Peter Schiff Answers His Critics

My popularity on television and the internet has led a very small money manager to use his popular financial blog to promote his fledgling business by attacking the recent poor performance of my long-term investment strategy. The post is causing quite a stir and compels me to provide some badly needed context.

To achieve his ends, this individual has distorted much of what I have been saying and writing, and has twisted the facts to support his own preconceived conclusion. In essence, his piece is nothing more than an overt advertisement (and a highly deceptive one at that) to use my popularity to advance his career. In so doing he has given my critics, particularly some who have been embarrassed by their roles in the "Peter Schiff was Right" video, their moments of retribution. In addition, some members of the press who have never been among my greatest fans are seizing the opportunity to discredit me as well.

The crux of the blogger's arguments are that my beliefs in "decoupling, hyperinflation, and that the dollar is going to zero" have been completely discredited by the events of 2008, and that the resulting investment losses suffered by my clients last year confirms the fatal flaws in my approach.

In addition to mischaracterizing many of my beliefs, he also is confusing short-term market fluctuations with long-term economic trends.

First of all, the hyper inflation issue is a straw man at best. While I often talk about the possibility of hyper inflation, I have always said that it would be a worse-case scenario that would play out over many years. The fact that it did not appear in the first year of the economic crash (2008) does not invalidate my position. I have always maintained that this worst-case scenario will likely be avoided by what will ultimately be a dramatic shift in policy once our leaders come to their senses. However, until then the dollar will likely lose a substantial portion of its value.

Second, I never said that the dollar would go to zero, either in 2008 or any year thereafter. I have said that in the event of hyper inflation the dollar's value would approach zero. My actual forecast in my book "Crash Proof" was that the Dollar Index would fall to 40 (currently about 85), with a realistic worst case scenario, assuming very high but not hyper inflation, of 20 or lower.

Third, the blogger points out that because the decoupling theory (foreign economies improving while the U.S. falters) that I wrote about in "Crash Proof" has yet to occur, that the theory itself was ridiculous. In my book I wrote that this process would not occur overnight, that initially our creditors would come to our aid, and in so doing our problems would become manifest abroad. I wrote that it would take time for the world to realize that what had been decoupled from the economic train was not the engine but the caboose. In fact, that is precisely the way it is playing out.

Chapter Ten of "Crash Proof" is specifically focused on the need to keep funds liquid to take advantage of the buying opportunity that would initially develop once our stock market began its collapse. I specifically mentioned that when U.S. stocks began to fall, we could expect sympathetic declines overseas. While I did not know the precise timing of those events, I advised readers to prepare.

I did not expect the huge dollar rally of 2008. But to discredit my long-term view of the dollar based on an eight month move is absurd. So while I believed that a weak dollar would cushion the temporary decline I expected in foreign stocks, a strong dollar ended up exacerbating it. In the meantime, I believed that the high dividends these stocks were paying would make it easier to ride out any correction. The problem was that the dollar fell so far leading up to the crisis (in 2005-2007) that by the time the crisis finally erupted the dollar was poised for a bounce.

Central to the argument that my investment thesis is wrong is the belief that the crisis is over or that the recent trends will continue until it is. But the crisis is just beginning and the movements thus far in the dollar, commodities, and foreign stocks, are mere head fakes. Once the speculators have been flushed from the markets, the underlying long-term trends I have been following should return in earnest.

To illustrate the flaws in my investment strategy the blogger has posted a client's statement that shows a loss in excess of 60%. In addition, he claims to know of other Euro Pacific clients who have experienced similar losses. The inference of course is that most, or all, of my clients must have suffered similar losses, and the existence of such losses proves that I am wrong. In fact, some have gone a step further, claiming that such losses prove that I am a fraud.

First let's deal with the one client's account. I have been following several key investment themes for the past ten years. The basis for my strategy is that recent U.S. prosperity has been false, and that the consequences of the bursting of our bubble economy would ultimately play out in a substantial decline in the value of the U.S. dollar, higher commodity prices, the re-monetization of gold, and foreign equities substantially outperforming U.S. markets. From an investment perspective, those themes played out extremely well in the eight years from 2000-2007. Recently we have seen a sharp, and I believe temporary, reversal of these trends. Those that came late to the party (at least based on where we are today) now have to ride out a particularly difficult correction.

For example, the account in question belongs to the son of a long-standing Euro Pacific client, who is still adding funds to his accounts. Without specially commenting on the performance of the father's account, it must have been compelling enough to finally persuade the son to come on board himself in early 2008. However, as is often the case, by the time he came on board, foreign stocks and commodities were about to sell off, and the dollar was about to begin its unexpected rally. Following such a sharp correction, the son now regrets his decision and must blame me for my part in helping him make it.

Perhaps as a stockbroker I should have persuaded the son to wait for a correction. However, while this clearly would have been the right call with the full benefit of hind-sight, it was certainly not as clear given the information I had at the time. However, I never held myself out to be a market timer. My advice was always geared to long-term investors. Given the thousands of clients that I have, and the large number who joined near the recent dollar peak and market tops, it's no wonder that a few have contacted this blogger to complain; especially since he has actively sought them out. Of course, the fact that the overwhelming majority of my clients are not complaining, to him or anyone else for that matter, says a lot more about what is really going on.

To the extent that the long-term trends I have been following continue, I am confident that even those whose short-term timing was bad will still do well in time. This is especially true if they take advantage of this pull back by adding to their accounts, either with new funds or by re-investing their dividends. However, to examine the effectiveness of my investment strategy immediately following a major correction by looking only at those accounts who adopted the strategy at the previous peak is unfair and distortive.

Since I have been advising investors to follow these trends for ten years, I will leave it to the public to draw their own conclusions as to how long-term followers of my strategy have fared. However, for those who only recently adopted my approach in 2007 or 2008, the road has been a lot bumpier than they or I thought it would be when they climbed on board. Yet if these long-term trends re-emerge, though the journey may be different than planned, the ultimate destination will remain the same.

The blogger in question implies that all of my clients are down by levels similar to the account he cites. He has asked me to refute his allegations by providing broader performance figures for more clients. But, since Euro Pacific Capital is a brokerage firm and not a Registered Investment Advisor, I am prohibited by regulators from providing any details on the investment performance achieved by my clients. The blogger in question makes his challenge knowing full well that I am legally prevented from accepting it. He then uses my failure to refute his false claim as validating its accuracy.

In addition, consider that 70% of the account in question happens to be invested in mining and energy stocks. These were the two sectors that got hit the hardest in the recent downturn. This is a very aggressive exposure to those sectors and not typical of Euro Pacific clients. While it is true that many of my clients are interested in these two sectors and specifically seek portfolios heavily weighted in these areas, most take a more balanced approach, with mining and energy typically representing 20% to 30% of their portfolios. I also have clients with minimal or no exposure to these sectors.

All Euro Pacific client accounts are different reflecting the individual objectives of each client. In general the goals of my clients are to get out of the dollar and hedge against inflation. However the way each client chooses to pursue these goals varies. Some choose a relatively conservative approach, consisting mainly of utilities, property trusts and bonds, others choice a more balanced approach, adding exposure to infrastructure, agriculture, energy trusts, and transportation, while some are more aggressive with heavy exposure to resources, junior mining companies, and oil and gas exploration companies. Some clients specifically seek to gain or avoid exposure to certain regions, sectors or currencies. Some are focused more on long-term preservation of purchasing power, while others look to maximize long-term appreciation. Most of our accounts are yield oriented, but many of our clients specially request more aggressive growth oriented portfolios. In a down market to evaluate my investment strategy based solely on the performance of the most aggressive accounts is completely unfair. Doing so ignores the better performance of less aggressive accounts that were not hit nearly as hard.

