I see. Yes, at bottom one must make a generalization on the level of ignorance of these “Keynsian decisionmakers” - namely, are they “wise to the game” or are they not?
I just don’t see how on balance they could be. Most people the world over, indeed most ECONOMISTS the world over, are nearly completely ignorant of Austrian economics. Thus, they are nearly completely ignorant to the possibility that a truly viable alternative to Keynsianism even exists.
It seems most reasonable to conclude that, in fact, decisionmakers are, like everyone else, currnently deluded by the spell cast by Keynes, rather than that they are wise to it and use it to their political advantage.
For anyone similarly interested in the question of whether and to what degree Mr. Schiff is correct, I recommend looking at Bob Murphy’s work - some very good information. Meambobbo, thanks for the link.
As a Europac account holder I can tell you I don’t listen too much of what Schiff says anymore. My account is 1/3 of the investment I put in. I don’t think he analyzes and takes in new info to well.
As long as you are receiving your dividends, and the companies you are invested in are still fundamentally healthy, why would you worry about your valuation in a crashing market?
I listen to people call in and complain all of the time on his radio show. He wasn’t going to help you pick stocks you could flip in trade for a profit necessarily. He was supposed to help you get out of the dollar, and into high dividend yield foreign stocks.
His whole approach is long, not short. I don’t understand why people are so concerned about their short position. The market is a dangerous thing to play that way if you can’t really afford to be so heavily into it.
So why am I complaining? Lets talk dividends first. What is the dividend from a bankrupt company? Or say 3 bankrupt companies? I went over my “diversified portfolio” of 18 stocks with my broker and 3 are basically bankrupt (mining). I have to write them off .. I have now 15 stocks.
As for other dividends, they are going to go down. Its a no brainer that company profits around the world are being squeezed. As I look at my “dividend stream” they are getting less and less. I don’t have the current payouts but keep in mind these bankrupt companies used to pay a dividend as well. My broker said others will slash it as well.
We are so US focused with our problems that we think we are the only one with issues. Schiff didn’t see it was a commodity bubble, real estate bubbles across the world, ect… As Shedlock wrote about Schiff .. Hugely Right, Enormously Wrong
In the bit of research I’ve done since posting, mostly reading Mr. Murphy’s articles, it seems as though Mr. Schiff places too much importance on manufacturing. You hear him constantly rail against what he calls the United States’ “bubble (service) economy”. I need to do more reading, but it looks as though the United States’ economy isn’t as horrible as Mr. Schiff says, at lesat in terms of our lack of manufacturing.
Sorry to hear about your losses. I suspect Mr. Schiff has a bit of tunnel vision. However, I would be hard pressed to bet against him in the long run - your portfolio may indeed make a serious comeback if Mr. Schiff is correct about the future.
I’m a big boy and can take losses and say hey the guy was trying to invest the best he thought how. I wouldn’t give him another dime but I can take it.
The frustrating thing is listening to him on tv and print get all this attention as some kind of prophet. He correctly predicted the bubbles in US stocks & real estate but was totally off the mark in the world economy bubbles. His last radio show he insisted that there was no deflation in the world! He talks more about how many youtube video hits he is getting or his reviews on Amazon (where he asks people to outpost the negative ones) than the foreign stock market. He used to call out guests on CNBC and FOX business when they made wrong predictions and now he is the one trying to cover his own up.
Sorry about the venting. I also talked 2 relatives and a friend into investing in Europac and they are all down around 50% or so. Its just ridiculous to hear this guy act like he was right when he was big time wrong in investing.
I listen more to Depew, Shedlock, North on global deflation so I don’t anticipate the stocks coming back anytime soon (the ones that survive). I really don’t know the true health of these other stocks as its hard to research ones overseas. I might eat my losses and get cash to invest in foreign CDs as I feel the dollar rally will end a bit.
I think Jim Rogers is definitely a better guide to investing - he tells you what he’s buying, but he says you should not invest unless you know a lot about what you are investing in. Especially right now. I think Jim is more right about Asia than Peter is about Europe.
Money stock measures are growing fast. Price inflation will be here soon enough. I’d think it will hit commodities hard. Jim says he expects agriculture to have the best gains. Many are predicting a gold surge. Silver (paper) is surely underpriced.
I think the biggest things right now are deflationary expectations and deleveraging. Both are causing strong demand for cash, pushing prices lower, causing a feedback cycle. A strong stock market rebound could change this. And once inflationary expectations return, cash demand will fall, causing greater inflation in the opposite cycle. The difference is that there are multiples more in bank reserves now, allowing a much larger wave of credit than what fueled the housing boom.
This is a real simple market analysis. The only investments I have are physical gold and silver. They cannot go bankrupt.
And I would not discount anyone’s analysis right now. No one really knows what’s coming next. Just because a stock goes up 10% in this environment doesn’t mean anyone could’ve listed a solid reason to buy it before it did so. The market is nuts, and government action is making it worse. When the housing market hits bottom, we should see a clearer direction. Then we can say who’s wrong or right.
I can definitely see the pull between inflation and deflation. In Schiff’s world though deflation was never a possibility. In fact in late 2007 he devoted a article on it saying no way consumer prices would fall. His ego is too big to say he was wrong.
I had gold and silver before Europac and haven’t sold it. I think that it will hold value and its the ultimate financial insurance.
Actually there was more of a communication problem between them rather then an actual disagreement. Murphy doesn’t believe deficits are allways good, and Schiff doesn’t believe deficits are always bad. Both of them agree that the current deficit is bad. There’s an interview with Schiff by Tim Swanson where this comes up.
It may well be that there was some miscommunication between Schiff and Murphy on the matter but the fundamental question itself is interesting, which is what I’ve attempted to find a solution to in the article.