Peter Schiff: The stimulus will bring about economic Armageddon
posted at 3:10 pm on February 6, 2009 by Allahpundit
Share on Facebook | printer-friendly
A new communique from the man who saw it all coming, warning us to prepare for Weimar II. If ever you wanted an illustration of just how inexact a “science” economics is, watch this clip back to back with The One’s assurances last night (at roughly 4:20 here) that the stimulus is the only way to avoid Armageddon. How much good has 75 years of data done us? From the NYT’s front-pager this morning on Japan’s experiment, this much:
Economists tend to divide into two camps on the question of Japan’s infrastructure spending: those, many of them Americans like Mr. Geithner, who think it did not go far enough; and those, many of them Japanese, who think it was a colossal waste.
Among ordinary Japanese, the spending is widely disparaged for having turned the nation into a public-works-based welfare state and making regional economies dependent on Tokyo for jobs. Much of the blame has fallen on the Liberal Democratic Party, which has long used government spending to grease rural vote-buying machines that help keep the party in power.
But some Western economists who have studied Japan’s experience say the stimulus accomplished more than it is now given credit for. At a minimum, they argue, it saved the economy from an outright, 1930s-style collapse.
Jim Manzi is demanding that economists put up or shut up on their predictions by publicizing their models now so that they can be scrutinized in a year or two, knowing full well that no one will take him up on the challenge. In sum: We’re at a fork in the road, with plenty of scholarly opinion urging us down both paths, and either one could lead to total destruction. Anyone got a coin to flip? Click the image to watch.
You must be logged in to post a comment.
Blowback
Note from Hot Air management: This section is for comments from Hot Air's community of registered readers. Please don't assume that Hot Air management agrees with or otherwise endorses any particular comment just because we let it stand. A reminder: Anyone who fails to comply with our terms of use may lose their posting privilege.
Trackbacks/Pings
Trackback URL
Comments
Comment pages: « Previous 1 2
We’re told that the start of this mess was when credit tightened due to bad mortgages. That is; there was no credit available to businesses and consumers, which would cause gridlock in the economy.
I wonder how the government competing in the credit market for 900 billion dollars is going to fix that problem.
jaime on February 6, 2009 at 4:16 PM
No that is not what you were doing. You said that the other commenter was wrong NOT that you were trying to make some additional point. Do not compound your foolishness like some politician.
HalJordan on February 6, 2009 at 4:18 PM
Griz on February 6, 2009 at 4:12 PM
You know, being in a lawless broken-down nation is not really all that fun. I never get why people actively wish for this stuff. Besides, the “elites” aren’t the ones who suffer. They just watch from security and tut-tut at the suffering of the masses.
theotherKate on February 6, 2009 at 4:18 PM
This is a interesting article.
DFCtomm on February 6, 2009 at 4:18 PM
He’s the one guy here you definately don’t want to start a flame war with. He will destroy you.
BadgerHawk on February 6, 2009 at 4:20 PM
It occurred to me because the Japan government model for arresting the downturn has been held out by government types as the right thing to do. This included spending big yen to prop up their banks and real estate, resulting in a ‘zombie economy’.
Will we get a different result?
Greg Toombs on February 6, 2009 at 4:22 PM
Are they going to put a measure in the bailout bill that if it does not work by 2010 all that voted for it have to resign their office?
albill on February 6, 2009 at 4:23 PM
The uber-rich don’t have enough money to run the govt for more than a few minutes.
Not to mention that such a prescription would kill job creation.
How the heck do you kill the welfare system by incrementing a different welfare system?
Could you repeat that. In English this time.
Sounds like you are calling for govt to regulate speech so that people don’t waste time talking about things you disagree with.
Why don’t we wait until we can see if the e-learning model works before we convert everything over to it.
We don’t need to dump the current education model, we just have to make it so the govt and the govt unions don’t control it.
I’m sympathetic regarding banning unions, though just eliminating their monopoly powers would be sufficient.
Ban corporations? On what grounds? Do you honestly think the nation can run on a huge series of mom and pop operations?
MarkTheGreat on February 6, 2009 at 4:23 PM
We can argue the point all day but ,for better or worse, the question will be answered definitively in the next couple of years.
