3 Minutes Ago: Peter Schiff Shared a Horrible WARNING

Añadido: 2026-05-26

[00:00:00]This can't happen. This future is impossible. There's no way we could get away with this. So, something has to happen between now and then to prevent this from happening. And it's going to be a a crisis. See, what the uh markets don't understand is that the entire foundation, right, that we've been living on is about to implode. It's in the process of imploding beneath our our feet.

[00:00:31]Nothing works with normal interest rates. Let alone high interest rates.

[00:00:36]You can't run these massive deficits with normal interest rates. In fact, even Janet Yellen, you know, remember when she was asked if she's worried about the debt, she said, "No, I'm not because the interest rates are low. So, who cares about the debt? All I care about is the interest payments." Well, look at the interest payments. Look what's happening. Why does she still not care about it? When she said that, I pointed out, "Well, interest rates are going to go up. It's inevitable. And so, the problem is inevitable. But, the government doesn't work uh with normal interest rates. The stock market doesn't work. All the companies are levered up too much. The real estate market doesn't work with normal interest rates.

[00:01:17]I said that the home mortgages are at 7.9. We could be at 9%. In fact, I think it's likely we can hit 9%. If the Fed doesn't come in and say uncle on the inflation war.

[00:01:30]>> [music] >> If If Powell continues to act as if he's going to keep fighting inflation, we're going to have 9% mortgage rates by the end of this year.

[00:01:39]Now, that's like a tripling from where they were.

[00:01:43]How can the banks survive?

[00:01:46]The mortgage-backed securities are imploding.

[00:01:49]We got a small taste of it when we got the bankruptcy of a few banks earlier in the year, where it was Mar- March or so, when uh you know, we we got three banks uh the Silicon Valley uh bank or Signature Bank or you know, those the banks that were lending to crypto, you know, they they went down.

[00:02:10]But, I said at the time that what happened with these banks is a problem for all banks. Because they all loaded up on mortgage-backed securities and treasuries. Again, I don't think anybody other than me, cuz I've never heard I never heard anybody saying that stuff.

[00:02:29]But, I was warning for all the years that everybody was saying how great it was that Americans could refinance and lock in these low rates.

[00:02:39]I was the only one saying, "Yeah, but what about the banks? What about the lenders who are stuck with this paper?"

[00:02:47]It's a it's a a negative-sum game. The borrower's gain is the lender's loss. I was saying, "What happens when interest rates eventually go up?" The borrowers are sitting pretty because they've got these cheap loans. The lenders are broke because they've got all these underwater assets. They own mortgages or treasuries that have collapsed in value, rendering them all insolvent. That's why when I was talking on my podcast, people you know, about or people would call me up, "Should I buy a house?" I would say, "Well, just make sure you get a 30-year fixed-rate mortgage." Because at the end of the day, that's going to be your biggest asset, your mortgage, [music] cuz it's going to be your bank's biggest liability.

[00:03:32]So, all these banks are insolvent. We're about to see another wave of collapses.

[00:03:38]Now, of course, the banks will be able to, you know, uh postpone the collapse by going to the Fed and giving them all their underwater mortgage-backed securities at par.

[00:03:51]Right? So, the the Fed's going to have to explode its balance sheet again.

[00:03:54]We're going to have to see a major reversal in quantitative tightening again to quantitative easing to prevent all of these banks from failing. But again, when the banks take this bad collateral to the Fed and get par for it, even though it may only be worth 50 or 60 cents on the dollar, this is only short-term.

[00:04:18]The Fed is supposed to give all these securities back uh to the banks and ask for their money back. Right? This is like a short-term thing. I forget the date that all these loans are due, but these are loans.

[00:04:32]Right? The new window that they opened up to stave off that financial crisis earlier in the year, they put a band-aid, you know, on a cancer.

[00:04:42]They said, "Look, you we'll we'll we'll loan you par, even though your securities are are worth a fraction of par, but we'll loan you the money for a year." Well, are the banks going to be able to repay these loans? Course not.

[00:04:54]They don't want that collateral back.

[00:04:56]They'd They'd immediately be insolvent.

