Peter Schiff to appear on the Daily Show:Warning some sheep may wakeup

[Sell 'em]

Schiff is pure Austrian Economics ... the same stuff that underpins the views of Marc Faber and Jim Rogers, to name a couple.

Lots of people saw and understood what Schiff did re: the coming collapse. Peter deserves credit for standing up in the middle of the party and telling everyone the sh*t stinks. He weathered ridicule for a couple years while he did it ... give him credit.


Those of you jamming on him for riding commodities down with the crash - take an enema already. Ramifications of the real estate collapse is playing out over several years. Commodities and foreign stocks remain up HUGE relative to everything else ... with anything but an ET-microsecond timeframe, he's making out in spades.

 

[Sell 'em]

Quote from tradestrong:

Now, many are arguing right now that with the printing presses turned on, this is going to cause massive inflation. I don't think it will at all and this is why. With a credit crisis, debt is wiped out across the board due to defaults. The money supply contracts like crazy. But by turning on the printing press, the FED is basically just creating a wash situation. The money supply won't contract at the rate it would with deleveraging. And, since the defaults are permanent, they will never find their way back into the money supply. So the printing of money just puts water back into the tub that has been permanently removed. There is no possible way to have massive inflation when in a credit crisis.

Now, if this wasn't a credit crisis, then the fed printing money like it did in the 70's is a different story. Then you cause massive inflation because you don't have a high rate of defaults that indirectly decrease the money supply.

Hmmm....so I think the hyperinflation theory here is completely wrong!!

I've heard this argument from many others, BUT YOU ARE CONFUSED. Let me try to simplify this.

A. Credit is contracting, yes, leading to immediate deflation.

B. Governments are printing money to counter-act A.

C. That new liquidity is being disproportionately channelled into hard assets. Look at Oil, Copper, Gold, and USD weakness.

C is the rumblings of outrageous inflation of the worst kind. High unemployment leaves wages slack, yet the price of goods rises at accelerating rates. Eventually this inflation will require a cataclysmic rate hike ala Volcker.

Fortunately it will take years to play out. But make no mistake, markets are going to be WILD over the next few years - particularly currencies & commodities.

Another way to say it: This inflation will be different from past inflations in that it will not be driven by tight labor but instead by easy money.

Buy commodities.
Sell the USD.
Stocks will rise, but it is more of an 'easy money' pheonomenon than an improvement in real earnings. Stockholders can only keep pace ... at best.

 

[makloda]

Quote from Debaser82:

Why do you judge Schiff on a 6 month downturn in his favourite asset classes (a quite serious one I will admit) wile on the other hand you have stated the likes of Hugh Hendry shouldnt be judged on a smal blimb in their investment career as people should look at the broader picture and over a longer period of time.

You don't get it. Hendry has a public track record that makes him accountable. Schiff doesn't. Talking heads like Schiff do not want to be held accountable. They just go back in history and claim victory on the calls that turned out right and they want the public to forget about the calls they got wrong.

Track records never go away and don't forget any mistakes. They're poison for talking heads.

Hendry's hedge fund was up 30% after fees in 2008 and last time I looked he's down 4% in 2009 (through May 31). The difference between Schiff and Hendry is that Schiff has a -60% year and still has a "job" of selling BS investment advice to unsophisticated retail investors on TV and goldbug blogs; Hendry knows if he had a -60% year he'd be forced to shut down his entire business he spent building for 10 years. It's called risk management and knowing when you're wrong -- an alien concept to Schiff.

I'd say ~+26% (30% - 4%) probably easily beats Schiff's "performance" (which we have to guess) from Jan 2008 through May 2009.

Don't judge calls (since they are not transparent); judge track records. Hendry has a track record. Paulson has a track record.

What do Roubini, Faber and Schiff have? Airtime and a cult status on YouTube, nothing else.

 

[makloda]

Quote from Optional:

What most of the idiots in this thread don't understand is that the accounts aren't MANAGED accounts.
percent returns don't mean FUCK ALL.
what matters is that his brokerage firm has a strategy which is buying dividend paying stocks in foreign currencies as well as physical bullion stored overseas.
Not every client DOES the same thing.

I'm sure that Peter's holdings fell hard during the collapse, but he kept buying all the way down, and unless he put his money in a bunch of BK stocks, so long as the companies were solid, i'm sure with what's happened in the last few months, his positions are killing it.

Remember that Peter has been buying this stuff since 2000, and been on the right side for a long time. Anyone who has been following his advice since then is WAY ahead of the curve.

Unfortunately, I bet most dumbass investors with his only ever heard of him and his amazing "strategy" (buy foreign stocks stocks with zero risk and money management, average down into losing positions, what an amazing radical strategy) in 2007/2008 -- and not in 2000/2001/2002. I'd not be surprised that he saw the biggest inflows into his accounts right in 2007/2008, after he released his "crash proof" book.

And then, all those scared housewifes and dentists -- who thought they could sleep soundly as they were now "protected against dollar losses" and "fully crash proof" -- saw their 50k and 100k accounts implode 50-70% in a matter of months. And then half of them probably pulled out their money right in Dec/Jan with emerging market stocks in the dumpster and the Dollar index at 90.