DFCtomm on February 6, 2009 at 4:23 PM
Okay, since you seem to have latched on to me for some godforsaken reason, let’s hash it out:
He stated that today’s Nikkei index is the same as it was 25 years ago(and admitted he was wrong, noting that it’s lower than it was then). I stated that it’s comparable to a far more recent volume(which was more accurate). Why does that upset you so?
MadisonConservative on February 6, 2009 at 4:23 PM
Maybe a picture would be clearer as the tables of your link seem to have thrown you off stride.
semloh on February 6, 2009 at 4:24 PM
The only way to do that is to print money. Which leads to inflation.
MarkTheGreat on February 6, 2009 at 4:24 PM
Don’t worry. It will go back down. I’d rather go to Vegas than try to buy financials right now.
The concern is more that our DOW 14,000 will be the Nikkei’s 39,000, and it will take us decades to recover from what our government is doing to us.
I don’t think I ever said I was worried about a complete collapse. If I was I wouldn’t be buying stocks right now.
BadgerHawk on February 6, 2009 at 4:26 PM
Trust me, I am no fan of the bailout or the stimulus, and would much rather ride the wave. I sincerely hope we do not emulate their reaction.
MadisonConservative on February 6, 2009 at 4:27 PM
No one has “latched on to you”. Don’t act so put upon – it looks bad.
He said that it was down to where it was 25 years ago and it was down to that level (and even lower). Your whole implication was that it was not down to that level. I did not notice him “admitting he was wrong”. He was right – it was down to that level and then some. You are one stubborn disingenuous cuzz. Just admit that you didn’t read your own tables very well and move on.
HalJordan on February 6, 2009 at 4:30 PM
Again, I’m simply making the point that the DOW value we place so much value in was an inflated number over the last few years that less than a decade ago, when the economy was thriving and prosperous, was at the exact same level. People who are getting upset are working on inflated figures as the norm rather than accepting the inevitable inflation and settling back down to standard figures. Is it good? No, but it wasn’t entirely good shifting our paradigm right away to a boom that barely got its feet wet before it went away.
MadisonConservative on February 6, 2009 at 4:30 PM
Um, no, it wasn’t. My “implication” was exactly what I’ve stated in other comments: we were at these levels half a decade ago. You’re reading implication that isn’t there, and you’re being incredibly insulting…
…in the process. You didn’t even try to discuss the issue with me civilly. You never seemed to have any intention of doing so, so kindly go jump in a wood chipper.
MadisonConservative on February 6, 2009 at 4:33 PM
No , if you check out the videos of him on the mortgage banking conference, he explains it all.
He was talking about using CDS:s against CDO:s , because he knew it would crash.
Part 1(8)
http://www.youtube.com/watch?v=6G3Qefbt0n4
the_nile on February 6, 2009 at 4:37 PM
It cannot work
this is why everone who has a brain stem left
knows when you see there so called economists
trying to guess what will happen
No one believes them..
I am at the point now that i am telling everyone i know
To stop
Putting any money into stocks
Putting money into your 401k
and instead take the funds and being to pay off as fast as you can
any credit cards
car loans
personal loans
and mortgage if possible
because when not if
WHEN this entire system either collapes
or goes into hyper inflation.. (by our standards 20 % per year would kill us). and we may see worse..
the only way you will survive is IF
you have cash in the bank
Food and fuel
guns and ammo..
and this is because when it gets really bad
people will be trying to steal rob and kill in order
to satisfy their needs for food alone..
I really believe this is comming
everything points to it..
obama and the dems are not trying to stimulate the economy
they are trying to PAY off all of their benefactors
Before the collapse occurs..
I say 90 days..
so around may 31 2009 we will see the us start to topple
and i will bet you i may be right on target..
as far as the date goes..
jcila on February 6, 2009 at 4:42 PM
Don’t try to act like such a victim. It is very unbecoming.
You are worse than most of our politicians. Don’t you even read your own comments?
Maybe you should go back to the other thread and gum some more of that hotdog.
HalJordan on February 6, 2009 at 4:44 PM
Okay, seriously, what is it about me pointing out that the Nikkei is where it was at 6 years ago, and attempting to pull the plug on your panic party, that pissed you off so much? Again, you haven’t once tried to discuss this civilly with me. Was trolling all you intended to do?
