Peter Schiff is back. That simply means he is talking more.
Today we learn “Schiff’s accurate prediction of the Subprime Mortgage Meltdown inspired the Academy Award-nominated film, The Big Short“.
The above image from an ad on Pro Wall Street Daily.
His “prediction” allegedly inspired the movie. Really? Is that delusional or what?
Schiff’s delusions don’t stop there.
In the very next sentence, Schiff predicts “no police“. And Schiff is back at it with hyperinflation nonsense.
Single Biggest Event In Human History
According to Schiff, Dollar Collapse Will Be the Single Biggest Event In Human History.
“This will be the first event that will touch every single living person in the world. All human activity is controlled by money. Our wealth, our work, our food, our government, even our relationships are affected by money.”
“No money in human history has had as much reach in both breadth and depth as the dollar. It is the de facto world currency. All other currency collapses will pale in comparison to this big one. All other currency crises have been regional and there were other currencies for people to grasp on to.”
“THE DOLLAR COLLAPSE WILL BE THE SINGLE LARGEST EVENT IN HUMAN HISTORY!”
“This collapse will be global and it will bring down not only the dollar but all other fiat currencies, as they are fundamentally no different. The collapse of currencies will lead to the collapse of ALL paper assets. The repercussions to this will have incredible results worldwide”
“What makes this story even more infuriating, is that it wasn’t necessary. It didn’t have to happen.”
Scream On
I have seen Schiff’s hype in other places recently and in each excerpt, Schiff textually-screamed in bold caps “THE DOLLAR COLLAPSE WILL BE THE SINGLE LARGEST EVENT IN HUMAN HISTORY!”
Schiff also says “When The Economy Crashes Parts Of America Will Resemble A 3rd World Country.”
Pedaling Snake Oil
I assure you any upcoming dollar crisis will not be the single largest event in human history, ahead of WWII, WWI, the Great Depression, the Medieval collapse, the Renaissance, and countless other ideas including the internet and the future impact of self-driving vehicles.
Whenever anyone make such absurd claims, you know they act like carnival barkers peddling snake oil.
Reflections on Gold
Like Schiff, I advise holding gold. For a couple of years, however, doing so was a very painful experience.
It now appears gold has bottomed, and if so, here are five reasons.
- Negative interest rates
- Competitive currency debasement
- Totally out of control central bank actions
- Trillions of dollars of debt that cannot possibly be paid back
- Renewed lack of faith that central banks have everything under control
Without making absurd claims of where gold is headed, I simply advise holding a decent portion of one’s assets in the metal.
How much depends of risk tolerance, but a level of 20% or so seems like a reasonable starting point of discussion.
For those who do not understand gold, and for those who would be uncomfortable holding much of anything that does not have a yield, a level of 5% might be more appropriate.
For others, 35% might be appropriate. If any investment causes a loss of sleep, it’s too much.
Global Currency Crisis
Like Schiff, I am a firm believer a global currency crisis awaits. I have stated that belief many times over the years.
However, a currency crisis is more likely to start outside the US. Leading candidates include Japan, China, and the Eurozone. Canada is a possibly, as is the UK.
Even if a currency crisis starts in the US, the crisis won’t be the single largest event in human history.
Unlike Schiff, I don’t pretend to know so many details on how it will play out. I also don’t pretend to know when it starts.
Schiff’s Dollar Myopia
With every country doing the same thing, even more so than the Fed in regards to negative rates, it’s downright silly to focus on the dollar.
Why not put a spotlight on the Yuan or the Yen? What about the possibility (if not outright likelihood) of a very destructive breakup of the eurozone?
Schiff not only maintains his US dollar myopia, he brought that myopia to a new level, to the point of believing police will vanish in the US.
Peter Schiff is either delusional or he buys into the idea that preposterous marketing hype sells. I strongly suspect both.
