Schiff: Zero rates, QE4 by election, and real estate crash looming

By on March 7, 2016
Schiff: Zero rates, QE4 by election, and ‘2007-style’ crash

(TRUNEWS) Top economic forecaster, Peter Schiff, predicts that the Fed will lower interest rates back to zero and begin QE4 before the November presidential elections. Schiff also believes a 2007 style crash is coming to the real estate market.

Schiff’s statements were made during an interview with Rick Wiles of TRUNEWS on Monday, when asked where he saw the U.S. economy going in 2016, especially amid rumors of looming widespread negative interest rate policies (NIRP) and the push for a global cashless society.

Schiff’s predictions and statements from the interview:

  • No faith in the Central banks, they caused the last real estate bubble, and their ignorance has caused the next
  • The new bubble is much larger than 2007/2008, and has already ‘popped’
  • U.S. already back in recession and stocks are a bear market
  • The bubble is now ‘releasing air’
  • Near end of ‘NIRP disaster’
  • Due to resurgence in commodity prices in oil, precious and industrial metals, and lead, global economy will see inflation and stagflation
  • Central banks won’t be able to use low inflation rates as an excuse to print money, and will have to raise rates due to higher cost of living
  • Due to the large debt burden, the U.S. can’t afford a rate hike, and will let inflation run away
  • Federal Reserve will move interest rates back to zero before presidential elections.
  • New round of open-ended bond purchasing program of agency mortgage-backed securities also known as Quantiative Easing (QE) before presidential elections.
  • Take Fed’s statements with grain of salt, promised hikes in 2015, only got 1 in Dec.
  • Fed’s hike of 25 bps did huge damage to U.S. Economy
  • Terrible jobs report: 90% of jobs created were part-time jobs, 80% of jobs were in low wage service sector, hours worked and wages down, biggest drop in weekly earnings in U.S. History / down 0.7%, 4.9% unemployment rate means U.S. creating low paying part time jobs, working age people have accepted bad jobs, or have left labor force.
  • $1300 is key marker for next gold surge, will increase to $1500-2000, $5000 gold is coming, next surge will break the 2012 surge to $1900
  • Public wants Donald Trump & Bernie Sanders because he’s something new, not establishment norm
  • Sanders not winning because black voters are resoundingly supporting Clinton, due to Obama link and Bill’s residual support
  • Sanders would win if black voters actually studied and voted for the candidate that actually represented the beliefs they support: Socialism
  • Powers of east are rising because they lack the debt baggage of decades of supporting a welfare state
  • U.S. Dollar dominated assets, CD’s, Corporate bonds, treasury bonds, dollars will crash in value as Fed continues to print money to prop up system
  • Real estate prices for both commercial and residential property will drop dramatically in the near future, like 2007/2008

What explains the sudden increase in commodities prices when demand is down?

Dollar going down, supply is decreasing. Dollar is weakening against South East asian currencies, 7 month low to Australian dollar. As Dollar comes down it decreases price of commodities, the price comes down and thus increases demand.

Whats the motive behind this current narrative that paper money needs to be eliminated?

The reason why governments want to move from worthless paper money to worthless digital money is so they can keep better control of public. Cash transactions are mostly anonymous, digital transactions can be tracked. This means the implementation of purely digital transactions allows governments to better tax the underground economy.

In the event of negative interest rates, the government wants the ability to disincentivize withdrawal and hoarding of paper currency. If the bank eliminates cash as legal tender or implements carrying taxes, the public will be forced to spend their cash or risk it becoming eventually worthless.

Why do you think European Banks are being told to have larger amounts of cash on hand?

To deal with the increase in cash withdrawals. In Japan, where interest rates have already gone negative, personal safes are being bought at unprecedented levels to presumably hoard cash.

Where do the central bankers get the idea that they have the authority to eliminate currency?

They don’t have the authority to do anything they do. The Federal Reserve is a private banking syndicate and its not even part of the government, because the governmental constitutionally doesn’t have the authority to print money.

Why do we tolerate this?

We tolerate everything, everything the government does is illegal. The Courts don’t enforce the constitution, they let the government get away with murder. Thats the problem. The nature of the country has changed dramatically over time, we are no longer a free people governed by the rule of law. We have an all powerful government that does whatever it wants.

