Peter Schiff: The Mother of All Bells

There is an old adage on Wall Street that no one rings a bell at major market tops or bottoms. That may be true in normal times, but as many have noticed, we are now completely through the looking glass. In this parallel reality, Ben Bernanke has just rung the loudest bell ever heard in the foreign exchange and government debt markets. Investors who ignore the clanging do so at their own peril.

The bell’s reverberations will be felt by everyday Americans, whose lives are about to change in ways few can imagine. While nearly every facet of America’s economy has been devastated over the past six months, our national currency has thus far skipped through the carnage with nary a scratch. Ironically, the U.S. dollar has been the beneficiary of the global economic crises which the United States set in motion. As a result, our economy has thus far been spared the full force of the storm.

Related article: Terence Corcoran: Is this the end of America? (Financial Post)

This week the Federal Reserve finally made clear what should have been obvious for some time – the only weapon that the Fed is willing to use to fight the economic downturn is a continuing torrent of pure, undiluted, inflation. The announcement should be seen as a game changer that redirects the fury of the financial storm directly onto our shores.

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Peter Schiff: Speech on America’s Bubble Economy (3/13/09)

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Added: March 15, 2009
Source: YouTube

Read morePeter Schiff: Speech on America’s Bubble Economy (3/13/09)

Peter Schiff tells the Saudis how to rule the financial world

I have not published this to criticize Peter Schiff. He just tells it like it is. This is not unpatriotic. This is the truth. The truth ranges far above patriotism.

(I could get carried away here by saying that: “Truth is the basis of love, without truth love cannot grow.”)

And NO, I am not a follower of Peter Schiff either. I disagree with him in several points:

1. I know that there is an elite out there, that manipulates the economy into the Greatest Depression ever. He believes that the government and the Fed are only ignorant and incompetent.

2. I am pretty sure that the price of oil will not go up for a while.

3. I told everybody to get out of the stock markets in Oct./Nov./Dec. 2007 and move into gold and invest into self-sufficiency. (Peter Schiff also advised to buy gold and thinks that gold will rise above $ 2000 an ounce in the very near future and then higher and I totally agree on that.)

With everything else that comes to my mind right now, Peter Schiff is in my opinion spot on and will be proven right again in the future.

I am grateful that there are at least some great minds left that speak their truth, no matter what mediocrity thinks about them. If you want to learn something about economics, then listen to Ron Paul and Peter Schiff.

Source: YouTube

Peter Schiff: Stimulus Bill Will Lead to “Unmitigated Disaster”

The fiscal stimulus bill being debated in Congress not only won’t help the economy, it will make the recession much worse, says Peter Schiff, president of Euro Pacific Capital.

Schiff scoffs at the notion the economic decline is starting to level off and concedes no government action means a “terrible” recession. But the path of increased government intervention will lead to “unmitigated disaster,” says Schiff, who gained notoriety in 2007-08 for his prescient calls on the housing bubble and U.S. stocks.

The problem, he says, is the government is trying to perpetuate a “phony economy” based on borrowing and spending. With the U.S. consumer tapped out, the government is “now taking on the mantle” of consumer of last resort, he continues, predicting the bond bubble will soon burst – if it hasn’t already – ultimately leading to a collapse of the dollar and an “inflationary depression worse than anything any of us have ever seen.”

If nothing else, Schiff is an nonpartisan critic of American policymakers, comparing President Bush to Herbert Hoover and President Obama to FDR, and neither in a favorable way.

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Peter Schiff: The World Won’t Buy Unlimited U.S. Debt

We’re asking others to sacrifice for our ‘stimulus.’

Barack Obama has spoken often of sacrifice. And as recently as a week ago, he said that to stave off the deepening recession Americans should be prepared to face “trillion dollar deficits for years to come.”

But apart from a stirring call for volunteerism in his inaugural address, the only specific sacrifices the president has outlined thus far include lower taxes, millions of federally funded jobs, expanded corporate bailouts, and direct stimulus checks to consumers. Could this be described as sacrificial?

What he might have said was that the nations funding the majority of America’s public debt — most notably the Chinese, Japanese and the Saudis — need to be prepared to sacrifice. They have to fund America’s annual trillion-dollar deficits for the foreseeable future. These creditor nations, who already own trillions of dollars of U.S. government debt, are the only entities capable of underwriting the spending that Mr. Obama envisions and that U.S. citizens demand.

These nations, in other words, must never use the money to buy other assets or fund domestic spending initiatives for their own people. When the old Treasury bills mature, they can do nothing with the money except buy new ones. To do otherwise would implode the market for U.S. Treasurys (sending U.S. interest rates much higher) and start a run on the dollar. (If foreign central banks become net sellers of Treasurys, the demand for dollars needed to buy them would plummet.)

Don’t miss: Jim Rogers: I Would Sell All Government Bonds

In sum, our creditors must give up all hope of accessing the principal, and may be compensated only by the paltry 2%-3% yield our bonds currently deliver.

Read morePeter Schiff: The World Won’t Buy Unlimited U.S. Debt