# News & Current Events > Economy & Markets >  Peter Schiff was WRONG!!!!

## helmuth_hubener

"Peter Schiff was Right!" we all cheer?  This is the right-thinking, Austrian thing to say?  Nope.  Peter Schiff was wrong, wrong, wrong.  On so many levels he was wrong.  And he still is wrong.

I, like him, subscribe to Austrian Economics.  I agree with his libertarian political views.  But when he has given investment advice, he has been horribly, horribly wrong.  Reasons:

1) Even when he has been right, such as 2008 (and if you are a permanent bear, you inevitably get to be right on occasion, when the stock market goes down) those who followed his advice, either by buying overseas stocks and precious metals directly, or by buying into Schiff's EuroPacific Capital fund still lost money!  In the case of EuroPacific customers: LOTS of money.  The vast majority of their life savings.  See here, and here.


2) But, usually you don't have to worry about 1), because his predictions have rarely been right.    For his track record of wrong predictions, see here, here, here, here, here, here, here, here, here, and here.

3) On the most fundamental level, he is horribly wrong because he is trying to predict the future at all.  He is teling people that they should base their investment decisions on his foreknowledge of the future.  But actually, he has no such foreknowledge.  So even if he _wasn't_ usually wrong in his predictions, and even if he _hadn't_ managed to still lose money even when he was right, he still would be following a fundamentally flawed methodology.  This methodology is called "Fortune Telling".  For more explanation of my thoughts on why I think the idea of basing investment decisions on the crystal gazing of gurus is such a disastrously flawed method, see here, here, here, here, here, here, and here.

So to sum up, I say that Peter Schiff is wrong because he makes wrong predictions (the simplest but least important reason); because he loses his clients catastrophic amounts of money even (perhaps especially) when he turns out to be "right," because his bets are breathtakingly foolish and over-risky; and most importantly because he presumes to predict the future at all.  Again:


*Makes Wrong Predictions**Is wrong even when he's "right"* (that is: his customers lost money)*Predicts the future at all.*

Schiff's antics on TV are entertaining.  But *his advice is not wise.*  I hope no one on RPF is taking investment cues from Peter Schiff.

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## Danke

I got my dad into EuroPacific, he has done well so far.

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## dannno

I don't know any one thing he has been wrong about. Can you actually name one thing he has been wrong about?

He was right about the crash in 2008 that he called and stated all the reasons why, and I believe he will be right about his current investment advice which is made to be longterm investment advice. 

You just don't understand the extent to which the dollar and our inflation has been exported, which will eventually come back to bite us and at that point you will understand why Peter Schiff is right.

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## helmuth_hubener

> I don't know any one thing he has been wrong about. Can you actually name one thing he has been wrong about?


  Peter in 2007 and 2008 repeatedly predicted that hyperinflation of the US dollar was imminent.  But it wasn't.  Here is just one example of a typical quote from Peter:

_The whole idea is to get out of the US Dollar. It is on the verge of collapse. The people who don't get out of the US dollar are going to be completely broke and that is obvious. Look at what Ben Bernanke did. Interest rates are zero. Money is free.

Bernanke is going to run up printing presses as fast as he can. This is pure inflation Latin American style. This is hyperinflation; this is Zimbabwe; this is the identical monetary policy of the Weimar Republic.

I am just as convinced that people who have their money in US dollars are going to be just as broke as people who have their money with Madoff.

I do not know how much time you have. With the dollar dropping 5% a week at this point, could it snap back? But what if it keeps falling? What if it's down 5% next week? And 5% the week after that? And then what if it drops 10%? and another 10%? At some point a year from now the dollar could be dropping 5% a day.

The inflation rate in Zimbabwe is over 100 million percent a year._ 

The US dollar, it turns out, was not on the verge of collapse.

Anyway, this is just an instance of wrongness of type 2.  The other types, 1 and 3, are more important, if you are interested in protecting your wealth.

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## gwax23

He seems to be doing quite well for himself, as well as his clients. 

As for the Hyperinflation, its coming, dont you worry.

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## Brian4Liberty

The "Peter Schiff was right" meme was the result of Peter Schiff arguing with Larry "King Dollar, Goldilocks Economy" Kudlow on Kudlow's show. The Housing and stock markets imploded, making Kudlow the fool, and creating "Peter Schiff was right".

What Peter and many "hyper-inflation is around the corner" investors have done wrong is bet against the Casino. King dollar is back, because it is propped up by the Federal Reserve, and forced upon the world at the point of a gun. Betting against the Casino in a game rigged by them tends to have set-backs. Will the Casino go out of business? Not if it has a monopoly, enforced by military power.

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## dannno

> Peter in 2007 and 2008 repeatedly predicted that hyperinflation of the US dollar was imminent.  But it wasn't.  Here is just one example of a typical quote from Peter:
> 
> _The whole idea is to get out of the US Dollar. It is on the verge of collapse. The people who don't get out of the US dollar are going to be completely broke and that is obvious. Look at what Ben Bernanke did. Interest rates are zero. Money is free.
> 
> Bernanke is going to run up printing presses as fast as he can. This is pure inflation Latin American style. This is hyperinflation; this is Zimbabwe; this is the identical monetary policy of the Weimar Republic.
> 
> I am just as convinced that people who have their money in US dollars are going to be just as broke as people who have their money with Madoff.
> 
> I do not know how much time you have. With the dollar dropping 5% a week at this point, could it snap back? But what if it keeps falling? What if it's down 5% next week? And 5% the week after that? And then what if it drops 10%? and another 10%? At some point a year from now the dollar could be dropping 5% a day.
> ...



Inflation was and *is* eminent from a long-term perspective.

The bottom line is that Peter Schiff does not and has not made investment decisions for short term gains provided by fed inflation - his investments are geared to profit from the result of that activity.

When he was directing away potential clients from investing in the internet stock bubble in '98 and '99, they acted just like you and thought he was crazy for not investing in the internet stock bubble. After the bubble popped he gained a lot of clients.

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## Tod

One thing he predicted earlier this year is that oil would go up....a LOT.  Instead it has gone down.

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## Zippyjuan

Schiff did back off his claims for hyperinflation. He has been predictiong $3000 and $5000 an ounce gold for the past five years or so. 

The problem with predictions is that most of them are usually wrong anyways- no matter who is making them. Especially if you give a date for them to happen by.

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## dannno

> One thing he predicted earlier this year is that oil would go up....a LOT.  Instead it has gone down.


Did he predict it would go up a lot this year, or was the prediction merely made this year of 2013?

It will go up A LOT eventually.

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## dannno

> Schiff did back off his claims for hyperinflation. He has been predictiong $3000 and $5000 an ounce gold for the past five years or so. 
> 
> The problem with predictions is that most of them are usually wrong anyways- no matter who is making them. Especially if you give a date for them to happen by.


Well it did go up to about $2k, but I seem to recall when he was running in 2010 for Senator that he said he only wanted to be there one term, because he didn't know if we had more than one term before everything went down. But that also leaves room for it to happen after the one term. A senate term is 6 years, so that means in 2010 he was predicting that it would probably happen before 2016, but they might be able to stave off the crash until after that.

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## Acala

Saying exactly WHEN a particular economic event will happen is nearly impossible.  That's why I'm not a day trader.  But anyone who thinks that the dollar is not going to be destroyed by inflation needs to explain to me how the US government is going to meet its roughly $100 trillion (or is it $200 trillion?) in unfunded obligations.  It can't except through inflation.  Or, perhaps, through a combination of selling all its assets, enacting one-time wealth taxes, and hacking spending with an axe.  And that isn't going to happen.

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## ctiger2

Schiff is a long term investor. Come back on in 2020 and say he's wrong. It's only been 5yrs since first crash.

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## helmuth_hubener

> Inflation was and *is* eminent from a long-term perspective.


 There is no such thing as long-term imminence.  If something is imminent, it is about to happen.  The weatherman can't say "the tsumani's landfall is imminent," and then if it doesn't happen, tell everyone for the next four years "I wasn't wrong; I meant imminent in a long term sense. Any moment now..."  You can't predict that something is "on the verge of happening... long term."  On the verge means short term.  That's what it means!  Seriously, is it not clear to you that in the quote above Peter Schiff is predicting the possibility of the total collapse of the dollar in the very near term and in an extremely catastophic way?  If not, I don't know how Peter could have made himself more clear to you.  He was not mincing words.  His meaning was pretty obvious.  I don't know how anyone could miss it.




> The bottom line is that Peter Schiff does not and has not made investment decisions for short term gains provided by fed inflation - his investments are geared to profit from the result of that activity.


 Actually, his investments are largely geared to profit from a rise in foreign equities and a rise in worldwide commodity prices.  Neither of which are directly related to US dollar inflation, and neither of which have happened in a very big way, by the way.





> When he was directing away potential clients from investing in the internet stock bubble in '98 and '99, they acted just like you and thought he was crazy for not investing in the internet stock bubble. After the bubble popped he gained a lot of clients.


  If you make enough predictions of collapse, you will eventually be correct.  Do you know when?  That's right: you will get to be right whenever a collapse occurs!  Then you can toot your own horn about how right you were!  Case study: Peter Schiff's predictions (_some_ of them) were right in 2001-2, and in 2007-8.  If he had been around long enough, he would have also been right in 1981 and 1987.  So yes, people can make tons of "Peter Schiff was Right!" videos about how he predicted the crash of 1987 and thus how seriously we should take his current-day predictions.  But it doesn't mean they won't lose lots of money if they take those predictions seriously.  No one knows the future.

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## Zippyjuan

Economic declines happened about every four years or so in the last century in the US. Saying one will come is not that big of a step for anyone.  Eventually they will be right. That doesn't make one an expert.

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## dannno

> There is no such thing as long-term imminence.  If something is imminent, it is about to happen.  The weatherman can't say "the tsumani's landfall is imminent," and then if it doesn't happen, tell everyone for the next four years "I wasn't wrong; I meant imminent in a long term sense. Any moment now..."


That's a poor analogy because imminent merely means that it is approaching. It could be a meteor that is coming in 10 years, we would still be in imminent danger if it is predicted to hit us.

It could be argued that a typhoon or some storm that is supposed to come in 4 years is not technically imminent because the storm hasn't started yet, whereas the actions that the government is taking to ensure that we will experience severe inflation has already occurred and is currently happening. So the collapse is imminent whether it is 1 or 10 years down the line.

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## dannno

> Economic declines happened about every four years or so in the last century in the US. Saying one will come is not that big of a step for anyone.  Eventually they will be right. That doesn't make one an expert.


What does that make the 'experts' who said it wouldn't happen?

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## helmuth_hubener

> Saying exactly WHEN a particular economic event will happen is nearly impossible.  That's why I'm not a day trader.  But anyone who thinks that the dollar is not going to be destroyed by inflation needs to explain to me how the US government is going to meet its roughly $100 trillion (or is it $200 trillion?) in unfunded obligations.  It can't except through inflation.  Or, perhaps, through a combination of selling all its assets, enacting one-time wealth taxes, and hacking spending with an axe.  And that isn't going to happen.


 Unfunded liabilities are different than actual debt.  Very different.  They still are relevant, for sure.  But they're different.  

Let's look at a young couple.  They have a young baby and one on the way.  They have no debt and $10,000 in the bank.  The husband makes $50,000 a year and the mom can stay home.  What is their financial situation?  What would you say?  Pretty good?

Do you know what another word for "baby" is?  "Unfunded liability."

Count in the "unfunded liabilities" and what was a very solvent, strong financial situation can all of a sudden look like an overwhelming amount of crushing and unsustainable debt.  The family is maybe half a million in the hole when you count their unfunded liabilities!

The US government has a tremendous amount of debt.  And yes, if it was an actual, responsible company running a legitimate pension plan, its pension liabilities should be counted on its balance sheet too, and should be fully covered by its assets.  No question.  But it isn't.  And because it isn't, in all likelihood the terms of the pension plan are almost certain to simply _change_.  Poof!  Problem solved.  A private pension can't do that.  The federal government can do whatever it can get away with.  Retirement age can rise, taxes can increase, benefits can decrease, and means-testing can be added.  Add up all those changes -- none of which are inflationary -- and run the numbers and you can see how things can start looking pretty solvent and doable.

That's not to say your concerns are invalid.  Obviously high inflation is a very real possibility, and something we should be prepared for.  But it is _not an inevitability_, and even if it were, it is not inevitable that it will happen at a certain _time_.

The same exact reasoning you have set forth here, Acala, was being set forth in the 1990s.  and the 1980s.  And even the 1970s.  And in fact, even before that.  And here's the kicker: _the logic was just as sound and just as true then!_  But if you had bet the farm on this inevitable collapse back then, you would have had a long wait, huh?  You'd still be waiting, 40 or 50 years later!  And if you really truly believed in the inevitable collapse, you may have completely torn up your life preparing for it, and for what?  To live out in the underground bunker for the next 40 years?

There exists a happy concept called "provident living."  I believe in it.  I believe in preparedness, and in providence.  Paranoia, in contrast, is not productive.  You should be prepared to survive and thrive should hyperinflation come.  Sure.  But are you prepared to thrive if prosperity comes instead?

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## helmuth_hubener

> That's a poor analogy because imminent merely means that it is approaching. It could be a meteor that is coming in 10 years, we would still be in imminent danger if it is predicted to hit us.
> 
> It could be argued....


 Yes, a lot of things _could_ be argued, but that's not what Schiff meant.  You can't predict that something is "on the verge of happening... long term." On the verge means short term. That's what it means! Seriously, is it not clear to you that in the quote above Peter Schiff is predicting the possibility of the total collapse of the dollar in the very near term and in an extremely catastophic way? If not, I don't know how Peter could have made himself more clear to you. He was not mincing words. His meaning was pretty obvious. I don't know how anyone could miss it.

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## helmuth_hubener

> What does that make the 'experts' who said it wouldn't happen?


 Well it probably makes them fools, too.

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## dannno

> Yes, a lot of things _could_ be argued, but that's not what Schiff meant.  You can't predict that something is "on the verge of happening... long term." On the verge means short term. That's what it means! Seriously, is it not clear to you that in the quote above Peter Schiff is predicting the possibility of the total collapse of the dollar in the very near term and in an extremely catastophic way? If not, I don't know how Peter could have made himself more clear to you. He was not mincing words. His meaning was pretty obvious. I don't know how anyone could miss it.


I've listened to at least 20-25 hours or more of Schiff talking and he always refers to the hyperinflation event being possibly within the next couple years, but maybe 5 or 10 years out.

People misconstrue his statements and he might possibly mis-speak on occasion, but he never purposely makes any claims about what will definitely happen in the short term.

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## Danke

> The US government has a tremendous amount of debt.  And yes, if it was an actual, responsible company running a legitimate pension plan, its pension liabilities should be counted on its balance sheet too, and should be fully covered by its assets.  No question.  But it isn't.  And because it isn't, in all likelihood the terms of the pension plan are almost certain to simply _change_.  Poof!  Problem solved.  A private pension can't do that.


What?  private pensions have been doing that for at least a couple of decades now.

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## specsaregood

> But anyone who thinks that the dollar is not going to be destroyed by inflation needs to explain to me how the US government is going to meet its roughly $100 trillion (or is it $200 trillion?) in unfunded obligations.  It can't except through inflation.


Maybe it doesn't plan on meeting those obligations.  Which *I think* would be deflationary.

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## gwax23

Im a schiff youtube subscriber and always watch his most recent videos so i thought U guys would find this interesting:

http://www.youtube.com/watch?v=YTICKDjOHR0

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## cubical

> Peter in 2007 and 2008 repeatedly predicted that hyperinflation of the US dollar was imminent.  But it wasn't.  Here is just one example of a typical quote from Peter:
> 
> _The whole idea is to get out of the US Dollar. It is on the verge of collapse. The people who don't get out of the US dollar are going to be completely broke and that is obvious. Look at what Ben Bernanke did. Interest rates are zero. Money is free.
> 
> Bernanke is going to run up printing presses as fast as he can. This is pure inflation Latin American style. This is hyperinflation; this is Zimbabwe; this is the identical monetary policy of the Weimar Republic.
> 
> I am just as convinced that people who have their money in US dollars are going to be just as broke as people who have their money with Madoff.
> 
> I do not know how much time you have. With the dollar dropping 5% a week at this point, could it snap back? But what if it keeps falling? What if it's down 5% next week? And 5% the week after that? And then what if it drops 10%? and another 10%? At some point a year from now the dollar could be dropping 5% a day.
> ...


Do you have a link to these quotes and their context?

If we have hyperinflation within the next 5 years(which peter says is the worst case scenario), you don't think he was right to say what he said? Will the history books say he was wrong? You are talking like a trader. Let me guess, you are in college and think you have it all figured out now.

Peter has been saying to get into gold for over a decade, as it when it was under $300 an ounce. Where were you the other 9 out of 10 years? Your stocks are back to where they were in 2000. Congrats.

Personally, I feel peter is underplaying the collapse. I fully expect hyperinflation.

