Peter Schiff: Hyperinflation Risk High, Stocks Will Crater - MoneyNews 8.18.09 1/3

[flagship21]

China will perge the excesses of the US economy

[BlueSkies360]

Thanks for posting!

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[cashfornothing]

Peter makes sense as always.

[deltapunk21]

We didn't have a bull market in the late 90's we had a horrible market with tremendous inflationary mirage and a complete and utter disaster.

[herbs814]

(dow/gold) has fallen by 80% in the last ten years... and may fall another 80-90% from here.

[nolan067]

dow/gold has fallen by 80% in the last ten years?

How do you figure?

[herbs814]

(dow/gold) circa 1999 ~ 44:1

(dow/gold) circa 2009 ~ 8 or 9 to 1

Stocks have lost 80% of their value in real terms. All of the "gains" in the dow or S+P have been artificially created by printing money with no value. It is merely because of the weakness of the dollar. Thus the Dow buys is worth less in gold and less in oil and less in real goods.

do an image search for "dow gold chart" or "dow gold ratio" and you'll see a steep fall from the high of 1999-2000 that has never been retested.

[nolan067]

thank you.

I had you confused. I htought you said that gold had lost 80% of its value in its last ten years.

I agree with all you said.

I invest in gold and silver and have high hopes for it in the future.

Gold should be 1:1 with dow one day soon,

the more they run the printing presses, the worse it becomes.

[Nintendomanwill]

@herbs814

Exactly, credit expansion doesn't cause an even rise in prices but due to its channelled nature, causes certain indices (eg housing) to rise, and this just couldn't happen with market money and free market banking sans central banking and fraudulently low interest rates driving FRB.

It's not that Keynesian economics doesn't work: it's that it DOES, it CAUSES the boom, it's a perfect way of destroying savings while increasing consumption.

[Nintendomanwill]

@herbs

Oh yeah, also the malinvestment as well as caused by businesses planning to use resources that do not exist (yet, but will in money whose printing will devalue that money anyway) i.e. running before they can walk before of distortions in the capital structure, there is also too much investment on non-profitable stocks (as in the late 90s) when credit expansion channels an apparent boom in those areas.

Keynes was a genius, he explained EXACTLY how to fuck up the economy with force/fraud!

[herbs814]

@Nintendomanwill

Keynes was a diabolical genius; a mad saboteur.