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While Schiff was right about a couple things, he has too much of an agenda.
Have you listened to his show on youtube? He has a weekly show on Wednesdays. He sometimes says some interesting things.But I feel like he is tooting his own horn for most of the hour, plugging his book and asking everyone to put money into his firm.
One thing I would offer here is that the Chinese walk a very dangerous tightrope. Crash the American economy and, suddenly, an enormous market for their export economy vanishes overnight.
China has to build up their domestic economy to survive long term. But the tightrope is complicated as they still are approx 60% export dominated. To build up a domestic economy wages will need to rise, and savings rates will need to decline. If wages rise too far, too fast the export business suffers.
US remains their largest single customer and the customer has slowed dramatically. While they have some ammunition to further hurt US economy by dumping dollars, they would be hurting themselves as well. They recently have devalued their currency slightly but this is also a dangerous game.
One thing I would offer here is that the Chinese walk a very dangerous tightrope. Crash the American economy and, suddenly, an enormous market for their export economy vanishes overnight.
Last I heard the Chinese save a huge amount of their income. I betcha they would love to use that income to consume the same iDork gadgets that have been shipped here for quite some time. Some of the Scandanavian countries that are running a budget surplus might want them as well.
snippet:
"Premier Liu Chao-shiuan gave a report to the lawmakers of the ruling Kuomintang (KMT) yesterday about the government’s plan of allocating NT$500 billion over the next four years to carry out a new wide-ranging economic stimulus program. "
It's in their best interests to stop relying on American consumers and America itself to keep their economy going; they have to build up their own infrastructure and economy - something they should have done years ago. That will bring up wages and the standard of living for their people.
That is what free trade should be all about..not sucking the life out of one country at the expense of another.
Hate to point out the obvious, but you should really do some homework before commenting on Chinese economy/politics/culture, etc. The "China" here is "Republic of China", commonly known as Taiwan. The least you should know is China's ruling party is Communist Party of China as opposed to the ruling party of Taiwan: Kuomingtang.
Last I heard the Chinese save a huge amount of their income. I betcha they would love to use that income to consume the same iDork gadgets that have been shipped here for quite some time. Some of the Scandanavian countries that are running a budget surplus might want them as well.
There are plenty of customers to take our place.
You are correct that they are diversifying their customer base and the US, as a percentage has dropped as an export destination. However, we are still there #1 customer as a nation and you can't give up your number 1 customer without feeling some pain. The Scandanavian countries are just not large enough in purchasing power to replace the US.
They do save a high percentage of income as most Asian countries do.
The China "dumping bonds" story has been out there for years.
Yet the 10 year is at 2.67%. 30 year at 3.16%? Where are the sky high interest rates?
The China, high inflation story is easy to report on. It gets peoples attention. Asian creditors dumping bonds and investing elsewhere makes sense. It's an easy story line. But what sets bond rates is more complicated. There's so much money sloshing around, and so many factors that set rates....but a more complicated story won't get the press or readership.
Schiff is generally right, but he's too far ideological and has too many businessi interests/too much of an agenda to accept everything he says.
He's better than a straight academic, but he's like one of these guys that write...."the coming depression of 1991 and how to prosper". and builds a philosophy and little industry around it.
I like Jim Rogers better. He offers easy explainations, is quick to admit what he doesn't know. He's short long bonds, thinks its one of the last bubbles in the world.
Thinks the bond bull market from the 80's to 03 is over and is making a big top now. Asians and the rest of the world have been buying US bonds for so long, you don't just reverse that policy in a year or two. The bond story will be long and played out.
But in 10, 20 years, much higher bond yields, lower prices.
That's the problem with these book guys like Schiff. They build a story, but the story doesn't play out according to their time line. I think we should be bartering in gold coins now in dec 08 according to Schiff Aren't we suppose to have shanty towns by now? We were suppose to turn into Zimbabwe a few months ago I think.
Getting on a tangent, I seperate market commentators into a few camps...
-The babbling incoherents/idiots. Cramer, etc.
-Academics/professors. The Jeremy Siegels.
-The maverick professors/academics. Roubini.
-Books guys, prognosticators. All the authors in the 80's and 90's who wrote..."the coming recession of 1994 and how to prosper". No one remembers who they are in 10 years.