MadisonConservative on February 6, 2009 at 4:48 PM
He does seem overly-concerned with your hotdog…
theotherKate on February 6, 2009 at 4:50 PM
I should have clarified what I meant before; the treasury dept is the source of the t-bills, they’re the issuer. They sell them to the market which is anyone who wants to buy them. The Fed can buy them too and when they buy them that puts new money into the economy. That’s one of the ways. The fed, as part of it’s assets has an inventory of treasuries that it can sell. When it does it can retire the money it receives and remove it from the economy. The problem with the fed soaking up the money is that the treasury dept. is vastly increasing the supply of treasuries; there are treasuries out there being traded in the market and it appears that major foreign buyers aren’t buying as much. The fed has been increasing base money supply at historic levels over the last few months. In summery, the supply of treasuries is going through the roof, demand is going down, and someone proposed(I forgot who) before that now the fed would like to sell even more treasuries into the flooded market? Here’s the problem; the amount of base money that they created recently will, through money multiplier effect, eventually result in the increase of the money supply even more as the banks clean up the balance sheets and start lending. We have a huge money supply increase that’s begun and will explode even more later. We have the fed say it’s going to buy treasuries to soak up the supply of treasuries because the market is going to be flooded with them increasing the money supply even more! Given all this the fed is planning the ability to sell the treasuries later? They’re not going to have enough treasuries to counteract the money multiplier effect. They are doing everything they can to make inflation explode.
Ann NY on February 6, 2009 at 4:50 PM
There are those MODERATE bung holes on this comment thread who dare call me a survivalist because I have been beating this drum for the last twenty-two months……
***laughing last***
seejanemom on February 6, 2009 at 4:50 PM
Peter Schiff is right, again.
Our economy only lasts as long as other central banks buy treasuries from the Fed. That only lasts as long as we continue to buy goods from Asia (China, Japan, etc) the longer we stop spending the more likely those countires are to stop buying treasuries and let thier currencies float freely, plunging the US into an inflationary depression, but it gives the Chinese and Japanese more domestic buying power and will restart their production for domestic goods instead of shipping everything over here. It may even help Japan’s low birthrate. If their cost of living goes down then children become cheaper to raise.
Theworldisnotenough on February 6, 2009 at 4:51 PM
The dollar is doomed in the mid- long-term.
The only thing that will keep it up over the next year or two will be the crappiness of the yuan and the yen
When China and the rest of Asia gets back on its feet, there will be a massive deleveraging off of our currency.
We are about to print 4 trillion dollars we don’t have and then sell our treasuries to foreign customers who don’t have the capital at present to bail us out and who are growing weary of holding our paper.
Think $140 oil was bad? Try to purchase it with Zimbabwe bucks!
TexasJew on February 6, 2009 at 4:52 PM
Over the past month, China has, for the first time, outproduced us in autos. That may be a temporary glitch, but won’t be, in the next couple of years..
Stimulate this!
TexasJew on February 6, 2009 at 4:54 PM
Just admit that it was you who was wrong and that it was you who was nasty
and move on. Otherwise you are clearly hopeless and not worth any more time.
HalJordan on February 6, 2009 at 4:57 PM
didn’t hear that part but heard him pushing the Lou Dobbs Trade Defecit non-sense. While refusing to point out that for each Dollar going overseas we’ve been getting about $1.50 in Foreign Investment back, along with his little political Conspiracy theory with no basis for proof to the actions.
This is why what Schiff is pushing is much, much different than the Hayek, Milton Friedman school of thought economist.
jp on February 6, 2009 at 4:59 PM
Apparently trolling is all you intended, if you’re going to complain about me making cracks about Peter Schiff. Get a new infatuation.
MadisonConservative on February 6, 2009 at 5:00 PM
the problem with the CDS is that when these mortgages go into foreclosure, the CDS balloon to outrageous amounts in losses for the company holding them. Thats why one day a company seems to be in good standing then the following week they go bust(see Bear Stearnes).
jp on February 6, 2009 at 5:01 PM
My dear Madison, you are beginning to remind me of Lyndon Johnson, Richard Nixon and Jimmy Carter. They never could admit they were wrong either or nasty.
Sigmund on February 6, 2009 at 5:02 PM
Accusations of “trolling” – the last refuge of the defeated. Repeated accusations of “trolling” – the last refuge of the trounced.
semloh on February 6, 2009 at 5:05 PM
Show me that the Nikkei wasn’t down to 8000 in 2003, and I’ll admit I was wrong. Since it was, and that was all I claimed, what am I wrong about?
