When Peter Schiff appeared on Fast Money, the dollar had just had a pretty good day. To the analysts at Fast Money, this was pretty good news. They noticed that oil and gold was a bit weak, so perhaps everything is beginning to turn around. They said that it is no surprise that the dollar is strong, because the economic data that has been coming out has been pretty favorable. These are just the numbers that economists and investors look for.
With the VIX heading lower, some of the Fast Money investors are saying that it is a good idea to purchase some options as an insurance in order to protect yourself. The yield on the 10-year treasury bonds hit a new recent high.
Brian Kelly says that a strong dollar is a good thing, and it signals a strong United States economy.
Peter Schiff chimed in to say that the dollar isn’t a safe investment whatsoever. The move today was most likely a response to higher interest rates. Interest rates are headed higher, but this dollar move won’t be able to last.
Brian Kelly argued that the only way that countries got out of the Great Depression was by expanding their money supply. However, you cannot achieve economic growth by printing and spending money. The only path to economic growth is to manufacture and produce goods.
Rates are going up everywhere, including Europe. Many people think that when rates get high enough, the Chinese will swoop in and start buying them up. However, Peter Schiff doesn’t think that the Chinese are that stupid. This 20 year bull market in bonds cannot last for ever.
There are so many things to purchase that are better than 10 year treasuries. In addition, you want to buy stocks in countries where there is stronger economic growth and future consumption. Things are not looking good for the American consumer. The Chinese are working hard, and they are producing a lot of goods. At some point, they will probably decide that they could just as well begin to consume the fruits of their labor rather than giving them away to the Americans for practically nothing.