Rick Santelli interviewed Peter Schiff on CNBC’s Santelli Exchange yesterday. Their brief conversation got right to the heart of America’s economic problems. While Santelli seems to agree that the Federal Reserve cannot successfully unwind its quantitative easing programs, he asks Peter to focus on the seeming improvements in the economy in the past couple years. Peter helps connect the dots, showing that both the supposed recovery and the coming crash are direct results of the Fed’s cheap money. Enjoy the full transcript below the video.
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Santelli:Â What are your thoughts of the last several weeks of volatility in the equity markets and in particular, a little less than a week ago, the huge drop in interest rates that had such a U-turn back up to the upside?
Schiff:I think the markets are slowly coming to grips with reality that the exit from QE is not going to be as easy as everybody thought. You know, I heard Dallas Fed Chairman Richard Fisher on CNBC earlier this morning calling for QE to end on schedule. But what Dick Fisher doesn’t understand is that you cannot end quantitative easing without plunging the US economy into a severe recession. It’s because of the monetary policy of the Federal Reserve that the US economy is more screwed up now than it has ever been in history and we cannot unravel all of these economic unbalances without a severe recession.
Santelli: I’m not saying I disagree, now there are exit issues. But for a moment, let’s just come to the conclusion that the messy exit is a given. Now let’s look at what we have left. What do you think the state of the economy is right now, void of that particular dynamic?
Schiff: I think the economy is a disaster. And that’s why I don’t think the Fed is going to exit. Unfortunately, they’ve got QE4 cued up and ready to launch right now. They’re going to do more quantitative easing, not because it has worked – because it’s been an abysmal failure – but because they can’t admit it has been a failure. They’re going to do it all over again.