MadisonConservative on February 6, 2009 at 5:05 PM
When someone insults and harasses me without any attempt whatsoever to address the point I was making, as well as declares implications I never implied, what would you call it?
MadisonConservative on February 6, 2009 at 5:06 PM
Madison, I know just how you are feeling right now. When that rope starts to pull tight, you can feel the Devil bite your ass.
Tuco on February 6, 2009 at 5:07 PM
If all this doom and gloom comes about (as predicted), I’m not so sure that hyperinflation, starvation, and riots in the streets will be the worst part of it.
My collie says:
CyberCipher on February 6, 2009 at 5:10 PM
There’s 8 parts , i dont know which of them the cds thing is in.
You don’t rethink the problem with trade deficit today?
the_nile on February 6, 2009 at 5:11 PM
The problem with that model is that Asia has resisted standard of living increases in their counties. They have pegged their currency to ours and did their best to keep the cost of their labor low. They did this to maintain their ability to export cheap goods, but this means that they haven’t really established the markets at home that should have been growing. They have designed their economies to exploit ours, and so if ours fails so does theirs.
DFCtomm on February 6, 2009 at 5:12 PM
Please call my secretary to make an appointment. I will have her clear my schedule. Your profound acute projection, denial and paranoia must be addressed STAT! Of course this may mean having to postpone Obama’s next appointment on my schedule, so you may have just caused the downfall of the western world.
Sigmund on February 6, 2009 at 5:12 PM
People also do this with house prices. A house that sold for $100K in 1990 and is now worth $300K is seen as a disaster because it was worth $500K 2 years ago. It should never have been worth $500K and $300K is the true value.
angryed on February 6, 2009 at 5:14 PM
Again, I’m simply making the point that the DOW value we place so much value in was an inflated number over the last few years that less than a decade ago, when the economy was thriving and prosperous, was at the exact same level. People who are getting upset are working on inflated figures as the norm rather than accepting the inevitable inflation and settling back down to standard figures. Is it good? No, but it wasn’t entirely good shifting our paradigm right away to a boom that barely got its feet wet before it went away.
MadisonConservative on February 6, 2009 at 4:30 PM
Since the Dow is based on a benchmark that is not adjusted for inflation, inflation of our currency will raise the Dow.
Se we may just finally reach that magic 40,000 mark with Weimar dollars. O, happy days!
For a better look at our depressing future, note the condition of the NASDAQ (QQQQ) since early 2001. Even without inflation added in, that index is still currently 70% below its peak.
TexasJew on February 6, 2009 at 5:15 PM
Wrong. Austrians are correct; Keynesians are wrong. All those in the middle don’t count.
JDPerren on February 6, 2009 at 5:17 PM
depends on which part of the TD, the Oil side yes. Especially last year when Gas prices got so high(our own fault for not drilling and building new refinaries.)…that alone made it jump way out of whack.
but traditionally, its not that bad. Look at all the Plants Toyota, Nissan and other foreign countries we trade with build here. the Foreign Investment rate has been higher than the amount we were sending out of the country. This is the point the Thomas Sowell and CafeHayek guys try to explain.
I think schiff is suspect ideologically, he’s right on paper about some things, but not everything. Problem is the people willing to worship his every word like his political pal…
jp on February 6, 2009 at 5:19 PM
Exactly.
If that’s the case, how come in the last year the Dow has plummeted, but the dollar has actually recovered slightly?
MadisonConservative on February 6, 2009 at 5:20 PM
Nonsense.
Peter Schiff is a Paulian nut and gold bug. He has breathlessly been predicting “The End of The World As We Know It” for years. Global Economic Trend Analysis thoroughly eviscerated this twit a couple of weeks ago.
Mike Honcho on February 6, 2009 at 5:20 PM
Generally I agree with you. Capitalism and free trade are about to get the blame for this mess, but the truth is the mess has been caused by trying to undermine, on a global level, the forces of capitalism and free trade.
DFCtomm on February 6, 2009 at 5:20 PM
The issue is not what this Nikkie thing was in 2003! It was your delusions about what it was a quarter of a century ago you
nut!person with issues, sorry. I don’t think that even I could treat you now so I might as well put Obama back on my busy schedule. Maybe you could try an exorcist. I am given to understand that Governor Jindal may be able to recommend a good one.Sigmund on February 6, 2009 at 5:21 PM
Milton Friedman, Hayek, Thomas Sowell? Not so much in the ‘middle’ as not on the same fringe as the current self-professing Austrians. Who are really Murray Rothbard worshipers.
jp on February 6, 2009 at 5:21 PM
Someone else with no interest in discussing the topic, only trolling. See how I’m discussing this with others intelligently? No problem here. You and HalTurner on the other hand…
MadisonConservative on February 6, 2009 at 5:21 PM
Ummm…right. Glad to see you have a faint idea of what you’re discussing.
