Peter Schiff: Stimulus Will Lead to "Unmitigated Disaster"
DriftingByTheStorm
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Peter Schiff: Stimulus Bill Will Lead to "Unmitigated Disaster"
[VIDEO in article]
Posted Feb 06, 2009 08:05am EST by Aaron Task in Investing, Newsmakers, Recession
The fiscal stimulus bill being debated in Congress not only won't help the economy, it will make the recession much worse, says Peter Schiff, president of Euro Pacific Capital.
Schiff scoffs at the notion the economic decline is starting to level off and concedes no government action means a "terrible" recession. But the path of increased government intervention will lead to "unmitigated disaster," says Schiff, who gained notoriety in 2007-08 for his prescient calls on the housing bubble and U.S. stocks.
The problem, he says, is the government is trying to perpetuate a "phony economy" based on borrowing and spending. With the U.S. consumer tapped out, the government is "now taking on the mantle" of consumer of last resort, he continues, predicting the bond bubble will soon burst - if it hasn't already - ultimately leading to a collapse of the dollar and an "inflationary depression worse than anything any of us have ever seen."
If nothing else, Schiff is an nonpartisan critic of American policymakers, comparing President Bush to Herbert Hoover and President Obama to FDR, and neither in a favorable way.
Note: Stay tuned for part 2 of my interview with Schiff, where he addresses recent criticism of his investing prowess.
[VIDEO in article]
Posted Feb 06, 2009 08:05am EST by Aaron Task in Investing, Newsmakers, Recession
The fiscal stimulus bill being debated in Congress not only won't help the economy, it will make the recession much worse, says Peter Schiff, president of Euro Pacific Capital.
Schiff scoffs at the notion the economic decline is starting to level off and concedes no government action means a "terrible" recession. But the path of increased government intervention will lead to "unmitigated disaster," says Schiff, who gained notoriety in 2007-08 for his prescient calls on the housing bubble and U.S. stocks.
The problem, he says, is the government is trying to perpetuate a "phony economy" based on borrowing and spending. With the U.S. consumer tapped out, the government is "now taking on the mantle" of consumer of last resort, he continues, predicting the bond bubble will soon burst - if it hasn't already - ultimately leading to a collapse of the dollar and an "inflationary depression worse than anything any of us have ever seen."
If nothing else, Schiff is an nonpartisan critic of American policymakers, comparing President Bush to Herbert Hoover and President Obama to FDR, and neither in a favorable way.
Note: Stay tuned for part 2 of my interview with Schiff, where he addresses recent criticism of his investing prowess.
If I was to smile and I held out my hand
If I opened it now would you not understand?
If I opened it now would you not understand?
Post edited by Unknown User on
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Comments
Lets see what you will be saying when (and, admitedly, IF) the bond bubble does collapse, the dollar is forced in to the ground, and interest rates spike.
Schiff's point is that things are going to suck NO MATTER WHAT,
but that government intervention is going to be our unmitigated undoing.
Its a point that deserves some scrutiny.
If I opened it now would you not understand?
but still I think something has to be done. it just seems schiff is all doom and gloom, no solutions.
The Stimulus Bill Passed The Senate Just a Few Minutes Ago.
Geithern pissed off the fat cats, and the market has collapsed (-280pts Dow, -30 S&P),
and here is Peter Schiff explaining how its Fucked-Dom for us all:
Peter Schiff Lays it Down Again
If I opened it now would you not understand?
7888.88 -381.99 (-4.62%) Feb 10 4:03pm ET
IF OBAMA GETS THIS PASSED ON FRIDAY YOU WILL NOT HAVE IT ANY LONGER.
http://www.bloomberg.com/apps/news?pid= ... zfDxfbwhzs
Republican fearmonging. I'd rather not have Federal oversight over the health insurance industry, but government oversight is necessary and good. I'd prefer a single-payer system.
THIS ARTICLE MENTIONS NOTHING ABOUT MY HEALTH INSURANCE....
here's an interesting read: http://en.wikipedia.org/wiki/Betsy_McCaughey_Ross
On February 9, 2009, McCaughey wrote an opinion piece for Bloomberg.com in which she posited that the 2009 stimulus bill was "dangerous to []our health".[6] She claimed that the stimulus bill would cause a newly created office to "monitor treatments to make sure your doctor is doing what the federal government deems appropriate and cost effective" which was, in essence, "enforcing uniformity." The portions of the text to which she cites, however, do nothing of the sort. Sec. 3001(b) of the bill, which sets forth the "purposes" of the substantive provisions, does not in and of itself do anything but set forth the reason for the substantive provisions.[7] The bill gives the Office of the National Coordinator for Health Information Technology no duties to review actual treatments but only to establish standards for a technology infrastructure that would allow doctors to better guide their patients' treatments and to ensure that doctors are given the appropriate tools to establish a proper course of treatment.