Mike “Mish” Shedlock
worth analysis … https://www.technologyreview.com/s/600980/a-bitcoin-style-currency-for-central-banks/
How did Euro-Pacific Capital do during the crash of 2008?
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He is wishing the dollar would collapse.
The apple doesn’t fall far from the tree… his father was a con-artist.
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Anyone who is predicting gloom and doom is a con artist. Taking credit for the movie is another strong tell. Liars need to be called out and shunned.
Mish calls that “delusional”. Perhaps that is to avoid legal trouble.
The government paid shill speaks….
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I do not get paid for posting my opinion.
But it is interesting that you seek to censor it.
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“It now appears gold has bottomed, and if so, here are five reasons.”
Misch gold is up this year, at least $100/oz in the past few months. Do you mean it has already bottomed out and is now on it’s way up?
Yes, gold appears up.
Miners have been exceptionally firm on gold pullbacks.
Look at charts of NEM and GG
I was contemplating leap calls on GG when it fell below $10 but I did not do it.
That would have been a huge winner.
Mish
Peter Schiff is a loud mouth idiot – Michael Burry was the first one to work out what was coming …
Schiff has been saying the world has been going to blow up tomorrow for 7 years now….
And when it does blow up — he will be saying see I told you this was going to happen.
That’s like saying I am going to die some day…
Duh – a 7 year old could be made to understand that the world is going to blow up…. timing is as always – a bitch
Useless bashing Schiff for giving an opinion.
No-one has to believe his opinion, but surely its worth looking at financial markets and their effect on society from every angle? The cops could all decide to go awol if the currency collapses. Would you go to work if you werent getting paid and were worried about the safety of your family. Schiff may be proven wrong, I hope he is wrong, but his opinion is still valuable.
To my knowledge he has never predicted when a currency collapse will happen, except – “when enough people lose faith in currencies”. I am one who has lost faith in paper / digital currencies. I wont vouch for Schiff, maybe he is a conman, but Im happy to defend his right to an opinion, since I share the same opinion.
Schiff certainly has his right to an opinion. So does Bernie Sanders, President Obama, Mario Draghi, and Ben Bernanke. Are we not supposed to comment on anyone’s opinion?
Hello Mish
Yes, I appreciate your comment on Schiffs opinion – thanks. Your piece looks like an assassination piece, plus I happen to share Peter Schiff’s concerns.
How can hyperinflation fears be nonsense when central and commercial banks continue to conjure up new credit, then used to buy real stuff? More currency units / same amount of stuff.
Ive never experienced hyperinflation, but have formed the opinion that it occurs when enough people realize that their currency is being diluted severely, and then decide to spend their currency with all haste. If this is true, then surely hyperinflation must be a real possibility, since I for one have done exactly that?
I have my own reservations about Peter Schiff, but they center around the treatment of his bullion products rather than his stated opinions.
His Europac Bank stores clients bullion at Perth Mint, which may be complicit in the re-hypothecation of bullion, and the same may be true concerning Europac’s digital gold product. I have no proof of this, but decided against using his service because of these concerns.
Japan has printed trillions of yen – yet they continue to crash into recession/deflation again and again and again.
Globally massive amounts of cash have been pumped out – yet we are facing a deflationary death spiral with commodity prices collapsed.
There will be no hyperinflation.
What there will be at some point is a complete and total collapse of the global economy.
It will be 2008 on steroids – and the central banks will be powerless to do anything — they can print all they like — it will push on a string at some point…. and then the string will push back.
Schiff is a loud mouth jackass who likes to hear himself talk
He’s been droning on like a broken record since 2008. It becomes tiring after awhile – no?
I guarantee you he is recording and saving all of his rants where he screams about how collapse is coming — and we’ll never hear the end of this when he says how right he was when this blows to pieces.
The thing is …. he is simply stating the obvious … this is not going to be 2008 again where almost nobody figured out what was coming.
Peter Schiff needs to get over himself
Mish,
Would you suggest silver too? Especially given the favorable ratio of silver vs gold.
