Peter Schiff joins Fox News to discuss last week’s rise in unemployment claims (up 13,000), the epidemic of foreclosures, and the next downward wave(s) in this economic slump.
There are a lot of waves to come. We’re standing in the ocean and there are actually some Tsunamis that haven’t hit.
The foreclosures are not the problem. They’re part of the solution. The problem is that a lot of people bought homes that they couldn’t afford and they actually need to leave those homes so that the people who can afford them can buy them. They need to rent something that they can afford.
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I still think all these banks are going to fail again, because the real crisis is the dollar crisis that could hit next year. That could send interest rates through the roof and all the banks that we bailed out, they’re going to be coming for another hand out only we’re going to have to give them a much bigger bail out next time.
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All of this [rise in silver, commodities recently] shows the dollar losing value. Look at commodity prices, look at agriculture. And all of this is going to impoverish a great number of Americans because the cost of living is going to go up dramatically. Every American is taking a pay cut every time the dollar loses value. This is a direct result of what the Federal Reserve is doing.
And they’re doing this because they refuse to allow us to confront reality – the reality of the enormity of the problem that was created by years and years of bad monetary policy, bad fiscal policy.
This economy is a complete mess. We need to allow the free market to cure it.
While we have dedicated some time over the last week to the foreclosure crisis and how the average home buyer should verify and validate who owns the mortgage note on their home and whether or not their mortgage service company is authorized to accept their monthly payments, the fact of the matter is that millions of Americans purchased homes they had no business buying.
Easy lending policies by the Fed, mandated social policies from our federal government, and a culture of greed in the mortgage lending system gave way for those with insufficient incomes to purchase homes and take out mortgage loans that they would never be able to service.
We, as a country, have lived a life of excess. Be it with buying expensive homes or cars, or racking up credit card debt for inferior goods made in China, or rocketing our national debt, we have spent too much. This was an upward, self reinforcing price spiral and now it has reversed course.
The loss of jobs that we outlined in our recently posted video is not going to stop. Neither will the real decline in wages in terms of the US dollar. Debt will continue to be defaulted on – in mortgages, car loans, credit cards, and student loans.
The free market is trying to cleanse itself.
Over the last twenty or thirty years we experienced a period of robust, often excessive, growth. Now we are experiencing the hangover, a self reinforcing negative feedback loop that is going to wipe out wealth (and debt) across the entire spectrum of the US and global economy.
It simply cannot be stopped. It is mathematically impossible, and the last two years prove that. No matter how much money is printed, how many laws are passed, how many financial institutions are bailed out, it will not stop until the system is rebalanced.
And like a pendulum, we will swing from one end (the boom) to the other end (the bust) and we will likely overcompensate the swing to the bust side (just as we overcompensated the boom side when the historical average for home prices went from $130,000 to over $200,000).
There is going to be a lot of pain on the bust side of the pendulum, and unfortunately, whether we admit it or not, that is the direction we’re swinging right now.
Hat tip: Schaef Report
Comments….. “I still think all these banks are going to fail again, because the real crisis is the dollar crisis that could hit next year. That could send interest rates through the roof and all the banks that we bailed out, they’re going to be coming for another hand out only we’re going to have to give them a much bigger bail out next time.”
We are seeing it happen today. The banks can come with their hand out, but they’ll get a handup. If the Repuglicans win in November, we will see nothing happen. This is what the Tea Party is pi$$ed about–the bailouts. To big to fail? They are failing and rightly so. They IMHO are the ones that have lived high on the hog and they allowed people to do the same. This is the cancer of consumption. It’s too late now, the natural law always prevails.
And you know what…it sucks,its sad to see that those irrresponsible sissies that had to have EVERYTHING and have it RIGHT NOW have put in motion a mess that will take down many folks who DID NOT participate in the so called boom and will still likely lose alot of; if not all of their savings and such due to inflation eating it up and God knows what else happening.
But even so I know its better to live within your means and to make due with what you have than to partyhardy and lose it all,at least you have a clear conscience…not that those who helped wreak this train have a conscience to bother them,just a thought.
NWO scam to collaspe America. Got news for you boys…100 million of us are nicely armed. I’ll live peacefully in my home.  ARMED!!!
