Peter Schiff says we need a big dose of castor oil, and he's advocating near total collapse today because he "knows" that will be better than Obama's stimulus package.
we need less credit....the stimulus is the absolute worst thing you can do... we have to let that foundation collapse...you have to let (the economy) collapse so you can replace it with a viable one...Roosevelt made the depression worse...
Schiff got famous for being a bear who was right about the bubble, but historically bears are wrong more often than right. His clients lost money last year, and I did better in the market last year than Schiff. And when he starts blaming FDR for the depression, I'm afraid he just loses credibility with me.
Does Schiff take into account the chaos from shutting down the economy? The Democrats won't pull the plug on the economy just because he says so, even if the Republicans are eager to do it just for grins and giggles.
More importantly, Schiff seems blind to the real question that nobody is asking.....
I hear what he's saying - we are going to try to finance this budget, and when people refuse to buy the bonds, the dollar will crash.
But it looks like EVERYONE'S currency is about to collapse. Schiff failed to predict that the banking crisis was international - he thought it was magically isolated to the US and that the rest of the world would quickly learn to live without us.
It's not as if China can keep its currency afloat if the money we owe them is worthless and we aren't buying any of their stuff anyway. It's not really clear that the Saudis would like to see all their American IOUs made worthless either.
But maybe that's what it will take - we pay off our debt with mountains of worthless dollars printed on double ply toilet paper and settle in for a decade of barter.
But there is a larger question that has been going unspoken - are we willing to sacrifice the nation for the sake of the army? How about cutting defense by 1/2? Are we willing to dramatically reduce our standard of living to keep the US army roaming the planet in an era of limited energy, increasing costs of mobilization, and dwindling strategic interests (eg oil). Because if we want to keep doing that, we should do the WW2 thing - ration food, ration gas, ration tires, and ration fertilizer so we can maintain the army.
This is what the Russians did - made everyone live like slaves for the sake of the army. And you know what? Their economy collapsed anyway!
But the media is going to keep the subject of drastic defense cuts off the table, and Schiff didn't go there.