Inflation Chickens Will Come Home to Roost – Peter Schiff
Money manager Peter Schiff says all the money printing and debt explosion since the Great Recession comes with a huge downside. Schiff says, “All sorts of bad policies basically took place thanks to the monetary excesses applied by the world central banks, but now we are at a point where all these inflation chickens are going to come home to roost. It will not be in stock prices or real estate prices or bond prices, but in good old fashion consumer prices. Food, energy and all the things that we need to live are going to get a lot more expensive.”
Schiff says the Fed is overlooking some big problems coming. Schiff says, “They (Fed) did not stress an environment where we have more inflation or where we have stagflation, where we not only have a rise in unemployment and a recession, but consumer prices and long term interest rates that go up at the same time. They (Fed) are not even thinking that’s possible, but that’s actually probable. The real problem is when real inflation rears its head, there is nothing the central bankers can do about it. If they try to fight the inflation by tightening up on monetary policy, it’s like slamming on the brakes. They are going to have to jack interest rates very high, and everything is going to start imploding. The whole credit bubble is going to collapse. We are going to see stock markets tumble. Bonds are going to go into default. There will be bankruptcies, layoffs, bank failures and the governments will have to start defaulting on their obligations and payments on social programs, or even interest on principal.
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