The "new position" to which McCaughey referred is the Office of the National Coordinator for Health Information Technology (ONCHIT) This position was already established on April 27, 2004, by President George W. Bush, under Executive Order #13335 [8], and was therefore not a newly created office. Regarding the duties of the ONCHIT, the draft House version of the Bill required, in Title XXX Section 3001[9], that the National Coordinator ensure that medical records meet certain technical standards to protect privacy, ensure physician office records can be communicated with local hospitals to prevent incompatibilities and inefficiencies, and other such technical requirements. The National Coordinator is also tasked with ensuring that the public has the opportunity to participate in the establishment of technical standards to ensure that the process be open, and promote competition in the private sector for health information technology. The Bill thus assigns the National Coordinator a technical role analogous to that of the FCC, which may define the technical standards to ensure that cellphones operate within a system, but has no role in determining the content of speech on cellphones, or how customers choose to use them.
McCaughey's claims that the National Coordinator's office was a "new office" that would control medical treatment was propagated extensively through the media as Rush Limbaugh, Fox News and the Wall Street Journal repeated McCaughey's interpretation of the Stimulus Bill language.
Actually, Executive Order (EO) 13335[2] states: "Section 1. Establishment. (a) The Secretary of Health and Human Services (Secretary) shall establish within the Office of the Secretary the position of National Health Information Technology Coordinator." (emphasis supplied). EO 13335 established "the position," not the "Office." In contrast, the Stimulus bill states, on page 441, ‘‘SEC. 3001. OFFICE OF THE NATIONAL COORDINATOR FOR HEALTH INFORMATION TECHNOLOGY. ‘‘(a) ESTABLISHMENT.—There is established within the Department of Health and Human Services an Office of the National Coordinator for Health Information Technology (referred to in this section as the ‘Office’). (Emphasis supplied).
It is a meaning with a distinction. A "position" is a job. It's one person. "Office," on the other hand, refers to:
Noun 1. federal office - a department of the federal government of the United States department of the federal government, federal department government department - a department of government [3]
Moreover, the "position" created by President Bush was to, in Section 3 (v) "Not assume or rely upon additional Federal resources or spending to accomplish adoption of interoperable health information technology"; In contrast, the Office created in the Stimulus bill provides considerable funding:
$700,000,000 for comparative effectiveness research: Provided, That of the amount appropriated in this paragraph, $400,000,000 shall be transferred to the Office of the Director of the National Institutes of Health (‘‘Office of the Director’’) to conduct or support comparative effectiveness research: . . . In addition, $400,000,000 shall be available for comparative effectiveness research to be allocated at the discretion of the Secretary of Health and Human Services (‘‘Secretary’’): Provided, That the funding appropriated in this paragraph shall be used to accelerate the development and dissemination of research assessing the comparative effectiveness of health care treatments and strategies, including through efforts that: (1) conduct, support, or synthesize research that compares the clinical outcomes, effectiveness, and appropriateness of items, services, and procedures that are used to prevent, diagnose, or treat diseases, disorders, and other health conditions; and (2) encourage the development and use of clinical registries, clinical data networks, and other forms of electronic health data that can be used to generate or obtain outcomes data:(pages 173-175 of the Stimulus bill; see note 7 below).
The previous writer also indicated that "The bill gives the Office of the National Coordinator for Health Information Technology no duties to review actual treatments." Obviously, he or she was mistaken, as demonstrated in the preceding quote.
Here’s an interesting commentary on what we might expect in the coming months in regards to the dollar and gold:
http://www.kitco.com/ind/willie/feb052009.html
For anyone living in a remote approximation of reality, here is a link to the cheapest gold & silver dealer i could find on the internet -- BY A LONG SHOT.
The Tulving Company.
I got my last batch of silver for something like $3 less PER OUNCE (and i bought some 500 ounces) than the next best site on the net (which i think is probably MJPM.com) ...
Anyhow ... you could still probably add some silver to your "portfolio" at less than $14 an ounce, if you went with the 40% "Junk" silver that is Kennedy Half Dollars. Tulving sells them for 60 cents over spot per ounce.
Just a heads up, folks.
Because this fellow is right, baring any more hanky-panky manipulation,
the price of metals is aimed at the moon.
If I opened it now would you not understand?
I'm still holding most of my eggs in one basket - a jr gold explorer that Goldcorp has it's eyes on...I'm waiting on assays (have been for frickin months) before I get out of the markets and into physical gold...might keep some G shares if they scoop up the jr. The latest gold run, and subsequent pop in this jr, has now put me back in the black for my entire portfolio....all of my fall losses have been recovered because I took the time to listen to all of you fear mongerers. It's not fear mongering if it's reality.
