Author Topic: Peter Schiff: "We're in the Early Stages of a Depression"  (Read 2021 times)

Soul Crusher

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Peter Schiff: "We're in the Early Stages of a Depression"
« on: August 16, 2010, 11:19:36 AM »
Peter Schiff: "We're in the Early Stages of a Depression"
By Jennifer Schonberger | More Articles
August 9, 2010 | Comments (58)

http://www.fool.com/investing/general/2010/08/09/peter-schiff-were-in-the-early-stages-of-a-depress.aspx


________________________ ________________________ _____________________


In August 2006, Peter Schiff, president of Euro Pacific Capital, offered what many considered to be an outlier prognosis for the economy: The exuberance would end, real estate prices would crash back down to earth, and consumers would revert to saving from spending. In short, a deep recession was in the works.

As outlandish as he may have sounded at the time, he was right. Four years and the worst recession since the Great Depression later, Schiff stands alone again with a bleaker diagnosis for the economy: an inflationary depression.

In an interview, Schiff, president and chief global strategist of Euro Pacific Capital, a candidate for U.S. Senate in Connecticut, and author of the new book How an Economy Grows and Why It Crashes, said he thinks the government's policies -- massive fiscal stimulus and a zero interest-rate policy -- have put the U.S. on a track for a collision course.

As such, to protect one's wealth, Schiff recommends divesting U.S. assets and dollar-denominated debt in favor of emerging markets. He likes natural resources economies like Australia, Norway, and Canada.

Companies like Rio Tinto (NYSE: RTP) or BHP Billiton (NYSE: BHP) are examples of companies that offer exposure to natural resources economies.

He also favors exposure to precious metals -- particularly gold.

With that, investors might want to consider exposure to gold miners like Barrick Gold (NYSE: ABX) and Newmont Mining (NYSE: NEM) or exchange-traded funds SPDR Gold Trust (NYSE: GLD) or iShares Silver Trust (NYSE: SLV).

Here is an edited transcript of our conversation.

Jennifer Schonberger: What's your take on the state of the economy now?

Peter Schiff: We're in the early stages of a depression now. It's going to be a horrific experience for average Americans who are going to watch their standard of living plunge. The cost of living is going to escalate dramatically. We are going to see soaring prices for the basic necessities of life, like energy, clothing, and other things. Education and health-care costs are going to continue to spiral out of control. Millions of more Americans are going to lose their jobs, and all of us are going to lose our freedoms and our rights. As the government gets bigger, it tries to end the crisis; but its policies are creating, perpetuating, and making it worse.

The sad fact is these policies are going to wipe out the middle class. They're going to wipe out the poor; they're going to wipe out retirees. Accumulated savings is going to be blown.

There is no economic recovery. All we did is spend more borrowed money. We dug ourselves into a deeper hole, and now we're in even more trouble than before Obama ascended to the presidency.

Schonberger: You've got the new book out on how an economy grows and why it crashes, and as you noted, you feel that this recovery is "fake." Certainly, it's slowing down as the stimulus is beginning to fade. How do we revive the economy for real growth and create jobs?

Schiff: We have to stop stimulating. We have to shrink the government and cut government spending dramatically. The reason the economy is so screwed up is because government regulations and subsidies have created a slowing economy. They have prevented market forces from operating the way they need to be. They have prevented an efficient allocation of resources. We need to rebuild our manufacturing base. We need to reindustrialize. We can't do that without the resources, without the savings, without the investment.

They've created a nation of spenders, speculators, and consumers, and they've destroyed the savers, producers, and the investing class that built this country. We're moving from a market-based economy to essentially a planned economy. We're abandoning capitalism and embracing socialism. That's a recipe for disaster.

Schonberger: Sans fiscal stimulus and the Feds' intervention -- quantitative easing -- do you think we would even have GDP [gross domestic product] growth?

Schiff: We don't have economic growth. GDP is going up, but that's not a sign of any economic growth. All we're measuring is what we're consuming. But we are paying for it by going into debt. As a nation, we're in worse shape because of the GDP growth. The real economy is shrinking. All we're doing is borrowing money from economies that are growing, like China, and we're spending their money. But that's going to stop.

Schonberger: You mentioned that you think we're in the early stages of a depression. When do you think we begin to see a double dip back into a recession?

Schiff: We've already seen that. GDP is decelerating now as the stimulus is wearing off, and the hangover is setting in. By next year, I believe we'll be back in recession territory, as far as the GDP numbers.

