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The Bond Trap
Posted by Peter Schiff on 06/23/2014 at 8:13 AM

The American financial establishment has an incredible ability to celebrate the inconsequential while ignoring the vital. Last week, while the Wall Street Journal pondered how the Fed may set interest rates three to four years in the future (an exercise that David Stockman rightly compared to debating how many angels could dance on the head of a pin), the media almost completely ignored one of the most chilling pieces of financial news that I have ever seen. According to a small story in the Financial Times, some Fed officials would like to require retail owners of bond mutual funds to pay an "exit fee" to liquidate their positions. Come again? That such a policy would even be considered tells us much about the current fragility of our bond market and the collective insanity of layers of unnecessary regulation.

 

Recently Federal Reserve Governor Jeremy Stein commented on what has become obvious to many investors: the bond market has become too large and too illiquid, exposing the market to crisis and seizure if a large portion of investors decide to sell at the same time. Such an event occurred back in 2008 when the money market funds briefly fell below par and "broke the buck." To prevent such a possibility in the larger bond market, the Fed wants to slow any potential panic selling by constructing a barrier to exit. Since it would be outrageous and unconstitutional to pass a law banning sales (although in this day and age anything may be possible) an exit fee could provide the brakes the Fed is looking for. Fortunately, the rules governing securities transactions are not imposed by the Fed, but are the prerogative of the SEC. (But if you are like me, that fact offers little in the way of relief.) How did it come to this?

 

For the past six years it has been the policy of the Federal Reserve to push down interest rates to record low levels. In has done so effectively on the "short end of the curve" by setting the Fed Funds rate at zero since 2008. The resulting lack of yield in short term debt has encouraged more investors to buy riskier long-term debt. This has created a bull market in long bonds. The Fed's QE purchases have extended the run beyond what even most bond bulls had anticipated, making "risk-free" long-term debt far too attractive for far too long. As a result, mutual fund holdings of long term government and corporate debt have swelled to more $7 trillion as of the end of 2013, a whopping 109% increase from 2008 levels.   

 

Compounding the problem is that many of these funds are leveraged, meaning they have borrowed on the short-end to buy on the long end. This has artificially goosed yields in an otherwise low-rate environment. But that means when liquidations occur, leveraged funds will have to sell even more long-term bonds to raise cash than the dollar amount of the liquidations being requested.

 

But now that Fed policies have herded investors out on the long end of the curve, they want to take steps to make sure they don't come scurrying back to safety. They hope to construct the bond equivalent of a roach motel, where investors check in but they don't check out. How high the exit fee would need to be is open to speculation. But clearly, it would have to be high enough to be effective, and would have to increase with the desire of the owners to sell. If everyone panicked at once, it's possible that the fee would have to be utterly prohibitive.

 

As we reach the point where the Fed is supposed to wind down its monthly bond purchases and begin trimming the size of its balance sheet, the talk of an exit fee is an admission that the market could turn very ugly if the Fed were to no longer provide limitless liquidity. (See my prior commentaries on this, including May 2014's Too Big To Pop)

 

Irrespective of the rule's callous disregard for property rights and contracts (investors did not agree to an exit fee when they bought the bond funds), the implementation of the rule would illustrate how bad government regulation can build on itself to create a pile of counterproductive incentives leading to possible market chaos.

 

In this case, the problems started back in the 1930s when the Roosevelt Administration created the FDIC to provide federal insurance to bank deposits. Prior to this, consumers had to pay attention to a bank's reputation, and decide for themselves if an institution was worthy of their money. The free market system worked surprisingly well in banking, and could even work better today based on the power of the internet to spread information. But the FDIC insurance has transferred the risk of bank deposits from bank customers to taxpayers. The vast majority of bank depositors now have little regard for what banks actually do with their money. This moral hazard partially set the stage for the financial catastrophe of 2008 and led to the current era of "too big to fail."

 

In an attempt to reduce the risks that the banking system imposed on taxpayers, the Dodd/Frank legislation passed in the aftermath of the crisis made it much more difficult for banks and other large institutions to trade bonds actively for their own accounts. This is a big reason why the bond market is much less liquid now than it had been in the past. But the lack of liquidity exposes the swollen market to seizure and failure when things get rough. This has led to calls for a third level of regulation (exit fees) to correct the distortions created by the first two. The cycle is likely to continue.

 

The most disappointing thing is not that the Fed would be in favor of such an exit fee, but that the financial media and the investing public would be so sanguine about it. If the authorities consider an exit fee on bond funds, why not equity funds, or even individual equities? Once that Rubicon is crossed, there is really no turning back. I believe it to be very revealing that when asked about the exit fees at her press conference last week, Janet Yellen offered no comment other than a professed unawareness that the policy had been discussed at the Fed, and that such matters were the purview of the SEC. The answer seemed to be too canned to offer much comfort. A forceful rejection would have been appreciated.  

 

But the Fed's policy appears to be to pump up asset prices and to keep them high no matter what. This does little for the actual economy but it makes their co-conspirators on Wall Street very happy. After all, what motel owner would oppose rules that prevent guests from leaving? The sad fact is that if investors hold a bond long enough to be exposed to a potential exit fee, then the fee may prove to be the least of their problems.

 

Peter Schiff is the CEO and Chief Global Strategist of Euro Pacific Capital, best-selling author and host of syndicated Peter Schiff Show.







Tags:  bond mutual fundsexit feeFederal ReserveFinancial Timesinterest rates
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Draghi Hits Savers To Salvage Faux Recovery
Posted by Peter Schiff on 06/18/2014 at 2:20 PM
On June 5th, Mario Draghi, President of the European Central Bank (ECB), announced a package of measures, including a policy of negative interest rates, aimed at encouraging or even forcing Eurozone banks to increase their lending to businesses.Although previously imposed by Swiss banks on their depositors, this will be the first time that a central bank has charged negative interest rates. The package also contained a reduction in Base Rate, a further major new Long Term Refinancing Operation (LTRO), a reaffirmation of 'Forward Guidance' to indicate low interest rates for the foreseeable future, and hints that the ECB might in future engage in Bernanke-style Quantitative Easing (QE).
 
Taken together, the total package is manna from heaven, or money for nothing, for the neo-Keynesians now holding power in most Eurozone governments. However, to Austrian School economists, it amounts to a political acceptance by Germany of a further postponement of the price of economic reality. It raises the eventual price to be paid in future for the illusion of economic growth today. In the meantime, the package likely will discourage savings, while perhaps encouraging imprudent lending, mal-investment, an asset price boom and currency distortions due to a carry trade based on low cost euros.
 
