Inflationist v. deflationist
YouTube - Peter Schiff VS Mish Shedlock by Max Keiser - inflation VS deflation debate
The world does not consist of a throng of geniuses. WilliamBanzai7
Tks. In the end they're both right.
Last edited by cbc58; 09-04-2009 at 07:06 AM.
mm, looks rather bad for Schiff
How so?Originally Posted by squarepusher
Any ideas what exactly Max Keiser has in mind regarding the supposed bad economic news coming from China in the near future? And why exactly are these (supposed) economic news from China going to cause deflation (falling prices) in America?
oh, i didn't mean it as an insult, I was just comparing Schiff's 40-50% fund drops last year, to the 10% gain in Mish's funds.
"I've been a long standing inflationist so-to-speak, in other words, not somebody who favors inflation, but somebody who predicts it, and I haven't been proven wrong yet. I mean, it's funny because the deflationists have been predicting deflation now since 1973. They've been wrong every year. You'd think their self-confidence would at least slip a little bit." - Murray Rothbard
Schiff didn't have any "funds" last year.He is a broker not an investment house. With that said, he has said that many of his picks are up over 90% this year....
dead horse. they are both right, with Mish having a better grasp on macro issues imho. proof is in the numbers. if you're smarter than Max Keiser and want to rebut him... go ahead.
so none of you have any idea what Max Keiser is talking about regarding the economic news from China?
i think it has to do with the fabricated expansion that probably can not be sustained...
inflation is caused by the bubbles- when the bubbles burst- the prices have to come down.
so there will be times of inflation and eventually deflation.
deflation will be the hard medicine in the end for businesses.
rewritten history with armies of their crooks - invented memories, did burn all the books... Mark Knopfler
what expansion? how should anyone "want to rebut him" without having any details about what he's saying?
expansion everyone is planning on in China that wall st. is predicting and pushing.
Rebut him is in relation to the vid posted regarding Schiff vs. Mish.
and why this supposed China expansion that is not going to happen will cause falling prices in America?
did you even watch the vid posted? the supposed news from China is the only thing he talked about in relation to 2009.
so none of you knows what he's actually talking about?
why don't you pick up the phone and call Max Keiser since you don't like the responses here. No one can know for sure what he is referring to except the man himself. I'm sure he has a phone number or email address.
Last year? You are aware that we are currently more than 3/4 of the way through THIS year, right?
Does anyone know how Mish is doing this year?
It is really easy for a fund manager to say 'look, I am up 10% this year'. Ok, so they predicted the collapse and got it right for a year. How did they do during the boom? Were they betting on a stock market collapse from 2000 till 2008 and have been sitting in cash the whole time while everyone else was doubling and tripling there money in PMs and oil?
In my opinion, Schiff's analysis is correct. Mish is a smart guy but I don't agree with his arguments against the inflationary outcome. If memory serves me correctly, his argument (in short) is that the outstanding money supply won't go up even in the face of massive printing because the printing doesn't exceed the debt-deflation.
Schiff has addressed this point in the past, explaining that if this argument were true, banks could simply make loans that consumers wouldn't have to pay back since they could simply cover their losses with inflation.
My suspicion is that Mish is looking at inflation/deflation too much in terms of macroeconomics. If a bank writes a loan, it puts money out into the economy which is then spent, re-deposited, etc. If the consumer doesn't pay the loan back, that doesn't change the fact that the money has already been spent. Someone has to take the loss.
The praxeology of rising prices in the face of monetary inflation isn't based on any macroeconomic formula. Monetary inflation causes prices to rise because it puts more money into the hands of buyers to bid up the price of goods whose availability has not changed. So goods become more scarce, relative to the increased supply of money. Remember how Ron Paul is always talking about how the rising prices we see in education and medical care is in large part due to inflation? The government inflates, and then the inflation isn't evenly distributed throughout the economy; rather, the new money is directed by the government into its favorite spending projects, pushing prices in those areas up faster than in the general economy. A macroeconomic approach completely glosses over these details.
Now, it may be true that Mish is a better market timer than Schiff. Austrians have been predicting the big bust for a long time, and as Ron Paul has said, there has been much surprise about how long the phony system has been held together. No one knows for sure when it is going to pop, only that it will. But you also have to consider that comparing the performance of Mish's accounts and Schiff's are somewhat apples and oranges. Mish actively manages his customer's money... Schiff is just a broker that gives out stock tips. Mish's strategy is dangerous in the sense that price inflation can happen quite suddenly (again, it's not based on a macroeconomic formula). Hyperinflation can happen at a rate well out of proportion with how much new money is printed... all it takes is for people to lose confidence, and then the numbers basically don't matter any more.
Perhaps Mish is clever enough to keep his clients from suffering a big loss in the case of rapid price inflation. Given that he doesn't seem to think this can happen (and given that I disagree for the reasons stated above), I wouldn't be so sure he would time that correctly. Schiff (as he often explains) is investing for the long term, specifically ignoring the market oscillations and focusing on safely positioning people to avoid permanently losing their hats when the currency collapses.
