.
LIZ: DOES THE 10-YEAR TREASURY
YIELD HOLD THE LEASH OF THE
STOCK MARKET IN WE SAW THAT
YESTERDAY.
WE HAVE THE YIELD OFF THE HIGHS
OF YESTERDAY, AT 2.92%, INCHING
TOWARD 3%, BUT ACCORDING TO
PETER SCHIFF, IT MAY BLOW THE
TOP OFF THAT AND EVEN TOUCH 4%
THIS YEAR, POSSIBLY EVEN HIGHER
AND THAT CONCERNS HIM, AND HE
SAYS IT SHOULD CONCERN YOU,
HE'S EURO PACIFIC CAPITAL
PRESIDENT.
PETER, THERE ARE A LOT OF
PEOPLE WHOSE EYES START TO
GLAZE OVER WHEN THEY HEAR ABOUT
THE 10-YEAR YIELD.
WHY DOES THAT PRESENT A
HARBINGER OF HORRIBLE THINGS TO
COME?
>> AND IT'S NOT JUST THE 10
YEAR, GO ALL THE WAY OUT TO THE
30-YEAR, RATES ARE GOING A LOT
HIGHER.
YOU HAVE TO REMEMBER THE WAY
THE FEDERAL RESERVE WAS ABLE TO
PROP UP THE MARKET AND THE
ECONOMY IS BY KEEPING INTEREST
RATES ARTIFICIALLY LOW, AND
THEY SUCCEEDED IN DOING THAT
FOR A LONG TIME.
BUT NOW THE MARKETS ARE GOING
TO RAISE INTEREST RATES BACK TO
WHERE THEY SHOULD BE, AND THEY
SHOULD BE A LOT HIGHER BECAUSE
WE HAVE RECORD DEBT, RECORD
BUDGET DEFICITS COMING, RECORD
TRADE DEFICITS, A 10-YEAR LOW
IN SAVINGS RATE.
WE HAVE TO BORROW TREMENDOUS
AMOUNTS OF MONEY AND THE WORLD
IS NOT GOING TO LEND IT TO US
AT RIDICULOUSLY LOW INTEREST
RATES, RATES ARE GOING TO
NORMALIZE QUICKLY.
LIZ: SHOW YOU THE LONG-TERM
10-YEAR YIELD GOING BACK TEN
YEARS, YOU CAN SEE WHERE IT WAS
TEN YEARS AGO AND YOU CAN SEE
WHERE IT IS NOW, AND IT'S KIND
OF HEADING BACK TO WHAT WE SAW,
EVEN HIGHER THAN WHERE WE WERE
IN 2008.
IT?
WHAT DOES THIS NUMBER ENGENDER
SO MUCH FEAR?
>> IT'S GOING TO GO HIGHER.
WE HAVE MORE THAN TWICE THE
DEBT THAN 2008.
REMEMBER, WHEN WE WERE DOING
TRILLION DOLLAR DEFICITS UNDER
OBAMA, THE FED WAS DOING A
TRILLION DOLLARS A YEAR IN QE,
SO NOW THE FED IS DOING NO QE
AND THREATENING TO SHRINK
BALANCE SHEET WHICH MEANS THE
TREASURY IS GOING TO HAVE TO
SELL EXTRA BONDS TO PAY OFF THE
FED.
SO THE AMOUNT OF DEBT THAT
WE'RE GOING TO BE SELLING IS
UNPRECEDENTED, SO SUPPLY IS
GOING OFF THE CHARTS, SO PRICE
RATES HAVE TO GO UP.
AND MARKETS DON'T UNDERSTAND
EXACTLY HOW HIGH RATES ARE
GOING TO GO.
LIZ: MAKE US UNDERSTAND.
HOW BAD COULD IT EVENTUALLY
GET?
LET'S LOOK AT THE DEBT CLOCK.
WE KNOW THAT THE DEBT HAS GONE
UP AND COULD POSSIBLY HIT A
FULL 21 TRILLION THIS YEAR, AND
LISTEN, THE PRESIDENT DID
CRITICIZE THE NATIONAL DEBT, I
RECALL, WHICH HE WAS RUNNING,
YET NOW IT'S GOTTEN HIGHER.
I THINK IT'S ADDING LIKE $45
PER SECOND.
>> HE CRITICIZED A LOT OF
THINGS RIGHTLY WHEN HE WAS
RUNNING, NOW EMBRACING
EVERYTHING HE CRITICIZED,
INCLUDING THE BIG FAT UGLY
STOCK MARKET BUBBLE.
AND I BELIEVE THAT BUBBLE
POPPED, I BELIEVE THAT WE'RE
NOW IN A BEAR MARKET, IT'S NOT
A CORRECTION, UNLESS THE FED
DECIDES TO BLOW MORE AIR INTO
IT, WHICH IS STILL WHAT I
BELIEVE IS GOING TO HAPPEN.
LIZ: MORE QE.
>> YEAH, QE 4 IS COMING.
