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发帖数: 2053 | 1 http://finance.yahoo.com/news/donald-trump-just-exposed-america
Presumptive Republican presidential nominee Donald Trump just revealed an
inconvenient truth about U.S. debt, the outspoken and often controversial
Peter Schiff told CNBC in a recent interview.
Last week, Trump joined CNBC's " Squawk Box " to discuss a wide range of
topics including U.S. debt , interest rates and replacing Fed Chair Janet
Yellen . It was Trump's comments about potentially renegotiating the more
than $19 trillion in U.S. debt and the sensitivity surrounding higher
interest rates that raised eyebrows.
While some observers argued that Trump's approach could be tantamount to a
debt default , Schiff told CNBC the GOP nominee was fundamentally correct in
his observation.
"Trump just admitted on CNBC that America has too much debt to afford a rate
hike, and that he wants our creditors to accept less than 100 cents on
their Treasuries," the Euro Pacific Capital CEO explained on CNBC's "
Futures Now " last week. "In other words, Trump knows a U.S. government
default is inevitable."
Last year, the widespread belief that the Federal Reserve would tighten
monetary policy unsettled markets. Recently, soft economic data and turmoil
around the globe have softened expectations of a rate hike. Still, Schiff
said an eventual rate hike could leave the world's largest economy exposed
to a growing risk.
"If rates go up, refinancing [debt] doesn't help. The only thing that helps
is restructuring," said Schiff, who compared the situation to the crisis in
Puerto Rico.
The commonwealth "can't pay because they are broke, well math applies on the
main land just like it applies in Puerto Rico, we can't pay either," he
said. "And if interest rates go up Donald Trump is right, we have no choice
than to tell our creditors they are taking a big haircut," he added.
Schiff has long been opposed to the Fed 's so-called easy money policies. He
insists that rather than helping the economic backdrop, the excess
liquidity has created fragile asset bubbles so fragile that may send the U.S
. spiraling into a recession worse than what occurred during the financial
crisis.
"[Trump] recognizes that we have a bubble and he wants to make America great
again," Schiff said, adding that of all the candidates he has the best
understanding of how bad the problems are.
"To get great again we need to recreate what made us great in the first
place, and so we're going to have to let interest rates go up," Schiff added
. "A big part of that is admitting that we aren't going to be able to re-pay
the debt." |
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