Tuesday, August 4, 2009

Peter Schiff



I feel no shame for posting propaganda which sides with truth.

20 comments:

KoTeach said...

LOL. You have not read any other arguments, so how can you say it is the truth? Oh yeah, I forget, "you just know".

Christopher said...

Hi, talking heads are obvious propagandits. Peter Schiff NEVER says anything different. Why? Becausee he is a propagandist.

Josh said...

I have not read any other argument in regard to what? When did I ever say I "just know"?

If you'd like to provide an opposing argument please do, but do not attack me with an assumption as to what I have and have not read. And certainly do not make these attacks without defining what it is you think I have not read.

Christopher said...

"I have not read any other argument in regard to what? When did I ever say I "just know"?"


Anything, of course.

"If you'd like to provide an opposing argument please do, but do not attack me with an assumption as to what I have and have not read."

Nah, attacking you by critique is much more fun.

"And certainly do not make these attacks without defining what it is you think I have not read."

Anything beyond the libertard miopia/propaganda that you keep posting.

Christopher said...

The money bomb? Where is Schiff getting that imagery? Oh yeah! Weimar Germany and Zimbabwe!

"Less commonly, inflation may occur when there is debasement of the coinage — wherein coins are consistently shaved of some of their silver and gold, increasing the circulating medium and reducing the value of the currency. The "shaved" specie is then often restruck into coins with lower weight of gold or silver. Historical examples include Ancient Rome, China during the Song Dynasty, and the United States beginning in 1933. When "token" coins begin circulating, it is possible for the minting authority to engage in fiat creation of currency."

"At the beginning of November 2008, the inflation rate was calculated to be at 516 quintillion percent (516,000,000,000,000,000,000%). The monthly inflation was 13.2 billion percent."

LOL. You'd have to print a shitload of money to get an inflation rate of 516 quitrillion percent for one year. They would have had to print the amount of money the economy was worth in the year before they started printing money many time over to get "516 quitrillion percent".

Same shit happened in Weimar Germany. The reparations, if you read Bertrand Russell with even an ounce of intelligence, were many times more than the value of all the gold in post-WWI Germany. This meant that the Germans had to try to pay another way, so they tried to pay with exports, products. The allies said no to this, because they knew that such products would put their own workers out of business. So, how was Germany to repay reparation payments that were worth many more times than their economy? Print cash. PRINT LOTS OF CASH.

It is not the printing of cash that leads to hyperinflation. Instead, it is the printing of cash in such a large number that it exceeds the value of an economy that causes hyper-inflation. Schiff is THEREFORE, wrong. And just to put more nails in this ridiculous, disingenuous, DEMAGOGIC imagery: the American economy was worth 14 trillion in 2008. I think, therefore, even with a negative GDP, the America WILL NOT suffer from hyper-inflation any time soon.

Josh said...

"The money bomb? Where is Schiff getting that imagery? Oh yeah! Weimar Germany and Zimbabwe!"

The money bomb has been a common fundraiser since Ron Paul's presidential campaign.

The US has been exporting their inflation for the past 30 years. . .a benefit which arises from providing the world with its reserve currency. When the world starts rejecting US dollars, all of that inflation which has built up over the past 30 years will come home to roost, and there very well could be hyper-inflation. Schiff isn't certain that hyperinflation will result, but he does predict very high inflation, as do most other people at this point, Schiff (and other Austrian economists) were simply the first ones to start talking about it.

Christopher said...

Again, another stupid assertion. The Chinese are not going to demand all their money at once. They understand the relation as good or better than the Americans. Remember, it is they who purposely devalue their currency.

Josh said...

"The Chinese are not going to demand all their money at once."

No, they would be stupid to do at all at once, but they're doing it. They're hording gold and moving out of dollars. They've began demanding payment in yuan from the US instead of dollars (as Japan has already begun to do). Anyhow, whether they do it all at once, or over the next 5 years, the US is still going to experience high inflation.

Christopher said...

But that's the problem, eh? Your leaders are demagogues, because they are ringing the bells of doom. They are scaring the populace into believing that hyper-inflation is real possibility WHEN the casual factors that create hyper-inflation do not exist.

Josh said...

"hey are scaring the populace into believing that hyper-inflation is real possibility WHEN the casual factors that create hyper-inflation do not exist."

The US is not a mirror of Weimar, Russia, Zimbabwe, or Argentina. The position of the US is one never held by any other nation in the history of the world. For the past 30 years they have been able to inflate their currency while exporting this inflation all over the world. If you do not believe the world will eventually reject the US dollar, there is no reason to think that the US will suffer from hyperinflation. But if you do believe the US dollar will eventually crash and the world will be rejected, all of that exported inflation would come home to roost. How much will the CPI increase, I do not think anyone knows. Am I so sure of this I would put money on it? No. I'm not that smart. But it makes enough sense to me.

