Peter Schiff Squashes the Latest Keynesian IllusionSubmitted by Marc Clair on Mon, 05/06/2013 - 13:39
People who are heavily addicted to drugs are always thinking of ways and excuses to get high. Modern governments, who are heavily addicted to debt and spending act in the same exact fashion. They relentlessly seek to conjure up excuses to expand the debt and money supply even more.
In both cases, consequences are shoved aside. Feed the addiction now….worry about consequences later, if ever.
The Keynesians, who are the idea junkies for the government, are constantly trying to craft the excuses to print…print…print! No logic is necessary. The excuse merely has to sound good to the government-educated public.
The latest curveball that the Keynesians are throwing goes something like this:
Governments need to listen to the market. And the market is saying that interest rates on government debt is very low. This is proof that governments aren’t borrowing enough. Governments should listen to the market and borrow more!
Sounds pretty straight forward. What problem can the average Joe have with that? He can go look at bond yields and say “Hey, that’s right!…the market is saying that the government should be borrowing more”.
Fortunately, Peter Schiff has eloquently squashed this Keynesian illusion.
Here’s Peter’s response:
It overlooks the most important aspect of this whole deal, and that is the quantitative easing, the money printing, the debt monetization. The reason that interest rates are so low is because central banks are buying up all these bonds – they’re printing all this money...