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## cubical

> Unfunded liabilities are different than actual debt.  Very different.  They still are relevant, for sure.  But they're different.  
> 
> Let's look at a young couple.  They have a young baby and one on the way.  They have no debt and $10,000 in the bank.  The husband makes $50,000 a year and the mom can stay home.  What is their financial situation?  What would you say?  Pretty good?
> 
> Do you know what another word for "baby" is?  "Unfunded liability."
> 
> Count in the "unfunded liabilities" and what was a very solvent, strong financial situation can all of a sudden look like an overwhelming amount of crushing and unsustainable debt.  The family is maybe half a million in the hole when you count their unfunded liabilities!


This is your reasoning for why the US's unfunded liabilities are not a problem? What if that same couple had 100 kids on the way? All is fine when you can just make up a scenario and say it fits.

Ever heard of present value? Present value of debt has been estimated in the range of 40 to 200 trillion. Here is one example.

http://www.economicpolicyjournal.com...l-us-debt.html

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## cubical

> Economic declines happened about every four years or so in the last century in the US. Saying one will come is not that big of a step for anyone.  Eventually they will be right. That doesn't make one an expert.


A global reserve currency collapse is not something that comes around every 4 years.

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## Zippyjuan

If he is so convinced of a dollar collapse he should be taking all of his money out of dollar denominated investments and should be encouraging his investors to do the same. EuroPac should be out of stocks.  Maybe even short it.  Are they? 

And if the dollar and US economy totally collapses it will bring pretty much the rest of the world with it so buying foreign stocks will offer little protection. 

In my opinion, Schiff uses fear to sell his own products.  Buy my book.  Invest in my funds. 

Let's check out his US Equity fund.  Granted this is a pretty new fund and doesn't have much track record.  Since inception, it has returned without including any sales charges (4.5%) annually an average of 3.09%.  Add in the fees, it drops to 0.14% a year. Compared to the S&P 500 which has returned 16.2% annually. http://www.europacificfunds.com/stratUS_fund.html

Consumer Staples are 26% of this fund.  Biggest holdings are Microsoft, Apple, a Utilities SPDR, Century Link (highspeed internet and phone company), ATT, ExonMobile, WalMart.  

His international Value Fund? Without fees, average annual return since inception: 1.96%. With fees, 0.62%.  They compare that with the performance of the MSCI AC World Ex US Value Net Index which over the same time period averaged 4.58% a year. http://www.europacificfunds.com/value_fund.html 

His International Value Fund's biggest countries are Canada (16.7%), Japan (13.3%- doesn't Schiff say Japan is collapsing too?), Norway (12.7% which seems a large amount for a small country) and Australia (8.7%) which rely heavily on trade with the US- a collapse of the dollar and the US economy would definately hurt them. http://www.europacificfunds.com/value_fundOverview.html

EuroPack Hard Investment Fund (basically commodities): http://www.europacificfunds.com/hardassets_fund.html  Since inception without fees: negative (loss) of 9.7% and with fees negative 11.2% returns. Comparable index there is the S&P Global Natural Resources Index which has averaged a loss of 6.63% over the same period. 

Got distracted checking out his returns.  Was actually looking for holdings in the funds.

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## Fredom101

Don't know if this was mentioned already, but Schiff IS wrong, completely wrong about Bitcoin, which he hates.

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## PRB

> As for the Hyperinflation, its coming, dont you worry.


just like global warming?

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## Libertomics

> He seems to be doing quite well for himself, as well as his clients. 
> 
> As for the Hyperinflation, its coming, dont you worry.


 Why would Hyperinflation come now?

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## toathis

> Don't know if this was mentioned already, but Schiff IS wrong, completely wrong about Bitcoin, which he hates.

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## gwax23

> 


Thats being owned? Very low bar for "Ownage" indeed. 

Im not going to bother getting into Bitcoin. I dont want all the bitcoin fanboys burning me at the stake.

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## cubical

I am selling all my bitcoins and moving into Tulip Bulbs.

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## eric_cartman

lol... i wouldn't say that peter got owned at all.  

peter was right that staples didn't take bit coins.

they accept their gift cards which can be purchased for US dollars. and this guy just converts his bitcoins to US dollars and then buys the gift card.

with the poker, i guess the idea is that if you want to make a deposit on a poker site for $100... you take $100 and conver them to bit coins, then you immeidately send the bit coins to the poker site.  and if you win money, say $50.... now you have $150 in your poker account.  then you convert the $150 into bit coins (at whatever their value is, it is irrelevent) and then you covert your bit coins into $150.

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## angelatc

I'm pretty Ron Paul says much the same thing about hyerinflation and the eventual collapse of the dollar.

I guess he was wrong about blowback since he called it 15 years before it happened, so he's probably wrong about all that stuff too.

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## dannno

> Why would Hyperinflation come now?


Wake me up when the dollar is no longer the reserve currency of the world.

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## cubical

> Wake me up when the dollar is no longer the reserve currency of the world.


A cause or result of hyperinfaltion? If you are waiting for that, I'm afraid you will be too late.

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## brandon

Good post OP. It's almost comical how completely and totally wrong Schiff has been about nearly everything. It blows my mind some of you are in such a think cloud of denial that you can't think of a single thing he's been wrong on.  And not only has his investment advice been totally wrong, but he has a very weak laymans understanding of economics, often asserting things have intrinsic value etc. The only thing Schiff is good at is talking and self promoting.

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## jon_perez

Apparently pride comes before the fall. I remember when Schiff was gloating over someone else who he admittedly did own in a particular investment/economics debate.  I remember thinking at that time that Schiff was no paragon of modesty. Well, it is his turn to be owned today.  His investment advice has SUCKED for at least two years running, if not longer.

It is not that his ideas are necessarily wrong, but when it comes to the markets, TIMING is EVERYTHING.  Your thesis may be right, but if you read the mood of the markets wrongly, and do not come in at the proper moment, you can still lose a big chunk of money.

The main argument against  QE and stimulus spurring inflation was persuasively made by Gary Shilling who noted that in 2010, iirc, all the money printing and govt spending still fell far short of and could not make up for the deleveraging in the private sector.  

The other prime argument is Japan, for which nearly two decades worth of ZIRP and QE have managed to generate only a minuscule amount of inflation, _far less than countries who had much higher rates of interest._

If one plotted the amount of inflation vs the price of gold before its bull run ended, it is obvious that gold was more of a momentum play than an inflation hedge and that its price run-up was the result of sentiment rather than actual value appreciation, seeing as how it outpaced actual inflation many many times over.

I still find the thesis of letting the markets rather than the Fed set rates a credible, even compelling, one.  At the same time, one cannot willfully ignore empirical evidence that sometimes flies in the face of Austrian economic theory's predictions.

I also harbor a fear at the back of my mind that all the QE may be destabilizing and that we are possibly headed towards a tipping point of either very high inflation and/or very high interest rates.  But if evidence proves otherwise, I'm not about to make up stories to stick to any particular economic ideology.

I say that Japan is still the case study to look at, because they are much further down on the money printing road than the USA.  If JGBs or the yen plummet suddenly, then the FED had better wake up and take that as a sign to cease and desist.

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## dannno

> Good post OP. It's almost comical how completely and totally wrong Schiff has been about nearly everything. It blows my mind some of you are in such a think cloud of denial that you can't think of a single thing he's been wrong on.  And not only has his investment advice been totally wrong, but he has a very weak laymans understanding of economics, often asserting things have intrinsic value etc. The only thing Schiff is good at is talking and self promoting.


No, you still have a complete lack of understanding about what he is saying just like the OP.

His investment advice isn't for NOW, it is for the FUTURE. He isn't wrong about his investment advice because it will pay off very well eventually. You don't even have to listen to Schiff, just listen to what Ron Paul says, it follows to the same exact logical conclusion. There is a reason why Ron Paul chose Schiff as his Economic Advisor during his '08 campaign.

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## dannno

> Apparently pride comes before the fall. I remember when Schiff was gloating over someone else who he admittedly did own in a particular investment/economics debate.  I remember thinking at that time that Schiff was no paragon of modesty. Well, it is his turn to be owned today.  His investment advice has SUCKED for at least two years running, if not longer.
> 
> It is not that his ideas are necessarily wrong, but when it comes to the markets, TIMING is EVERYTHING.  Your thesis may be right, but if you read the mood of the markets wrongly, and do not come in at the proper moment, you can still lose a big chunk of money.
> 
> The main argument against  QE and stimulus spurring inflation was persuasively made by Gary Shilling who noted that in 2010, iirc, all the money printing and govt spending still fell far short of and could not make up for the deleveraging in the private sector.  
> 
> The other prime argument is Japan, for which nearly two decades worth of ZIRP and QE have managed to generate only a minuscule amount of inflation, _far less than countries who had much higher rates of interest._
> 
> If one plotted the amount of inflation vs the price of gold before its bull run ended, it is obvious that gold was more of a momentum play than an inflation hedge and that its price run-up was the result of sentiment rather than actual value appreciation, seeing as how it outpaced actual inflation many many times over.
> ...


So you don't "get it" either.

Peter Schiff used to wax poetic about the internet stock bubble and how people like you, brandon and Jordan would all be like "but look at how well it's doing, I have to invest in that!"

Peter Schiff refused to invest in and profit from the stock market bubble and as a result picked up a lot of customers who began to understand his longterm strategy. 

Your two year strategy is going to do horrible in the longterm.

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## jon_perez

> So you don't "get it" either.
> 
> Peter Schiff used to wax poetic about the internet stock bubble and how people like you, brandon and Jordan would all be like "but look at how well it's doing, I have to invest in that!"
> 
> Peter Schiff refused to invest in and profit from the stock market bubble and as a result picked up a lot of customers who began to understand his longterm strategy. 
> 
> Your two year strategy is going to do horrible in the longterm.


Sure. But who is saying we won't finally get behind Schiff's strategy once we can sense the winds blowing along those lines?

You'd much rather have a clock that shows the correct time all the time, rather than one that just happens to be right twice a day.

In the medium term, I cannot think of anything to go long on, not stocks, not bonds, not gold, nor commodities. I am looking to short the market but not just yet. It is every bit possible that the S&P will pierce 1800, and who knows how much further up it will go after that on the back of irrational euphoria?  Interest rates aren't going lower, but it doesn't look like they will go up by much either (although my bias is on the upside).  Commodities look stable and I don't see any catalyst that will cause a bubble like last time.  The lack of a catalyst applies to gold as well.

Now that I think of it, perhaps long USD for the next 3-9 months is the most likely scenario to pan out.

----------


## helmuth_hubener

> It is not that his ideas are necessarily wrong


 Exactly.  This is what I am saying, of course.  The ideas of Austrian Economics are top-notch.  High quality.  Very solid stuff.  Print money, you get inflation.  Make a minimum wage, you get unemployment.  All these ideas are great.  They are the ideas underlying Peter Schiif's investment philosophy.  They're great ideas.

So how does Schiff take great ideas and make them into a highly flawed investment philosophy?

I explained in my opening post.

It boils down to: there are _other_ ideas that underlie his investment philosophy, too.  Ideas which are, frankly, really bad ideas.  All of which boil down to one really big, really bad meta-idea, which is:

*"I can predict the future."*

But no, Peter, you can't.

Peter predicted that foreign economies would "decouple" from the US.  Foreign stocks would do great, and commodities would soar, while US stocks were about to crash.  Well, US stocks crashed in 2007; he was right about that.  But foreign stocks crashed, too.  And so while his correct prediction about the US stock market looked good on TV in retrospect, it was useless to his investors, who lost tons of money in foreign stocks.  Commodities also crashed, and so his investors lost big money on that, too.  His prediction was three-fold.  One out of the three folds came true.  Unfortunately, he had set things up so his investors could only come out on top if all three predictions came true.

Peter Schiff does not know the future.  But he persists in telling people the future.  He does it with no modesty, no perspective, no indication of any awareness that he may have been less than perfectly prescient at any point in the past.  This is why Peter Schiff is wrong.

----------


## dannno

> Sure. But who is saying we won't finally get behind Schiff's strategy once we can sense the winds blowing along those lines?


I have no problem with people investing in the short term markets if they want to - but don't talk smack on Schiff's longterm strategy either because if everybody just invests in the short term they will be sorely disappointed in the longterm.

----------


## dannno

> Exactly.  This is what I am saying, of course.  The ideas of Austrian Economics are top-notch.  High quality.  Very solid stuff.  Print money, you get inflation.  Make a minimum wage, you get unemployment.  All these ideas are great.  They are the ideas underlying Peter Schiif's investment philosophy.  They're great ideas.
> 
> So how does Schiff take great ideas and make them into a highly flawed investment philosophy?
> 
> I explained in my opening post.
> 
> It boils down to: there are _other_ ideas that underlie his investment philosophy, too.  Ideas which are, frankly, really bad ideas.  All of which boil down to one really big, really bad meta-idea, which is:
> 
> *"I can predict the future."*
> ...


Wow, you still don't get it either.

The reason the stock market is doing well right now is because they are printing more money and funneling it into the stock market. If you want to invest in that and be apart of that bubble, great, but Schiff refuses to play that game because as a whole everybody gets burned in the end - the lucky people are the few who sell high before the crash, but not everybody can do that. Do you understand why everybody can't sell at the peak?

----------


## dannno

> Peter predicted that foreign economies would "decouple" from the US.  Foreign stocks would do great, and commodities would soar, while US stocks were about to crash.



They still are going to do those things.. he said it would be in the next 5-10 years, you wait 3 years and say, "Hah!! See you're wrong!"

Very foolish.

----------


## dannno

This is what Peter Schiff is preparing people's investments for:

http://www.ronpaulforums.com/showthr...he-Petrodollar

----------


## helmuth_hubener

> If one plotted the amount of inflation vs the price of gold before its bull run ended, it is obvious that gold was more of a momentum play than an inflation hedge and that its price run-up was the result of sentiment rather than actual value appreciation, seeing as how it outpaced actual inflation many many times over.


 There was no high price inflation during the 2000s in the US.  Gold reliably goes up during actual times of high price inflation, like the 1970s, for very solid theoretical reasons.  But since there was no such high inflation in the 2000s, we really don't know why it went up.  I feel like at least some of it was probably widespread uncertainty and fears that inflation _would_ come.  But we don't really know.

Austrian Economics explicitly and strongly states that economics is all about the actions of individual human beings, human beings who are not inanimate particles with definite and predictable behaviors like in physics.  They make choices.  They're unpredictable.  We don't know what any one of them will do next.  Much less a billion of them.  That methodological individualism is the very _foundation_ of Austrian Economics.




> I still find the thesis of letting the markets rather than the Fed set rates a credible, even compelling, one.  At the same time, one cannot willfully ignore empirical evidence that sometimes flies in the face of Austrian economic theory's predictions.


 This is the problem with people like Mr. Schiff.  He's out there making predictions and so people think that the predictions he makes are what Austrian Economics has to say about the matter.  It's not!  Austrian Economics does not say that if the Fed drops a trillion dollars into the market then the dollar will inevitably go into hyperinflation.  Austrian Economics does not predict that the price of gold must go to $2000.  It is a wrong-headed doomsday speculation industry built on top of Austrian Economics that says silly things like that.  There is no empirical evidence that I know of flying in the face of Austrian Economics.  Only in the face of loud-mouthed, know-it-all pundits.

----------


## dannno

> *There was no high price inflation during the 2000s in the US*.  *Gold reliably goes up during actual times of high price inflation*, like the 1970s, for very solid theoretical reasons.  *But since there was no such high inflation in the 2000s, we really don't know why it went up.*  I feel like at least some of it was probably widespread uncertainty and fears that inflation _would_ come.  But we don't really know.


What the hell are you talking about?!

I paid .89 for a gallon of gas on Jan. 1, 2002.

By 2007 it was like $3 or $4/gallon.

Energy prices went through the roof.

Housing prices went through the roof. 

College tuition went through the roof.

Medical costs went through the roof.

These are all things you would know if you listened to Schiff for any prolonged period of time.

----------


## helmuth_hubener

> They still are going to do those things.. he said it would be in the next 5-10 years, you wait 3 years and say, "Hah!! See you're wrong!"
> 
> Very foolish.


I count 6.  Four more to go!  Oh, the danger of putting definite dates on your predictions.  That's why the pundits generally never do it.  Being an investment expert means never having to admit you were wrong.

Anyway, I am really, truly, not focused on saying Schiff is wrong because his predictions didn't come true.  *He would be just as wrong if they had come true.  He is wrong because he is arrogantly presuming to know the future in the first place!*

Let's really get down into the nitty gritty.  _Why_ did Peter's predictions not all come true ("yet", as you would say)?  Why?  Answer:

Because he was unlucky.

If, on the other hand, all his predictions had come true, hyperinflation had crushed the US economy, China's and Norway's economies were flying high, gold was at $100,000, oil at $10,000, pork bellies at $5,000, and everything had happened to make Peter look like a total absolute prophet, why would that be?  Answer:

Because he was lucky.

----------


## qh4dotcom

> I don't know any one thing he has been wrong about. Can you actually name one thing he has been wrong about?


In 2008 he predicted gold would reach $2000 in 2009.

----------


## helmuth_hubener

> What are you talking about?!


I am talking about the price inflation rate.  That means the rate at which goods in general are becoming more expensive in dollars.  Certainly the price of gasoline that you talk about is a part of that.

