On July 2, 2018, Reason and The Soho Forum hosted a debate between Erik Voorhees, the CEO of ShapeShift, and Peter Schiff, CEO and chief global strategist of Euro Pacific Capital. The proposition: “Bitcoin, or a similar form of cryptocurrency, will eventually replace governments’ fiat money as the preferred medium of exchange.”
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It was an Oxford-style debate in which the audience votes on the resolution at the beginning and end of the event, and the side that gains the most ground is victorious. Voorhees won by changing the minds of 15 percent of attendees.
The Soho Forum is held every month at the SubCulture Theater in Manhattan’s East Village. At the next debate, which will be held on August 27, William Easterly, professor of economics at NYU, and Joseph Stiglitz, a Nobel Prize Winner in economics and professor at Columbia, will discuss whether free markets or government action is the best way to eliminate global poverty. You can buy tickets here.
In this video from VRIC 2020 Peter Schiff and Brent Johnson debate about the future of the fiat money specifically US Dollar and the gold standard.
Peter Schiff believes the US market has never been as overvalued and over priced. And one of the major warning signs is we blew up the private equity market. This decades dot.com bubble is the private equity market destruction. This destruction will lead to the decline of the US dollar and eventually a remonetization of gold as the dollar loses its place as the Worlds Reserve Currency.
Peter Schiff’s theory is that Central Bankers around the world are under the false impression that a cheap currency is a good thing because it allows them to export more to the United States. However, the US is broke and can never pay for what it’s buying.
And since America is the largest debtor nation in the world and have more debt than other major countries combined and manufacturing is such a small portion of the US economy, there is a complete dependency on foreign goods.
And Relative to Wealth producing components of GDP no other country on earth has as much debt as the United States.
Add in contingency guarantees such as bank accounts, pensions, brokerage accounts that the US government is committed to funding despite the lack of money to pay for these things.
Combine all of this together and there is the potential for a currency crisis the likes the world has never seen. Schiff thinks this because there is an unrealistic level of belief for the US Dollar.
Schiff thinks the dollar will perform worse than other fiat currencies around the world and that we’re going to remonetize gold as the central asset.
Brent Johnson ultimately believes the same ending but with a different theory on how it will all go down.
Brent’s theory is that MMT is that the government will spend more money into existence and the central banks will want to control of the monetary policy. And that the dollar will go up and people will continue borrowing and buying which will ultimately lead to a massive currency crisis.
Every country in the world has over leveraged their economy and Brent Johnson believes that Central Bankers in every country are making the same bad bets across the world.
Brent Johnson makes note of The Plaza accord and that it was put in place in 1986 to artificially weaken the dollar against the other worlds Fiats because it was too strong. He argues that the dollar will be the the worlds central currency until fiat fails.
Schiff’s theory is “Money Is Nothing” and the value is the production and real goods that a country has. Money just lets you divvy up whats been produced. The wealth of the nation is the productive capacity of that nation.
Schiff also believes that in order to have a strong country you need:
Which are things that the US severely lacks and will pay a massive price for the over dependence on countries that do have these things.
The Canadian economy will benefit from a resource and precious metals boom that will help the Canadian dollar.
Schiff on inflation: Inflation initially pushes up asset prices before consumer prices.
Brent believes that digital currencies could be the future of money and likely will be implemented by most countries in the near future.
Brent and Peter agree that The Gold Standard will happen after a general loss of confidence in fiat currency.
Schiff explains MMT Modern Monetary Theory as the practice of taking Quantitative easing to the extreme. Printing Money without creating prosperity. Democrats will rely on the central bank to fund their spending agenda.
Repo rates have spiked to 9% – the market wants rates higher but Americans have so much debt and American can’t afford to service the debt. And international banks have been accessing the FED repo market to a greater extent than the US domestic markets. Repo rates spiking shows a demand for funding from the US dollars.
