The FED won't let the dollar collapse? Like all the other central banks that allowed hyperinflation to destroy their country's currency? I won't hold my breath
I think that right now this administration is working in the interest of places like the UK and places that also have universal healthcare. They want the dollar to depreciate so that canadians and europeans will move here with newly appreciated buying power and scoop up these houses that Americans can't buy because they're so deep in debt. And if Obama passes Healthcare (Probably) that's exactly whats going to happen and theres almost nothing that can be done about it. Buy gold.
Wall street will fall, Rev 18:11 And the merchants of the earth shall weep and mourn over her; for no man buyeth their merchandise any more. Rev 18:15 The merchants of these things, which were made rich by her, shall stand afar off for the fear of her torment, weeping and wailing,
I am absolutely amazed how such stupidity is possible?! Shiff explained them with simple words what exactly is wrong - even complete idiots got it but not the us journalits in the studio! With such people USA is doomed!
He borrowed from the Chinese enough money to build a country, will return a lot of toilet paper. Sounds like a good deal to me. That's what we should do. Borrow a sum of money that buys a house and return a sum that buys a box of matches. At the end, show a middle finger to the banksters and that's it.
But that sum of money also comes out of your pocket. If we have massive inflation during a recession you can expect no increase in salary. This means less purchasing power for you. When you talk about a good deal for us, it's not even us that's spending the money. It's the government.
In the first place the price on gold is not determined by the market. This market sits in London and meets twice a day to set the price of gold. For dorks, here is the link: en(dot)wikipedia(dot)org/wiki/Gold_fixing. Secondly, the readers of this blog have to realize that Bernanke's goals may not coincide with our goals. Stop saying he is wrong. For you, he is. For banksters he is doing everything right.
Shiff is wrong when he tells that FED has flooded ecconomy with dolars, yes FED printed a lot of them but banks keep those notes as reserve. Granted if they start to lend them all hell will brake loose but for now there is no hyper inflation it's the anticipation of inflation (banks lending FED money) that makes people buy gold.
Do you really expect the banks to sit on the money?
People are begging for money, It is only a matter of time before the Government interferes and tells the banks to loan out the money at a very low interest rate.
Schiff is right and has been all along. Inflation is printing more currency and devaluing it. It's being devalued now. Price inflation is a different story, but we will see that too. Really, we are already. During this huge deflationary recession, what prices came down? They're still creeping up and I'm seeing far less items with very good sale prices at the grocery stores. Now, they'll be taxing the heck out of those with anything left. They're setting it up. We haven't seen the worst yet.
With this kind of logic we could say that gold is inflationary money because there is a lot of it underground. Just the simple fact of money printing doesn't make prices go up. Anyway fractional reserve banking creates much more money than FED and for the time being banks are being paid by FED to keep reserves thus stop money creation. We just don't know what is going to happen for example implementing 100% reserve system would justify all that printing without inflation.
As the fed continues to inflate the dollar, real wages are actually going down, as the wages earned don't buy as much. This has not fully emerged and hit the majority of Americans in the face, but the foundation of this is already in place, and as we move forward in the future, you will see an increase in defaults on mortgages, car loans, and credit cards.
I wish things were different but we have drunken Kool-aid drinkers at the helm as News Anchors holding back the truth!
Just wait till the bozos outlaw shorting the dollar...they've outlawed shorting before in other areas so why wouldn't they do it? I can see "bank holidays", price fixing, and all sorts of other BS coming from the 70's playbook right before the economic frog croaks.
sometimes I wish Peter was a little more tactful, like with the blond chick, who did make some decent points, albeit Peter was more spot on, but I wish he took more of a teaching approach rather than assume EVERYONE is an idiot. I think people are more receptive to what he has to say if he can be more tactful. But of course we love him because he isn't tactful too...so i suppose I can't have it both ways.
Great video!
The plan for strengthening the dollar was spot on as well.
He loves to go straight to the point doesn't he! :D I'm acting the same way with my budies now, i just assume they don't get what i'm talking about, haha.
I never seen all the people including the guy on the floor all agree so strongly about inflation. It was a pretty good segment.
Up until the great depression, what we call a recession was called a depression and when the war ended they changed the word to recession so nobody got freaked out hearing the word depression.
Now that we are having the great recession, what are we going to call recessions in the future (so they don't get freaked out by the recession word)?
people ran to the dollar to pay of debt caught off balanced they rehedged in other fianaces and bought gold switzerland this year said because of the usa irs going after everyones taxes many investores are storeing wealth in gold because the filthy goverments cant keep there hands off of there money this is a global shift people wake up peter is just one crow of many squawking buy food silver anything prepare and live or you figure it out love you peter keep going peace
Okay, there are multiple problems with tings Schiff said here.
1.) If there's so much inflation, then why are commodity prices like those of oil, industrial metals, etc, other than gold much lower than last summer? Are any of you paying $4.40/gallon for gasoline? And, why are interest rates low going out three and four years?
2.) If more central banks are waiting for a pullback to buy gold, doesn't that mean they think it's expensive? And it is very expensive right now.
3.) Americans assume that officials in other countries issue these dollar warnings to try to get us to defend the dollar to prop up their dollar reserves. That's not what's happening. Every country complaining or worry about the dollar have big trade surpluses with us. They all have export-led growth models. Germany, South Korea, China, India, etc. If the dollar goes up for those without currency pegs, we buy less of their stuff and sell more of ours. each dollar buys less of their stuff.
For those countries without dollar pegs, such as Germany, the effects are that straight forward. For counries with dollar pegs like China and India, a rising dollar helps insure that the supply inputs they import, such as oil and metals, will remain low, and inflation with respect to the dollars they already hold. They hold too many dollars, due to the artificially low peg which means their supply of dollars exceeds natural demand. Workers there work longer hours for less pay. China wants it.
This point is exactly correct Zeldovich. Too many people forget, other countries make moves that suit them best politically, not economically.
However, this doesn't change the fact that, economically Peter Schiff is correct. He's expecting other countries to act economically, instead of politically, and this is definitely an error on his part.
As far as prices not meeting last years highs, that has to do with lowered demand. Yes, some basic theory still applies even in a political economy.
I agree, but with a slight change. Governments will do what do what suits them best politically. Private citizens have no choice. They don't have the power to tax and inflate to subsidizes bad economic choices.
Second, prices are still rising, but falling in other areas. Customer demand has more or less shifted from some bubble activities (except for stocks and commodities) to basic needs. According to Shadow Stats, we have around 8% inflation.
I've been paying the same for products lately but notice getting smaller portions. That isn't inflation(increase of money supply) but it is a direct result of it.
Energy prices, Health care, education, food, hotel fees: immediate-short term needs (or whatever Govt subsidizes, which increases demand over supply, causing shortages and future price rises).
But most new money has flown into stocks, bonds and commodities. When money increases, producer goods go up more and far before consumer goods (Austrian Cycle). Everyone who claims no inflation misses it every time. Watching the CPI for inflation is like watching a race from the finish line.
Energy prices are less than half of their mid-2008 levels, Healthcare always gets about 7% more expensive each year, stocks and bonds are still 25% below the pre-meltdown ranges, and commodiies are about half as expensive as they were in mid-2008. So, you're just factually wrong there.
And I don't watch the CPI, I use the GDP deflator, but keep making assumptions.
A little advance that Austrians imssed was the study of the role of expectations in market bahavior. Increases in PPI cause
First: are you talking YoY or YoY and a half? Second: Are you talking with or without seasonal and hedonic adjustment? Third: despite its absurd aggregation, at least the CPI separates producer goods and Govt spending from consumer goods. The GDP aggregates on top of aggregation on top of aggregation, which is even worse. Then to aggregate even more with aggregation inflation is a recipe for reasoning disaster.
immediate inflation, alter the courses of market participants.
Again, you're factually wrong, and you'll always be behind the curve if you focus on Austrian economics. That is the quivalent to pre-Coperican cosmology.
Austrians don't look at price levels to determine economic distortions. E.g. Mises and Hayek reconized that even though prices in the '20's were stable, we still had inflation since prices were still higher than otherwise would have been because to Fed increased the money supply threefold.
Artificially low rates increases production without enough resources saved, which results in production costs rising. The increased production cost show up LATER in goods produced (PPI to CPI).
