Walter Morton

Interview with Peter Schiff

Peter Schiff has been correct in his predictions with high accuracy and anyone interested in finance should at least study his ideas. Predicting the future and predicting how it will affect your personal investments are two different beasts however. Some of his investment ideas require a vast change from the way things work today, i.e. a "decoupling" between the USA economy (backed by devaluing dollars) and emerging economies (backed by hard assets or actual growth in production.) This decoupling has not yet happened, though it may in the next decade if the USA can't find a sound financial course. And even if decoupling occurred it's effect would be unclear. Today, the USA companies doing OK are the ones (Caterpillar, IBM) with large sales overseas. Overseas customers are happy to buy these products priced in cheap USA dollars. This trend may turn the USA into the "discount mall" for the rest of the globe, but discount malls often do a lot of business. If you've traveled to Asian factories in the last few years (I have) you know that broadly speaking the people in Japan, China, and South Korea are working harder, and longer hours, and more efficiently than any workforce I know of in America. This is partly a result of cultural values -- many Americans take for granted they deserve a slice of the "good life" and should not have to work more than a 40-hour week to get a big fat reward. The Asian work ethic I witnessed was: "first you apprentice, then you work very hard, then you work even harder, then you pass on your craft, then you rest only when you are dead.” I may have deviated from direct commentary on Peter Schiff’s gold talk here – but his big-picture idea is how USA investors should position themselves in the global economy. The halcyon days when you could just buy stock in the top 5 USA-based companies (GM, Ford, Citigroup, Wal-Mart, Bank of America) and know you’d have a nice nest egg for retirement are over. Those companies are dinosaurs. In 20 years, those 5 will all be controlled by foreign sovereign wealth funds if they exist at all. Crazy talk? Not really, there are over 100 defunct USA auto manufacturers. (en.wikipedia.org/wiki/... ) In any case, if you want to know whether you should believe Schiff’s analysis I suggest you buy his book, read it, and come to your own conclusions.