저자: PeterSchiff · 외국인
요약 보기
연준의 실질 긴축 부재와 재정·부채 위기로 달러 신뢰가 약화되며 금·은이 10배 상승 가능하다고 주장. 생산자물가 상승률 연환산 17%, 모기지 금리 7.5%로 미실현 손실 2조달러, 주택가격 20~30% 하락 및 연쇄 부실을 경고. 금·은 급락 시 매수 권고, 해외·원자재 분산 투자 제시. 해설은 연환산 오용과 시점·결과 과신을 지적.
다듬은 글
After all, this is the best thing that can happen to gold and silver. I think we can grow 10 times again, given the continuation of the policies that caused the initial ten-fold growth. Look at the numbers we got today on producer prices: a 1.3% increase over the past month. In annualized terms, this is 17% per year.
So, sooner or later there will be a sovereign debt crisis or a dollar crisis, because it's either runaway inflation or a default. Current mortgage rates are 7.5%. Unrealized losses are estimated at $2 trillion by market valuation. So when you see these kinds of sell-offs in gold and silver in response to what is actually upbeat news for them, you buy.
Gold now seems to have fallen to around $80 on the lows. It closed down $55, i.e. it rebounded and closed above 4,100. Silver was hit hard. It's down about $3.50 as I record this podcast. It costs about $55.50. This is a great price. Perhaps this is a new low for silver's movement. I'm not sure. This is definitely not a new low for gold, because I remember gold being below 4,000.
But I don't know if I've ever seen silver this cheap. I mean, it was close to that, but now is a great time to buy both metals. And if we get a bad PPI tomorrow and you're lucky enough to see an even bigger sell-off, then it's an even better buy. Well, I think the dollar is already losing its dominance.
If you look at the dollar's share of total reserves, it has been falling for many years. Central banks now hold more gold than dollars or US Treasury bonds. This is partly due to the rising value of gold, not just its acquisition. But central banks continue to get rid of dollars and accumulate more gold.
So, this trend exists. And I think that's what will eventually replace the dollar. It will not be the euro , the yen, the pound, or the yuan. This will be gold. Foreign central banks will hold more gold and fewer dollars and Treasury bonds. So, this will significantly change the rules of the game, because now we will have to finance our debts domestically.
Which we cannot do because we have a very low level of domestic savings. And that means that the interest rates have to be much higher, which we again won't be able to afford to pay. So that's why we will have a crisis. And I believe that if the Fed ends up monetizing a significant portion of this debt so that the government doesn't have to cut spending and default, then we'll just destroy the value of the dollar.
And this is exactly the method by which we will reach default. Why are bond yields rising ? Because inflation has become higher. Well, that's why you should buy gold. You buy gold as a hedge against inflation. Now I see the markets taking this and saying, "Oh, this high inflation means the Fed, led by this ' hawk' Kevin Warsh, has to step up its game." They will have to fight even harder.
They will have to launch a real crackdown on inflation and seriously raise interest rates. So, it's going to hurt gold because the Fed is going to be too tight." This is all complete nonsense. Maybe that's what Warsh wants the markets to believe, but it doesn't matter what this guy says. All these big statements don't hold up to scrutiny because he doesn't back up his words with action.
Warsh has been at the helm of the Fed for about five months now . What has he done to fight inflation in those five months? Raise rates by 125 basis points? What the hell is that ? It's nothing. Also, look at the money supply. Did he shrink the money supply? No. The money supply is growing. Did he shrink the balance sheet?
No, the balance sheet is growing. So he's not acting like a "hawk." He's acting like a "dove." He's a " dove" in the clothing of a " hawk." He's fooled the markets. And if it takes, say, a few more years to get there, and by that time our $ 40 trillion in national debt would become $50 trillion. Assuming we had to finance all of that debt at 8%, which, you know, is quite possible, because all of this short-term debt is constantly maturing and needs to be refinanced.
