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Ron Paul and Peter Schiff Discuss Dollar Crisis and Markets: Bigger Cliff Than 2008 Head

Wednesday, October 7, 2015 20:09

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(Before It's News)

TND Podcast Spotlight: Ron Paul Liberty Report

Highlights from the interview courtesy of SchiffGold.com:

Peter: I’m surprised [this dollar crisis] hasn’t happened already. But I think it’s because the rest of the world has just been so brainwashed by the mainstream media, by the central bankers, by Wall Street, that they just haven’t figured out the problems that the Federal Reserve has created over the last seven years, with three rounds of quantitative easing and zero-percent interest rates. I think the US economy is poised on a much bigger cliff than the one we went over in 2008. You and I know it was the Federal Reserve that laid the foundation for that crisis. Now, with the same policies – only worse, they’ve laid the foundation for a much greater crisis… I do believe this window of opportunity will be rapidly closing. People need to act quickly to get out of US dollars, to accumulate foreign assets in places like Switzerland or Singapore or New Zealand, to buy some gold, buy some mining stocks. Do that before the bottom really drops out of the dollar, when everybody else finally wakes up to the reality, instead of the fantasy world they’ve been living in…

Dr. Paul: It seems like there are so few of us out there emphasizing the Fed… What’s the ultimate solution to the Fed?

Peter: You’re a medical doctor. When you have a cancer, there is no superficial treatment. You’ve got to remove that cancer or the patient is going to die… We need to got to the root cause of the problems. We need major surgery… The Federal Reserve is at the heart of it, because the Federal Reserve is enabling government. It’s subsidizing it. It’s making it possible to run all these deficits. It’s propping up Wall Street. It is basically giving us the novocaine to numb the pain, so we can let the disease get worse without actually doing anything about it…

Dr. Paul: Some people approach me with the question, “What should we do? Keep our money here and work it out here? Or go overseas and do some investing overseas?” Some people will even say Europe is a shaky place… What’s your answer to that?

Peter: Fortunately, the world is a big place. It’s not all just US and Europe. We underweight Europe too. I am cognizant of the problems in Europe. I just think ours are even bigger… Ours are being obscured by the fact that the dollar is still the world’s reserve currency, so we get to profit by everybody else’s mistakes for now. Everybody buys dollars when they’re worried about problems, even though our problems are bigger than the ones they’re worried about in Europe. Because the dollar is overpriced, we get to buy imports cheaper. We can keep these artificially low interest rates. We get to live beyond our means. There are countries you can invest in. In Europe, there’s Switzerland… They’re not doing everything perfect, but they’re in much better shape than the eurozone or the United States. We invest in places like Singapore, countries like New Zealand. Nobody is doing it perfectly. You have to figure out which countries are making the fewest mistakes, which countries have the most economic freedom, the fewest regulations, the lowest taxes, the soundest fiscal policies, the less reckless central banks. No one’s on a gold standard – it’s all fiat money. But it’s a question of degree… To hedge ourselves against all countries, we buy gold… The average investor doesn’t have anything in gold, and I think that’s completely foolish. You have to be completely ignorant as to economic history to be so complacent as to have no money in gold…

Dr. Paul: In Austrian economics we’re taught that it’s harder to predict the exact timing. You and I would be convinced that we don’t know exactly what the price of gold will be tomorrow or one week from now. We do know trends. We do know that low interest rates and artificially inflating the currency has consequences. Nevertheless, I’m sure you’re asked and you have to plan for it, and I’m asked this all the time – I want to know: when it’s going to happen. There are bubbles out there, but it’s different now… Do you ever get a little more specific?

Peter: You always get in trouble when you try to put a time on it. More often than not, you overestimate the ability of everyone else to figure out the problem. I obviously know we’re a lot closer to the endgame than we were a few years ago. I think there’s a lot of signs that we’re getting closer, based on the fact the Fed has backed itself into this box… I tell people you got to be early. If you’re not going to prepare early, you’re not going to prepare at all. You’re not going to finesse it perfectly. So if you’re not too early, you’re too late. You can’t afford to be too late. Currency crises come quickly. The value is lost, and it can never be retrieved…

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The above appeared at the Ron Paul Institute for Peace and Prosperity website and is reprinted with permission. To visit the website, click here. Ron Paul Institute for Peace and Prosperity is a project of Dr. Paul’s Foundation for Rational Economics and Education (F.R.E.E.), founded in the 1970s as an educational organization. The Institute continues and expands Dr. Paul’s lifetime of public advocacy for a peaceful foreign policy and the protection of civil liberties at home. The Institute mobilizes colleagues and collaborators of Dr. Paul’s to participate in a broad coalition to educate and advocate for fundamental changes in our foreign and domestic policy. To support the institute’s important work, click here.