저자: PeterSchiff · 외국인
요약 보기
PPI가 9월 1.3%(연율 17%)로 예상치를 크게 상회해 인플레이션이 Fed를 압도하고 있다고 주장. 워시 Fed 의장은 실질적 긴축 없이 말만 강하며, 대차대조표와 M2(연 6%)는 확장 중이라 비둘기파 행보. 국채이자 1.4조 달러로 재정 악화, 외국 중앙은행의 미국채 매도와 금 매수 예상. 모기지 미실현 손실 2조 달러 이상으로 금융 위기 가능성 경고. 금은 실질금리 하락 시 상승한다고 강조.
다듬은 글
Gold dropped half a percent on the week. Uh it closed at 4,145 approximately even though it should have gone up. That is good news. You can buy more gold at a cheaper price because traders don't understand what's going to happen. Silver was down even more. So you got an even bigger gift. Silver ended the week down about um 3%.
closed around $56.85. In fact, it did get as low as 55 and change intra week. This is a great buy getting silver back below $60, especially given all of the bullish news that came out this week that traders don't understand just how bullish it is. Gold dropped half a percent this week to close near $4,145 while silver slipped roughly 3% to settle around $56.85.
Paper traders see this pullback as a sign of weakness. But this temporary dip offers an exceptional buying opportunity for strategic precious metals investors. Peter Schiff, an acclaimed financial strategist and global asset manager, asserts that Wall Street completely misunderstands the macroeconomic landscape.
Mainstream markets assume hotter inflation readings will force central bankers to hike interest rates aggressively and shrink their balance sheets. However, with producer prices surging at a 17% annualized pace, central banks have already lost the monetary battle against persistent inflation. As real yields collapse, foreign central banks are expected to aggressively dump sovereign debt reserves and redeploy capital directly into physical commodities.
This structural flight from fiat paper will inevitably send bullion to new record highs with gold and silver soaring hundreds of dollars as money floods iold dropped half a percent on the week. Uh, it closed at 4,145 approximately, even though it should have gone up. That is good news. You can buy more gold at a cheaper price because traders don't understand what's going to happen.
Silver was down even more. So, you got an even bigger gift. Silver ended the week down about um 3%. Closed around $56.85. In fact, it did get as low as 55 and change intra week. This is a great buy getting silver back below $60, especially given all of the bullish news that came out this week that traders don't understand just how bullish it is.
All the news was hotter than expected, meaning inflation was higher than expected. Now, ironically, as has been the case for months and months and months, all of that bad news on inflation was actually bad news for gold and silver as far as the traders were concerned because they sold gold and silver.
And again, the reason they do that is that they interpret the worst than expected inflation news as a sign that the Fed is going to have to get more aggressive. It's going to have to get medieval in its fight against inflation. It's going to really jack up rates and maybe shrink the balance sheet. And it's that inflation fighting that has worried the traders and that's why they sell off gold.
But if they actually understood that the hotter than expected inflation numbers doesn't mean that the Fed's going to fight harder to beat inflation. It means the Fed has already lost. Inflation has won. That's what the numbers are showing you. The markets still don't understand that even if the Fed does hike rates two or three more times, it means nothing.
Inflation is accelerating far faster than the Fed is hiking rates. And in the meantime, the Fed, especially Kevin Worsh, he's all talk. Everybody thinks he's this tough inflation fighter. He's a Paul Vulkar reincarnate. It's all BS. He has been Fed chair for five months. And what has he done during those five months?
Hiked interest rates 25 basis points. Big deal. That's meaningless. And he's probably not even going to hike them another 25 basis points until December. So what? And look at the balance sheet. The Fed's balance sheet is bigger today than it was 5 months ago when he became Fed chair. And money supply M2 has been growing at close to a 6% annualized rate during the past 5 months.
Those are not the actions of an inflation fighter, of a hawk. Those are the actions of a dove. So Worsh is a dove in Hawk's clothing. Forget about what he says. Look at what he does. And pretty soon the markets are going to figure out that he's all bark and no bite when it comes to fighting inflation.
But let's look at the horrible numbers that we got that should have sent gold soaring hundreds of dollars an ounce this week if traders really understood inflation, interest rates, bond yields, the Fed, and if the Fed goes back into its inflation bag of tricks and tries the slight of hand of quantitative easing again and rate cuts, it's going to pour gasoline on that fire.