“Too big to fail”: If they are that big and filled with all those specialists why are they failing AGAIN?! If they have not learned the lesson the let them fail. I understand that will make a bigger mess but we can’t keep bailing out banks that just keep doing business as usual and not changing what the do and how they do it.  If you tell a child “no” and then let them do what you told them not to do, they LEARN that no means yes. And they learn that some else will fix their messes. They need to learn to fix their own messes.
I think Peter Schiff has proven himself as a sell-out shill. he flip flops as he sees fit to turn a profit.
/no – i didn’t bother reading the article. its nothing that isn’t already obvious.
When JP Morgan drops to ZERO, and the government divides it up, “good bank, bad bank” I’ll sell ten ounces of gold and buy some shares from the FED to recapitalize the bank.ÂÂ
Search,,,,,peter schiff was right on youtube,,,,,to see how far back Schiff warned this correction was coming.
Ludwig Von Mises summed it up quite well at the very top of this page. All of us have seen boom/bust cycles, but Americans are not prepared for a Great Depression. Having at least a one year food supply will insure your family is fed as the acquisition of food will become a growing concern for many. Millions of Americans will eventually run out of unemployment/food stamp benefits. People are going to feed themselves and their families one way or another. Gear up folks and Good Luck To All      Proverbs 27 : 12ÂÂ
Look at what happens to BofA. Mr. Shiff speaks the true.
Comments…..Check this out: http://noir.bloomberg.com , regarding BofA.
schiff is wacko about some details.                                                      ÂÂ
the current crisis started when BNP parabas told some bond holders the bank didn’t know how much their bonds were worth because the bonds contained u.s. mortgage backed securities.
the mortgage scam worked like this;
people with poor credit and/or insufficient money were encouraged to buy expensive homes with “sucker” loans designed so they would fail so the wall street bank could collect on the insurance on the mortgage failure(credit default swaps). some wall street banks had multiple swaps on a single home and made millions on a single home going into default. in the meantime the wall street bank had sold the morgage chopped up and packaged into mortgage backed securities and sold them easily because the corrupt rating agencies were paid to rate them AAA.
so, in conclusion;
the wall streeet bank originating the mortgage loan sold the loan principle and got paid in full for the loan……..
the wall street bank originating the mortgage collected full payment on multiple credit default swap insurance policies on the house when the owner defaulted (as they knew he would).
the banks made incredible profits using these multiple scams on a default they designed to happen.
the american tax payer paid for the losses (TARP) when the credit default swap insurance companies weny broke and could no longer pay.
how long after a depression hits will the govt still be handing out unemployment benefits, when 30-50% (or whatever % it will be) is now filing?
Back in ’08, when the USA , allowed the Bankster controlled government,  to throw out over 200 years of contract law, and rule of law,  is when I got serious ,about getting out of everything  controlled by FRN system.  (stocks,  IRAs, 401Ks, funds, etc.)
The Bankster Feds, have  collapsed the mortgage business, wrecked the economy, and made a joke of the stock markets.
The FRN system is broken and cannot be fixed.  It is going down, and the end will not be pretty.
The only thing true Americans can do, is get out of  the FEDs  game,  by pulling your wealth, out of their system.
Buy gold, silver, stuff……..hold anything, but their dollars.
And who’s fault is it that you ran up your credit cards, spent 200% more than you earned, took out 2nd mortgages and bought real estate thinking you could flip it for a 200% return in 90 days.ÂÂ
Yet you blame the banking system.
Comments…..Going to impoverish, going to impoverish?
No, no, no. It already happened. Using debt to accumulate stuff that has no real resale value impoverished Americans. Did we really figure debt would keep us fat, dumb and happy indefinately? We got fat, we are without a doubt dumb, but happy? I would contend that the only happiness with debt is if the debt entered into creates more return than the monthly premium on the debt.
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This is not a hangover scenario, but rather cirrhosis of the liver. Too much, too long and now the health of the economy is terminal. I want to believe there is a way out no matter how painful. I don’t see it.
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We are faced with a serious future devoid of hope. The best we can expect is survival during the societal upheaval. Our foremost problem will be effective distribution of critical supplies. Food, water and medicine. Never underestimate the medical aspects. No more antibiotics, no more mother’s little helper pills and just how many doctors will expose themselves to a society that will act illogically. Imagine a society that has dispensed every lotion, potion and erectile disfunction pills needed to keep society up and running being faced with going cold-turkey.
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We are already impoverished. We are just being served with formal notification.