I do have to agree with Peter on the “no police” aspect of the scare tactics. Recent history bares it out, also (Hurricane Katrina 2005 – widespread reports of no police showing up to work- instead ushering their own family members and friends to safety, leaving citizens (who foolishly refused to evacuate- mainly because they had nowhere to go) to fend for themselves. If you presuppose that the dollar collapses and a policeman’s salary is now a pittance, this could surely happen. I personally believe the dollar (US Dollar Index NYBOT:FX)
http://quotes.ino.com/charting/?s=NYBOT_DX is due a retreat to its longstanding level to the 76-82 range (it’s currently at 97) That’s an 18% -20% drop- definitely not a “COLLAPSE” I’m putting my money where my mouth is having switched to equities that trade in other currencies ( EFA – EAFE Europe, Australia & Far East) and generally do well when the dollar is sinking. It’s my only real way to hedge, as my work’s investment plan has limited choices.
As for the “no police” statement it should be noted our government is not the most efficient organization in the world. High profile incidents covered by the media often reassures the public that the government stands ready to rush to our aid in case of a national disaster. Following a tornado or hurricane in the newscast we see FEMA workers spread-out and moving from door to door offering help to Americans in need.
This reassuring media coverage is misleading. Be prepared that in the case of a major crisis or disaster if you find yourself in an large area of devastation the government will prove largely ineffective. If and when a really large Armageddon event does occur we will quickly become acutely aware that God helps those who help themselves. More on why this pandering in disasters is really a disservice to all of us in the article below.
http://brucewilds.blogspot.com/2014/07/government-pandering-in-disasters-great.html
That is why it’s best to live in communities where people help each other if needed and are mostly self-reliant and friendly towards each other instead of living among people many of whom get money from government handouts and become desperate and hungry in 1 day and have bitterness to the world as their attitude.
There is a way to balance the value of money and assets since 97% of fiat money is created with debt.
The whole discussion about maintaining value for future purchases is based on what to hold as a store of value, assets, commodities or money..
Go here for more info. wp.me/p42WQA-7c
Schiff has a business that sells gold. Strategy seems to be pretty much the same as Trumps and the more you write articles about him the better he does.
Anyone who thinks there will be a currency crisis around the dollar or yen have no understanding of how the monetary system works in the US and Japan. The Euro, however, is wide open to blow.
Euro will probably be the first one to crash and then yen.
Dollar should be saved if the next president is Trump and he takes on the ridiculousness in US healthcare of drugs costing over ten times more than in Europe by allowing re-importation and thereby forcing lower prices in US,if US government starts bidding out the drugs contracts instead of paying list price,if health insurance is freed from state borders and every insurer is able to offer every plan in 50 states and also obligated to take customers from 50 states and then as finale Trump demands that all hospitals need to post their prices for every procedure and honor said price per operation, with only additional billing being extra hours if the operation takes longer, no matter if it’s paid by health insurance or cash and competition is freed for example in the x-ray and scan business so the same scan which can be bought in Europe for 500 dollars from private healthcare company and gotten for 50 dollars from government healthcare if you wait 3-6 months can’t be charged for 5000 dollars in USA because of no-competition.
If the healthcare albatross is taken of the backs of businesses and consumers in USA there will be much better employment and much more spending money for everything else and therefore economy will grow and us dollar will get higher compared to Euro (total freeze in economy of EU-countries because of Euro and EU bureaucracy) and Japan (total destruction of economic growth by ZIRP and QE and rapid aging population).
Sciff is a loon if he does NOT see that Europe and Japan and China are all worse off than USA.
Dollar will probably get lower than Gold in comparison but this crash talk is charlatanism.
A collapse is impossible as that would require a true market place and the acceptance of reality to recognize it when it happens.
Meanwhile we each can celebrate in our own way at our benevolent government’s announcement that our chocolate rations have been increased from four ounces to three.
