Eric King: “Obviously the
big news this week, Dr. Roberts, was the Fed and how they shocked the financial
markets with no tapering. Your thoughts?”
Dr. Roberts:
“Here’s the situation
for the Fed: All of the markets, and the solvency of the big banks, are totally
dependent on the Fed buying the bonds. If they don’t buy the bonds, then the
interest rates are going to rise, the prices of all debt-related instruments are
going to go down, the insolvency of the banks again reappears, the bond market
collapses, and the stock market collapses....
“So they can’t stop QE because the
whole system is rigged-dependent on that (QE). The other part of the trap they
are in is that the longer they carry on QE, the closer they get to the time when
the rest of the world simply loses all confidence in the dollar because of the
enormous rate at which new dollars are being created, and they bail out (of
dollars).
And when there is a run on the
dollar the Fed loses control and the whole system blows up. So what the Fed is
doing is preventing a short-term blowup with QE -- that is, with rigging bond
prices, but the consequence is there is going to be a long-run blowup when there
is a run on the dollar.
So what the Fed is doing is simply
keeping the system going as long as it can. I don’t see how they can avoid a
crash. If they stop QE it’s going to crash. If they don’t stop it, it’s going
to crash later. So the Fed is manipulating everything to keep the system
intact. And to repeat myself, they can do that, until there is a run on the
dollar, and when there is a run on the dollar they lose control. At that point,
(the price of) gold and silver will explode.”
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