Paul Krugman

Peter Schiff Sees ‘Enormous Round Of Quantitative Easing’ Ahead For U.S.

Euro Pacific Capital CEO Peter Schiff, who correctly-called the housing bust and economic crisis last decade, just published a new entry to his Peter Schiff’s Gold Videocast vlog on Schiff talked about what’s behind the recent take-off in precious metal prices. From last Friday:

What’s really behind the metals rise is not what’s happening in Europe, but I believe what’s going to be happening here in the United States, because I believe the Federal Reserve is going to use the turmoil in the markets that followed that [“Brexit”] vote as the excuse that it’s been waiting for, not only not to raise rates, but to cut rates and to launch QE 4. In fact, that is the main reason, I believe, that the markets have recovered somewhat from their Brexit-related losses. Because if you look at the financial markets, they are now pricing in for the first time a higher probability that the next move by the Federal Reserve will be to cut rates, not to raise them. Now remember, I’ve been saying this the whole time. Ever since the Federal Reserve raised rates in December I was saying the likelihood was that the next move would be a cut and not another increase…

As we continue to get more weak economic data that continues to surprise all the bulls who are expecting strong data, it’s not going to be long before the talk of rate hikes is really replaced first by the talk of rate cuts, and then by actual cuts. And of course since there’s not a lot of room for the Fed to cut rates because it never really raised them, the real monetary stimulus is going to come from an enormous round of quantitative easing

The reason there was such a violent reaction in the financial markets to Brexit wasn’t because Brexit is so terrible, it just shows you how precarious the global financial system is. It’s all perched upon these props of cheap money and central banking. It’s all based on hype and hope and confidence. And when something shakes the confidence, you see the immediate result. The central bankers are going to do everything they can to keep this bubble from deflating. And that means more money printing not only here but around the world. And all the naysayers, all the guys that were saying “Oh, Peter Schiff was wrong,” “The Fed was right,” “Bernanke was right- he was the hero,” “Paul Krugman was right- there is no inflation.” All the people who had these premature victory laps are going to have a lot of egg on their face. But in the meantime, there isn’t a lot of time left for people to buy gold and silver while there are still people foolish enough to sell it

(Editor’s note: Bold added for emphasis)

“Silver Confirms Gold’s Breakout”
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By Christopher E. Hill
Survival And Prosperity (

(Editor’s note: A qualified professional should be consulted prior to making a financial decision based on material found in this weblog. If this recommended course of action is not pursued, then it must be understood that the decision is the reader’s and the reader’s alone. The creator/Editor of this blog is 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 contained herein.)


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Quote For The Week

So here’s what needs to be said about the latest numbers: yes, we’re doing a bit better, but no, things are not O.K. — not remotely O.K. This is still a terrible economy, and policy makers should be doing much more than they are to make it better.

-Paul Krugman, professor of Economics and International Affairs at Princeton University and New York Times op-ed columnist, in his February 5 Times’ piece “Things Are Not O.K.”



Monday, February 6th, 2012 Employment, Government, Quote For The Week No Comments

No National Debt Crisis?

A lot of bold statements being made these days about the U.S. economy and larger financial system.

First, the financial crisis is over.

Second, the economy won’t suffer a double-dip recession.

Finally, there is no national debt crisis.

Say what?

Back on November 8 Zachary Karabell wrote on TIME’s website:

The national debt is a big number, but it isn’t excessive. On a relative basis, the federal debt burden has hardly changed over the past 20 years. In fact, while the absolute amount of debt has ballooned, the percentage of the federal budget spent servicing that debt has actually decreased. That’s right: in 2009, net interest payments on the debt decreased from the year before, and the overall percentage the U.S. spends to service its debt (currently less than 3% of GDP) is lower than it was in the late 1980s and most of the 1990s…

Debt can be foolish, as the housing crisis demonstrated. But it can be a powerful tool when properly used. Government is not the answer, but wise fiscal policy—focused on investment—is a spark plug when activity sputters.

It appears a number of high-profile economists don’t believe the alarm bells over the national debt are justified either. Mark Trumbull wrote on the Christian Science Monitor website last Friday:

Whatever their disagreements, members of President Obama’s fiscal reform commission rallied around a basic premise: America’s public debt problem is serious, and the need for action is urgent.

But is that premise true?

It’s actually a matter of sharp debate among economists, with some prominent Nobel Prize winners arguing for higher federal deficits – as a means of stimulating economic growth – rather than for quick steps on deficit reduction.

The three economists Trumbull mentioned are Joseph Stiglitz, Robert Solow, and Paul Krugman- all Nobel Prize winners. From the piece:

Here are the contrarian voices, arguing that stimulus should be the bigger priority:

“We don’t have a recovery” in the economy right now, says Joseph Stiglitz, a Nobel winner from Columbia University. He argues that, for practical purposes, the US is still in a recession – growing too weakly to create strong job growth.

“We have to intervene,” he said in a telephone interview a few weeks ago, spelling out arguments from his book “Freefall.”

Mr. Stiglitz said that, with consumers weakened by high debt and unemployment, government needs to step in with a large new stimulus effort. Secondly, he says a more effective program of relief for borrowers at risk of foreclosure would help to put consumer spending back on track.

Similarly, Nobel winner Robert Solow of the Massachusetts Institute of Technology argues in the academic journal Daedalus that pursuing deficit reduction now “seems at best perverse, and in sufficient force, a suicidal recipe for renewed and protracted economic downturn.”

Mr. Solow, writing those words with Benjamin Friedman of Harvard University, argues that even though the US will need to address its deficit and debt problems at some point, fiscal stimulus can be a powerful tool for lifting the economy.

Another Nobel winner, Paul Krugman, has made similar arguments to those of Stiglitz and Solow in recent columns for the New York Times.

No more financial crisis, no double-dip recession, no looming national debt crisis. So much confidence, it reminds me of those old Sure deodorant commercials from the eighties:

YouTube Video Link


Karabell, Zachary. “Debt Doesn’t Matter.” TIME. 8 Nov. 2010. (,8816,2028095,00.html#). 6 Dec. 2010.

Trumbull, Mark. “Is deficit commission wrong? Critics say there’s no national debt crisis.” The Christian Science Monitor. 3 Dec. 2010. ( 6 Dec. 2010.


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