With historically low interest rates, the United States has been able to service its near $20 trillion national debt without too much difficulty. However, with the Federal Reserve planning to raise rates as much nine times over the next three years, maintenance of the national debt will become hard, which means a “debt bombing is going to explode,” says one contrarian investor.
Speaking in an interview with CNBC on Thursday, Peter Schiff, president and CEO of Euro Pacific Capital, explained that the nation’s debt problems are going to balloon and eventually explode at some point over the next four years. Although the U.S. has been fortunate enough to service the debt since adding near $10 trillion over the last eight years, repaying the $20 trillion has essentially become impossible.
According to Schiff, when rates go up and inflation surges, creditors will request a higher premium.
How will the U.S. tackle its debt? Inflation.
“I think the [Federal Reserve] is going to try to inflate its way out of this problem, but it’s going to inflate its way into a bigger one,” Schiff stated.
U.S. President Donald Trump doesn’t seem to care too much about the national debt as he plans to spend about $1 trillion on infrastructure. Schiff doesn’t believe this will help spur economic growth because government doesn’t create jobs and it takes resources away from the private sector.
“You don’t help the economy by spending money. To the extent that we need to repair our infrastructure, that’s a cost that we have to bear,” he averred. “The fact that it creates jobs, that’s not a good thing because we’re diverting resources that we might otherwise have been able to use more productively to make necessary repairs to our infrastructure.”
Schiff is reiterating previous remarks he made, warning Republicans about how Trump’s deficits are going to be huge over the next four years.
Yes, the financial day of reckoning is coming, those who are paying attention are preparing themselves for it, and those who dont want to understand will become instant victims.
Through false currency, the big lie of the Federal Reserve, and a debt economy, it is coming, and it will be horendous for many.
An Empty Stomach makes for a Willing Slave!