The Simple Truth On The U.S. Debt: Repayment Is Impossible

The thing about Ponzi schemes is that they have to keep on growing and if they don`t grow, they implode because you need a bigger supply of new investors to cash out the old investors.

Look at the U.S. Treasury Bond market. We have a 17 trillion dollar national debt (although that is just a tip of the iceberg, we actually have 100 trillion plus in total debt. 17 trillion is just where there are U.S. treasuries outstanding but the U.S. government has lots of obligations beyond the treasury debt).

But if you just focus on that, where does the U.S. government get the money to retire all the maturing bonds every year, trillions of dollars worth of Treasuries mature. The government does not have that money. It relies on new buyers to cash out the old buyers. And in many cases its the same holders, people that hold the debt, just roll it over, so we never have to pay it back.

But nobody wants to acknowledge the simple truth that repayment is impossible. All we can do is borrow more money to pay out the maturing debt but the debt stock keeps getting bigger and bigger because of the compounding interest and because the government borrows more more money every single year.

Peter Schiff is an American businessman, investment broker and financial commentator. Schiff is the CEO and chief global strategist of Euro Pacific Capital Inc.

We Are Going Get More And More QE Until We Overdose

The problem is we are not going to grow the economy, we are not going to create jobs by creating inflation, by debasing our money. It might make the stock market go up, it might make the real estate market go up and so we can delude ourselves into thinking that we are actually growing the economy but we are just blowing the bubbles and growing the debt. And because the economy will never recover, because the Fed won`t allow it to restructure, then the unemployment picture will continue to get worse, which means that we are going get more and more QE and they are going to keep on increasing the dosage until we overdose.

Peter Schiff is an American businessman, investment broker and financial commentator. Schiff is the CEO and chief global strategist of Euro Pacific Capital Inc.

Federal Reserve: No Impetus To Change Course

We will need to have a complete monetary disaster before there is any impetus to change course. Because as long as the Federal Reserve can take the easy way, that is what they are going to do. As long as they keep subsidizing the growth of government and prop up the real estate market and the stock market they are going to keep doing it. It`s going to be pressures that are brought externally that will finally force us to do something different and the sooner that happens, the better, the sooner we have this crisis the sooner we can begin to deal with the underlying problems. The more we succeed in postponing the day of reckoning, the more we will have to reckon with, the more difficult it will be to solve the problem.

Peter Schiff is an American businessman, investment broker and financial commentator. Schiff is the CEO and chief global strategist of Euro Pacific Capital Inc.