Stock markets rose strongly on Draghi's news. Amazingly, the 2.58 percent yield on 10-year Spanish government bonds fell below that of 10-year U.S. Treasuries. Given the continued structural problems that plague the Spanish economy, this fact indicates persistent delusions in markets.
 
It is hoped that charging a negative interest rate of 0.10 percent on bank deposits with the ECB will encourage banks to lend their excess deposits to other banks (in the interbank market) or to lend to corporate or retail borrowers. It is a desperate measure to force banks to take more risks. One of the unforeseen results may be the further development of the so-called "carry trade."
 
Given the relatively low cost of borrowing euros vis-à-vis other currencies, many investors could be tempted to borrow euros to purchase higher yielding currency (either for an interest rate spread or to use the newly raised funds to invest in the host country). For example, an investor may borrow euros, exchange them for British Pounds and invest the proceeds in the London property market, inflating further what the Bank of England has warned is a dangerous property bubble. In addition, upwards pressure is exerted on Sterling rendering British exports less price competitive. Of course, this suits Eurozone members such as Germany.
 
Although Draghi's decision to drop the interest rates on the ECB's  massive 400 billion euros Long Term Refinancing Operation (LTRO)has received less publicity, its impact may be just as great. The lower LTRO rate may encourage further risky lending and dubious investment. In the short-term such lending will conceal current bad loans, boost speculation and financial markets. The future costs of default likely will be socialized. But, by then, it is to be hoped that those bankers and politicians responsible will have been promoted or moved on!
 
In addition, the continuation of ultra low interest rates, under QE, will erode savings further and even discourage the ethos of saving in favor of current spending. The discouragement of saving in favor of current synthetic growth appears to be politically deceptive and deeply destructive of a healthy economy.
 
Furthermore, some would argue that, with bond markets at record highs, most banks are at far greater risk than appears at first sight. Already, Eurozone banks are far more highly leveraged than their American counterparts. As such, they are especially vulnerable to a dramatic rise in interest rates and a collapse in government bond prices.
 
Mario Draghi is acknowledged widely for his PR ability. However, more prudent observers see him more as a conjuror. While his policies have not attracted as many headlines as the Federal Reserve's Quantitative Easing program, the full roster of the ECB's liquidity injectors is perhaps more  injurious to economic growth. Draghi has joined and even exceeded the central bank 'monopoly money' policies of the United States, Great Britain and Japan.
 
It's a shame. The ECB could have been a beacon of sanity in an otherwise insane world.  
 
John Browne is a Senior Economic Consultant to Euro Pacific Capital. Opinions expressed are those of the writer, and may or may not reflect those held by Euro Pacific Capital, or its CEO, Peter Schiff.
 
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Tags:  ECBfederal income taxincome taxtaxtaxes
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Irwin Schiff's motion to the Supreme Court.
Posted by Peter Schiff on 06/16/2014 at 1:00 PM

My father makes a powerful case that the IRS has been collecting the income tax in violation of law, multiple Supreme Court decisions, and the U.S. Constitution.    At the very least his efforts provide compelling evidence of the sincerity with which he holds his beliefs and that his conduct was in no way criminal.   My father is 86, practically blind, in failing health, yet is still fighting for a cause he wholeheartedly believes in.  He is proceeding without a lawyer and despite his physical limitations and the limited computer access provided in federal prisons, he still managed to put this comprehensive motion together.   Read it yourself and share it with as many people as you can.  My father would appreciate your assistance in making sure that his message is heard.   Even if the courts ignore it, let's try and make sure that the American people do not.    Thanks for your help. 

 





Tags:  federal income taxincome taxIRSIrwin Schifftaxtaxes
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Posted by Peter Schiff on 06/13/2014 at 6:40 AM
Thus far 2014 has been a fertile year for really stupid economic ideas. But of all the half-baked doozies that have come down the pike (the perils of "lowflation," Thomas Piketty's claims about capitalism creating poverty, and President Obama's "pay as you earn" solution to student debt), an idea hatched last week by CNBC's reliably ridiculous Steve Liesman may in fact take the cake. In diagnosing the causes of the continued malaise in the U.S. economy he explained, "the problem is that consumers are not taking on enough debt." And that "historically the U.S. economy has been built on consumer credit." His conclusion: Consumers must be encouraged to borrow more money and spend it. Given that Liesman is CNBC's senior economic reporter, I would hate to see the ideas the junior people come up with.
 
Before I get into the historical amnesia needed to make such a statement, we first have to confront the question of causation. Just as most economists believe that falling prices cause recession, rather than the other way around, Liesman believes that economic growth is created when people tap into society's savings in order to buy consumer goods that they could not otherwise afford. But consumption does not create growth. Increasing productive output allows for greater consumption. Something needs to be produced before it can be consumed.
 
But even allowing for this misunderstanding, consumer credit does little to increase consumption. All it accomplishes is to pull forward future consumption into the present (while generating a fee for the banker). This is like giving yourself a blood transfusion from your left arm to your right. Nothing is accomplished, except the possibility of spilling blood on the floor. But it's not even that benign.
If, for instance, a consumer borrows to take a vacation, the debt will have to be repaid, with interest, from future earnings. This just means that rather than saving now (under-consuming) to pay in cash (which under normal circumstances would earn interest and defray the cost) for a vacation in the future, the consumer borrows to vacation now and pays for it in the future. But shifting consumption forward can only create the illusion of growth.
 
Unlike business credit that can be self-liquidating (businesses borrow to invest, thereby expanding capacity, increasing revenue, and gaining a better ability to repay the loan out of increased earnings), consumer credit does nothing to help borrowers repay. Why would a consumer expect it to be easier to pay for a vacation in the future that he can't afford in the present? Especially when he is using credit to pay, which will add interest costs to the final bill. As a result,  consumer loans diminish future consumption more than current consumption is increased.
 
In fact, borrowing to consume is the worst use of society's limited store of savings. As explained in my book, How an Economy Grows and Why it Crashes, savings leads to capital formation and investment, which grows productive capacity. When production grows, goods and services become more plentiful and affordable, thereby raising living standards. Consumer credit interferes with this process. Funds borrowed for consumption are not available for more productive uses. Since consumer credit reduces investment, it also reduces future production, which must also reduce future consumption.
 
