JohnAl

Peter Schiff vs. the Fed

Mr. McMorris,

Is it simple minded to think that monetary metals like gold and silver might retain their value better than fiat money, which can be created out of thin air?

You seem to understand that creating currency out of thin air devalues that currency and that this helps debtors. But you ignore the fact that doing this hurts holders and creditors of that currency.

When new money is created out of thin air, some people are helped, but others are hurt. Saving and lending are discouraged, while borrowing and spending is encouraged.

Is this what we want? Will this lead to a sustainable economy?

On Aug 09 09:20 PM Brian McMorris wrote:

> Puravi...you make sensible, well informed comments that reflect reality.
> But all the "goldheads" visiting this site can only spout their blind
> faith in colored dirt. I have no idea why people think gold and
> silver are their salvation. Are they all zombies?
>
> People should understand, like you do, that fiat currency represents
> the productive capacity and assets of the nation that issues that
> currency. America is not going away. Our national assets are fixed.
> The only thing that printing money does is make those assets equal
> to a larger number of dollars (devalues dollars).
>
> And here is where the mindless hoards really miss the point: when
> the country is faced with a massive Deflation (who can deny that
> houses and labor are worth less today than last year) due to a massive
> financial panic, a global psychological reaction, the best thing
> to do is Reflate the dollar back to where it was. This should pull
> the value of all those assets back closer to where they were and
> solve most of the credit problem. It is really simple math.
>
> But if you are drinking the Schiff / Roubini Koolaid, you can't think
> such simple thoughts and must instead come up with apocalytic scenarios.
> And you might even have your net worth in silver and gold, which
> of course, might influence how you argue this point.
>
> Keep up the good fight. But know that it is always the contrarians
> who win at the game of investing.