America hasn't bounced back as robustly from the 2007-2009 recession as it did in previous downturns because the nation is hobbled by its crushing $18 trillion of debt and all the government has done is "kick the can" rather than tackle the problem, Lear Capital CEO Scott Carter tells Newsmax TV.
In an interview on "The Steve Malzberg Show," the head of the precious metals investment firm said the U.S. economy remains anemic despite "misleading" unemployment statistics.
"When you look at manufacturing jobs, they aren't there," he said. "The jobs are smaller and weaker. I don't believe it's any surprise that we're seeing [Gross Domestic Product] slow down — and without the fed's stimulus money, we've got a problem with our economy."
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The heart of the problem is the nation's debt and the solution is getting rid of "underperforming assets," he said.
"In previous recessions, when companies were in trouble and we hit a recession, they were gone," he said. "This recession, the government stepped in and basically saved … every major company that was in trouble so now we're sitting here today with a weak economy.… [W]e took $9 trillion of debt and now it's $18 trillion of debt.
"All we've done is kick the can, we haven't really solved the problem, and Europe's doing the same thing, Japan's doing the same thing because we don't want to deal with the bad news, which is we have underperforming assets, they need to be gone and that's what will create a healthy economy."
Carter said "hard assets" will do well in that environment, however.
"The tried and true thing that central bankers do when they're trying to keep an economy going is lower interest rates to zero or negative —which is where we are right now and … print money so they try to loosen the wheels."
The problem, however, is "that digs the hole deeper, but hard assets that can't be printed perform well when currencies are devaluing," he said.
"Gold and silver has gone from $300 to $1,500 and it's up 400 percent over the last 15 years," he said. "It's because we're printing money. It's going to continue. The estimated debt is going to be $25 trillion over the next seven or eight years. … in gold and silver over the long haul, you're going to see these assets perform well in that type of environment."
Carter also weighed in on real estate billionaire Donald Trump's entry
into the GOP presidential candidates' ring, saying "he will add color," but declared "business guys can't get elected, because at the heart of what they do is they cut expenses and they make money."
"Right now the government has no interest and voters have no interest in seeing anything cut," Carter said. "He will be great for the debate, but I'm not sure what his chances are."
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