 

[fullblotter]

Quote from tradestrong:

That's a great video and it makes complete sense. But this also made me just realize something. The guy in the video talks about how with default rates skyrocketing, this causes a massive contraction in the money supply and eventually deflation. Which is exactly what we've seen.

Now, many are arguing right now that with the printing presses turned on, this is going to cause massive inflation. I don't think it will at all and this is why. With a credit crisis, debt is wiped out across the board due to defaults. The money supply contracts like crazy. But by turning on the printing press, the FED is basically just creating a wash situation. The money supply won't contract at the rate it would with deleveraging. And, since the defaults are permanent, they will never find their way back into the money supply. So the printing of money just puts water back into the tub that has been permanently removed. There is no possible way to have massive inflation when in a credit crisis.

Now, if this wasn't a credit crisis, then the fed printing money like it did in the 70's is a different story. Then you cause massive inflation because you don't have a high rate of defaults that indirectly decrease the money supply.

Hmmm....so I think the hyperinflation theory here is completely wrong!!

compare the logic and nuance of the deflation view with schiff and his hyperinflation talk. he keeps saying america is printing too much money therefore america equals zimbabwe.
seriously, how clueless is this guy?

hyperinflation ensues in third world countries becaues the governments LITERALLY print huge quantities of notes and put them directly into circulation. do they even have credit in zimbabwe? have they ever? people end up taking wheelbarrows full of notes to buy simple things. that can never ever happen in america because there are not enough physical fiat notes. if anything there is a serious prospect of a hyperdeflationary depression where digital money becomes worthless and physical fiat notes become exremely valuable.

 

[Cutten]

Quote from peilthetraveler:

I'm saving this post and im going to bring it back up in a year. Lets see if you were right or wrong about Peter.

Someone who suffered a 60%+ drawdown is wrong, period.

 

[Cutten]

Quote from makloda:


What do Roubini, Faber and Schiff have? Airtime and a cult status on YouTube, nothing else.

Wrong, Faber has a track record and manages money.

 

[Optional]

Yeah Makloda, but that's how things work.
The minute Schiff became a talking head sensation was an immediate warning signal to the informed - a classic fade.
The dentists/soccer moms of the world are always late to the party and ALWAYS get in at the top.

Peter's extremely prescient call about the real estate market has saved many a people. The people who didn't hear him out or listen to him about home valuations got royally dicked (in the bubble states).

Peter's analysis is correct and will continue to prove correct for many years to come. I think he's an inspirational orator and a presicent long-term market timer. Some people just hate to give credit where it's due.

Quote from makloda:

Unfortunately, I bet most dumbass investors with his only ever heard of him and his amazing "strategy" (buy foreign stocks stocks with zero risk and money management, average down into losing positions, what an amazing radical strategy) in 2007/2008 -- and not in 2000/2001/2002. I'd not be surprised that he saw the biggest inflows into his accounts right in 2007/2008, after he released his "crash proof" book.

And then, all those scared housewifes and dentists -- who thought they could sleep soundly as they were now "protected against dollar losses" and "fully crash proof" -- saw their 50k and 100k accounts implode 50-70% in a matter of months. And then half of them probably pulled out their money right in Dec/Jan with emerging market stocks in the dumpster and the Dollar index at 90.

 

[sprstpd]

Quote from fullblotter:

if anything there is a serious prospect of a hyperdeflationary depression where digital money becomes worthless and physical fiat notes become exremely valuable.

That doesn't make any sense to me at all. Both forms are completely fungible. Electronic transfers are easier and more accepted for many types of transactions. Please explain how that sentence makes any sense at all.

 

[Hoppean]

Quote from sprstpd:

That doesn't make any sense to me at all. Both forms are completely fungible. Electronic transfers are easier and more accepted for many types of transactions. Please explain how that sentence makes any sense at all.

I think what he's saying is that, while both forms of money may be fungible today, they may not be in the future. A good historical example would be America in 1929, at the time gold and federal reserve notes were fungible. However when the crisis hit, people demanded that their Fed notes be redeemed in gold coin, when this could not happen because of the nature of the banking system, the result was massive bank failures and a loss of purchasing power for Fed notes relative to gold coin. Incidentally, this also answers the common misconception about the Fed "not doing enough", since they could not actually create the physical gold that was necessary to stem the bank runs. Further, the catalyst for this "hyperdeflationary scenario" is that (electronic) credit ceases to expand at an ever increasing rate. Once this happens, and it already has, it is more than conceivable that the enormous inverted pyramid of electronic debt/credit that exists in both the private and public sector, can cave in on itself through "cascading cross defaults"; as the margins in the sectors, that have benefited from artificially low interest rates and credit expansion, contract causing mass defaults. At the extreme all that will be left will be the reserves which "back" this electronic credit, namely Fed notes, remembering that all these electronic deposits at commercial banks are nothing but legal promises to pay federal reserve notes, on demand.