An extremely small part of that.

Here is a chart of approximate inflation, as best we can tell:



Or, for an even beter chart, y can go here:

http://www.usinflationcalculator.com...flation-rates/


As you can see, inflation was around 1% - 4% per year.  That is not very high inflation.  When you get up to 10% per year, _that_ is high inflation.

----------


## dannno

> In 2008 he predicted gold would reach $2000 in 2009.


First of all, I would probably give it to him:

http://www.kitco.com/LFgif/au3650nyb.gif

That's pretty damn close to 2,000, and it happened in 2010. It was even going up all throughout 2009, so it's not like it went down or something.

But I don't remember that prediction, I'd want to see the exact wording because I doubt he said it would absolutely happen... He probably said something like "I'll 'bet' gold reaches..." or "Gold 'could' reach.." as in by his wording he probably wasn't staking a lot on it, *just trying to make the point that gold was going to go up due to the fed's actions.* Well, did it?

Was Schiff "right" in the broader sense? I believe he was.

----------


## dannno

> I am talking about the price inflation rate.  That means the rate at which goods in general are becoming more expensive in dollars.  Certainly the price of gasoline that you talk about is a part of that.
> 
> An extremely small part of that.
> 
> Here is a chart of approximate inflation, as best we can tell:
> 
> 
> 
> Or, for an even beter chart, y can go here:
> ...



You sound like a fed pushing the bull$#@! government figures.

No Austrian economists actually believe inflation was that low, that is just what the government tells everybody to keep them feeding at the trough of their bull$#@!.

----------


## Danke

My paycheck would go further if we had deflation, something the Fed has been preventing.

----------


## dannno

> I am talking about the price inflation rate.  That means the rate at which goods in general are becoming more expensive in dollars.  Certainly the price of gasoline that you talk about is a part of that.
> 
> An extremely small part of that.
> 
> Here is a chart of approximate inflation, as best we can tell:
> 
> 
> 
> Or, for an even beter chart, y can go here:
> ...


http://blogs.marketwatch.com/thetell...ndex-says-yes/




> During Federal Reserve Chairman Ben Bernanke’s testimony in front of the House Financial Services Committee Wednesday, the Fed chief was asked by Texas Rep. Ron Paul, a frequent critic, whether he does his own shopping.
> 
> 
>     U.S. Representative Ron Paul
> 
> After the Fed chairman said yes, Paul continued:
> 
> “OK.  So you’re aware of the prices.  But, you know, this argument that the prices are going up about 2%, nobody  believes it.  *You know, and the old CPI says prices are going up by 9%* so they believe this.  People on fixed incomes, they’re really  hurting.  The middle class is really hurting because their inflation  rate is very much higher than the government tries to tell them and that’s why they lose trust in government.”
> 
> ...



Sometimes I think some people who visit this forum don't listen to a word Ron Paul ever says.

----------


## helmuth_hubener

> Wow, you still don't get it either.
> 
> The reason the stock market is doing well right now is because they are printing more money and funneling it into the stock market. If you want to invest in that and be apart of that bubble, great, but Schiff refuses to play that game because as a whole everybody gets burned in the end - the lucky people are the few who sell high before the crash, but not everybody can do that. Do you understand why everybody can't sell at the peak?


  I welcome you to explain to me that which I do not get.

As for the rest of your post, if you think it is a reply to my post then you are mistaken and I invite you to re-read my post.  In fact, it's _so_ far off, perhaps you would do well to re-read _all_ my posts in this thread.  Slowly.  Without prejudice nor preconception.  Nowhere have I said the stock market is going up.  Nowhere have I presumed to have any insight as to how to get out at the peak.  The entire thread has been to criticize the very idea that I, or anyone, would make such predictions or claims.  Peter Schiff makes predictions like that.  I don't.

----------


## dannno

> In 2008 he predicted gold would reach $2000 in 2009.


Actually he said that gold "could" reach $2000 in 2009. It could have, but it didn't. 

I do not consider that an "incorrect" prediction of what "will" happen because it wasn't a prediction of what "will" happen, that is an incorrect prediction of what "could" happen. Huge difference. If he'd said, "Mark my words, gold will by $2,000 in 2009" that is a prediction of what WILL happen vs. what COULD happen.

----------


## dannno

> I welcome you to explain to me that which I do not get.
> 
> As for the rest of your post, if you think it is a reply to my post then you are mistaken and I invite you to re-read my post.  In fact, it's _so_ far off, perhaps you would do well to re-read _all_ my posts in this thread.  Slowly.  Without prejudice nor preconception.  Nowhere have I said the stock market is going up.  Nowhere have I presumed to have any insight as to how to get out at the peak.  The entire thread has been to criticize the very idea that I, or anyone, would make such predictions or claims.  Peter Schiff makes predictions like that.  I don't.


I already explained it - you completely miss the concept that what Schiff is predicting will happen in the future. It hasn't happened yet. What about that do you not understand?

----------


## dannno

I mean, $#@! man, Ron Paul has probably explained the concept that inflation was closer to 8 or 10% rather than 2-3% like a couple dozen times in media appearances and press conferences the last 5 years it baffles me that you are sitting here trying to argue that inflation is 2-3% on Ron Paul forums. 

YOU need to slow down and read what I AM saying, not the opposite.

----------


## helmuth_hubener

> I already explained it - you completely miss the concept that what Schiff is predicting will happen in the future. It hasn't happened yet. What about that do you not understand?


 OK, thanks.  Since you didn't tell me what I didn't get(you just told me the stock market wasn't going to go up, and claimed to know exactly why it _was_ going up) I had no idea what I didn't get.  Now, I do!  Thanks!

So, what I am not "getting" is that although Schiff's predictions have not come true, they will "in the future".  Since there is no due date for the most part, this "in the future" is a time that need never come.  Any due dates that have inadvertantly or incautiously been tossed out there can be explained away in other ways, such as "could" vs. "will," "well, it was close," and "the Fed messed it up by blowing a bubble; otherwise it would have happened for sure."

So, what I am getting here, or what I am beginning to get, is that there exists in this Universe no possible outcome which ever would nor ever could show any of Peter Schiff's predictions to be wrong about anything.  Is that correct?  Am I *getting it?*

----------


## dannno

Do you have any predictions by Peter Schiff that didn't come true that were supposed to already? 

And I don't want any of these "could" predictions, I want solid predictions that Peter says will happen by a certain time that hasn't.

----------


## helmuth_hubener

> What?  private pensions have been doing that for at least a couple of decades now.


 Well I am no pension expert.  My point is merely that there exist some sort of rules which govern pension plans and that the pension managers can't just change those rules at will.  Only the government can do that, because it makes those rules that govern them.

The government's own pension plan, the SS, can be changed at will by the pension manager, because the government is both the manager and the rule-maker.

----------


## dannno

> (you just told me the stock market wasn't going to go up, and claimed to know exactly why it _was_ going up)


That's bull$#@!, I have no idea what direction the stock market is going. It could crash REALLY hard, or they could continue to push inflation into the stock market.

----------


## dannno

> Do you have any predictions by Peter Schiff that didn't come true that were supposed to already?


This is really the key - we have a 4 page thread about Peter Schiff being wrong and not one single solid prediction that has been shown to be wrong.

The thing is, even if he did have a prediction that was timed wrong, even if you can show me one, he's still right in the broader sense. It's just pathetic that you can't even do that, when you say a million sentences you are bound to exaggerate or mis-speak somewhere and say something that you didn't mean to which I am sure he has.

----------


## cubical

> In 2008 he predicted gold would reach $2000 in 2009.


Not sure if true but, are you really getting on a guy because he said an asset would go up 250% in 1-2 years, but instead it went up 230% in 2-3 years?

----------


## helmuth_hubener

> Do you have a link to these quotes and their context?


  Certainly!  I always appreciate a bit of skepticism!  Here is a link:

http://www.thepeterschiffblog.com/20...ollar-now.html

The context was a radio show, I think; probably his own radio show.  Here is the original audio which I, your loyal and diligent helper have dug up, so you can listen to it in his own voice.  You can see that the transcript is actually imperfect and very abbreviated.

https://web.archive.org/web/20090325...hyperinflation




> If we have hyperinflation within the next 5 years(which peter says is the worst case scenario), you don't think he was right to say what he said? Will the history books say he was wrong? You are talking like a trader. Let me guess, you are in college and think you have it all figured out now.


 Yes, I have it all figured out.  I have it all figured out that I do *not* have it all figured out!  I don't, Peter doesn't, _we_ don't.  None of us does.  That's what I have all figured out.

And yes, I will say he was wrong.  He was wrong to think he could predict the future.  Whether his guesses end up lucky or unlucky is really irrelevant to my opinion.  And that's all they are: _guesses_, educated though they might be.




> Peter has been saying to get into gold for over a decade, as it when it was under $300 an ounce. Where were you the other 9 out of 10 years? Your stocks are back to where they were in 2000. Congrats.


 I don't understand this question.  I have long owned a significant (well, significant to me) amount of gold.  Only recently have I determined to hold 25% of my investment portfolio in stocks, in order to be prepared in the event of prosperity.  So, I guess the answer to where was I is that I was in gold.  Gold happened to do well.  I was lucky.





> Personally, I feel peter is underplaying the collapse. I fully expect hyperinflation.


  But actually, you don't know what will happen.  Your expectations could be wrong.

----------


## jon_perez

> There was no high price inflation during the 2000s in the US.  Gold reliably goes up during actual times of high price inflation, like the 1970s, for very solid theoretical reasons.  But since there was no such high inflation in the 2000s, we really don't know why it went up.  I feel like at least some of it was probably widespread uncertainty and fears that inflation _would_ come.  But we don't really know.


My own theory is: a combination of hysteria as well as pre-emptive action.  I believe most market participants understood that the 2008 crisis would likely lead to currency debasement as a "solution" and thus bid up the price of the one currency that couldn't be debased.

In hindsight, we could see that, as is usually the case, markets have overshot the target and went up too far, too fast.  Of course, gold is still nowhere near what it was at that time (well under $1000), so one could reasonably argue that _the thesis remains intact_.  Currency debasement DID occur, just not (yet?) up to the level that the [overbid] price of gold implied.




> Austrian Economics explicitly and strongly states that economics is all about the actions of individual human beings, human beings who are not inanimate particles with definite and predictable behaviors like in physics.  They make choices.  They're unpredictable.  We don't know what any one of them will do next.  Much less a billion of them.  That methodological individualism is the very _foundation_ of Austrian Economics.
> 
>  This is the problem with people like Mr. Schiff.  He's out there making predictions and so people think that the predictions he makes are what Austrian Economics has to say about the matter.  It's not!  Austrian Economics does not say that if the Fed drops a trillion dollars into the market then the dollar will inevitably go into hyperinflation.  Austrian Economics does not predict that the price of gold must go to $2000.  It is a wrong-headed doomsday speculation industry built on top of Austrian Economics that says silly things like that.  There is no empirical evidence that I know of flying in the face of Austrian Economics.  Only in the face of loud-mouthed, know-it-all pundits.


To be frank, I DO NOT BELIEVE that Austrian economics is necessarily more correct than other economic theories.  In fact, I DO NOT BELIEVE that _ANY_ economic theory will come near to the predictive reliability of a physics theory.  Economics is, and likely ALWAYS will be, a _dismal_ "science".  

However, I like to think of economic theories as analogous to the parable of the three blind men and the elephant.  They were all correct(!) and yet ended up arguing with each other.  What they failed to appreciate was that the elephant was a more complex beast than their limited world-views could fully articulate.  In fact, even physics theories are never complete, and this applies all the more to economic theories.

Most people on this forum probably have the belief that Austrian ideas necessarily invalidate Keynesian ones.  I don't think this to be the case.  Rather than being a be-all/end-all description of the state affairs, I submit that there will be contexts where a Keynesian-style analysis might be more constructive approach and other situations where an Austrian-style analysis is more appropriate.

There is in fact this new economic theory I came across (I believe this was in a recent issue of The Economist, a magazine which I often find disgustingly liberal/left, but still...) which does away with the axiom of a homogenous, "rational actor" and instead works with a model based on _heterogenous_ economic actors.  Sounds like a model that is a lot more unwieldy, which is probably why it is only gaining currency today, after the shortcomings of earlier models have shown themselves.

----------


## dannno

> I submit that there will be contexts where a Keynesian-style analysis might be more constructive approach and other situations where an Austrian-style analysis is more appropriate.


So sometime advocating theft from individuals will lead to a 'greater good' and sometimes it won't? Is that what you are saying?

Keynesianism implies that we need to print money and give it to banks and industry to spur economic development. 

Austrian economics implies that this is theft, will lead to mal-investment and inflation.

It's really basic when you boil it down.

----------


## jon_perez

> Personally, I feel peter is underplaying the collapse. I fully expect hyperinflation.


Wake me up once Japanese inflation is in danger of hitting 5%.  After two decades of ZIRP and QE, they're still trying to hit 2%.

I visited Tokyo in 1982 as a kid and the price of a can of soda was around 100 yen.  Earlier this year, before their all-out swear-to-print-as-much-money-as-they-can Abenomics, there were still 100 yen sodas but some were priced at 110 yen which works out to about 0.3% annualized inflation *WITH ZIRP AND QE for the better part of those 3 decades!*

Now, the US and Japan are not entirely comparable, but since the Japanese have been at it longer and there are enough similarities (burst housing bubble), I would like to see hyperinflation take hold of first over there before being so sure that QE will lead to such.  Remember that Japan pioneered the whole "QE" idea.

There is also a paradoxical aspect to the whole assertion that "QE leads to hyperinflation".  Jim Rogers has stated that Japan doing bailouts (kind of hand-in-hand with QE/stimulus) is why they are stuck in their lost decade - two decades already by now - whereas Korea, because they allowed liquidation to occur, has experienced healthy economic expansion as opposed to Japanese stagnation.  But if you're stagnating, prices tend to stay down!

I'm starting to think that *maybe forbidding money-lending with interest is the right idea*.  Without interest rates to dick around with, perhaps booms and busts will even be less pronounced.  Of course, life would be far less exciting, and one can't make (or lose!) as much money trading the markets.

----------


## helmuth_hubener

> My own theory is: a combination of hysteria as well as pre-emptive action.  I believe most market participants understood that the 2008 crisis would likely lead to currency debasement as a "solution" and thus bid up the price of the one currency that couldn't be debased.


 Yes, that is what I'm thinking, too.  Of course, it had a long-term up trend long before 2008.  So the fears were there all through the 2000s.  Maybe.  Or maybe there is some other reason that gold was going up.





> In hindsight, we could see that, as is usually the case, markets have overshot the target and went up too far, too fast.  Of course, gold is still nowhere near what it was at that time (well under $1000), so one could reasonably argue that _the thesis remains intact_.  Currency debasement DID occur, just not (yet?) up to the level that the [overbid] price of gold implied.


 Indeed, overshoot is so typical in markets, you can basically count on it.





> To be frank, I DO NOT BELIEVE that Austrian economics is necessarily more correct than other economic theories.  In fact, I DO NOT BELIEVE that _ANY_ economic theory will come near to the predictive reliability of a physics theory.


 Here's the thing: this statement is actually an Austrian statement!  This is precisely what Austrian economics teaches!  If you believe this, you are at least in that sense an Austrian and just didn't know it.  You can listen to lecture after lecture from the Mises Institute (and I have!) explaining why economics is not like physics and cannot be and never will be.  It is all/most of the other schools of economics that are holding out hope of trying to make economics a "real" science like physics or chemistry; a science that can actually give us useful predictions about the future.  But it can't.  Humans aren't missiles.  You can't do some calculus and chart their trajectories.  They aren't chemicals.  You can't say that a combination of A and B will give you C.  *Humans act.*  And that simple fact makes economics very, very different than the physical sciences.





> Most people on this forum probably have the belief that Austrian ideas necessarily invalidate Keynesian ones.  I don't think this to be the case.


 The most important, fundamental way that this is true is that Keynesianism believes that humans can be treated like rocks, or electrons, and that you can do enough fancy aggregating and mathematical gymnastics then you'll get an accurate model of the economy that you can use to make useful predictions.  *But you can't!*  Since you have already said you, too, believe this, that is, you too believe economics can't ever be like physics, you have invalidated the entire foundation of Keynesian ideas.

That is not to say that Keynesians cannot be brilliant and have great upsights.  They can, just as thinkers that happen to be in the Chicago School, the London School, the Public Choice school, or any other school.  And maybe that is what you meant.  You can use and appreciate a man's ideas and upsight without accepting his whole (possibly flawed) system of beliefs.  But the fundamental foundation of Austrianism, that humans act, and thus are never entirely predictable, I think that foundation is the most realistic and true out of all of them.





> There is in fact this new economic theory I came across (I believe this was in a recent issue of The Economist, a magazine which I often find disgustingly liberal/left, but still...) which does away with the axiom of a homogenous, "rational actor" and instead works with a model based on _heterogenous_ economic actors.  Sounds like a model that is a lot more unwieldy, which is probably why it is only gaining currency today, after the shortcomings of earlier models have shown themselves.