Also, I would think it to be a fallacy to assume the US will not experience hyper-inflation because its current position does not reflect that of Weimar. The US is essentially in uncharted territory.

Christopher said...

"The US is not a mirror of Weimar, Russia, Zimbabwe, or Argentina. The position of the US is one never held by any other nation in the history of the world."

Yes.

"For the past 30 years they have been able to inflate their currency while exporting this inflation all over the world."

Perhaps.

"If you do not believe the world will eventually reject the US dollar, there is no reason to think that the US will suffer from hyperinflation."

Why the fuck would they reject the U.S. dollar if they have a massive amount of loans invested in it? You never answer this question..

"But if you do believe the US dollar will eventually crash and the world will be rejected, all of that exported inflation would come home to roost. How much will the CPI increase, I do not think anyone knows. Am I so sure of this I would put money on it? No. I'm not that smart. But it makes enough sense to me."

There would have to be a pretty severe reason for Chinese to suddenly demand all its loans back at once, use the Yuan as the reserve currency AT THE DETRIMENT OF THE BILLIONS OF DOLLARS THEY INVESTED IN THE GREENBACK... Your argument is not making any sense and you have no reason for believing that the world will just suddenly turn their backs on their investment. All you have in your head is fear, which make sense since Schiff and Paul are demagogues.

"Also, I would think it to be a fallacy to assume the US will not experience hyper-inflation because its current position does not reflect that of Weimar. The US is essentially in uncharted territory."

Hyper-inflation is the result of the hyper-printing of a currency well beyond the worth of that economy. This is pretty straight forward, Josh. And unless you have some theory to describe your fears, all you have is fears..

Josh said...

"Why the fuck would they reject the U.S. dollar if they have a massive amount of loans invested in it? You never answer this question.."

Because they cannot buy anything of value with these dollars. We can both agree the manufacturing base in the US has been gutted. What value is it to hold $1 trillion in US dollars if there's nothing buy with them? It will not happen overnight (though some think it will), but at some point people will start selling this debt to others and the US dollar will drop. It has been hitting new lows all week. Is this a benefit to the Chinese? No. But holding $1 trillion worth of useless paper is not either.

Just think of the housing bubble. People who bought at the peak were screwed once the sell off began. And, even though China has a lot of US reserves, its not simply dependent on them. If other begin to sell off their US debt, private businessmen, corporations, other governments, and the US dollar begins to take a serious fall, China's hand will be forced.

"There would have to be a pretty severe reason for Chinese to suddenly demand all its loans back at once, use the Yuan as the reserve currency AT THE DETRIMENT OF THE BILLIONS OF DOLLARS THEY INVESTED IN THE GREENBACK"

Agreed. The reason would have to be pretty severe.

"All you have in your head is fear, which make sense since Schiff and Paul are demagogues."

Listen, if they were just spouting off stuff because of their own intuition, I'd understand it. But their line of thinking is based has an intellectual backing to it that you choose to ignore. Ron Paul has been talking about this stuff since the dollar was taken off the gold standard. Do you really think he's simply trying to fear monger for some alternative motive? 30 years of not being heard is a long time to be saying the same thing over and over again if you don't truly believe what you're saying. Mises, Hayek, Hazlitt, and Rothbard were not fear mongers. They were not demagogues. These are the people these predictions and ideas are derived from. Do not compare it to Bush scaring the public into war over non-existent WMDs (which is what I think of when criticizing fear mongering). Sometimes fear is legitimate.

"Hyper-inflation is the result of the hyper-printing of a currency well beyond the worth of that economy. This is pretty straight forward"

The theory is that the US has been doing this since removing the dollar's link to gold. But they haven't felt the effects of this because they have been shipping their inflation over seas. The money supply has massively outpaced the growth of the economy over the past 30 years and some would consider it "hyper-printing".

Christopher said...

"Because they cannot buy anything of value with these dollars. We can both agree the manufacturing base in the US has been gutted. What value is it to hold $1 trillion in US dollars if there's nothing buy with them? It will not happen overnight (though some think it will), but at some point people will start selling this debt to others and the US dollar will drop. It has been hitting new lows all week. Is this a benefit to the Chinese? No. But holding $1 trillion worth of useless paper is not either."

Yes, but that assumes it will always be useless and that the Chinese do not understand the concept of a run on the bank. I think you and your fellow Austrians underestimate the people who hold these investments.

