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Thread: We Are Headed for a Massive Financial Crisis

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    Senior Member Verđandi's Avatar
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    We Are Headed for a Massive Financial Crisis

    After a stern warning about a calm before an economic storm, investor Peter Schiff has accused the US Federal Reserve of being oblivious to the upcoming crash.

    Seeking Alpha quotes Schiff as saying that yields have risen to levels unseen since the last financial crisis a decade ago, with yield curves currently flattening. According to Schiff, that is a troubling sign for the economy in the bond market.

    “The 30-year [bond] is 3.15. It’s actually just under 20 basis points. 19 basis points is all you get for taking 20 additional years of interest rate and inflation risk. Think about how crazy that is,” the investor said. “I mean, interest rates, right now, on the 10-year, are just under three percent. On the 30-year, they’re slightly above three percent. But why would anybody believe that three percent yields are here to stay?”

    The investor said that those low rates are an aberration if you go back to the Second World War and look at average bond yields. They’ve been low for a long time, but they aren’t going to stay low forever, according to Schiff.

    “Clearly, the market assumes that interest rates on 10-year government bonds are going to stay just barely over three percent for the next 20 or 30 years. I mean, that is crazy. Why would anybody think that?” the analyst asked.

    According to Schiff, the current interest rates, which are hovering around three percent and could be easily blow through four or even five percent, is also reason to fret. “If the Fed continues to stay on this path, or at least the rhetoric is on this path, rates could blow through three percent like a hot knife through butter,” he said.

    The businessman slammed the Fed for seeing no signs of an impending crisis, saying that it was similarly blind ahead of 2008 crisis. “So the Fed has already proved when it comes to warning signs and seeing them in advance, they’re like Mr Magoo. They have no idea what’s going on. And in fact, just like Mr Magoo, they create all kinds of havoc all around them as they blindly move through the economy having no idea what’s going on, and there’s just all kinds of carnage,” Schiff said, warning that a massive financial crisis is coming.

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    Senior Member Drusilla's Avatar
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    We are always at the bring of financial crisis. It just depends on how the markets move. The interpretation of the markets depends on your level of knowledge within the financial industry. Most of the stuffs that makes the world continue to turn are not even played on the stock markets.

    Markets move and react different per country, per region, per continue and it never stops. If you put $1M to trade morning time in HK, it could either become $50M or $100M or best, more than that by the time you wake up the next day. The Fed does have a lot of responsibility because for some twisted reason, the US Federal Reserve dictates how and which money moves. The question for the movers and shakers is always is what civil or world event/issue will they have to respond to.

    Frankly, I don’t think we’ll be at the point of a Great Depression again soon. Zimbabwe’s inflation is insane but that country is still alive. What we have to worry more about is population control, climate change and food security. These are real tangible issues that have no turning back and that would really impact the world market. War in the Middle East is not really an issue because there will always be war. It’s human nature. Or unless you wish to glass the whole Middle East then the world will be more peaceful. The truth is, where and when there is war, there is always MORE opportunity to make money.

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    Senior Member Aelfgar's Avatar
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    It just seems to me that economies dependent on consumers going into debt in order to keep on spending are heading for trouble. No politicians have had the balls to stop the debt culture since the last crash. We'll see.

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    Who really controls the Federal Reserve?

    Ein Leben ist nichts, deine Sprosse sind alles
    Aller Sturm nimmt nichts, weil dein Wurzelgriff zu stark ist
    und endet meine Frist, weiss ich dass du noch da bist
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    We're always at the verge of an economic crisis, as the keynesianist economy goes in a boom and bust cycle, so Schiff of course always is right when he predicts the next recession as it is an automatism, at least he (Schiff) explains why it happens, that's a bonus. He is one of the few of the 1% defending his position in public.
    🔴 Peter Schiff at Occupy Wall Street "I am the 1%. Let's Talk"


    Those who speak German and are interested in economics should listen do Markus Krall (even though he is a neoliberal).

    „Epochale Krise ungefähr 2020“ (JF-TV-Interview mit Markus Krall)



    U.S. Boom-Bust Cycle And Why A Recession Will Come
    https://seekingalpha.com/article/403...sion-will-come

    Brexit: A view from Germany - Markus Krall
    https://www.spectator.co.uk/2017/07/...-from-germany/
    When men cease to fight — they cease to be — Men.

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