Sunday, December 22, 2013

The Fed Is In A Box

At some point the market is going to figure out the box the Fed is in and it will not want to hold the dollar. It will realize that it is QE infinity and when the dollar really starts to come under pressure, if it loses 10, 20 percent of its value against a basket of currencies, that is when the Fed is going to have to make a choice. A very difficult choice that is has been avoiding for years, which is going to be to dramatically increase interest rates even if the unemployment rate is rising, even though it is going to force many banks into failure, even though it might force the government to default on its debt, even though its going to bring out a very severe recession, the Fed is going to have to raise rates anyway and start selling Treasuries not buying them. Or if it does not have the integrity, or the courage to do that, then its going to print even more money and the dollar is going to crash.

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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