Peter Schiff Says Stock, Housing Markets Down If QE 4 Not Launched In 2015

“The U.S. economy entered 2015 on the most robust streak of consumer spending in years, yet when the first growth figures for 2014 came out Friday they underscored the lack of vigor in the current expansion.

Gross domestic product, the broadest measure of goods and services produced across the U.S., notched an annual growth rate of 2.4% for 2014, the government said Friday, just a touch better than the sluggish average of the nearly six-year-old recovery—and far from the 4% growth of the late 1990s. Fourth-quarter GDP was 2.6%, roughly half the summer’s blowout 5% pace, which was aided in part by a spree of military purchases that wasn’t repeated.

The report offered both hope and red flags for the world’s largest economy…”

The Wall Street Journal website, January 30, 2015

Euro Pacific Capital CEO Peter Schiff discussed the latest U.S. GDP numbers in his January 30, 2015, entry on The Schiff Report vlog on YouTube.com. Schiff told viewers:

Ultimately, what I think has to happen- and it hasn’t happened yet- is that people are going to have to connect these dots, and get their arms around the fact that the U.S. economy is not nearly as prosperous. That this recovery is not legitimate, and that it cannot sustain itself. I mean, how can anybody believe- if you believed that the stimulus worked, if you believe that quantitative easing and zero-percent interest rates stimulated the economy, then how can you take away the stimulus and have the economy perform better without the stimulus than it did with the stimulus? You would have to acknowledge that if you took away the stimulus, you’re going to get less growth. And that’s what’s going to happen. Yet everybody expects more growth…

The only question in my mind is- how long is the Federal Reserve going to maintain the pretense of economic growth and pretend that it stands ready to raise interest rates at some point, when it really is planning on launching QE 4 that will be larger than what they’re doing in Europe. If they don’t launch QE 4 this year, I think the stock market will be down. And not only will the stock market be down, the real estate market will be down. And remember, both the stock market and the housing market are the twin pillars upon which this phony recovery was built. And for those people who think that we’re going to have more economic growth in 2015- 3 percent economic growth which I think is still the consensus in 2015- how is that going to happen? Without any quantitative easing. With rate hikes later in the year. With a falling stock market. With a falling real estate market. You’re going to have the wealth effect working in reverse. In fact, they announced today that the homeownership rate just hit a brand-new 20-year low. And the Fed hasn’t even started to raise rates yet. How is this phony bubble economy going to grow faster under those conditions, than it did last year under the ideal monetary conditions? It can’t. And that is the dichotomy, the inconsistency, that nobody seems to be able to grasp.


“GDP Growth Slows Sharply in 4th Quarter: 2015 to be Worse”
YouTube Video

Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

(Editor’s notes: Info added to “Crash Prophets” page; I am not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information presented herein.)

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