MadisonConservative on February 6, 2009 at 5:22 PM
As far as security goes what can compete with the dollar? The Euro is tied to a loose gaggle of nations, that will probably split and pursue their own best interests when things truly turn south. What harbor is left to the international investor when he wants a safe cash position.
I believe Schiff is wrong about the decoupling. China has made every effort to marry their economy to ours in a parasitic fashion and now they are going to pay.
DFCtomm on February 6, 2009 at 5:30 PM
good link there, however ironically enough the guy who wrote that is also an idiot Paultard too. Looking at the archives. Although, he realized Paul had no shot to win so he supported Obama to ‘get us out of Iraq’. He’s posted a blog on Paul “grilling Petraus” about the Surge, which he of course looks like a fool for now.
jp on February 6, 2009 at 5:30 PM
The DOW went from 1003 to 1004 between 1973 and 1982. Yes, it went up a whole point in 9 years. And this was during a time of near-hyper inflation. So the notion that inflation = automatic higher stock prices is nonsense.
It took until 1954 to get back to 1929 levels….that’s 25 years for those of you in Palm Beach.
There is absolutely no guarantee that the DOW will be anywhere close to 14K for years to come. So much of the thinking these days is that now is a great time to buy because stocks are so cheap. That may be the case, but history says otherwise.
angryed on February 6, 2009 at 5:31 PM
Agreed there. Do you think the Dow is superficial then?
MadisonConservative on February 6, 2009 at 5:33 PM
jp,
Yeah, Shedlock is a bit flakey. Still his evisceration of Schiff’s thesis and exposure of how lousy Schiff’s funds have been performing was priceless.
Mike Honcho on February 6, 2009 at 5:45 PM
Bush et al pushed the dollar down to stimulate exports.This had the unwanted effect of kicking up commodity (especially oil) prices.The dollar is still seen as the main reserve currency, so it has had this rally.
Believe me, if Asia hadn’t gotten slammed by this recession, the dollar would not be this healthy at the present time. It’s a “flight to safety”, with the lifeboat, unfortunately, having a lot of slow leaks. When a better lifeboat comes along, they will very likely jump over to that one and abandon ours.
What will kill the dollar will be all this printing and borrowing. China has actual reserve liquidity to pay for its own stimulus, we do not. What we do have is a well-oiled printing press and a lot of green ink.
TexasJew on February 6, 2009 at 5:52 PM
Well my curiosity got the better of me so after spending way too much time I finally found this long range graph of the NIKKEI and the commenter Kent somebody was clearly right when he said that it was where it was at 25 years ago.
Tav on February 6, 2009 at 5:55 PM
The DOW went from 1003 to 1004 between 1973 and 1982. Yes, it went up a whole point in 9 years. And this was during a time of near-hyper inflation. So the notion that inflation = automatic higher stock prices is nonsense.
angryed on February 6, 2009 at 5:31 PM
I remember that era, and the economy tanked between 1973 and 1982, with a trough in 1979-1980. The recession then would have pushed the Dow down to 300, if it wasn’t for inflation (it got down to 650, I believe). This inflation may be worse, since that inflation was predominately based in the almost-dectupling of oil prices, from 3-30 dollars/barrel and the offsetting effects. This inflation will probably be much worse than the 10-18% inflation of the Carter years, so a comparison may not be viable.
And by the way, who cares what the freaking Dow is? It’s an international stock market now, in any case, with ETF’s and hundreds of hedging investment vehicles, unlike the prehistoric seventies. Just watch what the currency exchange is and invest accordingly.
TexasJew on February 6, 2009 at 6:02 PM
It saddens me that people REFUSE to learn History! History, (not some leftist rewrite of history to benefit their propaganda), shows that government stimulus bills, i.e. bailouts, NEVER work to cure a bad economy, have never worked in U.S. history and never will.
There are two things that have ever cured economic problems in the history of the U.S….TAX CUTS AND MILITARY SPENDING.
