http://moneymorning.com/ob-article/schiff-us-will-win-currency-war.php?code=3243 This article was on Yahoo's front page but it was filled with ads for you to buy his book, so I did some editing of the article to get to the meat and potatoes of the story. It's interesting what he says about stock markets gaining just due to money having less value. I've also heard this from a few friends who follow the markets closely. They tell me even though stocks are rising, there isn't a whole lot of growth in those companies. Then again, gold has gone tumbling, which is sort of surprising. Usually, when there is inflation, gold goes up. I sold mine at $1700/oz. but now it's at $1300/oz.
If the crash doesn't happen then this guy looks like an idiot. If the crash does happen then it will be Bush's fault. Dems will be covered either way.
Just out of curiousity, you aren't trying to allude to Teddy Roosevelt with your initials, are you? Because if so, you're an idiot. Actually, even if they aren't, you're still not the fullest can in the six pack.
Regardless of what happens, the guy is an idiot. His article is logically identical to the following phrase: The sky is blue, and today it has clouds in it. When that combination occurs, a great depression follows.
An investment firm led by Peter Schiff that helps retail and institutional investors diversify out of the U.S. dollar.
The way this works is that every Suit in the U.S. will run out and buy his book. Upper management will buy it to impress their friends, maybe pick a quote or two off the jacket to cite at parties. Middle management will buy it to impress their bosses. Academics will buy it and use it as a textbook for their MBA students. Schiff will make money. His publishers will make money. And if it turns out he's wrong, it won't matter to the people who've talked other people into buying the book, because that's what this is about. Oh, and drawing people to his website. And arranging speaking engagements. And this time next year someone else will have a book out with more dire predictions, and everyone will run out and buy that, too. And one of these years one of them might possibly be right.
We keep hearing this shit. It keeps not happening, and the people making the predictions keep getting everything wrong. Over and over and over again. Boring.
The hell do they mean, the next Depression? We haven't finished the Depression that's on our plate now!
I've heard most people call this The Great Recession. Not quite a depression. What makes an actual depression anyways? As for the article, I hope he is wrong. I think most people will hope he is wrong, unless you are one of those people who already have your bunker prepared and filled with food and ammo.
My bunker is all my neighbors. If the shit really and truly hits the fan, I'm going full-on pirate. You can play the theme music from "Pirates of the Caribbean" and everything.
Crazy talk. Everyone knows we have to enact a gun confiscation first, so those with any money can be robbed blind by the Third World thugs that are gaining power by the minute. Then the gub'mint can swoop in and take control (to save the nation of course) and run rough-shod over our once great nation. Hey, we had a good run!
It is Bush's fault. It's also Roosevelt's, Truman's, Eisenhower's, Kennedy's, Johnson's, Nixon's, Ford's, Carter's, Reagan's, Bush1's, Clinton's, and Obama's, and every Congress that has served with them. And ours. We kept electing these clowns, and we became too selfish to give up freebies and more, and too stupid to educate ourselves about what our government's relationship to us was supposed to be. We've been kicking the can down the road for far too long. We're fucked!
Remember when we had this thing called "Oklahoma"? Remember even before that, we had this thing called "Louisiana"? Nah, nah, we're okay, keep burning tires.
The debt is so large that I am actually now of the mindset that it really doesn't matter. We have a massive working economy. It all works together. Consumers consume goods and services creating jobs which pay the consumers who consume. I'm not convinced that suddenly all that is going to breakdown and stop working. The dollar is currency which can purchase resources of which there are a finite amount on Earth. If the dollar loses its purchasing power something else will replace it. The thing that doesn't change is the existence of the actual finite resources in the world. Yes we can deplete them but as technology advances they are replaced by others we discover. As long as we exist there will be some form of a buy and sell economy functioning. People will always need goods, services, and shelter. That will create jobs and the cycle will continue.
OK, I'm admittedly still working on the article and I'm not an economist, but I'm fairly bright and this bit has me stumped. By the entire nature of the financial system aren't bonds a hedge against stocks? And if interest rates rise, then bonds--which pay interest--become more attractive? So I'm not understanding how stocks and bonds can both tank at the same time. If stocks are strong, bonds are weak. And if the stock market is in the dumper bonds to well.
Yes, the thing on monetary depreciation driving up stocks is interesting. Because apart from that "Keep calm and carry on" is the only reason I can see for the stock market doing what it is doing. And that in the face of no good options you might as well choose the lesser of two weevils.
Bonds pay a fixed interest rate against the official value of the bond. If a bond has a rate of 5%, but market rates are higher, then the bond is less valuable than it would be if market rates were lower. So what happens, is the bond ends up selling for less than face value, to make up for the rate gap. The proper price for the bond is discounted to a point where the actual yield (5% of face in our example) becomes effectively higher. A bond with a $1,000 face value pays $50 in interest. But if real rates are 10%, nobody will want to pay more than $500 for that bond (because $50 = $500 × 0.1). This is somewhat simplified, but demonstrates why higher interests rates cause bond prices to fall. Which of course is not a good thing if you are holding bonds in your portfolio, because most people buy them on the assumption that they will hold value, and not with the intention of collecting interest.
"Everything," huh? I guess that'd be a good time to be someone who didn't have shit to lose. So, hooray.