Liesman is also mistaken that consumer credit has been the historic foundation of growth in the United States. It may surprise him to know that consumer credit was largely unknown until the second half of the 20th Century. Before that, people simply did not, or could not, buy things on credit. They tended to pay in cash (even for cars) or with the now quaint system of lay-a-way (which is essentially the opposite of consumer credit). Credit cards did not become ubiquitous until the 1970s. It was also much more common for Americans to save money for an uncertain future, the "rainy day," that we were always being warned about. But savings rates now are only a fraction of where they had been for most of our history. Consumers now expect to borrow their way out of any crisis. Yet the American economy enjoyed some of its best years before consumer credit ever became an option.    
 
What Liesman is really advocating is that consumers borrow money to buy things they cannot afford. What kind of economic advice is that? Especially now that one third of Americans have less than $1,000 saved for retirement; a statistic so shocking that even CNBC recently cited it as a cause for concern. Does he really think that these savings-short Americans should take on even more consumer debt? Does creating a nation of bankrupt seniors who are too broke to retire ever create a more prosperous society?
 
Contrary to Liesman's asinine contention, it's not consumer credit that built the U.S. economy but its opposite - savings! Under-consumption not excess-consumption is what made America great. By saving instead of spending, consumers provided society with the means to increase investment and production that led to rising living standards for all. Unfortunately, it's consumer credit that is helping to destroy what savings once built.

Peter Schiff is the CEO and Chief Global Strategist of Euro Pacific Capital, best-selling author and host of syndicated Peter Schiff Show.

Catch Peter's latest thoughts on the U.S. and International markets in the Euro Pacific Capital Spring 2014 Global Investor Newsletter!

Tags:  CPIeconomy
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Posted by Peter Schiff on 06/11/2014 at 12:00 PM

The French economist Thomas Piketty has achieved worldwide fame by promoting a thesis that capitalism is the cause of growing economic inequality. Unfortunately, he is partially right. However, the important distinction missed by Piketty and all of his supporters is that state capitalism, not free market capitalism, has reigned supreme in recent decades in the world's leading democracies. It is this misguided attempt to wed the power of the state to the private ownership of capital that has led to the mushrooming of economic inequality. If the public cannot be made aware of the distinction, we risk abandoning the only system capable of creating real improvements for the vast majority of people.

 

In his book entitled 'Capital in the 21st Century', Piketty, like Karl Marx in 'Das Kapital,' places the hinge of economic tension at the supposed opposition between the competing interest of labor and capital. He believes that "capitalism automatically generates arbitrary and unsustainable inequalities that radically undermine the meritocratic values on which democratic societies are based." However, this can only become true if free markets become controlled, or distorted, by the establishment of monopolies, be they private or state owned. 

 

In the early twentieth century, U.S. Governments were alert to the destruction of free markets by monopolistic cartels and enacted strong anti-trust laws to curb their power. The United States thereafter achieved strong economic results in the first three decades of the 20th Century. In contrast, the socialist governments of post WWII Britain used public funds to establish state owned monopolies, similar to those existing in the Soviet Union. This resulted in dramatic economic declines, that continued into the 1980s when the U.K. was rescued by the free market policies of Margaret Thatcher. Her central strategy was to restore individual freedom by breaking state owned monopolies and reducing the coercive control of trade unions. Her actions unleashed a resurgence of prosperity in Britain that was imitated in many other countries. Her policies were adopted with particular enthusiasm by countries, like Poland, which had only recently shaken off the yoke of Soviet Communism. Poland is now one of the strongest economies in Europe.

 

History provides ample evidence that when allowed to function properly free market capitalism generates massive national prosperity with high employment, a strong currency and rising standards of living. It is only when the state manipulates and over regulates free markets that capitalism fails. However, capitalism usually takes the blame for the failures of statism.

Piketty asserts that capitalism is "inherently unstable because it concentrates wealth and income progressively over time, leaving behind an impoverished majority. ..." He proscribes even an international wealth tax and higher income taxes, above 80 percent, to redistribute rather than to invest savings. This would essentially create a state monopoly on wealth. But again, history tends to demonstrate that state monopolies create poverty for all but the politically connected elite. 

 

Even the Soviet Union, a military superpower, was brought to its economic knees by state monopolies. Communist Party Secretaries, Andrapov and Gorbachev, were forced to the recognition that free markets should be introduced within Russia. This led to 'Perestroika' and 'Glasnost' and the freeing of markets in Russia. 

 

By concluding that capitalism, even if it is confined to just a few countries, will lead to increasing poverty among the masses around the world, many cynical observers may conclude that Piketty is laying out a carefully planned case towards global socialism along the lines first attempted by the Bolshevik Commintern. Some conclude that such a move could be spearheaded by international institutions like the UN and IMF. 

 

To achieve inherently unpopular global power, national elites must cooperate to bring about such levels of economic chaos and human suffering that people, despairing of ineffective democracy, will look for strong, global government as a welcome solution. To achieve this end the economic problems and human suffering must be extreme and seemingly beyond solution by any national government. By continuing to debase and destroy fiat currencies while preventing the markets from healing themselves, central banks around the world are doing their part to create these conditions. 

 

However, those who look towards strong global government must realize that likely it will lead to a world of extreme global inequality in which any effective opposition will be impossible. This is the fascistic face behind the cuddly and concerned image that has made Piketty the economic North Star of a new generation. These faulty bearings must be corrected or the world's poor will suffer far more than they need to.

Tags:  CPIeconomy
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Posted by Peter Schiff on 06/06/2014 at 11:08 AM

Economists, investment analysts, and politicians have spent much of 2014 bemoaning the terrible economic effects of the winter of 2014. The cold and snow have been continuously blamed for the lackluster job market, disappointing retail sales, tepid business investment and, most notably, much slower than expected GDP growth. Given how optimistic many of these forecasters had been in the waning months of 2013, when the stock market was surging into record territory and the Fed had finally declared that the economy had outgrown the need for continued Quantitative Easing, the weather was an absolutely vital alibi. If not for the excuse of the bad weather, the entire narrative of a sustainable recovery would have been proven false.

 

Remarkably, this optimism was largely undiminished when the preliminary estimate for first quarter GDP came in at a shocking minus one percent annualized. This number, almost four percentage points lower than the forecasts from the end of 2013, hinted at an economy on a path toward recession. Still, the experts brushed off the report as a weather-related anomaly.

