Donald Trump just exposed America’s dirty little secret
Last week, Trump joined CNBC’s “ Squawk Box ” to discuss a wide range of topics including U.S. debt , interest rates and replacing Fed Chair Janet Yellen . It was Trump’s comments about potentiallyrenegotiating the more than $19 trillion in U.S. debt and the sensitivity surrounding higher interest rates that raised eyebrows.
While some observers argued that Trump’s approach could be tantamount to a debt default , Schiff told CNBC the GOP nominee was fundamentally correct in his observation.
“Trump just admitted on CNBC that America has too much debt to afford a rate hike, and that he wants our creditors to accept less than 100 cents on their Treasuries,” the Euro Pacific Capital CEO explained on CNBC’s “ Futures Now ” last week. “In other words, Trump knows a U.S. government default is inevitable.”
Last year, the widespread belief that the Federal Reserve would tighten monetary policy unsettled markets. Recently, soft economic data and turmoil around the globe have softened expectations of a rate hike. Still, Schiff said an eventual rate hike could leave the world’s largest economy exposed to a growing risk.
“If rates go up, refinancing [debt] doesn’t help. The only thing that helps is restructuring,” said Schiff, who compared the situation to the crisis in Puerto Rico.
The commonwealth “can’t pay because they
FOR ENTIRE ARTICLE CLICK LINKClick here for the Top 12 Moments in Jewish History...LET THE ADVENTURE BEGIN! »