In addition, to look only at the performance of foreign stocks, while ignoring other aspects of my investment strategy only tells part of the story. What about gold, foreign bonds, short positions in financials, home builders and subprime mortgages (or merely avoiding long exposure to those sectors), or other investments people have made, either at Euro Pacific or elsewhere based on my insights? What about dividends earned, or gains realized on closed positions?

Mainstream economists, journalists, and investment professionals have never liked my message and have never resisted the temptation to shoot the messenger. When my investment strategies were performing well, I got little credit for it. Instead, all the attention was focused on the apparent failure of my dire economic predictions to materialize. Now that the economy is collapsing along the lines that I correctly forecast, criticism is being focused on the recent poor performance of my investment strategy (a fact that I have never tried to hide). Of course by the time my investment strategy is once again in step with my economic forecasts, an event that I believe will occur sooner than most people think, it will likely be too late for most people to do adopt it.

My critics have often referred to me as a stopped clock. I believe that the accusation is best leveled at the accusers. Having been wrong for so long, they are now enjoying their brief moment in the sun. They should enjoy it while it lasts. For now, they are creating fodder for some future "Peter Schiff was Right" piece where those who now criticize my investment performance will look just as foolish as those who once criticized my economic forecasts.

Comments

[Steven Hansen:]

Peter, you laid out a vision - and are sticking with it. Timing is always a problem. I really do not understand what triggered the broadside on you. sometimes it is better to just tell your critics to FO.

Jan 30 05:18 AM

[Jack K:]

Peter since you read the replies, I would like to say that I was going to invest with your company, but "only" $30,000 and the guy I spoke to seemed almost insulted that I would invest that small amount. Why would I plunk down 6 figures sight unseen? So I never did, and don't plan on it at this time. But you do deserve respect. PS your Dad is a great guy.

Jan 30 06:09 AM

[Firat Ünlü:]

Nice post.
What I like about finances it that in contrast to nearly all other fields you stand to make a substantial loss if you're wrong. Those deciding to make up their own mind, and stick to your line of thinking did make a lot of money, whilst those trying to ride on your thinking, blindly assuming you'd provide profits every possible time-period are left with losses.
It's good to fight against critics but, at least to me, there'd come a point when I'd just put out a chart and let the numbers speak for themselves. You can only lead a horse to water...

Jan 30 06:24 AM

[Archman Inv...:]

Let me start off by saying I am not a "kool-aid" drinker.

Wether it be Peter, or from the lying criminals of CNBC. I always try to take the middle road. Always. Taking the extreme has always been the wrong move.

I deeply respect Peter, have read his books, and understand his thinking. I respect that he has stuck to his guns. Yes, he is a bit over exposed now, so it was only a matter of time before folks started going after him.

However, Peter being temporarily wrong, pales in comparison to the thousands of so called "experts" paraded around on TV daily, who have been dead wrong for years, destroyed 100 times more wealth than Peter has, and yet are now STILL paraded around on TV doling out investment advice, acting as if they haven't lost anyone a cent. The bottom in the market was called almost 2 years ago by many of these people, then called again at DOW 10K, and again and again, each time lower and lower.

Again I am not a Peter Schiff, kool-aid drinker, worshiper.
However, there are countless hundreds of other "TV market mavens" who quite frankly should be put up against a wall and stoned for their outright lies, knowing they have zero accountability for their predictions and advice.

Now:
For those who complain that they lost money with Schiff's firm: "Get over it. Investing involves risk, and is NOT an entitlement system."

I prefer to reference my own saying which I use all the time: "Things take time to occur."

In my opinion, one should be positioned for a minor recovery in the US, and more major recoveries in other economies. I do agree with Peter and I believe that over time the world will come to realize that relying on 5% of the world population (the USA) to drive the majority of the world's economic growth is a huge mistake. Not when your own country's people have the same desire to consume and manufacture their own goods. This scenario in my opinion will take a decade to play out, and I think Peter's time frame was to short, for he assumed that things would change quickly.

Based on the amount of rhetoric we are hearing from the worlds leaders, the US is no longer going to be the "model" the world follows for economic growth. Consumptive lifestyles, fueled by very easy credit, financed thru debt bought by others, is not going to be the model for the world going forward.

While our leaders do everything they can to return the US to that model, instead of seeing what the future should look like, the rest of the world (except for the UK, they are in really bad shape) will come out of this crisis sooner than later.

The US will always be relevant, however contrary to the lies the gov't and financial media put out, we are not going to have the same level respect we once enjoyed nor the same level of persuasion we once had.

Best of luck to all in this tough environment.

Jan 30 07:19 AM

[tdillian:]

Thank you Mr. Schiff for the rebuttal... I really don't understand why you were broadsided by critics who weren't even critising you on your words. I noticed they weren't even quoting things you said.

Anyways... if you are to be critized, then I expect people like Dr. Marc Faber, Jim Rogers better be critized for saying the same stuff as you.. but low behold they are not.

Sorry.. I can't watch the Corrupt News Network of CNN anymore.. but I do catch you on bloomberg and Fox business and sometimes CNBC (as long as Larry Kudlow isn't pushing mustard seeds)

Anyways.. just wanted to say... good rebuttal! and keep up the good work!!..
I don't agree with you on everything, but I do agree with the overall macroeconomic trends you are outlining.

Jan 30 07:26 AM

[tdillian:]

Also... I meant to add, I stopped watchting the Corrupt News Network about 10 months ago b.c I noticed they are deliberately lying to the point where where they report news they don't tell the whole story, they are calculatingly misleading its audience.

I mean I know Fox has a right tilt, but they alway allow both sides to be told... Not so with the Corrupt News Network
I noticed they cut you off several times on CNN when you critized CNN's employer -- Barack the Messaih

I mean if you or anyone can't even critize a PUBLIC OFFICIAL then what kind of country is this??

Anyways.. keep up the good work and don't hold back in your critism of ANY democrat or republican!
we need at least a few americans who are willing to tell the public the truth.

Jan 30 07:33 AM

[You're Kidding:]

There is a guy named Joe Granville, who was a big investment Guru in the '70s. He did really, really well...for awhile, then started being wrong...and bingo, lost his Guru crown.

He was just one of many who have come, conquered, and then faded, and who will be followed by many more. They appear to be prescient and attract droves of followers, but alas, it turns out that they are soothsayers but for a limited time only, and not for always. Bummer.

Why is it that they always fade out? Well, obviously, because they weren't really Gurus at all. They were just lucky for awhile.

There are even some around today, and if you were to get into a time machine and jump into the future, you would find them there. They would have predicted, say, for example, the bottom of the Great Recession in late 2008 (or 2009, or 2010, or...whenever it was.) There they are...the Gurus..and they were right!

Except they weren't. They were lucky. How they saw the future happened to be somewhat correct. But do you think this correlation really means anything?

Well, lets say it does. The question now becomes how do I find a Guru before
we all discover he was right, which will then probably be too late to take advantage of his "predictions." There are lots of Gurus around making their prognostications; but which one is going to be right? If you think about this for very long, you'll discover that you can't ever know. How can you possibly know ahead of time which "Guru" will be right, and at what time in the future, unless...

You are a Guru, too!

In that case, you don't need one, do you? Just listen to yourself. But, alas... you know you're not a Guru. So, its impossible to pick one out and know ahead of time when they are going to be right, unless you just make a lucky guess.

So we only know who they are, and when they are right, after the fact, and not before. Again, big Bummer.

