In a currency war that is escalating, over time there is no doubt the U.S. will eventually come out the winner, in the sense that it will lose more of its value than competing currencies, which will devastate the economy.
Peter Schiff, CEO of Euro Pacific Capital, said this:
"There is a currency war going on," Schiff said at the Inside ETFs conference. "The irony of a currency war which makes it different from other wars is the object is to kill itself. Unfortunately, I think the U.S. is going to win the currency war."
"We're broke. We owe trillions. Look at our budget deficit, look at the debt to GDP (ratio), the unfunded liabilities," Schiff added. "If we were in the euro zone they would kick us out."
Since the Federal Reserve is artificially propping up the U.S. economy, it's only a matter of time before the negative consequences kick in, led by the ongoing debasement of the U.S. dollar.
Schiff also rightly notes the consumer price index isn't made to measure inflation, but rather to hide it through manipulation. He calls the CPI a "total fraud." Schiff says other similar indexes are just as fraudulent as the CPI.
Recommendations from Schiff are to continue to hedge inflation and global uncertainty and unrest with precious metals, especially gold.
Showing posts with label Peter Schiff. Show all posts
Showing posts with label Peter Schiff. Show all posts
Saturday, February 16, 2013
Thursday, January 10, 2013
Peter Schiff on CPI Illusion
Peter Schiff blasted the idea that inflation is under control during the unprecedented money expansion we're going through. Government court economist Paul Krugman has used the meaningless Consumer Price Index (CPI) and its alleged sub 2.5% increases as proof inflation hasn't been a factor during this period of time.
Most people following the CPI know it's a joke, but most in the financial media continue to use the statistics proffered by the Index as based on reality.
Schiff points out two sectors to confirm this is so.
"However, there is plenty of evidence to suggest that the CPI is essentially meaningless as it woefully under reports rising prices.
"Magazines and newspapers provide a good case in point. The truth has not been exposed through the economic reporting that these outlets provide, but in the prices that are permanently fixed to their covers. For instance, from 1999 to 2002 the Bureau of Labor Statistic's (BLS) "Newspaper and Magazine Index" (a component of the CPI) increased by 37.1%. But a perusal of the cover prices of the 10 most popular newspapers and magazines (WSJ, Washington Post, Time, Sports Illustrated, U.S. News & World Report, Newsweek, People, NY Times, USA Today, and the LA Times) over the same time frame showed an average cover price increase of 131.5% (3.5 times faster than the BLS' stats). This is not even in the same ballpark.
"Another stunning example is found in health insurance costs, which is a major line item for most families. According to the BLS we can all breathe easy on that front because their "Health Insurance Index" increased a mere 4.3% (total) in the four years between 2008 and 2012. Interestingly, over the same time, the Kaiser Survey of Employer Sponsored Health Insurance showed that the cost of family health insurance rose 24.2% (5.5 times faster). But even if the BLS had reported higher costs, it wouldn't have made much of a difference in the CPI itself. Believe it or not, health insurance costs are assigned a weighting of less than one percent of the overall CPI. In contrast, the Kaiser Survey revealed that in 2012 the average total cost for family health insurance coverage was $15,745, or almost one third of the median family income.
"If the inaccuracy of these two components were consistent with the rest of the CPI's components, inflation could now be reported in double-digits!
Not only is this true, but the CPI, over the years, has changed its methodology in order to ensure the majority of prices that would more accurately reflect higher prices are taken out of the equation.
"The newer CPI methodologies are designed to report not just on price movements, but on spending patterns, consumer choices, substitution bias, and product changes. In other words, the metrics have been altered to track not so much the cost of things, but the cost of living (or more accurately, the cost of surviving). But if you simply focus on price, especially on those staple commodity goods and services that haven't radically changed in quality over the years, the under reporting of inflation becomes more apparent."
To highlight how this impacts the reporting of inflation, Schiff did some research on 20 common financial transactions over two different ten-year periods. The focus was on the decades when the monetary policy of the Federal Reserve was loose.
"As reported in our Global Investor Newsletter, we selected BLS price changes for twenty everyday goods and services over two separate ten-year periods, and then compared those changes to the reported changes in the Consumer Price Index (CPI) over the same period. (The twenty items we selected are: eggs, new cars, milk, gasoline, bread, rent of primary residence, coffee, dental services, potatoes, electricity, sugar, airline tickets, butter, store bought beer, apples, public transportation, cereal, tires, beef, and prescription drugs.)
"We know that people do not spend equal amounts on the above items, and we know their share of income devoted to them has changed over the decades. But as we are only interested in how these prices have changed relative to the CPI, those issues don't really matter. We chose to look at the period between 1970 and 1980 and then again between 2002 and 2012, because these time frames both had big deficits and loose monetary policy, and they straddle the time in which the most significant changes to the CPI methodology took effect. And while the CPI rose much faster in the 1970's, the degree to which the prices of our 20 items outpaced the CPI was much higher more recently.
"Between 1970 and 1980 the officially reported CPI rose a whopping 112%, and prices of our basket of goods and services rose by 117%, just 5% faster. In contrast between 2002 and 2012 the CPI rose just 27.5%, but our basket increased by 44.3%, a rate that was 61% faster. And remember, this is using the BLS' own price data, which we have already shown can grossly under-estimate the true rate of increase. The difference can be explained by how CPI is weighted and mixed. The formula used in the 1970's effectively captured the price movements of our twenty everyday products. But in the last ten years it has been quite a different story."
The conclusion is the CPI can no longer be trusted or considered a valid measure of real inflation. Many people I talk to on the street know we're in a high inflationary period, as they point to the much higher costs of engaging in transactions and buying needed products and services. They don't know how to describe it in the terms readers here would know and use, but they are very much aware we're living in a significant inflationary economy.
Skewing data using smoke and mirrors can't hide what we pay in real prices.