Inflation is increase in the money supply, WITHOUT CORRESPONDING DEMAND FOR THE MONEY. Prices rising (or being higher than they would be absent the monetary increase) is the result.
I'm not sure what you're textually screaming here, but if you mean that demand for money doesn't factor into inflation/deflation, then you're wrong. Supply and demand applies to fiat money as well as gold.
And the mere creation of new money, ceteris paribus, is not inflation. That's one of Schiff's claims, which is stupid on the face of it.
The money supply has increased drastically over the past year, yet inflation is very low. Why? The banks are hoarding money. It isn't inflatinary.
Hence, more money creation would get some of that new money into the economy, but not necessarily all of it. It woudl increase the money supply and as long as the velcity of money doesn't exceed that of the economy at full-employment, then there is no inflation.
Banks are running carry trade which lets cheap money into circulation and that's future inflation for sure. And why was there a jump in trade deficit? B/c weak dollar drives import expense up, and that will hit consumers in future. W/ a still weak manufacture industry and yet mass budget deficit, government has no choice but to print more dollar to finance it all, which only exacerbates the situation. Your denial doesn't fly at all.
Well, we'd need interest rates at mroe than -6% just to get the money velocity back to trend, so some carry trade is actually helpful.
And you seem to be confusing domestic inflation with lower exchange rate values..
And having a weak manufacturing base isn't a probelm, considering it just represents a natural shift of output from lower value-added goods to higher. This is known as competitive advantage. Besides, it's not the manufacturing base that's been lost so much as manufacturing
You can "shift from lower to higher" all you want, but if you don't produce enough to support your lavish consumption then you get a problem. And US has a big one w/ all the deficit, national debt, welfare obligations, wars, new spending like universal health care, cap and trade and so on.
Does US produce enough to fund the above. No!! Not when 70% of economy is consumption. They will be funded by perennial deficit, debt, money printing and eventually a currency collapse.
70% consumption doesn't have to be bad.If you take any number of workers and say they initially split their time between production and consumption, increases in the efficiency of production can allow for more consumption without negative consequences, ceteris paribus.
We are NOT discussing time spent on producing & consuming. We are discussing about the balance between the income and expense.
If a guy spends two dollars on every dollar he earns, he is trouble unless he changes the behavior. You can keep rolling on the funny terms of "lower... higher,.. efficiency...", but you still have no solution to the imbalance at the end of the day. You have to either produce more or spend less.
sigh. It should be obvious that rates of expenditure and temporal allocation are one and the same. It's value over time that matters, and that's the same in either case. That's basic math.
If a given number of workers initially spend half their money on consumption and the other half on production, as production gets more efficient, they can consume more and maintain the same standard of living, ceteris paribus.
Well if we really have that many workers producing efficiently like you said then why do we have perennial trade deficit? Why do we have this huge imbalance between import and export? You threw out denial after denial yet hard facts blow them away. The truth is US does NOT produce enough to finance all the spending and consumption. Much of the current unproductive service business will be washed away by marketing force, and US has to rebuild the manufacture base. Ain't pretty but has to be done.
I never said the US economy was entirely like that, but it is to a degree. We have a vastly more efficient economy than China, which is why we're much richer so we work shorter hours, consume more, etc. Some foreign investors do fund some of our consumption, but in terms of countries, they are extending credit to their best customers. Independent investors obviously seek profts. Either way, demand for treasuries has been going up for a year.
It's true we have the most advanced technology while China does lots of low end production, but it doesn't change the fact that the extra productivity from tech edge gets overwhelmed by all the burdens government puts out there including welfare, business tax, war spending, universal health care, cap & trade and so on. The burden is so huge corporates choose to outsource jobs to escape it.The outcome is Americans pretend to be richer by spending borrowed money that they can hardly pay back.
Also I think what people miss about deflation and inflation is the time structure of debt.
Artificially low interest rates usually stimulates long termed debt and purchase of durables goods over short term debt and immediately needed consumption goods.
During a bust, long term debt and assets implode and capital shifts to shorter term debt and consumables. This is because there are not enough savings to sustain long debt and assets, but may be some for short term and consumables.
Well, the problem with the Austrian temporal capital structure perspective is that artificially low rates will lead to inflation, some of which the market reacts to immediately due to a shift in expectations. Hence, you have more of a shift toward current consumption.
@Zeldovich Yes, and because the local factor prices are already high, this means the common people's earnings buy them even lesser things.
A weak dollar is good for the export oriented industries owners (of which there are few alive), bad for everyone else who is currently buying chinese made stuff! Whose side are you on? If you want to make the lives of poor people miserable, this is the way to go.
Trade accounts for only 13% of economic activity in the US. China doesn't have as profound an impact as you may think, despite your rigorous analysis that involves noticing some made in China items in stores. Most American jobs are being lost to automation, not emigration. The same is even true in China.
Is that so? Well gee.. when I go to the store to buy stuff, I always look at the accounts and % economic activity. The price of stuff on the shelves is a mere triviality I should learn to ignore. Correct?
LOL! "American" jobs.. as if the job has a nationalistic affiliation! Now, only if we went back to the days of sickle and hammer, we would all have jobs! How about destroying the railroad and make jobs for people carrying loads on their backs?
I prefer my economic views on reality - not on faulty models of economics. You can continue to make the lives of American poor worse and I will persist otherwise.
Do you know that models have a fundamental problem? i.e. they are not reality! Whatever the model represents must be validated in reality not the other way around.
But its probably a waste of time for some one who is too steep in models to realize they are just models, nothing else.
Everything you do is based on a model. At the very least the models were shaped by evolution. When you walk, your brain has a model for stereotyped walking and gait, with influence from cortical structures to allow for voluntary movement. Any condidence you have that one stimulus is associated with another, you have a model. We only see a sliver of he electromagnetic spectrum, being unable to see radio, infrared, UV, x-ray, or gamma ray bands. How much of reality does this ignore?
ohhh! I guess this is to be expected.. Model based folks fail to realize that models are models not reality and reality is the validation, not the model. Models are good for explaining/teaching about reality, but not for understanding or predicting it. Even with the human brain - there is no particular model that fits a human brain (just one persons brain!) and it is impossible for current science to model a human brain enough to use it as a predictor. Let alone those of 6 billion people!
Very well put. This explains why keysnian central planner advocates are full of shit very clearly. They assume that economics is a hard science that can be calculated; but we all know, human beings are composed of rationality and emotionality. Therefore, we don't know where the demand will be. Governments may take a decision, but all it can do is market technology too late, or too fast; and a complete waste of resources along the way. Free markets are the shit!
Don't pretend you knwo even the first thing about Keynesian economic, If I quize you , I bet you fail. Wanna try?
it's also interesting that you only mention Keynesianism, which I assume is old Keynesianism, versus new,but ignore every other approach in economics that flat disagrees with your luddite views.
I can't possibly change the mind of someone who has a vested interest in the failure of the dollar. The fact that you somehow beleive that you can calculate human behavior just shows how arrogant you are. Which government department do you work at anyway?
I have some very simple logical points to make, then i'll leave you to your pink bunny illusion world.
Hey, I've studied economics for a couple of years (the Keynesian variety), and I'll be frank: There is no accurate model for a free market. Price fixing has done more harm than good (obviously), and anyone who thinks the Fed has done a great job preventing things from getting "worse," are only kidding themselves. At least when it comes to economics, there is no such thing as a "model," and if there is one, it's pure bologne.
Really? Which models have you looked at? Any nonlinear dynamical ones?
And someone has to stop banks from imploding more frequently than they do now. The very existence of a bank as they've always existed threatens the general economic welfare.
People love bubbles. Bank execs and sales people get bonuses, traders get capital appreciation, providers of goods and services get higher earnings, consumers get more credit and more jobs, and politicians get to take credit for the boom.
You're absolutely wrong. You dont even think about things, do you?
The moral hazard arguments don't apply to banks, because the management gets paid much more in many cases for risking breaking the bank rather than doing the right thing.
The same is true of investors. Everyone loves a bubble and so they make large capital gains on the way up.
utubehayter - you have nailed it! Look closer at the FED. It is controlled by the 12 major banks. Inside tose banks is where the Primary Shareholders exist. Find out who they are. HINT: Many of the top 10 are the original shareholders from 1913 and they are NOT American.