Corrections can ALWAYS happen, but i would be terrified that within the next month or two you will be chasing a run away rally in metals. Ironically (or paradoxicaly?) the only time metal really seems to pull back any more these days is during those moments of crisis that SHOULD send the price through the roof.
Look at that chart, PoG hammered after Bear Sterns and Indy Mac collapse ...
only way to justify that (outside of Central Banking manipulation theories) would be to say that institutions viewed the nearterm crisis as a liquidity concern and poured OUT of gold and into dollars in order to position themselves for rough waters in the moment. I tend to think it has more to do with central banks colluding to flood the market to suppress fear on the street. The only thing worse than a serious bank failure would be a serious bank failure combined with a huge spike in the price of gold -- a sort-of signal of the apocalypse, if you will.
Any way,
all that is just to say,
you might want to try and figure out a way to get SOME money in to physical metal, asap.
Of course, we COULD have a serious banking crisis (ok, we WILL have that) followed by a sharp DROP in the price of metals ... but at this point, you are risking missing the boat.
Just my humble opinion.
If I opened it now would you not understand?
I hear ya...I've been mulling this for months...but I've been trading this stock for a couple years waiting for the potential to be realized....I'm 99% convinced it will be a minimum 5-bagger someday....if that happens, I'll be able to afford another 20% on the physical gold
So far he has been spot on.
Check it out now, or go to cnbc.com in an hour or two and dig back through the video archive.
I'm headed out on a 5 hr car ride, so no responses from me.
Go peter go.
If I opened it now would you not understand?
help me understand...how does savings lead to production...? if people simply save, and not spend, who pays for the products produced...?
Sure thing.
I will help you help yourself:
Consumption, Savings, and Economic Growth (i have some disagreements with his statements in the "Q&A" portion of this page, but the basic information is respectable, i reckon)
and then,
Without Savings There Can Be No Economic Growth
and the ultimate rant:
The Assault on Saving
There you go.
Don't take it from me.
Or Schiff.
Read it for yourself.
If I opened it now would you not understand?
umm...ok...
the authors of these articles come off a pretentious pricks...anyway, it seems we have a "which came first, chicken or the egg" type of discussion...
this quote is interesting to me: When we deposit money in the bank, it does not sit there, it is loaned out to borrowers. Those borrowers use those funds to finance various projects they wish to undertake.
hmmm, I guess those projects don't included spending...or do they...?
another one of these articles talks about companies hording there profits...I suppose that's not savings, it's hoarding...
I suppose I'm a happy medium sort of fella...meaning, savings and spending together in proportion is the best...
Look,
you asked me for information, and i gave it to you.
You're dealing with economists. WTF did you think you were going to get.
By and large, they are ALL pretentious pricks, sorta like a good chef, or restaurateur -- it comes with the territory.
So personality assessments aside, i think the point is that savings is the first step in the capital investment process.
Consumer spending only puts profit in the corporate coffers, which in turn becomes shareholder equity, which could then take many paths, but it certainly does not DIRECTLY affect PRODUCTIVITY.
The point these authors are trying to make can be distilled,
and I have just such a distillation for you here, presented to you from our good friends, The Economist -- Rothschild owned publication of the super-elite.
So here it is, plain and simple,
from page 105 of Guide to Economic Indicators (6th edition) by The Economist
Does that clarify ANYTHING for you?
If everyone is spending, and no one is saving, who is providing the money necessary for capital investment?
Spending doesn't produce real growth, capital investment does, and spending has far less effect on capital investment than does saving.
If I opened it now would you not understand?
relax, lady...no need to be a dick about things...forgive me for asking simple questions...sorry if I don't worship your boy Schiff...you post this doom and gloom shit, so expect some questions...
for now I've got my answer...which is "save your money so others can spend it"...
well now it sounds like you're on about the absurdity of the situation,
which surely is so,
but by no fault of Schiff's or of pretentious economists.
No, it sounds like you are taking a jab at the paradox,
but perhaps you aren't quite aware that this sillyness only occurs because of the nature of
fractional reserve banking
in the first place.
To unwind THAT ball of yarn,
you need to "read" (audio book) the following:
The Case Against The Fed by Murray Rothbard.
I think you will understand a WHOLE lot more about how ridiculous The Federal Reserve system is -- and fractional reserve lending, more generally -- once you get through with that.
It shouldn't take more than 10 hours, i don't think.
If I opened it now would you not understand?
Good stuff.
Check it out.
If I opened it now would you not understand?