Source
Most people following the CPI know it's a joke, but most in the financial media continue to use the statistics proffered by the Index as based on reality.
Schiff points out two sectors to confirm this is so.
"However, there is plenty of evidence to suggest that the CPI is essentially meaningless as it woefully under reports rising prices.
"Magazines and newspapers provide a good case in point. The truth has not been exposed through the economic reporting that these outlets provide, but in the prices that are permanently fixed to their covers. For instance, from 1999 to 2002 the Bureau of Labor Statistic's (BLS) "Newspaper and Magazine Index" (a component of the CPI) increased by 37.1%. But a perusal of the cover prices of the 10 most popular newspapers and magazines (WSJ, Washington Post, Time, Sports Illustrated, U.S. News & World Report, Newsweek, People, NY Times, USA Today, and the LA Times) over the same time frame showed an average cover price increase of 131.5% (3.5 times faster than the BLS' stats). This is not even in the same ballpark.
"Another stunning example is found in health insurance costs, which is a major line item for most families. According to the BLS we can all breathe easy on that front because their "Health Insurance Index" increased a mere 4.3% (total) in the four years between 2008 and 2012. Interestingly, over the same time, the Kaiser Survey of Employer Sponsored Health Insurance showed that the cost of family health insurance rose 24.2% (5.5 times faster). But even if the BLS had reported higher costs, it wouldn't have made much of a difference in the CPI itself. Believe it or not, health insurance costs are assigned a weighting of less than one percent of the overall CPI. In contrast, the Kaiser Survey revealed that in 2012 the average total cost for family health insurance coverage was $15,745, or almost one third of the median family income.
"If the inaccuracy of these two components were consistent with the rest of the CPI's components, inflation could now be reported in double-digits!
Not only is this true, but the CPI, over the years, has changed its methodology in order to ensure the majority of prices that would more accurately reflect higher prices are taken out of the equation.
"The newer CPI methodologies are designed to report not just on price movements, but on spending patterns, consumer choices, substitution bias, and product changes. In other words, the metrics have been altered to track not so much the cost of things, but the cost of living (or more accurately, the cost of surviving). But if you simply focus on price, especially on those staple commodity goods and services that haven't radically changed in quality over the years, the under reporting of inflation becomes more apparent."
To highlight how this impacts the reporting of inflation, Schiff did some research on 20 common financial transactions over two different ten-year periods. The focus was on the decades when the monetary policy of the Federal Reserve was loose.
"As reported in our Global Investor Newsletter, we selected BLS price changes for twenty everyday goods and services over two separate ten-year periods, and then compared those changes to the reported changes in the Consumer Price Index (CPI) over the same period. (The twenty items we selected are: eggs, new cars, milk, gasoline, bread, rent of primary residence, coffee, dental services, potatoes, electricity, sugar, airline tickets, butter, store bought beer, apples, public transportation, cereal, tires, beef, and prescription drugs.)
"We know that people do not spend equal amounts on the above items, and we know their share of income devoted to them has changed over the decades. But as we are only interested in how these prices have changed relative to the CPI, those issues don't really matter. We chose to look at the period between 1970 and 1980 and then again between 2002 and 2012, because these time frames both had big deficits and loose monetary policy, and they straddle the time in which the most significant changes to the CPI methodology took effect. And while the CPI rose much faster in the 1970's, the degree to which the prices of our 20 items outpaced the CPI was much higher more recently.
"Between 1970 and 1980 the officially reported CPI rose a whopping 112%, and prices of our basket of goods and services rose by 117%, just 5% faster. In contrast between 2002 and 2012 the CPI rose just 27.5%, but our basket increased by 44.3%, a rate that was 61% faster. And remember, this is using the BLS' own price data, which we have already shown can grossly under-estimate the true rate of increase. The difference can be explained by how CPI is weighted and mixed. The formula used in the 1970's effectively captured the price movements of our twenty everyday products. But in the last ten years it has been quite a different story."
The conclusion is the CPI can no longer be trusted or considered a valid measure of real inflation. Many people I talk to on the street know we're in a high inflationary period, as they point to the much higher costs of engaging in transactions and buying needed products and services. They don't know how to describe it in the terms readers here would know and use, but they are very much aware we're living in a significant inflationary economy.
Skewing data using smoke and mirrors can't hide what we pay in real prices.
Source
Tuesday, November 13, 2012
Peter Schiff: Fiscal Cliff Part of Solution
In a recent article by Peter Schiff, he makes the case for the fiscal cliff not being a problem we face, but rather a part of the solution to the economic crisis facing America.
According to Schiff, politicians need to design a cliff that " ...is actually large enough to restore fiscal balance before a real disaster occurs."
He sees the probable disaster being enormous, saying, "That disaster will take the form of a dollar and/or sovereign debt crisis that will make this fiscal cliff look like an ant hill."
Schiff blasts Obama for his disingenuous plan for dealing with the fiscal cliff, which will do nothing to mend the economy.
All Obama can do is do the politically correct and acceptable raising of taxes on those Americans making over $250,000 a year. He claims that no one making under that amount will pay more in taxes.
What's wrong with this, other than the huge percentage of taxes already paid by the upper 2 percent of earners, which as of 2008 was 43.6 percent of all taxes paid? It would only bring about $30 to $40 billion annually into government coffers.
That's like someone giving someone that needs to pay $800 in rent, but can't, a couple of bucks to handle the situation. It's all smoke and mirrors to make it look like Obama is actually doing something. He isn't.
Schiff points out that even if the government were to tax them twice as much, it would only cut about a third of the deficit. That also assumes there would be no slowdown in the economy as a result of the taxes. Again, this is a political move, not a real attempt to deal with the economic crisis America faces, which must deal with slashing spending in a meaningful manner.
