Quote of the Day
We have a lot of dollars sloshing around the world thanks to years and years of artificially low interest rates and quantitative easing, and more of those dollars are going to be coming home as foreigners get out of U.S. financial asset.
You’re seeing a global exodus out of U.S. stocks, out of U.S. bonds, and all that cash is going to come back home, bidding up prices.
The solution involves much higher interest rates. Now, I understand that’s going to be very painful, given the economy that we’ve created, built on a foundation of cheap money.
It means stock prices come down, real estate prices go down, companies fail. There’s going to be bankruptcies. There’s going to be defaults. There’s going to be a protracted recession, probably a much worse financial crisis than 2008, but all that has to happen because the alternative to that is even worse.
The U.S. is on the path to “runaway inflation” that could become “hyperinflation.”
Peter Schiff
Euro Pacific Asset Management Chief Economist
June 18, 2025
Peter Schiff warns of stagflation for US economy | Fox Business
Is this true? It does resonate with me. Hyperinflation is one of my big concerns in life. And because of this I have socked away $100 Trillion for a rainy day. But I have never even taken a class in economics. Perhaps I should invest/prepare differently.
For me the big wildcard in all this is that economists can’t really accurately model the economy. The math does not exist to account for the emotional reactions of what people do with their money and other assets. It could be a one sentence post on social media by the U.S. President or Elon Musk changes the entire dynamic.
One could argue that short term blips are unpredictable, but the long-term averages adhere to some math model(s). But then, how do you explain economic Nobel Prize winner Paul Krugman having such an uncanny knack for getting nearly everything wrong? Economically blinded by TDS?
If so, then how do we know most other economists are not also economically impaired by the same or similar syndromes?
Oh, by the way, I ran out of Markley’s Law posts. The sources dried up early this year.