Peter Schiff was interviewed January 7th by Russia Today. They point out how Schiff correctly predicted the real estate and economic collapse several years ago, only to have his warnings fall on deaf ears or be met with ridicule. 5 years later and instead of turning to Mr. Schiff or others like him for advice, the Obama administration has invited the people who were arguing against Peter Schiff and have been dead wrong for the past decade to join his economic team and give him advice. Hope fades fast in politics.
I am of course aligned with Mr. Schiff’s views on the dollar, the economy and gold/silver, but am not as convinced that foreign currencies and stocks are a great idea. Foreign currencies are still fiat money and foreign economies rely heavily on U.S. consumption, so I see them getting dragged down in the mess. Leave a comment below and let me know if you agree or disagree.
I tend to agree with you about the whole world getting dragged down.
Peter Schiff is very similar to Jimmy Rogers.
I ,too am a big Rogers fan.
But I don’t think Schiff or Rogers give enough emphasis to gold and silver.
I think they both give too much emphasis to the yen and remnimbi.
As you said , Its all fiat”.
Jason , can you find anybody who can clarify this entire inflation/deflation debate?
I think Jim Willie is the best at trying to clarify this.
Right now , it appears that Schiff and Rogers are ,at least , partially wrong , in that deflation APPEARS to be having its way.
It seems like Prechter , Ackerman , Jim Sheperd
and that bunch seem to be shining right now.
They are all pretty much bearish on preciuos metals.
But I still think that at the end of the day when you turn out the lights and close the door
Schiff ,Rogers , John Williams and that bunch will be shining brightest.
My tendency is to lean more towards them [inflationists] , but with even a greater emphasis on precious metals than they expound.
I agree with Schiff on most things too, and like you I’m not sure about the foreign currencies but I can see that the foreign currencies have a chance to out pace the dollar long term because the US debt has a chance to crush the dollar. If the dollar is crushed some other currency will become the big dog even if it is a fiat currency.
It would be great is we would go back to a gold standard but I don’t see anyone in the world governments making that big a stand.
As soon as one major currency goes the rest will follow suit.
Having sucked up a realized loss of $10K in four and five star munis by March ’08, it would had been so much worse by now had I not heeded warning signs of men like Mr. Schiff, David M. Walker, Stephen Moore and Glenn Beck, all men who have pretty much been portrayed as nuts just one year ago. I owe a debt of deep gratitude to them all.
INFLATION / DEFLATION
The principal issue is that the economy was slowing down (inflation getting down), so natural response was to cut interest rates. Problem was that the interest rates were cut maximum (to 0 level), so the only alternative way to stimulate growth was to print money (effectively similar to further cutting interest rates).
Those who claim inflation is comming think that this was a good way to stimulate economy, but once there is more money –> it is worth less –> increase of price.
Those who believe deflation is comming think that economy is so weak that no money can help it.
I personally agree with one postulate I read which says that the only reason inflation in the US is still not growing is only because all this money pumped up into economy is still laying in bank accounts. Whenever banks start lending again, people will realize how many dollars there are on the market and of their real (low) value creating inflation.
This is because regular, so called multiplier of money supply is about 8 in US, whereas now it is around 1 as hardly any money is circulating. Whenever economy starts running inflation will be overwhelming.
Michal