2008년보다 더 심한 금융 위기, 회복을 위한 유일한 길!

Pacific Asset Management chief economist and market strategist Peter Schiff and Nataline Securities chief of global fixed income Andy Brener.

 Andy, let me start with you.

 You are always somebody who who lives and breathes every single word and you're able to interpret that that speak interpret it to our viewers right now.

 What should they care most about that he said? Paul remained very stubborn.

 He refuses to acknowledge the fact that the uh latest beige book, his own research, continues to show weakness in the employment area.

 Even today, we have Microsoft laying off thousands.

 It's going to continue.

 The labor market is much weaker and he's going to end up eating his words and have to cut much more aggressively than people believe.

 Uh something tells me Peter is chopping at the bit.

 Peter, you think that the Fed should not cut and that the Fed should hike and that we're already in a recession.

 So make your case.

 Well, first of all, I think the biggest takeaway is that Pal basically admitted that they have no idea what's going to happen.

 They don't really know what's going to happen to consumer prices.

 They don't know what's going to happen uh to employment.

 I don't even think their forecasts are educated guesses so much as um wishful thinking.

 Do you? Well, no, but I don't claim to know, but I do believe that inflation is going to be a lot higher than the Fed believes and the economy is going to be a lot weaker.

 I mean, at least they got that right in that they did tweak uh the numbers and they brought their inflation forecast up a bit, at least in the near term, and their their growth forecast down.

 I just don't think they they made big enough adjustments.

 But the big problem for inflation is not the tariffs themselves.

 It's all of the uh inflation chickens that the Fed has been releasing uh for more than a decade coming home to roost.

 We have a lot of dollars slloshing around the world thanks to uh years and years of artificially low interest rates and quantitative easing and more of those dollars are going to be coming home uh as foreigners get out of US financial asset.

 You're seeing a global exodus out of US stocks, out of US bonds and all that cash is going to come back home bidding up prices and I think we're going to see uh inflation moving up considerably and I agree with Andy that the economy is going to be weak.

 So that's the dilemma.

 It's going to be stagflation with a recession and much higher inflation uh happening at the same time really complicating uh the Fed's ability to try to do something about either problem.

 Either problem.

 And Peter's right, Andy, what we see here is an opportunity for the Fed to simply say that we are raising our inflation outlook.

 It's going to be hotter than expected.

 He kept pointing to tariffs.

 And then he also said growth is coming down.

 Are you alarmed by that? Yes, I am.

 I'm very much alarmed by that because I still think that rates should be much lower.

 And as far as inflation and tariffs go, I think the tariffs are much more deflationary than they are inflationary.

 And I think things are going to slow I think you're going to see it slow down the economy even more.

 And once we get these unemployment numbers right, and they're absolutely wrong right now.

 I mean, just look at jolts.

 Last year there were 10 million jobs out there.

 This year there are seven and a half million, but yet the labor market's fine.

 Of course it's not.

 Labor market's horrible.

 And I think it's going to continue to get ro worse.

 So I see three cuts still this year and I see four next year.

 Uh let's just listen to what Powell said when the markets started to go down into the red and then we can assess exactly what it was that spooked the markets.

 Listen, there's a range of possibilities on how how large the the inflation effects and the other effects are going to be.

 So, we'll make smarter and better decisions if we just wait a couple of months or however long it takes to get a sense of of really what what is going to be the pass through of inflation and what are what's going to be the effects on spending and on hiring and all those things.

 Waiting a couple of months, Peter.

 Well, I I don't think the decisions are going to get any smarter over time, but you know, I disagree with what Andy said about the need for lower interest rates.

 Lower interest rates are not the solution to our problem.

 They are the cause.

 The reason we have so many problems is because the Fed left rates so low for so long.

 So the solution involves much higher interest rates.

 Now I understand that's going to be very painful given the economy that we've created built on a foundation of cheap money.

 It means stock prices come down, real estate prices go down, companies fail, there's going to be bankruptcies, there's going to be defaults, there's going to be a protracted recession, probably a much worse financial crisis than 2008.

 But all that has to happen because the alternative to that is even worse.

 But unfortunately, that's the direction that we're headed, which is a runaway inflation, which may turn into hyperinflation.