🔴 BREAKING NEWS!! Fed Policy Bullish for The collapse of the world economy is just around the corner

What this episode is about

The content discusses the unexpected shift in Federal Reserve policy from planned interest rate hikes to cuts in 2019, arguing that this change was not due to unforeseen circumstances but rather a reaction to the negative impact of prior hikes on the market. It suggests that the Fed's reversal merely postponed a looming economic collapse, rather than preventing it, by reinstating the very policies that inflated the economic bubble initially.

Key takeaways

• The Fed's about-face: three cuts instead of three hikes – surprise! The bubble popped, not normalized.
• 2018's market downturn wasn’t a fluke; it was a delayed reaction to the Fed's prior rate hikes.
• Trump's election masked reality; fiscal enthusiasm led to more government spending, not genuine economic growth.
• Normalizing rates with high debt? Like squeezing jelly out of a donut – sticky and impossible.
• The true 'change' was the Fed confronting a mess of its own making, delaying rather than fixing the recession.

Who speaks in this episode?

• Peter Schiff (Host) · 19 min speaking

What is discussed, and when

1. 0:00 – 5:00: Federal Reserve
2. 5:00 – 10:00: Federal Reserve
3. 15:00 – 20:00: Federal Reserve, Sovereign Debt Crisis

Notable quotes from "🔴 BREAKING NEWS!! Fed Policy Bullish for The collapse of the world economy is just around the corner"

• Last year when i gave my talk the federal reserve had raised interest rates in december of 2018.

  about Federal Reserve · at 0:00

• The phony numbers there's going to be a crisis there's going to be a sovereign debt crisis it's not just going to be the federal reserve buying bonds they're going to be the only ones dumb enough to buy those bonds because.

  about Sovereign Debt Crisis · at 14:59

Who and what is mentioned in this episode?

Companies & orgs

• Federal Reserve — Company · 5 mentions · first at 0:03

Concepts & topics

• Sovereign Debt Crisis — Concept · 2 mentions · first at 15:02

Full transcript with timestamps

0:00 last year when i gave my talk the federal reserve had raised interest rates in december of 2018. and pretty much everybody believed at least everybody whose opinion counts that the fed was going to raise rates another three times in 2019. well they got the number right right the fed did move interest rates three times except the direction was the opposite of what everybody thought instead of hiking interest rates three times the fed cut interest rates three times now of course all the people who were completely surprised by exactly what i said was going to happen right they act as if something must have changed that well the fed was going to raise interest rates three times they were going to normalize rates but then they just didn't that somehow circumstances changed that they necessarily couldn't foresee and so they had to do this about face but none of that is true nothing changed the only thing that changed if you want

1:13 to call it a change is that the market started to react to the prior rate hikes precisely the way anybody should have been able to figure was going to happen the fed pricked its own bubble by raising interest rates the first time it just took a while before the air really started to come out in a way that made everybody scared because remember in december we had the worst december in the u.s stock market since the great depression and had the fed not reverse course had the fed continued on its trajectory we probably would have already had a worse market decline than the one we had in 2008 we would probably already be in a greater recession than the one that we had in 2008 but the federal reserve did not cancel that recession or market crash it simply postponed it by reverting to this very policies that inflated the bubble in the first place now it never made any sense to me that you had so many people that just

2:21 believed that the fed could normalize interest rates how anybody could feel that normal rates were possible when you have an abnormally large amount of debt and i knew that this journey was impossible to complete before the fed even embarked on it before the fed raised interest rates for the first time in december 2015 i spent the entire year saying they wouldn't raise rates and the reason i said they wouldn't is because i said they were smart enough to know if they ever attempted to normalize rates they could never complete the process and i thought that revelation would be more problematic for the fed than just never trying to do it at all and proving that i was correct and of course when 2014 came to an end much like when 2018 came to an end everybody believed the fed would raise rates three or four times in 2015 except for me and the fed waited until the last possible minute they didn't raise rates

