Economics Questions

Re: Just started reading 'Crash Proof' by Schiff...thesis?

Ronorama — Sat, 06 Sep 2008 16:23:34 GMT

I just finished reading the book, and although I had some of the same issues with Schiff's analysis of the trade deficit as Robert Murphy does, the economics are otherwise sound. The basic thesis of the book, as best I can describe it, is quite simple: The U.S. fiat money system has resulted in international overconfidence in the Dollar, but that confidence will soon come to an end. When it does, the results for Americans who hold dollar-denominated assets will be severe. As foreigners start looking to unload the less-valuable dollars Americans will see their purchasing power decline rapidly.The solution is to shift your investment portfolio to foreign investments, specifically those that pay dividends, and to convert a portion of your wealth to gold and silver. The strategies Schiff recommends are actually very conservative...there are no "get rich quick" schemes to be found in the book at all. And even though he does plug his own company several times in the book, he does so with some humility and goes so far as to give you a list of questions to ask should you choose NOT to use his company for your investing.

Re: Just started reading 'Crash Proof' by Schiff...thesis?

BlackSheep — Mon, 30 Jun 2008 23:55:24 GMT

A couple of Schiff interviews for the interested: at Mises , Barron's

Re: Just started reading 'Crash Proof' by Schiff...thesis?

Stolz2525 — Mon, 30 Jun 2008 17:09:14 GMT

ChaseCola:
Right around the time I turn 18 the economy will collapse (I am 16 now). We will be referred to as the f**cked over generation.

I think you have the wrong outlook on that actually. The real people who are screwed are the ones who have been relying on the Fed's constant money printing and a huge trade deficit to build up their wealth. They are likely to lose a lot of it. At 18 you have almost nothing to lose and everything to gain. If I could pick a point in history to invest some money I'd probably go back to the middle of the Great Depression and do it then. 1931-1933 would have been a great time to buy pretty much whatever you could and we'll likely have a similar opportunity in the next few years.

Re: Just started reading 'Crash Proof' by Schiff...thesis?

liberty student — Mon, 30 Jun 2008 15:34:49 GMT

Funny, I read the book and I wasn't worried. Worst case scenario, move to another country,. A US crash will be felt around the world, but it's not going to shut down the bordellos and boulangeries in Paris.

Re: Just started reading 'Crash Proof' by Schiff...thesis?

Anonymous Coward — Mon, 30 Jun 2008 06:34:35 GMT

ChaseCola:
After listening to Peter I am seriously scared of my future right now. Right around the time I turn 18 the economy will collapse (I am 16 now). We will be referred to as the f**cked over generation. Here is a quote from his book.

Meh...

I wouldn't put too much faith in the doomsayers just yet, chances are we'll just muddle through like all the other times the economy was sure to collapse.

ChaseCola:
I just got my first job and am saving up for weapons.

Dude, chicks love motorcycles...

Think of it this way, if it takes a couple years for the malinvestments to work themselves out as the doomers are claiming because of government intervention keeping this from happening all at once so the economy doesn't nosedive then everything will be back on track for the next boom-bust cycle a few years after you get out of college.

Through the next few bad years you can be sponging off the parents and then riding the financial aid gravy train (or still sponging off the parents) through college and when you graduate the next inflationary boom cycle should be in full swing. Jobs galore and all that.

Go read Kerouac or something...

Re: Just started reading 'Crash Proof' by Schiff...thesis?

ChaseCola — Sun, 29 Jun 2008 09:59:28 GMT

After listening to Peter I am seriously scared of my future right now. Right around the time I turn 18 the economy will collapse (I am 16 now). We will be referred to as the f**cked over generation. Here is a quote from his book.

"For years the United States has been traveling a course the Nobel Prize-winning Austrian economist Friedrich von Hayek set forth in a book self-descriptively titled The Road to Serfdom. The coming economic collapse may finally bring Americans to that grim destination. But it is also possible that the same dire economic conditions will inspire a return to the country’s constitutional traditions of sound money and limited government, the foundation upon which a viable economy can be rebuilt. There is a fork in the road to serfdom. One choice leads back to freedom, and it is my fervent hope that Americans will take it. (p. 259)"

Based on the intelligence of the american politicians and the american public I am pretty sure we have a one way ticket on the serfdom express. I just got my first job and am saving up for weapons. I have a feeling they will be valuable in multiple ways in the coming economy. Hopefully Peter is wrong and he predicted all the events leading up to now by chance. But I am starting to doubt that.

Re: Just started reading 'Crash Proof' by Schiff...thesis?

BlackSheep — Fri, 20 Jun 2008 18:57:40 GMT

ViennaSausage:
Who is RPM?

If you follow the link, you get a couple of articles from Dr. Robert P. Murphy on Schiff's book. Murphy is the author of the Politically Incorrect Guide to Capitalism and Chaos Theory.

It's not a big critique: he doesn't actually invalidate Schiff's observations, just pointing out some oversimplifications (like trade deficits being always abnormal, when it's possible for e.g. tourism to make up for it). I'm sure they both share pretty much the same view on the causes of the USA recession.

Re: Just started reading 'Crash Proof' by Schiff...thesis?

ViennaSausage — Fri, 20 Jun 2008 18:32:55 GMT

Who is RPM?

Re: Just started reading 'Crash Proof' by Schiff...thesis?

atrickpay — Thu, 19 Jun 2008 22:32:58 GMT

Mr. Coward: thanks for that. RPM has a lot of good articles critiquing Schiff's thesis over at Mises.org!

Re: Just started reading 'Crash Proof' by Schiff...thesis?

Dynamix — Thu, 19 Jun 2008 18:19:53 GMT

fsk:

Federal Reserve Notes *ARE* worthless.

I'll take them off your hands if you have any. :)

Re: Just started reading 'Crash Proof' by Schiff...thesis?

atrickpay — Wed, 18 Jun 2008 15:23:49 GMT

Ooh that looks good, I'll check it out.

Re: Just started reading 'Crash Proof' by Schiff...thesis?

Anonymous Coward — Wed, 18 Jun 2008 05:20:54 GMT

Google is your friend.

Re: Just started reading 'Crash Proof' by Schiff...thesis?

atrickpay — Wed, 18 Jun 2008 04:05:08 GMT

OK, there's been 20 posts here, and I still haven't gotten the answer I'm looking for...

Can somewhere lay out Schiff's thesis step by step?

Re: Just started reading 'Crash Proof' by Schiff...thesis?

ViennaSausage — Wed, 18 Jun 2008 03:30:06 GMT

atrickpay:

OK, but what is the problem with that?

That scenario wouldn't cause any problems if all the exchanges were completely voluntary...So in other words, how is the gov't f'n things up?

I never said that the production/consumption import/export was a problem. I was just responding to the question of what is the main thesis of the book.

Re: Just started reading 'Crash Proof' by Schiff...thesis?

BlackSheep — Tue, 17 Jun 2008 23:13:47 GMT

atrickpay:
Blacksheep: K, I'll check it out if you say it is a clear explanation.

I haven't read his book, so I don't know if it is as clear as this video, or even more since the video is more limited... But, from what I remember of the video (seen the thing a while back), I thought the various concepts he presented were pretty clear. Maybe his general view was not very coherent and clear though... I guess he does go over how regulation and stuff strangled the manufacturing, but the main point I got is that the trade deficit is not viable since it's based on accumulation of debt. Maybe because he spends most of the time with metaphors and simplifications of the kind, he might not make his case too deep? (as an ignorant of economics, I can't say if he is being superficial or is there some theories he is failing to address or something...)