(Schiff)—The mainstream remains optimistic about the trajectory of the economy. Price inflation has supposedly been beaten down. GDP growth was even better than expected, and most economists have tabled their recession predictions. But in his podcast, Peter Schiff explained that it’s all an illusion. The financial crisis has already started, and it continues to play out beneath the radar.
Nobody understands that this crisis has started. But believe me, it has. This was the way the 2008 financial crisis started. It didn’t just happen when Lehman Brothers went bankrupt.”
By the time Lehman went under, everybody knew there was a crisis. But it was obvious long before that.
That’s the reason it went under. It didn’t just go out of business out of the dark. It wasn’t just happenstance. The reason that Lehman Brothers, and Bear Sterns, and Fanny and Freddy, and AIG, and all these companies went under was their exposure to the mortgage market. That exposure was obvious to me for years, but particularly in 2007 when the subprime market blew up. That was the point where even the village idiot should have been able to figure out what was coming. The problem was most people on Wall Street weren’t even smart enough to qualify as the village idiot, so they still couldn’t figure it out.”
They needed the proverbial anvil to fall on their head. That finally happened in 2008. But even in the summer of ’08, a lot of people were oblivious.
So, if you’re wondering, ‘Peter, how can we be so close to this massive crisis, in fact, how could this crisis have already started if nobody is talking about it?’ Well, just go back to the summer of 2008. Nobody was talking about it.”
Peter emphasized that this crisis is much bigger because the problems driving it are much bigger.
They’re the same problems. They just dwarf the size of the problems we had before. Because instead of actually dealing with the problems, we kicked the can down the road and made the problems bigger. Now we have to deal with the consequences of that.”
Fed officials keep saying that the banking system is “sound.” But Peter said all of the big banks are insolvent.
Now, as long as they pretend that all their underwater assets, they’re going to hold them to maturity, well, they can pretend that they don’t have a problem. But eventually, they have to stop pretending because circumstances intervene, and they actually need to sell the securities that they had intended to hold to maturity.”
Newsweek recently published an article titled “America Is Heading for an Interest Payment Crisis.” Peter noted that at least they’re writing about that, but they still miss the root of the problem. It’s not just the interest. It’s also the principal.
A lot of people claim the principal doesn’t matter. As long as the US can make interest payments, everything is fine. But as Peter pointed out, the national debt wasn’t a gift. It’s debt. But it’s nature it has to be paid back.
So, when they would say, ‘We don’t have to repay the debt,’ I would say, ‘Well, did you run that by the Chinese? Did you run it by the Japanese? Do they know that that’s the deal? Do they know that they’re loaning us money but they’re never going to get it back?’ Because that’s not a loan. That is a gift.”
Of course, the response is always, “We can just borrow from somebody else to pay it back.”
In other words, it’s a Ponzi scheme. So, Bernie Madoff never had to worry about paying back money because he would get it from the next sucker who didn’t realize it was a Ponzi scheme. But what happens when people realize it’s a Ponzi scheme? They don’t want to participate. And that’s what’s going on. Our creditors don’t want to loan us more money to pay back other creditors. That is what is happening. That is why bond yields are going up because the people who own the bonds want their money back as they mature and we can’t find new buyers.”
Rising interest rates impede the solvency of the United States. As rates rise, the Treasury has to borrow even more to keep up with the interest payments. As debt goes up, the US becomes a bigger credit risk. It also becomes more likely that the government and central bank will have to create more inflation to service the debt.
So, higher interest rates don’t actually make Treasuries more attractive. They make them less attractive. That is a problem. This is a bottomless pit. This is a self-perpetuating collapse that we are witnessing that is going to gather momentum.”
During an interview, new House Speaker Mike Johnson claimed that during the Trump years, the US had the greatest economy ever. Peter called that “a lie.”
We didn’t have the greatest economy in the history of the world. It wasn’t even close. We didn’t even have the greatest economy in the history of America. We didn’t have the greatest economy in the 21st century. We had a bubble under Trump. Trump didn’t create the bubble. He inherited the bubble, and he made it bigger. That bubble is now popped.”
