Posted on 12/06/2008 10:34:37 AM PST by rabscuttle385
People aren't laughing any more at the way-out-there predictions of Peter Schiff, whose long-standing pessimism about the economy and stock market has been largely borne out.
Schiff heads Euro Pacific Capital, a brokerage in Darien, Conn. with more than $1 billion in assets under management. He has silenced critics because he predicted the collapse of the housing market, the subprime crisis and the soaring of oil prices in his market commentaries before they came to pass.
A YouTube video called "Peter Schiff Was Right" shows him being repeatedly mocked when he went on TV stock shows to make those ultimately correct calls in 2006 and 2007, including forecasting a recession 2 1/2 years ago.
Now, in the midst of what's already the biggest financial crisis in decades, the prominent purveyor of gloom and doom still sees far tougher times ahead - including a depression and a bear market he thinks will last another five years or more.
(Excerpt) Read more at forbes.com ...
I think Schiff is mistaken on both inflation and de-linkage. Deflation from imploding financial assets is going to continue overwhelm the Fed’s inflationary moves. And the global economy is going to suffer as long as the US does, the developing economies are export driven and when we don’t buy they don’t thrive.
“The government can stop deflation any time it wants by printing money”
It’s bank lending, not printing money, that expands the money supply. When banks won’t or can’t lend the Fed is stuck pushing on a string.
If it was easy for a central bank to stop a deflation the Japanese wouldn’t have been limping along for nearly two decades. Many of the factors that triggered their deflation are present in our present troubles.
I’m voting with Mish and Roubini. The Fed needs the assistance of the banking system to generate inflation or else it’s just pushing on a string- and I don’t see banks going wild with lending any time soon. Like for the next decade or so. Their balance sheets won’t let them go on another drunken lending spree, and the memory of how this last fiesta worked out is still fresh in their little minds.
To me the herd appears to be betting on inflation. The surprise will be strength in the dollar and persistent weakness in most everything else. The downturn is going to be long more than it will be deep.
I consider Schiff and Mish Shedlock to be the two leading gloom n doomers, and both are right. It remains to be seen as to whether we’ll have hyperinflation in the near run (say, 2 years) as Schiff believes, or a deflationary depression for a long period, as Shedlock believes.
Last year you were laughing at Schiff and those with his outlook, telling us things were going to be fine.
Glad to see you’re back, and admitting Schiff was right and you were wrong.
Read "The Plague" by Camus. It's about an outbreak of plague in a French port in Algeria in the old days. It lays out perfectly the dynamic whereby the politicians don't want to know the truth or speak the truth, when confronted with an oncoming predicted calamity. Pols always say, "we must prevent panic" and "it would wreck the economy if the peons knew this, so keep it secret."
I'm a pessimist at heart and this recession/stock market crash has just killed our chances for a good retirement fund, at least not one I can depend on in the next five years......
so I tend to believe all the naysayers.....
but having said all that, I can't continually listen to doomsayers.....like Glenn Beck...when no meaningful or practical solutions or preparations are given.....
if they don't have anything useful to say, then they should keep their thoughts to themselves..
I’ve always been an optimist and always will be. I feel no shame in this. I don’t remember “laughing” at Schiff, but I do remember posting I don’t care for those seem to relish gloom and seem to cheer for the demise of the US and our system. The US has seen dark times before and always finds a way out. Why? Because despite all the problems with our system of government, we are still the most free country in the world. This too shall pass, and I’ll bet you dollars to doughnuts I won’t need to live off of canned goods while huddled in a bunker in the desert.
What happens if the government decides one day to print up, say, $10 or $20 trillion to fund a massive new socialist entitlement program?
What if they just cut a check for $10,000 to every man, woman, and child?
(Sure, the Japanese would save that money for a rainy day, but not too many Americans would do the same.)
Who’s to say the Democrats aren’t putting on a great big act. They’re going to see to it that one way or another their campaign treasuries get fat with union money.
you could be correct. But I don’t think so and here’s why. Watching the Fox business block yesterday, one of the host twits inadvertently spoke a truth which is that what makes this mess so different is that people are depressed. That may not spell a “depression” in an economic sense, but I suspect that the “mood” of the public might well push this debacle into an economic depression. And why are people in the U.S. depressed? Simple, the leadership in DC and the Congress is laughable. AND it only gets worse! This gov’t can’t handle a hurricane response, (Katrina) why would any rational person think it can handle an economy much less an economic meltdown?
OK so did he also predict the immediate collapse of oil prices?
Actually they are engaging tankers to hold all the excess production.
[The only question is, how long is disinflation going to last before we see it.]
Let me know when you figure that one out. My family is all cash now, we have to convert to tangibles pretty soon to avoid getting crushed in the inflation.
I’m in the same boat as you, and please let me know when anyone can figure out the exact time to go from cash to things.
Thanks in advance.
;-)
I’m not following the herd, just those who have been right about the current crisis. They have my confidence, because they have the track record.
That said, I find no consensus among them. They is why I have my radar up and am constantly reading to see if a consensus begins to emerge among them on the $64 Trillion question, whether deflation or high inflation ultimately wins out here.
I’m stumped and have not made up my mind one way or another, because I don’t have the expertise or knowledge to judge. I’m just hitching my wagon to those who have proven to be right thus far, and they are pulling in two dramatically different directions.
You’ve decided that deflation wins out, ie - no short term double digit inflation possible because the collapse in wealth and money will swamp any attempt to reinflate. I agree to that possibility, I’m just stumped if the Fed has the ability to reflate or not. I’m just stumped, so I can’t decide either way. I’m leaning toward expecting big inflation, but today, I’m just stumped. In the coming months, I think things will be more clear.
I’ll admit one thing — nothing the government has done to date is working and the economy is still in freefall. I’m not seeing any evidence of reflation at this time. None.
And that right there is the $64 Trillion question. The sooner we know that answer, the sooner we can prepare for the upcoming outcome. I want that answered now, but it is unknowable, so we have to wait until closer to the actual outcome. Uncertainty is a bitch.
Dead on but my point is, they inadvertently make the panic worse. Once the public realizes they have been lied to, the panic becomes worse than it would have if the public had just been told the truth originally.
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