Americans have so much debt that the US government has to keep rates low other
Marin Katusa postulates that the highest risk lies in the credit market with debt in triple BBB
Yves here. I’m of two minds about featuring a post about Peter Schiff, since criticizing him treats him as being a more legitimate commentator than he is. But some targets ask so hard for a debunking that it’s hard to resist.
Schiff has been in the press recently for having said on the Daily Show that some people, such as the “mentally retarded,” didn’t even deserve minimum wage but should be paid only $2 an hour. But being offensive is not the worst of his sins.
Schiff is a money manager who claims to be an economist but has no formal credentials.* He such a terrible money manager that one wonders why the SEC hasn’t come calling. He lost 60% to 70% of customer assets in a two-year period when he was supposedly making correct macro calls. It isn’t just that he made disastrously bad timing decisions. He violated one of the basic rules of investment management, which is diversification (as of the last time his account results were made public, his picks represented only 2 bets: energy and gold, and that via small gold stocks or trusts). And he also appears to loaded up his customers with lots of risk. If so, he might have violated “know your customer” rules.
Mind you, this performance occurred when his public calls were generally correct. One can only imagine how he’s done when he’s been screaming “hyperinflation” and we instead have disinflation tending to deflation.
Now some readers might surmise that the fact that Schiff still has an investment business is the result of personal charm and selling skills, at least in the presence of Important People. Quite the reverse. so gratuitously rude. He got to the studio so late that he nearly missed the hit time (a huge deal in TV) and was unapologetic and haughty toward the tech who had to put up makeup and mike him up in haste. He repeatedly interrupted the host and even the Australian Finance Minister, who dealt with him with unruffled professional calm. And even though we sat elbow by elbow during the shoot, he pointedly never introduced himself and brushed off my move to shake his hand (I guess he’s afraid contact with non-libertarians might contaminate his precious bodily fluids). Mind you, I wasn’t offended but rather much as bemused and perplexed. What was the point of this display of lack of self control and basic manners? Did he really think it meant people would take him more seriously?
My recollection is that on the SBS show, the producers were able to contain Schiff by virtue of both him (and me) and the Australian Finance minister being on remote video. They could cut to someone else when they thought he’d had his say. Philip Pilkington sent this clip of Schiff with Cenk Uygur, “Uyger is the only one who handled him properly.” Of course, a fanboy or more likely, a flack put up overlay attempting to depict Schiff as a victim, as opposed to getting the treatment he deserved.
So let’s turn to Nate Heckmann’s takedown.
By Nate Heckmann, a graduate student at UC Irvine’s medical school who writes about health care, economics, and tax policy. Originally published at Et Vita
“The greatest enemy of knowledge is not ignorance, it is the illusion of knowledge.”
― Stephen Hawking
A libertarian friend of mine who — like most libertarians — subscribes to the Austrian school of economics sent me a video, convinced that I would no longer think about inflation the same way after watching it. The video is of well-known libertarian pundit, investor, and self-proclaimed Austrian economist, Peter Schiff.
In the video, Peter Schiff responds to his critics who attacked him for a prediction he made at the end of 2009 about hyperinflation:
You know, look, I know inflation is going to get worse in 2010. Whether it’s going to run out of control or it’s going to take until 2011 or 2012, but I know we’re going to have a major currency crisis coming soon. It’s going to dwarf the financial crisis and it’s going to send consumer prices absolutely ballistic, as well as interest rates and unemployment.
According to Schiff, the reason we haven’t seen hyperinflation yet is because the CPI is flawed, “deliberately designed” by the government to hide the true rate of inflation.
The video was so bad, it compelled me to write this post. First, watch the video above. Then read about what Schiff gets wrong:
1) “I never said the money printing would cause inflation. I said the money printing is inflation.”
Any student who has taken macroecon 101 knows this is an overly-simplistic view of inflation. It’s hard to believe that an “economist” holds this view.