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We can prepare, but we will never be prepared. Too many variables. Foremost of these variables is Congress. The Fed will continue to exist. The why is easily summed up. Congress rarely repeals laws affecting government operations. The Fed is too integrated into the body known as the US of A. Congress needs the Fed to be the whipping boy for failed economic policies.
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No place to run, no place to hide, we are all being served. Due and payable on demand.
Mac..Your comments in this article are the very core of the problem we here in America have been facing but unwilling to acknowledge.  Most will never acknowledge it even when they slam head on into it . ÂÂ
    Some will seek scapegoats, of which there are no shortage. Still others will indeed go directly to the riot route.ÂÂ
    I fear, no matter how the election shakes out, we are past  the tipping point to regain control of our country.ÂÂ
    Over 50% of our population are directly beholding to ‘Big Governments’ for financial support.
     ‘Overtheedge’ … Your words give me no comfort. They do, however, let me know I must be prepared.ÂÂ
      When I fought the ‘Cold War’, I believed I was leaving a a safe country to my children, grandchildren.  Now my preparations, my morals, and my deeds are all I can leave to them.
      ÂÂ
       Never give up on preparing. There can be strength and comfort in a solid group of family and like minded friends.
The U.K. has done a major cut back. Good for them, it’s coming this way…….. It will be worse here…..
Comments…..@ lostinmissouri
 You make an excellent point. The whole banking system is corrupt. That point is obviious, and speaks for itself. The only way a person can protect themselves, is to seperate themselves from the system. Precious metals, and other ‘real” assets that are worth something.
     We can see the natural death of the economy coming , faster and faster with each passing day. The eventual end won’t be pretty. The real sad thing is that it’s going to drag many people who pay their debts on time, and never participated in this folly, to their demise.ÂÂ
         This  whirlpool of corruption is going to drag everyone down, and if you don’t have the protection of real assets, and a well stocked pantry, and some firepower to protect it, you will go down with everyone else.
      Common sense dictates that it won’t be much longer before we see everything give way. Find anyway you can to buy some PM’s, and some food , if you havent’t already. Time is short. Good luck.
We are very gullible to believe that all of our problems stem from the “greed” of the banks. The government, under the control of the democRats, directed and indeed, forced this debacle. The “Community Reinvestment Act” is the real killer. Banks were coerced and outright forced to make loans to people they knew could not afford them.ÂÂ
The Bush administration told congress of their concern over Fannie and Freddie being unstable. Barney Frank was at the head of the list swearing that all was OK. By the way, his boyfriend was making big money off of this. Even if all was not “perfect” they were placing low income people in homes…..of course they did not belong there anyway.ÂÂ
The banks got rid of the “toxic paper” to Fannie and Freddie. Don’t forget the government pushed them into it anyway. Would you not get rid of the problem the same way?
Remember Barney and Friends were the real base of this problem. The banks were just a tool they used.
Comments…..@ robert
I’m sure many small banks knew better than make questionable loans. But the “too big to fails” were running the show. These ‘too bigs”, along with the FED, were running the entire show. AS being proved everyday, they knew exactly what they were doing, dragging all banks to doom. I have no sympathy for any of them, nor sympathy for Congress, who rubberstampd every law, in the favor of the banks, who own them, lock stock and barrel.
     Greed has finally caught up with them all. Yes, there is some guilt to go around, but if the banks had followed normal lending practices, millions would never be given the bad mortgages to start with, and we wouldn’t have the problem we have now.
   All sides and parties are guilty to a certain extent, but Congress, for not doing their job, and the banks for their greed have the most guilt in my book.
     These bad loans will be the death of the banking industry, as is being acted out as we speak. The natural laws of economics and a free market will cleanse the system. But that’s after an economic collapse happens. We are seeing it now, just getting into the heart of the exposure of fraud.
    Get your house in order, as it will be a wild ride to a dark place, that only the prepared will survive.
Comments…..
REB
October 19th, 2010 at 6:32 pm
It’s really hard to think of those sissies when Goldman Sachs split 140 billion in take-home bonuses….AGAIN!!!
Comments…..
Sketch
October 19th, 2010 at 7:27 pm
I actually found his article insulting..
1) he’s not addressing the people with equity in their homes who lost their jobs and can’t sell with this housing market so screwed
2) rent?? here it’s cheaper to own and if one can rent here, they can more than likely pay a mortgage
3) leave so those who can afford can buy?? what part of the universe is this idiot living??