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Called Mitt Romney's new running mate Paul Ryan taking a lot of fire from Democrats -- his budget plan.
But our next guest says Ryan's plan doesn't go nearly far enough.
Peter Schiff is CEO -- here.
And he joins us with more cater you get too far you don't get elected.
Well unfortunately though his plan is too little too late actually diffuse the ticking time bomb you know it really does upset -- To see the Republicans and Democrats arguing over who likes Medicare the most who wants to preserve it in a -- and we wanna -- -- it's a Ponzi scheme it's bankrupting the country.
What we need to do is transition out of it and that means we actually need real cuts today for people who are currently.
On the system all Ryan is talking about.
Is reductions in the rate of increases.
Are for people who are currently under 55 years all to -- that's not even a problem for another decade.
-- you're preaching to both investors and to voters and I ask you this.
Investors are willing to loan money to the federal government this point at near record low rates war ten years.
Which is insane but to that point until interest rates go up significantly.
An average American feels pain -- -- of that.
Will they vote to change what's happening with -- entitlements.
But I would really call them investors a lot of the buyers are central banks the biggest buyer being a Federal Reserve.
And then foreign central banks I'm not lending money did the US government at these low rates I don't know if you are they get hurt anybody you know becomes obvious joke who's buying all these -- -- -- -- Financially rates are are going to go -- they're gonna go way up.
And then what are we did you know they're talking about these Medicare trust funds that they're saying you're gonna go bankrupt but 2024.
They're already bankrupt there's nothing in -- all there are is -- used to the government if the government wants that happen to those trust -- it has to sell the bonds to the public which is exactly what they would do if there were no trust funds but what happens when nobody wants to buy them and nobody wants the money that the Fed is printing and dollar tanks rates skyrocket and this whole thing implode but.
My question do you is what anything ever change until it is when -- say it's too late now until it's way too light that is going to take.
A dramatic spike -- interest rates to force money out of treasuries.
And to force a change in the way people vote because again you start talking about touching Medicare.
And people the back of their heads -- blow off they go so crazy.
As long as the voters think that -- can give them something for nothing -- -- -- the politicians that promise that your right.
We're not gonna do the right thing until we have a crisis the good news is a crisis is coming very very soon but the scary part is.
If the wrong people are -- are in control if Obama and his team are on the watch win win this hits the fan.
Do what they're likely to do is they're gonna react kind of like -- -- dog and they're gonna want more government they.
It they don't they don't trust the free market -- more socialist and and they're looking for failures in the economy to validate -- they're socialist or you just slightly out of we have may -- -- Romney in there only might have -- open mind actually believing that capitalism could work or any.
My only willing to try it as opposed to -- -- repeating these big government.
By any politician to just put veteran.
More pressure on the Federal Reserve to just keep buying treasuries for a longer again more than three quarters of the -- eventually they won't be able to because nobody is gonna want the money the Fed buys treasuries by printing money.
But -- people don't want the dollar because -- losing too much value that it doesn't make a difference how many dollars they can print if you can't buy anything with them.
Peter good to say thank you star.
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