- Global stock markets got beaten up overnight and the carnage continued here in the U.S.
- Dow Jones down 350 points by closing bell – biggest point loss of the year
- NASDAQ down 122 points
- Possible Grexit sparked sell off in FOREX markets
- Banks in Greece closing, sending masses to the ATM machines
- Euro ended up closing near the highs of the day – nearly to $113
- The dollar was weak all day against the Yen and against the Swiss Franc
- There was no safe haven move into the dollar – gold up
- The dollar lost considerable ground against the euro
- Another confirmation that the dollar’s rally is over
- My newsletter released today does a good job comparing the U.S. vs global markets
- The U.S. did well against the international market from 1996 to 2000
- In 2008 the U.S markets went sideways and the markets I recommend skyrocketed
- We have been in a period similar to ’96 – 2000 and now we are about to see returns even greater than the 2008 gains in our markets
- Regardless of the direction that Greece goes in this weekend’s referendum, the dollar is going down against the euro
- Puerto Rican governor finally admitted the obvious – repaying their debt is impossible
- Puerto Rican debt is a fraction of the U.S. national debt
- If it is mathematically impossible for Puerto Rico to pay their debt, why does anyone think the U.S. will be able to eventually pay off its debt?
- The only way we can pretend to pay our debt is for the Fed to do it for us by creating inflation
- This is yet another reason why the Fed is not going to raise rates in September
- We continue to get recession-like economic data, despite the fact that the Fed is still optimistic
- The Federal Reserve is looking for an excuse to not raise interest rates
- Maybe the situation in Greece will provide that excuse
- Maybe it will be the volatility in China
- “External problems” are providing an excuse to not raise rates
- It is important to point out that Puerto Rico would not be experiencing such insurmountable debt if it were not for U.S. policy.
- Puerto Rican debt has seemed attractive with its high yield and triple-tax-exempt status
- Zero interest rates from the Fed, on top of high yields, have caused the debt to seem safe, even though mathematically it cannot be paid
- People may begin to wake up when they realize what’s going on in Puerto Rico and that may become an even bigger problem than Greece
For U.S., Puerto Rico Bigger Tragedy than Greece – Ep 90
Peter Schiff is an economist, financial broker/dealer, author, frequent guest on national news, and host of the Peter Schiff Show Podcast.
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