Schiff’s view doesn’t take into account inflationary expectations, the rate of money exchange, or where said money ends up in the economy (e.g. M1, M2, M3, etc). If the treasury printed $1T and buried it in a hole the money would not exert the same inflationary pressure as it would if the printed $1T were distributed to the nation’s poor and middle class. The former would have a much smaller inflationary effect than the later. Schiff, at least, ought to acknowledge the fact that while the Fed has expanded the monetary base from $0.87 to $2.92 trillion, it is holding on to $1.62 trillion of excess private bank reserves. That’s $1.62 trillion sitting in a hole, not being circulated, exerting no inflationary effect. This money parked at the Fed is not inflationary.
This is not a difficult concept to grasp, but Schiff fails to grasp it nonetheless.
2) “But Krugman would say that Peter Schiff is wrong because prices haven’t risen. But, again, the proof that he offers, and that other Keynesians offer, are government-created statistics that purport to measure inflation like the CPI.”
For someone like me that has been following this narrative closely, it’s plain to see that Schiff is misrepresenting Krugman’s critique. I’ll explain.
First, Krugman has criticized Schiff’s predictions of hyperinflation, not normal levels of inflation (i.e. “rising prices”). According to Schiff’s predictions in 2009, we should have sky-rocketing prices by now, but we don’t. And this is exactly why people like Krugman say Schiff’s predictions haven’t panned out.
Furthermore, in Krugman’s most recent post about Schiff, he doesn’t offer the CPI as proof that inflation is under control because he knows that Austrians don’t care for “government-created statistics”. Instead, Krugman offers MIT’s Billion Prices Project as a third-party estimate of inflation. This project monitors the daily prices of over 5 million online transactions in over 70 countries. Guess what? This metric only varies slightly from the CPI and it tells the exact same story — namely, that inflation is not a problem.
According to my calculations, from the end of 2009 when Schiff made his prediction, until the beginning of 2012 when this video was made, inflation has increased by the following:
The first three metrics are “government-created statistics”, the 4th is a third-party estimate of inflation, and the 5th and 6th are the Austrian metrics of inflation. Ask yourself: Which of these measures of inflation is inconsistent with reality? Has your cost of living gone up 30-50% since late 2009 or has it increased somewhere on the order of 5-7%?
3) “The CPI does a lousy job of measuring inflation. And I think it deliberately does so by design.”
By design? Evidence?
4) “In fact, I’m not the only one that’s convinced that inflation is a lot higher than the government admits.”
Schiff’s support for this claim? No, not a third party mathematically driven model like MIT’s or some other equivalent — a FOX News poll. The poll referenced, however, does not support Schiff’s claim that the CPI underestimates inflation. All the report states is that 41% of people polled felt that rising prices were their primary concern.
5) “Well, if the government is correct, if the CPI is accurate, then why are so many people worried about inflation that doesn’t exist?”
First, nobody said inflation doesn’t exist (see point #2).
Second, this poll does not support the notion that the CPI is inaccurate. Inflation is real and people who are out of a job or underemployed ought to be concerned about rising prices. As a student, I am concerned about rising prices, but this does not mean that I believe the CPI is inaccurate. Nor does my concern mean that I think there is ongoing hyperinflation.
6) “Afterall, what makes more sense? That the government can print all this money, and prices not rise? Or that prices are rising and the government is just not being honest?”
Arguments of incredulity are not only weak, but they often-time reveal a lack of knowledge or understanding in the person that uses them. Also, once again, nobody is saying that prices aren’t rising (i.e. see point #2).
Schiff doesn’t understand that printing money against the zero-lower bound — the point at which the federal funds rate is zero — does not have the same inflationary effects that it would in times of economic prosperity. I’ll outsource the explanation as to why this happens but, in a nutshell, “if interest rates are near [or at] zero, money printed now just gets hoarded, and monetary policy has no traction on the real economy.”
Given Schiff’s definition of inflation, I don’t blame him for not grasping this concept.
7) “The items that I selected for my basket were eggs, cars, milk, gasoline, bread, rent for a primary residency, coffee, dental services, potatoes, electricity, sugar, airline tickets, butter, store-purchased beer, apples, public transportation, cereal, tires, beef, and prescription drugs.”