 

In contrast, I spent the better part of the last five months arguing that the weather was a straw man. I saw a fundamentally weak and contracting economy being artificially propped up by Fed stimulus, illusory accounting, and massive federal deficit spending.  However, while it is difficult to precisely measure the effects of bad weather on the economy, a fresh look at the historical data does tell me that a bad winter usually has an economic effect, but not nearly enough to support the oversize excuses being made by our leading pundits.

 

According to Rutgers University's Global Snow Lab, the winter of 2014 was one of 18 winters in which North America experienced demonstrably "above the trend line" snow accumulation since 1967 (this is as far back as Rutgers data goes). But there were at least eight winters in that time period that had more snow than in 2014. So it would be a stretch to say that this past winter made a greater impact than the average of the 10 snowiest winters since 1967. Cross-checking those winters with corresponding GDP figures from the U.S. Bureau of Economic Analysis (BEA) reveals some very interesting conclusions.

 

In general, first quarter (which corresponds to the winter months of January, February, and March) shows annualized GDP growth that is in line with other quarters. For instance, since 1967 average annualized 1st quarter growth came in at 2.7%, slightly above the 2.55% for the average 4th quarter, and below the 2.8% in 3rd quarter and 3.4% in 2nd. But when winter gets nasty, the economy does slow noticeably in the first quarter. So, to that extent my initial analysis likely underestimated its impact.  The bad news for the apologists is that the drag is not nearly enough to explain away the current lethargy.

 

The average annualized GDP growth for the 10 snowiest winters (not counting 2014) was just .5%. This is more than two percentage points below the typical first quarter. It's also more than two percentage points below the average annualized growth for the 4th quarters that preceded those 10 snowiest winters. This is important, because the economy tends to develop in waves that occur outside of the weather cycle. So based on this, we can conclude that the snow of this year likely shaved two percentage points from 1st quarter GDP growth.

 

But the negative one percent growth is almost four points off the initial forecasts. So, at best, the winter accounted for half the disappointment. Imagine if we had a mild winter, and 1st quarter GDP came in at a measly 1%. Without a convenient excuse to blame it on, how optimistic would Wall Street be now? Would the Fed really be continuing to taper in the face of such anemic growth? I doubt it.

 

The apologists also ignore the increased ability of current consumers to shop on the Internet at home even when the snow keeps them from the malls. This is an ability that simply did not exist more than 10 years ago...and should help to minimize the winter slowdowns.

 

An analysis of the bad winters also reveals a clear tendency for the economy to bounce back strongly in the following quarter. This confirms the theory that pent up demand gets released in the spring. In the ten 2nd quarters that followed the ten snowiest winters, annualized GDP averaged a strong 4.4%, or almost four percent higher than the prior quarter. (The snap back was even more dramatic in the five snowiest winters, when the differential was more than five percent.) Based on this, we should see annualized 2nd quarter growth this year of at least three or four percent. 
 
However, the raft of statistics that have come in over the past few weeks does not show that this is happening. A horrific trade deficit report came in this week widening to $47 Billion, the highest since July 2012. The data out this week also showed that consumer spending fell .1% in April (for the first time in a year), and that productivity falling in the 1st Quarter by 3.2% in the face of higher labor costs, which grew at 5.7% annualized. And although May's 217,000 increase in non-farm payrolls was in-line with expectation (following the big miss in ADP data earlier in the weak) it nonetheless represents a significant slowdown from April's 288,000 pace. The level of hiring did nothing to push up the labor force participation rate, which remained stuck at a 35 year low of 62.8%. Predictably, almost all of the jobs added were in low paying sectors that will not contribute much to overall purchasing power, like hospitality (mostly bars and restaurants), healthcare, and education. The report included a big drop in the number of construction workers added, which is the latest sign that the real estate sector is decelerating.

 

But even if growth picks up in the 2nd quarter to 4%, my guess is that most analysts will herald the news as confirmation that the economy is back on track, and discussion of the weather will disappear. However, since half of that four percent will have been borrowed from Q1, Q2's higher growth rate will also be weather-related. But while everyone blamed first quarter weakness on the weather, very few will likely cite it as a cause for any potential second quarter strength. But if you add the minus one percent from Q1 to a potential plus four percent from Q2, the average would still only be just 1.5% growth for the first half of 2014. Despite this, the Fed has yet to revise down its full year 2014 growth estimates of 2.8% to 3.2% that it made at the end of last year. To grow at 3% for the year, even with 4% growth in Q2 (which is above the current consensus estimate), the economy would have to grow at 4.5 percent for the entire second half. Good luck with that. 

 

So yes, the winter was bad, and yes it had an effect. But it was not likely the driving force of the first quarter slow-down and its effects should be very confined. But that won't stop the pundits from gnawing on that particular bone as long as they can get away with it. Unfortunately, they can get away with it for a long time.


Peter Schiff is the CEO and Chief Global Strategist of Euro Pacific Capital, best-selling author and host of syndicated Peter Schiff Show. 


Catch Peter's latest thoughts on the U.S. and International markets in the Euro Pacific Capital
Spring 2014 Global Investor Newsletter!


Tags:  CPIeconomy
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Posted by Peter Schiff on 06/05/2014 at 9:44 AM
Even investors who typically eschew precious metals have been hard-pressed to ignore the platinum industry this year. The longest strike in South African history paired with surging Asian demand is set to push the metal back into a physical deficit in 2014 - and could have repercussions for years to come. While gold remains the most conservative choice for saving, the "industrial precious metal" platinum is a compelling investment for those, like me, who are bullish on global net economic growth.

China in the Driver's Seat

As with gold and silver, examining platinum demand takes us to the Eastern hemisphere and China's rapidly expanding economy. In particular, the growing Chinese middle class is generating massive demand for new automobiles, which in turn is consuming plenty of platinum.

For the last ten years, autocatalysts have composed 40-50% of total global platinum demand. Autocatalysts use platinum to clean the emissions of motor vehicles, and 95% of the world's new passenger cars come equipped with them. Both auto production and emissions standards are steadily increasing around the world, especially in the huge emerging market of China.

Global auto production grew 4% in 2013 to almost 89 million units. According to IHS, Inc., world auto sales will continue to grow to more than 100 million units by 2018 - that's 12% growth in the next five years. And you can bet that growth won't be coming from the US.

China's share of global vehicle production has exploded from under 4% in 2000 to an astounding 25% last year. I expect this demand to keep expanding as more Chinese citizens grow wealthier and are able to enter the auto market.