Do you know which school of economics you believe in? Let me guess, you learned your economics from a Nobel Laurette who writes for NY Times... right?
Actually, I learned economics from Mark Rush at the University of Florida years ago. I never knew what his political views were. Profesional economists are not ideological, unlike the ignorant, uncleaned masses who don't have a clue about the subject.
I was given the pros and cons of various perspectives.
China only loans us money, because they want to. We don't need them to loan us a dime. We can create all the money we want and spend society down that way.
@Zeldovich gas in ny 3dollars a gallon co2 just past electric bills will double be careful what you ask for when the tsunami hits you will be in shock saying who what where your gone into the ocean of denial gold is cheap rebounding now also gold 1300 by end of year gold real paper is real resell gold for more paper gold cant be printed peace good luck
Oil more than doubled in value. It was $30 a barrel and went up to $80!!! The price of oil is also a function of demand not just how weak the dollar is. If the price relating to demand is falling faster than the dollar is weakening then you have lower oil prices (net).
The goal of a central bank (ideally) is to buy as much gold as they can without influencing the price. If they all just come in and buy it could go to $2000/oz and it might cause panic
So you think oil should be making new highs? Silver is also not making new highs. Silver has an industrial use and part of the price is tied to industrial demand just as part of the price of oil is. The fact that oil ISN'T making a new high just goes to show you how speculative the oil trade was when it hit 150+/barrel. Also the dollar is not making new lows yet. Eur/Usd was at 1.60 we're hovering around 1.50 now.. so commodity prices are lower compared to before because the dollar is stronger.
If we have inflation, then of course it should be making new highs! It did for years before the meltdown! Christ, you can't be that dense.
And you're dead wrong about oil and the dollar, because it's down in almost every currency.
And the fact that oil and other commodities has industrial uses.yet the prices are low means the aggregate demand is down. There's liitle or no inflation and you've not presented a shred of evidence for it.
We do have inflation, just look at the FED's balance sheet. Also just look at the stats themselves, On Nov 18th the Core CPI m/m was reported at 0.2%. So they are reporting inflation. There's your evidence...the governments own numbers.
This will be my last reply, I try to help but you can only help the uninformed so much, I'm a trader by the way that's why i know so much. Also when trading oil we look at the Oil Inventories data that comes out every week. Aggregate demand is down, correct.
No, the baseline is 10 years ago when it was 10 a barrel. Oil went up 14x, went down because of paper barrels lost their value because of the liquidation and are now back to 80 a barrel (8x the price 10YA).
Wow. IN all seriousness, have you been diagnosed with a neurological disorder? How about brain damage?
Of course the baseline isn't 10 years ago! lol Talk about arbitrary. China and India and other developing nations have increased demand dramatically, helping lead to higher prices. wow The baseline should be the last supply/demand equilibrium. Are you a commie?
Inflation was a factor last year, but not this year. Oil is still less than half the price in the summer of last year.
lmao. That's because Schiff's stupid. A simple example is Japan. They greatly expanded their monetary base during the lost decade, yet there was deflatoin, not inflation. The money never made it into the markets, because the banks hoarded it. 20 years later, there's still been no inflation.
The same thing is happening with the Fed now.
I guess Schiff assumes that if banks have access to the money then they'll lend it, but they aren't lending most of it. Have to look at prices, duh.
Japan had a high savings rate. They didn't launder the money through the DoD, expand government, do lucrative stimulus programs and bailout selected corporations. The money gets out of the banks and it is loan to government with interest. U.S. citizens gave money to the banks so they can lend it back to them with interest. Makes no sense brother, step your game up.
Japan had much larger stimulus plans as a % of GDP and multiple ones during the lost decade. I guess you're completely unfamiliar with recent Japanese economics. And Japan's savings rate is much too high for a developed economy, especially one in deflation.
And if you knew anything about stimulus, it's about increasing money velocity, not spending it in specific ways. It doesn't matter how it's spent, just so that it is. This is basic economics and you're too ignorant to realize it.
The banks are using the money to run up stock prices and carry trades. If you think having a lost decade is a successful outcome, then I don't know what to tell you. Prices HAVE been on the rise.
Oil prices are going to rise and will be well over $100/bl by this time next year and that will cause price inflation everywhere because everything is affected by the price of oil. Oil production peaked in 2005 and India and China will gladly make up any demand shortfall in America.
Okay, so the lost decade strawman, when you have no numbers or anything else other than a stock broker on TV telling you what he thinks,
Where's your evidence that prices are on the rise. Show me the numbers, or you're just a tool of Schiff.
And you can't forecast oil prices without getting rich in the process. You think you can forecast oil prices. lol Do you even know the values of oil futures right now?
And China can't come close to making up for our demand shortfall. lmao
Do you know anything at all about oil? Do you understand the implications of declining production? Ultra deepwater? Tar sands and shale? Do you know anything about the geology involved? Do you know anything about Cantarell or the north sea? Ghwar?
Production costs are going through the roof and that ALONE is going to push the price of oil higher. Oil is going up, it doesn't matter WHAT you believe. America CAN'T cut it's use enough to offset Chinese/india growth.
I agree that China's GDP is 1/5 of ours and have a bigger population, but then again, let's not forget that China is a communist country where just about everything is controlled by the state. Even so, I think China is taking much more advantage of capitalism than the U.S. is, and continues to be a manufacturing giant. This is only the beginning of a meteoric rise in that country's economy, especially if the U.S. continues in the path that it's in.
Manufacturing is less important for employment all the time, even in China. World manufacturing employment has been going down for years. Automation is the main culprit, not capital outflows.
Given this and the stagnation of wages for the middle class and poor, more redistribution is needed so that their standards of living can be maintained.
I just hope they don't come up with the idea that communism is what makes productivity go to the roof, lol. I can see that comming in a few years... "Capitalism has failed, so communism will succeed!" lol.
I would disagree with that. I don't think there is anything capitalistic about China. You need gov permission for everything in China. China doesn't want to be the next America, it isn't interested in raising the quality of life of Chinese citizens. What China wants is political power.
China is moving towards capitalism, the US is moving away from it. Ground reality is always different than the conventional view in a far off land. Don't make that mistake again.. Iraq and Vietnam should be lessons enough.
US GDP is totally inaccurate, phony, arbitrary, and the wrong place to look at. More than 80% of it consists of credit.
Gold is on the rise, and the dollar is on the decline 98%+ devalued and still dropping . This means a rise in energy costs and food. Meanwhile the people conserve, Government continues to expand which increases spending, (as a trend) raises taxes, prints more dollars.
There are so many misconceptions in your post, I don't know if I sohuld bother.
First, explain to me what you think GDP is.
Second, gold is actually way down since last Friday, but the longer term upward trend will end soon. If market expectations as revealed in treasury yields and TIPs spreads ae any indication, we'll have a sluggish economy for at least a few more years. Hence, there won't be much more aggregate demand for gold, except as an inflation hedge, but when inflatoin doesn't
show itself, many of the new goldbugs will lose faith and sell their gold.
The dollar decline of 98% refers to the compounded cumulative loss of value since 1913, I assume. This is a very ignorant position that'd been presented to you. This represents a rate of intlation of around 2% per-year over that period, and provides a buffer against deflation. Some of you say it's a tax. If so, it's about the cheapest tax you'll pay. Just 2%.
i will go with real economics and base my judgments on what central governments are doing around the world, a shift towards a new world currency will be gradual as holders decrease their holdings in US treasuries, which even countries like Saudi Arabia are beginning to do, diversifying into the Yen or Euro, this can only mean that holding gold for dollars will be beneficiary in the long term, unless if you think ur not gonna live for more than 3 years.
@strongbadassman Zeldovich is a keynesian. Probably college sophomore I would guess.. Leave him alone, once he realizes he is wrong and pretty much everything he learned in mainstream keynesian economics is propaganda, he might change his mind.
OK mister insult everyone because you can't have a decent conversation... Explain to me ANY evidence you may have that oil production is going to rise to meet the demand or that the cost of producing oil will be flat to down.
