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Peter schiff has countered Mish with the following three points.
1. I believe that eventually long-term interest rates will head much higher to reflect significantly higher inflation expectations, particularly here in the U.S. where a lack of domestic savings in the absence of willing foreign lenders will put even more upward pressure on rates.
2. Any credit the Fed provides will be spent. It is not necessary that the banks that originally borrow it loan it to Americans to buy houses or U.S. businesses to buy equipment. They can use it to buy oil, gold, wheat, foreign currencies or invest in foreign dividend paying stocks. As long as the Fed enables banks to borrow dollars below the rate of inflation, they will borrow all they can and invest the proceeds in appreciating or higher yielding assets. Then those dollars will be spent into circulation bidding up consumer prices.
3.. Yes, all currencies are troubled, but the dollar is unique in that the American have borrowed so much money that we can not afford to repay, and have a phony economy that can not function without access to low cost imported products and foreign vendor financing. In the coming crisis, the U.S. will enter a serious recession; the dollar will fall sharply, sending both consumer prices and interest rates soaring. There will be wide-spread unemployment, and assets prices, such as stocks, bonds, and real estate will fall (if inflation gets out of control, stock and real estate prices might rise in nominal terms, but in that case their real declines will be even greater.) I can assure anyone that if they think they can ride this out is in U.S. treasuries or by stuffing dollar bills under their mattresses, they will be very disappointed. Just ask anyone in Zimbabwe who might have reached a similar conclusion.
Personally I think Mish has a tendancy to look short term while Schiff tends to look long term.
Unfortunately as well, Mish falls for the Keynesian fallacy of trying to restore money demand.
Which leads ultimately to government spending draining the financial markets of the very capital that private enterprises will need in order to do a better and quicker job of recovery.
I recommend reading 'crash-proof' for a better understanding of Peter Schiff.
I also recommend this book Alpha strategy,link below, which is a great introductory layman's approach to understanding Austrian economics as discussed by Rothbard, Ron Paul and Peter Schiff.
It's only problem it's its misunderstanding of the regression theorem regarding the development of money. Past prices do have relevance to future prices.
It's in pdf form as a free book written by John Pugsley, written back in 1981, but actually makes more sense to read now more than even 5 years ago, because of the early 80's recession period it was written in.
http://www.biorationalinstitute.com/zcontent/alpha_strategy.pdf (broken link)
Peter schiff has countered Mish with the following three points.
1. I believe that eventually long-term interest rates will head much higher to reflect significantly higher inflation expectations, particularly here in the U.S. where a lack of domestic savings in the absence of willing foreign lenders will put even more upward pressure on rates.
2. Any credit the Fed provides will be spent. It is not necessary that the banks that originally borrow it loan it to Americans to buy houses or U.S. businesses to buy equipment. They can use it to buy oil, gold, wheat, foreign currencies or invest in foreign dividend paying stocks. As long as the Fed enables banks to borrow dollars below the rate of inflation, they will borrow all they can and invest the proceeds in appreciating or higher yielding assets. Then those dollars will be spent into circulation bidding up consumer prices.
3.. Yes, all currencies are troubled, but the dollar is unique in that the American have borrowed so much money that we can not afford to repay, and have a phony economy that can not function without access to low cost imported products and foreign vendor financing. In the coming crisis, the U.S. will enter a serious recession; the dollar will fall sharply, sending both consumer prices and interest rates soaring. There will be wide-spread unemployment, and assets prices, such as stocks, bonds, and real estate will fall (if inflation gets out of control, stock and real estate prices might rise in nominal terms, but in that case their real declines will be even greater.) I can assure anyone that if they think they can ride this out is in U.S. treasuries or by stuffing dollar bills under their mattresses, they will be very disappointed. Just ask anyone in Zimbabwe who might have reached a similar conclusion.
Personally I think Mish has a tendancy to look short term while Schiff tends to look long term.
Unfortunately as well, Mish falls for the Keynesian fallacy of trying to restore money demand.
Which leads ultimately to government spending draining the financial markets of the very capital that private enterprises will need in order to do a better and quicker job of recovery.
I recommend reading 'crash-proof' for a better understanding of Peter Schiff.
I also recommend this book Alpha strategy,link below, which is a great introductory layman's approach to understanding Austrian economics as discussed by Rothbard, Ron Paul and Peter Schiff.
It's only problem it's its misunderstanding of the regression theorem regarding the development of money. Past prices do have relevance to future prices.
It's in pdf form as a free book written by John Pugsley, written back in 1981, but actually makes more sense to read now more than even 5 years ago, because of the early 80's recession period it was written in.
http://www.biorationalinstitute.com/zcontent/alpha_strategy.pdf (broken link)
The short term, 1-6 months, is really where most of us invest. I can say that inflation will return, eventually, but how many lost money believing everything that Schiff spoke? He was right about some things, but way off on others, so Mish wins this round, no question.
Peter is on the record, on video, predicting a few years ago just what is happening now. He was right then and now.
Actually he was predicting that we would have a worthless US dollar, and be in the midst of hyper-inflation, and steered his clients to foreigh dividend paying stocks, which since have tanked. I'm glad I didn't invest with him.
Actually he was predicting that we would have a worthless US dollar, and be in the midst of hyper-inflation, and steered his clients to foreigh dividend paying stocks, which since have tanked. I'm glad I didn't invest with him.
Much of my stuff has risen substantially after putting in additional money. Some of the mining companies are up 40-50% from their lows in about a month. I'm still keeping some powder dry.
Plus the dividends are still rolling in relatively uninterrupted.
exactly. Gold was down like 30-40% but now it is only down 10% or so. It peaked at 1k like 6 months back. It is at 900 now.
Say what you will, but look at their charts. I'll take Mish any day, though I don't invest with him or Peter.
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