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Euro Pacific Capital CEO Peter Schiff argues the European economic woes are driving investors to the U.S. markets.
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-- into treasuries today of course that sent the rates falling to all time lows as folks are trading in their euros.
For what they see is the safety of US treasuries but we have someone who says.
That debt could turn sour fast Peter -- It's a CEO and chief global strategist at Euro Pacific Capital Peter good to see nice to see is all people are dumping their euros I think correctly believing that Europe is in the middle of the of the big crisis in the Euro was gonna go down they're buying into the dollar's -- a mistake I mean they're jumping from the frying pan into the fire may be don't know a lot yet it's like the people -- bought FaceBook right -- are all excited about buying it but once they discovered what they owned bank wanted to get out I think the same -- -- happen.
How would the dollar -- how soon how -- because we know the Euro issues facing crisis right now how long before that happens the dollar will definitely I don't know I mean disheartening know exactly when I know there are problems in Europe which is why we we avoid the Euro in Europe the dollar isn't the only currency that -- a fatal -- I just think that we're in worse shape but right now we're benefiting.
From what's going on I mean the best thing that the US economy's got going for right now is that people think Europe is in worse shape I -- you mentioned.
Treasury rates why do you think that ten years at one point 65 esophagus -- such a good credit risk because we have no inflation.
Just because you've got this -- trade people moving reflexively from the Euro -- the will be perceived to be as safe haven.
And so we're benefiting from Europe look at the price of gasoline our oil prices coming down that's all because of problems in Europe it wasn't for that.
You know while prices will be going up the did.
Bond prices would be falling and said something -- very provocative not surprising coming from Peter Schiff.
That we are in a worse situation that our currency the dollars and worst situation in the Euro house so we just mention what you just talked about Spain and the problems over there in interest rates are up words like 7% Spain we have got a lot more debt.
Relative to GDP in Spain to some -- we're in worse shape than Spain.
-- we might not be in worse shape than Greece but we're certainly in worse shape of Spain but yet Spain is being held to account for all that debt.
And we still get a pass imagine what the US economy would look like right now if we had to pay the same interest rates -- -- I'm gonna be pandemonium here we've we've been complete freefall so you think the dollar is is going to collapse how does that happen explained should tell us how that would affect us -- Eventually you're gonna get some resolution to the European problem right.
And the focus is gonna is gonna be back on us when when the spotlight is off Europe.
But we have enormous amounts of debt I mean we can't repay this money the only reason that we can pretend that we can even service the debt is because interest rates are at zero.
But if we have to pay a market rate of interest -- true rate of interest on our debt in order to sell our bonds and clearly we cant -- service to existing bonds let alone the new ones -- what if interest rates went up near 7% that would probably -- close to a trillion dollars a year to the interest on -- debt which would send the budget which is close -- fortunately -- maybe up to five chill wind -- shifts in the -- world that we're gonna see a collapse of the US -- how do we recover.
From a collapse in our currency blogging that's a big topic in my book I got a book it just came out of the real crash -- came out though -- what what's it's a threat to but it's.
The real crash because the one that we already have wasn't it.
Some people think we we have the credit so how do we recover from a -- currency -- sounds like somebody would take general -- I want a little -- complete collapse -- -- -- want -- hyperinflation scenario pan out -- I'm hoping that we avoid that.
But we have to come to terms with the fact that we're broke.
We're gonna have to restructure our debt mean we can't afford to pay back a hundred cents on the dollar.
When interest rates go up.
But we can't keep keeping interest rates artificially low to delay that because we need -- higher interest finally you do say that there are things that people should be buying right now as bad as -- situation -- some -- -- -- got an investment conference going on two blocks -- don't tell -- -- -- you know should be -- what we're we're investing abroad -- investing -- companies that are -- to be catering to the emerging middle -- like what what we're we're buying in energy gains in mining but -- transportation.
But I think that when the world stops buying treasuries and starts buying stuff when they invested their own economies a set of ours.
I think you're gonna see an explosion in in in in consumption abroad I think you're -- to see appreciated foreign currencies.
Enhancing the with the wages in the purchasing power of consumers particularly in the emerging markets have been bailing bear -- -- bearing the lion's share of the burden.
A propping up our content and so we're investing in these companies I'm being told you didn't give us actual names of companies you have a couple of -- -- -- -- what are likely to give data -- -- -- we have bought by the Euro Pacific Capital it mutual Fuzzy all by our favorite bad that I thought I could say that.
Our by the -- your brother told me the book was a real threat but it's actually about the real -- that the real crash America's coming bankruptcy how to save yourself and your future big number ten on the New York Times but I always -- -- after -- show it'll be number one leadership you better -- Euro Pacific Capital CEO Peter thank.