According to Schiff, the CPI’s basket of goods is deliberately misleading, but his own basket of (20) goods is stable, unbiased, and more accurately represents price levels than the CPI? Does anybody buy this? I don’t.
First, Schiff’s basket is food and fuel-dominant, relying heavily on two factors that are commonly removed from measures of core inflation because of their inherent volatility.
Second, even if we accept Schiff’s high-ball basket of goods as being accurate, we are still left with a decade with only 44.3% of inflation. This is odd because it contains the recent post-recession period of hyperinflation (or high inflation) that many Austrians are angry about, yet inflation in this past decade is still well bellow the 117% increase during the 70s. So according to Schiff’s calculations, we’ve still only seen a fraction of the inflation that plagued us during the 70s.
Did Schiff intentionally show that inflation during this past decade was actually much lower than it was during the 70s, or did he do this by accident?
8) “But it actually gets worse because the government numbers are wrong. And I’ll prove it…”
Schiff continues by pointing out, what he claims to be, specific “inaccuracies” in the CPI. These warranted a fact-check on my part.
I checked Schiff’s claim about healthcare premiums only increasing 4.3% from 2008-2012 according to the CPI. According to the CPI — the CPI that I just looked up — health insurance premiums have increased by almost 20% over this period. The Kaiser report that he references, which by the way only refers to employer provided insurance, shows an increase of 24.2%. This doesn’t seem like a contradiction, but it makes me wonder where Schiff is getting his CPI numbers.
It appears that the CPI is actually referring to a 4.3% increase in the healthcare premium costs per year, but Schiff is — either misleadingly or accidentally — implying that according to the CPI, premiums have increased by a total of 4.3% over the entire five year period of 2008-2012, which, of course, is not true.
9) “So if the government is wrong about newspapers and magazines, if they’re wrong about health insurance, how should we believe that they are right about anything?”
Wait, how did Schiff prove that the government is wrong?
Krugman’s description of the Austrian viewpoint sums it up best:
Substance aside — not that substance isn’t important — Austrian economics very much has the psychology of a cult. Its devotees believe that they have access to a truth that generations of mainstream economists have somehow failed to discern; they go wild at any suggestion that maybe they’re the ones who have an intellectual blind spot.
Schiff is wrong, but he’s sticking to his guns. And, in the process, he’s revealing just how little he knows about economics, policy, and pretty much everything else. Why do people still listen to this guy?
*Schiff has a BA from UCLA in Accounting and Finance. His father is a well-known con artist who sold books and led seminars claiming no one had to pay Federal taxes and told followers his “secrets”. Schiff’s father is now serving a 13-year prison sentence for tax evasion, his second prison term (he previously served a four year term, again for tax evasion).
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<iframe width=”560″ height=”315″ src=”https://www.youtube.com/embed/tuR7CqPwqB4″ frameborder=”0″ allow=”accelerometer; autoplay; encrypted-media; gyroscope; picture-in-picture” allowfullscreen></iframe>08:12so the opposite of what everybodyexpected happened when we elected GeorgeBush because the bubble burst under Bushbut here’s a problem when the bubbleburst Bush did not blame that recessionthat we had in 2001 he did not say heywe had a bubble under Bill Clinton andnow we have to deal with theconsequences we have all thesemalinvestments because of the stockmarket bubble and we’re gonna have to gothrough a recession as we work our wayout of these imbalances no he made themistake of trying to use Keynesianstimulus budget deficits and AlanGreenspan slashed interest ratesto 1% and we were able to mitigate theseverity of that recession it was theshallowest recession in US history andwe replaced the stock market bubble witha housing bubble and that housing bubblecreated enough phony wealth and enoughphony prosperity to buy George Bush’ssecond term but the consequence of thatbubble blew up in 2008 while built whileGeorge Bush was still in office and soultimately that bubble collapsed andthat’s what paved a way for Barack Obamabut this time I don’t think GeorgeDonald Trump is going to be so luckybecause I think when the bubble burstsnow and it’s all the same