Chinese vehicle production grew almost 15% in 2013 and should grow another 10% in 2014. New emissions standards that went into effect last year are already forcing Chinese auto manufacturers to use more platinum. Indeed, platinum use in Chinese autocatalysts increased 33% in 2013.

I believe this trend will continue as the Chinese government tries to tackle the country's critical pollution crisis. Just last week, the PRC announced that it would be removing 6 million vehicles from China's roads by the end of the year because they no longer meet emissions standards.

Platinum as an Investment

Though industrial applications have the largest impact on its price, platinum remains a sought-after precious metal with growing demand from the investment and jewelry sectors. Jewelry accounts for well over 25% of platinum demand, and that figure has been steadily increasing. Once again, we look east for the most compelling numbers.

Chinese platinum jewelry demand represents about 65% of the world's total and is expected to expand 5% this year. But India is the real bright point - high import tariffs imposed on gold by the Indian government in 2013 have created shortages and very high premiums on the yellow metal, driving consumers to replace gold with platinum. India's platinum jewelry market has seen 30-50% growth every year so far this decade. 2014 should continue that trend with a 35% projected growth in platinum jewelry sales.

While Eastern investors buy physical platinum in the form of jewelry, Westerners are piling into relatively young exchange-traded funds (ETFs) backed by the metal. Platinum ETFs did not exist until 2007, and the first South African-based platinum ETF began just last year. 2013 saw a 55% increase in the amount of physical platinum held by ETFs, totaling 2.5 million ounces.

As short-term traders wake up to the same supply/demand issues summarized in this commentary, the trend of increasing retail investment may well absorb a greater share of the limited supply.

Just as with gold and silver, I believe platinum ETFs are inferior to physical bullion for long-term investment. However, many investors prefer the liquidity they offer, and as a fundamental data point, they should not be ignored.

Supply Goes from Shaky to Shocked

With promising new sources of demand, platinum supplies have been under pressure. To put into perspective how little platinum is available, simply compare it to gold and silver. Over the past decade, about 13.5 times more gold and 100 times more silver have been mined than platinum. The vast majority of the meager platinum supply comes from just two countries - South Africa and Russia. Troubles in both of these countries are pushing supply constraints into a market shock.

Beginning in January, more than 70,000 South African miners went on strike against the three largest platinum producers in the world - Anglo American Platinum, Impala Platinum, and Lonmin. This is the longest strike in South African history and is estimated to have already reduced global platinum production by 40%. About 1 million ounces of platinum will not be mined this year due to the strikes.

No matter when these wage disputes are resolved, they're going to have a deep impact on the platinum industry. Wages are already one of the biggest expenses of mining, and the Association of Mineworkers and Construction Union (AMCU) is demanding a doubling of wages by 2017. They've already rejected an offer of a 10% increase.

This much seems clear: wages are going to go up and the industry will have to restructure its operations to handle the extra expense. The average global all-in cost of production (including capital expenditures and indirect overhead costs) is already at about $1,595 per ounce of platinum - 10% above the current market price.

As the cost of business rises, some industry analysts are forecasting that Lonmin and perhaps other companies will be forced to keep some of their mines closed after the strikes end. This could affect the platinum market for many years into the future. Large mining operations cannot be started and stopped at the drop of a hat, and it may take a significant increase in the price per ounce to justify reopening any shuttered mines.

Meanwhile, there's the possibility that Russia's annexation of Crimea could draw stricter economic sanctions from the United States and the European Union. How this would affect Russia's giant mining industry is hard to tell, though it has already put a lot of upward pressure on the price of palladium, another important platinum group metal (PGM). Russia is the world's largest producer of palladium and is widely suspected of having exhausted its official reserves of the metal. This rumor, combined with the news that Russia has been exporting abnormally large amounts of palladium to Switzerland in anticipation of economic sanctions, helped to drive the metal's price to its highest since 2011 in May.

The rising price of palladium and its ever-deepening physical deficit might even spur more producers to pay the extra for platinum, which can be more efficient than palladium in some autocatalysts. Generally, any limitations on Russian mining are bullish for all PGMs, and I am waiting for platinum to follow palladium's spike.

An Opportunity to Diversify

All told, Thomson Reuters GFMS is predicting at least a 700,000-ounce physical platinum deficit this year. It projects that platinum will pass $1,700 per ounce by the end of 2014, a 18% increase from today's price. Johnson Matthey is even more pessimistic (or optimistic, from the point of view of a platinum investor), predicting a deficit of more than 1.2 million ounces - the largest since 1975.

Even precious metals bears cannot deny the robust fundamentals for platinum this year. Investors who have already formed a bedrock for their portfolio with gold should consider adding physical platinum to increase future returns.

Peter Schiff is Chairman of Euro Pacific Precious Metals, which sells high-quality physical platinum, gold, and silver coins and bars. 

Click here for a free subscription to Peter Schiff's Gold Letter, a monthly newsletter featuring the latest gold and silver market analysis from Peter Schiff, Casey Research, and other leading experts. 

And now, investors can stay up-to-the-minute on precious metals news and Peter's latest thoughts by visiting Peter Schiff's Official Gold Blog.



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Posted by Peter Schiff on 05/29/2014 at 8:54 AM
There can be little doubt that Thomas Piketty's new book Capital in the 21st Century has struck a nerve globally. In fact, the Piketty phenomenon (the economic equivalent to Beatlemania) has in some ways become a bigger story than the ideas themselves. However, the book's popularity is not at all surprising when you consider that its central premise: how radical wealth redistribution will create a better society, has always had its enthusiastic champions (many of whom instigated revolts and revolutions). What is surprising, however, is that the absurd ideas contained in the book could captivate so many supposedly intelligent people.  

Prior to the 20th Century, the urge to redistribute was held in check only by the unassailable power of the ruling classes, and to a lesser extent by moral and practical reservations against theft. Karl Marx did an end-run around the moral objections by asserting that the rich became so only through theft, and that the elimination of private property held the key to economic growth. But the dismal results of the 20th Century's communist revolutions took the wind out of the sails of the redistributionists. After such a drubbing, bold new ideas were needed to rescue the cause. Piketty's 700 pages have apparently filled that void.