3:27 until december of that year that wasn't an accident the fed didn't want to raise rates it just didn't want to admit that it wanted to pretend that it could raise rates without actually proving that it couldn't by raising them but it backed itself into such a big corner that it kind of felt pressured to do something and so they raised rates and my initial reaction was okay it's one and done right the fed is not going to raise rates anymore and i believe that forecast would have been accurate but for the election of donald trump i think had hillary clinton won the fed never would have raised rates a second time we would have gone back to zero already and the fed would have restarted qe sooner than it did but because donald trump was elected that provided the fed some cover because it created a lot of false optimism for the markets right that trump was going to somehow make america great again he was going to

4:26 slash regulation he was going to cut government spending or cut taxes and pay off the national debt and all sorts of you know promises and things that people attributed uh to trump created a lot of enthusiasm especially among republicans and of course a lot of entrepreneurs a lot of small business owners they tend to be republican so they became more optimistic about the economy and so that created another boost and of course the tax cuts themselves provided another shot of keynesian fiscal stimulus late in this in this cycle because we had tax cuts but we actually also had spending increases a lot of people overlooked the fact that government spending increased dramatically uh since trump was elected not just on the military which trump brags about all the time how much money we borrowed to buy more military equipment but we also borrowed a lot of money to provide for more social spending so

5:28 we had this huge increase in deficit spending you know that temporarily skewed the gdp numbers to get people to think that the economy was actually doing better since trump was elected than before he took office when the reality is we're simply continuing the same failed policies that obama had who's continuing the same failed policies uh that bush had i mean you know if you look at the popularity of president trump right now with republicans he's extremely popular among republicans even though the only real difference between trump and any other republican president or even democratic president for that matter because he's a very liberal uh republican it's all it's all style it's not substance his style is different his delivery is different but if you look at what's actually happening it's just massive government spending massive massive deficit spending and so the big fat ugly bubble that he inherited

6:29 from obama is simply bigger and fatter and uglier than when he took office but people are not paying attention to that to the problem and you know now that the fed has done precisely what i said it would do and in fact you know the my one of my my last appearance but i was on fox business on a two days before the fed's last rate hike and during that appearance i was asked you know what the fed was going to do and i said well they're probably going to raise rates but i think this is the last hike i think after this december rate hike the next thing the fed is going to do is cut rates and that's exactly what they did but i also made another prediction on that interview i said that after the fed cut rates they would go back to quantitative easing of course nobody expected the fed to do that because the fed was talking about quantitative tightening it was supposed to be on autopilot it was supposed to be like watching paint

7:35 dry and that prediction has also come true the federal reserve is back to quantitative easing now the federal reserve doesn't want to admit this because they specifically have stated over and over again in fact every chance they get they say we're not doing qe except that's exactly what they are doing see they've created a distinction without a difference see when they were officially doing qe the fed was concentrating its debt monetization on longer term government bonds now it's concentrating its debt monetization on short-term government bonds what's the difference they're still monetizing government debt the balance sheet is actually growing faster now when they now that they're not doing qe than it was when they were doing qe so this is the biggest qe they've ever done of course it's open-ended it's never going to stop and the fact that they are monetizing a lot of short-term debt which of course there's a lot more

8:35 short-term debt out there to be monetized than there is long-term debt that's part of the problem the way we finance the national debt but because they're so active at the short end that just means they're going to have to step up the amount that they're monetizing more frequently because everything they monetize is going to have to be remonetized when it matures and the reason the fed is back to quantitative easing the reason the fed is cutting interest rates right is because they helped create an economy that was completely addicted to cheap money we have much more debt now than we did before the fed first started qe we have much more debt now than when we had a debt crisis and that caused the fed to slash interest rates but instead of allowing the debt to be liquidated in the crisis we have even more debt than we've ever had before you know i'm even starting to read a lot of articles

9:31 in the mainstream media about how the fed kind of has no choice now right how the fed is kind of in a position and not just the fed but other central banks where they have to keep the monetary spigots open indefinitely right where uh the fed has to go back to zero or stay near zero wherever it is that they're gonna have to continue to do quantitative easing forever and this is not something that people should just be discovering this was obvious from day one but what all the you know the writers are getting wrong when they talk about that now the fed has no choice is first of all they do have a choice right it's just that there's no pain-free choice see the fed can do the right thing and then we have to deal with the pain now or they can keep doing the wrong thing so we have to deal with even more pain in the future see that's the problem it's politically they don't have a choice because when it

