PETER SCHIFF

PETER SCHIFF

Thursday, January 31, 2013

Peter Schiff : The Highest Debt rate we can afford is zero

Peter Schiff : “We’re now so addicted to debt that the highest rate we can afford is zero,” Schiff, the CEO and chief global strategist of Euro Pacific Capital, told Casey Research chairman Doug Casey in a video interview published today.“We pay about $300 billion a year right now in interest on a $16.5 trillion debt,” Schiff explained. “What if, in two or three years — and the debt is $20 trillion — what happens if interest rates are 5%? Well, that’s $1 trillion a year in interest payments.”“The only justification for keeping rates so low is that the Fed knows any increase in rates will collapse this phony economy and we’ll be right back in recession,” Schiff said.“I think a lot of this is going to be financed by the central bank,” he said. “Inflation is the tax that they’re going to levy, and it’s going to hit everybody.”“At some point, the dollar has to give,” he said. “You can’t just keep printing money, and monetizing debt, and buying bonds, without the dollar imploding.”“That will put incredible pressure on the Fed to raise rates, but the Fed can’t raise rates,” Schiff said. “And as investors around the world perceive that the Fed is all bark and no bite, that it’s never going to remove he liquidity because it can’t, then you get a run on the dollar.”“Now, either the Fed allows the dollar to collapse, in which case we have runaway inflation, or, they aggressively raise interest rates and collapse this whole economy,” Schiff said in an interview with Doug Casey yesterday

Peter Schiff is a well-known commentator appearing regularly on CNBC, TechTicker and FoxNews. He is often referred to as "Doctor Doom" because of his bearish outlook on the economy and the U.S. Dollar in particular. Peter was one of the first from within the professional investment field to call the housing market a bubble. Peter has written a book called "Crash Proof" and a follow-on called "The Little Book of Bull Moves in Bear Markets". He is the President of EuroPacific Capital, which is a brokerage specializing in finding dividend-yielding, value-based foreign stocks.

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