In other words, we need to go through some pain because the promises made by the government are unsustainable. As Schiff says, if it isn't dealt with now, kicking the can down the road will only make the cliff higher and deeper, which will result in extraordinary circumstances that are in general predictable, but as to the depth of the forced cuts in spending, will hammer those who have become dependent on government instead of taking care of their own wants and needs.
Schiff also points out that the fiscal cliff, in and of itself, is a good thing. The government would be forced to spend less while taxes would pay more for its operations. That, after all, is what must and will be done, whether it's intentionally done or forced upon them by reality.
In the end, if the fiscal cliff were to go forward, the federal budget deficit would be slashed by almost half of the current $1.1 trillion spent in 2012 to about $641 billion.
As usual, politicians and the clueless financial and business media thinks somehow this is a negative outcome. No it isn't. It's exactly what's needed ... and more.
Schiff concludes with this:
It is amazing that members of Congress can keep a straight face as they claim to want to address our long-term deficit problem while simultaneously working to avoid any substantive action. No doubt an agreement will be reached that will replace the looming fiscal cliff with another one farther down the road (which they can easily dismantle before we actually reach the precipice). Will the rating agencies buy this bill of goods a second time? If we lack the political courage to go over this fiscal cliff, why should anyone think we will be able to stomach going over the next one? Especially since each time we delay going over the cliff, we simply increase its future size, making it that much harder to actually go over it.
And this doesn't even begin to deal with the over $220 trillion in unfunded liabilities the nation faces.
As for the idea the weak politicians now in power have an ounce of political courage is laughable. They will bring the country down around all of our heads because they place their own jobs ahead of the health and economic survival of America.
One way or the other a day or reckoning will come. A ponzi scheme like that built by the alliance between the Federal Reserve and the U.S. government will end badly for most people. Anyone affected by this needs to build a strategy based upon this being the end-game of the process we're in the midst of going through. It will happen.
Monday, October 8, 2012
Disastrous Fed Policy Does Provide Road Map
Even though the decision by Ben Bernanke and the Federal Reserve to initiate an open-ended acquisition of mortgage-backed securities to the tune of $40 billion a month is a disaster, the good news is it does provide a roadmap for investors who would be smart to move from the U.S. dollar to hard assets.
By committing to attempt to bolster the mortgage sector, Bernanke and friends hope to push the prices of homes up in an attempt to boost the overall economy. Has he and they already forgotten the housing bubble? Apparently so.
The ECB, presumably anticipating the Fed move, or having had been communicated with by the Fed beforehand, made its stimulus the week before.
Not long after those two moves other central banks around the world followed suit, wrongly believing a weak currency is better for the country. This is, in most cases, a nod towards the belief a country's exports will plunge if their currencies rise too much.
Commenting on this recently, Peter Schiff said this:
All of this simultaneous money creation will likely be a boon for nominal stock and real estate prices. But in real terms such gains will likely not keep pace with dollar depreciation. Inflation pushes up prices for just about everything, so stocks and real estate are not likely to prove to be exceptions. Even bond prices can rise in the short term, but their real values are the most vulnerable to decline. In fact, even nominal bond prices will ultimately fall, as inflation eventually sends interest rates climbing. But prices for hard assets, precious metals, commodities, and even those few remaining relatively hard currencies should be on the leading edge of the upward trend in prices.Some investing options are to move towards commodities, and in some currencies that haven't had the central banks of the respective countries implement quantitative easing.
Again, now that we know what the Federal Reserve and other important central banks are going to do, it makes it much clearer on where to invest our money, as the Fed has suggested it will continue to stimulate until the unemployment rate falls below 6 percent, and possibly as low as 5.5 percent.
Friday, November 5, 2010
Peter Schiff Is Right on Gold, QE
Peter Schiff has been mocked by the clueless pundits at CNBC and other financial media outlets for his consistent opposition to the Federal Reserve inflating and the need to acquire gold for investors to protect themselves from the Fed's disastrous policies, but he's getting the last laugh.
Although the stated reason by the Federal Reserve to is to jump-start the economy, Schiff believes the motives of the Fed aren't as altruistic as that.
Schiff states, “The true purpose of QE2 is to disguise the decreasing ability of the Treasury to finance its debts. As global demand for dollar-denominated debt falls, the Fed is looking for an excuse to pick up the slack. By announcing QE 2, it can monetize government debt without the markets perceiving a funding problem.”
If that is true, it would make sense as to why the Fed and Bernanke are introducing another round of quantitative easing when their last one failed miserably.
Of course there is absolutely nothing else the Fed can do, as printing money is pretty much their major economic weapon, along with controlling interest rats.
Schiff concludes: “If the truth were known, a real panic would ensue. So, the Fed pretends buying treasuries is simply part of its master plan to boost the economy, even though, in reality, it is simply acting as the buyer of last resort."
For years Schiff has said the Fed doesn't have the will or nerve to raise interest rates, as it would result in the collapse of the stock market, the bond market, and burst the real estate bubble, even though the latter already happened in spite of low interest rates.
He also said bankruptcies would ensure in a big way, even though, again, it happened in a low interest rate environment.
Schiff's conclusion is that easy money policies of the Fed hide the true weakness of the economy, and that has proven correct as the trillion plus in spending has resulted in little effect, and once removed, showed the economy to be in the anemic state it really is.
Although the stated reason by the Federal Reserve to is to jump-start the economy, Schiff believes the motives of the Fed aren't as altruistic as that.
Schiff states, “The true purpose of QE2 is to disguise the decreasing ability of the Treasury to finance its debts. As global demand for dollar-denominated debt falls, the Fed is looking for an excuse to pick up the slack. By announcing QE 2, it can monetize government debt without the markets perceiving a funding problem.”
If that is true, it would make sense as to why the Fed and Bernanke are introducing another round of quantitative easing when their last one failed miserably.