Any modern political pollster will tell you that the battle of ideas is won or lost in the first 15 seconds. Piketty's primary achievement lies not in the heft of his book, or in his analysis of centuries of income data (which has shown signs of fraying), but in conjuring a seductively simple and emotionally satisfying idea: that the rich got that way because the return on invested capital (r) is generally two to three percentage points higher annually than economic growth (g). Therefore, people with money to invest (the wealthy) will always get richer, at a faster pace, than everyone else. Free markets, therefore, are a one-way road towards ever-greater inequality.

Since Pitketty sees wealth in terms of zero sum gains (someone gets rich by making another poor) he believes that the suffering of the masses will increase until this cycle is broken by either: 1) wealth destruction that occurs during war or depression (which makes the wealthy poorer) or 2) wealth re-distribution achieved through income, wealth, or property taxes. And although Piketty seems to admire the results achieved by war and depression, he does not advocate them as matters of policy. This leaves taxes, which he believes should be raised high enough to prevent both high incomes and the potential for inherited wealth.

Before proceeding to dismantle the core of his thesis, one must marvel at the absurdity of his premise. In the book, he states "For those who work for a living, the level of inequality in the United States is probably higher than in any other society at any time in the past, anywhere in the world." Given that equality is his yardstick for economic success, this means that he believes that America is likely the worst place for a non-rich person to ever have been born. That's a very big statement. And it is true in a very limited and superficial sense. For instance, according to Forbes, Bill Gates is $78 billion richer than the poorest American. Finding another instance of that much monetary disparity may be difficult. But wealth is measured far more effectively in other ways, living standards in particular.

For instance, the wealthiest Roman is widely believed to have been Crassus, a first century BC landowner. At a time when a loaf of bread sold for ½ of a sestertius, Crassus had an estimated net worth of 200 million sestertii, or about 400 million loaves of bread. Today, in the U.S., where a loaf of bread costs about $3, Bill Gates could buy about 25 billion of them. So when measured in terms of bread, Gates is richer. But that's about the only category where that is true.

Crassus lived in a palace that would have been beyond comprehension for most Romans. He had as much exotic food and fine wines as he could stuff into his body, he had hot baths every day, and had his own staff of servants, bearers, cooks, performers, masseurs, entertainers, and musicians. His children had private tutors. If it got too hot, he was carried in a private coach to his beach homes and had his servants fan him 24 hours a day. In contrast, the poorest Romans, if they were not chained to an oar or fighting wild beasts in the arena, were likely toiling in the fields eating nothing but bread, if they were lucky. Unlike Crassus, they had no access to a varied diet, health care, education, entertainment, or indoor plumbing.

In contrast, look at how Bill Gates lives in comparison to the poorest Americans. The commodes used by both are remarkably similar, and both enjoy hot and cold running water. Gates certainly has access to better food and better health care, but Americans do not die of hunger or drop dead in the streets from disease, and they certainly have more to eat than just bread. For entertainment, Bill Gates likely turns on the TV and sees the same shows that even the poorest Americans watch, and when it gets hot he turns on the air conditioning, something that many poor Americans can also do. Certainly flipping burgers in a McDonald's is no walk in the park, but it is far better than being a galley slave. The same disparity can be made throughout history, from Kublai Khan, to Louis XIV. Monarchs and nobility achieved unimagined wealth while surrounded by abject poverty. The same thing happens today in places like North Korea, where Kim Jong-un lives in splendor while his citizens literally starve to death.

Unemployment, infirmity or disabilities are not death sentences in America as they were in many other places throughout history. In fact, it's very possible here to earn more by not working. Yet Piketty would have us believe that the inequality in the U.S. now is worse than in any other place, at any other time. If you can swallow that, I guess you are open to anything else he has to serve.

All economists, regardless of their political orientation, acknowledge that improving productive capital is essential for economic growth. We are only as good as the tools we have. Food, clothing and shelter are so much more plentiful now than they were 200 years ago because modern capital equipment makes the processes of farming, manufacturing, and building so much more efficient and productive (despite government regulations and taxes that undermine those efficiencies). Piketty tries to show that he has moved past Marx by acknowledging the failures of state-planned economies.

But he believes that the state should place upper limits on the amount of wealth the capitalists are allowed to retain from the fruits of their efforts. To do this, he imagines income tax rates that would approach 80% on incomes over $500,000 or so, combined with an annual 10% tax on existing wealth (in all its forms: land, housing, art, intellectual property, etc.). To be effective, he argues that these confiscatory taxes should be imposed globally so that wealthy people could not shift assets around the world to avoid taxes. He admits that these transferences may not actually increase tax revenues, which could be used, supposedly, to help the lives of the poor. Instead he claims the point is simply to prevent rich people from staying that way or getting that way in the first place.

Since it would be naive to assume that the wealthy would continue to work and invest at their usual pace once they crossed over Piketty's income and wealth thresholds, he clearly believes that the economy would not suffer from their disengagement. Given the effort it takes to earn money and the value everyone places on their limited leisure time, it is likely that many entrepreneurs will simply decide that 100% effort for a 20% return is no longer worth it. Does Piketty really believe that the economy would be helped if the Steve Jobses and Bill Gateses of the world simply decided to stop working once they earned a half a million dollars?

Because he sees inherited wealth as the original economic sin, he also advocates tax policies that will put an end to it. What will this accomplish? By barring the possibility of passing on money or property to children, successful people will be much more inclined to spend on luxury services (travel and entertainment) than to save or plan for the future. While most modern economists believe that savings detract from an economy by reducing current spending, it is actually the seed capital that funds future economic growth. In addition, businesses managed for the long haul tend to offer incremental value to society. Bringing children into the family business also creates value, not just for shareholders but for customers. But Piketty would prefer that business owners pull the plug on their own companies long before they reach their potential value and before they can bring their children into the business. How exactly does this benefit society?

If income and wealth are capped, people with capital and incomes above the threshold will have no incentive to invest or make loans. After all, why take the risks when almost all the rewards would go to taxes? This means that there will be less capital available to lend to businesses and individuals. This will cause interest rates to rise, thereby dampening economic growth. Wealth taxes would exert similar upward pressure on interest rates by cutting down on the pool of capital that is available to be lent. Wealthy people will know that any unspent wealth will be taxed at 10% annually, so only investments that are likely to earn more than 10%, by a margin wide enough to compensate for the risk, would be considered. That's a high threshold.