Schonberger: If we continue on the current policy path, is there a chance the U.S. is facing a Japan scenario where we're in a slow-growth, deflationary malaise?

Schiff: No. There's no chance of us getting off as easy as Japan. Our situation is considerably worse. We're going to have runaway inflation and recession simultaneously. I call what we're going to have an inflationary depression, which is the worst possible depression you can have.

Schonberger: So even though you think we're in for a depression, you're not concerned about deflation?

Schiff: No. We're going to have falling stock prices and falling real estate prices. That's not deflation. Prices are rising. Oil is at $82 a barrel and rising. The Japanese yen is at a 15-year high against the dollar. The government is printing a bunch of money. These are signs of inflation. Deflation is healthy. That's what we need. Unfortunately, inflation is what we're going to get thanks to the Fed and government policy.

Schonberger: Then it's safe to say you think the Fed should not be following the zero-interest-rate policy right now?

Schiff: No. We need higher interest rates. Rates are much too low. Low interest rates are part of the problem; they're not part of the solution.

... We're repeating the same mistakes of the [Alan] Greenspan Fed except on a bigger scale. Obama is repeating Bush's mistakes. Bernanke is repeating Greenspan's mistakes. So their mistakes will do even more damage to our economy than the mistakes of their predecessors.

Schonberger: So how should investors preserve their wealth in this environment?

Schiff: By getting out of U.S. assets entirely, by not owning any dollar-denominated debt. Don't own Treasuries or bonds. Invest in the economies that are doing it right. Invest in emerging markets -- Southeast Asia, China. Invest in natural resources economies like Australia, Norway, and Canada. I invest in commodities and precious metals. Just get out of dollars.

Schonberger: So you're still buying gold, which is currently trading around $1,200 an ounce. Where do you see gold going from these levels?

Schiff: There's no limit to how high gold prices will go. They will rise many times from here --thousands and thousands of dollars per ounce higher. People will be shocked.

It's surprising to me that gold is still as cheap as it is. I just know it's going higher, and eventually it's going to go ballistic. ...

Schonberger: Given your outlook for the U.S. economy, do you think the U.S. stock market is poised to crash?

Schiff: No. I don't think it's going to crash in nominal terms -- the way we think about it -- because the government has already created inflation. All that money creation will put a floor under nominal stock prices. But I do believe that the Dow Jones will fall down to about one ounce of gold, which is an 80% or so decline from where it is right now. In real terms, U.S. stocks are going to get killed. But in terms of dollars that we create out of thin air, no, I'm not looking for Dow 1,000 or Dow 2,000. But I am looking for the equivalent, loss of purchasing power, in terms of an ounce of gold.

What do you think? Weigh in below in the comments box.

Soul Crusher

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Re: Peter Schiff: "We're in the Early Stages of a Depression"
« Reply #1 on: August 16, 2010, 11:23:29 AM »

Schiff: We have to stop stimulating. We have to shrink the government and cut government spending dramatically. The reason the economy is so screwed up is because government regulations and subsidies have created a slowing economy. They have prevented market forces from operating the way they need to be. They have prevented an efficient allocation of resources. We need to rebuild our manufacturing base. We need to reindustrialize. We can't do that without the resources, without the savings, without the investment.


________________________ ________________________ _________

In other words, do the opposite of what the Obama Admn is doing. 

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Re: Peter Schiff: "We're in the Early Stages of a Depression"
« Reply #2 on: August 16, 2010, 11:42:58 AM »
consider your sources

Jennifer Schonberger Conservative Republican Political Columns


Come on 3333 you know i aint gonna let you off the hook that easy

Straw Man

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Re: Peter Schiff: "We're in the Early Stages of a Depression"
« Reply #3 on: August 16, 2010, 11:48:29 AM »
Hey 333 - why do you think Schiff lost so bad in his Senate bid

Vince McMahons wife got more that 2x the votes he did

Soul Crusher

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Re: Peter Schiff: "We're in the Early Stages of a Depression"
« Reply #4 on: August 16, 2010, 11:49:30 AM »
consider your sources

Jennifer Schonberger Conservative Republican Political Columns


Come on 3333 you know i aint gonna let you off the hook that easy

My freaking source was Schiff himself.    Geez are you dense.  Or are you still reading ther bogus crap from hacks like Krugman, Herbert, Frank, and Rich? 

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Re: Peter Schiff: "We're in the Early Stages of a Depression"
« Reply #5 on: August 16, 2010, 11:51:31 AM »
My freaking source was Schiff himself.    Geez are you dense.  Or are you still reading ther bogus crap from hacks like Krugman, Herbert, Frank, and Rich? 


