Peter Schiff: Love Him Or Hate Him?

Peter Schiff's recent emergence on the national economic stage has been quite a polarizing event. You either love him or hate him. You may have seen Schiff's latest

exploring how he predicted our current economic crisis all those years ago. He defended his positions on-air while being attacked by Ben Stein and Art Laffer, who both believed things would not get this bad.

Schiff has also been very vocal against Obama in recent weeks for his new economic plans. Keep in mind, this is coming from the man who served as economic advisor to Ron Paul in his 2008 campaign. Make of that what you will. As an accomplished author and president of Euro Pacific Capital brokerage firm, Schiff sticks very closely to the sometimes unpopular Austrian School of Economics.

Taking all of this into account, the real question here is what side of the Peter Schiff fence do you fall on?

 

Doesn't strike me as the type that just got lucky. He called it step for step as Lynn said. Really interesting.

 

it's amazing that this guy called it before everything unfolded. watching the youtube videos of him on the networks goes to show that you can't trust everything the so-called analysts are saying and that you really must do your homework. i was talking to a lehman banker back in september and he warned my about how the auto industry would be the next to suffer, and look what's happening!

 

for refusing to listen to people like Schiff and others from the Austrian school. The American public's refusal to accept any personal responsibility (evidenced by a majority vote for Obama) is plunging the country into another depression.

The sad thing is, I'm sure Ron Paul, Peter Schiff, and other canaries in the coal mine aren't gratified by being right. I imagine they wish people would have listened and this crisis had been averted.

 
Edmundo Braverman:
The sad thing is, I'm sure Ron Paul, Peter Schiff, and other canaries in the coal mine aren't gratified by being right. I imagine they wish people would have listened and this crisis had been averted.

Totally agreed.

Lewis recently wrote another article on Wall Street ... there's mention of this guy named Steve Eisman. Apparently he saw it coming as well, just not getting as much coverage as Peter Schiff. In fact i think many people saw it coming.

Very insightful article, it's called The End of Wall Street's Boom i think. I have the article on pdf, pm if interested.

 
Best Response

he is the man....

...b/c his understanding of the economic fundamentals that would lead to the real estate crash and credit and financial crisis was spot on; when noone else would listen to him...

he is not the man...

...b/c he is a gold bug/hack/donk/whatever you want to call it.

... with all this great foresight, rather than killing it in 07-08 he lost money...

...any financial adviser who gets on TV and does the hard sell for his book at every opportunity ultimately has to get labeled as a hack...

now he predicts the deterioration of the US dollar, and calls for investing in gold/commodities and asian equities (less japan... intersting play since i just saw today that China is expected to go to 0% gdp growth next quarter)... lets see how he does round two...

 

The neoclassical (theoclassical) economists, both conservative (Monetarists like Milton Friedman and Alan Greenspan) and liberal (neo-Keynsians like Paul Krugman) are the people that missed the 2008 meltdown. Their unrealistic models of the economy should be discredited for their massive failure, but they are still the dominant school out there amongst university economics departments, academic journals, think tanks, businesses, pundits, and government.

Everything else can be classified at heterodox economics. Many many many people in the umbrella "heterodox" classification predicted the 2008 meltdown... NOT just the Austrians. For example, the post-Keynsians also did. Even some Marxians (NOT Marxists! those are different things). And then a few other prominent individuals such as Steve Keen of Australia that don't really fit into any category (though I suppose he's probably most related to the post-Keynsians). Only the Austrian school, amongst the heterodox economic schools, doesn't believe in empirical evidence, mathematical models, or predictions. That is why I don't trust them. I will grant you they predicted 2008... but they are one amongst many! Plus Peter is 100% gloom and doom all the time. Using that strategy you're guaranteed to be on the right side of the economy at least half the time.... so I don't see that as a big accomplishment.

Steve Keen fundamentally disagrees with Schiff on Peter's hyperinflation prediction. While both the Keen and Austrian schools argue that debt is a problem, Keen tends to see personal debt as prominent. Keen says the theoclassical response (lowering interest rates and stimulation) won't work because of personal debt. People are de-leveraging. He thinks we are much closer to deflation rather than inflation. Keen's criticism of Schiff is that Schiff doesn't understand how money is created. The federal reserve doesn't just shove money in people's hands hot off the press... instead what happens is that credit must be demanded first. People are not demanding credit because they're trying to pay down their existing debts (the personal debt to GDP ratio is at a record high: 300%!... traditionally it's been about 160%).

So, based on my concept that Austrians such as Schiff are just negative all the time (even a broken clock is right twice a day!) and that their theory is more like a religion than a theory (not subject to verification with facts and empirical evidence (how convenient!) according to the Austrians), I'll go with just about ANY of the other schools that predicted 2008... including individuals such as Keens, and post-Keysians, etc. Here's a primer from Keen on how money is ACTUALLY created:

http://www.debtdeflation.com/blogs/2009/01/31/therovingcavaliersofcredi…

 

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