bubble it’sall a continuation of the same policybecause when the housing bubble burstinstead of lowering interest rates to 1%the Fed didn’t stop at 1% days passedwhen and went all the way to zero andthey stayed there for like 7 years andnow despite all this talk about howthey’re gonna normalize rates and raiserates they’ve only raised them twicethey’ve raised them by 50 basis pointsthere’s still half of where greenspanslashed the middlee you know in 2002 andso now it’s not just that we reflate‘add the real estate bubble or reeflated the stock market bubble because wehave both but now we have a massive bondmarket bubble we have us we have arepeat of the dollar bubble we have thesame dollar bubble we had in the late1990s we pretty much have a bubble ineverything where we had a bubble in autoloans a bubble in student loans we havenow so much debt the national debt is 20trillion right the national debt doubledunder under Bush from 5 trillion to 10trillion it doubled under Obama from 10trillion to 20 trillion I mean is iteven within the scope of possibilitythat we can go from 20 trillion to 40trillion assuming that you know Trumpwas in office for eight yearsbut I think at this point and interest11:08rates are already starting to rise this11:10is going to be the problem this is the11:12pin that pricks this debt bubble is11:14rising interest rates11:16I mean why has the Fed kept rates so low11:18for so long because they can’t raise11:20them that’s why I mean they want to11:23pretend that well you know we’re we’re11:25just trying to make sure everything is11:26okay look if everything was okay when we11:29raise rates it’s because they can’t11:31raise rates because the debt is too high11:33what would happen to the budget if11:38interest rates went up right now we’ve11:40got a twenty trillion dollar national11:41debt yet we pay less interest on the11:43national debt than we paid when Ronald11:45Reagan was president and the national11:47debt was one trillion so all of this is11:51possible because interest rates are so11:53low if interest rates went back to 5%11:56which is still not high 5% you’d be12:01talking about an extra trillion dollars12:03a year or an interest on the national12:05that every year12:07where’d that money come from what if12:10interest rates went to 10% oh it’s I12:12mean they went higher than that under12:15under Paul Volcker but even some of12:18between five and ten and then what about12:19the housing market where would work12:22mortgage rates have been averaging the12:24last you know a few years mortgage rates12:25three and a half four percent yet12:28homeownership in America is at a 60-year12:30low what would happen into the12:31real-estate market if mortgage rates12:33went to 6 or 7% or 8% I mean that’s12:36normal for a mortgage nobody could12:39afford a house now how the market would12:41implode what about the corporate12:43corporate sector corporate America why12:45do you think the Dow is flirting with12:4620,000 it’s not because US companies are12:49earning all this money it’s because they12:51levered up during the era of cheap money12:53and they bought back a bunch of stock12:55you know and so we have this gigantic12:57bubble and Donald Trump is right you12:59know the last eight years have been a13:00disaster right our our country is13:03littered with closed out factories that13:05are like tombstones right people have13:08lost good jobs we’ve had massive debt13:10but there is no quick fix to all this I13:13mean Donald Trump talks as if all we13:15have to do is renegotiate NAFTA13:17right all we have to do is have smarter13:19bureaucrats negotiating and the trade13:22deficits are gonna go away no they’re13:23not you know and Donald Trump talks13:26about how you know the world has been13:27taking advantage of America no we’ve13:30been taking advantage of the world13:31that’s what he doesn’t understand right13:33what is the relationship that America13:36has with the rest of the world13:37well we consume in the world produces13:40well I mean well obviously we’re the13:42beneficiaries of that we we get to13:44consume all sorts of products yes the13:46factories are all gone but the consumer13:49goods that the factories used to produce13:50they’re still here13:52how are we getting all these goods that13:54we don’t produce because people in other13:56countries are dumb enough to give them13:58to us now they don’t think they’re14:00giving them to us they think they’re14:01selling them but they’re not because14:03we’re borrowing the money to buy it and14:04we’re never gonna pay it back I mean we14:07don’t have the capacity to pay it back14:09we don’t have the intention of paying