? Just wondering....

In reply to by karenm

tribune Thu, 04/26/2018 - 20:37 Permalink

peter schiff should listen to jeff snider on macrovoices and also to professor steve keen. peter  schiffs rat brain is oversimplifying  the "money printing" thesis (like many others- we all have to guard against rat brain thinking). he just cant get away from the inflation bogeyman and that the authorities can create inflation at will.

buzzsaw99 Thu, 04/26/2018 - 20:41 Permalink

Clearly, the market assumes that interest rates on 10-year government bonds are going to stay just barely over 3% for the next 20 or 30 years. I mean, that is crazy. Why would anybody think that?

that is crazy because they will be much lower than that.  schiff thinks they will be way higher in twenty years?  ha!  talk about mr. magoo.

VelociRapist Thu, 04/26/2018 - 20:47 Permalink

Schiff is correct about a financial crisis coming. It's just his timing that sucks. 

He's telling about that for years. "buy gold since it'll skyrocket". Gold is a good hedge against inflation but you don't receive dividends on it. 


Nassim Taleb and Mark Spitznagel have a better solution. 

east of eden Golden Phoenix Fri, 04/27/2018 - 06:40 Permalink

As far as I can remember, Schiff isn't the only one who 'got one thing right', there are lots of others, including Nasim Taleb, who so far, also has only gotten one thing right.

It doesn't matter to me how many 'right' calls a person makes, what matter is whether they are going to be right about what is coming around the next corner, and I say that Schiff is right. Of course, the PTB would want to demonize him (and his father) at every opportunity, because, well, that is what they do.

I remember well, the lead up to the last crash in 07/08. At the time 99.9% of the people I engaged with online, called me everything from a hack to an idiot. I didn't know the stock market; or my favourite 'stock markets always correct', etc. When the wipe out occurred of course, none of them were around anymore. A lot of banks were MIA as well.

So, I'll go by what I 'see' and what I see is that now, much more so than in 07/08 the US has a gigantic problem and that is called 'debt'. By any sensible measure, Congress is clearly out of control. Between the trade deficit the fiscal deficit and the  interest expense deficit the US is adding 2 Trillion a year in new debt to a pile of debt that is already above 110% of GDP, and what's worse is that American GDP is composed of 70% consumption, in other words consumer spending. So what DO YOU think is going to happen as costs rise and real wages drop?

Sure, I suppose the Fed can resume QE, but, the only thing that that will do is put ever more worthless Federal Reserve Notes into people's hands. It won't increase their purchasing power, in fact, it will diminish it. The end game is not that far off and personally, believing that Congress will actually DO something about it's outrageous spending is frankly like believing in the tooth fairy.

In reply to by Golden Phoenix

NAV Thu, 04/26/2018 - 21:19 Permalink

The Fed is no more like Mr. Magoo than is George Soros.  They both knowingly epitomize human evil. And just as their backer, the Rothschild family, they know exactly what they are doing. Their goal is economic destruction of the West’s working middle class.  They,  the international bankers -- the Jewish families such as Rothschild, Bronfman, Belzberg, Lehman, Kuhn, Loeb, Warburg, Frere, Seif, Schiff, Singer, Oppenheim, Saloman, Mendelsohn, Speyer, Goldman, Baruch -- have and are using usury  and ownership of the world’s reserve currency to destroy their only viable enemy --  Western civilization’s working middle class.

America’s stars shine in the middle-class: her traders, small merchants, professionals, highly-skilled workers, innovators...  Destroy America’s middle class and you destroy George Washington’s America. 

The agenda is globalism, rule of the world. Bolshevism!

OverTheHedge NAV Thu, 04/26/2018 - 23:21 Permalink

I'm not convinced that the wealthiest people in the world want communism: it would mean having to share their wealth with everyone else. Communism creates hard-man dictatorships and pogroms - the Rothschilds of this world would be off to the re-education camps, and some grubby ex-coal-miner will be living in the stately home, drenched to the elbows in bourgeois blood.

The idea that they would have the ability to remain aloof, above the murder and madness, seems far-fetched to me.

In reply to by NAV

red1chief Thu, 04/26/2018 - 21:27 Permalink

"The Fed keeps saying it plans to reduce its balance sheet, but it hasn’t sold very many bonds to date. What happens if they follow through with tightening plans and start dumping bonds on the market?"


They won't follow through. If the S&P starts a meaningful decline, the stock-compensated A***'s will rattle their cage too much.

DaGov Thu, 04/26/2018 - 21:37 Permalink

Schiff has been saying this for at least as long as I have been reading zero hereh. Just keep saying the same thing long enough and eventually it will come true .

MrNoItAll Thu, 04/26/2018 - 21:49 Permalink

Asserting that the FED is oblivious to the upcoming financial crash is pure BS. Of course the FED is fully aware of how screwed up things are. Why else would they be taking such radical, extreme measures to keep this dead-man-walking economy propped up.

Fantasy Free E… Thu, 04/26/2018 - 22:21 Permalink

It is amazing. What good is it to be smart if all of your thinking is based on erroneous assumptions?

Erroneous starts by dealing with people and institutions according to how they are defined and ignoring how they function. A political agenda does not end the same way an an economic initiative does. The political agenda will not end unless it is forced to or an accident occurs.

StheNine Thu, 04/26/2018 - 23:41 Permalink

schiff DOES have vision-he's seen his clients miss out in millions in profits and leave his firm...

I agree with his analysis of macro economic reality,but we have not been operating in financial "reality" for a very long time.