The main meat of the latest Peter Schiff video blog discusses the testimony this week of Ben Bernanke in his semi-annual visit to the US Congress. Mr Bernanke was challenged quite strongly by Congressman Ron Paul, who in effect asked the Federal Reserve chief to state how bad things would have to get before he realised his Keynesian stimulus policies of monetary expansion were wrong. Alas, Mr Bernanke managed to escape answering the question because Mr Paul ran out of time (you can see a YouTube of this questioning here).
Before discussing the Bernanke testimony, Mr Schiff also debates the continuing decline of the Dollar against other major world currencies, including the Euro and the Pound. He notes that there was better financial news this week coming out of Europe and the UK, and he thinks this is not entirely unrelated to the government spending cutback austerity programmes recently announced by European governments, as opposed to the continuing belief by the US government that Keynesian stimulus spending is the only way to revive the American economy.[Whether the UK government is actually bold enough to implement its proposed austerity programme and face down all of the emotive calls from government agencies to lessen their pain, is something we will need to wait and see.]
Commenting that the earlier US stress tests on banks were like letting gerbils run around on a suspension bridge and then declaring that the bridge was safe, Mr Schiff wants to reserve judgement on the efficacy of the European bank stress tests, but thinks that the Dollar index will need to drop to 70 before concerns will be raised about the continuing weakness of the Dollar.
Schiff follows these discussions by talking about the wisdom of letting General Motors use taxpayers’ money to buy up car loans companies and the possible ulterior motives of the US government in investigating the admittedly poor practices of some US gold dealers.