Of course there is absolutely nothing else the Fed can do, as printing money is pretty much their major economic weapon, along with controlling interest rats.
Schiff concludes: “If the truth were known, a real panic would ensue. So, the Fed pretends buying treasuries is simply part of its master plan to boost the economy, even though, in reality, it is simply acting as the buyer of last resort."
For years Schiff has said the Fed doesn't have the will or nerve to raise interest rates, as it would result in the collapse of the stock market, the bond market, and burst the real estate bubble, even though the latter already happened in spite of low interest rates.
He also said bankruptcies would ensure in a big way, even though, again, it happened in a low interest rate environment.
Schiff's conclusion is that easy money policies of the Fed hide the true weakness of the economy, and that has proven correct as the trillion plus in spending has resulted in little effect, and once removed, showed the economy to be in the anemic state it really is.
Friday, October 15, 2010
Marc Faber Recommended Gold Before Gold was Cool
While we haven't hit the place where gold is in danger of being in a bubble, there are an increasing number of institutional, and to a smaller degree, individual investors, putting a portion of their assets into gold.
Marc Faber has been calling gold for a long time before investors saw the possibilities gold offered because of trending government and Federal Reserve policies.
As with commodity investors Jim Rogers and Peter Schiff, Faber sees gold as one of the ultimate defenses against out-of-control government inflating and debt. What is being called quantitative easing today.
Faber hasn't encouraged investors to buy up more gold as a result of the obvious stimulus packages set in play, but has been seeing this happening since the early 2000s.
In one of his books named 'Tomorrow's Gold,' published in the latter part of 2002, Faber told investors they needed to put some of their assets in gold at that time. It was lower than $350 an ounce then.
In the early part of 2001 he called gold mining stocks cheap as well, which has also played out to be true for a large number of them.
All of this is in response to the macroeconomic changes about to hit the U.S. and Faber understood the signs of, and consequences of those actions, the reason he was so clearly right, and continues to be in regards to investing in gold.
Faber has also recently stated that gold prices are still relatively cheap, and quantitative easing will continue as the government is completely out of control and won't stop.
He recommends for people to become their own central bank and hold their own gold, as the Federal Reserve will continue to print money, as will many other central banks around the world.
While gold will build the wealth of those investing in it, Faber also sees it as financial self-defense against the misguided practices of the Fed and others endlessly printing money.
Faber advocates investors to allocate resources to gold on a monthly basis.
Marc Faber has been calling gold for a long time before investors saw the possibilities gold offered because of trending government and Federal Reserve policies.
As with commodity investors Jim Rogers and Peter Schiff, Faber sees gold as one of the ultimate defenses against out-of-control government inflating and debt. What is being called quantitative easing today.
Faber hasn't encouraged investors to buy up more gold as a result of the obvious stimulus packages set in play, but has been seeing this happening since the early 2000s.
In one of his books named 'Tomorrow's Gold,' published in the latter part of 2002, Faber told investors they needed to put some of their assets in gold at that time. It was lower than $350 an ounce then.
In the early part of 2001 he called gold mining stocks cheap as well, which has also played out to be true for a large number of them.
All of this is in response to the macroeconomic changes about to hit the U.S. and Faber understood the signs of, and consequences of those actions, the reason he was so clearly right, and continues to be in regards to investing in gold.
Faber has also recently stated that gold prices are still relatively cheap, and quantitative easing will continue as the government is completely out of control and won't stop.
He recommends for people to become their own central bank and hold their own gold, as the Federal Reserve will continue to print money, as will many other central banks around the world.
While gold will build the wealth of those investing in it, Faber also sees it as financial self-defense against the misguided practices of the Fed and others endlessly printing money.
Faber advocates investors to allocate resources to gold on a monthly basis.
Peter Schiff On Gold, Dollar, Inflation, Fed and China
Peter Schiff is known for his justified criticism of the Federal Reserve and the disastrous policies they've enacted which is the destroying the economic life of the United States and its citizens, and ultimately affects nations around the world.
Although he sees a disaster coming if they don't change course, there are things people can do to protect themselves against the addictive Federal Reserve policy of printing money, which is another way of saying inflating.
Today they've attempted to change the name to quantitative easing to make it sound like they're doing something different. But it's the same thing.
While Schiff sees hope, he doesn't think the government and the Federal Reserve will do the right thing, and they're going to keep on inflating. Which means they're going to print money to acquire bonds. It's only a matter of how much they're going to buy, not whether or not they're going to do it.
The result of all this will be gold prices and many other commodity prices continuing to rise, the U.S. dollar continuing to collapse, and inflation in other areas soaring.
Schiff says the government will attempt to hide the amount of inflation they're creating, but the ongoing rate of unemployment will force them to continue to print money, which will eventually reveal the monster they've created, as they acquire an enormous amount of bonds with each round of quantitative easing.
Another possible scenario, says Schiff, is he sees the possibility of Treasury yields being held back by the Federal Reserve. At that time corporate and municipal bonds would probably surge, which could woo the Fed into acquiring them too. If that happens, in Schiff's view, he sees the potential complete collapse of the U.S. dollar.
Probably the best hedge against all of this happening, or even part of it happening, is to hold gold.
Schiff says he believes gold and the Dow will eventually move to a 1-to-1 relationship. He has no idea what that number will be, but if the Dow were to move to 10,000, he sees gold moving to $10,000. If the Dow is at 3,000, he sees gold at $3,000 an ounce, etc.
According to Schiff, he sees a correlation between the bear markets of 1930s and the 1970s. In 1932 said Schiff, an ounce of gold equaled the value of the Dow. The same happened in 1980 after the bear market of the 1970s.
When the Dow shrinks in value, it tends to line up with the price of an ounce of gold.
If we end up entering into a period of hyperinflation, all bets are off there as far as the value of the dollar, which could lost almost all its value, according to Schiff.