10:27 comes to politics nobody wants pain now they'd rather postpone it to somebody else's watch now of course the central bankers are supposed to be independent they're not supposed to care if politicians feel some pain if they're held accountable for their extravagance by the voters but this should really set aside any kind of illusions that any central banks anywhere in the world are politically independent because the only reason they're pursuing this reckless policy is because of politics you know i thought it was funny when donald trump uh gave his uh signing speech when he when he put his john hancock on a completely meaningless phase one china trade deal and during this his acceptance speech he went off on a tangent where he started talking about negative interest rates and how great it was and how lucky the europeans were that they could go out and borrow money at negative rates and you know us dumb americans we actually

11:24 have to pay to borrow and he thought that this was a great thing and he really lamented the fact that we don't have negative interest rates yet in the united states and he really wants them but then he kind of posed this rhetorical question he said but i always wondered who's dumb enough to buy these bonds i mean i understand you know borrowing at negative rates but lending i mean who's dumb enough to lend money at a negative rate well the answer to trump's question is the ecb is the bank of japan it's central banks that are dumb enough to buy negative yielding bonds and donald trump wants the fed to be as dumb as all the other central banks now he's probably going to get his wish but the reality is why are central banks doing stuff that is so dumb they're doing it for politics it's smart politics to postpone the pain but it's lousy economics it's lousy monetary policy but one of the things too that people

12:24 just don't get is how bad this crisis is going to be now because the fed can't do this indefinitely the foreign central banks can't do this indefinitely sure they can buy bonds all they want they can create dollars out of thin air and buy up bonds to pretend prevent interest rates from rising but what they can't prevent is the dollar from collapsing and that's exactly what's going to happen and a currency crisis is going to make the financial crisis look like a sunday school picnic now the reason the dollar didn't collapse when they did qe1 and qe2 and the reason the price of gold stopped going up when it hit 1900 and it pulled back down to a thousand the reason all of that happened is because everybody believed that the fed could end that they could normalize interest rates that they could shrink their balance sheet after all that's what the fed was saying and so everybody believed what the fed was saying instead of

13:25 actually thinking about how ridiculous what they were saying actually was how what they were saying was impossible but people didn't care right because everybody just followed the herd and bought the dollar and sold gold and bought into the stock market in the bond market based on this ridiculous belief that the fed could do something that was impossible well now the world should know that it's impossible and i think they are gradually coming to that conclusion except they haven't come to the ultimate conclusion as to what it all means right now they're thinking okay yes the fed is going to do this forever they're never going to return interest rates to normal they're never going to shrink their balance sheet but they think that's okay it is not okay because it was the anticipation of the normalization process of all the rate hikes of all the quantitative tightening that's what kept the dollar from

14:22 collapsing that's what made it go up once the dollar starts to fall on the acceptance of the fact that rates are never going to normalize that's when you have a crisis because inflation is going to rear its head in a very very ugly way in fact we already have the major indexes that the government looks at right we're about two percent or a little higher and the government says that's not enough we need more we need to have symmetry we need a higher inflation but at some point as the inflation rate really takes off and they can no longer mask it behind the phony numbers there's going to be a crisis there's going to be a sovereign debt crisis it's not just going to be the federal reserve buying bonds they're going to be the only ones dumb enough to buy those bonds because when you have a higher rate of inflation it's not just negative nominal yields but negative real yields when donald trump said who's

15:18 dumb enough to buy negative nominal yields well who's dumb enough to buy negative real yields because real yields being negative still means you're losing money and at the end there's only going to be one buyer that dumb and that's going to be the fed and so we're going to have this dollar crisis gold is going to take off and i think probably the most dangerous part about all of this is the political ramifications because nobody is really focusing on this story and i pointed it out too even when donald trump won and i was giving talks what i said at the time was that the real story was not that trump won he went on a populist message the reason that or what was so significant about the 2016 election is that bernie sanders almost beat hillary clinton to me that was far more significant than donald trump winning because i thought that there was a pretty good chance that trump could win and i think that had the democrats not

