- Peter Schiff: Live by QE Die by QE. Don’t Be Fooled by the Strong Dollar!
by Greg Hunter’s USAWatchdog.com
Money manager Peter Schiff says don’t be fooled by the strong dollar or the so-called recovery. Schiff explains, “The biggest disconnect right now is between the real state of the U.S. economy and the fantasy land a lot of investors believe exists. Everybody is of the opinion that the Federal Reserve’s monetary policy worked. Because they did QE 1, 2 and 3 and kept interest rates at zero, the Federal Reserve saved the U.S. economy and they solved all the problems. Because the problems have been solved, we no longer need the Fed . . . and everything is fine. That is complete fantasy. There is a bigger disconnect now than there was just before the 2008 financial crisis. The truth of the matter is the Federal Reserve didn’t solve any of our problems. They made them all worse. We are more dependent on QE than ever before. So, rather than raising interest rates next year like everybody expects, I think they are going to launch QE 4, which nobody expects. There is no end to this. The Fed has to do this indefinitely because the minute they stop propping up this artificial phony economy, it will implode. Everyone is confusing a bubble for a genuine recovery. It’s not.”
How long can the economy be propped up and why hasn’t it fallen? Schiff says, “This stuff goes on longer than you expect. People were asking the same questions about the housing bubble, which I was warning about for years. They would say ‘well, nothing bad has happened, so what makes you think it’s going to?’ It’s just inevitable. The fact that we’ve been able to postpone the day of reckoning for so long just makes the problems worse, which means the day of reckoning is worse. The further back into the future we deal with the consequences, the bigger the problems are, the bigger the consequences. Right now, part of the reason we are able to continue this charade is all of the other countries, particularly Europe and Japan, are in so much trouble that people assume we are the safe haven. They think we are the only economy that is recovering. We’re not, it’s like a mirage in the desert, and the closer you get to it, you eventually find out it’s an illusion.”