USAWatchdog’s Greg Hunter spoke with Peter Schiff this week. They discussed the intricate problems of Europe and Greece, the phony economic recovery in the United States, and how investors can protect themselves when wars break out. Peter also responded to the ongoing negative sentiment of gold bears who continue to predict a lower gold price despite evidence to the contrary.
Highlights from Peter’s interview:
Greg Hunter: The headlines [concerning Greece] are all over the map. They’re going to get a six month extension. The Greeks are looking like they’re not going to do anything with the bailout. They’re making noises that they’re going to get help from Russia and China. One European official said it was berserk and there was no plan. What’s going on?
Peter Schiff: They had to cheat their way to get into the euro. They had to lie and cook the books with the help of maybe Goldman Sachs, but they managed to get in. Now they’re holding everybody else hostage. It’s unfortunate that they’re even part of this experiment, although I didn’t hold out a lot of hope for it from its inception…
First of all, you’ve got this group of politicians that are freshly elected. They rode a wave of populism. They promised to get tough with Europe, and they got to put on a show for the electorate… At the end of the day, I think Greece has little choice. If they follow through with their ‘my way or the highway, we’re going to leave the eurozone’, I think it would be a disaster in Greece. I don’t think the Greek politicians want to go through that…
I think for Europe, and Germany in particular, there’s a lot at stake here. People always talk about, ‘What about Spain or Portugal or Italy? What might they do if Greece leaves?’ I think Germany is more worried about what they may do if Greece wins some incredible concessions, because now everybody is going to want to be treated the same way. I think if they’re tough with Greece, they have a better chance of toeing everybody else into line.
If Greece does leave the euro, and it collapses in runaway inflation and debt, then it could be a poster child for what could happen. It could scare the rest of Europeans straight and do the reforms that the Greeks have been reluctant to agree to…
I think nations should be allowed to default. I don’t think they should be bailed out by the central bank. I don’t think the central bank should be monetizing government debt. I don’t think the Italian government should borrow at the same rate of interest as the German government or the Spanish government or the French government. I think governments should borrow based on their own criteria. US states, municipalities, some issue debt at higher interest rates than others because they’re deemed for creditworthy by the markets…
