Thursday, April 29, 2010
More moronic comments from Peter Schiff
Here's another sampling of Schiff's idiocy.
Schiff is also completely missing what is going on in Europe with the Eurozone and how THOSE countries are all seriously at risk to see skyrocketing interest rates, not the U.S. which is a currency issuer. He doesn't understand this.
The U.S. public debt has gone from $900 billion in 1980 to $13 trillion currently and interest rates have fallen from 20% to 0%! Yet Schiff and most of the mainstream of economics still cannot see that there is absolutley no connection between the national "debt" and interest rates when a country spends in its own currency and where that currency is non-convertible. The interest rate is a parameter set by the central bank, period!!
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Schiff doesn't understand that the meltdown in '08 was out of all proportion to the damage done by subprime lending. I suspect that the market didn't see that coming, at least partially, because it may have assumed that Bernanke wouldn't let nGDP fall so far, so fast. Afterall, Bernanke made his name in part with his analyses of the Japanese deflationary lost decade and his recommendations for more monetary easing, arguing that the zero bound doesn't have to be a problem. If only he'd follow his own advice. This recession was needless.
So, as the saying goes, Schiff was right for all the wrong reasons, as a stopped clock is right twice a day. Austrians always predict that an economic collapse is right around the corner,and have since at least 1971.
Even worse, Schiff had nearly exactly the wrong portfolio in '08, adhering to decoupling, though the US and Europe account for around 50% of world aggregate demand!
Contrary to his claims, the dollar surged more than 30% during the crises, exacerbating 40-70% losses for many of his clients. And people listen to this stockbroker?
Sandifer, the dollar surged 30% during the crisis? As a guy who was living in Chile during that time, I can tell you that the Chilean peso rose 20% in value against the dollar from June 2007 to March 2008. Are you sure the dollar surged?
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