U.S. Treasuries Are Not Risk-Free At All

U.S. Treasuries are not risk-free at all because people that own them are going to take a haircut, they are not going to get paid 100 cents on the dollar and if they are it is because the dollar has collapsed and what they get paid will be worth even less.

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

U.S. Debt: Is Default The Solution?

I think it is going to have to because we have to have higher interest rates, there is no question that we cannot keep artificially suppressed interest rates or the U.S. Dollar is going to collapse, we are going to have runaway inflation, we are going to have to do something or we are not going to have real capital investment unless we have genuine savings. And no one is going to save when interest rates are zero or negative.

We are going to have to raise interest rates but then when interest rates go up it will be impossible to service the debt. Forget about repaying it. We cannot even pay the interest. (iShares Barclays 20+ Year Treasury Bond ETF (TLT), ProShares UltraShort Lehman 20+ Year ETF (TBT), U.S. Treasuries)

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

Donald Trump On U.S. Debt, Interest Rates

Trump talked about the fact that if interest rates go up we cannot afford to service the debt. He is a low interest rate guy, we wants to keep interest rates low and the main problem with higher rates other than what he believes would be a strong U.S. Dollar (I disagree with him there) but on the fact where he talked about that high interest rates, he said we cannot afford high interest rates so we have to be very careful because if we raise interest rates even a little bit, even a one percentage point increase would be a disaster because we do not have the money to pay. And he is right! We do not! 

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