Peter Schiff Was Right (Debates Laffer, Ben Stein, et al.)

[dtotire]

Watch this video: a debate of Peter Schiff v. Arthur Laffter, Ben Stein, et. al.


http://www.youtube.com/watch?v=2I0QN-FYkpw&eurl=http://www.huffingtonpost.com/2008/11/14/this-guy-predicted-the-fi_n_143965.html

[2Design]

1. I noticed a bunch of people who invested with him lost a lot of money

This was on thehousingbubbleblog.com - so he did not help them out

[girl gone mad]

2. Mish had a good article on this topic..

Peter Schiff Hugely Right, Enormously Wrong as Hard Landing Hits China

(snip)

I totally agree with Schiff. The cause of the economic crisis we are in now is a result of reckless spending and loose monetary policy. If reckless spending was the cause of this mess then reckless spending cannot be the cure.

On that basis I nominated Schiff for my "Summit Of Winners". See Bush to Host Summit of Losers for more details.

Decoupling Missed

After that initial opening, Schiff jumps off the deep end with a "print print print" rant about hyperinflation, a huge rant against Obama, talk of recovery in his funds, and finishing up with "There is no way the dollar can possibly survive what is coming".

The big thing Schiff missed this year was in his decoupling theories. Schiff invested as if the US would crash and that everything else would be fine. The decoupling theory never made much sense. To believe in decoupling is to believe the tail wags the dog. And instead of saying how much his fund is up off the lows, he ought to disclose precisely how his anti-dollar fund plays are doing this year.

http://globaleconomicanalysis.blogspot.com/2008/11/peter-schiff-hugely-right-enormously.html


I agree with Mish that we'll have deflation for the near term. I'm less certain about what comes later.

Schiff has been right about many things, but he was wrong in believing that decoupling could happen in some kind of orderly fashion while the US economy collapsed. Roubini made a good case for why it couldn't happen some time ago. Schiff is also wrong to think that all government intervention is bad or that we can get out of this mess without government spending. He's right that the government intervention to date has been poorly designed and is probably complicating the situation. At least he is consistent in his free market ideology, but he needs to study what happened in the CDO markets and understand that his ideal model failed completely.