저자: PeterSchiff · 외국인
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연준의 인플레이션 대응으로 주택·채권 시장 위기가 올 것이며, 정부 부채 누적으로 국가부채 위기와 붕괴가 불가피하다고 주장. 달러 기축통화 지위는 약화되고 있으며, 실물자산(귀금속·원자재·에너지·신흥국)이 인플레이션 헤지로 유리하다고 봄. 미국 주식 다수는 이미 20% 이상 하락한 약세장이며 소비자 신뢰는 역대 최저라고 진단.
다듬은 글
it's going to be a bond crisis. I you know, a sovereign debt crisis. That That's the only thing that's going to stop the debt train is, you know, a a a crash. Uh but until then, you know, we're going to go right now we're a little over 40 trillion, but we're going to go 45 trillion, 50 trillion, 60 trillion, 70 trillion until there's a complete implosion.
Now, maybe that's going to happen before we get to 45 trillion. I you know, I don't know. I don't know where the breaking point is. I just know that it's there and we will eventually find it because we're not going to stop until we find it because there is no political incentive to avert the crisis.
All the incentives are wait for the crisis. So, the crisis is inevitable. If the Fed continues to fight inflation, we will have a housing crisis that will make 2008's financial crisis look like a Sunday school picnic. You know, we've been losing purchasing power ever since we went off the gold standard.
It's just been accelerating. In fact, even the Fed acknowledges that their goal is that we only lose 2% of our purchasing power on an annual basis. So, by design, we're losing purchasing power, but I think we're losing it a a lot faster than that and the Fed has lost control. Look at the numbers that came out on producer prices.
If you annualize September's increase, the 1.3% gain, that's 17% annualized inflation at the wholesale level. And obviously, it's going to you know, come down to the consumer because businesses always pass on their their costs to their customers. Uh and and the you know, the CPI numbers that we got you were bad, but these numbers are worse, which means future CPI numbers are going to be worse.
So, it is a big problem and the bigger problem is there's nothing the Fed can do to stop it. Nothing that's politically feasible because we'd have to raise interest rates so high and shrink the money supply and shrink the balance sheet that we would collapse the entire economy that's been built on a foundation of of debt and artificially low interest rates.
So we're in a very very precarious position right now. Well, and it's not even just a recession. It's a complete financial crisis of spectacular proportion. But during the entirety of the uh global financial crisis from 2007 through 2010, losses on mortgages on defaulted mortgages were about 450 billion.
But because interest rates fell so much, the 90% of the mortgages that didn't default actually rose substantially in value. I think banks had mark unrealized mark-to-market gains of over a trillion dollars on their book of mortgages. Today, unrealized losses on existing mortgages are 2 trillion dollars.
You've got um 8 trillion dollars of fixed-rate mortgages that don't mature for another 25 years with an average rate of 4.6 but a current rate of 7 and 1/2. And when mortgage rates hit 8 and 1/2, the unrealized losses will be 3 trillion dollars. Th- Th- This is dramatically more than was lost during the financial crisis.
And this is without any defaults. This is how much they're losing on the mortgages that don't default. Of course, they'll lose even more on the ones that do. But th- th- We've never been in this situation. If the Fed continues to fight inflation, we will have a housing crisis that will make 2008's financial crisis look like a Sunday school picnic.
It's going to be a bond crisis, a you know, a sovereign debt crisis. That That's the only thing that's going to stop the debt train is, you know, a a a crash. Uh but until then, you know, we're going to go right now we're a little over 40 trillion, but we're going to go 45 trillion, 50 trillion, 60 trillion, 70 trillion until there's a complete implosion.
Now, maybe that's going to happen before we get to 45 trillion. I you know, I don't know. I don't know where the breaking point is. I just know that it's there and we will eventually find it because we're not going to stop until we find it because there is no political incentive to avert the crisis.
All the incentives are wait for the crisis. So, the crisis is inevitable. Well, the dollar's reserve status is the reason we've been able to run up so much debt and it's the reason that we've been able to do it with interest rates as low as they've been. Now, that that is in the process of of changing.
Uh but yes, I do believe that the dollar's days as the world's reserve currency are numbered. I just don't know how big that number is, but it's a lot smaller than it used to be. I think all the banks that we bailed out in 2008 because they were too big to fail, they're a lot bigger now Yeah. because of the bailouts.
But I think financially they're in worse shape. As I just said, they're holding all these mortgages. I mean, not all of them, but the majority of the 8 trillion in mortgages that have 2 trillion in unrealized losses are held by the banks. But not only do they have trillions in losses on mortgages, they've got trillion in losses in treasuries that they're holding.
