Peter Schiff - The Assumption Everyone is Making

[TheManiacalSatanist6]

God damn it, can the interviewer shut up and let Peter speak!?

[TrippingTheTube]

I'd listen and believe what Peter Schiff says.

[koolance2012]

i dont own a credit card. but i could see intrest rates going up as high as some cards 22% , its unreal what some are willing to pay for credit, instead of saving.in the 80ties i remember 18% for car loans. thanks always for the great info

[trick29420]

head. in. sand.

[regelemihai]

I still don't get why lowering interest rates helps us borrow more from foreigners. At a time of crisis , as we've seen in the Euro-zone, countries increase the yields on bonds in an attempt to draw more and more investors. If we lower interest rates, that means less return for the money invested. So why on earth is lowering rates encourages borrowing, instead of having the opposite effect?

[regelemihai]

* is lowering rates encouraging...

[bluefootedpig]

@regelemihai I could be wrong, but I believe it is like this. I believe the interest rate that the government barrows at is near the fed level. This is also the rate that banks loan at. So when you lower yields on bonds, you make it so the average american person can afford more loan, thus finance a business.

[trick29420]

@regelemihai You're confusing the interest rate they are talking about with the bond yield rate. They aren't the same thing. Bond yields are set based on demand for the bonds. High demand, lower yields, and vice versa. It's why Greek 1 year bonds got to like 200% or something. The interest rate that has been kept so low, is the rate at which banks, and the gov't, can borrow from the FED.

[regelemihai]

True, but the same low inetrest rate from the Fed is meant to encourage foreigners to buy up more Treasury bills. If that is so, how is it helping them in any way if they get less for that inestment?

[trick29420]

@regelemihai It's not helping the foreigners, but they're trying to make lemon-aid out of lemons. It helps the US gov continue to fund all their waste though.

[regelemihai]

@trick29420

It helps the US fund its watse domestically, but how is it drawing foreigner investors, or foreigners in general, to buy more US treasury bills? That is my question.

[trick29420]

@regelemihai Because they don't have any better options. (or so they believe). And it's still the worlds reserve currency, and used for trading on just about every foreign exchange market. They just don't see anywhere else to go, so they go to the dollar. The low domestic interest rate is not an incentive for them at all.

[areyouready22]

@regelemihai The only lenders we have now is the Federal Reserve itself. No other country is buying US treasuries anymore. It is a ponzi schemes that doesn't hurt either party but instead buries Americans in enormous debt. Here is how it works: The fed spends without discipline and then gives permission to the Federal Reserve to print money out of thin air which then loans it back to the Fed. Neither one of them suffers because the debt is passed onto us. This system dismisses a need for others