In this regard I can hardly wait our jubilation once we reach the much vaunted 100% employment our leaders have so vigorously pursued, and the complete removal of risk in our markets and lives in general.
Collapse is a farce and we should be jubilant that Utopia is imminent.
Below is a piece that argues a great deal of wealth will be flowing into America seeking protection from the ravages fostered upon them. This is driven by policies that were even worse than those America’s leaders have chosen to pursue.
America has been described recently as the cleanest dirty shirt in the closet, or the best house in a bad neighborhood, both place it as the least worse option. The reality is other options fail to pass the smell test and the dollar has not fallen far from its recent highs..
http://brucewilds.blogspot.com/2015/12/strong-dollar-acts-as-magnet.html
If trump becomes president and lowers corporate tax to 10% many european companies will move their headquarters to USA instead of the current trend of for example Pfizer moving to Ireland from USA through corporate inversion.
Furthermore American companies have 2500 BILLION dollars stashed outside of USA and if Trump lets companies bring this to USA either with no tax or the 10% tax while simultaneously starting to charge 10% profits tax also for US companies profits outside USA then this wall of cash coming to USA would be hugely bullish to the dollar and US economy.
I think Sciff is wrong in his dollar demonization.
Mish is jealous of Peter Schiff. Peter successfully predicted housing crash. Has Mish predict anything worth mentioning? Mish is just another financial consultant trying to compete with Peter. Come on Mish stop bashing other and focus on economics.
I predicted the housing crash and the exact timing of it.
I predicted record low interest rates across the entire treasury curve when oil hit $140 and Schiff was screaming hyperinflation
I predicted deflation
I predicted a strengthening US dollar
I predicted a base commodities bust – but I failed to see gold taken down with it
Schiff’s track record is a joke
Mish
I’m no great fan of Schiff, but I also don’t think it’s a stretch to think that there is likely to be a sequence of events during which the cops just won’t bother to show up.
This is already the case in black, urban neighborhoods all over the country. I think it’s not much of a stretch to think that this behavior is likely to spread should things get ugly elsewhere.
Schiff = Moron
What interests me …. why are you wasting time on him?
I guess Mish does not know the difference between the subject of an interview and how the company that conducts that interview chooses to market it. I have no say in how Wall Street Daily markets that interview. I did not write any of the ad copy. Why doesn’t Mish watch the interview to learn what I actually said before attacking me? By the way, I did short subprime in 2006, as did a number of my clients who took my advice to short it with me. That trade did inspire the movie The Big Short. Wall Street Daily does not claim that I personally inspired the movie, just the trade. Of course I am not the only one who put that trade on. There were others who did it too, including the actual subject of The Big Short. But no where in that promotion does Wall Street Daily claim that it was my personal trade that inspired the movie, just the trade itself, which several other individuals also participated in. Of course Mish was not among those individuals himself. His investment advice has been so horrible over the years that his entire company only manages 23 million dollars for just 135 people. That is down from 75 million in AUM and 342 accounts at the end of 2009. So even though his entire firm barley had any clients or AUM back then, over the past 7 years, despite all his big talk, he managed to lose 60% of his clients and 70% of his assets under management. That is just pathetic. Maybe if Mish spent less time criticizing me, and more time taking care of his clients, he would have as many as I do. By the way his firm has been in business for 11 years, and during that time has only managed to retain 135 clients, or about 12 per year. That is only one client per month. Most individual brokers, let a lone an entire firm, would not even be able to retain their jobs with performance that bad.
I think it is impossible to predict ANYTHING in this world and those that do are likely selling something.
But what I do predict is that the depths of destruction are incomprehensible given our current existence, simply based on the knowledge that humans have NEVER been less capable or prepared to care for themselves.
