Peter Schiff makes the case of inflation intead of deflation

Peter talks with a caller about the possibility that a credit contraction necessarily produces deflation similar to the Great Depression.

Category:

News & Politics

Tags:

• depression
• crash
• peter
• schiff
• inflation
• deflation
• dollar

[grimesgw]

Right now, it seems Robert Prechter's deflationary outlook is more accurate than Schiff's hyperinflationary outlook.

oil, stocks, gold, silver, real estate, other commodities -- are are DEFLATING in nominal (fiat) terms, not just real (gold) terms.

[julebuggy]

But inflation is running at a multi decade high? Let's get real.

Commodities are subject to noise, and it's certainly plausible that central banks are trying to manipulate the price downward (flooding the market with supply, etc) so the boyz can buy them up at a bargain from individual investors who think the sky is falling.

Deflation first, maybe. There is no way out of this other than stagflation or hyperinflation.

[obsidian2012]

I have great respect for Peter Schiff and his opinions. But consider Argentina which Peter suggests is the economic paradigm for where the US is headed. Argentina had 3 distinct economic phases. Hyperinflation of 5000% in the 1990s, followed by a deflationary collapse in 2001, followed by inflation. So both extremes can be appear on a country's economic timeline. One thing I think we can all agree on is, regardless of the outcome, you should own precious metals as a hedge.

[julebuggy]

Yes, silver/gold/platinum/paladium = MONEY! :)

[BlueEagle8]

"If the American people ever allow private banks to control the issue of their money, first by inflation and then by deflation, the banks and corporations that will grow up around them (around the banks), will deprive the people of their property until their children will wake up homeless on the continent their fathers conquered." -Thomas Jefferson

[tomniemiller]

No, that's definitely Peter.

[Myndir]

@bakinjoo So unbelievably inflationary that inflation is at 1%.

Schiff got it wrong.

[Youreallsheople]

Peter Schiff is correct. Japan and the US are different. Japan had a future then when it went thru its crisis. The US has no future. When it defaults on the payments as it eventually will, there will be no recovery. High interest rates will not work ultimately. In the short term, it might 'work' for a while and the US can sell some more debt, but in five years, it will all come undone.

[ctrader09]

i do read EWI reports. there could be short term deflation due to demand and thus price erosion, but long term the dollar is certainly toast. Also remember you can have deflation in one asset class and not in another. i think this will be an inflationary depression in which asset prices (i.e. real estate) in real terms (in terms of GOLD) fall but consumer prices (and possibly some asset prices) rise in dollar terms. either this will be a deflationary or inflationary depression. time will tell

[czrart]

The US dollar will not collapse any time soon nor in the near medium to long term future. Instead, the US dollar will outperform every other currency out there because the US dollar is the most debt-inflated currency in the world; i.e., more debt is denominated in US dollars than any other currency. As such, as the current and ongoing debt implosion continues to its worthlessness state, the US dollar will rise. (see Eliott Wave International's financial forecast and Theorist reports).

[gaguy1967]

I think the will be somewhat successful reinflating t he bubble, thus creating an even bigger economic collapse in 2012-2014

[ctrader09]

as far as I'm concerned, that will only be in REAL terms. in nominal terms, prices are going through the roof, simply by the logic that the dollar will collapse. it has to. how can the dollar be worth anything if no country wants it? its simple supply and demand

[30percentplusreturns]

I agree with robert prechter how we will have years more of deflation. There has been so much credit destruction that we will be in a deflationary spiral for years to come. So far every asset class from real estate to commodities have cratered and are having no bounce, except oil, but that only because oil cratered. Im not buying the inflation argument. People are forclosing and losing their jobs like crazy.

[zurichdublin]

One thing is for damn sure;

You can't base models related to this financial crisis on the Depression Era.

Its just pointless. There are no similiarities other then the name of the country.

[jamesat6]

March 08 - "there's no chance that the dollar will appreciate" Good One mate

[elliottwavenews]

Deflation is here. And here to stay for a while.