"Just think of the housing bubble. People who bought at the peak were screwed once the sell off began. And, even though China has a lot of US reserves, its not simply dependent on them. If other begin to sell off their US debt, private businessmen, corporations, other governments, and the US dollar begins to take a serious fall, China's hand will be forced."

Yes, but everyone KNOWS this JOSH, so why would they start selling like scared cattle?

"Agreed. The reason would have to be pretty severe."

Almost completely retarded, actually, considering they know about what would happen to significant portion of their investment: it would be devalued. The investors who didn't get out early would lose even more.

"Listen, if they were just spouting off stuff because of their own intuition, I'd understand it. But their line of thinking is based has an intellectual backing to it that you choose to ignore. Ron Paul has been talking about this stuff since the dollar was taken off the gold standard. Do you really think he's simply trying to fear monger for some alternative motive? 30 years of not being heard is a long time to be saying the same thing over and over again if you don't truly believe what you're saying. Mises, Hayek, Hazlitt, and Rothbard were not fear mongers. They were not demagogues. These are the people these predictions and ideas are derived from. Do not compare it to Bush scaring the public into war over non-existent WMDs (which is what I think of when criticizing fear mongering). Sometimes fear is legitimate. "

Maybe, they never talk about anything else. If they were actually talking about what is needed to be done to retain jobs - well-paying jobs - they would have more credibility, but they don't, because they are fear mongering talking heads taking advantage of all the anger workers who have been devalued BECAUSE of their free-market principles. It really is a fun little circle to watch.

"The theory is that the US has been doing this since removing the dollar's link to gold."

That theory is garbage. Peter Schiff arguing that we need deflation is pure idiocy.

"But they haven't felt the effects of this because they have been shipping their inflation over seas."

Nope. They haven't felt the effects of previous inflation, inflation that never exceeded 8 % and was usually around 3 to 4 percent (look it up, because once prices rise to reflect inflation, the inflation ends. The inflation of the 1970s is OVER JOSH. Bubbles may still occur, but they have nothing to do with previous inflation. You know this, I know this, so stop making and believing in silly arguments.

Christopher said...

"The money supply has massively outpaced the growth of the economy over the past 30 years and some would consider it "hyper-printing"."

If the printing of money is accompanied by a rise of prices, it doesn't matter. Inflation in these cases is irrelevant. Every time a price increases to reflect the current money supply, a stable value has been reached. This stable price is equivalent to gold. For example, if the money supply of paper money was to stay exactly equal for 5 years, there would be no money-supply based inflation during the last four years of that period. If a fiat money supply is constant, it is the same as gold. It is only with the printing of money or with the increase of wages that inflation occurs.

Josh said...

"Yes, but that assumes it will always be useless and that the Chinese do not understand the concept of a run on the bank."

Most business people in the world, those that hold control of these dollars, understand that the policies the US government is enacting is poor policy for productivity.

I think they completely understand the concept of a run on the bank. I think they will do everything in their power to diversify their reserves out of dollars before the run occurs. But I do not think their attempt to side step a run on the US dollar will keep the US dollar bouyant indefinitely.

"Yes, but everyone KNOWS this JOSH, so why would they start selling like scared cattle?"

Because someone of some importance is going to decide they're holding too many dollars, that they serve no purpose to have them any longer. The scared cattle won't be what causes the initial drop; they'll be the ones that carry the momentum to the floor though.

"considering they know about what would happen to significant portion of their investment: it would be devalued. The investors who didn't get out early would lose even more."

Your logic didn't prevent the stock market crash in 29. The point is, people will only sell if they feel their investment is already significantly devalued, not the other way around. If there is a significant drop in the dollar, people will get scared and think it'll go to the bottom and will want to get out before it does so.

"If they were actually talking about what is needed to be done to retain jobs - well-paying jobs - they would have more credibility"

They're under the impression that they are.

"they are fear mongering talking heads taking advantage of all the anger workers who have been devalued BECAUSE of their free-market principles"

I'd ask you to expand on this, but maybe we'll save that argument for another post.

"That theory is garbage. Peter Schiff arguing that we need deflation is pure idiocy."

I'm not sure that that's what he's arguing for, but why would it be idiocy?

"Nope. They haven't felt the effects of previous inflation, inflation that never exceeded 8 % and was usually around 3 to 4 percent (look it up, because once prices rise to reflect inflation, the inflation ends. The inflation of the 1970s is OVER JOSH. Bubbles may still occur, but they have nothing to do with previous inflation. You know this, I know this, so stop making and believing in silly arguments."

You're arguing that the US is not exporting inflation overseas by referencing CPI numbers from the US?

