Schiff Backs Down from Hyperinflation Debate

[Danke]

Interview in 2002 when he was also predicting doom. He said we were entering a bear market and was predicting high inflation in the next couple years back then as well. Prediction was for the DOW to go down to 2000 and NASDAQ to 500 and interest rates "through the roof". DOW was 10,000.

And Gold was under 400.

If you took his advice then, you would be up over 300% with gold vs. 30% in the DOW.

[silverhandorder]

Schiff destroyed Mish on his show today. Mish works for a tiny firm that has 75 million in assets they manage. 40 million they got when he attacked Schiff. His firm underperformed in all of their strategies except one for only one year. They even managed to lose money. At the same time Schiff's strategy over-performed the market.

He also went into detail how Mish basically called him out when he knew Schiff could not respond over regulations.

As far as Schiff predicting inflation a lot of it is already here. We are severely under performing gold. Companies keep coming out with reports they they are seeing inflation in their inputs. Shit if you followed Schiff's advice even without hyper inflation you are better off.

[Bman]

Lets not forget the reports of abandoning pennies, nickels, and dimes. Why would they do that? That's the question all of the "there's no inflation" crowd better damn well answer seriously.

[Steven Douglas]

The surreal part about this goes right back to Dr. Albert Bartlett's famous statement:

“The greatest shortcoming of the human race is the inability to understand the exponential function.”



What's interesting about doubling rates in terms of fiat currency and debt-money creation, and the reason it looks like it could go on doubling forever, is that the market does react and adjust to it--by devaluing the currency, and trying to reach equilibrium--if given time, and provided the doubling rate doesn't utterly swamp that badly needed time. Everyone forced onto the treadmill takes their perpetual losses, one hundred becomes the new ten, everyone eventually demands just enough to keep pace, and it seems like it could go on forever.

The problem we're facing is the difference between the mathematical requirements of the Ponzi economy on the whole vs. the capacity of the individuals in that economy to continue supporting it, and the disparity between the doubling rates of each. That alone is what spells absolute catastrophe as a mathematical certainty.

The ever-expanding (and accelerating) circle of debt, and all the new debt that is ABSOLUTELY REQUIRED to service the ever-compounding, ever-doubling interest on all the compounded debt, has an exponential doubling rate that exists without regard to labor's ability to keep pace. And that's the wall we're up against now, with a stadium that is "only half full", with what everyone believes must be a long way to go before it fills to the brink. How long it takes to fill the rest of the way is at least as long as it took to fill halfway, right? And that's where these clever idiots with their normalcy biases flying, who suck their finger and hold it to the wind to declare hyperinflation a myth, and based only what they have recently observed, are in for the humbling shock of their lives.



Every time I shake that rickety shack full of sweaty dynamite, I turn to that old codger who warned me about it and say, "See? What do you know about rickety shacks full of sweaty dynamite, old man? This shack is part of my reality, and has been around since before I was born."

Then I climb up and do a dance on the roof of the old shack, just to show him just how stupid and wrong he is.

[sgt150]

And Gold was under 400.

If you took his advice then, you would be up over 300% with gold vs. 30% in the DOW.

I think Schiff does a disservice to himself by assigning specific timetables toward his predictions. He's like Alex Jones in that regard. Other than that, he's great. A big reason why Ron Paul is so fantastic is that he knows better than to do this.

[idiom]

We have a couple of other dynamics at work. We have huge deflation going on in the monetary supply with debts being written off. We also have price deflation in sectors, electronics for example continue to get cheaper.

We also have severe margin compression. This means wages are not expanding to with inflation, one of the key requirements for hyper inflation. A loaf of bread costing $100,000 is not a big deal when you are making a million per hour. In fact we have wages and work weeks decreasing.

A lot of the inflation is being exported, and a lot of it is showing up in education and medicine. This is causing Medicare to rapidly become the problem that is going to make the budget unbalancable without dealing with the monopoly practices in medicine. If you took away monopoly protections in the medical industry there would be massive overnight deflation there as well.

[cubical]

ya know, a lot of the Austrians (Ron Paul included) who have harped about mass inflation for the last 5 years have simply been wrong. Granted, eventually it will come but Schiff and the others who screamed that the sky is falling have just been wrong. At this point at least.

Relative to what? Remember, the silver lining that is supposed to come with a recession/depression is lower prices. Instead the unemployed are getting hit from all sides.

[erowe1]

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.

I'm not sure about that. The problem with it is that the federal government's obligations with Social Security and Medicare extend way out into the indefinite future. It's not something where you can pay it off with worthless money and be done with it.

[Gaddafi Duck]

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

Heh....Henry Hazlitt wrote in the 1940s that Brenton woods would collapse...it took 30 years for that to occur. Was he wrong?

Ron Paul spoke in the 1970s about the collapse of the Federal. Reserve system and the collapse of fiat money. 40 years later, we are still using paper money. Is Ron Paul wrong?

Schiff said in 2002 that we would have high inflation. We do already. Gasoline a decade ago was a buck a gallon...now it's 4 fold that. Commodity prices are much higher than a decade ago. Plus, inflation also acts to prevent prices from falling, so while computers and HD TVs are cheaper and better than they were a decade ago, you have to ask if they would be even cheaper today had we less inflation.

Also, if Schiff's predictions come to fruition, is it really a big deal if he's off by a few years given what he's predicting? I mean, when an entire financial system melts down, does it really matter if it's 2008 vs. 2014? Unless you plan on dying before it collapses, I would think it's immaterial whether it happens this year or next year. It's something that hasn't occurred in 200 years in this country: a collapse of the dollar. You're complaining because Schiff's predictions were a few years off given the perspective of what he' s predicting? Lol....

Besides, as I said, we have had high inflation. Look at everything from houses to stocks to bonds to commodities for the past decade.

[itshappening]

Schiff also made a good point about the government's inflation numbers. He said if you used the way they calculated them in the 70's then we probably have 70's style inflation now ... they change their basket of goods around to include all the cheap stuff from China and proclaim 2% inflation. Larry McDonald said in 1980 "only government bureaucrats don't drive or eat"