Least we forget, F.D.R’s “New Deal” did NOTHING to deliver the U.S. from the “Great Depression” and actually exacerbated the problems. F.D.R. had designs on being president for life (and actually, in truth, was). We forget that F.D.R. was little more than a petty dictator before W.W.2, he sat in bed each morning and set the commodity market prices as he drank his morning coffee.
Obama wants to be another F.D.R. and some leftists wanting to repeal the 22nd amendment should concern more people than it already does.
nelsonknows on February 6, 2009 at 6:05 PM
It is almost here $780 Billion – Bets on how long before the market dips to 5000? Bread will be $10 a loaf. Gasoline will be $7 per gallon. How long before Obama gets impeached after 2010?
izoneguy on February 6, 2009 at 6:08 PM
The problem with using “Austrians” is that it does not identify a principle, and only technically applies really to the first three generations of actual Austrian economists in a particular line of development.
So, when one refers to “Austrians,” the major economists in that line of development should come to mind: Menger, Bohm-Bawerk, Mises. Hayek is not the only Austrian of course in that “school,” but the last major actual economist who was also Austrian, being in the fourth generation.
So, why say “Austrians” as being primarily those who agree with Rothbard? Simply because of the Mises Institute that was dominated by Rothbard after Mises died and now by Rothbard’s students?
Among economists who have continued and built on that line of development, there are many students of Mises who branched off with their own independent careers and not just the dead-end line that is basically Rothbard and followers.
Historically, in terms of really historic theoretical contributions, Menger, Bohm-Bawerk, and Mises (and perhaps Hayek added) are the “Austrians,” and then there are those who came after.
Some call themselves “Austrians,” but then which of the big three are the most like? And are they “Austrians” but not Classicals?
“Austrians” as a short-hand should not refer to Rothbard, but it is because of its floating definition, attached to a country and a sequence of students, a term that should be gradually replaced by a principle that consistently integrates the achievements of the Classical, the big Austrians, and those who are continuing the work of economic science.
Ann NY on February 6, 2009 at 6:13 PM
Well I dont know about Armageddon, but its going to be one Hell of a hangover!
Cheshire Cat on February 6, 2009 at 6:56 PM
Collectivists always make the same excuse for why their “experiments” always fail so catastrophically: either it didn’t go far enough, and it simply bogged down a previously healthy free economy without fulfilling any of its goals. Or it went too far, and its leaders were “forced” to impose draconian constraints on civil liberties, eventually spirallying into full-blown totalitarianism.
In scientific terms, results like that indicate the existence of something called an “unstable system.”
Oh, but don’t worry. Despite a century of failures, liberals are always absolutely positive that the system will work juuuust right the very next time it is tried.
There is no possible analytical explanation for a belief such as this. It is simply an article of faith.
logis on February 6, 2009 at 7:26 PM
+1
tartan on February 6, 2009 at 8:25 PM
I’m speechless. It’s all so unreal.
tartan on February 6, 2009 at 8:33 PM
MadisonConservative I’m not an economist although I occasionally
playpretend to be one on this blog, but I’m not sure what your asking.DFCtomm on February 6, 2009 at 9:06 PM
Guess my WELCOME TO ZIMBABWE bumpersticker was more than just a sick joke.
profitsbeard on February 6, 2009 at 9:07 PM
You seem to be assuming Obama understands economics as well as anyone, and that he’s being honest about his beliefs and intentions in regard to this bill. Those assumptions seem unwarranted. Moreover, the political effect of disparaging economics instead of disparaging Obama seems to be to persuade some of your readers that economics is unworthy of study. That sort of demoralization seems to tend to leave the field of economics to Keynesians and Marxists.
Kralizec on February 6, 2009 at 9:33 PM
Allahpundit, do you really trust the NYT’s reporting on economic matters?
Kralizec on February 6, 2009 at 9:40 PM
Nor am I, but I took enough economics classes in college to get a degree in the field(instead I stupidly took business administration). I’m asking if you think the Dow value is a reasonable indicator of the state of the economy or not, not in terms of when it’s truly low, but as in the serious curve we’ve experienced in the last decade or so, to 14,000 and back under 10,000.
MadisonConservative on February 6, 2009 at 10:03 PM
Regarding the currency; I believe that the world’s confidence in our currency is probably more important than the American consumers’, if we continue to dig a hole of debt and create more money to spend.