Who wrote this article?

Neurotoxin

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Re: Peter Schiff: "We're in the Early Stages of a Depression"
« Reply #6 on: August 16, 2010, 11:52:30 AM »

Peter Schiff: "We're in the Early Stages of a Depression"
By Jennifer Schonberger | More Articles
August 9, 2010 | Comments (58)

http://www.fool.com/investing/general/2010/08/09/peter-schiff-were-in-the-early-stages-of-a-depress.aspx




i could be wrong but current market dynamics/action resemble that of a coming depression....not a lingering recession.

time will tell...



-NT



Schiff must be reading my thread.



-NT


Soul Crusher

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Re: Peter Schiff: "We're in the Early Stages of a Depression"
« Reply #7 on: August 16, 2010, 11:54:06 AM »

Who wrote this article?

These are direct quotes fool.  If it was your boy Obama writing it (which would be a first), it would be just as valid in my mind since these are direct quotes as reported even on HP. 

Face it, everything this idiotic regime has done for the last two years has been nothing short of a disaster on all levels. 

Soul Crusher

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Re: Peter Schiff: "We're in the Early Stages of a Depression"
« Reply #8 on: August 16, 2010, 11:56:20 AM »
Hey 333 - why do you think Schiff lost so bad in his Senate bid

Vince McMahons wife got more that 2x the votes he did

1.  McMahon ran a great campaign while Peter did not. 

2.  McMahon is a very attractive candidate in her own right.

3.  $$$$ - she spent boat loads of money more than anyone else. 

4.  CT is more liberal than maybe were ready for Peter.

Either way, I hope Linda beats that dope blumenthal silly.   

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Re: Peter Schiff: "We're in the Early Stages of a Depression"
« Reply #9 on: August 16, 2010, 11:56:20 AM »
My freaking source was Schiff himself.    Geez are you dense.  Or are you still reading ther bogus crap from hacks like Krugman, Herbert, Frank, and Rich? 
this supposed to be smart money man schooled on politics too...he lost to the broad on WWF Wrestling

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Re: Peter Schiff: "We're in the Early Stages of a Depression"
« Reply #10 on: August 16, 2010, 11:58:47 AM »
this supposed to be smart money man schooled on politics too...he lost to the broad on WWF Wrestling

The same "broad" who was the CEO of a billion-dollar company....THE HORROR!!!

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Re: Peter Schiff: "We're in the Early Stages of a Depression"
« Reply #11 on: August 16, 2010, 12:00:06 PM »
The same "broad" who was the CEO of a billion-dollar company....THE HORROR!!!


Bloomberg...you dont like him right....biggity boom...oh the horror..

3333 we can go all day...im not at the hospital today..hahahahahahahaha

Soul Crusher

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Re: Peter Schiff: "We're in the Early Stages of a Depression"
« Reply #12 on: August 16, 2010, 12:03:15 PM »
this supposed to be smart money man schooled on politics too...he lost to the broad on WWF Wrestling

You have got to be kidding with that nonsense.  Watch this and grow up.  No teleprompter, no cue cards, no hack kneed nonsense, no hope and change, no drivel like you bought into in 2008 - just sheer truth for an hour straight.  



and for the Home Run Mal - here you go.  




THE DAY YOU OR ANY OTHER FAR LEFT LIBERAL CAN SHOW ME A LEFT WING ECONOMIST EVEN COME CLOSE TO HOW CLOSE PETER WAS IN THESE CLIPS, I WILL LISTEN  TO YOU OR THEM.  UNTIL THEN - SSTTFFUU!!

Neurotoxin

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Re: Peter Schiff: "We're in the Early Stages of a Depression"
« Reply #13 on: August 16, 2010, 12:04:20 PM »
These are direct quotes fool.  If it was your boy Obama writing it (which would be a first), it would be just as valid in my mind since these are direct quotes as reported even on HP. 

Face it, everything this idiotic regime has done for the last two years has been nothing short of a disaster on all levels. 

its taken decades to get in this mess. (no obama fan)

nixon eliminating the gold standard was the beginning.



-NT

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Re: Peter Schiff: "We're in the Early Stages of a Depression"
« Reply #14 on: August 16, 2010, 12:04:27 PM »

Bloomberg...you dont like him right....biggity boom...oh the horror..

3333 we can go all day...im not at the hospital today..hahahahahahahaha

other than this mosque issue, I do like bloomberg.  I think he is dead wrong on this, but otherwise, he has done a good job as mayor.  