Yes the monetary base has doubled from 800billion to 1.7 trillion in the US, and most of it is sitting on the banks because they are getting paid interests on reserves. BUT obviously most reserves are not being used clearly some are being lent out and quantitative easing is also being implemented, causing increases in the money supply growth rate of 8-10% on annual basis. So the same thing is not happening with japan because money IS growing fast, and that will be reflectedinprices
An expansion of the money supply causes a rise in prices. If you push the money supply then you increase demand which pushes it beyond supply and suppliers have to raise their prices. Imagine if you doubled the money supply in monopoly, then you'd be willing to spend twice as much for a piece of property and the seller would sell it at a higher price.
Yes, we've had more than a year of deflation. Commodity prices, auto prices, housing prices, and stock and bonds have collapsed. We need prices to rise through a boost to aggregate demand.
If you go to Bloomberg you can see commodity indexes rising over the year. Stocks have also gone up since the collapse but I would think that's due to small yields on T-Bills. And I don't understand what you mean by prices needing to rise to boost AD because higher prices forces demand down. In deflationary periods where demand gets wiped out suppliers cut prices and costs to bring AD back up.
Maybe you don't mind having your salary inflated away, but I don't. When everyone else was partying and blowing borrowed money, I was saving and I want to be rewarded for doing the right thing, not punished. I don't need dollars of diminished value to pay bad debt, because I didn't borrow the money in the first place.
Agreed, I didn't take out a ARM on a million dollar property but I feel as if I should have.
Nice guys finish last. Doing the right thing isn't always "right", if we're talking about economics and incentives, the incentive is to borrow and spend before your money becomes worthless. Which is why I'm buying commodities and stocks.
That is the cultural impact of fiat money. People are led to believe that living in debt is better than being frugal. You are feeling it right now, but if you step away from the tragedy of commons that the US dollar is, you will be much better of.
That's just it, now we have to put our money at great risk just to try to beat the inflation (not even make a gain). If you buried $1000 in 1665 and dug it up in 1850, it was still $1000 worth of purchasing power, by 1913 it had only lost a very, very small portion and that was largely due to the civil war. Compare to today. If my dad gave me $1000 for being born in 69, it is only worth a fraction of that 40 short years later.
NO one's bashing Schiff and you can't learn economics in one lesson. I know it's appealing to think you know more than almost all of the academic and financial market economists in the world, but you don't. Hazlitt was just a newspaper guy. He was a know-nothing crank.
The FED won't let the dollar collapse? Like all the other central banks that allowed hyperinflation to destroy their country's currency? I won't hold my breath
defgill 9 months ago
well 6 months later and china is buying up all the gold, peter schiff always looks good in retrospect. these clowns just need to accept he is right.
bonfirejovi 1 year ago
everyone should shutup and lett only Peter Speak.
Nevawake 2 years ago
I think that right now this administration is working in the interest of places like the UK and places that also have universal healthcare. They want the dollar to depreciate so that canadians and europeans will move here with newly appreciated buying power and scoop up these houses that Americans can't buy because they're so deep in debt. And if Obama passes Healthcare (Probably) that's exactly whats going to happen and theres almost nothing that can be done about it. Buy gold.
htmenow454 2 years ago 2
Wall street will fall, Rev 18:11 And the merchants of the earth shall weep and mourn over her; for no man buyeth their merchandise any more. Rev 18:15 The merchants of these things, which were made rich by her, shall stand afar off for the fear of her torment, weeping and wailing,
glenbobsoapshop 2 years ago
the rally to the dollar was a flight from securities. And that was also BEFORE tons of money was printed. Think, you fucking porno fox bimbos!!
Ne0mega 2 years ago
those dumdass bitches need to shut the fuck up nobody cares when your talking!
rich232399 2 years ago 3
i can't wait any longer! Rescue meh from my boredom
SeexyyAmbeer 2 years ago
The problem with Peter being on TV News its that he is arguing with morons who know nothing.
And the discussion goes nowhere....
concujak 2 years ago 2
WOW. fox sucks
FreedomIsSecurity 2 years ago
moving out of it because they are looking for more risk? huh? No, the dollar is fucked
Seano71 2 years ago 2
I am absolutely amazed how such stupidity is possible?! Shiff explained them with simple words what exactly is wrong - even complete idiots got it but not the us journalits in the studio! With such people USA is doomed!
darthsuriel 2 years ago
zionistbernanke
zionistgeitner
zionistgreenspan
zionistpaulson
you have to tack on the zionist to their names so all the slow people can catch on
TheFlex21 2 years ago
There aren't enough synonyms of the word 'stupid' to describe you.
rawjhaw 2 years ago
rawjhaw
stupid is the perfect word to describe you
TheFlex21 2 years ago
He borrowed from the Chinese enough money to build a country, will return a lot of toilet paper. Sounds like a good deal to me. That's what we should do. Borrow a sum of money that buys a house and return a sum that buys a box of matches. At the end, show a middle finger to the banksters and that's it.
ktougodno 2 years ago
But that sum of money also comes out of your pocket. If we have massive inflation during a recession you can expect no increase in salary. This means less purchasing power for you. When you talk about a good deal for us, it's not even us that's spending the money. It's the government.
541austin88 2 years ago
In the first place the price on gold is not determined by the market. This market sits in London and meets twice a day to set the price of gold. For dorks, here is the link: en(dot)wikipedia(dot)org/wiki/Gold_fixing. Secondly, the readers of this blog have to realize that Bernanke's goals may not coincide with our goals. Stop saying he is wrong. For you, he is. For banksters he is doing everything right.
ktougodno 2 years ago
Inflation/deflation always hits Capital goods before it hits consumer goods......it always takes time for it to hit the public.
europa 2 years ago
Shiff is wrong when he tells that FED has flooded ecconomy with dolars, yes FED printed a lot of them but banks keep those notes as reserve. Granted if they start to lend them all hell will brake loose but for now there is no hyper inflation it's the anticipation of inflation (banks lending FED money) that makes people buy gold.
Marine475 2 years ago
Do you really expect the banks to sit on the money?
People are begging for money, It is only a matter of time before the Government interferes and tells the banks to loan out the money at a very low interest rate.
Look for this in the next 6 months.
Vunks2000 2 years ago
Schiff is right and has been all along. Inflation is printing more currency and devaluing it. It's being devalued now. Price inflation is a different story, but we will see that too. Really, we are already. During this huge deflationary recession, what prices came down? They're still creeping up and I'm seeing far less items with very good sale prices at the grocery stores. Now, they'll be taxing the heck out of those with anything left. They're setting it up. We haven't seen the worst yet.
misterskinny1 2 years ago 2
With this kind of logic we could say that gold is inflationary money because there is a lot of it underground. Just the simple fact of money printing doesn't make prices go up. Anyway fractional reserve banking creates much more money than FED and for the time being banks are being paid by FED to keep reserves thus stop money creation. We just don't know what is going to happen for example implementing 100% reserve system would justify all that printing without inflation.
Marine475 2 years ago
The blondie seems to get the message, good to see!
imre1000 2 years ago
Peter is on target.
lenny380 2 years ago 2
Yes, the dollar might collapse, gold won't. I think it's clear what's a safer bet.
Shaunt1 2 years ago
Schiff as usual is right. That blonde is one cute woman too!
thirdcoastguy 2 years ago
Poor Schiff - hes like the Rodney Dangerfield of economics... I hate when these guys laugh him off! I fear Schiff may have the last laugh yet...
boggywoman 2 years ago
Jeez...the guy on the trading floor has that TMJ mouth that most homos develop.
MoneyIsSilver 2 years ago
Dude, Peter gets all the babes. They want to be on his side now.
firstade86 2 years ago 3
Gold will only be down for a little while at best.
Remember the price of commodities, especially metals is nothing more than a reflection of the strength of fiat.
Bernanke has said he WANTS to weaken the dollar. The price of commodities (actually everything) MUST go up as a result.
Get it now, try to time it and you're likely to miss out.
UtubeMyAccountName 2 years ago 2
the chicks sure love peter
stoneeh 2 years ago 3
As the fed continues to inflate the dollar, real wages are actually going down, as the wages earned don't buy as much. This has not fully emerged and hit the majority of Americans in the face, but the foundation of this is already in place, and as we move forward in the future, you will see an increase in defaults on mortgages, car loans, and credit cards.
I wish things were different but we have drunken Kool-aid drinkers at the helm as News Anchors holding back the truth!
