Peter Schiff on CNBC Squawk on the Street June 8, 2009 discusses national debt, Argentina and the potential for default on National debt.
We have the biggest adjustable rate mortgage of all time. All the debt is being financed with short term T-bills just like Americans financed their homesÂ with teaser rates and the debt is being bought by foreign governments. There is no real private demand for this debt. Once the political situation turns and foreign governments don’t want to buy our debt we have no fault.
We’re just like Bernie Madoff in this situation. We’re running a giant Ponzi scheme and when foreign governments want out, we’ve got no choice.
We have a crisis of confidence approaching, and it will not bode well for the USA when foreign investors stop pumping their savings over to our long-term debt instruments.
Watch Peter Schiff on CNBC June 8, 2009: