Schiff Backs Down from Hyperinflation Debate

[idiom]

Hyperinflation isn't tied to expansion of the money supply. Its tied to a loss of faith in the currency. This causes the velocity of money to explode.

QE is causing serious inflation, but its uneven as it is fighting massive deflationary forces as defaults are causing the money supply to collapse.

[thequietkid10]

Dangerous to who? The fed?

Yes I'm sure that the fed is quite afraid of critics who have made repeated specific predictions of incoming doom due to fed actions and repeatedly have been wrong.

[matt0611]

Think this is bad someone should do a "best of Alex Jones" (hello Hot Topics)

I for one find apocalyptic rhetoric and the idea that abolishing the fed is a cure all to be dangerous.

Schiff doesn't even advocate getting rid of the Fed. He talks how bad its mismanaged in regards to bailouts and interest rates but I've never heard him blame the Fed for all of our problems.

I listen to his radio show almost every weekday, he puts blame on congress much more than the Fed and I never heard him say if we just end the Fed all problems will be solved.

[MozoVote]

I assume Schiff has made money for his investors in Euro Pacific, but his public punditry has been bearish for as long as I can remember.

[torchbearer]

Just curious- has Schiff ever had anything positive to say about the economy- even before the current economic crisis- or is he always bearish?

Since he has been on record, have we ever had a true free market with sound money? then no, he has been bearish and for all the right reason. have you read how an economy grows and why it doesn't?

[Seraphim]

While you make a good point, ultimately the loss in faith stems from expansion of the base money supply by GOVERNMENT. That is to say, arbitrary expansion without the required growth in capital creation to back more units of trade.

Confidence does not evaporate "Just because". Confidence is eroded by bad policy.

It is bad policy to paper over debt problems with confetti.

Hyperinflation isn't tied to expansion of the money supply. Its tied to a loss of faith in the currency. This causes the velocity of money to explode.

QE is causing serious inflation, but its uneven as it is fighting massive deflationary forces as defaults are causing the money supply to collapse.

[hazek]

Just curious- has Schiff ever had anything positive to say about the economy- even before the current economic crisis- or is he always bearish?

There is nothing positive to say about the economy for about the last 30 years.

[NoOneButPaul]

I have yet to hear any reasonable explanation of how the US government can pay its debts and meet its promises. That means it will either default by not paying or it will "meet" its debts and obligations by creating money. If someone has another escape route, I would like to hear it.

Given the two choices of simply NOT making the payments versus making the payments with a vast flood of new, devalued money, I predict the second path because it can delay the day of wreck-oning. Politicians are mostly cowards who will postpone facing reality.

The dramatic expansion of the money supply needed to "meet" its obligations WILL cause inflation. Hard to say if it will be a hyperinflation, but that would be my guess. In any event it will be enough inflation to turn the economy on its head and ruin millions of lives.

Adding to this...

Schiff says in the exact same interview that if we get inflation of 30-40% and maintain ourselves is that not still a hyperinflation of sorts? I think what Schiff is pointing out is that a full scale collapse will not happen but a serious devaluation is still possible and in his mind still on the horizon.

That or he's peddling doom to sell his gold and silver...

[nobody's_hero]

It's probably wiser that he doesn't.

I mean, if we go on and on preaching to heavily about hyper-inflation (however possible it may be), and yet people see that we don't have hyper-inflation, then it sort-of ruins our credibility. We can keep talking about it, but you know, just don't over-do it and don't give a definite date of "okay we'll see hyperinflation on june 3rd, 2013" or something. Because if it doesn't happen, then it looks like the people who are always talking about how the world is gonna end on such a date, and then nothing happens.

It's better just to wait until the event occurs and then be like, "see, I told you, but you idiots wouldn't listen."

[nobody's_hero]

It's also possible that the goal of the people in charge is not to let it go into hyperinflation, but just to continue as they always have done, which is playing off of centrally-planned cycles of inflation and deflation. Take the housing crisis, for example. The deflationary period that happened in the housing market was a chance for the big players to consolidate their holdings, and now we're going up again, so the cycle will probably repeat. Last year was a hard year for Georgia banks because it seemed like every week you heard about the FDIC folding a smaller bank into a larger one.

We create some gigantic financial institutions thanks to the boom-bust cycles. Buy low, sell high. Buy low, sell high. Buy low, sell high. And if you have friends at the Fed who can let you know when to expect a low and when to expect a high, it's a rigged market.