Inflation, The Dollar and Gold

" Hello and welcome to freedom watch your daily dose of raw liberty streaming online. At foxnews.com. I'm your host judge entered a Fontana -- here. Defending freedom defending your natural rights and defending your right to have a government that stays within the confines of the constitution. Rising unemployment and likely inflation. The falling dollar and talk of an alternative global currency and gold reaching record highs what's happening to our economy -- it. And will that rebound here with some -- his Connecticut senate candidate and president of Euro Pacific Capital Peter -- Peter welcome back to the show. -- judge that the government says the recession has bottomed out do you buy that."

" Not a camp. -- the recession has got a long way to go in fact if you look at the recent data that came out couple days ago. The GDP. Is now 71%. Consumer Spending that's an all time record released -- record since -- war war. And that shows me that the economy is getting more out of balance and we have a -- begun but to address the underlying economic imbalances that make -- recession necessary."

" what are we doing wrong or what is the government doing wrong. That gross domestic product GDP is that --"

" Well -- means spending when government is doing at the government it is encouraging. More spending. Through reckless borrowing. That the problem is we need less Consumer Spending right now because we spent too much. When -- consumers to save money we need savings to go to businesses. So they can make capital investments -- they can expand so we can be more productive. So that we can create more jobs but none of this is happening all of -- what was being squandered on president consumption we're digging ourselves and -- deeper ditch. And that is being reflected in the weakening value of the dollar. I would leave foreign exchange markets understand that all we've got -- inflation -- printing money we're not making stops were driving down the value of our currency. And you concede that reflected in the in a record high price of gold. All of this is gonna come up and heads to and I think get a real currency crisis -- you know it takes a big drop who's down maybe ten or 20% or 30%. In a short period of time. Then we're gonna be right back as -- a recession except we're gonna have very high inflation in very high interest rates. Simultaneous without it receptions just like to have -- Iceland right now."

" What what is the role of the Chinese Government in the value of the dollar worldwide is there -- some is there are some. Nefarious or evil goal here or -- they just doing what's best for themselves on their economy."

" Well I I I think maybe they think they're doing what's best for themselves but they're not they're actually hurting themselves they came out today China's reserves. Now expanded to point three trillion dollars -- up another 200 billion or so analog -- couple of months. What that represents. It's purchasing power transferred from Chinese citizens. Two Americans. By the Chinese Government because in order to maintain the value of the dollar so we can keep buying Chinese goods that we can't afford. The Chinese Government -- the -- up 200 billion more US dollars. To prevent the -- think. If they didn't do that we would have been able -- those goods because what currency -- fallen. But you -- would have happened the Chinese -- would have lived in and all of a sudden all these Chinese workers would have been able to afford the products that right now they -- So even though maybe they think that they're helping their export economy that hurting their domestic economy and China would be much better off if they kept their stop. And upkeep on paper money -- the other way around."

" Are so so let me get this straight we have a problem caused by too much borrowing and spending. So in order to cure this problem we borrow more from the Chinese the Chinese are worried about the value of the dollar in order to shore up the value of the dollar. They get more dollars."

" Yes but -- never -- trying to cure the problem. We're trying to prevent the problem from being cured. Because the -- is painful. The politicians don't want the cure what they want as a way to postpone -- By pushing off the problems to a later date that is all they're doing what we're doing exactly what. We did in 2001 and 2002. When bush and and Greenspan's. We used to -- our recession to run its course instead they slashed interest rates -- stimulate the economy and they created the problems that finally manifested 2008. Now we're doing the exact same thing but the problems -- so much bigger now and the stimulus is so much bigger to try to postpone it. That we're not gonna buy as much time you know 2000 the world what they did in 2001 -- 2002. We got about five years of phony prosperity that we're now paying for I think this time it's -- we're not gonna get -- as as long a period of phony prosperity. Maybe they're gonna buy one or two years. I three years -- And then we're gonna have a collapse so much worse than anything we've experienced in the -- here."

" Are are you surprised the gold is over a thousand dollars announced today."

" I'm surprised it's not over 2000 I was -- and I think that's. Commitment that the war was still not grasping the significance of what's going aren't they still don't appreciate. The real predicament that the US economy has been yup how precarious our our Bob -- banking system and that is how -- we're totally depended right now on this artificial life support. Of 0% interest rates intact and -- the Fed is pretending that they stand ready to raise interest rates as soon as inflation becomes apparent that -- blocked inflation is already getting worse they can't raise interest rates they're gonna huge box. And when the -- figures out. The extent of of this problem I think -- gonna -- go ballistic but I think for now people should take advantage of other people's shortsighted -- and complains that he. And and buy gold by -- by commodities get -- your dollars by foreign assets before the diluted much more valley."

" And and before I let you go the government thinks it can help liquidity. By suppressing. The compensation. Packages. Of executives at major banks. Won't that cause a flight of talent away from those banks."

" and this whole thing you know it's you know. Because that's you have no stake in setting compensations anywhere but the problem is. They bailed out all these companies they should've let them -- the compensation that I think a lot of these executives should be getting Peter Nero. -- adjust the composition of an unemployment check. Because they -- have lost their jobs and all -- bad -- went -- instead -- buddies I'm being downloaded the album -- with with massive amounts of money. And now Wall Street is making even more money record amounts of money taking cheap free money from the government and just speculating what. And you know as for -- now illness such an account way to put it back last that the government wants a continent and our -- related -- that operates and what I'm afraid of is that they're gonna go even further. This is -- to be to Camel's nose under the tent. They'll start regulating its settings -- For all sorts of companies -- even companies that have nothing to do it with -- government bail out."

" Peter Schiff thanks for joining us some freedom watch critically."