Besides gold, Schiff likes the agricultural sector, energy, commodities in general, and China.
Everyone should own at least some gold says Schiff.
Although he sees a disaster coming if they don't change course, there are things people can do to protect themselves against the addictive Federal Reserve policy of printing money, which is another way of saying inflating.
Today they've attempted to change the name to quantitative easing to make it sound like they're doing something different. But it's the same thing.
While Schiff sees hope, he doesn't think the government and the Federal Reserve will do the right thing, and they're going to keep on inflating. Which means they're going to print money to acquire bonds. It's only a matter of how much they're going to buy, not whether or not they're going to do it.
The result of all this will be gold prices and many other commodity prices continuing to rise, the U.S. dollar continuing to collapse, and inflation in other areas soaring.
Schiff says the government will attempt to hide the amount of inflation they're creating, but the ongoing rate of unemployment will force them to continue to print money, which will eventually reveal the monster they've created, as they acquire an enormous amount of bonds with each round of quantitative easing.
Another possible scenario, says Schiff, is he sees the possibility of Treasury yields being held back by the Federal Reserve. At that time corporate and municipal bonds would probably surge, which could woo the Fed into acquiring them too. If that happens, in Schiff's view, he sees the potential complete collapse of the U.S. dollar.
Probably the best hedge against all of this happening, or even part of it happening, is to hold gold.
Schiff says he believes gold and the Dow will eventually move to a 1-to-1 relationship. He has no idea what that number will be, but if the Dow were to move to 10,000, he sees gold moving to $10,000. If the Dow is at 3,000, he sees gold at $3,000 an ounce, etc.
According to Schiff, he sees a correlation between the bear markets of 1930s and the 1970s. In 1932 said Schiff, an ounce of gold equaled the value of the Dow. The same happened in 1980 after the bear market of the 1970s.
When the Dow shrinks in value, it tends to line up with the price of an ounce of gold.
If we end up entering into a period of hyperinflation, all bets are off there as far as the value of the dollar, which could lost almost all its value, according to Schiff.
Besides gold, Schiff likes the agricultural sector, energy, commodities in general, and China.
Everyone should own at least some gold says Schiff.
Monday, August 9, 2010
Peter Schiff Says Inflationary Depression Has Already Begun
Almost four years ago to this date, in August 2006, Peter Schiff offered his take on the economy, and he painted a bleak picture very few believed, that real estate prices would crash and consumers in America would start to save again.
That and more happened, and the president of Euro Pacific Capital has once again made a dire prediction of where he sees the economy going in a recent interview.
Even though a lot of media attention has gravitated towards deflation, Schiff will have none of that, as he sees what he calls the worst type of depression beginning, and that is an inflationary one.
When asked where he saw the economy now, Schiff responded:
"We're in the early stages of a depression now. It's going to be a horrific experience for average Americans who are going to watch their standard of living plunge. The cost of living is going to escalate dramatically. We are going to see soaring prices for the basic necessities of life, like energy, clothing, and other things. Education and health-care costs are going to continue to spiral out of control. Millions of more Americans are going to lose their jobs, and all of us are going to lose our freedoms and our rights. As the government gets bigger, it tries to end the crisis; but its policies are creating, perpetuating, and making it worse."
When asked what needs to be done to fix the economy, Schiff added, "We have to stop stimulating. We have to shrink the government and cut government spending dramatically. The reason the economy is so screwed up is because government regulations and subsidies have created a slowing economy. They have prevented market forces from operating the way they need to be. They have prevented an efficient allocation of resources. We need to rebuild our manufacturing base. We need to reindustrialize. We can't do that without the resources, without the savings, without the investment.
"They've created a nation of spenders, speculators, and consumers, and they've destroyed the savers, producers, and the investing class that built this country. We're moving from a market-based economy to essentially a planned economy. We're abandoning capitalism and embracing socialism. That's a recipe for disaster."
Schiff recommends getting out of U.S. dollars altogether. He says people need to flee U.S. bonds and Treasuries, and look more toward emerging markets and commodities.
That and more happened, and the president of Euro Pacific Capital has once again made a dire prediction of where he sees the economy going in a recent interview.
Even though a lot of media attention has gravitated towards deflation, Schiff will have none of that, as he sees what he calls the worst type of depression beginning, and that is an inflationary one.
When asked where he saw the economy now, Schiff responded:
"We're in the early stages of a depression now. It's going to be a horrific experience for average Americans who are going to watch their standard of living plunge. The cost of living is going to escalate dramatically. We are going to see soaring prices for the basic necessities of life, like energy, clothing, and other things. Education and health-care costs are going to continue to spiral out of control. Millions of more Americans are going to lose their jobs, and all of us are going to lose our freedoms and our rights. As the government gets bigger, it tries to end the crisis; but its policies are creating, perpetuating, and making it worse."
When asked what needs to be done to fix the economy, Schiff added, "We have to stop stimulating. We have to shrink the government and cut government spending dramatically. The reason the economy is so screwed up is because government regulations and subsidies have created a slowing economy. They have prevented market forces from operating the way they need to be. They have prevented an efficient allocation of resources. We need to rebuild our manufacturing base. We need to reindustrialize. We can't do that without the resources, without the savings, without the investment.
"They've created a nation of spenders, speculators, and consumers, and they've destroyed the savers, producers, and the investing class that built this country. We're moving from a market-based economy to essentially a planned economy. We're abandoning capitalism and embracing socialism. That's a recipe for disaster."
Schiff recommends getting out of U.S. dollars altogether. He says people need to flee U.S. bonds and Treasuries, and look more toward emerging markets and commodities.
Monday, June 28, 2010
Peter Schiff Bullish on Precious Metals, Oil
Peter Schiff stated recently that while he is heavily invested in gold, he is also bullish on other precious metals, and oil as well.
Specific metals identified by Schiff were platinum and silver, although he added he is also bullish on some industrial metals too.