 Well obviously individuals _are_ heterogeneous.  Have you ever met two homogeneous people?  So this seems like it is only sensible to accept this to be the reality which it obviously is.  Of course, Austrians have been doing this for a long time.

----------


## dannno

> I'm starting to think that *maybe forbidding money-lending with interest is the right idea*.


Yes, we should make sure drugs stay illegal too, more government is always a great solution.

----------


## helmuth_hubener

> So sometime advocating theft from individuals will lead to a 'greater good' and sometimes it won't? Is that what you are saying?
> 
> Keynesianism implies that we need to print money and give it to banks and industry to spur economic development. 
> 
> Austrian economics implies that this is theft, will lead to mal-investment and inflation.
> 
> It's really basic when you boil it down.


 There is a lot more to it than that, my friend.  It is part of Ron Paul's brilliant political and educational entrepreneurship that he was able to water it down and stick to a very certain set of catchphrases such that people were able to catch on and think they understood with only such a crude and rudimentary understanding.  And I am very thankful that he did!  But if you're interested in this stuff, maybe it's time you learned more?  What do you think?  Any interest?  If so I can make some excellent recommendations!

----------


## jon_perez

> So sometime advocating theft from individuals will lead to a 'greater good' and sometimes it won't? Is that what you are saying?
> 
> Keynesianism implies that we need to print money and give it to banks and industry to spur economic development. 
> 
> Austrian economics implies that this is theft, will lead to mal-investment and inflation.
> 
> It's really basic when you boil it down.


You need exercise more care when trying to understand other points of view.  Not only did you get the spelling of imminent wrong earlier, you completely misunderstood what the word meant as well.

The way I understand it, Keynesianism (as originally articulated) says that it is ok for the government to incur a deficit (not exactly the same as money-printing) IF (and ONLY IF) there is a bad recession and during good times, it can/should pay back the deficit.  Of course, just about all governments today have perverted that idea (in cooperation with their citizens of course!)

But anyway, for what it's worth, when Keynesianism was taught to us in college, I felt it was hogwash and voodoo and I still believe that to a large extent.  But consider the following scenario:

* Massive recession in the US, a lot of people have no jobs
* US government incurs a deficit and hires people to build/upgrade roads (in the right places!) and the transport system in general
* People start to have money and, at the same time, the infrastructure is improved
* Leads to a virtuous cycle as productivity increases due to more efficient infrastructure and the economy booms

Is it possible to conjure up money out of thin air and then have that money conjure up products/services "out of thin air"??  Apparently so!
The above is NOT a voodoo scenario because an economy itself is all about creating something out of nothing, or creating more from less - and this happens even without having to conjure up abstract money - except that the latter tends to make things a bit easier as long as it is not abused.

The problem with Keynesianism is that it has been grossly perverted and misapplied to serve political interests.  Merely spending money DOES NOT improve the economy.  It has to be spent in the right places!  The economic theory does not tell you where to spend it, so people oversimplify the application of the theory (it's just a _theory_) and often it fails to work, but that doesn't mean Keynes was not able to contribute some insight.

Now, what I understand of Austrian theory is its analysis of boom-and-bust cycles and how money supply and/or interest rates may exaggerate such.  Well, I happen to think Austrian theory also presents a very reasonable analysis there and it definitely explains a lot of what has transpired recently!  

So in the cases I've outlined, the two theories are talking about two different situations and do not necessarily conflict with each other.

----------


## dannno

> You need exercise more care when trying to understand other points of view.  Not only did you get the spelling of imminent wrong earlier, you completely misunderstood what the word meant as well.


I also spelled it correctly several times, and you have a grammatical error in your sentence right there. And I understood it better than you, imminent means that something is approaching, it may be "near" but there is no definitive timeframe as you suggested and something being "near" or "close" to happening can be defined differently depending on the time period you are looking at. 5-10 years is close if you are looking at the history of our banking system or our country or if you are forecasting a huge economic disaster.

Austrian theory says that when the government gets out of people's way they will spend the money on the things that are most important to them and if the government allows development to occur then the right things will be developed by individuals who see a need for those things and can convince others to collaborate.

Keynesian theory is inherently immoral because you are forcing people to make those decisions - even if you made the same exact decisions to do with their money as they would have, you are still stealing it then spending. 

But there is another huge problem with Keynesianism as it functions - people with the power to move the money are going to be corrupt and will use that money to benefit their politically connected friends. 

So in theory it does not work. In practice it does not work.

I see no reason to give Keynesianism the time of day and reading your post didn't help.

----------


## Madison320

> Wake me up once Japanese inflation is in danger of hitting 5%.  After two decades of ZIRP and QE, they're still trying to hit 2%.
> 
> I visited Tokyo in 1982 as a kid and the price of a can of soda was around 100 yen.  Earlier this year, before their all-out swear-to-print-as-much-money-as-they-can Abenomics, there were still 100 yen sodas but some were priced at 110 yen which works out to about 0.3% annualized inflation *WITH ZIRP AND QE for the better part of those 3 decades!*
> 
> Now, the US and Japan are not entirely comparable, but since the Japanese have been at it longer and there are enough similarities (burst housing bubble), I would like to see hyperinflation take hold of first over there before being so sure that QE will lead to such.  Remember that Japan pioneered the whole "QE" idea.
> 
> There is also a paradoxical aspect to the whole assertion that "QE leads to hyperinflation".  Jim Rogers has stated that Japan doing bailouts (kind of hand-in-hand with QE/stimulus) is why they are stuck in their lost decade - two decades already by now - whereas Korea, because they allowed liquidation to occur, has experienced healthy economic expansion as opposed to Japanese stagnation.  But if you're stagnating, prices tend to stay down!
> 
> I'm starting to think that *maybe forbidding money-lending with interest is the right idea*.  Without interest rates to dick around with, perhaps booms and busts will even be less pronounced.  Of course, life would be far less exciting, and one can't make (or lose!) as much money trading the markets.


Don't confuse ZIRP with QE. ZIRP causes bubbles, QE causes a general rise in prices. Until very recently (last year I think?) Japan has not done QE, only ZIRP. That's why they haven't had prices increases. Now that Japan has started QE, prices are rising.

----------


## Madison320

> Why would Hyperinflation come now?

----------


## Madison320

> *"I can predict the future."*
> 
> But no, Peter, you can't.


Since you can't predict the future what's your investment strategy? Wait for something to go up and then buy it because it will keep going up?

----------


## helmuth_hubener

> This is your reasoning for why the US's unfunded liabilities are not a problem?


 Umm, no, because I do not claim that they are not a problem, and even if I did, the ability for me to invent this scenario would not provide a very strong basis for that claim.  Now would it?  

The unfunded liabilities are a problem.  They are a very big problem.  They are just a somewhat different problem than the actual federal debt.  We ought to think about these things carefully to come to a correct understanding, and not just give total credence to a preposterously high number as "the real debt number" because it makes a good tabloid headline and seems to support and reinforce our views.




> What if that same couple had 100 kids on the way?


 Ahh, good question!  Things would change, wouldn't they?  Let's make it 5 just since that keeps things within the bounds of realistic imagination.  So, they already had the one kid.  And they had certain unfunded liabilities for him.  Maybe they had decided together that Junior was going to have only grass-fed Omega-3 eggs and the best clothes and the best private/homeschooling education available.  Now things are changing.  Will these decisions stay the same?  No.  That's an important characteristic of the couple's unfunded liabilities, like the gov't's: *they're not set in stone*.  There's a lot of ways to raise a kid.  With these five newcomers, garage sales have just become a major part of the way for this family.  Maybe they've committed that the kids will go to college and they would pay for it.  Things are on track (even with the 6 kids.  They're savers!), but then suddenly, when Junior is 18 they suffer some financial set-back.  Is the family going to blindly pay for college anyway and just go bankrupt?  Not likely.  Junior may have to pay his own way.

Now the gov't is a lot more likely to do just precisely the kind of stupid stuff like blindly pay for the college anyway, because of the crazy logic of the system.  But even for government managers, financial realities do graze their consciousnesses occasionally, or, more often, hit them in the head due to decades of closing their eyes and plugging their ears.  And there happen to be multiple solutions to the unfunded liability problems, only one of which is hyperinflation.  I listed some; go back and look.  *So, the point is, hyperinflation is not inevitable when these kinds of problems occur.*  If it was, we would have had hyperinflation in the 1980s.  Instead, we got a raised SS tax.  Can you predict which destructive and possibly crazy actions the gov't will choose to take to solve their financial problems?  If so, you are a better man than I.  Can you predict which direction a careening car of drunken teen boys will turn?  These people are out of control and unpredictable.

----------


## helmuth_hubener

> Since you can't predict the future what's your investment strategy?


 That is a fascinating question!  What would the ideal investing strategy be for someone who has accepted that they do not know the future?  What are your thoughts, Madison320?

----------


## jon_perez

> I also spelled it correctly several times, and you have a grammatical error in your sentence right there. And I understood it better than you, imminent means that something is approaching, it may be "near" but there is no definitive timeframe as you suggested and something being "near" or "close" to happening can be defined differently depending on the time period you are looking at. 5-10 years is close if you are looking at the history of our banking system or our country or if you are forecasting a huge economic disaster.


 Sigh... just like some doomsday sects have been saying that the end of the world is "imminent"...

If that's how you choose to distort your dictionary then, whatever...




> Austrian theory says that when the government gets out of people's way they will spend the money on the things that are most important to them and if the government allows development to occur then the right things will be developed by individuals who see a need for those things and can convince others to collaborate.


WOW.  Now you're confusing Austrian theory with Libertarianism/Free Market theory.    I'm clearly talking to someone who has failed to do even just BASIC homework.




> Keynesian theory is inherently immoral because you are forcing people to make those decisions - even if you made the same exact decisions to do with their money as they would have, you are still stealing it then spending.


And you confuse Keynesianism with Socialism here!  Good grief... 




> But there is another huge problem with Keynesianism as it functions - people with the power to move the money are going to be corrupt and will use that money to benefit their politically connected friends. So in theory it does not work. In practice it does not work.
> 
> I see no reason to give Keynesianism the time of day and reading your post didn't help.


I have no idea WTF you are talking about here.  I've lost all respect for whatever you have to say.

It's amazing how there are so many people out there who support this-or-that politician and/or movement without having even a basic understanding of what it is they support.  You remind me of those Tea Party supporters holding up placards that say "Don't Touch My Medicare!".

----------


## jon_perez

> Don't confuse ZIRP with QE. ZIRP causes bubbles, QE causes a general rise in prices. Until very recently (last year I think?) Japan has not done QE, only ZIRP. That's why they haven't had prices increases. Now that Japan has started QE, prices are rising.


Actually, Japan has been doing QE for a long time now.  Wikipedia confirms what I've always remembered.... that the BoJ had resorted to QE well before your average American had even heard of the term (e.g. certainly before 2008) http://en.wikipedia.org/wiki/Quantitative_easing  The wikipedia article mentions Japanese QE started in 2001 (with corresponding references).

Abenomics is just even more massive QE.

----------


## dannno

> Sigh... just like some doomsday sects have been saying that the end of the world is "imminent"...
> 
> If that's how you choose to distort your dictionary then, whatever...


If you add the word "relative" to your own personal dictionary then I am not distorting ANYTHING.






> WOW.  Now you're confusing Austrian theory with Libertarianism/Free Market theory.    I'm clearly talking to someone who has failed to do even just BASIC homework.


No, you are wrong, Austrian Economists espouse libertarian/free market theory all the time. They are essentially one in the same.

http://mises.org/etexts/austrian.asp





> And you confuse Keynesianism with Socialism here!  Good grief...


I'm not confusing anything, again, THEY ARE PRETTY MUCH ONE IN THE SAME. By advocating Keynesianism you are advocating wealth distribution. Period.




> I have no idea WTF you are talking about here.  I've lost all respect for whatever you have to say.


That's really too bad because you could learn a lot.





> It's amazing how there are so many people out there who support this-or-that politician and/or movement without having even a basic understanding of what it is they support.  You remind me of those Tea Party supporters holding up placards that say "Don't Touch My Medicare!".


Agreed, though I would be applying that to others here.

----------


## jon_perez

> That is a fascinating question!  What would the ideal investing strategy be for someone who has accepted that they do not know the future?  What are your thoughts, Madison320?


helmuth, I suspect our way of thinking is pretty much along the same lines.  That's a great question to ask.  

Many of the great investors, Buffet and Rogers come to mind, have precisely stated that they DON'T KNOW what's going to happen [exactly] in the future, and that's probably the correct frame of mind for a good trader/investor.

Soros, on the other hand, once famously said to an audience (students, I think) "I know exactly where the dollar is going, but I can't tell you".   Well, during the 2008 crisis, he bet that the USD would go down and it did the opposite.  But then, I think Soros has his own style, and this sort of apparent hubris doesn't seem to hurt him tremendously.

My answer to your question is that you need to hedge properly and also be prepared to admit you're wrong and cut a losing position rather than insist that it is the market that is wrong.  But of course, quite often, the market head-fakes you!  For all you know, gold is head-faking Schiff right now! Maybe it will go all the way down to $900, and bottom-out at the precise moment when Schiff capitulates.  Even Paulson was famously wrong on GLD and lightened up at the wrong moment.  Trading is hard and it seems to be as rigorous a test of character as anything out there.

One lesson that has stood out for me in trading seems to be patience.  Prices always seem to go far lower and also far higher than you think they can, and for those who don't know how to surf these waves, they seem to do so at the worst moments!  I once pooh-poohed this book "The Intuitive Trader" as being new-age mumbo-jumbo, but after re-reading it lately with the benefit of experience, it does seem that riding the markets is very much a psychological affair.  The prices it is trading at right now is obviously a VERY objective reality, but what it is _supposed_ to do in the future is a reflection of the countless "reality tunnels" of all its participants and the outcome is by no means determined.

----------


## gwax23

You must spread some Reputation around before giving it to dannno again.

----------


## dannno

> helmuth, I suspect our way of thinking is pretty much along the same lines.  That's a great question to ask.  
> 
> Many of the great investors, Buffet and Rogers come to mind..



With friends like these, huh Gary?

----------


## Madison320

> That is a fascinating question!  What would the ideal investing strategy be for someone who has accepted that they do not know the future?  What are your thoughts, Madison320?


I asked you first. 

One strategy would be as good as the other if you had no idea what the future would look like.

----------


## Madison320

> Actually, Japan has been doing QE for a long time now.  Wikipedia confirms what I've always remembered.... that the BoJ had resorted to QE well before your average American had even heard of the term (e.g. certainly before 2008) http://en.wikipedia.org/wiki/Quantitative_easing  The wikipedia article mentions Japanese QE started in 2001 (with corresponding references).
> 
> Abenomics is just even more massive QE.


Several years ago (I need to recheck) I looked at the BOJ website and found a page that showed historical data for their monetary base. I think I only checked from 1980 to 2000. They were increasing their base by something like 5% a year. Over that time frame I also checked the price of gold and oil, both declined slightly. So over that time frame Japan did a tiny bit of QE and prices fell by a tiny bit. I don't consider that nearly strong enough evidence to refute thousands of years of data of failed fiat currencies from QE.

----------


## helmuth_hubener

> With friends like these, huh Gary?


Dannno, I do not know what this phrase and picture are referencing, but I take it that you have become agitated.

If so, let me remind you:    _It's Not Worth It!!!_  

This is just the internet!!  So take a break and enjoy some Weird Al.   Oh Al, what would the world do without you?    Let's hope we never have to find out.




And remember it is not you who I am telling that everything you know is wrong, but rather myself.

And also remember that I think I agree with the vast prepoderance of your views, and if I were to merely phrase things differently you would think that I agree with essentially all of them.  Indeed, I have done just that for much of the past 5 years on this forum, see the archives to refresh your memory.  I choose not to on this thread because I am trying to convey some different, unrelated ideas, which apparently are not interesting to you, and indeed are probably not very relevant to you either.  But they could really help some others and save them money.  I do believe in the risk of hyperinflation, I believe the Fed causes major problems, etc., etc., so don't get all wound up in a bundle.

And then whenever you're feeling better, you may enjoy some of my ideas on one of your favorite investments (I would call it a speculation, not an investment), Bitcoin, over in the other thread about selling stocks and buying gold.

----------


## helmuth_hubener

> I asked you first. 
> 
> One strategy would be as good as the other if you had no idea what the future would look like.


Hmm, would it?  As good for what, exactly?

----------


## dannno

> Dannno, I do not know what this phrase and picture are referencing, but I take it that you have become agitated.


It's from The Big Lebowski, one of the funniest movies ever made.

I just never expected to see Buffet worship happening on RPFs after all these years. I don't care how much money he made in "investments", it's all central banking bull$#@! as far as I am concerned. Either he is lying when he says he doesn't know the future, trying to mislead investors from the truth of what central banking system does within the economy, or he is actually really ignorant about how the system works and with some good fortune landed himself where he is today.

I have no problem with people investing short term and taking advantage of Fed fueled bubbles, if you are good at it then go for it. What I have a problem with is those same people saying that Peter Schiff's investment strategy is wrong when it isn't. You didn't think you would get some people upset on RPF posting a thread called "Peter Schiff is WRONG!!"?? It comes off as a troll thread, and when I can't come in here and defend his ideas which are pretty much perfectly aligned with Ron Paul's beliefs as far as economics goes, then why even call this place RPF??

