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It's really not rocket science. What he is talking about is basic Keynesian economics. Too much debt accumulates in the system. The interest on the debt begins to divert too much money out of the economy. Eventually the debt climbs to a point when people can't pay, and then they default. After an economic crisis, people start saving too much, and that's also bad for the economy.
Peter's a genius. I'm a EuroPac client, not worried about the slump we're experiencing (actually, my gold mining stuff is holding up well). His prediction of inflation/hyperinflation has yet to pan out, but there was always the looming spectre of deflation prior to this. He's just underestimated the deflationary cycle. But, I personally think it's time to back up the truck on some of the commodity companies like Schiff and Rogers are doing.
It's really not rocket science. What he is talking about is basic Keynesian economics. Too much debt accumulates in the system. The interest on the debt begins to divert too much money out of the economy. Eventually the debt climbs to a point when people can't pay, and then they default. After an economic crisis, people start saving too much, and that's also bad for the economy.
This issue to me, the issue of whose theory of economics holds up to rational inquiry, to the historical evidence, is the most important issue of our time. Austrian economics correctly and accurately predicted the implosion of communist economies back in the 1920's. It has a superb track record and in my opinion, it deserves some serious consideration.
We've seen the problems with big government, with socialism, with Keynesian economics, with fractional reserve lending and central banking.
This issue to me, the issue of whose theory of economics holds up to rational inquiry, to the historical evidence, is the most important issue of our time. Austrian economics correctly and accurately predicted the implosion of communist economies back in the 1920's. It has a superb track record and in my opinion, it deserves some serious consideration.
We've seen the problems with big government, with socialism, with Keynesian economics, with fractional reserve lending and central banking.
Right. I'm by no means a trained economist - in any school - but my understanding of the discipline is that Austrian economics approaches economics for what it is, i.e. a human science that is better explained by basic logic rather than complex mathematical models that don't account for a number of human factors.
It's very easy to say now that what Peter is saying isn't rocket science - because it's HAPPENING RIGHT NOW - but two years ago the conventional wisdom was that he was a fool.
Yeah, this guy is definitely not just the economist who has correctly predicted 10 out of the last 5 recessions. He knew what was coming.
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