The Gulf oil accident with BP (NYSP:BP) is particularly noteworthy in Schiff's estimate of oil in general, and he said the costs of offshore drilling will skyrocket, including insurance.
There will also be less oil because of the moratorium in the Gulf, which will decrease production if that isn't changed.
Demand for oil from China is a factor as well. So combining what appears to be increased demand and lower supply, and there is nowhere for oil prices to go but up, in Schiff's view.
Specific metals identified by Schiff were platinum and silver, although he added he is also bullish on some industrial metals too.
The Gulf oil accident with BP (NYSP:BP) is particularly noteworthy in Schiff's estimate of oil in general, and he said the costs of offshore drilling will skyrocket, including insurance.
There will also be less oil because of the moratorium in the Gulf, which will decrease production if that isn't changed.
Demand for oil from China is a factor as well. So combining what appears to be increased demand and lower supply, and there is nowhere for oil prices to go but up, in Schiff's view.
Friday, June 11, 2010
Peter Schiff on Oil Prices
In a recent interview, Peter Schiff said he believes the only reason oil prices haven't skyrocketed is concerns by people around the world over the potential fallout from the sovereign debt crisis in Europe, which could spread far beyond the continent to infect the world.
When you take the time the year it is, the usual high-priced gas and oil summer season, the moratorium by Obama in the Gulf, and the Gulf disaster itself, and you have the elements of extraordinary oil and gasoline prices, which haven't emerged.
Schiff stated, “Oil prices Should be going through the roof right now. The only reason they’re not is because of the broad-based sell-off around the world in equities, commodities, and other currencies due to the fear of contagion in Europe. This is trumping the very very bullish news for oil. But once we hit a bottom, I think we’re gonna see a huge increase in the price of oil.”
When you take the time the year it is, the usual high-priced gas and oil summer season, the moratorium by Obama in the Gulf, and the Gulf disaster itself, and you have the elements of extraordinary oil and gasoline prices, which haven't emerged.
Schiff stated, “Oil prices Should be going through the roof right now. The only reason they’re not is because of the broad-based sell-off around the world in equities, commodities, and other currencies due to the fear of contagion in Europe. This is trumping the very very bullish news for oil. But once we hit a bottom, I think we’re gonna see a huge increase in the price of oil.”
Saturday, May 8, 2010
Peter Schiff: Government Bubble Bursting
In a recent interview on Sound Off Connecticut, Peter Schiff said the government bubble will burst, and when it does, the bond market will collapse and hyperinflation will follow soon afterwards.
Schiff also stated that “The bigger the government gets, the weaker the real economy gets,” and of course he's correct. Just look at Greece as an example of that truth.
All the government does is rob from the productive and redistribute to the unproductive. Government can't produce anything, and the larger it gets, as Schiff says, the weaker the real economy becomes because it takes away from investment capital and becomes a part of consumption, which produces nothing.
Keeping interest rates low will "destroy the value of" the dollar, said Schiff, and that will result in hyperinflation, which could bring chaos to the country.
Schiff also stated that “The bigger the government gets, the weaker the real economy gets,” and of course he's correct. Just look at Greece as an example of that truth.
All the government does is rob from the productive and redistribute to the unproductive. Government can't produce anything, and the larger it gets, as Schiff says, the weaker the real economy becomes because it takes away from investment capital and becomes a part of consumption, which produces nothing.
Keeping interest rates low will "destroy the value of" the dollar, said Schiff, and that will result in hyperinflation, which could bring chaos to the country.
Sunday, March 21, 2010
Paul Krugman Clueless on China ... and Everything Else
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.
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.
Monday, March 15, 2010
Peter Schiff Warns U.S. Dollar Bulls
Peter Schiff on U.S. Dollar in 2010
Peter Schiff recently stated there is nothing more accurate than dissecting the fundamentals of a government to ascertain the value of its currency, and in the case of the U.S. dollar, that doesn't point to a reason those who are bullish on its strength should continue to be.
Very quickly the seemingly endless bearishness toward the U.S. dollar ended because of the sovereign debt crisis in Greece and the resultant plunge in value of the euro.
Now that it seems to be on relatively solid footing for now, the inherent value of the U.S. dollar should emerge again, and that should continue downward in Schiff's opinion, based on the continuing policies of the U.S. government which undermines its value.
In an extraordinarily short time Schiff notes, the sentiment concerning the fall of the U.S. dollar gravitated toward the euro, something he said, as far as how quickly it happened, he had never seen before in his life.
Schiff believes there will soon be a huge sell-of of the greenback, and once there is more of a surety concerning Europe, there is no reason people would hold onto the U.S. dollar, as it still remains a flawed currency.
Peter Schiff on U.S. Dollar in 2010
Peter Schiff recently stated there is nothing more accurate than dissecting the fundamentals of a government to ascertain the value of its currency, and in the case of the U.S. dollar, that doesn't point to a reason those who are bullish on its strength should continue to be.
Very quickly the seemingly endless bearishness toward the U.S. dollar ended because of the sovereign debt crisis in Greece and the resultant plunge in value of the euro.
Now that it seems to be on relatively solid footing for now, the inherent value of the U.S. dollar should emerge again, and that should continue downward in Schiff's opinion, based on the continuing policies of the U.S. government which undermines its value.
In an extraordinarily short time Schiff notes, the sentiment concerning the fall of the U.S. dollar gravitated toward the euro, something he said, as far as how quickly it happened, he had never seen before in his life.
Schiff believes there will soon be a huge sell-of of the greenback, and once there is more of a surety concerning Europe, there is no reason people would hold onto the U.S. dollar, as it still remains a flawed currency.