Thanks Peter!
nvsyru 2 years ago 6
Hopefully the dollar will collapse and pete doesn't have to educate these fools.
itubeutude 2 years ago 9
The blonde cunt wants to give Schiff a blow job. Someone give her a good smacking, silly bint.
buffett1000 2 years ago 3
This money Oprah, shite.
buffett1000 2 years ago
REFORM=END THE FED
odin422 2 years ago
Just wait till the bozos outlaw shorting the dollar...they've outlawed shorting before in other areas so why wouldn't they do it? I can see "bank holidays", price fixing, and all sorts of other BS coming from the 70's playbook right before the economic frog croaks.
Nickelodeon2002 2 years ago
When the dollar crashes there's nothing the Fed or Gov't can do......because the only thing they're good at is printing and spending.
JessicaBelle81 2 years ago 3
That blonde bitch doesn't know shit. Shut up and do what you're good at.
chroNick546 2 years ago 2
ohh my god! lawn jarts? color theory?
nobodysfool67 2 years ago
nah i was thinking more along the lines of her giving me head, lol.
chroNick546 2 years ago 3
Schiff = win!
Great video.
Intervene 2 years ago
With EPA claiming that CO2 is a public danger today we have officially entered Fascism.
Vunks2000 2 years ago
sometimes I wish Peter was a little more tactful, like with the blond chick, who did make some decent points, albeit Peter was more spot on, but I wish he took more of a teaching approach rather than assume EVERYONE is an idiot. I think people are more receptive to what he has to say if he can be more tactful. But of course we love him because he isn't tactful too...so i suppose I can't have it both ways.
Great video!
The plan for strengthening the dollar was spot on as well.
thane17 2 years ago 2
He loves to go straight to the point doesn't he! :D I'm acting the same way with my budies now, i just assume they don't get what i'm talking about, haha.
ExquisiteDoom 2 years ago
vote Schiff!
jaythizzle1969 2 years ago
Don't reform the Fed. End it!
thecommaking 2 years ago
Schiff smokes 'em again!
bajoverga 2 years ago 3
O ya!
yjfoo81 2 years ago
he was on fire this one for sure! Wow.
markymarkuss777 2 years ago
Peter is spot on, the arrogance of everyone else in this clip makes me sick. Hopefully they're the first to starve in the next depression.
DontTread0nMe1776 2 years ago 2
Could you imagine Schiff on the floor of the Senate filibustering a spending bill? We need to get him in there.
mjhonsun 2 years ago 2
2007, 2006, 2005....when are these clowns gonna get it?
cayman187 2 years ago 2
This has been flagged as spam show
peter schiff was right 2008
cayman187 2 years ago
peter schiff was right 2009
cayman187 2 years ago
go go go peter build in amrica
when the depression hits gas 7 dollars
and manufactering will start in america wil be cheaper to produce in america
but cap and trade might force us into a deeper depression
washington has gone nuts
we cant just consume 70 percent
its a fools bet
nafta is the new slave trade
this is exactly like 1930s i love history
over and over the same old bs
winner502 2 years ago 2
I never seen all the people including the guy on the floor all agree so strongly about inflation. It was a pretty good segment.
Up until the great depression, what we call a recession was called a depression and when the war ended they changed the word to recession so nobody got freaked out hearing the word depression.
Now that we are having the great recession, what are we going to call recessions in the future (so they don't get freaked out by the recession word)?
christo930 2 years ago 2
That's because it's hard to find enough people that stupid to fill a room.
Zeldovich 2 years ago
id like to spank that sweet blonde.
cas111498 2 years ago
I think peter is used to people arguing with him. And nobody will anymore.
shityhomesinc 2 years ago 2
your wrong many people called for a depression but no one listened gerald celente
and many others
my family has been prepareing for ten years
no doc loans
a blind man in a dark room could see this black cat
winner502 2 years ago
winner502 2 years ago
Why should u be reforming the fed?
Why not end the fed?
rosewood223 2 years ago
@rosewood223
Agreed! In the long run, this reforming thing is going to help the fed, and keep it alive.
utubehayter 2 years ago
He's trying to be realistic, one step at a time ;)
john5246 2 years ago
Okay, there are multiple problems with tings Schiff said here.
1.) If there's so much inflation, then why are commodity prices like those of oil, industrial metals, etc, other than gold much lower than last summer? Are any of you paying $4.40/gallon for gasoline? And, why are interest rates low going out three and four years?
2.) If more central banks are waiting for a pullback to buy gold, doesn't that mean they think it's expensive? And it is very expensive right now.
Zeldovich 2 years ago
3.) Americans assume that officials in other countries issue these dollar warnings to try to get us to defend the dollar to prop up their dollar reserves. That's not what's happening. Every country complaining or worry about the dollar have big trade surpluses with us. They all have export-led growth models. Germany, South Korea, China, India, etc. If the dollar goes up for those without currency pegs, we buy less of their stuff and sell more of ours. each dollar buys less of their stuff.
Zeldovich 2 years ago
For those countries without dollar pegs, such as Germany, the effects are that straight forward. For counries with dollar pegs like China and India, a rising dollar helps insure that the supply inputs they import, such as oil and metals, will remain low, and inflation with respect to the dollars they already hold. They hold too many dollars, due to the artificially low peg which means their supply of dollars exceeds natural demand. Workers there work longer hours for less pay. China wants it.
Zeldovich 2 years ago
This point is exactly correct Zeldovich. Too many people forget, other countries make moves that suit them best politically, not economically.
However, this doesn't change the fact that, economically Peter Schiff is correct. He's expecting other countries to act economically, instead of politically, and this is definitely an error on his part.
As far as prices not meeting last years highs, that has to do with lowered demand. Yes, some basic theory still applies even in a political economy.
UtubeMyAccountName 2 years ago 2
I agree, but with a slight change. Governments will do what do what suits them best politically. Private citizens have no choice. They don't have the power to tax and inflate to subsidizes bad economic choices.
Second, prices are still rising, but falling in other areas. Customer demand has more or less shifted from some bubble activities (except for stocks and commodities) to basic needs. According to Shadow Stats, we have around 8% inflation.
thomasst2 2 years ago 2
If we have 8% inflation, then where is it?
Zeldovich 2 years ago
I've been paying the same for products lately but notice getting smaller portions. That isn't inflation(increase of money supply) but it is a direct result of it.
justgetsome 2 years ago
Energy prices, Health care, education, food, hotel fees: immediate-short term needs (or whatever Govt subsidizes, which increases demand over supply, causing shortages and future price rises).
But most new money has flown into stocks, bonds and commodities. When money increases, producer goods go up more and far before consumer goods (Austrian Cycle). Everyone who claims no inflation misses it every time. Watching the CPI for inflation is like watching a race from the finish line.
thomasst2 2 years ago
Energy prices are less than half of their mid-2008 levels, Healthcare always gets about 7% more expensive each year, stocks and bonds are still 25% below the pre-meltdown ranges, and commodiies are about half as expensive as they were in mid-2008. So, you're just factually wrong there.
And I don't watch the CPI, I use the GDP deflator, but keep making assumptions.
A little advance that Austrians imssed was the study of the role of expectations in market bahavior. Increases in PPI cause
Zeldovich 2 years ago
First: are you talking YoY or YoY and a half? Second: Are you talking with or without seasonal and hedonic adjustment? Third: despite its absurd aggregation, at least the CPI separates producer goods and Govt spending from consumer goods. The GDP aggregates on top of aggregation on top of aggregation, which is even worse. Then to aggregate even more with aggregation inflation is a recipe for reasoning disaster.
thomasst2 2 years ago
Yes YoY and a half.
No seasonal adjustments are needed, as summer travel does not double the price of oil, for example.
And you're just flat wrong about GDP and apparently don't know what the GDP deflator is.
Zeldovich 2 years ago
immediate inflation, alter the courses of market participants.
Again, you're factually wrong, and you'll always be behind the curve if you focus on Austrian economics. That is the quivalent to pre-Coperican cosmology.
Zeldovich 2 years ago
Austrians don't look at price levels to determine economic distortions. E.g. Mises and Hayek reconized that even though prices in the '20's were stable, we still had inflation since prices were still higher than otherwise would have been because to Fed increased the money supply threefold.