"If the printing of money is accompanied by a rise of prices, it doesn't matter. Inflation in these cases is irrelevant. Every time a price increases to reflect the current money supply, a stable value has been reached. This stable price is equivalent to gold. For example, if the money supply of paper money was to stay exactly equal for 5 years, there would be no money-supply based inflation during the last four years of that period. If a fiat money supply is constant, it is the same as gold. It is only with the printing of money or with the increase of wages that inflation occurs."

Inflation isn't caused by the increase in wages.

The problem with your line of thinking is that it completely ignores wage-earners and savers. Prices may increase to match the supply of money, but unfortunately this steals the value of an individual's savings, and wages rarely move up at the rate of inflation. Of course, in your perfect world all businesses would be forced to raise wages at the rate of inflation even though this would destroy 99% of small businesses who are having trouble enough to keep up with the rising prices caused by inflation and the devaluation of their capital.

Also, you continue to ignore that this massive inflation over the past 30 years has been exported over seas.

Christopher said...

"Most business people in the world, those that hold control of these dollars, understand that the policies the US government is enacting is poor policy for productivity. "

Yes, and they also understand what happens when there is a run on the bank. They know all about it. So why would they risk their investment for the short-term?

"I think they completely understand the concept of a run on the bank. I think they will do everything in their power to diversify their reserves out of dollars before the run occurs. But I do not think their attempt to side step a run on the US dollar will keep the US dollar bouyant indefinitely."

I think they know that it is probably best that they keep their value in the dollar until the crisis is over. In fact, I think it is goldbugs like you who are causing a lot of the instability. Fiat against counter-fiat = instability. The greenback and other strong currencies are the standard. Accept it. Stop rocking the boat.

"Your logic didn't prevent the stock market crash in 29. The point is, people will only sell if they feel their investment is already significantly devalued, not the other way around. If there is a significant drop in the dollar, people will get scared and think it'll go to the bottom and will want to get out before it does so."

Or they will think it will rebound once the economy recovers. Jesus Christ, Josh, do you think they are morons? They have much more knowledge of economics than the investors and small banks of the thirties. This should be pretty clear.

"They're under the impression that they are."

Still waiting for the Chinese to make good wages, Josh.

"I'd ask you to expand on this, but maybe we'll save that argument for another post."

It's simple: The "free market" causes the loss of well paying jobs. This causes anger and irritation among white men who thought they would be paid well.

"I'm not sure that that's what he's arguing for, but why would it be idiocy?"

Because it would lead to a massive loss of wealth for those not buying gold. Paper currency only works because it stabilizes. That stabilization mimics the stable nature of gold currency. That's why inflation is bad, duh.

"You're arguing that the US is not exporting inflation overseas by referencing CPI numbers from the US?"

Obviously it is the Chinese buying it. No demand, no exports. Anyway, there is no government bureaucrat somewhere planning to sell inflation to the Chinese. Government bonds and such have a much longer history..

"Inflation isn't caused by the increase in wages."

Yes, yes it is. That's why the inflation of the 60s and 70s was so dramatic.

"The problem with your line of thinking is that it completely ignores wage-earners and savers. Prices may increase to match the supply of money, but unfortunately this steals the value of an individual's savings,"

WRONG. Savings of any significant amount are usually saved in savings accounts of 3% to 5% interest. Since inflation was roughly around 3 to 5% since the 80s, it follows that those savings accounts are offered to keep large savings in line with inflation. The percentage is even higher with higher amounts of savings. Finally, even if 5% savings accounts didn't exist, inflation still doesn't increase fast enough to outstrip wages or to be a significant loss for the savers.

"and wages rarely move up at the rate of inflation."

WRONG. Unionized industry wages definitely did and do stay with inflation.

It is a big problem with the lower wages jobs, and since you are worried about such wages brackets YOU MUST be in favor of an inflation-adjusted minimum wage. SURELY. You and Rontard talk about jobs all the time, so it follows that you must be for an inflation-adjusted minimum wage.
Of course, in your perfect world all businesses would be forced to raise wages at the rate of inflation even though this would destroy 99% of small businesses who are having trouble enough to keep up with the rising prices caused by inflation and the devaluation of their capital.

Christopher said...

"Also, you continue to ignore that this massive inflation over the past 30 years has been exported over seas."

Ptah. Nope. They were not exporting inflation, because the inflation wasn't significant enough of a number. Instead, they were selling American dollars like gold. THAT'S A FACT>

Josh said...

"Yes, and they also understand what happens when there is a run on the bank. They know all about it. So why would they risk their investment for the short-term?"

They won't until they realize their investments in the US dollar in the long-term is worth nothing.