It's up to everyone to make up their own minds, and we don't yet have the benefit of hindsight to know for sure who is right in this argument. To me, it seems simple... unless Bernanke & co. have a magical method of "unprinting" all this new inflation (say, taxing it back out of businesses and consumers and then setting it on fire), it simply *has* to find its way into the economy at some point. Trying to vacuum up the excess liquidity by way of the central bank selling off assets just amounts to an accounting shell game.
One last easy way to think about it: focus less on the money and more on the resources that money purchases. Austrian business cycle theory explains how the inflation of the past led to malinvestment such as the housing bubble. But now that we have an excess of houses, the resources (land, labor and capital) that went into those homes have already been spent. Adjusting the money supply cannot change that fact. Trying to paper over the fact that the resources were spent badly can only result in further distortion.
Kaiser showed his true colors on the last Alex Jones interview. First he went against whole foods, one of the few places we can buy unpoisoned food.
He used Obamacare as his reason why whole foods is so evil.
Kaiser is obviously establishment after the last week, and I call on AJ to no longer have Kaiser on his show. Why give this talking head a voice where those who would listen don't agree?
Last edited by buffalokid777; 09-05-2009 at 01:32 AM.
Mish lost money in a market where it's never been easier to make money. You could have thrown darts a piece of paper to pick your stocks since Feb and watch your stocks gain anywhere from 30-90%. In that time, Mish managed to lose money. He proclaimed that it was time to buy treasuries again right before treasuries got hammered and all markets rallied. How you manage to lose money in a market where good stocks have gone up and worse stocks have gone up even more is beyond me. Mish found a way to do it. That's what happens when you buy treasuries yielding 1% at a time when good stocks were yielding 10-15% after their dividend cuts.
Last edited by theoakman; 09-07-2009 at 10:47 AM.
you can buy now using an elevated dollar to get in on things that are poised to go way up when the dollar collapses. If he's right, and I think he is, his profits are going to be ridiculous. I've already showed by referencing some mining stocks that you can make a killing in this market playing Schiff's investment strategy.
-theoakman, RPF 1/26/09.
Oh what a difference 10 months makes. Deflationists, where are thou?
Where is this quote from?
you can buy now using an elevated dollar to get in on things that are poised to go way up when the dollar collapses. If he's right, and I think he is, his profits are going to be ridiculous. I've already showed by referencing some mining stocks that you can make a killing in this market playing Schiff's investment strategy.
-theoakman, RPF 1/26/09.
Oh what a difference 10 months makes. Deflationists, where are thou?
Mish lost money in a market where it's never been easier to make money.
What are you referencing? Some specific fund or investment? Please elaborate.
The blue line in the graph from Feb 09 until now. I believe it is one of Mish's 3 funds
We need immigrants in this country. What we don't need is politicians. Get rid of them! - Peter Schiff
Thanks oakman. That is what I was looking for. So since Feb 2009, Mish has been wrong.
I thought you guys said Mish was a short term investor while P Schiff is a long term investor. Not very good short term returns by Mish there.
Sorry, Mish can keep his treasuries. I am holding on to my PMs and oil stock.
I posted the chart of the fund he was bragging about in Feb when he wrote his Peter Schiff hit piece. The thing has done nothing since he wrote that piece. In fact, it lost money. Meanwhile, gold, silver, oil, all stocks (including worthless companies like AIG), and foreign currencies have all had ridiculous gains. How anyone managed to lose money they threw into the market after the 1st quarter of this year is beyond me.
you can buy now using an elevated dollar to get in on things that are poised to go way up when the dollar collapses. If he's right, and I think he is, his profits are going to be ridiculous. I've already showed by referencing some mining stocks that you can make a killing in this market playing Schiff's investment strategy.
-theoakman, RPF 1/26/09.
Oh what a difference 10 months makes. Deflationists, where are thou?
Because he invested in the only things that went down, dollar and treasuries.
Is Max Keiser an idiot? Or is he just playing some slippery word games and hoping the people listening are idiots?
He is taking Warren Buffet's company stock value, not the actual investments his company does, and comparing it to Mish's investments, and claiming that Mish is a ninja warrior for outperforming Warren Buffet.
you mish bashers conviently leave out many details. here's the original post he made regarding schiff, which also explains the other funds and recommendation for buying gold:
http://globaleconomicanalysis.blogsp...was-wrong.html
hedged growth is but one fund geared torward safety and the others (absolute return) invest in the very things you pontificate (pm's, commodities, etc) and that have increased in value. why not post that info?
WTF are you talking about? That's only one of his funds. Its down 6.8% for the first half of the year, but its beat the average fund every other year he's had it.Mish lost money in a market where it's never been easier to make money.
His other funds investment funds are up 17.3%, and 5.4% so far this year and have beat the average fund every year he's had them. His commodities fund it up 13.7% and beating gold and silver.
The guy can't have a bad half year in one of his four funds?
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