Peter Schiff Video Blog - March 15, 2011

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The media has done a great job talking about the loss of life in Japan. But they have been terrible when it comes to the economic impact. They have been saying that this will be great for the economy because there will be a lot of jobs available as they rebuild their infrastructure. This is just another version of the Broken Window fallacy.

If it was true that an earthquake is so great for an economy, then we could easily replicate that without all the messy loss of life. We could choose a city at random and then just bomb it to rubble. Then there will be a lot of jobs available for all those citizens as they rebuild their city.

Resources will need to be redirected from more productive uses towards building things that have been destroyed. They will be spending all their time rebuilding what they have lost, rather than building new things.

The central bank in Japan is going to print money in order to help the problem. But this won't help anything. Japanese people need to scale back on their consumption to cause a deflationary environment. This will lead to a stronger Yen, which will allow them to purchase more goods from foreigners more cheaply. They're going to need to buy oil, steel, and concrete. A stronger Yen would allow them to buy more of these things. But people are saying that the Japanese people might retrench, so their economy needs to be stimulated to promote consumption.

The Japanese government should be using this opportunity to sell some of their U.S. treasuries in order to finance this. But they won't do it because they are afraid that that will lead to a collapsing United States dollar. So while they are trying to build up their own economy, they are going to keep trying to prop our up as well. They are doing this because they still think that exports are the most important for their economy. But they are going to need to import a lot of stuff this year, not export.

Category:

News & Politics

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• Peter Schiff
• Treasuries
• Government Bankrupt
• Financial Collapse
• Economic Collapse
• Financial Crisis
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• Gold
• Silver
• Dollar
• Federal Reserve
• ron paul
• john stossel
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• japan
• broken window

[btaylor9661]

The pundents on TV are all so bullish and talking about corporate profits and increasing GDP. We are also talking about when June comes up and QE stops taht it will be better for the economy because this economy has legs, HAHA. There are no legs just an airbag under us and that bag is filling up big time.

[a13solute]

right, but isnt that the point of a currency war, i mean really, saying hey if they are devaluating their currency isnt that just going to postpone the collapse, so do u think that devaluate the 4th largest economy in the world?

[donniebrasco24]

just print baby!!! and keep stacking!!!

[flownet07]

Yeah, go ahead, carpet bomb Denver or Portland!!!! LOL!!! That will kickstart the economy!!

[TheSwampStalker]

If the FED doesn't end the QE soon, I believe it will be the end of the Dollar as a reserve currency. China and Russia have partnered up and are already moving away from the dollar being the only currency used to buy oil. Our debtors will not stand by forever and watch us make their investments in US treasuries worthless, which is what we are doing with the QE programs. I see major changes coming in the next 12 months.

[katchum]

What's interesting is that Marc Faber sasy that Japanese yen will fall, but Jim Rogers says it will rise. What will Peter say?

[beiqi89]

wow. u would make a great president

[fuzzywzhe]

@JJJHHH123123 Screw that, Americans don't deserve a good president.

Gold and silver are being taken down. Just get ready to buy, and wait it out. In a few years, sell your commodities, and invest in the stockmarket. It's a simple and easy to follow no fail formula.  Stop trying to save morons from themselves, and start taking advantage of them instead.

[dispersingweight]

peter spits the truth. need more men and women like him.

[jcmnica2007]

Yes run for president!!!