One of the things the government might want to do next is eliminate cash, though they haven’t done that yet. They have however gradually eliminated cash by discontinuing notes larger than $100. 100 years ago there were $500, $1000 and even $100,000 bills. Due to inflation, a current $100 bill is like a $1 bill in 1913, in regard to its current abstract buying power.

People have slowly accepted the push to a cashless society by heavily adopting debit and credit cards, and rarely carrying cash for purchases.

If the U.S. Federal Reserve made a move to eliminate cash, what kind of response would we see from the general public?

Public wouldn’t like it, certain group of people don’t even want to use bank accounts because of the costs. The move to watch will be of the underground economy. Hopefully people switch to silver and other precious metals.

What is the state of the real estate market in America?

U.S. home ownership is at a 50 year low, and many people are being forced to rent after they were leveraged in the 2007/2008 housing crisis and lost their home. Rent has increased for the last 6-7 years, and the amount of people who spend half their income on rent has risen to an all time record high. Even with the rising rent prices, home ownership has stayed low because real estate is still too expensive relative to the lower earnings of Americans, thus prices must come down for ownership rates to increase. Artificially low interest rates are also responsible for keeping house prices high, as the government has once again taken over the subprime real estate market and offered no money down, no income verification loans to risky applicants. The U.S. Government is up to their old tricks, and there is a new crash coming as this inflated bubble implodes.

Big buyers of single family homes have been hedge funds and private equity funds, and they are mostly sitting vacant because there are no tenants that can afford them. Once interest rates go up, the funds will no longer be able to afford to keep the properties and will unload them on the market. The Chinese will buy some of these properties in high value locations like Miami, Manhattan, and California but not in places like the midwest or the average American residential suburb. These houses will go to the highest bidder, and the bid will be pretty low!

Once supply drastically increases from this shift and demand stays relatively low, the prices will fall accordingly.

Commercial real estate will also be hit hard. Most of the available space are retail shopping outlets, and service industries. The service sector has reported horrific earnings reports in 2016, and has adopted online commerce as a cheaper alternative to expensive retail space as many consumers use Amazon or eBay to purchase goods. This will cause greater unemployment in the service sector, due to the commercial space staying vacant.

Very few are starting new businesses in the U.S., evident in how hard it has become to sell or dispose of used office furniture, much of which charity stores won’t even take due to already being capped in those inventory categories.

Peter-Schiff

Schiff’s Recommendations

  1. Buy physical gold and silver
  2. Drop U.S. Dollar dominated assets, CD’s, Corporate bonds, treasury bonds, dollars
  3. Invest stocks and bonds in sounder economies, better markets with solvent currencies like Singapore, Switzerland, New Zealand
  4. Take advantage of strategic opportunities in gold and mining sector stocks

For the full episode tune into the Thursday, March 7th edition of TRUNEWS.


Peter Schiff is Chairman of SchiffGold, CEO and Chief Global Strategist of Euro Pacific Capital, Inc, and host of The Peter Schiff Show. Peter is an economic forecaster and investment advisor influenced by the free-market Austrian School of economics. He is one of the few forecasters who accurately and publicly predicted the 2007 housing market collapse and subsequent 2008 financial crisis. His latest best-selling book, The Real Crash: America’s Coming Bankruptcy – How to Save Yourself and Your Country, warns that the 2008 crisis was just the prelude to a larger sovereign debt crisis in the United States that may lead to a collapse of the US dollar. Peter recommends long-term investment in foreign markets with sound fiscal policies, as well as global commodities including physical precious metals.

Peter Schiff’s websites are Schiffradio.comSchiffgold.com, and Europac.com


Edward Szall

About Edward Szall

Edward is an Army veteran who turned to Christ in 2012 & has a fire for bringing truth to the world of online and broadcast media. If you have any tips please tweet @EdwardSzall, call or text 321-200-6431, or email him at Edward.Szall@trunews.com / How beautiful on the mountains are the feet of those who bring good news, who proclaim peace, who bring good tidings, who proclaim salvation, who say to Zion, “Your God reigns!” - Isaiah 52:7