it14:10back so the world has been conned into14:13supporting this this relationship so14:15Donald Trump has that backwards the14:17world loans us the money to buy their14:20products so in order to make America14:23great again and Donald Trump talks with14:24us all the time we’re gonna have to go14:26through a massive recession and the14:31scary part is Donald Trump is not14:32preparing any Americans for any of the14:35pain that is necessary if we’re going to14:38write this economic ship if we’re going14:40to have real production in America again14:43Americans have to stop spending we have14:46to start saving we have to start14:49investing in plant and equipment you14:51know Donald Trump wants to deliver tax14:53relief to the middle class how we have14:5620 trillion in debt the middle class is14:58on the hook for that we have a massive15:00government that the middle class has to15:02support the only way to deliver tax15:04relief is to slash government but Donald15:07Trump is talking about more spending on15:09the military more spending on15:10infrastructure more spending on the15:12border we’re not going to make any cuts15:14to Social Security we’re not gonna make15:15any cuts to Medicare and he’s gonna15:17replace Obamacare with Trump care what’s15:19that gonna cost I don’t know15:21yes he’s talking about some kind of cuts15:23to discretionary spending but they’re15:25gonna be tiny compared to all these15:27increases so none of this is possible it15:30seems to me15:31that all that all Trump is trying to do15:33is make the bubble bigger right he’s15:35saying you know we want to I want to I15:37want to change it right now right you15:38have all this quantitative easing that15:40has benefited the 1% benefited the rich15:43benefit of Wall Street maybe he wants to15:45target monetary policy or fiscal policy15:47to somehow benefit the middle class what15:49would actually benefit the middle class15:51is going to be to free up the economy15:54from the burden of government15:55unshackle the middle class from15:57government but in order to have this15:59transition we can’t go from a consumer16:02credit bubble economy to a real savings16:05base productive economy without16:08collapsing the asset markets stock16:10prices have to come down a lot real16:12estate prices have to come down a lot16:14bond prices have to come down a lot16:16interest rates have to go way up and16:18when that happens a lot of companies go16:20bankrupt a lot of banks fail a lot of16:23people lose money a lot of people lose16:25jobs this has to happen it should have16:28happened in 2001 but it didn’t it should16:31have happened in 2008 but it didn’t16:33because they kept you know blowing the16:35bubble up with more and more air and now16:38it is just so big it’s just so ignore16:40that it can’t possibly not pop and I16:43don’t think there is there’s another16:46bubble that the Fed has up and sleeve16:47and you know Donald Trump of course you16:49know he criticized the Fed when he was a16:51candidate I don’t think he’s gonna do16:53that as president in fact when Donald16:54Trump ran for office he talked about the16:57stock market he said it was a big fat16:59ugly bubble well it’s bigger fatter and17:03uglier now but he never mentions it as a17:04bubble because now it’s his bubble he17:07doesn’t want it to deflate he wants it17:09to keep going up he doesn’t want to get17:11blamed for all the bad things that are17:14about to happen and he’s I think setting17:16himself up for a disappointment because17:18he’s promising so much everything is17:20gonna be so great it’s not and and he is17:23appointing a lot of business people17:26smart people to the cabinet but they17:28have no idea what they just bit off and17:31I think the markets and I’ll talk more17:33about this tomorrow17:35but I think we have a real opportunity17:36here because this dollar bubble it is as17:39big as the dollar bubble that popped17:41when Bush took over because17:45when this market when the economy ends17:47up being a lot weaker then people17:50believe because the economy has been17:52decelerate and you know we’re far as I’m17:54concerned the only reason we’re not in a17:56recession is because the government17:58isn’t honest about the inflation rate17:59because they take the nominal GDP and18:02and they deflate it but a lot of people18:05are thinking hey if we’re gonna get this18:07fiscal stimulus we don’t need the Fed18:09anymore right that’s what’s been that’s18:11what helped the dollar and hurt gold18:13hey the feds gonna raise rates because18:15now they’re not the only game in town18:17right before we couldn’t get any fiscal18:19stimulus because we had gridlock