"In fact, I think it is goldbugs like you who are causing a lot of the instability."

Yea...people who like gold are bad. We've been talking the Chinese into accumulating more and more gold...yep.

"The greenback and other strong currencies are the standard."

The greenback isn't particularly strong. Currencies that are issued by countries with large amounts of natural resources are consistently out-performing the US dollar (i.e. the Canadian dollar). This is not gold bugs rocking the boat. This is the world recognizing that as the US economy tanks, the US dollar is worth less and less because its purchasing power is shrinking.

"Or they will think it will rebound once the economy recovers."

Maybe some, but there are plenty around the world that understand the policies being enacted by the US government will not lead to a recovery; this is why Asia markets have been significantly out-pacing US markets the past 10 months.

"They have much more knowledge of economics than the investors and small banks of the thirties. This should be pretty clear."

I don't think that's necessarily clear.

"Still waiting for the Chinese to make good wages, Josh."

They'll be much closer to the US in about 20 years, as one will continue to rise and the other will continue to fall.

Josh said...

"The "free market" causes the loss of well paying jobs. This causes anger and irritation among white men who thought they would be paid well."

How does the free market cause the loss of well paying jobs?

"Paper currency only works because it stabilizes."

Yea, paper currency has a long, rich history of stabilization.....

"Because it would lead to a massive loss of wealth for those not buying gold."

I think the loss of wealth that you would see is simply inflated wealth; not real. It would be very similar to all of the wealth loss during the housing boom. A lot of people though they had a lot of wealth because housing prices soared; the distortion in pricing caused an illusion. I think this type of illusion exists in many other sectors of the economy> sports, health insurance, farming. A lot of paper wealth would be wiped out with a move to a more honest currency, but it would affect the richest 2% more than the middle class. The middle class would benefit in a big way because their wages would have a higher purchasing power and the gap between the middle class and upper class would have shrunk significantly.

"Anyway, there is no government bureaucrat somewhere planning to sell inflation to the Chinese."

They do not think of it in those terms (maybe), but that's what they're doing.

"Yes, yes it is. That's why the inflation of the 60s and 70s was so dramatic."

Inflation in the 70s was so dramatic because the US government printed a ton of money to pay for the Vietnam War and then took the link between the US dollar and gold away when they discovered they didn't have enough gold to properly back the amount of paper they printed.

"Savings of any significant amount are usually saved in savings accounts of 3% to 5% interest."

You MIGHT be able to find a 3% savings account, but most standard savings accounts right now offer 1% - 1.25% (in Canada at least).

Josh said...

"Since inflation was roughly around 3 to 5% since the 80s, it follows that those savings accounts are offered to keep large savings in line with inflation. The percentage is even higher with higher amounts of savings."

LOL, WRONG. Unfortunately you keep referencing CPI. People do not save money to pay for food. They save to buy a house, pay for health care, pay for education or other large expenses. If you look at the increase in costs of healthcare, housing, and education over the past 20 years you'll find its much greater than 3% - 5% per annum. This forces people into riskier investments (stocks) to try and make returns that will keep pace with the increase in cost of these expenses which they are saving for.

"Finally, even if 5% savings accounts didn't exist, inflation still doesn't increase fast enough to outstrip wages or to be a significant loss for the savers."

Inflation has been outstripping wage increases for the past decade, and causes a loss for the savers.


"Unionized industry wages definitely did and do stay with inflation."

Wages across the board have not increased in line with inflation for the past decade.

I'm sure the unemployed auto workers in Detroit are happy unionized wages have kept pace though...lol.

"It is a big problem with the lower wages jobs, and since you are worried about such wages brackets YOU MUST be in favor of an inflation-adjusted minimum wage. SURELY."

No. That's attempting to fix one government caused problem while creating a new government caused problem. I'd rather just eliminate the first problem: the government should not have a monopoly on currency; repeal legal tender laws.

"You and Rontard talk about jobs all the time, so it follows that you must be for an inflation-adjusted minimum wage."

And we understand some people would rather work for $5/hr than not work at all. Why do you think there's been such a large immigration of Mexicans into the US over the past 20 years? Its largest mass movement of a population of people in the history of North America. These are illegal aliens coming in and filling a void in the job market created by the minimum wage. And then they're blamed for taking all the work when its really the government preventing legal citizens from working under their arbitrarily set minimum wage. Its fixing one government caused problem while creating another.

"They were not exporting inflation, because the inflation wasn't significant enough of a number. Instead, they were selling American dollars like gold."

Because there was a perception american dollars were just like gold. What happens when this perception disappears? People go back to real gold. Duh. And yes, they were exporting their inflated money supply, i.e. exporting inflation.