So, gold and silver traders right now are completely oblivious to what is about to happen. And this is exactly the way people were in 2006, 2007, even in the first half of 2008. We were very close to a crisis in the credit markets, in the housing markets, in the financial system. That was a consequence of rising rates.
Yet nobody saw it but a few people, myself included, until after the fact. Well, we're actually even closer now to an even bigger crisis. The problems are bigger. The real estate bubble is bigger. The banks that were too big to fail in 2008 are even bigger now and they're even more insolvent based on all the additional debt that has been accumulated.
And the government, we just got the report today that interest on the national debt is now $1.4 trillion. It is the second biggest line item in the budget. It exceeds Medicare. It's well above defense. The only expenditure that's higher is the $1.7 trillion we spend annually on social security. But by sometime next year, interest on the national debt is going to pass social security.
It's going to hit two trillion. Then it's going to hit three trillion. Then it's going to hit 4 trillion. And when that happens, our annual budget deficits will be 5 trillion, then 6 trillion. I mean, right now they're about 2.5 trillion, but they're going a lot higher. So, we were not in that predicament back in 2008.
And back in 2008, we can count on our friends. We can count on China and Japan, even Russia back then, the Saudi Arabia. Everybody was willing to finance our deficit spending and buy up our bonds. Now they want to get rid of our bonds. They don't want our bonds. And in fact, as inflation really heats up, they're going to start selling their treasuries even more.
And what are they going to be doing? They're going to be buying gold. Gold is the last safe haven standing. When inflation is hot, you buy gold. You don't sell it. You don't look at the bond market and think, "Oh, look, yields are rising. That's bad for gold." What you should think is that bond prices are falling.
That's good for gold. When bond yields are going up, that means by definition bond prices are going down. And that means that people who own bonds or central banks who own bonds are losing money. Well, if you want to avoid losing even more money, what do you do with your bonds? You sell them. And then what do you do?
You buy gold. These nominal yields are meaningless. Because if inflation is 10% and your bond is paying 5%, you're not going to get excited even if the bond goes up to 7%. Because you're still losing 3%. So if you want to avoid losing 3%, you buy gold because gold preserves your purchasing power that you would lose if you just held government paper.
Even if they give you back some of what you lose in interest, net, you're a loser. So money is going to be flowing into gold. Money is going to be flowing into silver. The United States federal balance sheet is confronting a historic debt spiral. Annual interest on the national debt stands at an unprecedented $1.4 trillion, ranking as the second largest line item in the entire federal budget.
This debt servicing cost already surpasses both national defense expenditures and Medicare, trailing only social security. Concurrently, annual budget deficits stand at approximately $2.5 trillion, forcing immense Treasury bond issuance onto global credit markets. In previous decades, foreign powers such as China, Japan, and Saudi Arabia willingly financed domestic deficit spending.
Today, these sovereign buyers are actively offloading American paper rather than absorbing new supply. Meanwhile, the domestic money supply expands at a 6% annualized pace while the central bank balance sheet remains bloated. Under these conditions, relying on quantitative easing and rate cuts pours immediate fuel onto underlying cost of living pressures.
Now, let's get back to the interview. This came out on Thursday. We got the PPI, and if people thought the CPI was bad, the PPI was way worse. And what's also worse about the PPI being so bad is that it's a leading indicator for the CPI because before consumer prices go up, producer prices go up. That's the chain.
The businesses, their costs go up, their prices, and then they pass that on to the consumer. So if you want to know what's going to happen to consumer prices in the future, you look at producer prices today. And when you look at producer prices, it is an ugly picture. So the consensus forecast was for producer prices to rise by.5%.
And that would have uh been a little bit more than the 4% in the prior month. Instead, they rose by 1.3% on the month. That's almost triple what analysts had been expecting. And again, if you annualize that number, that's 17%. Producer prices rose at an annualized inflation rate of 17% in September.
Does that sound like the Fed is winning the battle against inflation? It's it it seems like inflation has crushed the Fed year-over-year. They were looking for a 5.6% increase in producer prices. Instead, they rose by 6.3%. The core was supposed to rise by.3 and it rose by.7% on the month. Annualize that and you're at 9%.