And to go one step further, if after all that we still decide to follow what someone says because it appears they were right once, or for awhile, how on earth do we know if they are going to be right again? Jo Grandville was "right" for awhile, and then he wasn't. Peter Schiff was right, it seems, for awhile, if you give him a lot of leeway time wise, (and now recently has been faltering, or just judged incorrectly, perhaps?) Nevertheless, he seems to have known what was going to happen in that future that now is happening...right???

Well, I've got great news for all. Here's a way to find a real Guru who can pick the direction of the DOW at least 10 times in a row! So he's got to be correct on the 11th, too, right?

Get a thousand people together on your web site to pick whether the Dow will go up or down tomorrow. The next day we'll find that about half of the group was right. Keep only those in the group who were correct. Then repeat for nine more days. In the end, one or two people will be left who will have been correct for ten days in a row! Will this be the Oracle we are looking for?

This is what PURE CHANCE gives us: people who stand out and appear to "know something" and have methods which appear to "predict" what is to come. But its all just a coincidence.

We all have to have a very strong desire for the truth in and of itself, in order to be objective enough to see past our own rose colored glasses. Whether we have this desire or not, says far more about us in this present moment - our desires, our agendas, our beliefs, etc., than we will ever be able to accurately predict about the future.

Jan 30 08:05 AM

[TruthSayer:]

The truth is investing is hard - and its really all about timing. I have predicted so many things in my career from the asian financial crisis which lead to the oil collapse in 1998 - dig deep I had my 10min of fame in the press - to the impending doom of the real estate market - to now our current situation. You would think I would be the richest man alive. Well it does take money to make money and being at the right place at the right. Lets look at some examples: I was shorting Toll brothers starting in 2006 - however they kept lying every qtr how things were well and I just couldnt bear the dividend and stock loss I was taking. Now look - but net I lost money on that trade. Lets look at 2008 - I started shorting natural gas in May and June - margins were a pain in the rear as it shot to $13 on irrational exuberance - i couldnt bear it anymore and I lost - now look $4.50/mmbtu. Now dont be all sad for me I did make money in other areas its just you cant win it all the time particurlarly in the short term. As a good trader friend once told me "the market can be illogical longer than you can be solvent"

Lossing money does not mean your wrong in the longterm - just bad timing and not enough money in my case. If you read my articles I have publish - I do hope Peter and I are wrong but the facts are clear if your read the writing on the wall without any preconcieved notions. I estimate there will be need to be at least $15 trillion dollar of deleveraging in the US market. I will end on a good note - one of my article leaves hope of a silver bullet Peter and I could be missing - some sort of PC like revolution to propel productivity. Let me know if you do see one - I am on the watch.

Jan 30 08:17 AM

[De Graaf:]

I agree with the Hand.
Your critics are always hard on timing. Thinking they are 'capable' of doing that. They can't and neither can anyone else.

Your strategy is good, and you are sticking with it. Thats leadership. You can't tell that of those TV pundits. I and many others are laughing at those pundits on FOX and CNBC. 'Experts in knowing nothing' thats what they are.

Anyway, Trolls don't need replying. They continue to feed on your active thrive of counterattacks. I think this is not necessary. Time will tell who is right. Your continued (over) exposure on TV feeds that critic base. The repetitive slogans tend to dull people. Critics foremost.

I say, moderate appearances on shows and broadcasts and in particular after significant happenings in our world economy could strenghten your vision/strategy. Critics have nothing else to do then talking crap and getting paid for that.

You have more important things to do I guess. Making sure your strategy remains right and build in a few safety valves for the short term volatility in the markets.

Keep up the good work Peter. Your on the right side of the game.

Jan 30 08:48 AM

[Roberm73:]

"Perhaps as a stockbroker I should have persuaded the son to wait for a correction" Early 2008 I think we all agree was a unsettled time. No advisor would have told someone to go 100% in stocks at the start of 2008. Most people with a clue where hoarding cash to see if the market would take another leg down. As for commodities it was clear in the begining of 2008 where look at a very large bubble in Oil and other 'hot' items at the time. So I find it self serving to say you could have but thought different. As for the long term investor the correct advice is to always buy in at a slow amount to any market especial for a readjustment. So if you placed all his money at work in 2008 then clearly you did not care if your client lost money.

Global Decoupling Thesis was also one your key items you pushed in 2007-2008. Clearly this was wrong. In fact it is now clear the globalazation is full effect either for the good or the bad of the world.

To me it sounds like you are just another guru who was humbled by the market and can not admit it.

Jan 30 09:17 AM

[DaveW:]

Peter, you are paying a high price for being right. Human nature is such that when a lone wolf is right and the sheep are wrong, the sheep are gleeful and celebrate when the wolf comes on hard times. I think it's pathetic that you've been publicly attacked on your timing. Keep to your guns, the game is not over, there is a last laugh out there somewhere...

Jan 30 09:20 AM

[Crude Oil T...:]

True American hero is what Peter Schiff is. Could CNBC please rerun the videos from 2007 and early 2008 where all the guest are literally laughing at Peter.

Jan 30 09:31 AM

[Long Silver...:]

Austrian economic theory predicts that when the central bank inflates the money supply, this will create a "cluster of errors" by large segments of otherwise smart investors. The easy money encourages them to push too far out on the risk curve. Then it collapses.

This is what happened in the 1920s and it's what is happening now. The long term trend is not going to be reverse, so long as government pushes even more money into the economy (rather then letting the market sort out the mess).

I believe Austrian economic theory is correct and therefore Peter will be proven right. Time will tell.

Jan 30 09:32 AM

[Tatertot:]

Oh, there's plenty to criticize about his words too, take a look at a piece from earlier this year, back at the end of may.
www.usnews.com/article...
"My main theme is the global economy will survive and the U.S. economy is a disaster."
"Asian markets are the place to be."
(to a prompt asking him what his best call has been. Think it was financials?...)
"I've been bearish on bonds." -So his best call has been one that not only didn't go his way, but compared to his investment advice has been a veritable goldmine.
(on a prompt of whether oil, grains and other commodities were a bubble)
"These prices do not constitute bubbles."
" I'm confident that by next year we'll see more aggressive movements to abandon the dollar by the [Persian] Gulf region and by the Asian bloc."

Of course, he did have some great calls in that interview including anti-financials, anti-homebuilders, anti-retailers, pro gold (well, it's maintained value since the article). And in some respects, I do expect some of the aforementioned plays to work out well. Treasuries do look pretty bubbly, and long term they are definitely not what you want to own. But for the next couple years, we may see the long bond maintain the elevated price. The moment inflation appears again would probably be the safest time to pick up any shorts on it. But it can be a long wait, especially if you are using double inverse ETF and lose a lot to slippage in the meantime.
Resources are a good play, but only because they have come down in price. At the peak, they were trading at such elevated levels and there was really no justification for such pricing. They were a bubble, and it is okay to criticize Schiff for failing to recognize that bubble when it was a month away from bursting, when it took him over 5 years for his housing bubble to burst. Resources will not shoot back up, but there will be a nice steady rise. If we see an L shaped recovery, however, it may be a while before we really see solid increases.
But what should always be done, even if you are sure of your investment thesis, is hedging your bets. This, I think, is the biggest fault that may be laid at the feet of Mr. Schiff. There was no plan B. There was no recourse for a down movement in commodities. No put positions, (seemingly) no stop losses, no short hedges. One of the better points in Mish's article is that for large losses it takes even larger outsize gains to make up for it.