----------


## Madison320

> Hmm, would it?  As good for what, exactly?


How about if you answer since I've asked you twice?

----------


## Madison320

> You didn't think you would get some people upset on RPF posting a thread called "Peter Schiff is WRONG!!"?? It comes off as a troll thread, and when I can't come in here and defend his ideas which are pretty much perfectly aligned with Ron Paul's beliefs as far as economics goes, then why even call this place RPF??


I thought he might be a troll also when in an earlier thread he told me fiat currencies have only existed since 1971. He also gave me the "you seem to be agitated" line.

----------


## helmuth_hubener

Well it sounds like you already know the answer, Madison320.  You write that one strategy is as good as another if a man has no idea what the future will look like.  And maybe that is true, maybe not.  It depends on what you mean.*  But if it is true, then my strategy is of no possible interest to you, is it?  I mean, there's no possible way that it's any good, right?

* For instance, good at what?  And is not knowing the future the same as having _no idea_ about the future whatsoever?

----------


## helmuth_hubener

> I have no problem with people investing short term and taking advantage of Fed fueled bubbles, if you are good at it then go for it.


 Well that is nice for them.  It is not at all what I am doing, but it is nice for those who are doing it that you approve of their actions.




> What I have a problem with is those same people saying that Peter Schiff's investment strategy is wrong when it isn't.


 Well that is what we disagree about.  But reasonable people can disagree about investment strategy, can't they?  Why, my own thoughts and understanding on the matter are very different from even two years ago.  So I can certainly understand that you may have a different idea of how to best invest.  And I respect your right to have your own ideas and keep your own counsel regarding what you will do with your money.  It's your money, not mine.  

We're just here on the Economics and Sound Money board to talk about these money-related issues, learn some things, and maybe have a little fun doing it.

----------


## helmuth_hubener

> I got my dad into EuroPacific, he has done well so far.


 He got in recently, I take it?  Post-2009?

----------


## Danke

> He got in recently, I take it?  Post-2009?



Yes. About 3 years ago, but I'd have to check.

Maybe 4.

----------


## helmuth_hubener

> One lesson that has stood out for me in trading seems to be patience.  Prices always seem to go far lower and also far higher than you think they can, and for those who don't know how to surf these waves, they seem to do so at the worst moments!


 Isn't that the truth!




> I once pooh-poohed this book "The Intuitive Trader" as being new-age mumbo-jumbo, but after re-reading it lately with the benefit of experience, it does seem that riding the markets is very much a psychological affair.  The prices it is trading at right now is obviously a VERY objective reality, but what it is _supposed_ to do in the future is a reflection of the countless "reality tunnels" of all its participants and the outcome is by no means determined.


From your post it is clear you have a lot of experience trading.  And yes, psychology is very much a huge part of economics and investing.  It's subjective.  Henry Hazlitt in his excellent introductory book _Economics in One Lesson_ said "The *art of economics* consists in looking not merely at the immediate but at the longer effects of any act or policy."  The *art*.  Economics, as applied to investing and especially to _speculating_, is _an art_, not a science.  Some people have a knack for it, a natural inclination.  It's not something you can learn in a book, any more than you can read a book called "How to Sing" by Pavoratti and expect to become a great singer.

----------


## helmuth_hubener

> Yes. About 3 years ago, but I'd have to check.
> 
> Maybe 4.


 Good timing!  You did well for him.

----------


## jclay2

Peter Schiff is a scam artists. Sure he says some good things and all, but his clients are completely screwed. His fees are absurdly high and he offers nothing of value for them. Any "schiff" portfolio can be created via vanguard indexes for little to no costs with considerably higher diversification.

Edit: Close family member signed up with the firm for a fairly large sum. I also work in finance/trading so I am not just throwing this out there.

----------


## Danke

> Peter Schiff is a scam artists. Sure he says some good things and all, but his clients are completely screwed. His fees are absurdly high and he offers nothing of value for them. Any "schiff" portfolio can be created via vanguard indexes for little to no costs with considerably higher diversification.
> 
> Edit: Close family member signed up with the firm for a fairly large sum. I also work in finance/trading so I am not just throwing this out there.


Ya, the fees are high when you trade.

But I know first hand a fund that a family member who invested in one of his funds has done quite well.

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## dannno

> Ya, the fees are high when you trade.


I don't know exactly how his funds work but I wonder if he does that on purpose to weed out the short term trader types like the ones up in this thread so they don't crash his fund and get the long term investors panicked. Maybe it adds to the stability of the fund. Either way if you're going to hold onto to it for a long time a fee is less consequential.

----------


## Danke

> I don't know exactly how his funds work but I wonder if he does that on purpose to weed out the short term trader types like the ones up in this thread so they don't crash his fund and get the long term investors panicked. Maybe it adds to the stability of the fund. Either way if you're going to hold onto to it for a long time a fee is less consequential.


Ya, when I get around to it, I'll look it up.  I just know the last time I looked into it, his funds were up.

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## gwax23

> Peter Schiff is a scam artists. Sure he says some good things and all, but his clients are completely screwed. His fees are absurdly high and he offers nothing of value for them. Any "schiff" portfolio can be created via vanguard indexes for little to no costs with considerably higher diversification.
> 
> Edit: Close family member signed up with the firm for a fairly large sum. I also work in finance/trading so I am not just throwing this out there.


Ok so his fees are high. His predictions about inflation/hyperinflation? Dollar Crisis? Completely BS because he has high fees?

----------


## helmuth_hubener

> Either way if you're going to hold onto to it for a long time a fee is less consequential.


 Actually, the longer you hold it, the more consequential the fees become.  These are not one-time transaction fees jclay2 is talking about.  Funds have a annual expense, measured in what's called "Expense Ratio".  This is the percentage of your account value that the fund charges you every year for managing everything.

Fees are killer.  They will slaughter your returns.  Just absolutely butcher them.  And for what?  Take a look, not just at Peter's fund, but at every fund out there.  Just take a random sampling of five.  Look up their returns.  If you look at only five, chances are good at that _all five_ will have returns _lower_ than the Dow!  And it is virtually certain that at least four will.  And then look at their expense ratios.  Oh, I'm supposed to pay these guys 2% of my money every year.  And for what?  What are you getting for your money?  Lower returns!  Lower returns than a monkey could get!  Lower returns than you could have gotten with the Fidelity Total Market Fund (FSTMX), for instance, with an expense ratio of 0.1%.

In my opinion, any fee above about 1% is ripping you off.  This is Wall Street fleecing you.

----------


## helmuth_hubener

> Ok so his fees are high. His predictions about inflation/hyperinflation? Dollar Crisis? Completely BS because he has high fees?


 His awareness of the possibility of such things is terrific.  His understanding of the mechanics, maybe not so much.  And his predictions about them are worth as much as the palm reader's at the fortune-teller booth.

----------


## Libertomics

>

----------


## Madison320

> I don't know exactly how his funds work but I wonder if he does that on purpose to weed out the short term trader types like the ones up in this thread so they don't crash his fund and get the long term investors panicked. Maybe it adds to the stability of the fund. Either way if you're going to hold onto to it for a long time a fee is less consequential.


Last time I checked his fees were in line with other managed, foreign investment firms. Most people are comparing Schiffs fees to a discount broker like Charles Schwab. You have to compare apples to apples.

----------


## Madison320

> 


Yes, but the fact that banks are holding a lot of the newly created money only confirms that there will be price increases in the future.

----------


## Libertomics

> Yes, but the fact that banks are holding a lot of the newly created money only confirms that there will be price increases in the future.


 Interest on excess reserves allows the fed to prevent any hyperinflation or any large inflation in the future.

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## helmuth_hubener

Hi, Libertomics!  

I like your name.  Anyway, yes.  Let me verbally explain what you are saying to others to whom it may not be so clear: the Fed has been busy blasting the monetary base into the stratosphere, that is, creating more and more money, but the financial institutions (banks, credit unions, etc.) are just taking those extra funds and saving them.  So, the extra money is not having a big effect on the economy.

One can look at charts like that monetary base chart, and think that huge, staggering, unprecedented inflation is coming for sure.  Any minute now.  There's no stopping it.  But as a matter of fact, it might not be.  

I remember looking at such charts years and years ago.  The conclusion seemed inescapable; our fate inevitable.  But it turned out that I was wrong.  The fate was not inevitable.  In fact, it never came.  That doesn't mean it won't.  It just means we don't know, and we especially don't know when.  Do you want to lose huge amounts of money for 30 years waiting for a prediction to come true, even if sure enough in the 31st year it does come true?  That is a brittle plan, and a poor plan.  Better to accept reality, indeed to embrace reality, and reality is this: we do not know the future.  

Peter Schiff does not know the future.  
Cramer does not know the future.  
Doug Casey does not know the future.
CNBC does not know the future.
The Mogambo Guru does not know the future.
Lew Rockwell does not know the future.
Even Ron Paul himself, that's right: does not know the future.

That is my position.  If you have a different idea, feel free to put it forward.  Defend it.  But do not get upset just because I am saying something you do not like to hear.

----------


## helmuth_hubener

> Interest on excess reserves allows the fed to prevent any hyperinflation or any large inflation in the future.


 Well..... it allows them to do _something_.  But remember that government doesn't work.  Just because the Fed wants to prevent a hyperinflation doesn't necessarily mean that they will be able to be sucessful in doing so every time, any more than just because the DEA wants to prevent drugs from coming into America that they necessarily succeed in doing so.

We say the Fed controls interest rates.  If that were really true, then we would never have had the very high interest rates of the 1980s.  Do you think the Fed wanted the the 30 year treasury rate to get over 15% in the early '80s?  Let me tell you: they did not.  Or, to take a more recent example, do you think the Fed wanted the 10-year yield to spike to 3% over the summer?

So while you are right that there are good reasons to think there will _not_ be high inflation coming up, do not be so sure and confident of the Fed's ability to be competent and perfect and make everything go exactly how they want.  There are also good reasons to think that there _could_ be high inflation coming up.

Which reasons will win out?

Can you guess my answer?

----------


## helmuth_hubener

Another way to put it: the market is bigger than the Fed.  The market is more powerful than the Fed.  The market can overrule the Fed.  The market ultimately sets the interest rate.  The Fed just attempts to distort it.

----------


## Libertomics

> Well..... it allows them to do _something_.  But remember that government doesn't work.  Just because the Fed wants to prevent a hyperinflation doesn't necessarily mean that they will be able to be sucessful in doing so every time, any more than just because the DEA wants to prevent drugs from coming into America that they necessarily succeed in doing so.
> 
> We say the Fed controls interest rates.  If that were really true, then we would never have had the very high interest rates of the 1980s.  Do you think the Fed wanted the the 30 year treasury rate to get over 15% in the early '80s?  Let me tell you: they did not.  Or, to take another example, do you think the Fed wanted the 10-year yield to spike to 3% over the summer?
> 
> So while you are right that there are good reasons to think there will _not_ be high inflation coming up, do not be so sure and confident of the Fed's ability to be competent and perfect and make everything go exactly how they want.  There are also good reasons to think that there _could_ be high inflation coming up.
> 
> Which reasons will win out?


 The federal reserve system is probably the most competent part of out government. I doubt that the fed would sit by as inflation becomes high, just as likely as the EPA watching as someone dumps nuclear waste infront of their HQ. The 1980s had very low inflation compared to the decade before because inflation fighting by the fed, the early 80s Fed was doing what it was supposed to do.




> Can you guess my answer?


 Too hard to guess.

----------


## Libertomics

> Another way to put it: the market is bigger than the Fed.  The market is more powerful than the Fed.  The market can overrule the Fed.  The market ultimately sets the interest rate.  The Fed just attempts to distort it.


 The Fed is great at distorting the interest rate.

----------


## helmuth_hubener

> Either he is lying when he says he doesn't know the future, trying to mislead investors from the truth of what central banking system does within the economy, or he is actually really ignorant about how the system works and with some good fortune landed himself where he is today.


 Why would you think that Warren Buffet knows the future?





> It comes off as a troll thread, and when I can't come in here and defend his ideas which are pretty much perfectly aligned with Ron Paul's beliefs as far as economics goes, then why even call this place RPF??


 Cerrtainly you may defend them.  I invite you to defend them.  I positively welcome and am excited to see you defend them!  I don't know why you would feel like you can't.

If you have some ideas, _especially_ some ideas which contradict mine, then by all means, please put them forward!  And then defend them valiantly!  Just for the fun of it!  Even if you don't have any such contradictory ideas, feel free to pretend to.  Just for the debate of it, just for the learning of it.

----------


## helmuth_hubener

> The Fed is great at distorting the interest rate.


Distort it, yes.  But control it, no.  The interest rate is determined by the decisions and the time preferences of millions, and in fact billions of people.




> I doubt that the fed would sit by as inflation becomes high, just as likely as the EPA watching as someone dumps nuclear waste infront of their HQ.


 Sit idly by?  No, that is unlikely.  But be able to stop it?  That is another story.  Were they able to stop it in the 1970s?





> The 1980s had very low inflation compared to the decade before because inflation fighting by the fed, the early 80s Fed was doing what it was supposed to do.


 Nevertheless my point still stands: the Fed absolutely, positively did not want super-high interest rates like the 15% yield on the 30-year Treasury.  They didn't want that.  Yet they were powerless to prevent it.  It happened anyway.

The 1980s had low inflation, true.  Did the 1970s?  No.  Do you think that the Fed wanted a decade of high inflation?  If the Fed Board of Governors had sat down in 1969 to plan what their target inflation rate for the next decade would be (and actually, they probably did do something like that), do you think they met their target?

The Fed is not in total control.  The Fed cannot manipulate things however they want.  No one can.  The market is bigger than the Fed.  The market is bigger than any of us.

----------


## Libertomics

> Distort it, yes.  But control it, no.  The interest rate is determined by the decisions and the time preferences of millions, and in fact billions of people.
> 
>  Sit idly by?  No, that is unlikely.  But be able to stop it?  That is another story.  Were they able to stop it in the 1970s?
> 
> 
>  Nevertheless my point still stands: the Fed absolutely, positively did not want super-high interest rates like the 15% yield on the 30-year Treasury.  They didn't want that.  Yet they were powerless to prevent it.  It happened anyway.
> 
> The 1980s had low inflation, true.  Did the 1970s?  No.  Do you think that the Fed wanted a decade of high inflation?  If the Fed Board of Governors had sat down in 1969 to plan what their target inflation rate for the next decade would be (and actually, they probably did do something like that), do you think they met their target?
> 
> The Fed is not in total control.  The Fed cannot manipulate things however they want.  No one can.  The market is bigger than the Fed.  The market is bigger than any of us.


 The Volcker reccesion fought inflation so how were they supposed to prevent high interest rates? If the fed wanted low interest rates at expense of inflation then low interest rates and high inflation would happen. The 70s inflation was becuase the Fed was afraid to cause a recession. The Fed may not be in total control, but it is fully able to stop inflation or high interest rates dead in its tracks if it has the guts.

----------


## jon_perez

> Nevertheless my point still stands: the Fed absolutely, positively did not want super-high interest rates like the 15% yield on the 30-year Treasury.  They didn't want that.  Yet they were powerless to prevent it.  It happened anyway.





> The Volcker reccesion fought inflation so how were they supposed to prevent high interest rates? If the fed wanted low interest rates at expense of inflation then low interest rates and high inflation would happen. The 70s inflation was becuase the Fed was afraid to cause a recession. The Fed may not be in total control, but it is fully able to stop inflation or high interest rates dead in its tracks if it has the guts.


My understanding was that the Fed has control over short term interest rates but not over long term ones.  They jacked up short term rates to fight the inflation/stagflation in the 70s, but the side effect of that was that the market bid up long term rates sky-high.  

In the documentary "Commanding Heights", iirc, Volcker said if he knew rates would go up that high, he would have just crawled into a hole.





> The Fed is not in total control.  The Fed cannot manipulate things however they want.  No one can.  The market is bigger than the Fed.  The market is bigger than any of us.


That's the conventional wisdom.  So far, no one seems to have been able or willing to take on the Fed, whereas recent history has shown that Asian central banks (with the interesting exception of the HKMA) and even the Bank of England, even working together with the Malaysian central bank, eventually capitulated trying to defend against the market. 

The Fed's thus far unchallenged status notwithstanding, even Jamie Dimon has said that _"the bond market moving against the United States is virtually assured"_ -> http://www.zerohedge.com/news/2013-1...s-debt-endgame.

----------


## jon_perez

> I just never expected to see Buffet worship happening on RPFs after all these years. I don't care how much money he made in "investments", it's all central banking bull$#@! as far as I am concerned. Either he is lying when he says he doesn't know the future, trying to mislead investors from the truth of what central banking system does within the economy, or he is actually really ignorant about how the system works and with some good fortune landed himself where he is today.


What is interesting is that Warren Buffet's congressman dad, Howard Buffet, was very right-wing in his economic philosophy (gold standard, no deficits, etc...) and would definitely fit very well as a "tea party" candidate today.  To hear Warren tell the story, his dad was very principled and well-loved such that even people who did not vote for him or agree with his ideology went to his funeral.  

