Jan 31, 2014

The Federal Reserve Will Have To Reverse Course


Peter Schiff is an American businessman, investment broker and financial commentator. Schiff is the CEO and chief global strategist of Euro Pacific Capital Inc.

A Different Housing Bubble

In America now, its a very different housing bubble because the houses now are being bought by institutions, hedge funds, private equity guys, to rent them out to the guys that lost them out to foreclosure the last time around.

So, this housing bubble is very different from the last one. But I think, its even more dangerous because these guys that own these houses, they will sell them quickly just like they are going to cut their losses in their stock portfolio. And you have all these houses now that are owned by hedge funds that are empty because they actually can`t find tenants because people don`t have jobs, so they can`t afford to rent these houses. So, they want to rent small apartments and apartment rents are rising very rapidly in the United States, meanwhile we have all these single family homes for rent sitting vacant, yet we are still building them because of the Federal Reserve. So, if we had a rational interest rate policy, we would have lower home prices, we would`t be squandering our resources.  

Peter Schiff is an American businessman, investment broker and financial commentator. Schiff is the CEO and chief global strategist of Euro Pacific Capital Inc.

Jan 30, 2014

Housing Bubbles Everywhere

There are housing bubbles everywhere. Wherever interest rates are artificially low, they are going to impact asset markets, particularly something like housing because most of the houses that are bought are not bought with cash. Usually there is debt involved, people borrow money to buy a house. And the cheaper it is to borrow, the more you can pay for your house. If you have an extended period of time where interest rates are held artificially low, you are going to have artificially high real estate prices.

Peter Schiff is an American businessman, investment broker and financial commentator. Schiff is the CEO and chief global strategist of Euro Pacific Capital Inc.

Jan 29, 2014

Why Falling Prices Are A Good Thing

Falling prices are a reward for capitalism. They make wages more valuable, they make savings more valuable. Well, the argument is, if prices are falling, nobody is going to buy anything, they will just be waiting for lower prices. Of course, that is absurd. We all have cellphones, we all have laptop computers, we all have plasma TVs. The prices for those items are falling all the time. That does not stop people from buying them. In fact it encourages people to buy them.

Peter Schiff is an American businessman, investment broker and financial commentator. Schiff is the CEO and chief global strategist of Euro Pacific Capital Inc.

Video: Canadian Housing Bubble, U.S. Economy


Peter Schiff is an American businessman, investment broker and financial commentator. Schiff is the CEO and chief global strategist of Euro Pacific Capital Inc.

Interest Rates Are Very Important

Interest rates are a very important aspect of money because interest rates represent a price. And like all prices, they are determined by supply and demand. The supply is all the savings, the demand is all the people that want to borrow money, wether its businesses, wether its college students, someone who wants to buy a car, the government... Everyone borrowing money is competing for this store of savings. Because for every dollar borrowed, someone had to save that dollar, someone had to not consume and put that dollar into savings so that someone else could spend it or invest it.

If you have a lot of savings then you are going to have low interest rates because the supply is going to be greater. And what does that mean? What economic signals is that sending to the market? What that says is that people prefer future consumption to current consumption. Because after all when you are saving money, you are just deferring consumption. Every dollar you save is going to be spent eventually, except you are not going to spend it today, you want to spend it tomorrow. And hopefully you will spend the dollar tomorrow plus all the interest that you earned over time.

Peter Schiff is an American businessman, investment broker and financial commentator. Schiff is the CEO and chief global strategist of Euro Pacific Capital Inc.

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