16:16 rigged the primaries sanders would have won and he may win this time i mean they're trying their best to prevent them from winning but we'll see what happens but there has been a huge shift in the political spectrum in the united states because donald trump is a very liberal republican he's probably the biggest spender the most liberal republican we've had in office maybe since nixon right he's a rockefeller republican he's the opposite of what um reagan was supposed to be but what's so surprising about this massive shift is that the republicans love it as i said trump is extremely popular with the tea party republicans remember the tea party was founded as a protest to the big deficits that obama was running during the great recession well trump is running even bigger deficits when we're supposedly having the greatest economy in the history of the country yet no one in the tea party who was upset about

17:17 those big deficits when at least you can make the false argument that we needed them right nobody is worried about trump running even bigger deficits when nobody can claim that we need them and the problem is if the deficits are this big now when times are supposedly good what does that mean during the next recession because it's not like we're never going to have one how much bigger are those deficits going to be and there is going to be no push on the republican side to be able to counteract those deficits like the tea party did when obama was president the deficits would have been much bigger under obama had the republicans not been pushing back well those republicans aren't going to be able to push back even if they want to they look like complete hypocrites if they did so you have the republican party that for all practical purposes is now the democratic party they're the party of protectionism

18:11 uh big government spending big deficits sure they want tax cuts but they don't want to make government smaller they just want to pay for bigger government with debt and inflation those aren't conservative principles so you have the republicans that are now the democrats and where are the democrats the democrats are the socialists those are the only two parties we have left in america we have a democratic party and we have the socialist party uh you know led by bernie sanders or warren or aoc and that's the wing of the the democratic party that is gaining popularity and the problem is the republicans have so invested themselves in this fake narrative of how great this economy is and claiming credit trump was elected because he told the truth about how bad the economy was now he's lying and pretending that the same bad economy is great and when it blows up this is going to play right into the hands of the left and the

19:07 united states is going to make a sharp turn left probably bigger than we've ever done since fdr and it's happening at a time when we're already broke and the idea is it doesn't matter because we could pay for it all with the magic of the printing press doesn't matter how many bonds the us government sells doesn't matter how much money we print because it's all good right nothing bad could happen so this is going to be a perfect storm an economic financial political storm there is going to be no reprieve like we had last time where the federal reserve was able to bail everybody out because this crisis is not just a subprime mortgage crisis it's a sovereign debt crisis it is a dollar crisis so you're going to have to bail yourself out you're going to have to make the right investments now because if you don't make them now there's no other way to get your purchasing power back and i see that

19:56 i'm out of time here i'm going to talk about uh what we should be doing with our money and how to protect our our savings and profit from what's going to be happening over the next several years at my workshop later today i think it's at one o'clock so i'll see everybody there thank you

Questions about this episode

Who speaks in "🔴 BREAKING NEWS!! Fed Policy Bullish for The collapse of the world economy is just around the corner"?

Peter Schiff (Host).

What is "🔴 BREAKING NEWS!! Fed Policy Bullish for The collapse of the world economy is just around the corner" about?

The content discusses the unexpected shift in Federal Reserve policy from planned interest rate hikes to cuts in 2019, arguing that this change was not due to unforeseen circumstances but rather a reaction to the negative impact of prior hikes on the market. It suggests that the Fed's reversal merely postponed a looming economic collapse, rather than preventing it, by reinstating the very…

What is mentioned in this GLOBAL NEWS PODCAST episode?

2 people, works and ideas are mentioned, including Federal Reserve, Sovereign Debt Crisis. Each one on this page links to its own page with every episode that mentions it.

How long is "🔴 BREAKING NEWS!! Fed Policy Bullish for The collapse of the world economy is just around the corner"?

The episode runs 20 min; the transcript is about 3,426 words in 21 timestamped sections.

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