Peter Schiff, who was totally right about about the financials, is totally wrong on Joe Scar

Run time: 10:56 https://www.youtube.com/watch?v=3AlD6U7O1pE   Posted on YouTube: March 25, 2009 By YouTube Member: Views on YouTube: 0   Posted on DU: March 25, 2009 By DU Member: ProfessorPlum Views on DU: 1840

 
How can this guy, who clearly understood the problems with what the big financial companies were doing, be so wrong about just about everything else?

First of all, he trashes Keynesian economics, which as far as I can tell is totally repudiated by the New Deal and WWII.

Then, he says that Obama is doing what both Hoover AND Roosevelt did in not letting the depression run its course? First of all, Hoover didn't do anything to try to stop the Depression - he let it run its course, and that sucked. Roosevelt did many things, and most of them worked.

I agree that people should save as much as they can, but trying to get money circulating again is the right policy for the government to take.

We need to shrink the government? Thanks, Grover Norquist. Maybe we just need to shrink our military budget.

Read history much, Peter Schiff?

Peter Schiff is right about our economic model being unsustainable. The proof is in the reality
of what has happened to our economy!

Seventy percent of the U.S economy is consumer spending. We used credit cards, home-equity loans and
other borrowing to artificially prop up demand. Schiff saw this and called it out--as far back as 2005.

Look at the tape of those buffoons on Fox News---totally mocking Schiff and telling him, "Boy, you must
be a lot of fun at a party!" and "Gee, do you give yourself a heart condition with that pessimism?"

Those bastards. Schiff was right about his pessimism! He knew it was all a house of cards.

Look, maybe some of us disagree with Schiff on his solutions.

However, one cannot deny that he was "Cassandra." He said EXACTLY what would happen to the economy
and he explained why---in great detail. And he was laser-beam accurate on ALL accounts.

I have tremendous respect for his intellect and his rich understanding of macroeconomics.

This guy is a hero---he went out there and tried to blow the lid off of the heist that was happening
for years---under our noses. Just look at the mocking and the protesting from Fox News and also
from Art Laffer (the father of supply-side economics) during the CNBC interview. They protest Peter
Schiff because he told the truth about the criminal clubhouse these thugs played in with the psychopathic
Wall Streeter.

parasites invest in the companies that go to China, then China grows and we decline. Ross Perot was right and these parasites knew it but they are so greedy that they are willing to bring down the majority of America for more momney.

90% of the people i know live beyond their means - just like our country. they live like spoiled brats who think they deserve the best of everything, even if they have no need.
on the other hand, how can so many respected economists disagree? are they all dead wrong? and, if schiff is right, when did we begin to go wrong?

Peter is absolutely spot on with his assessment and has been for a number of years. My brother is a huge Peter Schiff fan and is a Financial Advisor with his own Financial firm. The problem that I have with Peter and my brothers cure is simple.

If we do what Peter suggests we would fix our balance sheets quicker and get back to sound money, the problem is their will be no country left to have a market in.

If you do what Peter says and even go as far as abolishing the Federal Reserve and all the things we should do which will lead to 80% unemployment and mass riots you won't have a country anymore. You can't have a civil war, people starving to death and martial law and expect to have a market.

So the only other alternative is stop the hemorrhage and when things settle, cut out all the waste and abolish the FED and everything else wrong with the way we do business. If we have to take a loan out to do that than so be it.

...and I hear what you are saying.

I don't necessarily believe that we let the whole house of cards tumble down. There has
to be some government intervention, and there also has to be a lot of help for the people
of American. After all, we propped up this mess for the people who made trillions off of
our spending. We deserve some help for our suffering.

I think we both agree that Schiff's assessment of our economy and what a lie it is--was
very astute and accurate.

I also think that these Fox talking heads and people like Art Laffer attempted to mock
him and silence him--because they all knew damn well it was a lie too. But they needed
that lie to continue for a few more years, so their cocktail-party brigade could make a
few more billion.

And if the brick a brats thrown his way are hard hitting, they were even harder before the Collaspse of 2008.

And if he is criticizing Obama's sleazy crew (Geithner, Sumemrs, Rubin, Bernanke, Gensler, et al) I agree there too.

But he should not be trashing FDR. FDR separated hismelf from the money crowd and did things for the working class. Things Obama may well hold the intentions of doing - but when this current Toxic Asset plan fails, he won't have the political capital to make those sorts of things happen.

Plus inflation is the worst of the money fall outs for the middle incomed and lower classes.

We should all be trashing Keynesian economics, because its a failed economic theory.

Simply put, we cannot borrow our way out of a debt crisis.

If you or I over spent and didnt have the funds to pay our bills, what would we do? Stop spending more than we made, and decrease our overall debt.

Why do think our government can avoid this reality?

It is simple mathematics when you consider compounding interest. The more you borrow, the more it costs to service your debt. The more you pay to service the debt, the less you have to spend.

