community. i would rather be you are watching booktv tb on c-span2 >> joining us now is peter schiff, the author of the real crash america is coming

bankruptcy. how to save yourself and your country" what do you mean with a government bubble? >> we had two big bubbles. the stock market because the cheap money went to the stock market -- stock market so based on the stock market well it was replaced by a larger bubble that we expand did this economy based on false real-estate. people spending money they did not have and it was -- employment was based on the false leff -- wealth now it goes to the

government through the bond market and they can borrow money at all to low interest rates. >> but when it does the consequences will. >> recall its and the private sector bubble. what was the government's role? >> base applied all but a year. if you remember the 1990's of russia and debt crisis, long-term cap boat

management. the market got nervous and the stock started to fall and the repressed was history. beekeeping rates too low although higher still lower than the market. you have a bubble and the same monetary policies inflated the but it made the subprime lending possible and the mortgages aren't the effect but you compound did with fannie mae, freddie mac putting taxpayer guarantees that which never be a great kid did.

you can lend people even if you don't pay of course, it is the first and people like to blame the market for brian not saying they are innocent but they don't go watch of the alcohol. >> look at the source why were so many people so full list. many were lying about their income buying houses but instead of learning from my mistakes they keep that does

1%. the government bubbling is enormous. >> when it pops they will fail again only the losses will be bigger. not just government itself could have a default not paying 100 sense. >> that means we have massive inflation. if the fed doesn't but politically can you foresee

the government not to propping the bubble could. >> hopefully they will. not popping it is worse. trying to inflate its common it is the dollar that collapses. the government does not want to bondholders to lose their money for depositors to lose their money. they cannot stop the losses but change their form. >> guinness's is its value but but the better off the list i heard to be pulled -- paid in full. >> host: peter schiff, walk us through the time frame how you see the

government bubble bursting and what will happen. >> is greece prepare. >> record the magistrate's it was fine. it was not. of the bondholders were oblivious to the future greece then woke up demanding higher interest now the government cannot afford the rates and people realize that to some of they want to an. >> we could not prevail.

>> but you cannot to service the debt. we can print it would it is not worth very much. there is a demand for dollars as a safe haven. the 50 u.s. states. >> we may not be a worse shape than greece we're in worse shape but yet we have the benefit of the doubt. people think everybody is okay. they realize printing is worse we will see a spike in

interest rates and we have a crisis. even the fed allows the rates to go up. say 10 percent to stop the implosion of the dollar. roehm with two to win dollars a year second -- but who were the creditors those we're on the hook but the fed is the largest buyer right now. phoenix all over the world. china this governments are

holding onto the debt. there was a store the mentioned it is down more than that when you factor each household share. >> american families cannot repay the money borrowed in their names. >> we admit we are solvent? >> then you cannot pay restructure. greece imposed a haircut of 50%. but it is not just the

creditors. we have to tell people who collect social security to quit right now. because americans cannot afford to pay the bill. the alternative is are repaid many of minimal value? 378 and a way to find the problem for printers rates have to be higher interest rhodes. we cannot raise their living standards and provide employment opportunities with no savings or capital. higher interest rates, let the chips fall, solvent

institutions fail, those would bested lose money. and restructured to shrink the garment but with the aid -- the free market economy was the original source of our wealth. >> the subtitle is how to end bail-out this? >> >> caris is securities some sense touche people have to be accountable to wait risk and reward. of the rise you get a disaster. we have to end that perception once and for all. if you loan money to a

sovereign government and they cannot pay you back, they will default we have to brace risk and face a higher rate of interest. we have to end the subsidy for students for college and individuals to buy a house. there should be no government guarantee or bailout. therefore the banks will make sure the person has an adequate down payment and has the income. right now you have more house third. we need to make sure the bank is safe to look at the taxpayers of the rise. if they know they are concerned about solvency they will act responsibly.

banks are reckless because the golf -- because they told them to in not forcing them to be responsible with their deposits. >> host: do you think monetary policy and the languages to complicated for most americans to get excited? >> is deliberate the government doesn't know what they are doing. they came up with quantitative the same. inflation. printing money. monetizing debt. a complicated to inflation is what happens when the government expands the money supply. we just create inflation. we need to stop because monetary policy is the

source and is a function with the manipulation if we were on the gold standard we would have discipline and not macro and balances and the government could not run up the debt if it had to pay in cold. that is why politicians oppose the gold standard and it stands in their way and pretax individuals. to protect the liberty from usurping power. isn't our entire economy based on consumer spending? >> not really. you could only buy something

at has been produced. >> it comes from under consumption and ricky obsessive low to is the rest of the world lends us money to supply us with merchandise and resources. we cannot pay back the money be borrowed. our creditors will figure it out then we will implode. you could show up at a wal-mart with paper but officials of and do you just go home. we have built up this economy based on the keynesian men the spending drives the economy. it doesn't.

