There's a lot of quotable stuff in it. As he normally does, Schiff has used plenty of relevant analogies to get his point across. I'm posting this quote because a lot of people see the recent strengthening of the dollar and the drop of oil prices and assumes this contradicts what the Austrian economists (negative nancys) have predicted in regards to inflation. Of course, there is an explanation:
For now the inflationary tide is being held back by the countervailing pressures of bursting asset bubbles in real estate and stocks, forced liquidations in commodities, and troubled retailers slashing prices to unload excess inventory. But when the dust settles, trillions of new dollars will remain, chasing a diminished supply of goods. We will be left with 1970s-style stagflation, only with a much sharper contraction and significantly higher inflation.
12 comments:
That assumes that the stimulus package and bailout money will not be used to create jobs and won't help create confidence in investment capital. Moreover, Schiff is ignoring another factor: the American dollar is THE dollar. Therefore, if people stop buying American currency, they stop supporting paper money as THE currency. They know this, and are cautious waiting to see how the bailout money and stimulus package will affect matters. Course, if they do no good, it might get pretty ugly..
It'll get pretty ugly.
Sorry, Josh. People are not spending right now because they are scared. Therefore, spending tax money or loaned money on infrastructure that needs to be upgraded anyway is the right thing to do.
The "therefore" part of your statement reminds me of "yadda yadda yadda".
"The "therefore" part of your statement reminds me of "yadda yadda yadda"."
That's the lying I'm talking about.
"That's the lying I'm talking about."
I still don't get it. You say "therefore" and give no reason to make me believe there's a connection other than you saying "therefore".
"I still don't get it. You say "therefore" and give no reason to make me believe there's a connection other than you saying "therefore"."
The economy is receding because people are not spending. THEREFORE, using their taxes to cause people to spend will help the economy to stabilize.
"The economy is receding because people are not spending. THEREFORE, using their taxes to cause people to spend will help the economy to stabilize."
That's an over simplification. Taking money from an individual by gun point (because this is what the income tax amounts to) because this individual chooses not to spend it, in order for the government to invest this money in areas they deem will create wealth will only help the economy stabilize if the government can successfully predict where to invest the money for the greatest return. (Spending the money on repairing roads = investing in infrastructure). However, the assumption that the government can determine or predict which investments will be the most beneficial to the economy and provide the most wealth is on par with speculating in the stock market, which any investor will tell you is not a smart thing to do. The individual has earned the money and therefore has the greatest vested interest in where it is best spent.
"That's an over simplification. Taking money from an individual by gun point (because this is what the income tax amounts to) because this individual chooses not to spend it, in order for the government to invest this money in areas they deem will create wealth will only help the economy stabilize if the government can successfully predict where to invest the money for the greatest return."
Um, no, the government is not suggesting that we take money at gunpoint. The government is suggesting we use already taken taxes.
"(Spending the money on repairing roads = investing in infrastructure). However, the assumption that the government can determine or predict which investments will be the most beneficial to the economy and provide the most wealth is on par with speculating in the stock market, which any investor will tell you is not a smart thing to do. The individual has earned the money and therefore has the greatest vested interest in where it is best spent."
Ah, sorry, Josh, the person who is not spending because they are too scared of losing their job has a vested interest to save. Therefore, even if some of the infrastructural investment turns out to not be valuable in the long run in terms of additional returns, it will still be valuable because it will be used to build infrastructure that needs to be built anyway.
"Um, no, the government is not suggesting that we take money at gunpoint. The government is suggesting we use already taken taxes."
And if I refuse to pay my taxes?
"Ah, sorry, Josh, the person who is not spending because they are too scared of losing their job has a vested interest to save."
And in a country with a negative savings rate, this is probably a good idea.
"Therefore, even if some of the infrastructural investment turns out to not be valuable in the long run in terms of additional returns, it will still be valuable because it will be used to build infrastructure that needs to be built anyway."
If it needed to be built, it will provide returns and will be valuable in the long run, otherwise it didn't need to be built and it was a waste of resource, i.e. a clear example of this was the "bridge to nowhere". Not that I'm suggesting Obama plans on building a bunch of bridges to nowhere, I'm just saying he can't predict where best to invest the country's wealth.
Again, I accept your apology.
"And if I refuse to pay my taxes?"
And if I oppose private property using a gun?
"And in a country with a negative savings rate, this is probably a good idea."
Not at the moment, unfortunately.
"If it needed to be built, it will provide returns and will be valuable in the long run, otherwise it didn't need to be built and it was a waste of resource, i.e. a clear example of this was the "bridge to nowhere". Not that I'm suggesting Obama plans on building a bunch of bridges to nowhere, I'm just saying he can't predict where best to invest the country's wealth."
I think its pretty easy. Most of the country's infrastructure is ageing. Invest in that. This "bridge to nowhere" crap is just another example of idiocy and corruption happening in government, NOT THAT GOVERNMENT IS INHERENTLY IDIOTIC AND CORRUPT. I might as well bring up the dot.com malinvestment as an argument against capitalism everytime you make a point. THAT WOULD BE ABSURD>
Post a Comment