If any of the following happens, we’re d o n e.
(A) Asia figures out how to get out of the dollar without killing themselves
or
(B) OPEC decides to standardize on some other currency
That’s just my semi-informed opinion. Your mileage may vary.
cryptojunkie on February 6, 2009 at 10:09 PM
People! Not so much rancor, please. (After all, this is only our nation we are talking about.)
Allah describes our choices well:
Perhaps what we need to try is the great Yogi Berra compromise: “When you come to a fork in the road, take it.”
So why don’t we cease these internecine squabbles. Instead, let’s all send Washington a “Fork You!” message.
Dr. Charles G. Waugh on February 6, 2009 at 10:15 PM
By it’s very nature, capitalism creates wealth while socialism consumes wealth. Socialism kills motivation, innovation, and productivity and creates stagnant economies. The truth is, socialism is really just an idea, in practice it leads to either communism or fascism. Socialism fails always, not sometimes, not occasionally, but every single time. These facts don’t change with public opinion polls. It is something we will learn one way or another.
Dollayo on February 6, 2009 at 10:21 PM
Hey MC,
It seams to me that Siggi is practicing the alinsky model ….ummm….
What chapter was that…
jerrytbg on February 6, 2009 at 10:54 PM
No I really don’t think the DOW is a good indicator of the economy, but it is a good indicator of how people who are buying stocks feel about the economy. If the market was privy to some knowledge from the universal consciousness then it would never run off a cliff like a frightened heard of bison as it has on a few occasions.
DFCtomm on February 6, 2009 at 11:24 PM
This guy is very doom and gloom but damn if he hasn’t been right more often than not.
I hope he’s wrong but….
Yakko77 on February 7, 2009 at 2:55 AM
Good summary. And while neither may happen today, both seem like reasonable goals for our creditors to pursue.
JiangxiDad on February 7, 2009 at 8:13 AM
We are basically giving China a Hobson’s Choice of financing more debt, or watch us debase the currency in real time (trashing their current holdings). My personal opinion is that Geithner’s bold (some say reckless) public assertion about China manipulating the yuan is an acknowledgement that China is presently buying time to position itself for a paradigm shift in world markets. They could short us some time in the future and sustain manageable losses.
rhodeymark on February 7, 2009 at 9:14 AM
I guess that means barry doesn’t scare them.
JiangxiDad on February 7, 2009 at 9:26 AM
A small announcement from china november 3 2012, could totally ruin his day. Whatever he’d done until that day.
the_nile on February 7, 2009 at 9:35 AM
Yes, but they’d be far smarter to just start whispering in his ear now. Have you considered that??? Yikes!
JiangxiDad on February 7, 2009 at 10:08 AM
HERE’s an idea, one that our Founding Fathers thought was keen enough to base an entire nation upon:
let every individual citizen work for their own way in the world, command their own property without crippling taxation of personal property, and use their “cash” or financial worth as they deem they individually want to.
If they want to save their wealth, their accumulating money, let them save it. If they want to spend it all or part of it, let them do that. Let government NOT be involved in how individuals use their personal property and let what government exists, do so while managing within what taxes it does collect from citizens.
What Obama’s PORKULUS is attempting is to continue government at the costs of individual wealth — personal property, in other words.
What “failure” that may occur if they are not fed this trillion dollars is that bad government will flounder and so it should.
Then it can be rebuild in moderation as it was meant to be, by citizens, after they enjoy their property themselvse.
This may sound idealistic today but this is exactly what our nation was founded to establish. Obama does NOT “know” the Constitution, he is only familiar with what loopholes he might use to violate it.
S on February 7, 2009 at 10:55 AM
BICYCLES are not a bad idea. Everyone should have at least one per family member and all the gear necessary to use one for just about everything when/as necessary.
Not joking.
S on February 7, 2009 at 10:57 AM
What Schiff is saying is that it’ll bring about THE END or DESTRUCTION of this nation as we know it.
What’ll remain is something else, not the United States of America as it’s defined by our Constitution, nor by our Declaration of Independence, which I just reread and republished on my own site, just to be able to stare at that document again and again.
Schiff is saying that, by bringing about “an economic Armageddon,” that the nation will economically be destroyed if Obama gets his ruination passed.
S on February 7, 2009 at 11:01 AM
We — this nation, the U.S.A. — is CONSTITUTIONALLY DEFINED as a republic (representative democracy) based upon capitalism.