IF YOU THINK THAT THE ECONOMY
IS GOING TO GROW AT 3%, WHICH I
DOUBT.
I THINK IT'S GOING TO BE HARD
TO HIT 2, BUT IF IT DOES 3,
THAT'S THE REAL RATE, THE
NOMINAL RATE WOULD HAVE TO BE 5
IF YOU THINK INFLATION IS JUST
2%, THAT WOULD IMPLY A 10-YEAR
YIELD OF AT LEAST 5%, THAT'S IN
NORMAL TIMES.
>> LET ME SPEAK IF PRESIDENT
TRUMP WERE HERE HE WOULD SAY
THE TAX CUT WILL PAY FOR
ITSELF, THE 1.5 TRILLION AND
STIMULATE THE ECONOMY.
I STILL DON'T UNDERSTAND,
THOUGH, WHY SUDDENLY THEY'RE
PREDICTING 2 TO 4% GROWTH AND
YET IF YOU LOOK AT ATLANTA FED,
THEY'RE REALLY SCALING BACK
THEIR PREDICTION.
I BELIEVE JUST A FEW DAYS AGO
AT THE BEGINNING OF FEBRUARY,
THEY PRETTY MUCH HAD IT AT
5.4%.
FEBRUARY 1, AND BY FEBRUARY 16.
IT'S 3.2%.
>> YEAH, AND THEY'RE GOING A
LOT LOWER THAN THAT.
LIZ: WHAT DO THEY SEE?
>> I DON'T KNOW WHAT THEY WERE
SMOKING WHEN THEY PUT UP 5.4.
AT LEAST NOW THEY'RE THINKING A
LITTLE MORE CLEARLY.
BUT THEY'RE STILL TOO HIGH.
THIS IS A LIMBO.
THEY'RE GOING TO KEEP LOWERING
THAT BAR AS WE GET CLOSER AND
CLOSER TO THE --
LIZ: WHAT ARE YOU AT EURO
PACIFIC DOING TO HELP YOUR
CLIENTS?
>> I BELIEVE THAT THE END GAME
IS QE 4.
I THINK THE FED IS GOING TO
SACRIFICE THE DOLLAR TO PROP UP
THE STOCK MARKET, TO PROP UP
THE ECONOMY.
LIZ: ARE YOU SHORTING THE
DOLLAR, WHAT ARE YOU DOING?
>> OF COURSE, THE DOLLAR NOW IS
ON PACE FOR WORST YEAR IN 30
YEARS, LAST YEAR THE BIGGEST
DROP IN 14.
I'M BUYING FOREIGN STOCKS,
COMMODITY STOCKS, GOLD STOCKS,
ALL THIS IS BULLISH FOR GOLD
AND BEARISH FOR THE DOLLAR.
THE MAINSTREAM IS SCRATCHING
THEIR HEADS, THEY DON'T KNOW
WHY YIELDS ARE RISING AND THE
DOLLAR IS FALLING, BECAUSE OF A
LOSS OF CONFIDENCE IN THE FED.
BECAUSE OF RISING INFLATION,
RATES ARE NOT RISING FOR THE
RIGHT REASON, FOR THE WRONG
REASON, AND TRUMP IS WRONG, YOU
DON'T STIMULATE THE ECONOMY BY
CUTTING TAXES, YOU STIMULATE
THE ECONOMY BY SHRINKING
GOVERNMENT.
LIZ: YOU VOTED FOR PRESIDENT
TRUMP, CORRECT?
>> WELL, YOU GOT TO REMEMBER MY
CHOICES, RIGHT?
IT WAS TRUMP OR IT WAS HILLARY
CLINTON.
SO HE WASN'T MY PICK FOR THE
NOMINEE, I WAS A RAND PAUL
SUPPORTER.
BUT MY POINT I'M TRYING TO
MAKE, LIZ, YOU STIMULATE THE
ECONOMY BY MAKING GOVERNMENT
SMALLER.
LIZ: WELL, THAT'S NOT
HAPPENING, SO WE HAVE TO WORK
WITH THE LANDSCAPE WE HAVE
AHEAD OF US AND YOU HAVE TO
TELL OUR VIEWERS RIGHT NOW THE
NUMBER ONE THING THEY SHOULD DO
WITH THEIR PORTFOLIO.
>> THEY SHOULD SEND IT TO ME TO
MANAGE IT AT EURO PACIFIC
CAPITAL.
LIZ: OH, MY GOD.
SHORT OF THAT!
[LAUGHTER].
>> THEY GOT TO GET OUT OF THE
U.S. STOCK MARKET, GET OUT OF
THE U.S. BOND MARKET.
LIZ: OKAY, OKAY, AND GO WHERE?
>> THERE'S A LOT OF PLACES THAT
YOU CAN GO.
THERE ARE OTHER COUNTRIES THAT
ARE NOT AS RECKLESS AND
IRRESPONSIBLE, THEY HAVE FEWER
REGULATIONS, LOWER TAXES, TRADE
SURPLUSES, GOVERNMENTS THAT
LIVE WITHIN THEIR MEANS, AND