In the biography by Roger Lowenstein, Warren also explains why he ended up evolving a different economic philosophy from his father.

----------


## jon_perez

> I doubt that the fed would sit by as inflation becomes high, just as likely as the EPA watching as someone dumps nuclear waste infront of their HQ. The 1980s had very low inflation compared to the decade before because inflation fighting by the fed, the early 80s Fed was doing what it was supposed to do.


In Gary Shilling's "Age of Deleveraging", he says that a big reason for the inflation in the 70s was inflation *expectations*.  Because people got used to inflation they expected more of it, stocked up on inventory, causing shortages and further aggravating inflation.

In Japan, it seems the opposite is what's happening, deflationary *expectations* are far more powerful than all the monetary easing the BoJ is engaging in.

Because the Fed has gained credibility in the 80s that it CAN stop inflation if it really wanted to, the markets do not seem to fear inflation caused by all the QE and thus is somewhat happy with the low interest rate environment.

----------


## helmuth_hubener

> My understanding was that the Fed has control over short term interest rates but not over long term ones.  They jacked up short term rates to fight the inflation/stagflation in the 70s, but the side effect of that was that the market bid up long term rates sky-high.


 No, the market determines both.  If no one wants to loan out money at any price, guess what?  The interest rate becomes infinity.  If no one wants to borrow money at any price guess what?  The interest rate would go to zero, but the government always wants to borrow money so it will go to something somewhat above zero.  Of course, even that could change, in theory.  The government could stop running deficits and either pay back or default on the debt.  Anything could happen.

The point is, it's the actions of market actors -- human beings -- that determines what the interest rate will be.  The Fed is a group of very powerful human beings.  They have a very big lever with which to mess things up.  But they are not all-powerful and the results of their actions are not always predictable.




> That's the conventional wisdom.


 I don't know about that, but it is my position.  If you want to challenge this wisdom, conventional or not, feel free to do so.

----------


## helmuth_hubener

> The Volcker reccesion fought inflation so how were they supposed to prevent high interest rates? If the fed wanted low interest rates at expense of inflation then low interest rates and high inflation would happen. The 70s inflation was becuase the Fed was afraid to cause a recession. The Fed may not be in total control, but it is fully able to stop inflation or high interest rates dead in its tracks if it has the guts.


 I thought I explained myself well, but maybe I was too wordy in doing it.  So let me just ask you:

Do you think that what the Fed does will always work?

----------


## gwax23

> In Gary Shilling's "Age of Deleveraging", he says that a big reason for the inflation in the 70s was inflation *expectations*.  Because people got used to inflation they expected more of it, stocked up on inventory, causing shortages and further aggravating inflation.
> 
> In Japan, it seems the opposite is what's happening, deflationary *expectations* are far more powerful than all the monetary easing the BoJ is engaging in.
> 
> Because the Fed has gained credibility in the 80s that it CAN stop inflation if it really wanted to, the markets do not seem to fear inflation caused by all the QE and thus is somewhat happy with the low interest rate environment.


His father was a self described Austrian.

----------


## helmuth_hubener

> I just never expected to see Buffet worship happening on RPFs after all these years. I don't care how much money he made in "investments", it's all central banking


 Why do you hate Mr. Buffett?  Do you hate all rich people?  Or did he do something in particular that you find distasteful (other than getting rich)?

----------


## gwax23

http://www.youtube.com/watch?v=0L7SOPDOvvI

----------


## helmuth_hubener

Oh, my goodness, Bitcoin is in every thread and on every mind.  What a world.

----------


## dannno

> Why do you hate Mr. Buffett?  Do you hate all rich people?  Or did he do something in particular that you find distasteful (other than getting rich)?


Warren Buffet campaigned for Obama, do you expect me to lick his nutsack??

Obviously I don't hate all rich people otherwise I wouldn't be defending Peter Schiff. 

I hate elitists - very successful people who are either evil or very out of touch with reality.

I'm not a big fan of Buffet and I don't know why for certain because I don't know what he knows, but I do know there are only a few options:

His dad explained to him Austrian Business Cycle theory and he didn't listen and a lot of his economic views support the establishment status quo.

http://www.ronpaulforums.com/showthr...f-US-recession

http://www.ronpaulforums.com/showthr...oughts-on-gold


So either he is out of touch and kind of dumb for not incorporating his father's lessons on Austrian Economics into his own political ideology or he is actually evil and is taking advantage of the system and has an ulterior motive.. and yes I realize he has vowed to give away 99% of his wealth, but for what, I shiver to imagine what it could be.

----------


## helmuth_hubener

> Warren Buffet campaigned for Obama


 Witch!  Heretic!  Burn him!

And Steve Jobs had _dinner_ with Obama!  Maybe even multiple times!  Yet Steve is a hero of mine. Hmmm....

Look, not everyone is wrapped up in the libertarian cosmos.  If one looks at the whole world through the lens of "libertarians" and "evil people," that's a whole lot of evil people.  That's a whole lot of people to hate.  Why not instead accept that there's lots of interesting ideas and interesting people and interesting ways of looking at things and relatively few of them are mutually exclusive.  Even fewer of them are of necessity at loggerheads with each other.  *Life is not Cowboys and Indians.*

It is clear to me that politics and especially political philosophy is not a big interest to Warren Buffet.  Neither, frankly, is economics in the scholarly, theoretical sense.  Buffet may not be reading Mises, but he's probably never read Keynes either.  Buffet is a takeover artist, a speculator, a business manager, and just someone who tries to create value for his investors.  He's not an economist.  And, to me, he's not an Indian.




> Obviously I don't hate all rich people otherwise I wouldn't be defending Peter Schiff.


 Well, you weren't defending him for being rich, but for giving people bad investment advice.  But now that you point this out, it is obvious.  I'm glad to hear it.




> I hate elitists - very successful people who are either evil or very out of touch with reality.


 Umm, I don't know what that means.  Bill Gates?  Steve Jobs?  Anyone who lives in a mansion on a manor?  Anyone with a yacht?  What is the picture in your mind when you say "elitist"?  It sounds kind of like hating the rich, to me.  I know, you just said you didn't.  But that's what it sounds like.





> *I'm not a big fan of Buffet and I don't know why for certain* because I don't know what he knows, but I do know there are only a few options:
> 
> His dad explained to him Austrian Business Cycle theory and he didn't listen and a lot of his economic views support the establishment status quo.
> 
> *Buffett-sees-little-chance-of-US-recession*
> 
> *Warren-Buffet-s-latest-thoughts-on-gold*


 It sounds like you _do_ know why you don't like him: he is making investment predictions which you dislike.  You don't want to hear "Prosperity is probably coming, not recession," and you don't want to hear "Gold will go down".  So that is why you don't like him.  That, and he holds mainstream political views, like, umm, the vast majority of human beings.  That's why they're called "mainstream".  Heaven forbid he not be like you and agree with you in every particular.





> So either he is out of touch and kind of dumb for not incorporating his father's lessons on Austrian Economics into his own political ideology or he is actually evil and is taking advantage of the system and has an ulterior motive..


 Here we come to, in a way, *the reason for this thread* and one of the problems with our current situation.  I am trying to fix this problem.  You see, it's like this:

*Buy Gold =/= (does not equal) Austrian Economics 
The Crash is Coming =/= Austrian Economics
Doom is Imminent =/= Austrian Economics*

Sometimes it seems like investing in gold is like a religion.  Austrian Economics is agnostic on the matter.  Austrian Economics teaches us that we do not know what is going to happen, for those who really have a deep understanding of it.  It takes an agnostic stand.  Maybe the next five years will see growth and prosperity.  Or, maybe they will feel the pinch of a downturn.  Or maybe there will even be a depression, or a monetary collapse, or something else horrible.  Maybe you should buy gold, but maybe you should sell it.  It is not inevitable that gold will always go up.




> and yes I realize he has vowed to give away 99% of his wealth, but for what, I shiver to imagine what it could be.


 Giving away this money is hardly a virtue, in my mind.  He is squandering values.  They're his to squander, but I think it's unfortunate, and reflects poorly on his character.  He couldn't think of any great goals or exciting things to do with his wealth himself?  He couldn't find any successor to carry on his vision and legacy, furthering his goals even long after he has passed away?  To me, it's a cop-out.  

But, to earn it in the first place was a great acheivement and hugely benefited the world, so if he's now out of ideas and energy and ambition, well, in his life he still had far more than most.

----------


## helmuth_hubener

> I don't know any one thing he has been wrong about. Can you actually name one thing he has been wrong about?


So, now that we have covered the larger and more important over-arching reason Peter's advice is very, very, fundamentally flawed, we can come back to this.  Because some people may not be convinced of the wisdom of the "we don't know the future" stance.  They may think Peter is an exception.  And if it could be found that everything Peter ever said was uncannily true, then these people would be inclined to say "Look!  See!  Here is an exception to your rule.  Here is a guru who really knows what he's talking about, and whom we can follow with confidence."

So, here is a fairly extensive, though outdated, list of predictions, last updated around 2010:

http://www.economicpredictions.org/p...f-predictions/

Enjoy.

And his acolytes , like Dannno, of course will be able to explain every single one marked as wrong.  I don't know how, but I am sure he will.  Here is my suggested apologist line of defense: this list must have been made by evil Keynesians.  It is lies, lies, all lies!

----------


## helmuth_hubener

Economic predictions bump!

----------


## helmuth_hubener

Since Peter's fans* have apparently grown weary of defending the indefensible, I'm going to go ahead and just keep piling on!  Here's a few more of his divinations:

*Peter Schiff predicted in 2012 that Treasuries will collapse in 2013*

Was Peter right about this?  Well, one month to go.  Thus far, it looks like he was (to quote myself) "WRONG, WRONG, WRONG!!!!"

*Peter Schiff predicted for 2011 a catastrophic collapse of the U.S. stock market.*

Did this happen?  No.  Wrong again.

*In Jan. 2011, Peter Schiff predicted hyperinflation, and he predicted interest rates on 10 year notes would climb to 6%.*

2011 came and went, and that delicious 6% was nowhere to be seen, nor was hyperinflation.

*In mid-2012, Peter Schiff predicted that for the next 2 to 3 years either Gold will reach $12,000 or the Dow will fall to 1,400.*

Still time to go on this one.  I think Peter has smartened up and realized that 2-3 years is a good time-frame for a prediction: long enough that when it doesn't come true, no one will remember it.  Then you can just make the same prediction again.  Of course, not giving any time-frame at all is the best way to avoid having to look like you were wrong, but on cable TV shows that sometimes might look pansy and gutless, especially for Peter, whose whole TV schtick is to be an obnoxious and bombastic contrarian, saying shocking things with outrageous confidence.

* (and understand: I am a fan of his too, in a way)

----------


## helmuth_hubener

Since Peter's fans* have apparently grown weary of defending the indefensible, I'm going to go ahead and just keep piling on!  Here's a few more of his divinations:

*Peter Schiff predicted in 2012 that Treasuries will collapse in 2013*

Was Peter right about this?  Well, one month to go.  Thus far, it looks like he was (to quote myself) "WRONG, WRONG, WRONG!!!!"

*Peter Schiff predicted for 2011 a catastrophic collapse of the U.S. stock market.*

Did this happen?  No.  Wrong again.

*In Jan. 2011, Peter Schiff predicted hyperinflation, and he predicted interest rates on 10 year notes would climb to 6%.*

2011 came and went, and that delicious 6% was nowhere to be seen, nor was hyperinflation.

*In mid-2012, Peter Schiff predicted that for the next 2 to 3 years either Gold will reach $12,000 or the Dow will fall to 1,400.*

Still time to go on this one.  I think Peter has smartened up and realized that 2-3 years is a good time-frame for a prediction: long enough that when it doesn't come true, no one will remember it.  Then you can just make the same prediction again.  Of course, not giving any time-frame at all is the best way to avoid having to look like you were wrong, but on cable TV shows that sometimes might look pansy and gutless, especially for Peter, whose whole TV schtick is to be an obnoxious and bombastic contrarian, saying shocking things with outrageous confidence.

* (and understand: I am a fan of his too, in a way)

----------


## GregSarnowski

> Witch!  Heretic!  Burn him!
> 
> It is clear to me that politics and especially political philosophy is not a big interest to Warren Buffet.  Neither, frankly, is economics in the scholarly, theoretical sense.  Buffet may not be reading Mises, but he's probably never read Keynes either.  Buffet is a takeover artist, a speculator, a business manager, and just someone who tries to create value for his investors.  He's not an economist.  And, to me, he's not an Indian.


Buffet is a corporatist shill who pushes for higher taxes in order to force people into shelters conveniently offered through Berkshire's various financial services companies.

I can't believe you're defending him yet ragging on Schiff for not being right -- yet. As if this house of cards won't collapse at some point.

----------


## gwax23

> Since Peter's fans* have apparently grown weary of defending the indefensible, I'm going to go ahead and just keep piling on!  Here's a few more of his divinations:
> 
> *Peter Schiff predicted in 2012 that Treasuries will collapse in 2013*
> 
> Was Peter right about this?  Well, one month to go.  Thus far, it looks like he was (to quote myself) "WRONG, WRONG, WRONG!!!!"
> 
> *Peter Schiff predicted for 2011 a catastrophic collapse of the U.S. stock market.*
> 
> Did this happen?  No.  Wrong again.
> ...


Few things. You only provide one source for all these claims and its a dubious forbes article. 

Even if he did claim all these things would happen (which I doubt, most of these look exagerated) people should be smart that despite Schiff being an intelligent guy hes running a business, so he has to keep his business priorities first. 

None of his general beliefs or claims are wrong, that includes inflation, gold, the dollar, and hyperinflation. If you are arguing hes wrong on this (which would mean  you think Ron Paul and most Austrian economists are also wrong) than say so and Ill gladly debate you point by point. 

All this Peter schiff bashing is ridiculous and pointless though. Why dont you spend your time bashing and pointing out the false predictions and economic lunacy of people like Krugmand and other Keynesians instead of devoting your time to attacking Schiffs free market beliefs. So what if he made a few bad predictions on timing. Grand scheme of things he will prove to be right in the end, on this and Bitcoin.

----------


## helmuth_hubener

> Few things. You only provide one source for all these claims and its a dubious forbes article.


 Yes, I only have one life and it seems clear that it makes absolutely no difference how well-footnoted and carefully documented my posts are to you and Peter's other backers.  The existence of a multitude of unambiguously wrong predictions documented in every different kind of way imaginable -- video footage, audio archives from his radio show, and in print in his various books -- does not seem to touch your faith in him.  It doesn't seem to address it in any way.  You go on believing, undeterred.  Furthermore, when cubical called for sources, seeming to be genuinely skeptical, I took it at face value and went to some trouble, suceeding in unearthing the actual audio clip using the Wayback Machine from Archive.org.  His response?  None.  No "thank you," (Boo on ingratitude!  This is Thanksgiving time!) no rebuttal, no admitting that I proved myself right, nothing.  I do not think it actually makes a single lick of difference to you whether I linked to sources or not, you're just using that as a rhetorical obfuscation.  Yep, sure enough, your rhetorical gambit is followed immediately by an "even if...":




> Even if he did claim all these things would happen (which I doubt, most of these look exagerated) people should be smart that despite Schiff being an intelligent guy hes running a business, so he has to keep his business priorities first.


  So, in other words, _"even if"_ he made these predictions, _anyone smart should realize_ that he's a highly biased person with a strong financial interest in certain outcomes* and is an unreliable source of investment advice.  Yes, I would like everyone to realize that.  That's the whole point of the thread.  You're making my case for me, Gwax.




> (which I doubt, most of these look exagerated)


My previous post has, what, about a dozen predictions, sourced, linked, and bulletproof.  If you truly "doubt" my latest list of predictions, then let's simply talk about those instead, about which there is no room for doubt.




> None of his general beliefs or claims are wrong, that includes inflation, gold, the dollar, and hyperinflation. If you are arguing hes wrong on this (which would mean  you think Ron Paul and most Austrian economists are also wrong) than say so and Ill gladly debate you point by point.


 Yes, definitly let us do so!  Sounds like great fun to me.  First, please tell me what Peter's general beliefs and claims are, as you understand them.  Or maybe just start with one, to keep things simple.  Kick that ball off; get it rolling!




> All this Peter schiff bashing is ridiculous and pointless though.


 That's funny, it didn't seem pointless to _me_.



* Actually, and this is part of his stupidity and hubris, in one and only one very particular multifaceted outcome, which if even a single facet of it doesn't pan out (for instance, decoupling), his investors will lose lots of money, even if all the rest happens exactly as he predicted!  Talk about a foolish bet!

----------


## helmuth_hubener

Here is Peter Schiff on a financial show participating in the traditional New Year's Predictions game.  He looks into his crystal ball and tells the viewers what 2011 will bring them.




Among hios predictions for 2011: 2011 will bring a collapse of bonds.  "[T]he bull market is bonds is over.  And the mother of all bear markets has begun.  So, stay away from bonds."