The reason people take issue with you, Mr. Schiff, is that you are one of the most arrogant people in the media. Now, clearly you think that it is somewhat justified, but this year has just gone to show that pride really does come before a fall. When you make statements such as (taken from the interview)
"The reality is I don't think I've been wrong on anything."
It makes you look conceited and unwilling to bend on anything. If you showed even just a small token of contriteness, I think the criticisms against you would be much more muted. Abrasive is met with abrasive. This is probably the biggest problem with your investment thesis. It's so sure of itself, it doesn't leave much, if any room for diversification across a wide range of businesses, not just the miners, energy producers, and gold related fields. Or, barring that, even a good way to hedge against losses.


On Jan 30 07:26 AM tdillian wrote:

> Thank you Mr. Schiff for the rebuttal... I really don't understand
> why you were broadsided by critics who weren't even critising you
> on your words. I noticed they weren't even quoting things you said.

>
>
> Anyways... if you are to be critized, then I expect people like Dr.
> Marc Faber, Jim Rogers better be critized for saying the same stuff
> as you.. but low behold they are not.
>
> Sorry.. I can't watch the Corrupt News Network of CNN anymore.. but
> I do catch you on bloomberg and Fox business and sometimes CNBC (as
> long as Larry Kudlow isn't pushing mustard seeds)
>
> Anyways.. just wanted to say... good rebuttal! and keep up the good
> work!!..
> I don't agree with you on everything, but I do agree with the overall
> macroeconomic trends you are outlining.

Jan 30 09:35 AM

[MarcVdB:]

A revered investment manager who thinks he has to start his defense against criticism with an 'ad hominem' attack falls off his pedestall. The main other arguments are: "my clients believe I'm right" and "I'll be proven right in the long run".

So, sod your investment returns dear clients, you just paid a good fee to Peter Schiff for him being right too soon.

Jan 30 10:22 AM

[Allah:]

Here's another form of decoupling: having great insight into the state of the economy and being a great investor.

Jan 30 10:31 AM

[debtacid:]

Yeh, I read that cheap shot that Mish took at Schiff the other day. Schiff may have been wrong about a few of the details but he was dead on about the big picture. When wall street talking heads were wallowing in happy talk minutia, he offered a sobering contrary view that made too much sense to ignore. I rode gold to $980 on Schiff’s advice for a nice profit and shorted the Financials and real estate for more free money. In addition, I notice that Mish hasn’t posted to Seeking Alpha in quite a while.

Jan 30 10:49 AM

[know nothing:]

Most people don't want to hear the truth, but believe me, they will never foreget who told them the truth when this is all over! If they live that long!

Jan 30 11:29 AM

[CJJ:]

Wow. If anything this blog caused Peter Schiff to fully lay out his thoughts and strategies. I think this post clearly points out Schiff's ideas from the source himself and not in clips from 1 minute spots on television where the media creates headlines out of two or three words spoken quickly while being interrupted, hurried, talked over.
One thing I disagree with is that Schiff claims the blogger was just taking a shot at him to pump his own business up. Peter, why do you go onto television? The same reason of course.
If its okay for Peter to fail at his JOB over a 1 year period, why are CEO's not allowed the same favor?

The whole problem I have with these people is they are all selling you something(not just Schiff)..the people with blogs, the people with books, the people with newsletters, the people in the media...They act to be concerned about the economy(and some are to a point)...but they are ultimately trying to sell you on their investment strategy and not trying to actually improve the economy...This crisis is actually a heyday for all of these people...No matter right or wrong more people then ever are fixated on the economy and while staying 100% in cash is probably the easiest, safest thing to do in the near past and the near future, there are a million theories, etc of what to do next...This is a chance for people to convince investors to move from the institutional money management to them...
As always, make your own desicions and if the desicion is to give someone else your money...if they lose it, its still your fault.

Jan 30 11:45 AM

[MGA_1:]

Well, I've been avidly watching Peter's stuff on youtube since discovering him several months again. Did he predict the dollar's rally correctly... well maybe not - he even admits that, but he's been right on regarding just about everything else. Everything he says makes sense and he also provides the eventual solution (savings + manufacturing). Keep on trucking.

Jan 30 12:36 PM

[Chris Lau:]

Peter,

I started following your viewpoint on the US economy through a youtube video. As such I have added your views on my blog. Mish's entry found some things you are not right on (yet) in what you have said, but moving past that, your calls were made at a time when everyone else was following a herd mentality - straight down a cliff.

No one can really predict the direction of the market, even now - we just have to go with the flow, and listen to people like you who see things objectively.

People hate pain. Pain comes from bad news. It will be the traders/investors who are about face about this who will survive, and the rest can be in denial, holding their fully invested mutual funds.

Jan 30 12:53 PM

[nmelendez:]

jUST BUY GOLD...

Jan 30 12:59 PM

[Tony Daltorio:]

Peter Schiff is damn good at what he does. From my 20+ years in the investment business, market timing is THE hardest thing to try to do. The key is to invest for the long-term (5+ years). Mish is not only delusional with his fairy tale thinking about deflation, but he is also your typical American investor who never looks longer term than a month or so -- "I want my million and I want it now, not in 5 years!"

Jan 30 01:33 PM

[notsosmart:]

if u think this guy is so great its easy. just give him all your money & relax.if it doesnt work out dont whine.

Jan 30 02:03 PM

[Tom deSabla:]

I can tell you what triggered the broadside - the same thing that caused Art Laffer to go all in against Peter with no cards at all. It's the same thing that triggered the Jamie Kirchick hit piece on Ron Paul.

There is an underlying evil in our world - statism. It is a force that is born out of the natural human desire to control others. It often functions so as to protect the state. It animates and possesses people at will.

Or you could look at it as an addiction.

Or a terrible vice.

Our whole country is infected with it.

I believe this force, in many guises and on many issues, acts to enslave mankind.

I think that Shedlock is very clever and very intelligent; but what he's doing is wrongheaded. In the end, no nation's currency has ever been destroyed by deflation, only by inflation. So, therefore, all talk of deflationary collapses must acknowledge that such "collapses," by definition fall well short of signaling the demise of a nation or its currency.

The real risk, which neither Shedlock nor Bernanke seem concerned with, is starting on the downhill path to outright currency destruction. That would be worse than anything, deflation included.

Also, it should be noted that we have quite far to fall, and there is a lot of pain to be felt long before hyperinflation. There are a lot of dollars floating around this globe, and eventually they are going to come home to the only place they can be spent. - right here.

The coming dollar repatriation will generate domestic price inflation and then wage inflation independently from the new dollars the Fed is creating.

Finally, I agree with Steve Saville and others that asset value destruction is not true deflation, which, for the millionth time, is exclusively a monetary phenomenon. Falling or flat prices in manipulated markets like oil and gold and silver do not equal deflation either. Nor do artificially manipulated interest rates that are held at abnormally low levels by multiple trillions of J.P. Morgan interest rate derivatives. Check out Rob Kirby's work on this.

Shedlock has an agenda, and it don't think it's a healthy one for his readers. What happened over one measly year doesn't mean anything. What matters is what should the average Joe expect to happen over time. What he should prepare for.

Essentially, if we were to believe Shedlock's deflation thesis, then we should not concern ourselves with securing access to commodities, or valuing them highly. We should hold cash, because it will increase in buying power. We shouldn't worry about food or energy, because they will only get cheaper during a true deflation.

No.

I'm with Adam Hamilton, Peter Schiff, Doug Casey, and Ron Paul. They all realize that what we have here are great long boom-bust cycles, born out of human nature, nurtured and exacerbated by government into waves of greater and greater magnitude. They take, on average, about 17 years on each side. We're 9 years into the bust, and accelerating. During this portion of the cycle, real tangible things come back into vogue.

