The Daily Show with Jon Stewart: Peter Schiff--June 9, 2009
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Stumble ThisPeter Schiff believes Americans have to go back to a basic economy that grows based on savings, not consumer credit.
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Daily,Show,Jon,Stewart,Peter,Schiff,Obama,Euro,Pacific,Capital,Bernenke,Wall,St The Daily Show with Jon Stewart: Peter Schiff--June 9, 2009
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But cmon. Obama, Bernanke.. They're not stupid people. They are educated and know what they're doing and have a plan. They would not purposely destroy the country.
would they?
i have been posting his material for years,there is some on the sift:
http://www.videosift.com/video/Peter-Schiff-warns-of-run-on-the-dollar
the way i look at it,if someone keeps calling it correctly THATS the guy i listen to.while others were constantly getting it wrong,schiff was on the money every time.
nice post TC.
Paul Krugman was talking about the dangers of a deflationary depression and a housing bubble starting in 2003.
I've never heard a word come out of Schiff's mouth that wasn't some sort of over-the-top Austrian Economics-fueled fear mongering about the fact that we still collect taxes and have a Federal Reserve leading us to swift and inevitable doom, especially since we elected a Democrat.
Schiff is a quack, and a partisan hack to boot. Here's a good analysis of his supposed prescience:
http://globaleconomicanalysis.blogspot.com/2009/01/peter-schiff-was-wrong.html
I'm somewhat surprised that Stewart didn't call him on some of his more ridiculous claims.
Mish's criticisms are even more laughable. Schiff is a long-term investor, not a trader like Mish. The dollar headfake in the last year where people ran toward the blast initially is not a sustainable trend and totally meaningless. When you know the Titanic is going to sink, you don't stick around because you think you can get one last dance in, and that seems to be what Mish thinks people should do. Decoupling is going to happen whether Mish likes it or not. Our treasury secretary is getting laughed at by Asian students when he tries to reassure them of dollar integrity.
(1) From the creditor's perspective, there's no point in loaning money to someone to consume your production. You don't devalue your currency to export for the sake of exporting, you export for imports or keep your currency strong so that you can consume your own production. Otherwise, you're exchanging products for stashes of paper IOUs that we show no intention of replacing with real products. When the Asian countries figure out how easy it would be to consume their own products, our economy is toast. The only problem for someone like a China is how to head for the exit without causing a stampede. The minute such a large holder of dollars starts spending them, their value relative to goods will diminish substantially. Avoiding a hit now is going to be impossible, but they know that continuing to accumulate dollars is simply creating a larger future hit.
(2) From our perspective, politicians will always do what is expedient in the short-term. Telling the truth and saying you have to cut spending and entitlements by massive amounts for the sake of future generations isn't politically profitable. Not just because of all the people expecting things like unlimited health care regardless of our productive capacity to finance it, but because such a high percentage of our voting population now have overpaid government positions that they don't want to lose. Someone like a Ron Paul tells the truth at the expense of having an chance of winning. Winning requires that you be a candyman.
Savings is underconsumption and required for loans to exist. Ideally, people borrow that finite capital to increase productive capacity, to turn a shovel into a bulldozer and pay the loan off with more production. That is the kind of borrowing that benefits the creditor, the debtor, and society. It's not supposed to be a tool for consumption and winning elections, and that's where this country derailed from the sustainable and healthy growth it had in the 19th century. Whatever "success" we had from things like Medicare and Social Security came at an equal or greater long term cost. It's generational theft in its purest form, borrow to consume in the present to leave each successive generation with a higher and higher interest burden that will have to be paid for with higher taxes or currency devaluation. I say this because it is the fundamental oversight of people like Steve Forbes and Art Laffer who try to cast off trade deficits as "meaningless because it's something we've always had" in debating the resiliency of the bond market without distinguishing how we spent our loans then vs now.
Defaulting on our debt through inflation is a certainty. If you listen to Financial Sense or Schiff's weekly radio show, you'll learn how obvious that conclusion is very quickly.
http://www.youtube.com/watch?v=JGdj3Gx4A8w
http://www.youtube.com/watch?v=EgMclXX5msc