Ultra-low interest rates are among the biggest impediments currently preventing genuine economic growth in the U.S. economy.
By committing to keeping them near zero for the next two years, the Fed has actually lengthened the time Americans will now have to wait before a real recovery begins. Artificially low interest rates are the root cause of the misallocation of resources that define the modern American economy. As a direct result, Americans borrow, consume, and speculate too much, while we save, produce, and invest too little.
This reckless policy, designed to facilitate government spending and appease Wall Street financiers, will continue to starve Main Street of the capital it needs to make real productivity-enhancing investments.
American investment capital will continue to flow abroad, denying local business the means to expand and hire. In addition, such an inflationary policy drives real wages lower, robbing Americans of their purchasing power. The consequence is a dollar in free-fall, dragging down with it the standard of living of average Americans.
Until interest rates are allowed to rise to appropriate levels, more resources will be misallocated, additional jobs will be lost, government spending and deficits will continue to grow, the dollar will keep falling, consumer prices will keep rising, and the government will keep blaming our problems on external factors beyond its control.
As the old adage goes, "insanity is doing the same thing over and over again and expecting different results."
Related: ProShares UltraShort S&P500 (ETF) (NYSE:SDS), PowerShares QQQ Trust, Series 1 (ETF) (NASDAQ:QQQ), ProShares UltraShort QQQ (ETF) (NYSE:QID), SPDR S&P 500 ETF (NYSE:SPY), SPDR Gold Trust (ETF) (NYSE:GLD)
Peter Schiff`s comments on the economy, stock markets, politics and gold. Schiff is the renowned writer of the bestseller Crash Proof: How to Profit from the Coming Economic Collapse.
- Gold: The Rally Will Gather Momentum As The Year Progresses
- U.S. Dollar: The World Has A Lot More Confidence Than They Should
- Video: Confiscating Excess Wealth
- Dow Jones Industrials & Gold Parity
- Video: The Federal Reserve Will Not End QE
- What Is Full Employment To Janet Yellen?
- Momentum Stocks Are Having Trouble
- Quantitative Easing (QE) Is An Euphemism For Inflation
- China: No Evidence That Demand For Gold Will Slow
- Video: The Bullish Case For Gold
- ► 2013 (395)
- ► 2012 (438)
- Fiat Currencies Can Be Created At Will In Infinite...
- Silver Will Eventually Break Through 50 USD
- The Dollar Is Ready To Break Down Further
- Recession: It’s A 100 Percent Chance
- The Only Industry Where Over The Last Couple Of Mo...
- Making Money Is Controversial? Ron Paul's Profitab...
- No Ceiling For The Price Of Gold
- Video Market Update: Stocks, US Treasuries
- How Can The US Hold AA+ And China AA-?
- The Reality Is That We Are Going Back To Recession...
- In Wall Street Parlance Any Downgrade Means Get Th...
- The Worst Is Yet To Come For The Markets & Economy...
- Gold Is Going To Go Higher Because People Want Ref...
- New York Times Breaking News: Superhero Paul Krugm...
- Reckless Policy Is Destroying The US Economy
- Americans Borrow, Consume, And Speculate Too Much,...
- Pegging The Swiss Franc To The Euro Is Not A Good ...
- Ultra-Low Interest Rates Are Among The Biggest Imp...
- Video Interview: FOMC Announcement Reaction
- The Tipping Point
- Yen & Swiss Franc Interventions: They Will Not Be ...
- AA+ Rating On U.S. Sovereign Debt Is Not Low Enoug...
- Video Interview On BBC Newsnight
- We Are Not Going To Have Growth, We Will Have Infl...
- We're On A Collision Course For Disaster
- The Dow Jones Index - Gold Ratio
- The Cost of Government Is Going To Be Born By Thos...
- Central Banks Should Sell Dollars And Buy Gold
- The Real Crisis Is Not The Debt Ceiling. The Crisi...
- Means For The Government To Deal With This Intract...
- Why Are US Treasuries Rallying?
- Debt Ceiling Theatrics, U.S. Economy Back in Reces...
- ▼ August (32)
- ► 2010 (300)
- ► 2009 (280)