Peter Schiff on U.S. Dollar in 2010
Saturday, February 20, 2010
Peter Schiff Still Likes Gold
Peter Schiff Gold
In a recent interview, Peter Schiff maintains that he still like gold and expected it to go much higher. Schiff added it doesn't matter which currency you look at gold through, it still looks strong going forward.
While liking gold in general, Schiff also mentioned gold miners will do well during the time goes up as well.
The primary impetus of gold says Schiff is fears over inflation from the fiat money being created.
Peter Schiff Gold
In a recent interview, Peter Schiff maintains that he still like gold and expected it to go much higher. Schiff added it doesn't matter which currency you look at gold through, it still looks strong going forward.
While liking gold in general, Schiff also mentioned gold miners will do well during the time goes up as well.
The primary impetus of gold says Schiff is fears over inflation from the fiat money being created.
Peter Schiff Gold
Friday, February 19, 2010
Peter Schiff: Buy, Hold Gold
Peter Schiff on Gold
Most of us know that Peter Schiff has championed buying and holding gold for some time, as the economic circumstances around the world show there needs to be a haven for our money when everything around us has the potential to collapse.
The most recent economic disaster is the PIIGS from Europe, which all are in danger of sovereign default, and which would crush the global economic system before we begin a true economic recovery.
Some seem to think Greece would only have an effect on Europe, rather than the world, but it depends on who is holding the debt and how much. Banks will fall if Greece does, and Greece knows it, and holds the upper hand in that regard.
Either way, gold should be a key player in the years ahead, not only because of this hanging sword over the head of Europe and the euro, but because it would have been a key player based on the decisions of central banks and their futile policies which are causing more harm than good.
As Peter Schiff has said in the past concerning gold, when you own gold, you have something that has lasting value. Most of the currencies is this world can no longer say that.
Peter Schiff on Gold
Most of us know that Peter Schiff has championed buying and holding gold for some time, as the economic circumstances around the world show there needs to be a haven for our money when everything around us has the potential to collapse.
The most recent economic disaster is the PIIGS from Europe, which all are in danger of sovereign default, and which would crush the global economic system before we begin a true economic recovery.
Some seem to think Greece would only have an effect on Europe, rather than the world, but it depends on who is holding the debt and how much. Banks will fall if Greece does, and Greece knows it, and holds the upper hand in that regard.
Either way, gold should be a key player in the years ahead, not only because of this hanging sword over the head of Europe and the euro, but because it would have been a key player based on the decisions of central banks and their futile policies which are causing more harm than good.
As Peter Schiff has said in the past concerning gold, when you own gold, you have something that has lasting value. Most of the currencies is this world can no longer say that.
Peter Schiff on Gold
Thursday, February 4, 2010
Peter Schiff: Buy Gold Not Dollar
Peter Schiff Gold
Peter Schiff, along with many commodity investment experts maintain it'll be far more profitable to invest in gold than the U.S. dollar, and people should continue to think in those terms going forward.
Even though the U.S. dollar has made a temporary upward move recently, gold has actually held up quite well in spite of it, as the numerous data and reports have for the most part been yawned at by investors, as the underlying economic fundamentals remain extremely weak, and defaults on loans, both commercial and retail will grow during 2010.
Gold not only will build wealth for investors over the next several years, but it will also provide safety against inflation which has already started its upward climb.
Recent data that household debt will grow to $1.3 trillion in the United States should also help gold perform strongly in 2010 and beyond.
Peter Schiff Gold
Peter Schiff, along with many commodity investment experts maintain it'll be far more profitable to invest in gold than the U.S. dollar, and people should continue to think in those terms going forward.
Even though the U.S. dollar has made a temporary upward move recently, gold has actually held up quite well in spite of it, as the numerous data and reports have for the most part been yawned at by investors, as the underlying economic fundamentals remain extremely weak, and defaults on loans, both commercial and retail will grow during 2010.
Gold not only will build wealth for investors over the next several years, but it will also provide safety against inflation which has already started its upward climb.
Recent data that household debt will grow to $1.3 trillion in the United States should also help gold perform strongly in 2010 and beyond.
Peter Schiff Gold
Sunday, December 13, 2009
Peter Schiff: Dollar Collapse Soon
Peter Schiff believes the collapse of the U.S. dollar is imminent, and that it'll happen sooner rather than later. He believes it will happen before Obama leaves office, even if he's a one-term president.
Schiff is quick to add the U.S. dollar won't fall every day or period of time, but its overall trajectory will be down, and even with some periods of strengthening, there's nothing to keep it on it precipitous fall off the edge of the cliff.
Part of the reason the U.S. dollar hasn't completely collapsed, according to Schiff, is the continual investment of foreign governments to keep it strong.
For those governments, if the dollar falls too much, it will have a negative impact on their exports, which would of course hurt their domestic economies. So they continue to invest in the dollar through buying up U.S. debt in hopes there will be an actual rebound in the value of the greenback from market forces.
The longer foreign governments prop up the dollar, the longer there will be large global imbalances, which won't be solved until the U.S. dollar falls in value.
When the dollar loses value, the price of everything goes up, as it takes more dollars to buy the same thing. This will be true of everything; including commodities.
Food and energy usually lead the cost increases, and that has consequences because if people are spending most of their money on food and energy, they have much less, if any, to spend on other products and services.
This could affect corporations in the U.S. because if the cost of debt begins to rise and consumers aren't spending money on their products, you'll eventually see the share prices of stocks fall along with the value of the U.S. dollar as it collapses.
Schiff is quick to add the U.S. dollar won't fall every day or period of time, but its overall trajectory will be down, and even with some periods of strengthening, there's nothing to keep it on it precipitous fall off the edge of the cliff.
Part of the reason the U.S. dollar hasn't completely collapsed, according to Schiff, is the continual investment of foreign governments to keep it strong.
For those governments, if the dollar falls too much, it will have a negative impact on their exports, which would of course hurt their domestic economies. So they continue to invest in the dollar through buying up U.S. debt in hopes there will be an actual rebound in the value of the greenback from market forces.