The primary flaw in his arguments are not moral, or even computational, but logical. He notes that the return of capital is greater than economic growth, but he fails to consider how capital itself "returns" benefits for all. For instance, it's easy to see that Steve Jobs made billions by developing and selling Apple products. All you need to do is look at his bank account. But it's much harder, if not impossible, to measure the much greater benefit that everyone else received from his ideas. It only comes out if you ask the right questions. For instance, how much would someone need to pay you to voluntarily give up the Internet for a year? It's likely that most Americans would pick a number north of $10,000. This for a service that most people pay less than $80 per month (sometimes it's free with a cup of coffee). This differential is the "dark matter" that Piketty fails to see, because he doesn't even bother to look.
Somehow in his decades of research, Piketty overlooks the fact that the industrial revolution reduced the consequences of inequality. Peasants, who had been locked into subsistence farming for centuries, found themselves with stunningly improved economic prospects in just a few generations. So, whereas feudal society was divided into a few people who were stunningly rich and the masses who were miserably poor, capitalism created the middle class for the first time in history and allowed for the possibility of real economic mobility. As a by-product, some of the more successful entrepreneurs generated the largest fortunes ever measured. But for Piketty it's only the extremes that matter. That's because he, and his adherents, are more driven by envy than by a desire for success. But in the real world, where envy is inedible, living standards are the only things that matter.

Peter Schiff is the CEO and Chief Global Strategist of Euro Pacific Capital, best-selling author and host of syndicated Peter Schiff Show.

Catch Peter's latest thoughts on the U.S. and International markets in the Euro Pacific Capital Spring 2014 Global Investor Newsletter!

Tags:  CPIeconomy
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Posted by Peter Schiff on 05/23/2014 at 11:51 AM

In this week's release of the minutes from its April 29-30 meeting, Federal Reserve policymakers made clear that they see little chance of inflation moving past their 2% target for years to come. In order to make such a bold statement, Fed economists not only had to ignore the current data, but discount the likelihood that their current stimulus will put further upward pressure on prices that are already rising.

Even if you believe the highly manipulated government CPI data, April's year over year inflation rate came in at 1.95%, a statistically insignificant difference from the Fed's 2% target. If annualized, April's monthly change would equate to a rate closer to 4%. On the producer side, the numbers are even worse. Last week the Producer Price Index (PPI) came in at .6% for April, after notching up .5% in March. These two months together annualize at 6.6%. So already there is very little wiggle room, if any, before the Fed reaches the point where even its dovish leaders should admit that inflation is a problem.

But like most modern economists, leaders at the Fed deny Milton Friedman's famous maxim that inflation "is always and everywhere a monetary phenomenon." Instead they like to think of it as a kind of pesky but necessary byproduct of economic growth. (Recently the theory has gone even further, mixing cause and effect to determine that inflation causes economic growth). If this were so, then the Fed would have a lot to worry about if its economic forecasts can be trusted.

Despite the muted economic statistics over the last few months, the Fed has not backed off Janet Yellen's 3.0% forecast for 2014 GDP. The near zero growth we saw in Q1 (likely to be revised negative) has not convinced her, or anyone at the Fed, to ratchet down this estimate. So to hit that target, growth for the remainder of the year will have to come in close to 4% per quarter.

If the economy finally picks up to that level, by throwing off the supposedly chilling effect of the past winter, then based on the Fed's views it should expect significant upward pressure on inflation. Yet nowhere in the minutes released today is that possibility even considered. In fact, they explicitly said that inflation would be well below 2% for the next few years, despite the fact that it's already at 2% right now...during a period of admitted weakness! So they expect the economy to grow and inflation to subside even while real interest rates stay deep in negative territory? In essence, they are writing a new economic textbook on the fly. In truth, they are simply stringing together words and ideas designed to soothe the market and to keep anyone from detecting the dangerous trap that they have led us into. So just as the Fed saw no risk of housing prices falling in 2006, they see no risk of consumer prices rising now. In fact, they are just as confident that inflation is "contained" as they were about the sub-prime mortgage crisis. Based on their track record, people should fear exactly what the Fed is not worried about.

In the meantime, the truth about inflation is bubbling up in some unexpected places, sometimes from the same government that tells us that it's not a problem. In order to calculate the payment levels for the SNAP Food Program (aka "Food Stamps"), The U.S. Department of Agriculture is responsible for providing a baseline estimate for the costs needed to feed the typical family that would qualify for the program.

Looking over a twenty-year time frame provides a revealing pattern that we have seen in other places (see Big Mac Index). From 1994 to 2003 the CPI rose by a total of 25% or about 3.2% per year. This is almost exactly the same change that was seen in both the food component of the CPI and the USDA SNAP estimates for their "thrifty" plan to feed a family of four (the "thrifty" plan is the least expensive) over the same period.

But that all began to change in the early part of the current century as the costs began drifting apart from the official CPI. I have made the case many times that this occurred as a result of changes in the way the CPI is calculated, all of which were designed to conceal the true level of inflation. 


From 2004 to 2014 the CPI was up 26% or about 2.5% per year. However, the food component of the CPI was up 30% and the USDA estimate for a family of four was up 32% (The higher cost "liberal plan" increased even more, at 35% over that time). When comparing two sets of government data, it's tough to credit one over the other. But the USDA data is likely much closer to what most of us who shop for food actually experience. If accurate, the USDA numbers mean that over the past decade the costs to actually feed a family increased 23% more than most economists like to tell us.

Rising food prices are a major problem for many Americans struggling to make ends meet in our listless economy. Exactly how much more pain does the Federal Reserve want to inflict on the middle and lower classes before it relents and stops creating even more inflation? 

There is a growing belief among economists, highlighted in a recent debate I had with Nouriel Roubini, that higher prices are actually a benefit to consumers. They believe that the growth created by inflation is worth more than the cost imposed at check-out lines. Instead, we are simply getting another dose of 1970s-style stagflation as higher prices simply amplify the pain of a stagnant economy and diminished employment opportunities.  

The good news for Roubini and his ilk is that inflation does indeed help some people...the very rich. I have long argued that Fed stimulus and quantitative easing only result in the formation of asset bubbles that unevenly favor the rich, while misdirecting capital away from savings and productive investments that would benefit everyone else. Economists had blamed the recent disappointments from mass-market retailers like Walmart, Target, Best Buy, Staples, Dick's Sporting Goods, and Pet Smart (to name but a few) on the ravages of winter weather rather than weak fundamentals. Butyesterday the upscale vendor Tiffany's issued a boffo report that showed net income up an astounding 50% over first quarter in 2013. The rich seemed to have little trouble braving the elements to buy baubles on Fifth Avenue, yet average Americans were too thin-skinned to make it to Dick's Sporting Goods.  

