Peter Schiff in talking about Paul Krugman - who doesn't have the right to be called an economist - asked for the Nobel Prize committee to take the medal back for stirring up issues with China that will end up doing the U.S. great harm.
Schiff calls out Krugman on calling for an economic war with China, where Krugman believes China no longer purchasing Treasuries is a winner for the U.S. and devastating to China.
But if China were to sell its existing debt or refuse to buy any more, the Fed would be forced to again ramp up the printing presses and throw more money at the problem, which even Krugman admits would cause the value of the U.S. dollar to fall; something he thinks would be good for all of us.
That would drive up prices for American consumers, although it would temporarily help American-made products to be more competitive on the world stage.
Consequently, the standard of living for most Americans would plunge, while the Chinese standard of living would continue to rise. That doesn't sound like a winning hand for America, and it isn't.
The Chinese would start to have their domestic prices lowered while their own factories would do the majority of the supplying of those goods.
Commodity prices in that scenario would also fall steeply, making it easier and cheaper for China to produce products to serve their people.
Being a fading Keynesian, all Krugman can think of is printing money will solve all economic problems. The idea of transferring that thought stupidly to the Chinese monetary situation is reckless and ignorant. No wonder Schiff is calling for the Nobel Prize committee to take the medal back from Krugman.
Of course he should never have received it in the first place.
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