The idea that we're not going to end up with inflation is a joke.

Yes, big ticket items like houses will be the last to inflate, because people won't have the money to buy them, because they will be too tapped out from paying higher prices for food and energy to keep them alive.

Yes, banks are hoarding their money right now, and that is not inflationary; but they can DO NOTHING with the money if it doesn't somehow enter the economy. When it does, as it must, that money will reinforce the inflationary cycle.

The only question now is how much of a lag before the first wave of monetary inflation already in the pipeline manifests itself as price inflation.

By then, it can be presumed that, like Keynes, Shedlock will simply say that, "hey, the facts changed, so I changed my mind."

Maybe he'll win the Art Laffer Award for his performance on the next "Peter Schiff was Right."

On Jan 30 05:18 AM The hand wrote:

> Peter, you laid out a vision - and are sticking with it. Timing is
> always a problem. I really do not understand what triggered the broadside
> on you. sometimes it is better to just tell your critics to FO.<br/>
>

Jan 30 02:13 PM

[SoCalsurfbum:]

Is Peter Schiff a religious figure now?! The way some of these comments carry on...

People that defend him so vehemently need to examine themselves. He is another self promoting talking head that spends time writing and promoting books, making appearances, and responding to bloggers. If my financial advisor did any of these, he is obviously not spending enough time paying attention to my account. And this is proven out by the negative returns even he admits to in the accounts he is responsible for.

If he had any foresight, like he claims, he would have had gains this year... since he claims he saw everything happening before volitility spiked in May. Some nice Puts on financials, bond purchases, hell even cash since he "saw the crash"... If he really saw it coming, this would have been the easiest year ever to make money and beat the indices... I know good managers that did. It is people that went along with Wall Street groupthink that got burned.

I made money this year and I am not even a professional... the difference is I don't claim I can see the future.

And on his supposed "hits"... financials, housing, gold... way to go captain obvious. Those were really bold choices. But wait, If you knew those were going to be hit... how come your clients lost money!???

Jan 30 04:15 PM

[Chris B:]

Suppose that in the market, various sectors go up and down at various times: technology, precious metals, real estate, oil, consumer products, healthcare, commodities, various currencies, corporate bonds, treasuries, munis, telecom, finance, green, etc. and shorting each of the above.

Now suppose that each sector has 10,000 analysts following it, each with an interest in attracting investment dollars which compels them to promote that sector.

Now suppose that among these analysts, there are four overarching economic theories (Keynesian, monetarist, Austrian, and classical) and that one of these theories is most useful for persuading people to invest in each market sector.

Now suppose most retail investors lack the time, aptitude, energy, or desire to do hours of investment homework every day, so they pay for advice from analysts.

Add these factors together and you have a financial system that will inevitably produce messianic gurus with perfect 1-4 year records preaching their economic theory on TV and in books to retail investors. As the monetary tides shift from sector to sector, new gurus with great past records inevitably replace the old.

Yet, only a handful of people ever learn that in the markets no sector goes up or down forever, and that the people on CNBC and MSNBC are almost always telling you to invest in what will go down in a few months.

Jan 30 04:37 PM

[carey_jim:]

Sorry Chris B I meant to give your post a +1 and hit the wrong button. Then I clicked on the abuse button to try to correct it.

(It's a lucky thing I'm in cash now or I would probably be dangerous to my portfolio ;)

I was just getting ready to make a comment which was essentially the same idea as the one you posted but you beat me to it so there is no need for me to repeat what you said.

All I can say is that what you said seems obvious to me and I don't understand why more people can't see it.




On Jan 30 04:37 PM Chris B wrote:

> Suppose that in the market, various sectors go up and down at various
> times: technology, precious metals, real estate, oil, consumer products,
> healthcare, commodities, various currencies, corporate bonds, treasuries,
> munis, telecom, finance, green, etc. and shorting each of the above.

>
>
> Now suppose that each sector has 10,000 analysts following it, each
> with an interest in attracting investment dollars which compels them
> to promote that sector.
>
> Now suppose that among these analysts, there are four overarching
> economic theories (Keynesian, monetarist, Austrian, and classical)
> and that one of these theories is most useful for persuading people
> to invest in each market sector.
>
> Now suppose most retail investors lack the time, aptitude, energy,
> or desire to do hours of investment homework every day, so they pay
> for advice from analysts.
>
> Add these factors together and you have a financial system that will
> inevitably produce messianic gurus with perfect 1-4 year records
> preaching their economic theory on TV and in books to retail investors.
> As the monetary tides shift from sector to sector, new gurus with
> great past records inevitably replace the old.
>
> Yet, only a handful of people ever learn that in the markets no sector
> goes up or down forever, and that the people on CNBC and MSNBC are
> almost always telling you to invest in what will go down in a few
> months.

Jan 30 05:32 PM

[Daniel Moser:]

I would just like to point out that Peter uses class to argue his case. I am yet to see him lose his cool and he is dealing with quite frankly very immature opponents. It never siezes to amaze me how naive people end up looking with hindsight, as they attempted to debunk contrarianism and fringe beliefs using nothing more than shouting and rude behavior. I live in the United States and I certainly hope it doesn't decline in status quite like Peter lays out, however, I am certainly not naive to the prospect that it might. After all England was once the most powerful country on Earth and now, while a great nation, it is certainly not the most powerful country on Earth. What is so inherently great about the U.S. that prevents us from declining in status as our politicians enact bad policy and our consumers live beyond their means for upwards of 20+ years? May the best man win...but show some class when stating your case. Peter Schiff represents a great case study in patience. Keep it up Pete, stick to your positions, and we shall see you in the long run to measure your results!

Jan 30 05:42 PM

[carey_jim:]

I agree with your basic stance except for one thing. I don't think it's wise to call the state evil in itself, because there is, basically, nothing we can do to get rid of it.

All we can do is to try to avoid it as much as possible ourselves and/or, with political action, to try to prevent its excesses and abuses of power.

Anarchism is an attractive political philosophy which can live on both sides of the political spectrum. For example, Noam Chomsky considers himself to be an anarchist socialist and believes that socialism can exist without a government the same way Ron Paul believes that capitalism can.

Realists understand that there have been virtually no examples of countries without some form of government that is coercive and sometimes abusive of its power.

Utopian thinking is dangerous because it ignores practical, realistic solutions to problems and looks to impossible solutions instead.

Jack Kennedy once said, 'Politics is the art of the possible' but I've often thought if he'd lived longer he would have changed his opinion and said, instead, 'Politics is the art of the probable.'

Jan 30 05:45 PM

[Robotto:]

When we say "fire proof", it means that we don't get burnt. The word "proof" is used to mean we are protected from something. Peter Schiff did not deliver what he promised. His investors were not protected from the crash. So he failed. There are fund managers who performed better than he did even though they did not predict the crash. In the end, what's more important?

There is a big difference between a book about how to recover from your injuries after a car crash and a book about how to avoid a car crash. Schiff was claiming that he can protect you from the crash, but he clearly failed on that.

Jan 30 08:38 PM

[Hmm?!:]

Robotto, you stated "There are fund managers who performed better than he did"........., How do you know that? No one knows the performance of his clients and as stated in the article it is not legal to give out such information.

Secondly, how does that benefit other readers? That is like saying, if you had bought Microsoft in the 80's.... when there were hundreds or thousands of softwares companies to choose from and only one Microsoft.

What percentage of mutual funds outperformed staying in cash last year?




