저자: PeterSchiff · 외국인
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Fed의 긴축 발언에도 실제 행동은 없어 금·은 하락은 매수 기회라고 주장. 일본 국채·엔화 약세가 미국의 미래 시나리오이며, 일본 부채 위기가 임박했다고 경고. 일본 금리 상승과 엔 약세 흐름을 강조.
다듬은 글
Gold sold off about 50 bucks. So, gold around 4135. Silver's down 58 cents. None of these politicians are willing to do what it takes to actually solve the problems that they created. It's a vicious cycle that you can't get out of. So, and this is a look into America's future because we're on the same trajectory as Japan.
We just don't have a big stock pile of foreign assets. We could try to sell our gold. That that would open up a whole new can of worms for the United States. Gold has sold off again is just an opportunity for people to buy more. The balance sheet expanded by another 11 billion. Warsh is there. They don't care if it crashes after somebody else takes the wheel.
They just want to make sure they don't get blamed for it. Just to pay interest on the national debt. This is an incredible crisis in the making. I think that there is a chance that you see pronounced weakness. If the yen breaks down here, this is a big deal. This is a crisis. Japanese government has about 1.2 trillion in foreign reserves.
Vast majority in US Treasuries. That's a disaster waiting to happen. Now, the gold market, again, is still not reflecting this. In fact, when our markets were closed yesterday, gold was not yesterday, Friday. Gold sold off about 50 bucks. Uh a lot of that, again, is based on the tough talk uh uh um uh from uh Warsh about fighting inflation and price stability.
And as I'm recording this podcast, gold's down another 18 bucks on top of the 50. So, gold's around 4135. Silver's down 58 cents. It was down over a buck Friday. So, trading just over 64. I don't believe any of this tough talk. It's easy to talk tough. The hard part is to walk that walk. It's not going to happen.
He's just trying to gain some credibility. He's the new sheriff in town. He's going to try to make a lot of noise. It's going to be different, right? I'm going to I'm going to get rid of inflation. I'm going to do what Powell failed to do. No, he's not. Because for the same reason Powell failed, Walsh will fail.
Because he can't fight inflation. Actually, he can't shrink the balance sheet. He can't raise interest rates high enough for the same reason that Japan can't do it. And that's why they're not doing it. None of these politicians are willing to do what it takes to actually solve the problems that they created.
The one thing they can do is pretend that they're willing to solve them, but they can't actually try without exposing the real gravity of the situation that they don't want to acknowledge. So, the fact that gold has sold off again is just an opportunity for people to buy more. The strength in the dollar is the same thing.
The dollar has strengthened somewhat based on an expectation that will not happen. What if the recent drop in gold and silver isn't a warning sign, but one of the biggest buying opportunities of the year? Peter Schiff believes investors are focusing on the wrong story. While markets react to tough Federal Reserve rhetoric, Schiff argues the real problem is exploding government debt, central banks trapped by their own policies, and a growing crisis brewing in Japan that could eventually spread across the global financial system.
And according to Schiff, what's happening in Japan today could be America's future tomorrow. And even if uh the Fed does come through with a couple of quarter point rate hikes, it doesn't matter. It's spitting in the ocean. What the Fed would need to do with interest rates and its balance sheet, it's not going to do.
In fact, if you look at the government balance sheet, we got the numbers again uh last week, the balance sheet expanded by another 11 billion. Walsh is there. He's the chair of the Fed. Why did he expand the balance sheet last week? What's he waiting for? If he's going to be tough on inflation, why not get tough now?
Again, why didn't he already raise rates? Why didn't Why didn't he vote for a rate hike in his first meeting? Because he doesn't want to. He wants to talk about it. Sure, he wants to get credit for talking, but he doesn't want to actually act because he doesn't want to have to deal with the consequences of acting, but the consequences of not acting are going to be much worse.
Just like the consequences of Japan not acting are going to be worse for Japan. So, why don't they act? For the same reason that our politicians and our bankers don't act. Because they don't want to deal with the problem today. They want to kick the can down the road and hope somebody else deals with it tomorrow.
Even though the somebody else deals with a bigger problem with even more profound consequences, they don't care because these are politicians. They don't care about what They just care about what happens while they're at the helm of the ship, right? They don't care if it crashes after somebody else takes the wheel.
They just want to make sure they don't get blamed for it. But, you know what? Everybody who's had the wheel is to blame. All of the past Fed chairmen, all the past presidents and the BOJ, and the prime minister of Japan that have continued on this path, they all are to blame. Everybody has had the ability to do something about it, yet nobody did.
And unfortunately, you know, academia doesn't hold people accountable, the investment community doesn't hold anybody accountable because nobody wants to upset the apple cart because a lot of people are getting rich off of this. And so, they don't want to do anything to disrupt that gravy train even though in the end the gravy train is going off the edge of a cliff.