In the Great Depression 80% of people lived on farms and were used to providing the bulk of their own necessities through skills and the willingness to actually labor to survive. Today’s world looks nothing like that, where we buy virtually everything we eat and have NEVER before depended on prepared food to this level. We do not know how to grow or even prepare food much less do all of the other things that are the basics of survival. This does not mean we are stupid, only lacking those skills needed to survive a bad spot, and indoctrinated to the expectation that our survival is a debt of society that they will feel justified in rendering to themselves by violence if necessary, as that is the primary example presented to them every day.
Schiff may be a shill, but he may also be correct if not for the cause but the effect of collapse. The dollar is just another component to the fraud and corruption of the values that constitute a viable society. Many have their theories on what will bring about the end of times, but I believe if it is to come it will be not be due to the lack of the value of a dollar, but a lack of what we value in our lives. This world reflects who WE are, not just those at the top of the heap or the symbols we carry in our pockets..
People trying to profit from this delusion of “value” are responsible for perpetuating this disaster. The idea that our money can work for us, that we can earn from investing cash rather than our labors and personal creativity, has done much to devalue the REAL assets we hold. When we value and invest in creating wealth less than the means of creatively transferring that wealth to “investing geniuses”, our end is within sight.
There is a way to balance the value of money and assets since 97% of fiat money is created with debt.
The whole discussion about maintaining value for future purchases is based on what to hold as a store of value, assets, commodities or money..
Go here for more info. wp.me/p42WQA-7c
http://www.wp.me/p42WQA-7c
My father read the elder Schiff’s book about not paying income taxes. My mom and I had a hell of a time settling his estate when he died. What should have been a comfortable last twenty years for my mom turned out to be a rough slog.
Bad advice can have a serious human toll.
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Sorry for your mom.
When I was in college I worked as a desk clerk at a hotel his father used to lead innocent people down his primrose path. I felt sorry for all the lambs he was leading to slaughter. I hope he was the only one who went to prison.
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A good article, written in 2009, looks at “A View of the Dark Side” by Bruce Krasting: http://brucekrasting.com/a-view-of-the-dark-side/
“What makes this story even more infuriating, is that it wasn’t necessary. It didn’t have to happen.”
Every cycle has an inevitable down phase. Every reserve currency except the current one, has come to an end. The dollar will be no different. The inevitable cannot be prevented.
As Martin Armstrong has noted, the world financial center will move to the east, to Asia. Why? Because that is what cycles do. Everything shifts over time. In 1990ish, the Soviet Union fell. As one can see, Russia has rebounded to some degree or another. Under Mao, China was in the wilderness. As a result of a huge industrial vacuum, China has become the biggest boom town in history. The bigger the boom, the bigger the bust.
The 1990’s boom “didn’t have to happen”, but it did. It was a product of its phase in the long term cycle. The cheaper debt became, the more it piled up.
People blame Reaganomics, but 1980 was the peak of the price inflation cycle, which caused an inflection point. If not Reagan, it would have been someone else. The trend reversed in 1980. What is happening now is a product of that trend reversal. Part of that product was another 1920’s boom and 1930’s bust.
Schiff has some empirical observations which match some of his theories, so like a clock sometimes he is correct twice a day.
But since a transactional system is necessary, having the senior transactional system go to zero is impossible. In fact, since most dollars are really just in form of asset values and levered debt, the numbers of dollars available are more likely to go DOWN. There are no wheel barrows of paper- it’s all phoney asset values. And when people default on high asset value devices like homes, derivatives, crap the dollars disappear and net worth goes down. The amount of money the banks print and liquify the system is NOTHING compared to the amount of dollars that are ASSIGNED to assets of all sorts. That’s why DEFLATION is the problem here. Too much money is non-liquid and held hostage in asset assignments and the FED keeps popping up assets so it’s all stuck. When when DEFLATION hits there is even LESS dollars to get .Please see dollar index which is near 100. Amazing how central control capitalism creates the problem
Mish, what are your thoughts on Martin Armstrong’s analysis?
you have to be more specific – I suspect I agree with some things and disagree with others – but I don’t really follow him
Mish
Armstrong is either a genius on the order of Einstein (as he would have you believe) or a first-rate con man. I tend to lean toward the latter but I do wonder sometimes…
Why should gold rise in nominal USD terms if you truly believe in a deflationary outcome? Sure, in real terms it could rise in value in a true deflation (like in 2008).
