Here’s Peter Schiff of Euro Pacific Capital pointing out that the recent positive GDP numbers indicate that America is spending money – money that is just created by the Fed. The GDP “is goosed.” If the Fed decides to take all that easy money away, the propped up markets – stocks, housing, etc. – will collapse. This, combined with the fact that most people don’t see the value of gold in this environment, makes Schiff even more bullish on the metal.
Grant Williams, author of the newsletter, Things That Make You Go Hmmm, reviews the results of the last decade of Central Bank activity – namely: Bubbles. Bubbles are everywhere…. stocks, bonds, commodities, real estate. But Williams goes on to explain how the central bankers are stuck. There is no way out of this mess without severe pain. They (the central bankers) have found themselves in a position where they can only talk about halting the easy money policies, but cannot actually do it without completely crashing the system. He notes that Janet Yellen may indeed try to taper from $85 to $65 billion per month, but soon would have to re-engage more QE because the US economy is not strong enough on its own.
So what to do? Williams recommends holding a lot of cash right now in order to take advantage of the situation coming after the crash.
Grant Williams, of Vulpes Investment Management, provides us with a brilliant presentation explaining how greed and fear play into the making of economic bubbles. After giving a few examples of historic bubbles of the past, Williams then goes on to describe two bubbles in the present. Spoiler alert!
- The Tulip Bubble of the 1630’s
- The South Sea & Mississippi Company bubbles of 1720
- Government Bonds (today)
- Gold (today)
Williams presents the latter two bubbles happening today as one nearing a collapse and the other in a “sweet spot” ready to enter the hyper-inflating mania phase.