but now18:22that we have Republicans in Congress and18:24we have a Republican president we’re18:26finally gonna get the fiscal stimulus so18:29now the Fed can back off and let rates18:31go up they got it wrong the only way we18:34can have so-called fiscal stimulus is if18:37we get an even bigger dose of monetary18:39stimulus to make it possible because if18:41the Fed is gonna be letting interest18:43rates go up and they’re not going to be18:44monetizing debt with QE and we’re gonna18:47take the budget deficits and increase18:50them dramatically to finance tax cuts18:52and more government spending who’s gonna18:54buy all those bonds the Chinese aren’t18:57gonna buy them they’re selling the18:59Japanese aren’t buying them the Russians19:00aren’t gonna buy them a Saudis or19:01everybody is selling everybody is19:03selling Treasuries in fact the bond19:05bubble the bull market that started in19:081981 is pretty much over the whole world19:10wants out of Treasuries how are we going19:13to finance massive deficits in a bond19:15bear market where nobody wants to buy19:17our debt and if interest rates go up the19:20the depressing effect on the bubble19:22economy of rising rates will more than19:25offset the stimulus of the tax cuts I19:27mean just what people are gonna have to19:29pay an extra debt service costs are19:31gonna destroy whatever benefits they get19:33from whatever tax cuts and the tax cuts19:36are talking about our minimal they’re19:37not even as big as bush they’re nowhere19:39near like Reagan there are people19:40comparing Trump to Reagan I mean it’s19:43just it’s night and day I mean when19:44Reagan came in the debt to GDP was 30%19:48now it’s over a hundred percent when19:50Reagan came in interest rates on 30-year19:52bonds were 14% they had nowhere to go19:55but down19:55short-term rates were 20%19:58the stock market was at a p/e of seven20:00so we had cheap stocks we had expensive20:05money and they cut rates dramatically20:07Reagan’s rate cuts the marginal rate20:09went from what 70 percent down to 30 son20:11was a huge cut in marginal tax rates and20:13yes Reagan ran up the deficits but we20:16were able to finance him because we were20:18a wealthy country when Reagan was20:20elected we had trade surpluses in20:21America when Reagan was elected we were20:24still the world’s wealthiest creditor20:25nation not the world’s biggest debtor so20:28Trump is coming in at a time that’s why20:30I say it’s not morning in America it’s20:32midnight in America but people are as20:34optimistic now as they were then they20:36actually believed that all these20:37problems can be solved just because20:40Donald Trump is the first person to have20:41the courage to actually you know call20:44the problems out right to actually say20:47what a lot of Americans were thinking it20:49didn’t all didn’t buy all this hype and20:50all this propaganda about how good20:52things were but as the air comes out of20:55this bubble when the Fed has to come20:56back with more QE when they have to cut20:59rates have I gone over oh it’s kind of21:03yeah hello it’s counting up I must have21:05gone over all right so when the event21:08when the Fed has to has to cut rates and21:10they have to do QE four and I think this21:12next round of quantitative easing is21:14going to be bigger than the last three21:16combined and what’s gonna really21:17surprise people is just as the Fed is21:20easing the ECB is gonna be tightening21:22because inflation is picking up all over21:24the world21:25inflation in Europe is picking up it’s21:28gonna be above 2% sometime this year21:30they can’t have that the Bundesbank is21:32not gonna allow they’re gonna have to21:34start taping their QE they’re gonna have21:36to start raising interest rates so it’s21:38gonna be the exact opposite instead of21:40the world you know ECB easing and the21:43Fed tightening it’s gonna be the reverse21:45and I think the dollar is gonna fall21:46through the floor and eventually this is21:49going to end in a currency crisis21:50there’s no way around that that we’re21:52gonna have a dollar crisis and we almost21:55had a dollar crisis in 200821:58but it was saved by the financial crisis22:00we’re not gonna get that lucky next time22:02anyway I’ll be at my booth thank you22:06[Applause]22:17you
This has me utterly baffled. Peter Schiff is a pretty bright guy, and for a long time he’s been a vocal advocate of the sound money and libertarian economic viewpoints. That’s why I’m wondering if he’s had a stroke recently, because he’s done more to marginalize his own point of view over the past six weeks than the army of his detractors has managed in the past decade.