Artificially low rates increases production without enough resources saved, which results in production costs rising. The increased production cost show up LATER in goods produced (PPI to CPI).
thomasst2 2 years ago
Prices were stable, because money supply was stable. Inflation doesn't have a lag nearly that long.
research stlouisfed org/fred2/graph/?s%5B1%5D%5Bid%5D=AMBNS
Not only do you not look at numbers, but even your imaginative ones are so far off that it makes you look like a fool.
And where is the evidence that MIses or Hayek claimed the money supply trippled during the decade of the 20s?
Zeldovich 2 years ago
Inflation is increase in the money supply, WITHOUT CORRESPONDING DEMAND FOR THE MONEY. Prices rising (or being higher than they would be absent the monetary increase) is the result.
thomasst2 2 years ago
I'm not sure what you're textually screaming here, but if you mean that demand for money doesn't factor into inflation/deflation, then you're wrong. Supply and demand applies to fiat money as well as gold.
And the mere creation of new money, ceteris paribus, is not inflation. That's one of Schiff's claims, which is stupid on the face of it.
The money supply has increased drastically over the past year, yet inflation is very low. Why? The banks are hoarding money. It isn't inflatinary.
Zeldovich 2 years ago
Hence, more money creation would get some of that new money into the economy, but not necessarily all of it. It woudl increase the money supply and as long as the velcity of money doesn't exceed that of the economy at full-employment, then there is no inflation.
Zeldovich 2 years ago
Banks are running carry trade which lets cheap money into circulation and that's future inflation for sure. And why was there a jump in trade deficit? B/c weak dollar drives import expense up, and that will hit consumers in future. W/ a still weak manufacture industry and yet mass budget deficit, government has no choice but to print more dollar to finance it all, which only exacerbates the situation. Your denial doesn't fly at all.
dlmaniac 2 years ago
Well, we'd need interest rates at mroe than -6% just to get the money velocity back to trend, so some carry trade is actually helpful.
And you seem to be confusing domestic inflation with lower exchange rate values..
And having a weak manufacturing base isn't a probelm, considering it just represents a natural shift of output from lower value-added goods to higher. This is known as competitive advantage. Besides, it's not the manufacturing base that's been lost so much as manufacturing
Zeldovich 2 years ago
jobs due to automation. Manufacturing jobs have been disappearing worldwide for years, even in China.
Zeldovich 2 years ago
You can "shift from lower to higher" all you want, but if you don't produce enough to support your lavish consumption then you get a problem. And US has a big one w/ all the deficit, national debt, welfare obligations, wars, new spending like universal health care, cap and trade and so on.
Does US produce enough to fund the above. No!! Not when 70% of economy is consumption. They will be funded by perennial deficit, debt, money printing and eventually a currency collapse.
dlmaniac 2 years ago
70% consumption doesn't have to be bad.If you take any number of workers and say they initially split their time between production and consumption, increases in the efficiency of production can allow for more consumption without negative consequences, ceteris paribus.
Zeldovich 2 years ago
We are NOT discussing time spent on producing & consuming. We are discussing about the balance between the income and expense.
If a guy spends two dollars on every dollar he earns, he is trouble unless he changes the behavior. You can keep rolling on the funny terms of "lower... higher,.. efficiency...", but you still have no solution to the imbalance at the end of the day. You have to either produce more or spend less.
dlmaniac 2 years ago
sigh. It should be obvious that rates of expenditure and temporal allocation are one and the same. It's value over time that matters, and that's the same in either case. That's basic math.
Zeldovich 2 years ago
If a given number of workers initially spend half their money on consumption and the other half on production, as production gets more efficient, they can consume more and maintain the same standard of living, ceteris paribus.
Do I have to do all your thinking for you?
Zeldovich 2 years ago
Well if we really have that many workers producing efficiently like you said then why do we have perennial trade deficit? Why do we have this huge imbalance between import and export? You threw out denial after denial yet hard facts blow them away. The truth is US does NOT produce enough to finance all the spending and consumption. Much of the current unproductive service business will be washed away by marketing force, and US has to rebuild the manufacture base. Ain't pretty but has to be done.
dlmaniac 2 years ago
I never said the US economy was entirely like that, but it is to a degree. We have a vastly more efficient economy than China, which is why we're much richer so we work shorter hours, consume more, etc. Some foreign investors do fund some of our consumption, but in terms of countries, they are extending credit to their best customers. Independent investors obviously seek profts. Either way, demand for treasuries has been going up for a year.
Zeldovich 2 years ago
It's true we have the most advanced technology while China does lots of low end production, but it doesn't change the fact that the extra productivity from tech edge gets overwhelmed by all the burdens government puts out there including welfare, business tax, war spending, universal health care, cap & trade and so on. The burden is so huge corporates choose to outsource jobs to escape it.The outcome is Americans pretend to be richer by spending borrowed money that they can hardly pay back.
dlmaniac 2 years ago
Also I think what people miss about deflation and inflation is the time structure of debt.
Artificially low interest rates usually stimulates long termed debt and purchase of durables goods over short term debt and immediately needed consumption goods.
During a bust, long term debt and assets implode and capital shifts to shorter term debt and consumables. This is because there are not enough savings to sustain long debt and assets, but may be some for short term and consumables.
thomasst2 2 years ago
Well, the problem with the Austrian temporal capital structure perspective is that artificially low rates will lead to inflation, some of which the market reacts to immediately due to a shift in expectations. Hence, you have more of a shift toward current consumption.
Zeldovich 2 years ago
@Zeldovich Yes, and because the local factor prices are already high, this means the common people's earnings buy them even lesser things.
A weak dollar is good for the export oriented industries owners (of which there are few alive), bad for everyone else who is currently buying chinese made stuff! Whose side are you on? If you want to make the lives of poor people miserable, this is the way to go.
utubehayter 2 years ago
Trade accounts for only 13% of economic activity in the US. China doesn't have as profound an impact as you may think, despite your rigorous analysis that involves noticing some made in China items in stores. Most American jobs are being lost to automation, not emigration. The same is even true in China.
Zeldovich 2 years ago
Is that so? Well gee.. when I go to the store to buy stuff, I always look at the accounts and % economic activity. The price of stuff on the shelves is a mere triviality I should learn to ignore. Correct?
LOL! "American" jobs.. as if the job has a nationalistic affiliation! Now, only if we went back to the days of sickle and hammer, we would all have jobs! How about destroying the railroad and make jobs for people carrying loads on their backs?
utubehayter 2 years ago
You're stupid if you base economic views on anecdotes.
And American jobs are those that exist here. I have no idea what you're talking about.
Zeldovich 2 years ago
I prefer my economic views on reality - not on faulty models of economics. You can continue to make the lives of American poor worse and I will persist otherwise.
utubehayter 2 years ago
Right. Explict supply and demand models are faulty. lol
Zeldovich 2 years ago
Do you know that models have a fundamental problem? i.e. they are not reality! Whatever the model represents must be validated in reality not the other way around.
But its probably a waste of time for some one who is too steep in models to realize they are just models, nothing else.
utubehayter 2 years ago
Everything you do is based on a model. At the very least the models were shaped by evolution. When you walk, your brain has a model for stereotyped walking and gait, with influence from cortical structures to allow for voluntary movement. Any condidence you have that one stimulus is associated with another, you have a model. We only see a sliver of he electromagnetic spectrum, being unable to see radio, infrared, UV, x-ray, or gamma ray bands. How much of reality does this ignore?
Zeldovich 2 years ago
ohhh! I guess this is to be expected.. Model based folks fail to realize that models are models not reality and reality is the validation, not the model. Models are good for explaining/teaching about reality, but not for understanding or predicting it. Even with the human brain - there is no particular model that fits a human brain (just one persons brain!) and it is impossible for current science to model a human brain enough to use it as a predictor. Let alone those of 6 billion people!
utubehayter 2 years ago
Very well put. This explains why keysnian central planner advocates are full of shit very clearly. They assume that economics is a hard science that can be calculated; but we all know, human beings are composed of rationality and emotionality. Therefore, we don't know where the demand will be. Governments may take a decision, but all it can do is market technology too late, or too fast; and a complete waste of resources along the way. Free markets are the shit!
ExquisiteDoom 2 years ago 4
Don't pretend you knwo even the first thing about Keynesian economic, If I quize you , I bet you fail. Wanna try?
it's also interesting that you only mention Keynesianism, which I assume is old Keynesianism, versus new,but ignore every other approach in economics that flat disagrees with your luddite views.