Your position makes zero sense. The only way gold heads higher in nominal terms is in an inflationary environment. Period.
I have debunked that nonsense dozens of times.
The fact of the matter is gold does well in times of deflation and credit stress.
Gold does least well in times of low and falling inflation and no credit stress.
Want proof?
Look a a chart of the price of gold from 1980 to 2000.
Case closed.
Mish
I agree it does well in real terms in times of deflation and credit stress. But I am talking about in terms of USD. Why should gold be favored over USD when credit (or M2 or whatever) is shrinking?
Thanks.
Mish, you seem a little envious of Peter Schiff. You come across like Jerry Lee Lewis’ resentment of Elvis Presley being the bigger star..
The dollar is the world reserve currency; that is the point. Many nations’ currencies are directly tied to the dollar. Almost everything is priced in dollars. There are no other existing currencies that could step in to fill the dollar’s place. This is why a collapse of the dollar would matter.
Without a doubt the collapse would matter.
Why will it collapse?
Mish
I can understand Peter Schiffs alarm calls on U.S debt but I just cannot understand why he thinks China is so much better in this regard, or for that matter Europe. If ever there was a debt based ponzi scheme, you will find one in China, what has been going on there is insane, yet Schiff thinks China will rule the world in 5 years time. How could this possibly happen?
Because the produce a majority of the products consumed…that’s why
If Schiff says the dollar will collapse, it really means the dollar will be king!
Whew!~ I feel a lot better now 🙂
Way to try to make a name for you’re self. I see you are the one stuck in the delusional state. Nothing will change. We dont know who you are and no body cares
I find Schiff says alot of good things, he just tends to go OTT with his predictions on gold and consumer prices, and ends up discrediting himself. He used to correctly talk about central banks creating asset bubbles, then he incorrectly switched to talking about consumer prices in the middle of a recession. Still, he is worth listening to overall.
Aren’t currencies values relative to each other? So how can they all crash?
Peter is right for the wrong reason.
Hyperinflation will kick in when policymakers inflate to 3/4% to monitize debts and large Institutions see there nominal yield disappear.
Because the moment you reach NYTM status OPEC countries will no longer accept US dollars as payment for there oil which creates a demand shock and after that even transactions like bilatteral trade will be made in other currencies like a gold backed yuan.
The reason people talk about Schiff is because everything he explains is correct. And then he gets discredited because he can’t predict people’s intelligence to recognize it, therefore his timing is off
Everything he says is correct – LOL
Like mortgage your house to buy stocks?
Like hyperinflation is coming?
Like China will decouple from US economy?
Like it’s a good idea to short treasuries?
He generally got gold right and housing right except for his idiotic idea on mortgaging your house to buy stocks
But he got damn near everything else wrong
Mish
What the republican establishment fear most is that Trump is smart enough to achieve what the Fed has failed to do, normalize the US economy. It’s a very simple move to redefine the ‘Iraq war’ as a punitive war that has inflicted enough pain and withdraw. Ditto for other wars that are of no real benefit to economic and fiscal normalization and simply add more trillions to US debt. To get back in the black after decades of deficits is going to be painful but like they say – no pain, no gain.
Why are people bashing Peter? So what if he’s been saying theres a crash coming for the last 7 years, he’s right. The fed should’ve let the banks fail and shouldn’t have done 3 rounds of QE. They are postponing the inevitable and its going to be a hell of a lot more painful now.
There is a sense what Peter Schiff is saying. That is to think on our own and think what may become of the future with the current reality we are facing. I do not believe Mr. Peter Schiff entirely and I’m not against with his opposition as well. But there are indication around us that say otherwise it maybe possible.