Peter Schiff: Right On The Crisis, Wrong On Investing?

I just want to let folks know that last year my investments in my 401k fell 40% so we started researching information on the economic ideas and found Peter Schiff. Because all our money was in an employer 401k and down to almost nothing Europac really couldn't help us at that time. We however did find out from the descriptions of Peter's favorite stocks which ones they were and bought them in our 401k account. Peter's stock picks are up 150% from January 2009 folks. We had sold all our other funds and bought those stocks! One is up 499% from when we bought.

It is the economic understanding that makes Peter Schiff Right!! Not his negative attitude of the U.S. economy. If the U.S. government would utilize a market model instead of commanding heights, we would see an improvement in the U.S. market, but not without a time of considerable pain.

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jen of TN 12:22PM October 23, 2009

Let's be honest. Schiff never said that the dollar would go to ZERO. However, it will lose much of its value soon. The government can only raise money three ways: 1. Tax it out of the people 2. Borrow it by selling Treasuries with the promise of paying interest on them or 3. print it. Our glorious members of Congress (which, by the way, is the only govt body that can spend money or raise taxes...the president can only either sign the bill into law or veto it)...anyway, since September of last year Congress has now spent 4.4 Trillion dollars and obligated us for another 7 trillion in future years. This year, in order to get the money to spend, the govt must sell 1.75 Trillion in treasuries by the end of the fiscal year which ends on 30 September. This is almost as much money as the surplus that the Chinese have in their bank. The question is: who is going to buy all these treasuries? It is clear that the Chinese and the Japanese aren't going to buy much more. They, along with South Korea and 10 other asian nations just agreed last week to establish a regional reserve of $120 Billion. In addition, China has made currency swaps with other nations. It is clear that they are setting up a regional reserve currency. (By the way, Mr. Shinkle, this is straight up decoupling from the dollar...so Schiff was right again.) The reserve agreement hammered out last week also includes the selling of asian bonds. So, back to the question: Who will buy US treasuries? Europe? Africa? South America? Australia? Certainly not China and Japan...they have so much on their plate with setting up their regional reserve currency. Perhaps Martians or some other Extra-terrestials will buy them?

The answer is: our own central bank (aka the Fed). They will print the money and buy the IOUs (treasuries) from the US Treasury Department. In short, our government is going to have to print trillions. If the dollar does not collapse, it will will be the first time in the history of economics that multiplying the money supply by four, five or six times doesn't result in inflation.

(Can you say Argentina, boys and girls? How about Weimar Republic? Zimbabwe? Iceland?)

Now, I will admit that knowing about sound monetary policy is a bit different from picking and choosing winners and losers in the stock market. However, it is clear that anyone with dollar denominated assets will see their wealth diminish as the dollar loses its value. That is, no doubt, why the Chinese are so concerned about the hundreds of billion in US treasuries that they currently hold. They don't want to see themselves lose their investment because we print so much money. The Chinese know something that it seems you, Mr. Shinkle don't know. And they are worried about it. You probably don't have billions invested in US treasuries so you don't have to worry about it. They do.

My bet is on Peter Schiff, Gerald Celente, Jim Rogers and Glenn Beck. They know something about money.

Ronald P. Reitz

Ronald P. Reitz of FL 9:44PM May 09, 2009

This is another frustrating example of the "I want it now!" mentality that has led America in the crisis we are dealing with today. Many people, mostly "gamblers" expect to position themselves in order to cash in as fast as possible without an actual analysis of the timing of markets and worlds economies in general. This bubble that is bursting did not start in 2007 or 2008, or even during the Tech bubble. It is the continuation of years and decades government interventionism in the markets, starting evidently with the creation of the FED in 1913. The understanding of the historicity of this current crisis can only allow an intelligent person to conclude that the world is not going to "crash" in 24 hrs! Markets take time to function and if you want to check inflation, just go in your local grocery store!

Added to the fact that most if not all countries around the world have embraced the keynesian principles of increasing the money supply during crisis; it makes it even more difficult to tell which country will go down first!

But the fact are quite simple in my opinion: The usa has nothing to show but its enormous debt and deficits of all sorts. There manufacturial foundation has been destroyed, the government is too big and the army swallow to much money with its bases around the world.

It is not a good picture whether you are an investor or someone who is just trying to figure out his short term future. Are we going to "create" a world war in order to save our head out of the impending depression?

But, when you are rational, you must agree with Peter schiff and the Austrian school of economics.

Obviously, if you invest in the US, you are taking an enormous risk for the fundamentals are inexistant for a long term gain. Maybe looking elsewhere isn't such a bad idea after all.

Imhotep of MD 3:31PM March 21, 2009

If you invested in Schiff's companies you may be broke. Look up Babcock Power, Sterling Mining, Oz Minerals, Minara Resources. These are Schiff stocks, so how much dividend does a bankrupt company pay folks? How does a bankrupt stock coming roaring back when the big dollar collapse that Schiff speaks of comes? Get real, if you believe in Schiff invest with him. He is a sorry investor

Brian of OR 11:56PM March 02, 2009