Near as I can tell, he started jumping the shark in December when he posted a video of himself ostensibly protesting against Wal-Mart workers protesting for higher wages. It was tongue in cheek, and not a completely outlandish point to make, but it begs the question: where does a millionaire CEO find the time to protest against minimum wage workers in a Wal-Mart parking lot? And why the hell would he?
It was all downhill from there. He appeared on Joe Rogan’s podcast on January 22 and I couldn’t believe what I was hearing. He spent three solid hours railing against government regulation of any kind and, when pressed on the environmental impact of disasters like the BP spill and the growing sentiment against fracking, his attitude was basically, “F the environment, I’m getting paid.”
But the piece de resistance was his appearance on The Daily Show last Tuesday, where he opined that people should work for anything they can get, and that the mentally retarded should be happy to get $2 an hour.
I’m frankly stunned. Schiff has always been a fringe player, but he could also always be counted on for his rationality. Now he’s either trolling, or he’s legitimately off his rocker. Even if he believes all the things he’s said recently (and I have no reason to suspect otherwise), why on Earth would he be vocalizing them? Has watching his precious gold meltdown sent him over the edge?
Bottom line: this is still a guy with a business to run and customers to serve. How could he possibly think that a Daily Show appearance (where you know you’re going to be made fun of) was a good idea? There’s nothing but downside there. And how could he think that he’d come off as anything other than pompous and petty for protesting against minimum wage workers? The guy is annihilating his own brand.
What do you guys think? Should Schiff see a shrink before he does any more damage? Or is he just trolling all of us?
Schiff protesting WalMart workers:
Joe Rogan Experience:
The main stars of America’s financial trash TV are broken clocks and contrarian indicators who deliver the same sales pitch day after day, week after week, year after year. That is what salesmen do after all.
Once they have been finally called out for being completely wrong for years, they fight back by changing their talking points to focus on trivial rants, such as when the Fed is going to taper or raise interest rates.
Keep in mind that these talking heads focus on this type of nonsense as a way to distract from their investment failures and lousy predictions.
Schiff couldn’t even get this right. The guy is a complete failure, so why does the media promote him constantly?
Peter Schiff has become a very frequent participant in this media dog-and-pony show. Schiff receives interviews every day, and many times multiple times per day from every segment of the Jewish media, from CNBC and FBN, to Bloomberg.
He also gets quoted or discussed in in the Wall Street Journal, MarketWatch, Forbes, Fortune, The Financial Times, you name it.
Accordingly, Peter Schiff could be considered the male version of a “financial Kim Kardashian.”
For anyone out there who isn’t too bright, let me make sure you get the point. That was by no means a compliment.
Think about it. Schiff runs a brokerage firm, Euro Pacific Capital.
So naturally one would expect him to discuss topics like compelling investment sectors and stocks, valuations, earnings, asset allocation strategies and so forth; you know, things competent financial professionals talk about. The same kinds of things an audience wants to hear about.
Even though he is really only a stock broker and not an analyst, he calls himself Euro Pacific Capital’s chief global strategist. But this too is only a superficial designation.
In my professional view, Schiff is really a marketing strategist because that is how he spends the majority of his time. I state this with complete confidence because I have been noting Schiff’s schedule for several years.
Regardless, surely Schiff has people to do “research” for him, letting him know what is going on, right?
Yet, he is constantly talking about trivial topics, like whether the Fed will raise rates over and over instead of talking about relevant issues.
Why might that be?
Maybe, his research results are complete dog shit.
Once you carefully examine Schiff’s track record as well as his record of investment performance and you will see why he has been focusing on trivial events instead of discussing investment and economic forecasts.