Peter Schiff now predicts demise of the dollar

By Tuesday October 6, 2009

This is the guy who predicted the Housing bubble, the financial meltdown, and now he’s saying this.



37 Comments
  1. Stars & Bars` says:
    10/6/2009 at 5:40 pm

    Three Government Reports Point to Fiscal Doomsday.

    Reply
  2. brm says:
    10/6/2009 at 6:28 pm

    This guy is crazy! Don’t listen to him! lalalalalala

    Reply
  3. really_ni_shot says:
    10/6/2009 at 6:39 pm

    Now Predicts???

    He along with a lot of other smart people have been predicting it for years and they are right. If you read Schiff’s books and listen to his past interviews. You learn his prediction about the demise of the dollar would not be brought about by an economic crisis such as the housing market crash but the governments predictable “Print like hell” response to that crisis.

    Oh and fark keynesianism

    Reply
  4. Lou Minatti says:
    10/6/2009 at 7:12 pm

    It’s only been predicted by thousands of bloggers. Schiff is like that Celente asshole.

    Reply
  5. deowll says:
    10/6/2009 at 8:55 pm

    Then I would say thousands of bloggers have it right.

    Reply
  6. Grandpa says:
    10/6/2009 at 9:16 pm

    Wow, that’s a hard one to predict. I’d like to predict right now that the Republican assholes that made this mess, and now have all the answers to fixing it, will be re-elected again real soon.

    Reply
  7. DA says:
    10/6/2009 at 9:43 pm

    #2 BRM,

    “This guy is crazy! Don’t listen to him! lalalalalala”

    That’s what everyone said in before the stock market crash…turns out he was right.

    There were a few things he was wrong about…BUT… Since then, he’s been vindicated by the market, because his investments have performed much better than everyone claiming he’s wrong.

    You’d be a fool to bet against him. Of course, you’d also be a fool if you didn’t listen to people like Micheal Shedlock (aka “mish”).

    #6, Grandpa,

    For the 1 billionth motherfucking fucking god damn motherfucking time…IT’S NOT the “REPUBLICANS” or the “DEMOCRATS” who caused this crisis. It’s both. Both parties have been driving this country into the abyss for a LONG time now.

    MORE IMPORTANTLY, it was the federal reserve who cause the vast majority of our economic woes, the government only served to amplify these problems.

    Reply
  8. chris says:
    10/6/2009 at 9:49 pm

    Less here than meets the eye. His assertion that because oil price is denominated in dollars that their oil is our oil is bizarre. The price of oil can be figured versus any other currency or commodity without difficulty. People with euros or yen can buy oil without difficulty. Price oil in euros and people with dollars will still be able to buy oil.

    Venezuela doesn’t sell their oil in dollars and yet Valero gas stations still exist. They also sell their gas at about the same price as everywhere else.

    China holds lots of dollars, or more exactly T-Bills. China is holding dollars because we have a trade deficit with them. American consumers are indebted so we can’t buy as much stuff from China. Consequently China’s dollar holdings will be reduced.

    Schiff predicts runaway inflation on all goods. Does anyone really think that house prices are going back to the moon? Most daily necessities, clothes, and gadgets are getting cheaper(seems like to me anyway).

    Japan’s lost two decades are instructive. A huge run up in real estate caused by bad loans led to a credit crunch and overwhelming government spending. Price levels fell or held steady on most things. The Yen was part of a brisk carry trade caused by artificially low interest rates. Pretty similar.

    A dollar crisis is certainly possible, but currency exchange works relatively well. I still think that “exotic” financial instruments are a much more likely cause of crisis. The underlying regulatory environment hasn’t changed enough for my liking.

    Reply
  9. UniquelyCool.com says:
    10/6/2009 at 10:20 pm

    Peter Schiff is awesome…. I’m surprised you haven’t heard his videos and read his other stuff… he predicted the financial collapse and is the upcoming collapse of the dollar.

    Reply
  10. DA says:
    10/6/2009 at 10:46 pm

    #8, chris,

    You make many very valid points.

    So, I’m not going to necessarily argue against them. Many of them are very valid and I would only be disagreeing with details in most cases.

    In fact, many of the points you make have been made by “Mish” one of the most well known economic bloggers on the internet. He subscribes to the same school of economic thought as Peter Schiff; the “Austrian school of economics”.

    Mish also endorsed Peter Schiff in his run for the senate, despite their opposing views on the dollar. Schiff thinks it will crash, and Mish doesn’t. Of course, mish is a SHORT TERM investor. Peter is a LONG TERM investor. So naturally If you start hearing Mish talking about a collapsing dollar…uh-oh…head for the hills and buy some gold.

    The key to know how to solve the puzzle is…to know, What is going to happen to the dollar?

    There are many inflationary and deflationary pressures on the dollar.

    The deflationary pressures are VERY obvious to all Americans. The inflationary pressures are NOT directly obvious, mainly because no one observes them directly. The main inflationary factors are, increase in money supply, a continued policy of easy money, and the biggest most elusive threat of all…that is…the dollar losing it’s status as the reserve currency.

    China and many other big hitters appear to be positioning themselves to get out of the dollar. If that happens, all bets are off.

    I propose we do the following to ensure we have sound money…

    1. Audit the fed.
    2. Repeal all legal tender laws.
    3. Allow competing money and currencies.
    4. ????????
    5. Profit.

    please forgive any spelling or grammatical mistakes, I’m now 3 beers deep and tired as crap.

    Good night.

    Reply
  11. Lou says:
    10/6/2009 at 10:57 pm

    Guess he’s short the USD index.
    Good to hear, so am I.