On Jan 30 08:38 PM Robotto wrote:

> When we say "fire proof", it means that we don't get burnt. The word
> "proof" is used to mean we are protected from something. Peter Schiff
> did not deliver what he promised. His investors were not protected
> from the crash. So he failed. There are fund managers who performed
> better than he did even though they did not predict the crash. In
> the end, what's more important?
>
> There is a big difference between a book about how to recover from
> your injuries after a car crash and a book about how to avoid a car
> crash. Schiff was claiming that he can protect you from the crash,
> but he clearly failed on that.

Jan 30 11:40 PM

[Robotto:]

Consider Schiff's general approach:

"In general the goals of my clients are to get out of the dollar and hedge against inflation."

Then consider this particular client:

"In addition, consider that 70% of the account in question happens to be invested in mining and energy stocks."

He talks about this client as if this is the client's own problem, but if you really listen to his general advice above, investing heavily in mining and energy stocks is the right thing to do. In other words, this particular investor was a very good student of his, and if Schiff's prediction about inflation and the US dollar had played out, Schiff would have been using this type of client as the best example of his strategy. In other words, the horrible loss of this particular client reflects very well Schiff's general vision. And, many fund managers have done much better than this, despite the fact that they all have lost money.

The "Crash" caused deflation, not inflation. The "Crash" caused the dollar to appreciate, not depreciate. So, if you had listened to his advice, you would have done very badly. There was nothing "Crash Proof" about his investment advice.

Schiff was indeed right about the fact that the crash was coming, but he was wrong about how to become "crash proof". If any Icelandic investors had listened to his advice, they would have been "crash proof", or even profited from the collapse as Schiff's book suggests. What Schiff thought would happen in the US was the scenario that is occurring in Iceland. I myself thought the same, and I was proven wrong. So, it's about time Schiff too should admit that he was wrong about how the crash would play out. He did not "crash proof" his clients; the exact opposite happened.

Jan 31 07:23 AM

[Ian R. Camp...:]

I just posted the following commentary on stockresearchportalblo... under the title 'Peter Schiff's Low Road'. I have reproduced the entire post here as I thought it might be of interest to those who follow both Mish and Peter Schiff's writings.

Note: I do not know Mish and only began reading his Blog 10 days ago. While I find him an ‘interesting commentator’ I read his articles with a healthy skepticism – an approach I bring to everything I read.

An article titled ‘Peter Schiff Answers His Critics’ is posted today on Seeking Alpha – click here. It is 4 printed pages of highly defensive rebuttal to the ‘Mish Post’ I commented on earier on this Blog – click here. The Press (notably the Wall Street Journal) and others have commented extensively on Mish’s Post. The publicity Mish’s Post has received may be the reason Schiff deals, in my view, on a low and unbecoming level in his current article – I say it doesn’t ‘look good on him’. He begins the article (not naming Mish) referring to Mish as “a very small money manager (attempting) to use his popular financial blog to promote his fledgling business”. Schiff goes on to say: “To achieve his ends, this individual has distorted much of what I have been saying and writing, and has twisted the facts to support his own preconceived conclusion. In essence, his piece is nothing more than an overt advertisement (and a highly deceptive one at that) to use my popularity to advance his career.”

Schiff has not taken the ‘high road’. He clearly is entitled to rebut Mish’s views. He should have done just that in an impersonal and logical manner. For me, who has bought and read Schiff’s books, his approach degrades him, not Mish.

I have written several technical books on Business Valuation. These books are used by most senior litigators and valuation experts in Canada, and are frequently referenced by Canadian Courts. I say that, not because I talk about those books often –I don’t and have no ego need to – but to give some context and credibility to my following comments. I have found that many authors write out of ego need to be recognized. The best ones write because they have something to say in circumstances where they are more interested in helping their readers than helping themselves. I don’t know Schiff, but his ‘low road’ ‘personal attack’ approach to dealing with Mish’s criticism doesn’t impress me one bit. In my view he either should have said nothing, or should have written a ‘high road’ carefully thought out rebuttal that would (done properly) have added to his existing work. I don’t see him having done that.

Jan 31 08:40 AM

[wes mantooth:]

Mr Schiff, I bought and read "Crash Proof" in November of 2007 based on the recommendation of a friend. In it, you strongly dismissed deflation as a possible outcome to our credit bubble bursting. As a fan of American history I was surprised by this. In almost every credit bust this country has ever experienced deflation has been the primary result. This flawed analysis coupled with your recommendation that people take equity out of their homes and invest with Europac (pg. 245) brought me to a single conclusion. You are a greedy charlatan playing on peoples' fears to line your own pockets. In fact your current efforts to turn Youtube into the Peter Schiff channel are particularly nauseating. Your attempts to portray your detractors as fools reeks of hypocrisy. Your results so far in this collapse (and lets not kid ourselves that it's not) can't possibly be worse than theirs. Keeps roping in the rubes though so I guess you are successful in that regard. Judging by your supporters here you may even be the Jim Jones of financial advisors. Even after a financial Guyana they still drink your Kool Aid. Amazing.

Also, much of the current criticism from Mish and other bloggers isn't brought on by your abysmal investment performance in this crash. It's your blowhard personality braying at full volume about how right you were that's the issue. A little humility is in order I'd say.

Jan 31 09:55 AM

[Mark Anthony:]

Mr. Peter Schiff:

This is a must read for any one worried about where America's future lies and how we can turn things around, and the correct investment strategy in short to mid term:

stockology.blogspot.co...

With reckless government spendings, I see a prompt resume of a commodity boom returns in full force. Just remember, government spending, just like consumer spending, will drive demand on physical goods and services, but at a much larger scale!

Jan 31 11:39 AM

[carey_jim:]

Peter Schiff has built a reputation based on both public opinion and his record.

He is in a position where he has to take irrational criticism (public opinion) along with rational criticism (his record and logic.)

Giving a post negative points for a private apology and private communication demonstrates the irrationality of the critical process, at least on this blog space.

Not to accept or recognize an apology and perhaps kick a person for giving it demonstrates the irrationality of public opinion.

The only reason anyone should care about his ranking on this site or anywhere else is either for psychological, feel-good reasons or because he/she is in the business of attracting clients.

But when it is a question of doing the profitable thing for one's portfolio, being right is all that matters.


On Jan 30 05:32 PM carey_jim wrote:

> Sorry Chris B I meant to give your post a +1 and hit the wrong button.
> Then I clicked on the abuse button to try to correct it.
>
> (It's a lucky thing I'm in cash now or I would probably be dangerous
> to my portfolio ;)
>
> I was just getting ready to make a comment which was essentially
> the same idea as the one you posted but you beat me to it so there
> is no need for me to repeat what you said.
>
> All I can say is that what you said seems obvious to me and I don't
> understand why more people can't see it.
>
>

Jan 31 03:51 PM

[Alphameister:]

Classical (Austrian) economics will always be right in the long run, but knowing that isn't enough to manage money effectively in the short run. Your message seems to be that those markets which performed in accordance with your expectations were right while those that did not were wrong. A little humility in acknowledging your errors might go a long way toward reducing the animus so prevalent in these comments. It does not do a lot of good as an investor to foresee the future as well as you did if you are unable to profit from your foresight.

Feb 01 07:50 PM

[Rob Viglione:]

You serious, Wes? A "greedy charlatan"? The Weimer government faced similar pressures on its currency in 1921, in which banks could not dispense cash quickly enough to satisfy demand. The solution they chose was cranking up the printing presses. The rest is history.

You cannot expand the monetary base during an economic contraction without causing inflation. Deflation threat is always the initial symptom as asset prices collapse and the demand for money increases. However, at some point we are faced with the unpleasant fact that we have more currency chasing decreased output. Money velocity never remains suppressed forever, particularly as people come to realize they are chasing decreased output..