You can trace the origins of the bubble all the way back to the Bill Clinton era and the monetary policy initiated by Alan Greenspan. That bubble popped the first time under Bush 2, was reinflated, popped again in 2008, and then they managed to blow it back up again.
The idea that people think everything was great just a few years ago and it’s all gone to hell — that’s wrong because it assumes that we could just fix it, really simple. We just have to go back to the Trump policies and we’re going to be great again. No! This problem is much bigger than just the bad things that Biden has done.”
Peter explained how the Clinton administration started the trend of using shorter-term financing to lower interest payments. They could do that because rates were so low. Of course, that created more risk because rising rates can quickly make those payments skyrocket. That’s where we are today. Interest rates are soaring and all of that short-term debt is maturing. That means the Treasury has to borrow at a much higher rate to replace that debt.
It’s going to escalate into this complete sovereign debt and currency crisis, which is already started, but it’s a long way from ending.”
In this podcast, Peter also explains why the future of the US looks more like Argentina than Japan.
Five Things New “Preppers” Forget When Getting Ready for Bad Times Ahead
The preparedness community is growing faster than it has in decades. Even during peak times such as Y2K, the economic downturn of 2008, and Covid, the vast majority of Americans made sure they had plenty of toilet paper but didn’t really stockpile anything else.
Things have changed. There’s a growing anxiety in this presidential election year that has prompted more Americans to get prepared for crazy events in the future. Some of it is being driven by fearmongers, but there are valid concerns with the economy, food supply, pharmaceuticals, the energy grid, and mass rioting that have pushed average Americans into “prepper” mode.
There are degrees of preparedness. One does not have to be a full-blown “doomsday prepper” living off-grid in a secure Montana bunker in order to be ahead of the curve. In many ways, preparedness isn’t about being able to perfectly handle every conceivable situation. It’s about being less dependent on government for as long as possible. Those who have proper “preps” will not be waiting for FEMA to distribute emergency supplies to the desperate masses.
Below are five things people new to preparedness (and sometimes even those with experience) often forget as they get ready. All five are common sense notions that do not rely on doomsday in order to be useful. It may be nice to own a tank during the apocalypse but there’s not much you can do with it until things get really crazy. The recommendations below can have places in the lives of average Americans whether doomsday comes or not.
Note: The information provided by this publication or any related communications is for informational purposes only and should not be considered as financial advice. We do not provide personalized investment, financial, or legal advice.
Secured Wealth
Whether in the bank or held in a retirement account, most Americans feel that their life’s savings is relatively secure. At least they did until the last couple of years when de-banking, geopolitical turmoil, and the threat of Central Bank Digital Currencies reared their ugly heads.
It behooves Americans to diversify their holdings. If there’s a triggering event or series of events that cripple the financial systems or devalue the U.S. Dollar, wealth can evaporate quickly. To hedge against potential turmoil, many Americans are looking in two directions: Crypto and physical precious metals.
There are huge advantages to cryptocurrencies, but there are also inherent risks because “virtual” money can become challenging to spend. Add in the push by central banks and governments to regulate or even replace cryptocurrencies with their own versions they control and the risks amplify. There’s nothing wrong with cryptocurrencies today but things can change rapidly.
As for physical precious metals, many Americans pay cash to keep plenty on hand in their safe. Rolling over or transferring retirement accounts into self-directed IRAs is also a popular option, but there are caveats. It can often take weeks or even months to get the gold and silver shipped if the owner chooses to close their account. This is why Genesis Gold Group stands out. Their relationship with the depositories allows for rapid closure and shipping, often in less than 10 days from the time the account holder makes their move. This can come in handy if things appear to be heading south.
Lots of Potable Water
One of the biggest shocks that hit new preppers is understanding how much potable water they need in order to survive. Experts claim one gallon of water per person per day is necessary. Even the most conservative estimates put it at over half-a-gallon. That means that for a family of four, they’ll need around 120 gallons of water to survive for a month if the taps turn off and the stores empty out.