    Reply
  12. Ralph, the Bus Driver says:
    10/6/2009 at 11:18 pm

    The dollar is the unit of trade simply because it is still the strongest currency out there. It has diminished a little in strength while most other major currencies have strengthened considerable.

    Libertarians don’t grasp the idea that a currency is as strong as the country behind it. The EU and China have grown so much over the past 20 years. But as a standard of value, items and commodities are quoted in US dollars.

    Regardless of what you are buying, if you want to buy it in Euros or Canadian dollars, someone will sell it at the same price as if you paid in US dollars. The old saying still applies, “If the bank takes it, I’ll take it”.

    Reply
  13. Jim says:
    10/6/2009 at 11:27 pm

    So he’s suggesting that we will have an inflationary spiral caused by international trade and reduction in dollar value vs other currencies.

    Except that if we don’t BUY those items they are trying to sell us, there is no inflation — which leads to failures in the external countries as finished goods pile up for lack of demand.

    Which is where we are RIGHT NOW. The US is in a major pullback caused by the three or so bubbles we’ve had and the commensurate reduction in viable wealth. Consumers have to trust that they have jobs, can pay their bills, and need or want the items offered to them. Those three points are in heavy duty minus territory.

    The commodity bubble from last year managed to siphon off any real inflation, since it managed to wipe out those investors who were pushing the bubble out, leaving real companies and governments to actually buy the materials. China also stopped buying quite a lot over the past year as a few of their big ticket projects completed or had enough materials to continue.

    At the moment the huge dumping of dollars to shore up the banking industry (which is all the fed and government is doing) hasn’t filtered into the economy because those people who WERE using the cash to “invest” have been burned enough to not jump into the shark waters yet.

    I would start to worry if commodities in general started back up in a strong way similar to how oil jumped ridiculously last year. THAT would tell me that the asshat derivative traders are back in the market and that the banking industry would be setting up for another major death spiral.

    There is no major demand out there for imported goods, which is reducing demand in the manufacturing countries, which is, in turn, reducing demand for commodities. If anything, I’d say we’re in for a flat to slightly lower dollar for a while and then a pickup in a few months if there are no other major economic events on the downside. If there are any more major industry buyoffs then the dollar will plummet.

    However, that reduced demand will likely percolate into the manufacturing and resource countries, leading to industry slowdowns and potential buyoffs on their end, which would shore up the dollar temporarily.

    Reply
  14. soundwash says:
    10/6/2009 at 11:39 pm

    well heck, the dollar was stillborn.

    it was planned to die when *it’s value*
    reaches 0. i think if you look at the inflation calculator, it’s at 3¢ or 4¢
    now.

    …and since time is running at factor of 20x..good chance it’ll be dead no later than February, 2010. -unless someone drags it out further..

    but given that oct 15th is the IRS extension deadline for 1000′s of small businesses..we may see a crash
    on the 16th or so..as 1000′s close up shop due to the “2009 recovery that wasn’t”

    -to bad i didn’t get the hang of this
    stuff years ago. I’d probably had lost
    all my hair,had several ulcers and been a corrupt CEO by now.. :s

    -s

    Reply
  15. Sister Mary Hand Grenade of Quiet Reflection says:
    10/6/2009 at 11:52 pm

    Yeah, no shit Sherlock!

    Reply
  16. brm says:
    10/7/2009 at 12:17 am

    #7:

    Sarcasm really doesn’t translate well over the internet.

    I love Schiff!

    Reply
  17. TTHor says:
    10/7/2009 at 12:17 am

    Peter Schiff is good at simplifying a very complex issue. Regardless, it does not take much to understand that decades with trade deficit and a printing press gone mad has to hurt the USD. US economic politics since Nixon’s uncoupling of the USD from gold is where it all started. After that every president has contributed its fair share to undermine the USD, though the Clinton administration very likely was the one to cause most harm with its new banking policies and subprime ‘dictates’.
    Brace for impact!

    Reply
  18. Johnny Canuck says:
    10/7/2009 at 4:00 am

    Is his modem blinking out the word “Torture” ind Morris code?

    Reply
  19. pedro says:
    10/7/2009 at 4:25 am

    #8 Who the eff told you venezuela doesn’t sell its oil in dollars? Have you even gotten into a venezuelan government web page, let alone an online newspaper?

    Go to google (if you even know how to do that) and translate this “Presupuesto 2010 se calculará con 40 dólares el barril de petróleo” http://tinyurl.com/ya88paz

    I guess you must be another moron that believes anything kuzco spews

    I agree with you, there’s less here than meets the eye… in your post.

    #10 Well, his first point is just a brain fart, so I think you better think twice before backing his “points”.

    Reply
  20. bobbo, most things are plain to see says:
    10/7/2009 at 4:56 am

    and the unknowns are really just limited to timing or rank order.

    Don’t we all—ALL—- already know that if you have long running trade deficits, and long running spending deficits, that eventually the currency will devalue?

    Yes, we ALL know that.

    You can’t get in the way of people’s greed, and you can’t stop a government from corruption. A few hedge funds called the timing on the financial collapse and made b/millions. I wonder if there are longer term players who are riding these predictable, but still variable, financial curves for the billions to be made?

    There is no mystery, just those profiting from misery.

    BTW==I’m looking forward to Obermann’s Hour Long Special Commentary of Healthcare Policy and Death. I think Olbermann is GREAT–so like all my idols, I look for the clay feet, the false comment/facts. I invite the conservatives and LIEBERTARIANS to attend to this special and add to the list of errors he makes. Not in the “conclusions” he reaches==but rather the FACTS he uses to get there.

    Reply

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