You know, um Adam Schiff, you know, he probably looks at all the people on welfare and food stamps, oh, these are the deserving people. What do they deserve? What are they doing? They're not doing anything. Talk about paying your fair share. Those are the people who don't pay their fair share. People living off of government.
People who don't even have jobs. People who just get a check from the government. Why doesn't the left ever say, "Hey, you're on welfare, you're on food stamps, you need to pay your fair share. You need to do something. You need to contribute to society." No, they look at the people who are contributing the most to society, who are paying the most amount of taxes, and those are the ones that supposedly aren't doing their fair share.
Again, I agree with that. The wealthy are not paying their fair share of taxes. They're paying way more than their fair share. If you want the rich to pay their fair share, then they need a tax cut. That is the reality. Now, I don't like the entire tax system. I agree uh with Adam Schiff about that.
We have a bad tax system. We should eliminate it. Not because I want fewer wealthy people, but because I want more. I want the government to be poor, not the people. I want the people to be rich, and the way you get rich people is to have a poor government. Because the government only has what it takes.
So, if you enrich the government, you impoverish the people. That is what uh the left does. That is That is the empty promise of socialism. It sounds great. Hey, let's just take money away from these rich people so we can have it for ourselves. Stealing from the rich and spending their money, you shoot yourself in the foot.
Every country Look look look at the Soviet Union. Look at Cuba. Uh look at North Korea. Look at every communist experiment that has failed. There's never been one that succeeds. Yet, the left wants to keep touting out these false promises, but the the one thing that they do work at is they get you votes because the public, they don't know, especially the dumbed-down Americans who are the product of our failed public government school system, they don't know.
They believe this nonsense. Yeah, take his money. You know, let you know, let us have it. Right? They they don't understand uh the consequences. Anyway, speaking of consequences, I've I've warned about this, but I'm watching this and everybody needs to pay attention uh to what's going on in Japan. All right?
The Japanese yen is starting to really break down. We're at a very uh important, maybe inflection point in in that currency. The Japanese yen is 161 and a half. Now, going up means the yen is going down. It means that you can buy more yen with your dollar. And about 160 was kind of like a key level.
And we're now through that level. And the Bank of Japan is intervening or threatening more intervention to try to kind of draw a line in the sand. But remember, they drew a line in the sand uh in at the 10-year JGB. Remember, they said we're not going to let the rate on the 10-year Japanese government bond get above a half a percent.
That was their original line in the sand. Well, now it's at 2.65. It's It's It's way above where they said they weren't going to let it go. And if you remember on my podcast, I said at the time, there's no way they're going to defend this, that rates are going a lot higher. The big increase in rates is exactly what I predicted was going to happen.
And in fact, the the yield on the 10-year Japanese government bond got as high as almost 2.8, got to like 2.77. Now it's 2.65, but it's going to take out that high. There's going to be a lot of upward pressure on bond yield in Japan. The 30-year Japanese government bond, they don't have as many of those, uh they actually got up to 4% uh not too long ago, a few weeks ago.
Right now we're at 3.78, but we're going to go through 4%. But think about the gravity of the crisis that could hit Japan. And this is not about a strong dollar. This is about a weak yen. The yen is dropping against everything. Yes, the dollar index is a bit over 100, but the Japanese yen is falling against the euro, falling against the pound, it's falling against, you know, all these other Southeast Asian currencies, against the Australian dollar, against Canadian dollar.
So this is a weak yen. This is not a strong dollar story. Gold recently fell more than $50, dropping near $4,135, while silver also pulled back sharply. But Peter Schiff says investors shouldn't be fooled by the sell-off. The market is reacting to promises of tougher inflation-fighting policies from the Federal Reserve.
However, Schiff argues there's a huge difference between talking tough and actually taking action. According to him, the Fed simply cannot raise rates high enough or shrink its balance sheet enough to solve inflation without creating a major economic crisis. In fact, while officials continue talking about tightening policy, the Fed's balance sheet recently expanded by another $11 billion.
Schiff believes policy makers are doing what they've always done, kicking the can down the road and hoping someone else deals with the consequences later. But his biggest concern isn't gold. It's Japan. The Japanese yen has weakened significantly, breaking through key levels against the US dollar. At the same time, Japanese government bond yields continue rising despite years of efforts by the Bank of Japan to keep them under control.
Why does this matter? Because Japan's debt-to-GDP ratio is around 250%, one of the highest in the world. Schiff warns that if interest rates continue rising, the government could end up spending most or even all of its tax revenue just paying interest on its debt. That's the definition of a debt trap.
To make matters worse, a weaker yen increases import costs pushing inflation even higher. That creates a vicious cycle. Higher inflation leads to higher rates, higher rates increase debt costs, and governments respond with more money printing which weakens the currency even further. Schiff says this is exactly why gold remains attractive despite short-term volatility.