Zeldovich 2 years ago
I can't possibly change the mind of someone who has a vested interest in the failure of the dollar. The fact that you somehow beleive that you can calculate human behavior just shows how arrogant you are. Which government department do you work at anyway?
I have some very simple logical points to make, then i'll leave you to your pink bunny illusion world.
You can't consume what isn't first created.
You can't expand an economy without savings.
You can't inflate and hope for the best.
ExquisiteDoom 2 years ago
@Zeldovich
Hey, I've studied economics for a couple of years (the Keynesian variety), and I'll be frank: There is no accurate model for a free market. Price fixing has done more harm than good (obviously), and anyone who thinks the Fed has done a great job preventing things from getting "worse," are only kidding themselves. At least when it comes to economics, there is no such thing as a "model," and if there is one, it's pure bologne.
EdMan2012 2 years ago
Really? Which models have you looked at? Any nonlinear dynamical ones?
And someone has to stop banks from imploding more frequently than they do now. The very existence of a bank as they've always existed threatens the general economic welfare.
People love bubbles. Bank execs and sales people get bonuses, traders get capital appreciation, providers of goods and services get higher earnings, consumers get more credit and more jobs, and politicians get to take credit for the boom.
Zeldovich 2 years ago
"And someone has to stop banks from imploding more frequently than they do now."
Why?
Bank failures are a good thing. It is what keeps banks honest. The more people try to "keep the banks safe", the more dishonest banking becomes.
utubehayter 2 years ago 3
You're absolutely wrong. You dont even think about things, do you?
The moral hazard arguments don't apply to banks, because the management gets paid much more in many cases for risking breaking the bank rather than doing the right thing.
The same is true of investors. Everyone loves a bubble and so they make large capital gains on the way up.
Banks are set up to self-destruct.
Zeldovich 2 years ago
Something stinks of Marx and Chomsky.. I am out! Enjoy your retarded socialism.
utubehayter 2 years ago 2
utubehayter - you have nailed it! Look closer at the FED. It is controlled by the 12 major banks. Inside tose banks is where the Primary Shareholders exist. Find out who they are. HINT: Many of the top 10 are the original shareholders from 1913 and they are NOT American.
nobodysfool67 2 years ago
You probably wouldn't know either if they were bitching you in prison.
Zeldovich 2 years ago
@Zeldovich
Do you know which school of economics you believe in? Let me guess, you learned your economics from a Nobel Laurette who writes for NY Times... right?
utubehayter 2 years ago
Actually, I learned economics from Mark Rush at the University of Florida years ago. I never knew what his political views were. Profesional economists are not ideological, unlike the ignorant, uncleaned masses who don't have a clue about the subject.
I was given the pros and cons of various perspectives.
Zeldovich 2 years ago
You've got to spend money to make money! HUrrrrrr.
And by "spend money" we of course mean the government borrows a shitload of money from China and blows it on consumption and unproductive jobs.
iamacyborg 2 years ago
China only loans us money, because they want to. We don't need them to loan us a dime. We can create all the money we want and spend society down that way.
Zeldovich 2 years ago
winner502 2 years ago
Low old prices compared to what?
Oil more than doubled in value. It was $30 a barrel and went up to $80!!! The price of oil is also a function of demand not just how weak the dollar is. If the price relating to demand is falling faster than the dollar is weakening then you have lower oil prices (net).
The goal of a central bank (ideally) is to buy as much gold as they can without influencing the price. If they all just come in and buy it could go to $2000/oz and it might cause panic
john5246 2 years ago 2
Doubled in value from it's meltdown forced liquidation lows? lmao
The baseline is not the panic of lat fall, but the highs of last summer. That was before the crisis.
Zeldovich 2 years ago
So you think oil should be making new highs? Silver is also not making new highs. Silver has an industrial use and part of the price is tied to industrial demand just as part of the price of oil is. The fact that oil ISN'T making a new high just goes to show you how speculative the oil trade was when it hit 150+/barrel. Also the dollar is not making new lows yet. Eur/Usd was at 1.60 we're hovering around 1.50 now.. so commodity prices are lower compared to before because the dollar is stronger.
john5246 2 years ago
If we have inflation, then of course it should be making new highs! It did for years before the meltdown! Christ, you can't be that dense.
And you're dead wrong about oil and the dollar, because it's down in almost every currency.
And the fact that oil and other commodities has industrial uses.yet the prices are low means the aggregate demand is down. There's liitle or no inflation and you've not presented a shred of evidence for it.
Zeldovich 2 years ago
We do have inflation, just look at the FED's balance sheet. Also just look at the stats themselves, On Nov 18th the Core CPI m/m was reported at 0.2%. So they are reporting inflation. There's your evidence...the governments own numbers.
This will be my last reply, I try to help but you can only help the uninformed so much, I'm a trader by the way that's why i know so much. Also when trading oil we look at the Oil Inventories data that comes out every week. Aggregate demand is down, correct.
john5246 2 years ago
Ignorance can help no one, but be sure to message me after gold turns bearish whether you get out on time or not.
Zeldovich 2 years ago
No, the baseline is 10 years ago when it was 10 a barrel. Oil went up 14x, went down because of paper barrels lost their value because of the liquidation and are now back to 80 a barrel (8x the price 10YA).
christo930 2 years ago
Wow. IN all seriousness, have you been diagnosed with a neurological disorder? How about brain damage?
Of course the baseline isn't 10 years ago! lol Talk about arbitrary. China and India and other developing nations have increased demand dramatically, helping lead to higher prices. wow The baseline should be the last supply/demand equilibrium. Are you a commie?
Inflation was a factor last year, but not this year. Oil is still less than half the price in the summer of last year.
Zeldovich 2 years ago
Inflation as defined by Schiff is an expansion in the money supply, not a rise in consumer prices.
iamacyborg 2 years ago
lmao. That's because Schiff's stupid. A simple example is Japan. They greatly expanded their monetary base during the lost decade, yet there was deflatoin, not inflation. The money never made it into the markets, because the banks hoarded it. 20 years later, there's still been no inflation.
The same thing is happening with the Fed now.
I guess Schiff assumes that if banks have access to the money then they'll lend it, but they aren't lending most of it. Have to look at prices, duh.
Zeldovich 2 years ago
Japan had a high savings rate. They didn't launder the money through the DoD, expand government, do lucrative stimulus programs and bailout selected corporations. The money gets out of the banks and it is loan to government with interest. U.S. citizens gave money to the banks so they can lend it back to them with interest. Makes no sense brother, step your game up.
pedroquintero 2 years ago
Japan had much larger stimulus plans as a % of GDP and multiple ones during the lost decade. I guess you're completely unfamiliar with recent Japanese economics. And Japan's savings rate is much too high for a developed economy, especially one in deflation.
And if you knew anything about stimulus, it's about increasing money velocity, not spending it in specific ways. It doesn't matter how it's spent, just so that it is. This is basic economics and you're too ignorant to realize it.
Zeldovich 2 years ago
The banks are using the money to run up stock prices and carry trades. If you think having a lost decade is a successful outcome, then I don't know what to tell you. Prices HAVE been on the rise.
Oil prices are going to rise and will be well over $100/bl by this time next year and that will cause price inflation everywhere because everything is affected by the price of oil. Oil production peaked in 2005 and India and China will gladly make up any demand shortfall in America.
christo930 2 years ago
Okay, so the lost decade strawman, when you have no numbers or anything else other than a stock broker on TV telling you what he thinks,
Where's your evidence that prices are on the rise. Show me the numbers, or you're just a tool of Schiff.
And you can't forecast oil prices without getting rich in the process. You think you can forecast oil prices. lol Do you even know the values of oil futures right now?
And China can't come close to making up for our demand shortfall. lmao
Zeldovich 2 years ago
Do you know anything at all about oil? Do you understand the implications of declining production? Ultra deepwater? Tar sands and shale? Do you know anything about the geology involved? Do you know anything about Cantarell or the north sea? Ghwar?
Production costs are going through the roof and that ALONE is going to push the price of oil higher. Oil is going up, it doesn't matter WHAT you believe. America CAN'T cut it's use enough to offset Chinese/india growth.
christo930 2 years ago
When you say things for which you have no evidence, it's then people assume you're a retard.
China's GDP is still only 1/5 of ours, but they have 6 times our population. lol
You are stuck on stupid and you love it.
