Elaine Supkis

The Cult of Peter Schiff - Is It Deserved?

Understanding and predicting downturns is a complicated business. First, you have to understand international central banking policies which are all tied in ribbons of red to TRADE policies. Then, you figure out how much lending these central banks will allow while playing international trade games and from that, you can figure out where markets will go, up or down.

For everything hinges on interest rates. The queer ZIRP system set up in Japan has unbalanced everything in strange and horrible ways. This created the Japanese carry trade. The unwinding of this 'carry trade' is now monumental. It began in July, 2007. Each year, as one central bank after another falls into the Japanese ZIRP system, the unwinding gets worse and worse.

Making money off of this unwinding is very difficult since it is DESTROYING WEALTH. ZIRP won't retrieve wealth. Why is this?

The Derivatives Beast: this insurance/hedging system unwittingly hooked itself into the central bank interest rate manipulation system [derivatives are openly based on this system] and since the central banks openly manipulate interest rates, this means, all the people who are 'inside' the system have utterly warped it. That is, Citigroup's people, the guys running JP Morgan, Goldman Sachs, etc.

Their insider knowledge coupled with their wild attempts to always make profits even when wealth is being destroyed has so unbalanced the systems, it is all now crashing down like a house built on a solid foundation and then the residents dig out the foundation and put it on the roof! Picture that!

There is no way to stop this crash. Only after all the illicit wealth built up by previous speculation vanishes, will this crash end. Then, we must build a BALANCED TRADE system, not the grossly unbalanced one with the US sucking up nearly a trillion in trade overruns. Right now, we are far, far from fixing the fundamental problems of free trade.

This is Elaine Supkis of emsnews. Thank you.