Verdict?  *Very false*.   Bonds did very well in 2011.  Here's a source to head of any tiresome rhetoric and pedantary: http://www.google.com/finance?q=tlt

"The Fed will print a lot of money to try to slow down the rise of interest rates.  That's gonna be terrible for the dollar."

There's three predictions wrapped up in these short statements.

1. Interest rates will be rising in 2011.

Verdict?  *False*. Interest rates actually fell, and fell _a lot_, in 2011.  Sources: http://www.treasury.gov/resource-cen...alization.aspx
and http://www.google.com/finance?q=tyx

2. The Fed will try to print a lot of money to stop that.

Verdict?  *False*.  The rise never even happened, and so the Fed never had to do anything in response.

3. 2011 will be terrible for the dollar.

Verdict: *False*.   The dollar index rose in 2011.  Source: http://www.google.com/finance?q=INDEXDJX%3AUSDOLLAR


Peter predicts that "the gold bull market is gonna kick into a higher gear."

Verdict?  *Somewhat False*.  In 2010 gold went up 28%.  In 2011, it went up 10%.  So the bull market kicked, in fact, into a lower gear.  Nevertheless, at least a simple long gold position would have increased, even though his prediction was false.  Source: http://www.kitco.com/charts/historicalgold.html

Peter also predicts that 2011 will be good for emerging markets.  "You want to invest around the world," he said.  Well, did you?

Verdict?  *False*. No, you didn't.  Emerging markets collapsed in 2011.   Typical is VWO, which went from 48 to 38.  Source: http://www.google.com/finance?q=VWO

----------


## Bossobass

> No, the market determines both.  
> 
> The point is, it's the actions of market actors -- human beings -- that determines what the interest rate will be.  The Fed is a group of very powerful human beings.  They have a very big lever with which to mess things up.  But they are not all-powerful and the results of their actions are not always predictable.



It's my opinion that this is the fatal flaw in your position. The Fed's actions not only have created the future of the US (no need to predict), they've exported this model to all of the world's CBs.

Collectively, just since 2007, the major CBs of this planet have increased their balance sheets from $6 trillion to $17 trillion. If you prefer to call this the actions of market actors, I'm not sure what to say to you.

As stock indices soar in the US, corporate earnings have not. This is another part of the manipulation of the market by CB-connected players… "The Fed".

In the past 12 months, for example, 28 of the 30 DOW companies have bought back their shares. As a result, 70% of DOW companies have been able to show better than otherwise increased per-share earnings, skewing their actual earnings reports. That's Market Manipulation more so than a Free Market to anyone with half a brain.

Again, "No one can predict…" is false. The FED and it's pals create the future. As a result, in their collective vaults are the title deeds to every company, building, house and government on this planet.

Peter Schiff is simply predicting the outcome of FED/Gov policy since 2008. Placing an exact date on the outcome is a typical human failing but the prediction is otherwise academic.

The DOW is up 60% in the new millennium. Gold is up 333% over the same period. Why would anyone jump the Schiff, Stockman, Paul, etc ship at this point to board the Titanic because folks like you can't see that they were and continue to be right? Well, that's the human tendency, to jump on the bandwagon. That, of course is a far cry from going in to a forum to sell tickets for a seat on the band wagon, IMO.

Like Joe Kennedy said regarding how he survived the '29 crash; "When the shoeshine boy gave me a stock tip, I knew it was time to get out of the market".

----------


## Madison320

> Here is Peter Schiff on a financial show participating in the traditional New Year's Predictions game.  He looks into his crystal ball and tells the viewers what 2011 will bring them.
> 
> 
> 
> 
> Among hios predictions for 2011: 2011 will bring a collapse of bonds.  "[T]he bull market is bonds is over.  And the mother of all bear markets has begun.  So, stay away from bonds."


Peter Schiff does NOT predict that 2011 will bring a collapse of bonds in that video. You are either a liar or an idiot.

----------


## cubical

> *No, the market determines both.*  If no one wants to loan out money at any price, guess what?  The interest rate becomes infinity.  If no one wants to borrow money at any price guess what?  The interest rate would go to zero, but the government always wants to borrow money so it will go to something somewhat above zero.  Of course, even that could change, in theory.  The government could stop running deficits and either pay back or default on the debt.  Anything could happen.
> 
> The point is, it's the actions of market actors -- human beings -- that determines what the interest rate will be.  The Fed is a group of very powerful human beings.  They have a very big lever with which to mess things up.  But they are not all-powerful and the results of their actions are not always predictable.
> 
>  I don't know about that, but it is my position.  If you want to challenge this wisdom, conventional or not, feel free to do so.


No the fed determines short term rates and has much control over long term rates(UNTIL the market takes over), unless you are saying the fed is part of the market. The fed is the buyer and they buy until rates are where they determine they should be.

----------


## dannno

> *Buy Gold =/= (does not equal) Austrian Economics 
> The Crash is Coming =/= Austrian Economics
> Doom is Imminent =/= Austrian Economics*


Have you ever studied Austrian economics? Are you sure you aren't studying Australian Economics?

----------


## cubical

btw this whole thread is dumb. Yes, Schiff is been wrong on some things, mainly timing. Anyone who is on TV as much as him who is asked to predict things will be wrong. But his thesis has not been disproved and the problems he sees are only getting worse. He was calling for a housing crash since 2002. It didn't happen until 2007.

If the fed is able to shrink its balance sheet and/or the US government returns to a balanced budget and/or the US becomes net exporters, then he really would be wrong. Until then, you just sound ignorant of his position.

----------


## cubical

> Have you ever studied Austrian economics? Are you sure you aren't studying Australian Economics?


Austrian Business Cycle Theory would say we are headed for a bust of great magnitude

http://www.youtube.com/watch?v=5K4Os5eXPw4

----------


## eduardo89

> Here is Peter Schiff on a financial show participating in the traditional New Year's Predictions game.  He looks into his crystal ball and tells the viewers what 2011 will bring them.
> 
> 
> 
> 
> Among hios predictions for 2011: 2011 will bring a collapse of bonds.  "[T]he bull market is bonds is over.  And the mother of all bear markets has begun.  So, stay away from bonds."
> 
> Verdict?  *Very false*.   Bonds did very well in 2011.  Here's a source to head of any tiresome rhetoric and pedantary: http://www.google.com/finance?q=tlt
> 
> ...


Here are his 2013 predictions:

----------


## gwax23

This helmuth_hubener  guy is probably the same guy that runs the youtube channel the "Schittreport." Which is this crazy antischiff youtube channel that never stops talking about Schiff.

----------


## cubical

> This helmuth_hubener  guy is probably the same guy that runs the youtube channel the "Schittreport." Which is this crazy antischiff youtube channel that never stops talking about Schiff.


I believe Schiff mentioned this guy and it was one of the people who was laughing at him on the "Peter Schiff was right" video. I could be wrong though.

----------


## helmuth_hubener

> Peter Schiff does NOT predict that 2011 will bring a collapse of bonds in that video.


 Oh really?  Did I somehow get very confused?  The woman asks for his three top trades of 2011, 3 trades, walk us through.  Peter walks us through, saying the following: "[T]he bull market is bonds is over. And the mother of all bear markets has begun. So, stay away from bonds."  The mother of all bear markets sounds like a really big bear market.  It sounds really bad, to me.  It's hard for me to imagine a _more_ melodramatic way for him to phrase it, such to get through people's thick skulls to "WAKE UP!  Get out of the bond market yesterday!  It's going to be a bloodbath!"  But apparently he was not over-the-top enough for you to get the message he wanted you to get?  Hard to believe.  Maybe just listen to it again.  In 2011, Peter wanted you to sell your bonds.  I hope you didn't!  Because in 2011, bonds rocketed up very, very strongly.

Anyway, he was wrong.  In December of 2010 *The Mother of All Bear Markets(TM)* had, in fact, _not_ begun.  Rather, they were about to have one of the best, most successful years ever _in the entire history of US Bonds!_




> You are either a liar or an idiot.


 Now, now, no need to be testy!

----------


## helmuth_hubener

> Have you ever studied Austrian economics? Are you sure you aren't studying Australian Economics?


 Dannno, Dannno, Dannno, thank you for proving my point.

As we can see, this is a big problem.  Not only does Dannno think that Austrian Economics teaches us that we should buy gold, because the crash is coming any day now, and doom is imminent, he thinks it's ludicrous that anyone would think otherwise.  I think there are many others like him.  I fear that the populace in general, to the extent that they have any awareness of the existence of Austrian Economics, likely has the same kind of impression.  "Oh, Austrians, they're the gold bugs who think the stock market will crash this year and the dollar will be toilet paper by 2015."

This is, however, not the case, as everyone familiar with Austrianism of course knows.

----------


## helmuth_hubener

> btw this whole thread is dumb.


 Now, now!  I think you actually secretly agree with me that Schiff is wrong.  After all, you have 100% of your 401k in a US Stock Index Fund.  Mr. Schiff would not approve.  Get out of the dollar, cubical!  Put it all in Indonesia!

Right?

Hmm, maybe _not_ right, huh?

----------


## cubical

> Now, now!  I think you actually secretly agree with me that Schiff is wrong.  After all, you have 100% of your 401k in a US Stock Index Fund.  Mr. Schiff would not approve.  Get out of the dollar, cubical!  Put it all in Indonesia!
> 
> Right?
> 
> Hmm, maybe _not_ right, huh?


I have said he was wrong many times. Why would it be a secret? He has also been very right too.

I only put into 401k because of the match and I do the US fund because of low fees and tax free divs. If I could take that in cash and buy physical gold, I would.

----------


## helmuth_hubener

> I have said he was wrong many times. Why would it be a secret? He has also been very right too.


 Well, there we go.  That's my exact position, as well, regarding the accuracy of his predictions.  We agreed all along and just didn't know it!

I set out in the OP two additional "layers of wrongness" that I believe Peter has.  I wonder if you agree with them as well?

----------


## helmuth_hubener

> Here are his 2013 predictions:


Thanks, Eduardo!

There, he makes only two predictions:

*1. The dollar "could come down lot in 2013."  Also, "You've gotta get out of U.S. Dollars."*

This is a nice, cushy prediction, because it's actually not a prediction at all.  Yes, it _could_ come down.  That is unavoidably true.

But let's pretend he predicted that the dollar would come down, since that's clearly the impression he was trying to give without going to the risk of sticking his neck out and actually saying it.

Verdict?  *False*.  The dollar is up this year, by 5.78% in the Dow Jones FXCM Index.

*Emerging markets will be good.  He mentions specifically SE Asia, Indonesia, Mexico, and "exotic places."*

Verdict?  *It depends.*  It will depend which emerging market fund (or individual stocks) you were in.  VWO is down 6.85% YTD.  But iShares EEM fund is up 0.84%.

----------


## Madison320

> Oh really?  Did I somehow get very confused?  The woman asks for his three top trades of 2011, 3 trades, walk us through.  Peter walks us through, saying the following: "[T]he bull market is bonds is over. And the mother of all bear markets has begun. So, stay away from bonds."  The mother of all bear markets sounds like a really big bear market.  It sounds really bad, to me.  It's hard for me to imagine a _more_ melodramatic way for him to phrase it, such to get through people's thick skulls to "WAKE UP!  Get out of the bond market yesterday!  It's going to be a bloodbath!"  But apparently he was not over-the-top enough for you to get the message he wanted you to get?  Hard to believe.  Maybe just listen to it again.  In 2011, Peter wanted you to sell your bonds.  I hope you didn't!  Because in 2011, bonds rocketed up very, very strongly.
> 
> Anyway, he was wrong.  In December of 2010 *The Mother of All Bear Markets(TM)* had, in fact, _not_ begun.  Rather, they were about to have one of the best, most successful years ever _in the entire history of US Bonds!_
> 
>  Now, now, no need to be testy!






4:50 into the video: "The real US collapse wasn't in 2008, it might happen in 2011 or 2012.

You said he predicts bonds will collapse in 2011 in this video. Again, you are either a liar or an idiot.

----------


## helmuth_hubener

> [video=youtube;t3ZnJL7DLSE] Again, you are either a liar or an idiot.


 Thank you for your constructive feedback!  I will take it into consideration.

----------


## helmuth_hubener

> No the fed determines short term rates and has much control over long term rates(UNTIL the market takes over), unless you are saying the fed is part of the market. The fed is the buyer and they buy until rates are where they determine they should be.


The Federal Reserve does not determine the interest rate, neither short-term nor long-term.  Supply and demand determines the interest rate.  As Austrian Economists, we believe in supply and demand.  The Federal Reserve can distort the interest rate greatly, but it does not control it.

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## helmuth_hubener

> Austrian Business Cycle Theory would say we are headed for a bust of great magnitude


 Mmm.... somewhat true.  But this is not really useful information from an investing perspective.  There is no way to profit from this information.

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## schiffheadbaby

> Mmm.... somewhat true.  But this is not really useful information from an investing perspective.  There is no way to profit from this information.


Must be a shill helmuth.  The Fed can at some point create limitless money to buy bonds, thus setting the curve.  

I can't believe you think there is a free market in interest rates

----------


## helmuth_hubener

> Must be a shill helmuth.


 For whom, exactly, am I shilling?  That is what I'd like to know.




> The Fed can at some point create limitless money to buy bonds, thus setting the curve.  I can't believe you think there is a free market in interest rates


 Believe it, baby!  Let's parse things through:

"The Fed can at some point create limitless money."

That is true.  There is no theoretical limit as to how much money the Federal Reserve can create.  There are many reasons to believe they will go on creating more and more.  At the same time, there are some reasons for them to not want to create hyperinflation.  Can you accurately predict the actions of the Federal Reserve?  Just because they _can_ do something, do you know that they _will_?  Even if you think you do know that they will, do you know _when_?  I sure can't predict that.  I submit to you that no one can _reliably_ predict that.  Such predictions will usually be wrong.  Wrong predictions followed, in investment, means lots of money lost.  Losing lots of money means flushing the products of years and years of your life down the drain.  So this is not just an academic point.  This thread is not a high-faluting excercise.  These flawed ideas have real, solid, and sometimes disastrous consequences.  *You do not know what the Fed is going to do.*  Believe it.  Internalize it.  Understand the consequences.

"to buy bonds, thus setting the curve."

The Fed has multiple tools in its toolkit, and yes, creating money and then using that money to buy US Treasury bonds is one of them.  Does that mean they can "set" the interest rate?  Not hardly!  The US Federal Government debt is of tremendous size.  It is staggering.  It is collossal.  But even so, it actually is only a relatively small part of the total amount of debt in the US economy: around 11% right now. (Source.  See line 3 on page 2)  There are a lot of people borrowing a lot of money, and a lot of people lending them that money.  All the actions and choices of all those people are somewhat unpredictable.  All the actions and choices of all those people are what we call "the market."  The market is bigger than the Fed, and bigger than the US Government.  The market is bigger than any of us.

"I can't believe you think there is a free market in interest rates"

And yes, all the actions and choices of all those borrowers and lenders are what sets the price of borrowing.  The price of borrowing is also called the "interest rate."  So there you have it!  The market sets the interest rate.

This is, of course, a very different statement than the belief you attribute to me.  Just because there is a market does not mean that it is a *free* market.  Indeed, I do not think there exists within the jurisdiction of the United States any _free_ market in anything.  The interest rate market is no exception.

Economics often requires very careful, methodical thinking in order to reach a correct understanding.

----------


## helmuth_hubener

*More WRONG!!!! Predictions*

From May 30, 2008:

US News: How about some predictions? 

Schiff: I think the stock market is headed lower. Gold is going to be $1,200 to $1,500 by the end of the year. That puts the Dow at a less-than-10-to-1 price ratio to gold.

At a minimum, the dollar will lose another 40 to 50 percent of its value. [in context, "this year" is implied]

-- http://money.usnews.com/money/person...cenario?page=2
Verdict on Gold?  *False.*  Gold was around $875 when Peter wrote this.  At the end of 2008, it was $869.75.  Or, if you want to interpret the statement differently, gold was at $975.50 the following May 29th.

Verdict on the stock market?  *True.*  He finally got one right!  However, strangely, this was the time when he probably sounded the most bullish on the US stock market he ever has in his life.  He is usually not one to add qualifiers like "I think".  And "headed lower" is hardly a typical Schiffism.  What's very clear is that he _didn't_ think that it was going to fall _dramatically_ lower.  The Dow was at 12,638.62 on May 30, 2008.  And indeed, if gold had gone up to $1,200 as he predicted that would have been a 10-to-1 ratio -- _if_ the Dow stayed at roughly 12,000.  In other words, he is predicting that while gold will go up a lot, the Dow will go down only a little bit.  This is remarkable for Peter!  And, as is so typical with such things, the one time when he softened his bearish message (for just a moment!) is the one time when he would have been right in predicting a bloodbath!   The Dow didn't go down a little bit to 12,000.  No, it collapsed collosally.  A year later, the Dow would be at just 8,500, and that would be up from a bottom of 6,600 a couple months earlier!  Why, oh why, Peter, why?  Why couldn't you have been predicting a massive decline coming in the very short term for US stocks _in May, 2008_, right before it crashed by 40%?  Like you had every other year in your career?  Ah well, like I say, this is what happens with market gurus.  They'll be making the right calls but at the wrong time, right up until that right time finally comes, at which point they'll switch to the wrong call.  Really his call for the stock market, to 'I think, maybe, head slightly lower' is so weak and so failed to predict the massive coming collapse, I should weaken the verdict to only somewhat true.  But, we'll give him the benefit of the doubt.  At least he did say it would go down, and it went down.

