Precious metals expert and financial writer Bill Holter says the market is exuberant with the idea the Federal Reserve is going to be forced to cut interest rates as the economy sinks. Holter has warned about the US dollar turning into confetti because of massive dollar printing and more and more bank bailouts. Holter is taking the other side of the rate cutting bet, and he thinks the Fed will do just the opposite. Holter says, “If you look at the amount of debt service the federal government is paying, it’s over $1 trillion a year. That’s going to go to $1.5 trillion, and then it will go to $2 trillion in interest a year. There is no reflection of deterioration of credit in the rates themselves. I foresee the day, and it may be within the next year, that the Fed is forced to raise interest rates to defend the dollar. That’s the problem. You have bad credit with the country who issues the world’s reserve currency. . . .If all of a sudden the dollar falls apart, how does evil get paid to preform? How do we fight wars?”
Holter goes on to say, “The US Treasury, this year alone, has more than $6 trillion plus the $1.5 trillion to $2 trillion in deficit that they will run. They are going to have to borrow this money this year. Where are they going to borrow that from? Who are they going to borrow it from? Is the Fed just going to conjure the money up and buy the bonds? The Fed lost $114 billion last year, and they are technically insolvent, as is the European Central Bank, as is the Bank of Japan, as is the Bank of England. These central banks are technically insolvent because their assets have dropped in value because interest rates have gone higher. The bond prices have dropped by more than what their equity was worth. . . . The whole system is running on nothing. There is nothing holding it up.”
Several years ago, Bill Holter envisioned a Mad Max type of scenario unfolding because of all the exploding and unpayable debt. Holter heard snickers, but nobody is laughing at his prediction now. Holter says, “Once the credit spigots stop, you are going to see everything stop. You’ll see no goods in stores. You may or may not have water. You may or may not have electricity. Who knows what is not going to work. Everything runs on credit. Without credit I think you could see a 60% to 70% drop in actual GDP, and there is your Mad Max scenario. . . Commerce is not going to happen if there is no credit available.”
On the election coming up in November, Holter sees a 50/50 chance of it not happening. Holter says, “If Trump wins, they will be jailing people left and right.”
On gold, Holter says, “Gold never defaults, and it will act as a risk barometer. Gold will be going much higher in price. . . .We live in the most indebted time in history.”
There is much more in the 51-minute interview.
Join Greg Hunter as he goes One-on-One with financial writer and precious metals expert Bill Holter for 2.20.23.