And wrt historical financial crises...the USD was once backed by gold and could not be inflated nearly as rapidly as is currently the case. Good luck to you if you trust public officials to resist the temptation of inflating away previous fiscal indiscretions!


On Jan 31 09:55 AM wes mantooth wrote:

> Mr Schiff, I bought and read "Crash Proof" in November of 2007 based
> on the recommendation of a friend. In it, you strongly dismissed
> deflation as a possible outcome to our credit bubble bursting. As
> a fan of American history I was surprised by this. In almost every
> credit bust this country has ever experienced deflation has been
> the primary result. This flawed analysis coupled with your recommendation
> that people take equity out of their homes and invest with Europac
> (pg. 245) brought me to a single conclusion. You are a greedy charlatan
> playing on peoples' fears to line your own pockets. In fact your
> current efforts to turn Youtube into the Peter Schiff channel are
> particularly nauseating. Your attempts to portray your detractors
> as fools reeks of hypocrisy. Your results so far in this collapse
> (and lets not kid ourselves that it's not) can't possibly be worse
> than theirs. Keeps roping in the rubes though so I guess you are
> successful in that regard. Judging by your supporters here you may
> even be the Jim Jones of financial advisors. Even after a financial
> Guyana they still drink your Kool Aid. Amazing.
>
> Also, much of the current criticism from Mish and other bloggers
> isn't brought on by your abysmal investment performance in this crash.
> It's your blowhard personality braying at full volume about how right
> you were that's the issue. A little humility is in order I'd say.

Feb 01 10:14 PM

[meta99:]

Your analysis is careful and well thought out. However, I do disagree on one major theme, the "middle road" approach. While I believe that this approach was the best one in the past, I would now beg to disagree. Worldwide fundamentals have changed so drastically, economic numbers have become so alarmingly poor, and our debtor situation has deteriorated to such an extent that I think the middle road approach will end in failure for at least the next decade.... let me give some ammunition for my assertion. Middle road would not have worked for anyone investing in the late 1920's through the early 40s. I'm not saying we have a repeat of the Great Depression, but IT IS one possibility. However, as with all periods of underperformance, things will be different this time. I personally believe we will call this period the Great Stagflation.

Feb 01 10:57 PM

[meta99:]

It's not always coincidence. People follow a herding instinct, even when they're plunging off a cliff. Its only in hindsight that most can see clearly. This housing bubble was CLEARLY easy to see, if you could look at it objectively. I mean, who did they think was going to buy all the homes they were building. It's the same with the lending practices, the excessive consumer and government debt and the printing of trillions of dollars to flood our money supply. Peter and others have studied the facts, it was and is only a matter of time before the massive deleveraging showed its full effects. This is not luck, it is a study of history and perspective. We don't know if Mr. Schiff and others will correctly call the end of this period, and that could be his undoing, but clearly his initial warnings should have been taken more seriously.

Feb 01 11:14 PM

[wes mantooth:]

Recommending people take equity out of their houses to invest with Europac against an economic event that has never occurred before in the US is being greedy. Most Austrians that saw this housing crash coming were forecasting deflation. That's exactly what we've experienced so far. I'm not sure hyperinflation could be as damaging to a portfolio as Schiff's blown investment advice. Schiff's Youtube efforts to write a revisionist history is what's behind these attacks. He has ruined people financially. He deserves what he gets.



.



On Feb 01 10:14 PM Rob Viglione wrote:

> You serious, Wes? A "greedy charlatan"? The Weimer government faced
> similar pressures on its currency in 1921, in which banks could not
> dispense cash quickly enough to satisfy demand. The solution they
> chose was cranking up the printing presses. The rest is history.
>
>
> You cannot expand the monetary base during an economic contraction
> without causing inflation. Deflation threat is always the initial
> symptom as asset prices collapse and the demand for money increases.
> However, at some point we are faced with the unpleasant fact that
> we have more currency chasing decreased output. Money velocity never
> remains suppressed forever, particularly as people come to realize
> they are chasing decreased output..
>
> And wrt historical financial crises...the USD was once backed by
> gold and could not be inflated nearly as rapidly as is currently
> the case. Good luck to you if you trust public officials to resist
> the temptation of inflating away previous fiscal indiscretions!
>

Feb 04 09:29 AM

[mr freddo:]

Peter:

Thanks for the post. I have been a big fan of your weekly podcasts and I am thankful for your point of view. In this difficult investing environment, I have refrained from buying much preferring to keep my powder dry for a while. Based on your recommendation though, I have taken a position in tbt which is doing well. (ultra short long treasuries).

Any experienced investor knows that it is impossible to time markets and you have always admitted that you are not a market timer. What I like about your podcast, books, articles, is that you are not afraid to take a stand, a point made stunningly in your now infamous youtube video.

Keep up the good work. I'll be increasing my gold position over the next few weeks.

Feb 05 03:59 AM

[The Too Sma...:]

You can be right, but if your timing is off, you are wrong. If you only have a long term thesis with no sense of timing, how can you claim to be right. I am with Mish.

Feb 07 01:54 AM

[raytayzmd:]

..."the resulting investment losses suffered by my clients last year confirms the fatal flaws in my approach..."...uhhhh -- yeah!...

Feb 09 03:05 PM

[raytayzmd:]

..."Following such a sharp correction, the son now regrets his decision and must blame me for my part in helping him make it."??????...well, uhhhh -- yeah!!

Feb 09 03:08 PM

[otbricki:]

You don't have to be an Austrian guru to recognize an asset bubble of the magnitude of 2001 or 2008. When something looks like it is nonsense there is a good chance it is. Zero interest loans and companies going public with no revenue just is not going to work out.

As far as the Austrian school itself, I personally hold it in very little regard. It rejects the basic processes of scientific investigation, making it very unlikely it will add anything to fundamental knowledge in economics.


On Feb 04 09:29 AM wes mantooth wrote:

> Recommending people take equity out of their houses to invest with
> Europac against an economic event that has never occurred before
> in the US is being greedy. Most Austrians that saw this housing crash
> coming were forecasting deflation. That's exactly what we've experienced
> so far. I'm not sure hyperinflation could be as damaging to a portfolio
> as Schiff's blown investment advice. Schiff's Youtube efforts to
> write a revisionist history is what's behind these attacks. He has
> ruined people financially. He deserves what he gets.
>
>
>
> .
>
>
>
> On Feb 01 10:14 PM Rob Viglione wrote:

Feb 09 11:14 PM

[ebschor:]

I like your style. I just wish you'd not try to address your critics. There's no need. They will soon fail and fade away. Listening to your investment advice and words of caution kept me 100% in gold from 14,000 to 7,800 when I started reintroducing myself to equities. I've had a fun time accumulating equities ever since.

I now have Ben Stein's money :-)

Mar 13 05:41 PM

[silver-bug:]

It's funny how some people take things literally. If you are wearing a "bullet-proof" vest, it means the vest will prevent a certain calibre bullet from penetrating it. It doesn't mean that it will prevent an injury, or that it will prevent all types of bullets to penetrate it.

Use your common sense, Robotto. If you are wearing a bullet-proof vest that prevents up to a .38 calibre bullet, but you go ahead like a fool and take a .45 or a .50 calibre bullet, guess what - see you in heaven!

And yes, Fire Proof means it will prevent a fire from destroying contents or injury for up to a certain number of hours. It doesn't mean indefinitely...

Don't take things literally. "Crash Proof" means it is designed to prevent death from certain kinds of crash up to a certain magnitude and time-frame. It doesn't mean it will protect you from any or all kinds of injury.