Destroy any part of that, you destroy who and what this nation is.
S on February 7, 2009 at 11:02 AM
Barack Obama is a Marxist. He has affirmed that time and time again. Not necessarily by using that definition, but by declaring his support and favor for Marxism as a political philosophy.
He has said repeatedly that “what works” is what he seeks. He disregards the methods, he places the “means” subservient to the “ends,” which is classic Marxism.
In other words, his philosophy is Socialism, his political model is Communism.
S on February 7, 2009 at 11:04 AM
The currency of a nation heavily in debt to other nations, with a nation of cheap-gadget-obsessed dimwits and a dolled-up chimpanzee for the President is secure?!
I don’t mind the occasional exaggeration of our nation’s greatness in the name of patriotism, but that’s just a little too much!
Dark-Star on February 7, 2009 at 1:52 PM
Whats your alternative? The Euro currently is a good choice, but it’s a currency without a nation, and if times get bad the member nations will fracture and pursue their own interests. They did just that late last year when many of them chose to bolster their own national banks instead of acting in unison as the EU. My comment isn’t about how great the dollar is, but how bad all other currencies will be if things get much worse.
DFCtomm on February 7, 2009 at 2:46 PM
One thing I didn’t hear in the video is when. I may have missed it, though.
I’m sure those who were unemployed during the great depression thought it was an global economic Armageddon. I guess it depends on your perspective.
I think Schiff is right about the economic fundamentals – more government debt in the form of government spending didn’t work in the 1930s and will only add to the problem. He’s definitely not a Keynesian!
The sub-prime mess and the freezing of the capital markets are just the tip of the structural problems relying upon spending now, paying later.
You have the current government debt,
– add in the TARP,
– add in Obama’s Democratic payback non-stimulus package,
– add in more government spending as the Dems expand their
Socialist power grab,
– add in the rapidly approaching and escalating and
unfunded Social Security payouts (spending) as the
boomers retire in numbers,
That debt will eventually have to be dealt with and when it does some very nasty inflation will occur.
Whether Schiff’s economic Armageddon will occur, who the heck knows.
The conumdrum for me, is being close to retirement, where do I target my investments knowing that abnormally high (8 – 18%) inflation is likely (remember the late 70s/early 80s?), and worse inflation is possible.
I know things are scary when my wife tells me she’s going to plant an unusually large garden and wants to raise some chickens this year.
Dr. Bob on February 7, 2009 at 9:37 PM
Of course, the hard left has no use for a prosperous middle class – and they love to exploit a crisis – so this should be happy news for them. There are no conservatives in Latin America.
Reagan inherited 12 % inflation from Carter. Just remember that number so that you will know what to say when we reach that point and Obama blames it all on “them”.
el gordo on February 8, 2009 at 12:27 PM
by the way, Japan´s public debt is about 170 % of GDP. Anyone who thinks they didn´t spend enough should be confined to a padded cell.
el gordo on February 8, 2009 at 12:27 PM
a) china is looking into self stimulus and weening themselves down off the dollar. They are already trading in asia with their currency not dollars
b) the saudi’s have moved their dinar (gold backed currency) up from Jan 2010 to this september. Those who want oil will have to convert their money to dinar – no more oil tied to US$. That will have major ramifications both economically and milatarily
audiotom on February 9, 2009 at 8:49 AM
I sense the public is awakening to the fact that governments role (as embodied in the Constitution) is not to provide its citizens anything except protection from enemy attack. The governments role, as stated in the constitution, is to promote (provide an environment that enables the public to attain a level of free speech, welfare, etc. that satisfies them personally) these ideals.
However, the Stickittous Bill is the tool Demoncrates are using to convolute the role of this legislation. The bill will not do anything for U.S. but it will do a hell a lot to U.S. Basically, this legislation does emulate the actions of FDR to a point.
It will make us feel good initially, but this ‘feel good’ atmosphere eventually will result in putting U.S. into debt. But, the public today did not learn (because of an eroded eduction system) the solution that FDR’s ‘New Deal’ was WWII.
Finally, a review of the Stickittous Bill does not contain any funding to improve our ability to defend ourselves. Therefore, we resemble those fish in the barrel and we know what happened to them when our enemies have weapons to go fishing.
MSGTAS on February 9, 2009 at 10:04 AM
Comment pages: « Previous 1 2