While the world talks about the dangers of deflation, which offers no harm to economies or consumers, actual inflation is everywhere to be seen and nowhere acknowledged. Instead, we get a universal agreement that the middle class must continue to suffer so that the Fed and financial speculators can continue to revel in the charade.

Peter Schiff is the CEO and Chief Global Strategist of Euro Pacific Capital, best-selling author and host of syndicated Peter Schiff Show. 

Catch Peter's latest thoughts on the U.S. and International markets in the Euro Pacific CapitalSpring 2014 Global Investor Newsletter!


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Posted by Peter Schiff on 05/19/2014 at 3:52 PM
One of the biggest questions at the end of 2013 was how the Treasury market would react to the reduction of bond buying that would result from the Federal Reserve's tapering campaign. If the Fed were to hold course to its stated intentions, its $45 billion monthly purchases of Treasury bonds would be completely wound down by the fourth quarter of 2014. Given that those purchases represented a very large portion of Treasury bond issuance at that time, it was widely assumed by many, me in particular, that the sidelining of such huge demand would push down the price of Treasury bonds. Without the Fed's bid, interest rates would have to rise.

But almost five months later, yields on the 10-year Treasury bond are 50 basis points lower than they were at the end of 2013, despite the fact that the Fed has officially trimmed its monthly purchases in half. Apparently, plenty of other buyers were prepared to fill the void. Many have concluded that Uncle Sam doesn't need the Fed after all.  But a close look at international activity in the Treasury market reveals some odd patterns that should be explained.

Over the last six months Belgium has started to behave eccentrically, even by Belgian standards. No, the small country of 11 million has not decided to stop making chocolate or waffles. It has decided to increase its buying of U.S. Treasury bonds... in a very big way. According to latest U.S. Treasury Department data, since August of 2013 entities in Belgium have purchased and held a stunning $215 billion of U.S. Treasuries. This figure is equivalent to about half the country's annual GDP, and equates to almost $20,000 for every living Belgian. Prior to that time, Belgium had held its cache fairly steady at around $170-$190 billion. But by March, that total had increased by almost 130% (to $381 billion) in just seven months. The purchases represented 61% of the total increase in foreign holdings of U.S. Treasuries over that time frame. Given the fact that Belgium, as of last September, had less than 3% of the Treasury bonds held by foreign sources, this is strange behavior indeed.

Of course exactly who is buying those bonds remains a mystery. It's only known for sure that a Belgium-based clearing house called Euroclear is "likely responsible" for holding the $200 plus billion in Treasuries. It's amazing in this day and age when every e-mail and phone call is scrubbed for security content that hundreds of billions of dollars could move across borders without anyone really knowing what is going on. Of course this is likely only possible if official sources themselves are the transacting parties.

What is clear is that this is not likely the government of Belgium, or private Belgian capital, that is doing the buying. The numbers are just too large. This is particularly true in the First Quarter of 2014 when the buying averaged a stunning $41.5 billion per month (January was the biggest month with $54 billion). In all likelihood, the only European buyer with a wallet that big would be the European Central Bank (ECB) itself. But why would the ECB buy when the Federal Reserve was supposed to be tapering?

It is widely recognized that as the flow of capital increases exponentially across borders, and financial systems become more globally integrated, international central bank cooperation has increased. This is especially true between the Federal Reserve and the European Central Bank (ECB) which have closely coordinated policy to deal with the Great Recession of 2008 and the European Sovereign Debt Crisis of 2011. Exactly how, where, and why these banks have worked together is a little harder to imagine.  

Back in late 2011, when the sovereign debt crisis of Greece, Spain, Italy and Portugal threatened to fracture the European Union and take down the euro currency, the Wall Street Journal reported the Federal Reserve was engaging at that time in a "covert bailout" of European banks. Using what was known as a "temporary U.S. dollar liquidity swap arrangement," the Fed provided billions in funds that its European counterpart used to bail out its banks. The Journal speculated that the roundabout arrangement was followed in order to get around legal restrictions that prevented the ECB from lending to banks directly. The Journal called the arrangement "Byzantine" and questioned whether its design was simply meant to confuse the press and investors as to who was funding whom. In any event, the program seems to have achieved its end of keeping European banks solvent until the debt crisis had abated.
 
The Belgian head-scratcher may therefore be a simple case of central bank quid pro quo. In fact, on my radio program today, former Congressman Ron Paul shared my suspicions that there was indeed some type of "quid pro quo" coordination. While there is no smoking gun, the timing and scope of the buying is certainly suggestive of a coordinated effort. Confidence that the financial markets would stay stable during the tapering campaign was a critical element of the program's success. Any panic in the bond market would cause yields to spike, which would have a strong negative effect on stock prices and economic confidence. If the fear persisted for more than a few weeks, the Fed would have been forced to an embarrassingly early backtrack. The lost credibility would have greatly limited the Fed's latitude for further maneuver. 

But what if the ECB started buying just as the Fed stopped? Better yet, what if the ECB purchases were larger than the taper? It would then appear that the Fed buying was simply a footnote in the current environment of ultra-low interest rates, not the driving force. It may not be coincidental that the Belgian buying began in earnest just as the tapering got underway. Something may in fact be rotten, and it's not in Denmark...but several hundred kilometers to the southwest.

Rather than looking to explain the unusual spike in Belgian coffers, most market watchers are fixated by recent comments by Mario Draghi that the ECB is poised to launch a quantitative easing-style bond buying campaign in order to weaken the euro and to push up inflation in Europe. If that is the case, how long could the ECB be expected to fight a two-front monetary war...carrying water for the Fed while buying European bonds simultaneously?   We must expect that any clandestine campaign by the Europeans to support Treasuries will have a brief shelf life, which could get even briefer if the ECB initiates their own QE. 

It is a testament to the bovine nature of our financial media that this story is not being pursued strongly by all the power the fifth estate can muster. But who cares when rates are low and stock prices high? Have another chocolate. The Belgian ones are the best.

Peter Schiff is the CEO and Chief Global Strategist of Euro Pacific Capital, best-selling author and host of syndicated Peter Schiff Show. 

Catch Peter's latest thoughts on the U.S. and International markets in the Euro Pacific CapitalSpring 2014 Global Investor Newsletter!


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