US Treasurys Are ‘Junk,’ Dollar Headed for Collapse

By: Jean Chua



The greenback and the U.S. bond market are headed for a collapse as the U.S. Federal Reserve loses the ability to service the nation’s debt with “artificially low” interest rates, Peter Schiff, CEO of Euro Pacific Capital told CNBC on Wednesday.

“As far as I am concerned, U.S. Treasurys are junk bonds,” Schiff said on CNBC Asia’s “Squawk Box.” “And the only reason that the U.S. government can pay the interest on the debt, and I say ‘pay’ in quotes because we never pay our bills. We borrow the money so we pretend to pay, but the only reason we can do it is because the Fed has got interest rates so artificially low.” 


The Fed  has been keeping rates on benchmark 10-year Treasurys low by purchasing bonds via quantitative easing (QE)  , and this will ultimately be the U.S. economy’s “undoing,” Schiff said.  “And the minute you take it away, it’s going to collapse.”


http://www.cnbc.com/id/47256715