The Keynesians are WRONG, and the sooner we all get that in our heads, the better. We cannot reinflate the bubble.

In a recession, the government is the only entity that can spend money to keep the economy flowing.

Reinflating the housing bubble is dumb, I agree, but you are conflating the stimulus bill with this moronic thing that Geithner is proposing.

Uhh... sure we are. How do you think the government is funded?

The government runs on our incomes, i.e., taxes. If the governments 'income' is reduced, while its debt increases, its cost to service that debt also increases correct?

Sure, we can devalue our currency, i.e., lower our overall income, but that just leads to greater costs to service the debt. Again, the same endless spiral.

It really is simple math. You cannot spend more than you earn. You cannot consume more than you produce. And magic unicorns dont poop skittles. ;-)

in the hands of the rich and powerful. Therefore, no money is moving around = bad economy.

The answer? Tax the rich and powerful, enforce labor laws, strengthen the safety net. You are acting as if the rich are suddenly penniless when the problem is that the rich have all of the money and the poor have spent and leveraged themselves to keep spending to keep the economy moving - but that is all tapped out now.

Do me a favor and read these four posts and get back to me:

http://journals.democraticunderground.com/ProfessorPlum/3
http://journals.democraticunderground.com/ProfessorPlum/4
http://journals.democraticunderground.com/ProfessorPlum/5
http://journals.democraticunderground.com/ProfessorPlum/2

First, you make a lot of claims without a lot of support for those claims.

'All the money' is not in the hands of the rich and powerful. We, the United States, have a substantial and wealthy middle class.

"Therefore, no money is moving around = bad economy."

Not quite. We experienced a time period of rapid credit expansion, and we are now experiencing a period of rapid credit compression. The primary cause of this expansion being government support of this credit expansion, without proper management of the risk and the refusal to allow the business cycle to run its natural course, i.e., expansion/recession.

"You are acting as if the rich are suddenly penniless when the problem is that the rich have all of the money and the poor have spent and leveraged themselves to keep spending to keep the economy moving - but that is all tapped out now."

The result of this fraud in a fractional banking system such as ours was enormous wealth at the top of the 'hourglass', as you like to call it.

But that is not the point. Government revenues are going to collapse, because we are paying less in taxes, because unemployment is going up, and because people are losing their homes. Sure, we can tax the rich more, and I encourage it. I think we should have a 90% tax rate for all income above $1MM until our debt is 0.

I actually think you're making my case even though you dont realize it. By borrowing/leveraging our children's production for our consumption today, we almost guarantee their place in the feudalistic society you feel is coming. Something to think about. Why not just consume what we produce, and free our children from the bondage of debt?

on the wealthy.

I'm not saying we shouldnt invest money on our infrastructure, schools, healthcare, etc. I think we should have been spending on those things all along.

But do we need military bases in 150 countries?

Do we need to be launching space shuttles every 6 months?

Do we need to subsidize billion dollar agriculture firms with farm subsidies?

I'm not saying we dont spend our money wisely, I'm just saying that we have to spend within our means.

this country - our government - thinks it owns the world (except for israel, of course). and just to be sure the world does not forget, we will remind it by destroying who we want, whenever we want.

http://www.acting-man.com/2008/12/hoovers-heirs-at-work.html

"...A brief excursion into history – the monumental failures of the Hoover administration

The current situation is so far very much analogous to 1930-1932, years in which the Federal Reserve pumped up base money to an unheard of extent, increasing its balance sheet more than five-fold (!) over 36 months. It is important to keep this in mind , because the falsehood that the 1930's depression was so bad 'because the Fed failed to pump' keeps being widely accepted and bandied about. It is simply untrue.

In fact, one would do well to remember that when the 1930's depression started, absolutely no-one expected the downturn to turn into such a catastrophic economic wipe-out.

The general consensus was that:

1. the still relatively new-fangled Federal Reserve would be able to avert a deep economic downturn due to its 'flexible currency' and
2. that Hoover's new deal type policies would do the same. Hoovers 'new deal'? Yes, you read that right. All the policies that were later christened the 'New Deal' under the leftist FDR were initiated by the allegedly conservative Hoover...


However, the 'Hoover danger' was kept in check under Harding, who refused to bow to Hoover's demands during the 1921 recession. Harding was the last US president to endorse a 'laissez-faire' approach toward recession, a commendable attitude that had characterized policy under his 19th century predecessors as well...


...In April of 1930, as the stock market hit its post crash recovery highs, Hoover was generally hailed as having averted the depression. This was ascribed to his decisive actions in keeping wage rates high, initiating public work programs and farm supports.
He put pressure on the Federal Reserve to inflate, which initially met with some resistance from then governor of the board Roy Young. Young however relented, and later decided to resign in August of 1930. He was replaced by a more enthusiastic inflationist, Eugene Meyer...