The longer foreign governments prop up the dollar, the longer there will be large global imbalances, which won't be solved until the U.S. dollar falls in value.
When the dollar loses value, the price of everything goes up, as it takes more dollars to buy the same thing. This will be true of everything; including commodities.
Food and energy usually lead the cost increases, and that has consequences because if people are spending most of their money on food and energy, they have much less, if any, to spend on other products and services.
This could affect corporations in the U.S. because if the cost of debt begins to rise and consumers aren't spending money on their products, you'll eventually see the share prices of stocks fall along with the value of the U.S. dollar as it collapses.
Thursday, November 19, 2009
Jim Rogers: Avoid Mining Stocks
A large number of investors have looked to Jim Rogers for advice on how to play the ongoing rise in silver and gold, as it looks like there's no end in sight as to how high the prices of the two precious metals will go in the years ahead.
Rogers has cautioned that he wouldn't by gold through mining stocks unless you're a great stock researcher and picker, as investing directly in gold and silver over the years has proven to be the best way to make money.
He applies that to all commodities as well, where studies confirm investing in commodities in and of themselves outperform commodity companies.
Even though gold is far below its high when adjusted for inflation, it is hovering near its all-time highs as far as price goes.
Rogers says while he's not buying, neither is he selling, as price will go up without a doubt, even if there are the usual corrections.
Concerning gold, Rogers recently stated that there is no doubt in his mind that gold will surge past the adjusted for inflation high of about $2,000. Peter Schiff has said he could see it going as high as $5,000 in the current commodity bull market.
Rogers has cautioned that he wouldn't by gold through mining stocks unless you're a great stock researcher and picker, as investing directly in gold and silver over the years has proven to be the best way to make money.
He applies that to all commodities as well, where studies confirm investing in commodities in and of themselves outperform commodity companies.
Even though gold is far below its high when adjusted for inflation, it is hovering near its all-time highs as far as price goes.
Rogers says while he's not buying, neither is he selling, as price will go up without a doubt, even if there are the usual corrections.
Concerning gold, Rogers recently stated that there is no doubt in his mind that gold will surge past the adjusted for inflation high of about $2,000. Peter Schiff has said he could see it going as high as $5,000 in the current commodity bull market.
Friday, October 9, 2009
Jim Rogers | Gold Over $2,000
We've heard a lot of talk about the price of gold and where it'll end up going to, and the latest to make their prediction is Jim Rogers from Rogers Holdings and other companies, who says in a decade gold should go over $2,000 an ounce.
Another person predicting extraordinary increase in gold prices is Peter Schiff, who has asserted gold could top $5,000 before things settle down.
Rogers has also said for some time that commodity prices will rise for years into the future as growing demand won't be able to be met by supply.
Another major factor in ensured rising commodity prices is the fact very little in the way of new production capacity has been built over the last 30 years, and because in most cases it takes approximately 10 years to bring production online, it'll be some time before supply in many commodities will be able to meet demand.
Another person predicting extraordinary increase in gold prices is Peter Schiff, who has asserted gold could top $5,000 before things settle down.
Rogers has also said for some time that commodity prices will rise for years into the future as growing demand won't be able to be met by supply.
Another major factor in ensured rising commodity prices is the fact very little in the way of new production capacity has been built over the last 30 years, and because in most cases it takes approximately 10 years to bring production online, it'll be some time before supply in many commodities will be able to meet demand.
Wednesday, October 7, 2009
Gold Prices Break Another Record
Gold prices rose to another record high, as it closed at $1,050 a troy ounce, as gold investors at this time are shrugging off the idea that there will be a correction.
Since August the price of gold has soared by over 10 percent, some thinking it is headed for $1,500, and over the long term projections have been as high as $5,000, with Peter Schiff offering that as a real possibility for gold prices.
The continuing plunge in value of the U.S. dollar, along with the fears of inflation, seem to be keeping investors in the gold game rather than taking profits.
Some in the gold industry have looked at the falling demand for jewelry in a number of nations, including India, Italy and Turkey, among others, as a reason to be concerned over the price of gold holding, but in reality, the price movements of gold are far less dependent on jewelry demand than a hedge against inflation and holding on to your money, which in times like we're living in is more relevant.
Jim Rogers has said he wouldn't buy gold while it's hitting record highs, but at the same time he's also not thinking in terms of betting against it either. He's basically waiting for the price to drop and then he'll buy more, knowing over the long term there is a lot of upside for gold before it begins to level out.
Another interesting point is while gold has reached record levels when measured against the U.S. dollar, against other currencies it is still far from reaching its highs. For example, it's 30 percent below former highs against the Australian dollar and 15 percent below highs it has hit against the yen.
Since August the price of gold has soared by over 10 percent, some thinking it is headed for $1,500, and over the long term projections have been as high as $5,000, with Peter Schiff offering that as a real possibility for gold prices.
The continuing plunge in value of the U.S. dollar, along with the fears of inflation, seem to be keeping investors in the gold game rather than taking profits.
Some in the gold industry have looked at the falling demand for jewelry in a number of nations, including India, Italy and Turkey, among others, as a reason to be concerned over the price of gold holding, but in reality, the price movements of gold are far less dependent on jewelry demand than a hedge against inflation and holding on to your money, which in times like we're living in is more relevant.
Jim Rogers has said he wouldn't buy gold while it's hitting record highs, but at the same time he's also not thinking in terms of betting against it either. He's basically waiting for the price to drop and then he'll buy more, knowing over the long term there is a lot of upside for gold before it begins to level out.
Another interesting point is while gold has reached record levels when measured against the U.S. dollar, against other currencies it is still far from reaching its highs. For example, it's 30 percent below former highs against the Australian dollar and 15 percent below highs it has hit against the yen.
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