And here's the bigger warning. He believes the United States is following a similar path. Unlike Japan, America runs massive trade deficits and is the world's largest debtor nation, making the situation potentially even more dangerous if debt servicing costs continue to rise. For Schiff, the current gold pullback isn't a reason to panic.
It's a reminder that the long-term debt crisis hasn't gone away. Although the dollar inching higher is adding to the pressure on the Japanese yen. But debt to debt to a GDP in Japan is about 250%. So, it's about double what it is in the United States. They are now running annual budget deficits of about 200 billion.
Now, I I'm dollarizing this. Obviously, it's all in yen, right? I'm just expressing it in dollars so you have some idea of of what it means. So, their annual budget deficits are about 200 billion dollars, which is about 4 and 1/2% of GDP, which is a big deficit, 4 and 1/2% of GDP. Um total debt, the national debt of Japan is 8.3 trillion.
Now, that's small compared to our 40 trillion, but you know, they're a much smaller country. I mean, the whole I mean, geographically, it's about the size of California, but it's a much smaller economy uh than ours. The Japanese government collects about 500 billion a year in taxes. So, if interest rates go to 4% and they're already about there on the long end.
The If you The The shorter rates are not quite there, right? You got 2-year government bonds at 1.4, 5-year at just, you know, 1.9, but there's going to be a lot of pressure. But, imagine if interest rates went up to 4%, which is not outrageous. That's about where we are, right? We're at about 4%. Uh what happens if Japan gets up to 4%?
Well, then the Japanese government is going to be spending 2/3 of their taxes. 2/3. Paying interest on the national debt. 2/3. If interest rates in Japan get to 6% and, you know, they've been 6% in the past, years and years ago, and they've certainly been a lot higher than 6% in America. But, a 6% interest rate would be enough to consume 100% of Japanese tax revenue, just to pay interest on the national debt.
This is an incredible crisis in the making. I think that there is a chance that you see pronounced weakness. If the yen breaks down here, this is a big deal. This is a crisis. Now, the Japanese are sitting on The Japanese government has about 1.2 trillion in foreign reserves, the vast majority in US Treasuries.
They need to sell that at a minimum. But that would only repay about 15% to 16% of their national debt. They're not out of jail if they dump all their treasuries, but at least it's something. They got to do that. But even without doing that, just a breakdown in the Japanese government bond market and the Japanese yen is going to be a problem.
But then, when the Japanese government has to do something about it. But right now they're doing nothing about it. They're They're running these big deficits even though there's a ticking time bomb. They should be running budget surpluses now. They should be paying down this debt, but politically they can't do it.
Meanwhile, if you look at import prices year over year. Now, some of this obviously you can say is war related. But import prices in Japan are up 25% year over year. That's a big number. A lot of that is food, a lot of that is energy, but people need food, people need energy. You've got a lot of upward pressure on inflation that is going to exacerbate if the yen continues to depreciate, which of course directly impacts import prices.
And a weakening yen is going to put more downward pressure on Japanese government bonds, which puts more pressure on the JGB to monetize government bonds, to print more yen, to buy more bonds, which weakens the yen, pushes prices up, pushes bond yields up. It's a vicious cycle that you can't get out of.
So, and this is you know, a look into America's future because we're on the same trajectory as as as Japan. We just don't have a big stock pile of foreign assets. We could try to sell our gold, but that that would open up a whole new can of worms for the United States. Um and you know, Japan still has um a lot of exports relative to its imports.
Even though they're running budget deficits, their trade deficits are are not huge like ours. And Japan is still a net creditor nation, meaning the Japanese still own more foreign assets than foreigners own Japanese assets. So, that gives the Japanese a position of strength to deal with a massive crisis that America doesn't have.
We're going to get into our crisis from a position of weakness with huge trade deficits on top of our budget deficits and the fact that we are the world's biggest debtor nation. It's going to compound the problem. We just haven't had it yet, but it's obvious that these overly indebted governments are getting closer and closer to a day of reckoning.
Nobody is worried about it. Nobody is talking about it. I mean, nobody important. Yes, I mentioned Hank Paulson said we need a plan, an emergency break the glass plan, to deal with this crisis when it happens. Not a plan to try to prevent the crisis from happening because the crisis is inevitable. There's no way we're going to do something to prevent it from happening.
So, we just resign ourselves to have to react afterwards, but that's not a plan. So, is this just another temporary correction in gold and silver or are we witnessing the early stages of a much larger sovereign debt crisis? Peter Schiff believes the warning signs are already flashing in Japan and eventually the rest of the world may be forced to confront the same reality.
What do you think? Is gold still the ultimate safe haven or is the market overlooking something bigger? Let me know in the comments below. If you enjoyed this analysis, don't forget to like, subscribe, and turn on notifications for more updates on gold, silver, and the global economy.
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