Being near a fresh water source, whether it’s a river, lake, or well, is a best practice among experienced preppers. It’s necessary to have a water filter as well, even if the taps are still working. Many refuse to drink tap water even when there is no emergency. Berkey was our previous favorite but they’re under attack from regulators so the Alexapure systems are solid replacements.
For those in the city or away from fresh water sources, storage is the best option. This can be challenging because proper water storage containers take up a lot of room and are difficult to move if the need arises. For “bug in” situations, having a larger container that stores hundreds or even thousands of gallons is better than stacking 1-5 gallon containers. Unfortunately, they won’t be easily transportable and they can cost a lot to install.
Water is critical. If chaos erupts and water infrastructure is compromised, having a large backup supply can be lifesaving.
Pharmaceuticals and Medical Supplies
There are multiple threats specific to the medical supply chain. With Chinese and Indian imports accounting for over 90% of pharmaceutical ingredients in the United States, deteriorating relations could make it impossible to get the medicines and antibiotics many of us need.
Stocking up many prescription medications can be hard. Doctors generally do not like to prescribe large batches of drugs even if they are shelf-stable for extended periods of time. It is a best practice to ask your doctor if they can prescribe a larger amount. Today, some are sympathetic to concerns about pharmacies running out or becoming inaccessible. Tell them your concerns. It’s worth a shot. The worst they can do is say no.
If your doctor is unwilling to help you stock up on medicines, then Jase Medical is a good alternative. Through telehealth, they can prescribe daily meds or antibiotics that are shipped to your door. As proponents of medical freedom, they empathize with those who want to have enough medical supplies on hand in case things go wrong.
Energy Sources
The vast majority of Americans are locked into the grid. This has proven to be a massive liability when the grid goes down. Unfortunately, there are no inexpensive remedies.
Those living off-grid had to either spend a lot of money or effort (or both) to get their alternative energy sources like solar set up. For those who do not want to go so far, it’s still a best practice to have backup power sources. Diesel generators and portable solar panels are the two most popular, and while they’re not inexpensive they are not out of reach of most Americans who are concerned about being without power for extended periods of time.
Natural gas is another necessity for many, but that’s far more challenging to replace. Having alternatives for heating and cooking that can be powered if gas and electric grids go down is important. Have a backup for items that require power such as manual can openers. If you’re stuck eating canned foods for a while and all you have is an electric opener, you’ll have problems.
Don’t Forget the Protein
When most think about “prepping,” they think about their food supply. More Americans are turning to gardening and homesteading as ways to produce their own food. Others are working with local farmers and ranchers to purchase directly from the sources. This is a good idea whether doomsday comes or not, but it’s particularly important if the food supply chain is broken.
Most grocery stores have about one to two weeks worth of food, as do most American households. Grocers rely heavily on truckers to receive their ongoing shipments. In a crisis, the current process can fail. It behooves Americans for multiple reasons to localize their food purchases as much as possible.
Long-term storage is another popular option. Canned foods, MREs, and freeze dried meals are selling out quickly even as prices rise. But one component that is conspicuously absent in shelf-stable food is high-quality protein. Most survival food companies offer low quality “protein buckets” or cans of meat, but they are often barely edible.
Prepper All-Naturals offers premium cuts of steak that have been cooked sous vide and freeze dried to give them a 25-year shelf life. They offer Ribeye, NY Strip, and Tenderloin among others.
Having buckets of beans and rice is a good start, but keeping a solid supply of high-quality protein isn’t just healthier. It can help a family maintain normalcy through crises.
Prepare Without Fear
With all the challenges we face as Americans today, it can be emotionally draining. Citizens are scared and there’s nothing irrational about their concerns. Being prepared and making lifestyle changes to secure necessities can go a long way toward overcoming the fears that plague us. We should hope and pray for the best but prepare for the worst. And if the worst does come, then knowing we did what we could to be ready for it will help us face those challenges with confidence.