They come up with a big theme, and they're generally right. Or what they say seems to make sense. But they stray into too much self agenda, too much of their own business at stake. Too much self promotion to look at objectively.
Or they venture off into esoteric stuff like Elliot Wave. Schiff is the 2000's version of these guys.
-The grizzled veteran. Like Barton Biggs, John Bogle. But too US centric and too vanilla. Buy low cost index funds....but what if your index fund goes down 40% and never comes back? I.e. Japan...
-More worldly, Rogers, Marc Faber, Soros. But still not above making mistakes and getting it right.
And plenty of other ones. But you have to take whatever makes sense and do your own research, reading and draw your own conclusions.
The China "dumping bonds" story has been out there for years.
Yet the 10 year is at 2.67%. 30 year at 3.16%? Where are the sky high interest rates?
The China, high inflation story is easy to report on. It gets peoples attention. Asian creditors dumping bonds and investing elsewhere makes sense. It's an easy story line. But what sets bond rates is more complicated. There's so much money sloshing around, and so many factors that set rates....but a more complicated story won't get the press or readership.
Schiff is generally right, but he's too far ideological and has too many businessi interests/too much of an agenda to accept everything he says.
He's better than a straight academic, but he's like one of these guys that write...."the coming depression of 1991 and how to prosper". and builds a philosophy and little industry around it.
I like Jim Rogers better. He offers easy explainations, is quick to admit what he doesn't know. He's short long bonds, thinks its one of the last bubbles in the world.
Thinks the bond bull market from the 80's to 03 is over and is making a big top now. Asians and the rest of the world have been buying US bonds for so long, you don't just reverse that policy in a year or two. The bond story will be long and played out.
But in 10, 20 years, much higher bond yields, lower prices.
That's the problem with these book guys like Schiff. They build a story, but the story doesn't play out according to their time line. I think we should be bartering in gold coins now in dec 08 according to Schiff Aren't we suppose to have shanty towns by now? We were suppose to turn into Zimbabwe a few months ago I think.
Zimbabwe was an exageration. Also, with a system where information on monetary policy is increasingly suppressed (lack of M3 for example since 2005), it takes a few years for the public to realize that the emporer has no clothes.
I wouldn't be surprised if the Fed convinces government to scare folks into surrendering gold/silver and taxing/restricting foreign investment in preparation for what's to come. Lots of spin can make it seem legit. "For the good of the nation", "To help the poor", etc.
Schiff is definitely a wee bit too arrogant, but few can deny most of his predictions have come true. I'm quite convinced that Schiff (in agreement with Marc Faber and Jim Rogers) believe that rampant inflation will be the end game to complete the prophecy. Whether we teeter into hyperinflation is anyone's guess, but on a daily basis my money is increasingly on that bet.
Getting on a tangent, I seperate market commentators into a few camps...
-The babbling incoherents/idiots. Cramer, etc.
-Academics/professors. The Jeremy Siegels.
-The maverick professors/academics. Roubini.
-Books guys, prognosticators. All the authors in the 80's and 90's who wrote..."the coming recession of 1994 and how to prosper". No one remembers who they are in 10 years.
They come up with a big theme, and they're generally right. Or what they say seems to make sense. But they stray into too much self agenda, too much of their own business at stake. Too much self promotion to look at objectively.
Or they venture off into esoteric stuff like Elliot Wave. Schiff is the 2000's version of these guys.
-The grizzled veteran. Like Barton Biggs, John Bogle. But too US centric and too vanilla. Buy low cost index funds....but what if your index fund goes down 40% and never comes back? I.e. Japan...
-More worldly, Rogers, Marc Faber, Soros. But still not above making mistakes and getting it right.
And plenty of other ones. But you have to take whatever makes sense and do your own research, reading and draw your own conclusions.
I take in a mix of Schiff, Faber, Tice, and Rogers. I believed more in a heavy deflationary cycle prior to high inflation/hyperinflation, as past posting on CD have proved. That's why I kept a lot in cash, just incase. I'm tempted to pull the trigger and go "all in" on the commodities though.
It's a joke to think that cash is king. No way in h**l with all of the virtual money that WILL be printed (as Mr. Bernanke has eluded to today).
Soros is a fool and I'm ashamed for my ancestry that he co-exists.
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Aren't we suppose to have shanty towns by now? We were suppose to turn into Zimbabwe a few months ago I think.