But 8% of $50 trillion is $4 trillion a year in interest payments. Gold falls after an inflation shock. Does this mean that the inflation hedge has failed? The answer depends on what investors expect next. If markets expect the Fed to respond with tighter policy , higher yields and a stronger dollar could put immediate pressure on gold.
But if inflation persists and debt pressures make such a response difficult, the long-term case for gold becomes stronger. That's the central tension in this debate. How much tightening can the financial system withstand? However, one distinction matters . Annualizing one month's rise in producer prices does not determine the level of inflation over the next 12 months.
months. It just shows what would happen if this pace were to continue. The strongest part of this argument is the conflict between containing inflation and financing the debt. The weakest part is to treat every sale as an automatic opportunity to buy. There is no way we can do that. Because to do that we would have to borrow all of that $4 trillion.
So that would add almost $3 trillion to the current government deficit, which is now approaching $3 trillion. I mean, the official deficit is about $2 trillion, but the government debt is growing at over $2.5 trillion a year. So that is the real debt. But if we are already close to $3 trillion, and we have to borrow another $ 3 trillion to pay the interest on the debt, that would mean that our annual budget deficit would be $6 trillion.
That would be more than 100% of tax revenue. The government would be borrowing more money than it collects in in the form of taxes. These numbers are so huge that there is no realistic way the government can make these payments. So, unless they hyperinflate, default is the only other alternative. So either way, we are in for a crisis.
This is proof that the Fed has already lost the battle against inflation. I don't care if they raise rates two or three more times, 25 basis points each. It won't matter. Inflation is rising faster. What if inflation hits 5%, 6% or higher in the next 12 months? Even if the Fed raises the federal funds rate to 5%, it will still be negative.
The rate is still below the rate of inflation. That's a positive signal for gold. If interest rates aren't high enough to compensate for the loss of purchasing power, they are worthless. Gold is a hedge against falling bond prices. That's what's happening. Remember when we say about rising bond yields, that means bond prices are falling.
The bond market is in a bear market right now. So if you're holding bonds, you're losing money. If you want to avoid those losses, you need to sell your bonds. So what do you have left? What do you buy as a safe haven? If you were using bonds, what do you replace them with if your safe haven isn't so safe?
If you're losing value in your safe haven, you buy gold. 60% of stocks are down more than 20% from their peak. So, you know, if you're not just buying the top seven and a few other AI-related companies or energy. I mean, energy stocks have done pretty well too. But, you know, with the exception of a few specific sectors of the S&P 500 , maybe 60 or 70 stocks , the rest are nowhere.
are not moving or are in a bear market. So I think people are hoping that the soldiers will follow the generals. But if history teaches us anything , it's that the generals will follow the soldiers. Because the last two times in the history of the U.S. stock market, when there was this bad performance, that is, so few stocks were going up compared to the ones going down.
There were only two times when it was this bad: 1973 and 1999-2000. And after both of those extremes, the S&P fell almost 50%. So I know, you can say that this time is different , because, you know, everyone always says that this time is different , but maybe it's not. Maybe this time it's the same as the last two times.
In that case, you know, we're in for a big bear market. If you just look at the eight trillion dollars of mortgages outstanding, mortgages with fixed rate. I'm just talking about fixed rate mortgages. They currently have an average term of 25 years. And an average interest rate of 4.6. Some are lower , some are higher, but the average is 4.6.
Current mortgage rates are 7.5. The unrealized losses by market valuation are two trillion dollars. That's about four times the actual losses during the financial crisis. But it gets worse. If mortgage rates go up to 8.5%, which I think they will be by early next year, if not higher, that would be three trillion dollars in losses.
And that's without taking into account any defaults. But if mortgage rates go to 8.5%, I expect home prices to fall by 20 to 30% or more, which would trigger a wave of defaults and foreclosures. Where the real losses are going to be. But these the losses will not be offset by unrealized gains on other mortgages .
