consumers

Bank For International Settlements (BIS): Global Economy Situation Similar To Pre-2008 Crash Era

At the end of last week I left readers with that post about individuals credited with publicly predicting the 2008 global economic crisis.

Yesterday, I learned that some organizations correctly forecast the carnage. In particular, the Bank for International Settlements (BIS). Phillip Inman reported on The Guardian (UK) website Sunday:

The BIS was one of the few organisations to warn during 2006 and 2007 about the unstable levels of bank lending on risky assets such as the US subprime mortgages that eventually led to the Lehman Brothers crash and the financial crisis.

Curious to know what the “central bankers’ bank” thinks about the state of the global economy these days? Inman revealed:

Investors are ignoring warning signs that financial markets could be overheating and consumer debts are rising to unsustainable levels, the global body for central banks has warned in its quarterly financial health check.

The Bank for International Settlements (BIS) said the situation in the global economy was similar to the pre-2008 crash era when investors, seeking high returns, borrowed heavily to invest in risky assets, despite moves by central banks to tighten access to credit.

The BIS, known as the central bankers’ bank, said attempts by the US Federal Reserve and the Bank of England to choke off risky behaviour by raising interest rates had failed so far and unstable financial bubbles were continuing to grow.

(Editor’s note: Bold added for emphasis)

I’m not going to steal The Guardian’s thunder here, so head on over to the article on their website for the full story.

By the way, Inman noted the following about the BIS chief economist who was around during those alarms sounded in 2006 and 2007:

William White, who now chairs the OECD’s review committee, warned last year that global debt levels had escalated to unstable levels largely in response to almost zero interest rates to create a situation that was “worse than 2007”.

(Editor’s note: Bold added for emphasis)

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

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Peter Schiff Bullish On Foreign Stocks, Gold, And Silver

Euro Pacific Capital CEO/Chief Global Strategist Peter Schiff appeared on the FOX Business show Countdown to the Closing Bell last Wednesday. Host Liz Claman asked Schiff, who correctly-predicted the housing market crash and 2008 economic crisis, about where he was investing these days. He replied:

Well, my strategy has been the same for quite some time because I understand the problems that underlie the U.S. economy, how the Federal Reserve is exacerbating them in the name of trying to solve them, and so I want to invest abroad. We still favor equities, but I look at international equities. I look at value. I look at good dividends. And I want to own companies that are not dependent on the consumer…

A map was subsequently displayed that showed “Peter’s Global Area Picks”- Australia, Chile, China, Denmark, Hong Kong, Mexico, New Zealand, Norway, Peru, Singapore, and Sweden.

Claman also brought up precious metals in the discussion. Particularly, silver. From their exchange:

CLAMAN: Let’s put up the miners, because you feel that the miners now have an opportunity to really rise. Silver below $20 an ounce these days. That seems to me like a good buy because it’s so cheap.
SCHIFF: Well, it did get as high as $50 a couple of years ago. But it started the rally from below $4. So, we’re in a big bull market. We’ve been pausing for the last couple of years. But I think it’s the pause that’s going to refresh. I think what drove the metals market lower in 2013 was the false belief in a U.S. recovery, and the idea the Fed was through with QE, and that we were on the verge of a tightening cycle. None of that is true. We are slipping back into recession. Janet Yellen is going to launch an even bigger round of QE than what Bernanke launched. And this is going to be very bullish for gold and silver. But it’s not going to be bullish for the U.S. economy.


“Safeguarding Your Portfolio By Investing Abroad”
YouTube Video

By 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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Peter Schiff Predicts Effect On Consumers When Bond, Stock, And Real Estate Bubbles Pop

Anyone catch Euro Pacific Capital’s CEO and Chief Global Strategist Peter Schiff on FOX Business Network’s The Willis Report back on November 27?

I just saw it for the first time the other day. Host Gerri Willis began the segment by talking about recent upbeat economic reports, to which Schiff replied:

You know, Alan Greenspan actually came out today and proclaimed that there was no bubble in the stock market. And he ought to know, right? Because he’s 0 for 2 when it comes to spotting bubbles. I think it’s 3 strikes and he’s out.

Ouch. A close second for my earlier “Quote For The Week” post.

The “crash prophet” added:

Because not only is there a bubble in the stock market. But the Fed has managed to make bubbles in the stock market, the bond market, and the real estate market simultaneously. That’s a lot of bubbles for the Fed to juggle.

Later on in the segment, Schiff, who correctly predicted the recent housing market crash and 2008 economic crisis, told Willis the U.S. dollar “is eventually going to get hit hard.” The host asked:

What will I feel as a consumer?

Schiff answered:

When the Fed is ultimately forced to raise interest rates- yes, we’ll have a big drop in the stock market, a big drop in the real estate market, we’ll be back in a severe recession, and it’s going to be tough. Prices are also going to go up for consumer goods, because a weak dollar means consumer goods are more expensive, But ultimately if the Fed has to protect the weak dollar with rate hikes, then your assets go down in value. But the price of everything you need to buy goes up.

Not a pretty scenario at all for American consumers if Schiff is correct once again.


“Holding the Dollar Could be Riskier Than Stocks”
YouTube Video

By 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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Survival And Prosperity
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Christopher E. Hill, Editor

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