Peter Schiff: Bank Stress Tests Are a Joke, Because the Fed Never Actually Tests for the Real Stress, Which Is Stagflation

Schiff You know you ░░░░░░░░ earlier that they re ░░░░░░░░ to be announcing the ░░░░░░░░ test on the bank ░░░░░░░░ those stress tests are ░░░░░░░░ just a joke because ░░░░░░░░ Fed never actually stresses ░░░░░░░░ tests for the real ░░░░░░░░ which is stagflation They ░░░░░░░░ look at a scenario ░░░░░░░░ the economy goes into ░░░░░░░░ but interest rates and ░░░░░░░░ rise instead of fall ░░░░░░░░ don t test that ░░░░░░░░ I think they assume ░░░░░░░░ s impossible but I ░░░░░░░░ the real reason they ░░░░░░░░ t test it is ░░░░░░░░ every bank would fail ░░░░░░░░ that s really what ░░░░░░░░ happening and that s ░░░░░░░░ going to be putting ░░░░░░░░ on the Fed CLAMAN ░░░░░░░░ s almost as if ░░░░░░░░ bank lobbyists are in ░░░░░░░░ faces saying Don t ░░░░░░░░ this an ugly one ░░░░░░░░ at least the bar ░░░░░░░░ high If you re ░░░░░░░░ at big financials if ░░░░░░░░ can prop those up ░░░░░░░░ ve got Goldman Sacks ░░░░░░░░ JP Morgan Morgan Stanley ░░░░░░░░ Bank of America moving ░░░░░░░░ the red here Schiff ░░░░░░░░ of these banks though ░░░░░░░░ they were forced to ░░░░░░░░ their unrealized losses to ░░░░░░░░ they d all be ░░░░░░░░ So we have a ░░░░░░░░ bankrupt financial system thanks ░░░░░░░░ the Fed thanks to ░░░░░░░░ government If we had ░░░░░░░░ free market we d ░░░░░░░░ a sound banking system ░░░░░░░░ unfortunately we don t ░░░░░░░░ s on the verge ░░░░░░░░ collapse which again is ░░░░░░░░ the Fed is going ░░░░░░░░ have to allow inflation ░░░░░░░░ run out of control ░░░░░░░░ the alternative is a ░░░░░░░░ worse financial crisis than ░░░░░░░░ 2008 CLAMAN Andy BRENNER ░░░░░░░░ me comment on that ░░░░░░░░ Sure Sure BRENNER Two ░░░░░░░░ One Peter is absolutely ░░░░░░░░ if banks were marked ░░░░░░░░ market we d have ░░░░░░░░ trouble And you know ░░░░░░░░ else if they marked ░░░░░░░░ market would be out ░░░░░░░░ business the Fed itself ░░░░░░░░ 1 2 1 3 ░░░░░░░░ of losses But Peter ░░░░░░░░ point doesn t make ░░░░░░░░ If you believe the ░░░░░░░░ are in trouble and ░░░░░░░░ don t disagree with ░░░░░░░░ point then the Fed ░░░░░░░░ be easing not tightening ░░░░░░░░ you want to you ░░░░░░░░ to keep your bank ░░░░░░░░ Schiff Well that s ░░░░░░░░ point But in order ░░░░░░░░ do that they have ░░░░░░░░ unleash massive inflation So ░░░░░░░░ think ultimately that s ░░░░░░░░ Wiping out the value ░░░░░░░░ your savings to inflation ░░░░░░░░ worse than having the ░░░░░░░░ lose your savings But ░░░░░░░░ the government is going ░░░░░░░░ choose to save the ░░░░░░░░ so that the public ░░░░░░░░ its money but what ░░░░░░░░ s going to lose ░░░░░░░░ its purchasing power because ░░░░░░░░ value of your bank ░░░░░░░░ will collapse Of course ░░░░░░░░ government will blame it ░░░░░░░░ greedy speculators on business ░░░░░░░░ the free market If ░░░░░░░░ did the right thing ░░░░░░░░ would be more obvious ░░░░░░░░ the villain was So ░░░░░░░░ re very good at ░░░░░░░░ to shift the blame ░░░░░░░░ inflation to third parties ░░░░░░░░ that s what s ░░░░░░░░ to happen CLAMAN So ░░░░░░░░ s the most important ░░░░░░░░ gotta run but what ░░░░░░░░ the most important wind ░░░░░░░░ change that we could ░░░░░░░░ in the next 48 ░░░░░░░░ Is it GDP Is ░░░░░░░░ the bank stress tests ░░░░░░░░ is it PCE BRENNER ░░░░░░░░ And don t lose ░░░░░░░░ of the fact that ░░░░░░░░ speaks twice in the ░░░░░░░░ two weeks and he ░░░░░░░░ got a different view ░░░░░░░░ everyone else CLAMAN Peter ░░░░░░░░ quick Schiff And remember ░░░░░░░░ is not prices It ░░░░░░░░ money supply and credit ░░░░░░░░ have grown dramatically Rising ░░░░░░░░ are merely a result ░░░░░░░░ inflation They aren t ░░░░░░░░ they don t cause ░░░░░░░░ And given how much ░░░░░░░░ has been created and ░░░░░░░░ much credit prices have ░░░░░░░░ way to go and ░░░░░░░░ s way up CLAMAN ░░░░░░░░ My peanut butter my ░░░░░░░░ peanut butter is gonna ░░░░░░░░ back to 12 Not ░░░░░░░░ Good to see you ░░░░░░░░ Thank you for a ░░░░░░░░ inspiring discussion Peter Andy ░░░░░░░░ a pleasure.”