that is what we're not doing enough of. >> host: peter schiff. ceo and chief global strategist of euro pacific capital. >> we are in asset management company and brokerage firm if people want to use me as a broker we specialize with precious metals and investing the can manage money added discretionary basis in a separate account also a precious metals company for those who want physical delivery. >> host: also a radio talk show host. and the author of two other books. >> i also have why an

economy grows and why it crashes. of the best to start with you can read it into were three hours per curtis funny the breaks down economics it is a good primer to understand keynesian is them and children can understand the book i wrote it for the level of a child so congressmen can understand it. i also ran as a republic 10 in a primary i did respectable for the first time. >> would you run again? >> i don't have plans to run for anything but i might. >> we are here at freedomfest of libertarian leanings.

a lot of the authors use the word moral, what do you mean by that? >> on list. principal. fair. theft would be a moral. if the government will force me to subsidize someone slowed or bail some video, that is not moral. things need to be above board and honest. i'd want to be obligated unless i choose to do it. we all know individually if i take money from you against your will, theft is a moral. involving a third party like government convince somebody how does that not make it

that? you are not in favor of it but they put you in jail if not? capitalism is fair amoral based on voluntary change. people trade without coercion but now involves coercion and it is very immoral. >> one other thing you wrote americans been too much time on it -- and money on college. fewer kids should go. >> absolutely a highest percentage have college degrees unfortunately many are waiting tables, driving taxis, working as janitors. not to everybody needs to go to college. there are colleges teaching remedial math and reading.

if you cannot do that at high-school you are wasting your time. the best skills you can acquire are on the job. you can be an apprentice with a lower paying job. right now we have the bubble in education because the government subsidizes student loans they can borrow tremendous amounts of money they can jack up the tuition because they will get the money from the government. we have destroyed one generation now they will struggle to repay with no relevance now they are broke and squandered five years of their life to acquire skills that would provide with a comfortable living.

some things makes sense but the vast majority do jobs that high-school graduates could do. this is a mess. it just enriches the educational establishment and everybody associated with it. the biggest losers squander their youth and acquirer mortgages been no houses. society is bore. we waster resources one resend they graduate into the economy with new jobs because it was directed to universities to educate them. they were indoctrinated so

now they graduate and cannot get a job. we are broke as a nation. stock wasting all this money force colleges to compete and prices will collapse and only those who will benefit will go. to saying major's who enhance our. major engineering if maybe easier to get the loan and the private sector you can pay it back but comparative philosophy, good luck. we need real market discipline to education and free up resources. we spend too much on housing and health care and what government subsidizes and not what it taxes.

>> host: is there a way to prevent the coming bankruptcy? >> we're already broke. but how we acknowledge and deal with it. i they out a plan. it is not paid less. we are sick. the medicine does not taste good but it will cure us but if we refuse to swallow we will get a sector. eventually will have to swallow and it will taste that much worse because the illness got worse. ultimately it will be a complete financial meltdown meltdown, bond prices, a currency crisis and make 2008 look like a picnic if we don't get our arms around the severity to recognize it is not capitalism that caused it but lack of capitalism.

government screwed it up we need to get the free market forces back in. we're in a gigantic coal. will not get out with government but with real free-market as a fair to cage the government back up the way the founding fathers envisioned. and make the government as small as possible and of these the entrepreneurial spirit. we see it in other countries. we can create a prosperous economy. the government will not give it to us. we have to give it to ourselves. peter schiff. the name of the book is the real crash. booktv. c-span2.

>> i am with nbc news. as i read the 60% of the time on the ipad and 40%

hard copy. starting with nonfiction over winter break i read a book on fdr there is another one the just came out called final victory. i am obsess with this but why maybe interesting in today's time period, you read thomas to rebut seidman romney. you will see pop-up particularly the campaign of 44. forget 48. i am working on that one and also getting through the book i have been meeting to

read called pinched. is about to the great recession chronicling in is culturally changing us with what kind of long-term change takes place around the country with the white male underclass. it is said good way i am thinking of making it required reading but every politician should read this because it explains the chronic pessimism. why are we so pessimistic about the future? we don't have optimism and a more. there is a pall of pessimism umbro