Don't take things literally. And you can't fix stupid.

On Jan 30 08:38 PM Robotto wrote:

> When we say "fire proof", it means that we don't get burnt. The word
> "proof" is used to mean we are protected from something. Peter Schiff
> did not deliver what he promised. His investors were not protected
> from the crash. So he failed. There are fund managers who performed
> better than he did even though they did not predict the crash. In
> the end, what's more important?
>
> There is a big difference between a book about how to recover from
> your injuries after a car crash and a book about how to avoid a car
> crash. Schiff was claiming that he can protect you from the crash,
> but he clearly failed on that.

Mar 20 03:23 PM

[Lang:]

As for the "crash" being over, I don't hear any fat lady singing yet...
Lang.



On Jan 31 07:23 AM Robotto wrote:

> Consider Schiff's general approach:
>
> "In general the goals of my clients are to get out of the dollar
> and hedge against inflation."
>
> Then consider this particular client:
>
> "In addition, consider that 70% of the account in question happens
> to be invested in mining and energy stocks."
>
> He talks about this client as if this is the client's own problem,
> but if you really listen to his general advice above, investing heavily
> in mining and energy stocks is the right thing to do. In other words,
> this particular investor was a very good student of his, and if Schiff's
> prediction about inflation and the US dollar had played out, Schiff
> would have been using this type of client as the best example of
> his strategy. In other words, the horrible loss of this particular
> client reflects very well Schiff's general vision. And, many fund
> managers have done much better than this, despite the fact that they
> all have lost money.
>
> The "Crash" caused deflation, not inflation. The "Crash" caused the
> dollar to appreciate, not depreciate. So, if you had listened to
> his advice, you would have done very badly. There was nothing "Crash
> Proof" about his investment advice.
>
> Schiff was indeed right about the fact that the crash was coming,
> but he was wrong about how to become "crash proof". If any Icelandic
> investors had listened to his advice, they would have been "crash
> proof", or even profited from the collapse as Schiff's book suggests.
> What Schiff thought would happen in the US was the scenario that
> is occurring in Iceland. I myself thought the same, and I was proven
> wrong. So, it's about time Schiff too should admit that he was wrong
> about how the crash would play out. He did not "crash proof" his
> clients; the exact opposite happened.

May 18 12:45 PM

[Wilson Siu:]

Your comment is correct in the context of the study of philosophy. However, it lacks economics. According to your definition of "Guru", it is someone who can predict economic outcomes.

You do not need to be a "Guru" to know who is a "Guru". And here is why. There is a two steps thought process required.

First of all: Just like Robert Shiller, Nouriel Roubini, and Peter Schiff, these three gentlemans have precdicted disaster. Their predictions are no rocket science. What they did was look very introspectively into important economic statistics, and reviewed that based on those statistics, the economy is going to be in a bad shape. So let's be clear, "Gurus" are not "Gurus", they are simply human beings who understand economics, and took their time to look into the statistics, and reviewed the likely outcomes that will happen.

Second: Since not all of us have the time to research and look deep into all the economic statistics, these "Gurus" do. When they have finished their investigations, they simply presented the numbers and their conclusions to us.

For example, it does not take a "Guru" to realize that if one does not work, borrow money, eat pizzas, sleep and eat donuts, one will very likely be fat, broke, and unhealthy.

So Basically what Peter Schiff is saying is that " If the US continues to 1. borrow and spend, 2. print and spend" the country will likley see the US$ depreciating rapiadly.

Final comment in regards of timing: a doctor knows a patient with terminla cancer will die in the future, but if you were to ask him to pin down which date, it is near impossible.

Being able to conclude something logically is possible and if the topic requires substantial of data gathering and analyzing, well that is "Guru" according to my definition.

Being able to time something on the exact date is not "Guru", it is luck.

Conclusion, you don't have to be a Guru to know who is a Guru. You just need to think deeper.

If not, good luck to your future.

On Jan 30 08:05 AM You're Kidding wrote:

> There is a guy named Joe Granville, who was a big investment Guru
> in the '70s. He did really, really well...for awhile, then started
> being wrong...and bingo, lost his Guru crown.
>
> He was just one of many who have come, conquered, and then faded,
> and who will be followed by many more. They appear to be prescient
> and attract droves of followers, but alas, it turns out that they
> are soothsayers but for a limited time only, and not for always.
> Bummer.
>
> Why is it that they always fade out? Well, obviously, because they
> weren't really Gurus at all. They were just lucky for awhile.
>
> There are even some around today, and if you were to get into a time
> machine and jump into the future, you would find them there. They
> would have predicted, say, for example, the bottom of the Great Recession
> in late 2008 (or 2009, or 2010, or...whenever it was.) There they
> are...the Gurus..and they were right!
>
> Except they weren't. They were lucky. How they saw the future happened
> to be somewhat correct. But do you think this correlation really
> means anything?
>
> Well, lets say it does. The question now becomes how do I find a
> Guru before
> we all discover he was right, which will then probably be too late
> to take advantage of his "predictions." There are lots of Gurus around
> making their prognostications; but which one is going to be right?
> If you think about this for very long, you'll discover that you can't
> ever know. How can you possibly know ahead of time which "Guru" will
> be right, and at what time in the future, unless...
>
> You are a Guru, too!
>
> In that case, you don't need one, do you? Just listen to yourself.
> But, alas... you know you're not a Guru. So, its impossible to pick
> one out and know ahead of time when they are going to be right, unless
> you just make a lucky guess.
>
> So we only know who they are, and when they are right, after the
> fact, and not before. Again, big Bummer.
>
> And to go one step further, if after all that we still decide to
> follow what someone says because it appears they were right once,
> or for awhile, how on earth do we know if they are going to be right
> again? Jo Grandville was "right" for awhile, and then he wasn't.
> Peter Schiff was right, it seems, for awhile, if you give him a lot
> of leeway time wise, (and now recently has been faltering, or just
> judged incorrectly, perhaps?) Nevertheless, he seems to have known
> what was going to happen in that future that now is happening...right???
>
>
> Well, I've got great news for all. Here's a way to find a real Guru
> who can pick the direction of the DOW at least 10 times in a row!
> So he's got to be correct on the 11th, too, right?
>
> Get a thousand people together on your web site to pick whether the
> Dow will go up or down tomorrow. The next day we'll find that about
> half of the group was right. Keep only those in the group who were
> correct. Then repeat for nine more days. In the end, one or two people
> will be left who will have been correct for ten days in a row! Will
> this be the Oracle we are looking for?
>
> This is what PURE CHANCE gives us: people who stand out and appear
> to "know something" and have methods which appear to "predict" what
> is to come. But its all just a coincidence.
>
> We all have to have a very strong desire for the truth in and of
> itself, in order to be objective enough to see past our own rose
> colored glasses. Whether we have this desire or not, says far more
> about us in this present moment - our desires, our agendas, our beliefs,
> etc., than we will ever be able to accurately predict about the future.

May 26 06:08 AM

[cyndrellian:]

Peter Schiff isn't the only one writing about the same exact things, the dollar not being backed by gold and our future in the U.S. There are numerous others, they all are "gurus" who will fade? Or will something else fade?

Jul 25 02:42 PM

[cyndrellian:]

Peter Schiff isn't the only one writing about the same exact things, the dollar not being backed by gold and our future in the U.S. There are numerous others, they all are "gurus" who will fade? Or will something else fade?

Jul 25 02:42 PM

[Gold Bug:]

Peter Schiff Video Blog Another new low for the Dollar watch it in the link bellow
:
peterschiffchannel.blo...

Oct 21 06:22 PM