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Re: Peter Schiff: "We're in the Early Stages of a Depression"
« Reply #15 on: August 16, 2010, 12:08:11 PM »
its taken decades to get in this mess. (no obama fan)

nixon eliminating the gold standard was the beginning.



-NT

you are high...obama caused everything..in some round about way...shit i just farted during the obama administrations reign of terror...i think i have had an increase in farts...in the last 8 months...and obama is in office...is there a connection...im just sayin

Bindare_Dundat

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Re: Peter Schiff: "We're in the Early Stages of a Depression"
« Reply #16 on: August 16, 2010, 12:12:22 PM »
this supposed to be smart money man schooled on politics too...he lost to the broad on WWF Wrestling

She spent $300 of her own money per vote. She had much more media coverage. 46% of voters didn't even know who Schiff was. I don't even understand what point you are trying to make with your statement, is it his fault that most Americans are about as stupid as you?

Please tell us what the Obama administration has done that is so drastically different from past administrations to improve the economy?

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Re: Peter Schiff: "We're in the Early Stages of a Depression"
« Reply #17 on: August 16, 2010, 12:15:41 PM »
She spent $300 of her own money per vote. She had much more media coverage. 46% of voters didn't even know who Schiff was. I don't even understand what point you are trying to make with your statement. Is it his fault that most Americans are about as stupid as you?

Stupid as me? Why do you say that...what about my posts show lack of intelligence.

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Re: Peter Schiff: "We're in the Early Stages of a Depression"
« Reply #18 on: August 16, 2010, 12:16:38 PM »
its taken decades to get in this mess. (no obama fan)

nixon eliminating the gold standard was the beginning.



-NT

Not saying he caused the problem, but what he has done has grossly made the issue far worse than it was in 2008.  Since 2008 - we have a higher deficit, higher debt, higher UE, etc, with no hope whatsoever of a turnaround any time soon.  
  

Neurotoxin

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Re: Peter Schiff: "We're in the Early Stages of a Depression"
« Reply #19 on: August 16, 2010, 12:18:38 PM »
schiff spoke the truth and lost. american voters do not embrace facts.

ask ron paul.


-NT

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Re: Peter Schiff: "We're in the Early Stages of a Depression"
« Reply #20 on: August 16, 2010, 12:19:25 PM »
Not saying he caused the problem, but what he has done has grossly made the issue far worse than it was in 2008.  Since 2008 - we have a higher deficit, higher debt, higher UE, etc, with no hope whatsoever of a turnaround any time soon.  
  

agreed.


-NT

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Re: Peter Schiff: "We're in the Early Stages of a Depression"
« Reply #21 on: August 16, 2010, 12:19:40 PM »
Stupid as me? Why do you say that...what about my posts show lack of intelligence.

\

The fact that you blame him over the ignorance of the voters  speaks volumes.

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Re: Peter Schiff: "We're in the Early Stages of a Depression"
« Reply #22 on: August 16, 2010, 12:20:03 PM »
Hey 333 - why do you think Schiff lost so bad in his Senate bid

Vince McMahons wife got more that 2x the votes he did

I live in CT and it had everything to do with spending. She's been dumping millions of her own money into her campaign and Schiff screwed up by only campaigning in Fairfield County. He just wasn't as big of a name as the other two.


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Re: Peter Schiff: "We're in the Early Stages of a Depression"
« Reply #23 on: August 16, 2010, 12:22:02 PM »
I live in CT and it had everything to do with spending. She's been dumping millions of her own money into her campaign and Schiff screwed up by only campaigning in Fairfield County. He just wasn't as big of a name as the other two.



Personally, I like Linda McMahon.    She is a business person who grew a business in the private sector, understands the economy, has strived in difficult times, and comes across as very intelligent and articulate.

I would prefer her over a life long govt, hack like Blumenthal any day.   

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Re: Peter Schiff: "We're in the Early Stages of a Depression"
« Reply #24 on: August 16, 2010, 12:23:46 PM »
Personally, I like Linda McMahon.    She is a business person who grew a business in the private sector, understands the economy, has strived in difficult times, and comes across as very intelligent and articulate.

I would prefer her over a life long govt, hack like Blumenthal any day.   

Should see the CT papers. They've been spending a lot of time trying to victimize Blumenthal and play down all the lies he's been caught in recently. McMahon seems solid but CT is democrat heaven so it's going to take a lot for Blumenthal to lose.