Calling a Super Bubble. | Front Row with Jeremy Grantham
The Day of Reckoning is Here. Stagflation Will Shock the Markets! | Peter Schiff
Fun (or sobering) excerpts from: “We’ve got a $3 trillion-dollar national debt right now and it’s financed at one percent. And it’s not financed at one percent, with 30-year government bonds, it’s financed with 90-day T-bills. The government has to constantly roll over this low-yielding debt in order to keep the financing at 1%. Well 1% of $30 trillion, is $300 billion.
“What if interest rates went up to 10%, which is half of what they got to in 1980, under Paul Volcker? 10% of $30 trillion is $3 trillion. There’s no way the government can come up with an extra $3 trillion dollars each and every year to service the national debt. So, the only way to keep the government in the position where it can pretend its solvent, is to keep interest rates artificially low. But the fed couldn’t make or couldn’t tell the markets the truth about why it was keeping interest rates low, so it came up with a lie about inflation being too low and then transitory. What’s the lie going to be now?”
“There is no way to actually fight inflation without creating a massive financial crisis and putting the US government into insolvency.”
“When people realize that – they are going to be piling into gold and silver and prices are going to go up dramatically. I think we’re going to have another leg up similar to the leg we had from 2001 to 2011, where gold was up about 5x. It could easily happen again and that means the money that’s going to be made in the mining sector, is going to be even bigger and that’s where your speculative funds should be invested.”
One Year Ago. Why Grantham Says the Next Crash Will Rival 1929, or 2000. Starting in Months.