They will only increase the unrealized losses . You see, in 2008, lenders only lost money on mortgages that were in default. They made money on all the others . Now lenders are losing money on all mortgages, whether they were in default or not. Every mortgage is now in loss. So it's...it's a disaster.
And how much you're willing to pay depends on the mortgage rate. In fact, if mortgage rates go up to 9%, which I think we'll be at early next year, to make the monthly payment the same as a 3% mortgage, you have to cut the price of the house in half. That's a huge difference. So prices have to go down.
And of course, it's not just that mortgage rates have gone up. Insurance has become more expensive. Utilities have become more expensive. Taxes have become more expensive. Maintenance has become more expensive. So everything about owning a home is more expensive. That means the buyer has to pay less because they have to be able to afford all of these costs.
And once enough homes are sold for 20% to 30% less than they were before, you reset the entire housing market, because home prices are based on comparable sales. Your home is worth what your neighbor's home sold for. And so once we reset the prices, suddenly millions of people who have mortgages at 4% or 3%, maybe they have good terms, but they're going to be underwater because their mortgages are going to be much more than the value of their homes.
They're going to have negative equity. I think they're going to go bankrupt again. I mean, they're already in receivership, but I think they're going to need more one bailout. Everyone talks about how much money the federal mortgage agencies are making. Well, they're losing a fortune on their mortgage portfolio.
They have a huge number of mortgages that they're losing a lot of money on. But as mortgages start to go bad, they insure over 7 trillion of those loans. So if 10 % of them go bad, like they did in the 2008 financial crisis, that's 700 billion. And if the lenders lose, say, 20% of that, that's 140 billion .
You should buy physical gold and silver. That's why I have Shift Gold. That's why I encourage people to go to Shift Gold and buy gold and silver. You know, Grant Cardon may not think 10x is a good return, but I think it's a good return, and I think we can get back to 10x, based on the continuation of the policies that caused the first 10x.
So I think you should buy gold and silver. You should also diversify your holdings. The U.S. market is expensive, but there are many overseas markets that are not, especially if you're looking for bargains. If you look at emerging markets, the resources sector, you know, commodities, resources, and energy.
So I think there's a way to structure your portfolio in a way that insulates you from a lot of the financial carnage that I think is going to devastate the portfolio of the typical American investor. The most important issue here is the potential for multiple financial pressures to reinforce each other.
Higher borrowing costs could gradually increase the government's interest bill as it repays existing debt. They also reduce the market value of older fixed-rate bonds and mortgage-backed securities. Meanwhile, expensive mortgages weaken housing affordability and can put pressure on demand for it. But these relationships need to be interpreted with caution.
An unrealized loss on a mortgage-backed security is not the same as a borrower defaulting. And a security trading below its purchase price does not mean that the homeowner owes more than the house is worth. These are different problems with different consequences. The danger increases when an institution needs cash and is forced to sell impaired assets, or when borrowers stop making payments.
That’s when market losses and credit losses can become more severe. Calculating debt also requires context. $50 financed at 8% will yield $4 in annual interest. The arithmetic is correct . But applying that rate to the entire debt is a scenario, not an immediate outcome. Refinancing happens over time.
For precious metals, the key question is whether investors will start demanding protection against both inflation and and from financial instability. Gold could benefit if confidence in sovereign debt weakens. Silver could also participate, but its industrial exposure creates additional vulnerability.
An economic slowdown could hurt demand even if monetary concerns support precious metals. This makes a 10x increase a speculative outcome, not a foregone conclusion from these figures. There are also more possible policy paths than immediate default or hyperinflation, including fiscal changes and a prolonged period of inflation that erodes purchasing power.
In my opinion, the speaker identifies a serious vulnerability but presents its timing and outcome too confidently. Watch refinancing costs , credit stress, inflation expectations, and actual policy decisions. These events will tell us whether this warning turns into a broader crisis.
Comments 0