Zeldovich 2 years ago
I agree that China's GDP is 1/5 of ours and have a bigger population, but then again, let's not forget that China is a communist country where just about everything is controlled by the state. Even so, I think China is taking much more advantage of capitalism than the U.S. is, and continues to be a manufacturing giant. This is only the beginning of a meteoric rise in that country's economy, especially if the U.S. continues in the path that it's in.
EdMan2012 2 years ago
Manufacturing is less important for employment all the time, even in China. World manufacturing employment has been going down for years. Automation is the main culprit, not capital outflows.
Given this and the stagnation of wages for the middle class and poor, more redistribution is needed so that their standards of living can be maintained.
Zeldovich 2 years ago
I just hope they don't come up with the idea that communism is what makes productivity go to the roof, lol. I can see that comming in a few years... "Capitalism has failed, so communism will succeed!" lol.
ExquisiteDoom 2 years ago
I would disagree with that. I don't think there is anything capitalistic about China. You need gov permission for everything in China. China doesn't want to be the next America, it isn't interested in raising the quality of life of Chinese citizens. What China wants is political power.
christo930 2 years ago
China is moving towards capitalism, the US is moving away from it. Ground reality is always different than the conventional view in a far off land. Don't make that mistake again.. Iraq and Vietnam should be lessons enough.
utubehayter 2 years ago
US GDP is totally inaccurate, phony, arbitrary, and the wrong place to look at. More than 80% of it consists of credit.
Gold is on the rise, and the dollar is on the decline 98%+ devalued and still dropping . This means a rise in energy costs and food. Meanwhile the people conserve, Government continues to expand which increases spending, (as a trend) raises taxes, prints more dollars.
BIackOp 2 years ago
There are so many misconceptions in your post, I don't know if I sohuld bother.
First, explain to me what you think GDP is.
Second, gold is actually way down since last Friday, but the longer term upward trend will end soon. If market expectations as revealed in treasury yields and TIPs spreads ae any indication, we'll have a sluggish economy for at least a few more years. Hence, there won't be much more aggregate demand for gold, except as an inflation hedge, but when inflatoin doesn't
Zeldovich 2 years ago
show itself, many of the new goldbugs will lose faith and sell their gold.
The dollar decline of 98% refers to the compounded cumulative loss of value since 1913, I assume. This is a very ignorant position that'd been presented to you. This represents a rate of intlation of around 2% per-year over that period, and provides a buffer against deflation. Some of you say it's a tax. If so, it's about the cheapest tax you'll pay. Just 2%.
Zeldovich 2 years ago
i will go with real economics and base my judgments on what central governments are doing around the world, a shift towards a new world currency will be gradual as holders decrease their holdings in US treasuries, which even countries like Saudi Arabia are beginning to do, diversifying into the Yen or Euro, this can only mean that holding gold for dollars will be beneficiary in the long term, unless if you think ur not gonna live for more than 3 years.
strongbadassman 2 years ago
Considering that you don't know what economics is, I hope you do. i can't wait until the market starts to empty your overstuffed wallet.
How do I know it's overstuffed? Because any amount of money is too much to pay someone without a cerebral cortex.
Zeldovich 2 years ago
i know more economics talking out of my ass then a little zionist conman like you would know studying eCon for the rest of you life moron.
strongbadassman 2 years ago
First, you're stupid for assuming I'm a zionist. I'm actually against aid to Israel.
Second, if you know so much aboutt economics, then give me the second derivative of a human utility function. Two diminsions is fine.
Zeldovich 2 years ago
@strongbadassman Zeldovich is a keynesian. Probably college sophomore I would guess.. Leave him alone, once he realizes he is wrong and pretty much everything he learned in mainstream keynesian economics is propaganda, he might change his mind.
utubehayter 2 years ago
@zeldovich
OK mister insult everyone because you can't have a decent conversation... Explain to me ANY evidence you may have that oil production is going to rise to meet the demand or that the cost of producing oil will be flat to down.
christo930 2 years ago
When did I claim anything about oil production? Is engrish your first language?
Zeldovich 2 years ago
@Zeldovich
Yes the monetary base has doubled from 800billion to 1.7 trillion in the US, and most of it is sitting on the banks because they are getting paid interests on reserves. BUT obviously most reserves are not being used clearly some are being lent out and quantitative easing is also being implemented, causing increases in the money supply growth rate of 8-10% on annual basis. So the same thing is not happening with japan because money IS growing fast, and that will be reflectedinprices
asierra1492 2 years ago
Well, we need a lot more money flowing into the economy to get as back to 150 year trend nominal GDP.
Zeldovich 2 years ago
huh?
asierra1492 2 years ago
An expansion of the money supply causes a rise in prices. If you push the money supply then you increase demand which pushes it beyond supply and suppliers have to raise their prices. Imagine if you doubled the money supply in monopoly, then you'd be willing to spend twice as much for a piece of property and the seller would sell it at a higher price.
leejae 2 years ago
Yes, we've had more than a year of deflation. Commodity prices, auto prices, housing prices, and stock and bonds have collapsed. We need prices to rise through a boost to aggregate demand.
Zeldovich 2 years ago
If you go to Bloomberg you can see commodity indexes rising over the year. Stocks have also gone up since the collapse but I would think that's due to small yields on T-Bills. And I don't understand what you mean by prices needing to rise to boost AD because higher prices forces demand down. In deflationary periods where demand gets wiped out suppliers cut prices and costs to bring AD back up.
leejae 2 years ago
Rising ain't back to trend. Sure, they're rising against their crisis liquidation lows,but they are nowhere near the pre-crisis trends.
Zeldovich 2 years ago
Yes but why are they rising? I wouldn't think supply or demand has changed much or not in directions that would cause this rise.
leejae 2 years ago
A weak dollar is never a net good in my opinion. The negatives outweigh perceived positives.
g00se99 2 years ago
It's good in the sense that our creditors get payed back with more and more worthless dollars (dollars of diminishing value)
The problem is getting it just right so we devalue enough but no so much that people stop buying our bonds.
john5246 2 years ago
Maybe you don't mind having your salary inflated away, but I don't. When everyone else was partying and blowing borrowed money, I was saving and I want to be rewarded for doing the right thing, not punished. I don't need dollars of diminished value to pay bad debt, because I didn't borrow the money in the first place.
christo930 2 years ago
Agreed, I didn't take out a ARM on a million dollar property but I feel as if I should have.
Nice guys finish last. Doing the right thing isn't always "right", if we're talking about economics and incentives, the incentive is to borrow and spend before your money becomes worthless. Which is why I'm buying commodities and stocks.
john5246 2 years ago
That is the cultural impact of fiat money. People are led to believe that living in debt is better than being frugal. You are feeling it right now, but if you step away from the tragedy of commons that the US dollar is, you will be much better of.
utubehayter 2 years ago 2
That's just it, now we have to put our money at great risk just to try to beat the inflation (not even make a gain). If you buried $1000 in 1665 and dug it up in 1850, it was still $1000 worth of purchasing power, by 1913 it had only lost a very, very small portion and that was largely due to the civil war. Compare to today. If my dad gave me $1000 for being born in 69, it is only worth a fraction of that 40 short years later.
THANK YOU FEDERAL RESERVE.
christo930 2 years ago
Stop saving in dollars (any fiat for that matter). Save in metals.
Invest with fiat, this way as the enterprise grows and gets first use of the currencies, you also get the benefit.
UtubeMyAccountName 2 years ago 2
Your savings will be fine. It's your job/income you should worry about. The market isn't pricing in inflation for at least 3 years.
Zeldovich 2 years ago
This has been flagged as spam show
And your opinion is very ill-informed.
Zeldovich 2 years ago
"Reform the FED." Peter, how about END THE FED?
kungfujones1 2 years ago 2
moving out of the dollar because they want more risk?
cough cough
GovWillKillU 2 years ago
These people should just read Economics In One Lesson and stop bashing Peter. Peter Schiff for Senate 2010!!!!!!!!!
petiemac12 2 years ago 4
NO one's bashing Schiff and you can't learn economics in one lesson. I know it's appealing to think you know more than almost all of the academic and financial market economists in the world, but you don't. Hazlitt was just a newspaper guy. He was a know-nothing crank.
Zeldovich 2 years ago