9% core inflation. Inflation is running away and the Fed is asleep at the switch. In fact, Worsh gave a speech I think last night or early this morning that got everybody excited because even though he already had all these bad inflation numbers, during his speech, he didn't express any concern about these numbers or that it meant that the Fed had to be any more aggressive than they already were.
And that caused the expectations of a rate hike in October before the election to collapse from about 40% 45% down to about 15%. And there is a crisis brewing in the mortgage market because of the losses that are being suffered now on paper by mortgage lenders. Think about this. There are now over $8 trillion of fixed rate mortgages outstanding with an average duration left of 25 years.
So this is great for the borrower. The average coupon, the mortgage rate on those eight plus trillion dollars of mortgage debt is 4.6%. That's the average. Obviously, some people have less than that. Some people have in the threes, some people have in the twos. I've got one that's 3 and 38 myself on my my Connecticut house.
But so the average is 4.6. The current rate is 7 1/2. Well, what happens if you wanted to sell your mortgage? If you own a mortgage or mortgage back security and it's paying you 4.6%. But the market is 72. You're not going to get par. You're not going to get 100 cents on the dollar. You're going to get a huge discount right now.
the unrealized marktomarket losses which the lenders are not marketing to market but these are the losses. mortgage lenders, and these are banks or mostly banks, but insurance companies and funds, whoever owns them, are $2 trillion. And when mortgage rates go up another percent to 8.5, and they're going to go higher than 8 1/2, but when mortgage rates hit 8.5%, the unrealized losses are going to be $3 trillion.
And this is without anybody defaulting. To put this in perspective, during all the years of the global financial crisis, let's say 2007 through 2010 in the US, the total losses on defaulted mortgages that the banks had to write down was about $450 billion. That's a lot of money, but it's nothing like the two trillion that they're underwater now on paper.
But this is another important comparison. So because the Fed slashed interest rates to zero during the financial crisis, the value of all the mortgages that didn't default went way up. Only 10% of the mortgages defaulted. 90% kept paying. Those mortgages increased in value dramatically because the banks, you know, were borrowing at near zero from the Fed and they were collecting four, five, six, 7% on these mortgages.
So the unrealized marktomarket gain on the mortgage book for the mortgage lenders was about 1.3 trillion. So the actual losses were a lot smaller about a third of the marktomarket gains. So mortgage lenders actually came out okay. They made money because of the increase in the value of the mortgages that stayed current.
Now, today, the mortgage lenders are losing money on all of their mortgages, 100%. They're losing money on the mortgages that are current, and they're going to lose money on the ones that default. And here's why you're going to get defaults. People can't afford to buy homes right now because the mortgage rates are too high, and they're going to go even higher.
when mortgage rates hit 9%. Which they easily will do unless the Fed just starts a massive QE program to buy mortgage back securities, which it might do. But if mortgage rates are at 9%. In order for a potential home buyer to afford a house that he could have bought when the mortgage rate was 3%. In order to have the same monthly payment, the price of the house has to fall by 50%.
That's how important mortgage rates are. A massive structural dilemma is quietly destabilizing the residential lending system and commercial banking sector. Financial institutions currently hold over $8 trillion in fixed rate mortgages with an average remaining duration of 25 years. These assets carry an average coupon of just 4.6% creating a severe balance sheet mismatch against current market mortgage rates of 7.5%.
As a result, institutional lenders face over $2 trillion in unrealized marktomarket losses on paper. This dynamic presents a stark contrast to the 2008 financial crisis. During that collapse, banks absorbed $450 billion in writeowns from defaulted mortgages. However, when benchmark interest rates were slashed to zero, the 90% of loans that remained current surged in value, producing 1.3 trillion in unrealized capital gains that offset bad debts.
Today, mortgage lenders face severe capital erosion across 100% of their portfolios, sustaining losses on both performing and non-performing loans. Furthermore, the underlying payment mathematics severely restricts consumer purchasing power. To meet the monthly payment on a 3% mortgage at today's elevated rates, home valuations must be discounted by 50%.
This systemic balance sheet impairment locks banks into underwater credit exposure. .
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