The Austrian money manager, Mr Peter Schiff is back with another one of his Schiff reports. In this YouTube he tries to seek out what is catalysing a weak dollar, weak bonds, and rising commodity prices.
He thinks Catalyst #1 is the increasing inflationary heating in China, caused by their export of goods to the U.S. in return for container ships full of U.S Treasury I.O.U.s, to import uncontrolled American inflation into China, with Chinese food prices rising 12% in the last calendar year.
Schiff describes the only way China can reduce its inflation rate, which is to let the Chinese Yuan rise. When they do this — which Schiff thinks is inevitable — then price inflation will funnel back to the United States, which will produce higher U.S. interest rates, which will then pull the rug out from under any of the Fed’s “stimulus” money printing programmes.
Catalyst #2, says Schiff, was Obama’s platitudinous set of folksy homilies delivered last weekend, which promised more tax cuts, more unemployment benefits, and more government spending — all paid for with fresh air and fairy dust — as combined with the thoughts of Chairman Ben Bernanke, as broadcast on 60 Minutes, on how this sagacious doge stands ever-ready with a firm hand on the plunger wired up to nuke the printing press, which absolutely no-one, including himself, believes he will ever press.
If Ben Bernanke does fail to raise interest rates in 15 minutes, when the Tsunami of price inflation washes in from China, says Schiff, then all of the U.S. government spending obligation chickens will come flying home to roost, plucked and ready to cook; this will then send the U.S. into massive price inflation. Hoist by his own petard, if Mr Ben Bernanke does raise interest rates in 15 minutes, as he promised to do on 60 Minutes, then the gargantuan U.S. economic collapse he has been holding off with massive money printing for the last two years will melt down the roost, instead.
Either way, thinks Schiff, this is a Sophie’s Choice that the Federal Reserve has long been dreading, while it has been cowering for the last two years betwixt a rocky printing press and a hard monetary fire pit, hoping beyond hope that all those dreadful people shouting at it will go away when the leprechauns at the World Bank find some fiat currency solution to this horrible mess that it has created for itself in the last forty years of its insane money printing madness.