[00:04:59]The reason they're not insolvent is because they dumped all that bad debt on the Fed. But the Fed is pretending it's going to give it back to these insolvent banks. But if it gives it back to the banks, they'll be insolvent. And so, it can't. But the it when the Fed has to admit this, again, that's, you know, letting the cat out of the bag. But if it continues this, then the balance sheet is going to have to explode. But then in order to prevent all the banks that took advantage of this from failing, >> [music] >> uh Powell is going to have to extend the maturity of these loans. Again, he's going to be extending them indefinitely because the banks cannot repay the loans without failing.

[00:05:38]And of course, if the banks fail, well, there's a financial crisis, and who's going to bail them out?

[00:05:43]You see, if Powell is going to continue to fight inflation, nobody can get a bailout. The minute there's a bailout, you stop the inflation fight because inflation is how the Fed bails everybody out. They bail out banks or they bail out the economy the government by creating inflation.

[00:06:03]The government is going to have to level with the people and tell them, you know what? The party's over. We got to either massively raise your taxes or we got to slash spending.

[00:06:16]We can't keep spending all this money that we don't have. We can't keep giving people social security checks because they just take that money and spend it.

[00:06:26]You know, people on social security aren't working, right? They're retired, so they're not producing, but they're spending a lot of money. They're driving up prices. You want to cut back on inflation, you got to take that social security money away or you got to take money away from somebody else so that people on social security can spend it.

[00:06:44]So, either you cut social security benefits or you raise the taxes of the people who are paying the social security taxes. So, you got to raise the payroll tax or you got to cut social security, but the politicians don't want to do either one of those and they didn't have to do anything for years because they could borrow the money instead. And the only reason they could do that was because interest rates were rock bottom. Well, they're not rock bottom anymore. They are normalizing and they're nowhere near where they're going to go. We still have a long way to go up. People are in denial here. Right?

[00:07:15]Again, they expect the Fed to cut rates any moment. How can they do that where with inflation where it is? You know, by the way, oil was up again today. Oil is back to almost $91 a barrel. And this is with the dollar going up, right? Oil is still going up and stocks the Dow was down 400 points today. Nasdaq had an even bigger drop down about a percent and a half and oil still went up.

[00:07:41]Imagine how what's going to happen to oil if we get a bounce in the stock market, if the dollar falls, oil's going to just go straight up. We're going to go through 100. Oil prices are not going to stop going up because inflation has driven them up. Meanwhile, we can't sell any more oil from the Strategic Petroleum Reserve.

[00:07:59]In fact, they need to buy oil from the to refill the reserve.

[00:08:04]And they're going to have to buy it back at a higher price than they sold. It's going to be a lousy trade. The American public is going to get stuck with the loss. Now, maybe they won't even buy it back for a while. They'll just watch the price go up uh before they have to try to uh buy some of that oil back. But, you can't cut rates. The markets don't get this. Yes, the Fed slashed rates to zero in 2000 and uh and nine. In fact, it slashed them to 1% in 2001 after the financial crisis.

[00:08:35]Slashed slashed them to zero in 2008 and then again in 2020 with COVID. Everybody expects, okay, the Fed's going to slash rates to zero again. They can't do that this time.

[00:08:47]The only reason they got away with it is because inflation, the way it's measured, was under 2% and Powell could say, "Well, we can print more money. We can do QE to stimulate the economy because we're underneath our inflation target. And since we need to get the inflation rate up to 2%, we can do this because now we kill two birds with one stone. We stimulate the economy, plus we push up the inflation rate so that we can get to our target." So, quantitative easing, stimulus, the Fed conceded that those policies would push the inflation rate up because that's what they claimed they wanted. They wanted higher inflation.

[00:09:31]So, that was the justification. But, if we have a crisis now, if the markets crash and if banks start failing, but the inflation doesn't come down, how do you justify cutting rates? You can't.

[00:09:46]Because inflation is too high. You can't say, "Well, inflation is 4 or 5% but we're going to create even more of it to try to prop things up." That will just crash the dollar, uh you know, send prices ballistic. In fact, I think that at some point soon, that's going to happen anyway.