And And other long-term debt instruments that are on their balance sheet. And as rates continue to rise, those losses continue to mount. That's part of the problem with the Fed raising rates. The more rates they raise, the further, you know, impaired the the the bank's balance sheet become. And then when these banks start to fail, which they will, just like Silicon Valley or Signature Bank, when these banks start to fail, now you've got to liquidate their mortgage portfolios, liquidate and now you have to realize those unrealized losses.
So, that that's the going to put a lot of pressure on the Fed not to hike rates, to cut rates, despite inflation getting worse. And when they do that, then inflation will get even worse than that. Look at France, look what's going on there right now. France has almost as much debt to GDP as we do. Uh so, that there's a big problem there.
Um and you know, there are a lot of other countries in Europe that that have these problems. Look at Japan, look what's going on there, look at all the debt they have. Um rates are rising. I mean, the chickens are coming home to roost for all the sovereigns that have been living on borrowed money and selling too much debt.
They all were making hay while the sun was shining, it was great because interest rates were low, so they kept borrowing and borrowing and borrowing without any consideration for the consequences that would ultimately befall them when interest rates inevitably rose cuz they weren't going to stay down forever.
They had to go up eventually. And so, the crisis that we're heading to was inevitable the entire time. That's why I was warning about it for so long. Because I I was, you know, obviously I wanted the governments to do something to avert the crisis, but I was pretty confident that they wouldn't, but I at least wanted to sound the alarm so that individuals A can do something to protect themselves, but B, so that when the crisis happened, not only could I say, "Yeah, I told you so." but I could explain why that the crisis was caused by government and by central banks, not by some kind of inherent flaw in capitalism.
If we really had capitalism, the conditions that created the crisis never would have developed. They only developed because of socialism, because of the government interference in capitalism, and what they did to distort the markets and inflate the bubbles that inevitably always pop. Uh the the only thing that may change it would be if the productivity improvement from AI is so dramatic that prices decline.
Now, if it wasn't for all the inflation, the prices would decline a lot more. So, let's say AI is so productive that it that it causes prices to fall by 20% a year. Like everything gets 20% cheaper every year. Well, if inflation is, you know, 22%, then we get 2% inflation. Right? So, we still have prices going up, but if we didn't create all this inflation, we didn't print all this money, prices would have gone way down, which would be a good thing.
Because it's always a good thing when the things that you want and the things that you need are less expensive. And it's not bad for business because it's not just the prices that they sell that are coming down, but the cost of production that's also going down. So, businesses can make more money with falling prices, provided that their margins are intact.
Because even if their margins stay the same, their volume goes up as price goes down. So, everybody wins when prices come down. The government, on the other hand, wins when prices go up because they're the ones that create the inflation. They're the ones that spend the new money into circulation. But other than precious metals, you can be invested in uh hard assets in general.
You can invest in companies that are in the resource space. So, uh mining companies, not just precious metals, but industrial metals, agriculture, energy. Um and to the extent that you can get good buys even in technology. Um you know, just just real assets. I think emerging markets are looking very attractive and a lot of their companies.
You need inflation hedges. You need to own things, not a paper promise. Uh because you know, those promises won't be worth the paper they're written on because inflation is going to erode away their buying power. I think the demand for energy is is growing. And I don't think the supply is there to meet that.
Not now. We have to invest a lot more in in capacity. But obviously, the current situation uh both in in uh in Russia and the Ukraine and in um in the Middle East are complicating that. And there's no end in sight to either of those situations. Uh the real estate industry is getting decimated. Um I think the banks, I don't know if they're all down 20%, but I think the financials are getting getting beat up.
A a lot of consumer names uh are getting hit hard. Um you know, the the the this utilities, the stocks that are doing well are tech related, AI related, and energy. Energy is also doing well. Um but the majority of stocks in the S&P are down more than 20% from their highs. So, the the majority by definition are in bear markets.
And I think a lot of the smaller companies are are are struggling. Uh the higher interest rates are impacting them and consumer spending is being impacted. Consumer confidence is the lowest it's ever been. It's the lowest in 75 years of recorded data. That means that consumers are more concerned now than they were during the Korean War or the Vietnam War or during the Watergate scandal or during the the the oil embargo and the oil shocks of the '70s and the Iranian hostages or they were during the pandemic.
Or you know how is it that that consumers are so worried? They must be so stressed out in their lives from rising inflation, the higher cost of living, the higher interest rates that there's that they're so concerned about their their circumstances. And of course that flies in the face with President Trump's bogus claim that we're living in the greatest economic boom ever. Cuz the consumer is behaving like it's the greatest economic bust ever.
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