...Needless to say, what the modern-day Federal Reserve is doing today amounts to exactly the same – by taking impaired mortgage securities off the banks books, it likewise prevents the liquidation of unsound credit. For reasons no-one has as of yet deigned to explain, this is somehow supposed to work better nowadays than it did in the 1930's..."



We are not 'all dead in the long run'

http://www.acting-man.com/2008/12/we-are-not-all-dead-in-long-run.html

"1. The long run becomes the here and now

In response to the classical and Austrian critique of his advocacy of state intervention in the economy, J.M. Keynes once uttered the following 'witticism':

'In the long run we are all dead'.

The criticism was that government intervention , while possibly capable of alleviating the short term pain of economic downturns for a while, was apt to store up ever bigger problems for the long term.
The government could 'paper over' economic crises up to a point by attempting to resurrect an inflationary boom with interest rate cuts and deficit spending, but this would distort the economy's production structure further, until at some point in the future, an economic bust of exceedingly great magnitude would inevitably ensue.
In short, payment for foolish economic policies could not be delayed forever; the damage done by government's tinkering with the economy would eventually be revealed....


...Money of zero maturity, a broad money supply measure. click on chart for larger image.
For many years, a falling savings rate and a concurrent sharp rise in consumption-related debt was rationalized away by mainstream economists. Absurd increases in first share prices and then house prices were considered to represent 'an increase of wealth' , which had magically replaced the need to actually save.
There was no need to worry about the growing mountain of debt, they would say; after all, you only needed to look at the other side of the consumer's balance sheet, where all that 'wealth' had piled up, as if houses and stocks had been watered with 'super-gro'.

Here and there a party-pooper would ask, yes, but what if these elevated prices were to fall one day?
Such objections were routinely shouted down : Can't happen! It has never happened! House prices always go up! And so do share prices, in the long run.
They do? But.....aren't we supposed to be 'all dead in the long run'?

All of a sudden, this seeming 'permanent plateau of prosperity' and growing phantom wealth has given way to one of to the greatest bouts of economic instability in living memory, and – oops! – house prices are falling, and so are share prices – with over $30 trillion in stock market capitalization having disappeared globally.
The balance sheet looks all bent out of shape now, as the debts remain big as ever and are going sour at a rapid clip, taking down lenders and borrowers alike..."

While Schiff is right about us having a non producing economy and inflation will be a tough one with all the spending we're doing to do nothing would be worse. It's hundreds of trillions that would be lost and felt around the world. Schiff is like Ron Paul. Agrees with the Austrian or Laissez-faire approach. Odd thing is that while they agree with a government hands off approach that's pretty much what brought us this party so at least both Schiff and Paul are consistant in their thinking but we would all be in the bread lines that Hoover brought as you pointed out. Remember Greenspan having 'shocked disbelief' at the way shareholders were being stripped of protection! As Keyes himself stated nominal” values could have “real” effects.

We had fake wealth overall although some made a killing it wasn't the true value of a sustainable economy. The dreaded bubble and to add insult to injury the middle class was steadily being attacked which is the backbone of a sound economy imho.

It's a necessary evil right now but perhaps if we had not seen millions of jobs outsourced we could have sustained it better. I don't like it but the choices are limited...their will be price to pay down the road if these toxic assets aren't purchased by
the private sector.

Schiff is so excited babbling like "I was right all along" -a-fire. Not quite Peter. You were right on some stuff, and your prognosis is dead wrong on a lot of what you just shot off in this interview with mr. confused joe-the-shill.

We were told to "go spend"..."go shopping".....buy, buy, buy. Give them zero interest loans, let them buy houses without adequate financial backing, drive the Humvees they will never be able to pay off with low interest loans...BUT KEEP THEM BUYING. That is bull shit strategy. GRANTED. But that, my little peter, is as far as it goes.

To let the businesses go under...to let the unemployment levels top the Great Depression; to keep government out of it and make them tighten their budgets is calling for a disaster!! President Obama has it right to restructure the tax codes to help the middle class and less fortunate. The wealthy have done NOTHING with their tax breaks to help the country, except buy more Humvees with cash and toss around a few easily earned bucks on the restaurant tables. Absolute bull shit.

We need to invest in our decaying infrastructure. We need to invest in keeping jobs at home and creating new and "green jobs" in this country. How many big corporations have off shore offices to evade paying their taxes? How many corporations are sending their factories outside the US to get the cheap labor and bigger profits??? Who is going to save money when you are paid .125% on earnings?? We'll spend it or possibly toss it in to the mutuals to see if we can get a better return; except we'll lose it all when the Stock Market bounces back to reality.

God, this man is NO guru. Right on some things....f*cking crazy on the rest of his analysis.

Keep your car on the slow road that is making the progress for this country for tomorrow Mr. President. These Charliton's are just whispers in the wind. Some truth...lots of speculation....even more bull shit.

savings is actually up right now, and we are in a recession, so that "how do you save money when you've lost your job?" is a nice one liner but that is all it is. some people have lost their job, others are saving. duh.

"....we're still... we're still screwed." lol