Peter Schiff
Friday, 08/14/2009 - 10:14 am by Jane Farrell | 6 Comments
Deal Breaker: Peter Schiff
FDR did not “let us feel the pain” during the Great Depression…
Why is Peter Schiff a Deal Breaker?
Schiff, author of The Little Book of Bull Moves in Bear Markets: How to Keep your Portfolio Up When the Market is Down and Crash Proof: How to Profit from the Coming Economic Collapse, is an economic commentator and owner of Euro Pacific Capital, Inc.
Schiff’s Libertarian viewpoints stem from the Austrian School of Economics and place him among the ranks of Ron Paul and those wishing to return to the gold standard. He is a proponent of limited government and the free market. He also plans to run for Chris Dodd’s Connecticut Senate seat in 2010.
It’s no longer considered strange to see pundits and writers alike spouting off nonsensical figures and brutally maimed examples from history, but sometimes the sound bites they provide are just too appalling to pass up. Peter Schiff is such an example – a man who, despite having access to the facts, continues to spout the same old nonsense day after day. Then again, what more can you expect from one of Glenn Beck’s idols?
What he’s saying:
On a recent show with Glenn Beck, Schiff talked about debt as if there’s only one type – the type our government is apparently “force-feeding” us. He also compared our current situation to those of Japan and Germany after WWII, falsely implying they were able to emerge from a recession without government intervention. And on the Great Depression? Schiff claims that a quarter of the country out of work, lines at food banks impossibly long, and a sense of utter despair permeating every household just wasn’t enough. If only FDR and Hoover had “let us feel the pain” we would have emerged with…shovels?
Who is taking him on?
In Mike “Mish” Shedlock undoes the Peter Schiff myth, in detail, on his popular blog….”Now, had you listened to Peter in 2002, 2003, 2004, 2005, 2006 or even 3/4 of 2007, you lost your shirt. Had you placed bets based on Schiff’s market calls, you lost everything you wagered,” says Seeking Alpha….”The bust-up he didn’t see was the one that made mincemeat of his investors,” says the Wall Street Journal….Megan McArdle of the Atlantic explains why Schiff and Ron Paul are so wrong about the gold standard and brought it up again a few months later.
i think it is important to draw a distinction between economic forecasting and specific stock picks/investment ideas, schiff is blurred between the two. his call on US housing was totally on the money but his dollar hypothesis (in the time frame he put it forward) was not.
Having said that, EVERY economist is wrong eventually, and timing is - as Warren Buffet would agree - impossible to get right all the time.
if you know of a commentator or advisor who does get it right all the time let me know, i’ll open an account with them!
even progressive economists like krugman make bad calls, if its good for the left its good for the right no?
Posted by karl deeter | August 14th, 2009 at 12:21 pm
has krugman ever made a good call?
Posted by Stefan | August 14th, 2009 at 8:25 pm
Schiff takes you on here (several minutes in):
http://www.youtube.com/watch?v=EATALto8YnI
Your post is very misleading - Schiff made a lot of money between 2002-2007.
His gold recommendation has done great over the last 8-10 years.
He also called the crisis spot on, explaining everything that would happen, and even detailing the erroneous response government would make.
Regarding gold, see this: http://mises.org/money.asp
Government should never be in control of money - the history of debasement and manipulation by government (Federal Reserve, specifically) is breathtaking.
Posted by Jack | August 14th, 2009 at 9:04 pm
Wow. What a ridiculously weak post.
You couldn’t be more wrong here.
Do you know anything about history or economics that wasn’t picked up by skimming an 8th grade “Social Studies” textbook?
Try Googling “FDR’s policies prolonged Depression by 7 years, UCLA economists calculate” or just spend 5 minutes reading ANYTHING at mises.org.
Are you really trying to back up your claim of “nonsensical figures and brutally maimed examples from history” by just quoting one of Peter’s statements about the Great Depression (that’s ends up being 100% true, mind you) and by linking to a competitor’s attack piece and Megan McArdle’s post that basically says “the gold standard does not solve all of society’s ills and Paul Krugman and Keynes said so” for her argument against the gold standard?
Really. What gives here?
If your going to tease about “nonsensical figures and brutally maimed examples from history”, then let’s have it. Lay out your arguments and defend them. Don’t just say, “He’s crazy because he disagrees with Paul Krugman and is liked by Glenn Beck!” That’s exactly the same thing Glenn Beck would try to pull.
Posted by Rusty Shackleford | August 14th, 2009 at 11:43 pm
This is an intentionally misleading smear piece.
“Schiff talked about debt as if there’s only one type. . .”
How scandalous. I would be interested in hearing about these other types of debt you’re implying exist.
“Schiff claims that a quarter of the country out of work, lines at food banks impossibly long, and a sense of utter despair permeating every household just wasn’t enough. If only FDR and Hoover had “let us feel the pain” we would have emerged with…shovels?”
In the above lines, you have basically fabricated a quote and attributed it to Schiff. So much for journalistic integrity. This also demonstrates a gross misunderstanding of the events of the FDR regime. The intentionally naive interpretation of Schiff’s analyses may be cute to those who don’t care to read hard economic data, but anyone else can see that this post is politics, not economics.
Posted by Chase Banks | August 19th, 2009 at 6:51 am
The crash of 29 was the result of the Fed’s loose money policies in the 20s. Then Fed chair Benjamin Strong was trying to prop up the British Pound relative to the dollar after Britain devalued to fight WWI. But that’s insane. Imagine two brothers who are racing each other. One of them decides to get drunk beforehand and starts lagging behind. The real solution is to let the drunk brother to go through the pain of becoming sober again, but Strong’s solution was to take 20 shots of whiskey himself.
Hoover and Roosevelt took the resulting bust and went absolutely nuts trying to prevent the withdrawal from happening quickly. We couldn’t muster a sustained recovery for a decade. Perhaps the best example of their idiocy would be the orders to destroy crops and livestock for fear that lower prices would hurt farmers. Tax rates on higher incomes went absolutely ballistic, anyone who had any money left after the crash sat on it. They sure as hell weren’t going to start a business and buy labor if the government was going to take 90% of the profits if you managed to make any.
An economy has to be allowed to correct, we can’t expect another world war to happen again and leave us in prime position to get rich exporting and making loans to a devastated world trying to rebuild. The only reason government invested in factories and infrastructure was to fight a just war. And the only reason people rallied to finance that investment was because it was a just war. Lucky them, that’s what the economy needed as well: production and savings. And yet they go on claiming that the years of insane policy that preceded that was aiding the recovery instead of stifling it. Amazing.
Posted by Ben Shee | August 19th, 2009 at 10:04 am