Saturday, July 31, 2010

Peter Shiff Video

Hi FerFAL,

I've been reading your blog with great interest and admiration for the last months. I heard about your blog on the biggest (and almost only) french libertarian forum :, whose members, included myself, are very much interested in the state of our sick global economy.
Thank you for dealing with survivalism along with other relevant matters on your blog.

Here is the reason for my e-mail : I just watched this video today, a conference from Peter Schiff who explains in 76 minutes pretty much everything a beginner in economics - which i am - needs to know about the crisis (why does it happen, how to get out of it). I thought this could be worth sharing, especially with your readers, whom I'm sure most would like to know how today's economy works.

If you have already dealt with this video on your blog, I apologize.

Many thanks from France.

Hi! Thanks for the video. If you can't watch the complete thing, at least watch the last 15 minutes, it basically explains why he thinks the dollar will collapse and why there's going to be inflation, maybe even hyperinflation.
Basically he thinks that what happened in Argentina will happen in USA sooner or later, which a lot of people think so as well.
I really dont like predicting, but I see that he makes a few truthful points. Will it be as bad as it was here? Maybe, I dont know. But I know USA HAS preppers and survivalist, and there's not even a WORD for either one in Spanish. That's why I'd still rather be in USA than anywhere else.
Enjoy your weekened my friends, and if you think what this man is tlaking about will happen as well, then do some reading here in the blog, becuase what I constantly write about is exactly that, dealing with the realities of a country which economy collapsed along with its currency and the aftermath of that.
Take care.


Anonymous said...

If you are reading this blog, you probably don't need much convincing. The debt is so great that it is inevitable that we'll see a severe depression or worse. It is a mathematical impossibility to continue as we are. There are few if any places to hide. Unlike Argentina, a relatively small country, this will be global, and there will be no outside help. The U.S will be hit the hardest and stay down the longest. Now for the when. Based on the math, the debt, the dollar cannot continue beyond 5 years. We are already on the edge of the next big leg down, and will likely see prices in the coming year rise at least 15%. It can be a slow decent, yet as happen in the USSR, collapse can occur over night and all the while, the Gov't and talking heads will tell you that everything is just fine. Turn off the T.V. And let's hope and pray that they don't start WW3.


David said...

Schiff always harps about inflation, yet there is NONE. The U.S. central bank doubled the monetary base yet the broadest measure of money, M3, is negative year over year.

We're most probably heading into a credit collapse, deflationary depression where it will be cash (to pay off loans or pay for groceries, fuel, etc.) that people want and need, not gold coins or raw land (which might be useful in a hyperinflationary environment, but even that is subject to debate).

After watching Schiff you owe it to yourself to watch a more reasoned view that better matches our reality.

Twinedog said...

I like a lot of what Peter Schiff has said. He correctly predicted the real estate crash.

And although his long term views regarding inflation, and dollar devaluation may turn out to be correct, for the time being these things haven't occurred.

His investment company has failed to make any money utilizing the strategies he has advised in his books. Of course he could ultimately end up being proved correct. As with many investment decisions the devil is in the precise timing.

In regards to hyper inflation I think the reason we haven't seen it yet is that although the money supply has greatly increased the velocity of money decreased rapidly. But if heaven forbid things change and the velocity of money increases then its game over massive hyper inflation.

As far as gold I suppose it would allow you to escape the country assuming you have amounts that you could carry away. I personally think guns, ammunition, tools, food, seeds, and water will ultimately be the most valuable items in a hyper inflationary environment.

Everyone should have 6 months of food for their families to survive a hyper inflationary period.

Security, Food, Water, Shelter.

Anonymous said...

It is unfolding very much as he expects and for the reasons he has provided. Unlike many, he anticipated the majority of the 'unexpected' moves made by our government to mitigate. And how did he know? He read it in a history book. However in these modern times, the Fed has been very resourceful and creative and further expands it's ability to manage (manipulate). Recent law has given it unprecedented powers to control many important aspects right down to your bank account. There will be more surprise moves by the Fed to keep the gambling and thieving going. The longer it is artificially kept going, the deeper the damage. Schiff has added greatly to the conversation and continues to do so. His strategy is very long term. Think in decades and forget watching the daily prices. For the average guy he is not. I'm glad I'm not a client.

The Big problem I'll skip is derivatives, yet currently this is the issue. M3 was not negative until last year. Contraction in credit, and creative ways used by the Fed has hidden monetization (the purchase of dollars they tried to sell to others because they refused it), and they will continue the practice in new ways. The 11.8 trillion given to the bankrupt banks has been held at the Fed with interest. They are no longer paying interest and that 11.8 trillion will enter the supply over several years. Some will go to buy treasuries (monetization by indirect and discrete means to deceive the ignorant) and support the dollar, and some will drive price inflation with expansion of credit as this previously uncirculated or sanitized 11.8 trillion enters. When anything is in abundance it's value is lower. Expect also further stimulus of about 5 trillion in giveaways, bailouts of certain states, and programs from the federal government and expansion of the war. They are buying time. Expect a host of sneaky moves including austerity measures to creep in, the commandeering of pension funds through enticement, and rising taxes.

With the currency war ( attacks by Goldman Sucks on the Euro) ended and the Euro stabilizing, it is now the dollar's turn to take the hit. China continues to sell as fast as possible, and recently stated that the U.S. has the debt and policies of a third world country. Whether be it quick via hyper inflation or severe revaluation, or a slow death by high inflation or all of the above, periods of significant deflation can dominate while money creation is hidden and is typically a precursor in a cycle that includes price inflation in the Fiat World. It can repeat over and over during coming decades, that's of course if the Big problem, dervivatives and counter party risk that goes with all that, does not get us.

Of the 3,800 fiat currencies that have existed, all have failed. Such that a fever fights infection by raising the body's temperature, we will also experience the occasional chills. The illness is Classic Empire Decline, and clinically, death will be by runaway fever. While we may hope for continued life support, we are entering a phase where sudden and catastrophic failure, sudden death can occur, ala the USSR.

For those who seek to understand and choose a method to protect yourself, does it really matter whether by inflation or deflation this country collapses? It matters, however, if we seek a solution. It matters to understand why a fiat currency is a cancer, that sound money is needed to rebuild and achieve the prosperity our countries once had. If the primary concern is to survive, then seek to protect what you've got. Don't speculate and risk it by holding cash thinking cash will be king with the bet there will be only deflation. Split the difference. Buy precious metals, and hold currency in Swiss Francs and Canadian dollars or a variety, but not the U.S. dollar. And the best bet which is not a bet in my books is essential tangibles.