Verdict on the Dollar?  *False, of course.*

----------


## dannno

You're right, we don't know what the Fed is going to do and when... but we do have a pretty good idea of what they are NOT going to do.

Secondly, I'm wondering if you understand the concept of "exporting inflation" and what that could mean to us some day.

----------


## helmuth_hubener

> You're right, we don't know what the Fed is going to do and when... but we do have a pretty good idea of what they are NOT going to do.


  Oh really?  Could you tell me what that is?




> Secondly, I'm wondering if you understand the concept of "exporting inflation" and what that could mean to us some day.


 I understand many concepts.  This is one of them.  Yes, being the number 1 money in the world and enjoying a rising popularity worldwide has mitigated inflation problems for the US dollar.

----------


## helmuth_hubener

Getting back to the real, more fundamental reasons Peter Schiff is wrong, which go far beyond mistaken predictions, here are some quotes from the same interview:

US News: Say something positive about the U.S. economy. 
Peter Schiff: There's nothing good to say about our situation.
Really?  Seriously?  Is he living in an alternative fairy land?  Having such an arrogant, distorted, no scratch that: *blind* view of the world makes your perspective worth very little.  The real world has subtlety.  It has variety.  If you are looking at a world in which there is literally nothing good about the US economy, you are looking at a world of your own imagining, your own creation.  And because you have no humility nor introspection whatsoever, anything that seems to contradict your ideas, to intrude into your fantasy world, that is tossed aside or explained away.

US News: What are your best or worst calls through this downturn? 
Peter Schiff: I've been bearish on bonds. U.S. bonds have lost a lot of real value but not nominal value. I still think that's going to be proven to be correct. While the housing bubble was inflating, I was telling people to rent. I was telling people to get out of tech stocks in 1998 and 1999. They kept rising, but then they collapsed, and I turned out to be right. The reality is I don't think I've been wrong on anything.
He seriously thinks he has not been wrong on anything.  This arrogance, this utter delusion, this inability to reflect, this inability to learn, is the fundamental reason why Peter Schiff is wrong.

----------


## dannno

> Oh really?  Could you tell me what that is?


Stop inflating the currency.





> I understand many concepts.  This is one of them.  Yes, being the number 1 money in the world and enjoying a rising popularity worldwide has mitigated inflation problems for the US dollar.


You don't fully understand the concept if you don't see a problem occurring in the future.

----------


## helmuth_hubener

> Stop inflating the currency.


 I actually think that they could do that, even in a literal sense.  They could actually stop all monetary inflation; they could stop creating any additional money.  It is highly unlikely, but it is possible.  It is much more likely that they could inflate relatively moderately for many years and even decades to come, which could result in the effect of very negligible price inflation or sometimes in slight deflation.  Of course, alternatively, even this moderate rate of monetary inflation could instead result in a very high rate of price inflation if people lost confidence in the dollar.  In fact, if people lose confidence in the dollar the Fed could even deflate the money supply and we still could have high inflation, even hyperinflation! Think of that!  Hyperinflation going on at the very same time that the Fed is causing fewer and fewer dollars to be in existence!  It could happen.  Fiat money is a fragile thing.  The Fed really doesn't control what happens with it.  That is in the hands of the people who use it and trust it.  _Or don't._




> You don't fully understand the concept if you don't see a problem occurring in the future.


 Dannno, I've explained this several times, and I'm sure it's obvious to most of the readers of the thread by now, but once again for old times sake: I do see _the possibility_ of a problem.  I think that the dire forcasts of Peter Schiff could come true, someday.  The dollar _could_ collapse.  Oil prices _could_ skyrocket.  There _could_ be civil unrest in the streets.  But you know, in addition I also see a possibility that Peter Schiff cannot see, refuses to see: the possibility that he is wrong.

It's also very possible that none of those things will happen, or if they do happen, it may not be for a very long time.  Doug Casey, another Austrian (brilliant and interesting, but with a misguided investment philosophy), wrote a book in 1980 called _Crisis Investing: Opportunities and Profits in the Coming Great Depression_.  And maybe that Great Depression was indeed coming.  Is still coming.  But do you want to wait for another 33 years for it, losing more and more of your life savings the whole time?

----------


## Danke

> Peter Schiff was wrong, wrong, wrong.  On so many levels he was wrong.  And he still is wrong.
> 
> I, like him, subscribe to Austrian Economics.  I agree with his libertarian political views.  But when he has given investment advice, he has been horribly, horribly wrong.  Reasons:
> 
> 1) Even when he has been right (and if you are a permanent bear, you inevitably get to be right on occasion, when the stock market goes down) those who followed his advice, either by buying overseas stocks and precious metals directly, or *by buying into Schiff's EuroPacific Capital fund* would have still lost money!
> 2) But, usually you don't have to worry about 1), because his predictions have rarely been right.
> 3) On the most fundamental level, he is horribly wrong because he is trying to predict the future at all.  He is teling people that they should base their investment decisions on his foreknowledge of the future.  But actually, he has no such foreknowledge.  So even if he _wasn't_ usually wrong in his predictions, and even if he _hadn't_ managed to still lose money even when he was right, he still would be following a fundamentally flawed methodology.  This methodology is called "Fortune Telling".
> 
> Schiff's antics on TV are entertaining.  But *his advice is not wise.*  I hope no one on RPF is taking investment cues from Peter Schiff.


My Dad is up 72% in ~4 years with EuroPacific.

----------


## helmuth_hubener

> My Dad is up 72% in ~4 years with EuroPacific.


 Right, and I congratulated you on that.  Do you think that this gain means that Peterr Schiff's investment advice is wise?

_You_ were wise to have your dad enter when he did.  Or lucky, whichever you want to think of it as.  But it was you, not Schiff.  Schiff's funds registered catastrophic losses in the two years before that.  Absolutely catastrophic.  _You_ didn't have to take those losses and then climb back out.  Lucky you.  But Peter and his longer-time investors were not so lucky.

Lucky one day, unlucky the next.  The last time Peter was right, it was a bloodbath for his investors.  You'd better hope he isn't right _again_.

----------


## Danke

> Right, and I congratulated you on that.  Do you think that this gain means that Peterr Schiff's investment advice is wise?
> 
> _You_ were wise to have your dad enter when he did.  Or lucky, whichever you want to think of it as.  But it was you, not Schiff.  Schiff's funds registered catastrophic losses in the two years before that.  Absolutely catastrophic.  _You_ didn't have to take those losses and then climb back out.  Lucky you.  But Peter and his longer-time investors were not so lucky.
> 
> Lucky one day, unlucky the next.  The last time Peter was right, it was a bloodbath for his investors.  You'd better hope he isn't right _again_.


The investment did go down, but it was short lived.

----------


## dannno

> The investment did go down, but it was short lived.


Just about everything went down if I recall...

Schiff got a lot of his customers in the early 2000's after the dot come crash when gold was around $300 or $400. I'm sure they are just devastated.

----------


## helmuth_hubener

> Just about everything went down if I recall...


 Yes, and Peter _knew_ the crash was coming! He was finally proven right (after many years of waiting)!  *Vindication!*  Sweet, sweet vindication.  And yet.... wait, there's something wrong.  What's happening?  My portfolio is losing tons of money?!?  What!?!?!?!

Like I said: *you'd better hope Peter isn't right again if you have money with him.*  The times when he is right is when he loses his clients tons of money.  Whereas the times when he is wrong, such as now, his investments seem to do alright (though not necessarily as well as the market overall).

It takes a special kind of talent to correctly predict a collapse, yet fail to position yourself and your clients correctly so that they can profit from the correct prediction.  Not only that, not only do they not profit, they experience catastrophic losses of 50%, 60%, and even 70%.  They lose even more than the people who simply stayed in the stock market and experienced the collapse!  So, here's the situation: you know the collapse is coming, you predict the collapse, but rather than protecting your clients from it, you cause their investments to collapse even more horribly than those of the public in general (who only saw a 40% or so loss, which is still catastrophic)!




> Schiff got a lot of his customers in the early 2000's after the dot come crash when gold was around $300 or $400. I'm sure they are just devastated.


 I am sure they are happy that the very small percentage of their portfolio that is in gold has gone up.  I'm sure they are sad about other components which have gone down.  I am sure many of them got out after experiencing 72% losses and other similar numbers and thus missed out on the rebound which Danke's dad is now experiencing.  A lot of investing is psychology.  Huge volatility is simply killer and virtually no investors can survive it.  That's why having a 4X25 Permanent Portfolio is so important.  It smooths out the volatility.  Following "gurus" like Schiff will lose you the money you worked so hard your whole life to save.

----------


## dannno

Peter puts his clients in positions that will earn them the most in the longrun, not the shortrun. 

Peter would have had to tell his clients to buy dollars in order to best survive the 2008 crash in the shortrun, and that is using hindsight. That would have meant changing their entire strategy temporarily to resolve what amounts to poor information in the market. The market believed that the dollar was sustainable in the longterm. The market also believed that the Nasdaq was sustainable in 1999.

Peter doesn't time markets, he invests for the longterm. You really have no understanding of the strategy and are acting like a CEO who is just trying to get their quarterly profits the highest. That might be good for this quarter and the next quarter, but soon they will end up getting $#@!ed. 

It doesn't matter when a client goes with Europac, in the end then will be doing better than just about anybody else.

----------


## helmuth_hubener

> Peter puts his clients in positions that will earn them the most in the longrun, not the shortrun.


I have told you what Peter has actually done, for real, live clients who experienced it: he had sub-standard returns for years, and then *lost them the majority of their life savings* in 2007 and 2008.  Then he went back to having fine (though not thrilling) returns from 2009 to present.  

You have told me that Peter's clients will earn the most in the long run.

My statement is a recounting of empirical facts, about real, actual events, which you can look up and confirm.  Your statement is a forecast of future events which have not yet occurred.  Indeed, your position seems more and more to be entirely a faith-based one.  It is just a religious belief that you have, based solely on faith, and thus cut off from rational scintific discourse.

Tell me this, dannno: *Just how long is this "longrun" you speak of?*  Are the clients going to be dead by the time it gets here?  What do you think about Casey's 1980 book?  Let me tell you, all the arguments that Peter makes, all the reasons that the collapse of the dollar is so inevitable, all of them were just as true in 1980!  There was nothing backing the dollar!  It was worthless!  Etc., etc.  We are now 33 years later.  Anyone who believed that "Doug Casey is Right" and faithfully followed his advice did not, in fact, ever end up profiting from the Coming Great Depression.  Instead, by now they have likely died, poorer than when they started their course of discipleship.

Now that doesn't prove the religion wrong.  I get it: it's a faith thing.  But it does mean that those who want to actually protect and enjoy their money _in this mortal realm_ (not the distant, ever-coming longrun) should perhaps look elsewhere for answers.

----------


## WillieKamm

> Peter in 2007 and 2008 repeatedly predicted that hyperinflation of the US dollar was imminent.  But it wasn't.  Here is just one example of a typical quote from Peter:
> 
> _The whole idea is to get out of the US Dollar. It is on the verge of collapse. The people who don't get out of the US dollar are going to be completely broke and that is obvious. Look at what Ben Bernanke did. Interest rates are zero. Money is free.
> 
> Bernanke is going to run up printing presses as fast as he can. This is pure inflation Latin American style. This is hyperinflation; this is Zimbabwe; this is the identical monetary policy of the Weimar Republic.
> 
> I am just as convinced that people who have their money in US dollars are going to be just as broke as people who have their money with Madoff.
> 
> I do not know how much time you have. With the dollar dropping 5% a week at this point, could it snap back? But what if it keeps falling? What if it's down 5% next week? And 5% the week after that? And then what if it drops 10%? and another 10%? At some point a year from now the dollar could be dropping 5% a day.
> ...


 Exactly. I quit listening to him a long time ago. He still has a lot of support on this site. I am uncomfortable with rigid dogmatic thinking no matter where it comes from. The Weimar/Zimbabwe scenario is not panning out, nor is it likely to any time soon.

----------


## dannno

> The Weimar/Zimbabwe scenario is not panning out, nor is it likely to any time soon.


How would you know if most of our inflation is being exported?

----------


## helmuth_hubener

OK, in the ongoing effort to make this thread the compendium of all things Peter-Schiff-Wrongness, here is a Wall Street Journal article about his follies:

*Right Forecast by Schiff, Wrong Plan?*

Peter Schiff predicted a collapse of the U.S. financial system. The bust-up he didnt foresee was the one that made mincemeat of investors who took his advice in 2008.

Mr. Schiffs Darien, Conn., broker-dealer firm, Euro Pacific Capital Inc., advised its clients to bet that the dollar would weaken significantly and that foreign stocks would outpace their U.S. peers. Instead, the dollar advanced against most currencies, magnifying the losses from foreign stocks Mr. Schiff steered his investors into.

Investors open accounts at Euro Pacific to take advantage of Mr. Schiffs investment advice, which generally involves shunning investments in dollars. Individual returns can vary. Some investors may like gold-mining stocks, while others prefer energy-focused stocks.

Most had one thing in common last year: heavy losses. A number of investors said their Euro Pacific portfolios lost 50% or more in 2008, worse than the 38% drop in the Standard & Poors 500-stock index last year. People familiar with the firm say that hardly any securities recommended by Euro Pacific brokers gained ground in 2008.

Such losses came as something of a surprise. Mr. Schiffs prescient call for the collapse of the U.S. housing market and the weakening of the financial system helped him gain fame as an economic guru and savvy investor who promised shelter from the financial storm.

In his 2007 book, Crash Proof: How to Profit from the Coming Economic Collapse, he recommends that investors pile into gold, commodities and overseas stocks that spit out steady dividends.

When global markets were soaring, many Euro Pacific investors' accounts experienced strong performance. For several years, investors saw returns in excess of 20% a year as foreign stocks and commodities surged, according to people familiar with the firm.

In 2008, investors nervous about the state of the U.S. economy who were impressed by Mr. Schiff's track record poured money into Euro Pacific, nearly doubling the number of accounts to 16,000. But many did so at the worst time possible, much like investors who piled into Internet stocks as the dot-com bubble peaked.

Mr. Schiff, 45 years old, says the downturn in his strategy is a short-term setback. He argues that it is only a matter of time before the dollar collapses, pressured by massive government bailouts, triggering outsize returns for his investors.
Another relevant quote:

Critics say Mr. Schiff's strategy is much riskier and more aggressive than many investors realize. David Yeske, managing director of Yeske Buie, a Vienna, Va., money manager, says Mr. Schiff's investment strategy was a focused bet on a single outcome, rather than risk management for investors looking to protect assets from an economic collapse. "He's a speculator; he thinks he can see the future," says Mr. Yeske, former chairman of the Financial Planning Association. "That's not really risk control."

One of Mr. Schiff's biggest forecasts was that many overseas economies would "decouple" from the U.S., gaining strength even as the American economy struggled. Instead, overseas stock markets plunged as much or more than U.S. stocks in 2008 as the global economy skidded. Prices for commodities also tanked, torpedoing another favorite investment theme of Mr. Schiff's. After last year's losses, his firm has about $845 million in assets.

Early last year, Richard De Gennaro, a retired Harvard University librarian, put $100,000, about 15% of his assets, into a Euro Pacific account that included Canadian Oil Sands Trust, which focuses on crude-oil projects in Canada, and the India Capital Growth Fund, which holds investments in companies that do business in India.

Both investments took big hits in 2008, compounded by the fact that the Canadian dollar and the Indian rupee fell 18% and 19%, respectively, against the U.S. dollar. The 83-year-old retiree's account is now worth about $37,000, a 63% plunge. Mr. Schiff "goes around saying that he was right," says Mr. De Gennaro. "He was right about one thing and wrong about everything else."

Among investors who turned to Mr. Schiff's firm just as his strategy began to falter, Brian Kullberg, a design engineer in Portland, Ore., says he started to worry about the state of the U.S. economy in early 2008. He put $70,000 into a Euro Pacific account, hoping it would benefit as the U.S. economy and the dollar weakened. By late January 2009, his investment had shrunk to about $25,000.

"It's curious," says one longtime client of Mr. Schiff's who works in finance. "His thesis of how things are going to collapse and crumble and fall apart isn't effectively executed in [my] account." The account, which is largely invested in gold, mining and infrastructure stocks from Canada to Australia, was down roughly 35% last year, the client estimates. The Australian dollar weakened 19% against the U.S. dollar in 2008.
-- http://www.creditwritedowns.com/2009...rong-plan.html

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## helmuth_hubener

Here is a juicy prediction that Peter served up in 2012:

*Peter Schiff: Market-Crushing Treasury Collapse To Hit Around 2013*

http://www.forbes.com/sites/afonteve...t-around-2013/

Hmm, didn't seem to happen.  Wrong again.  No big deal.  Mr. Schiff cannot predict the future.  Neither can I.

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## dannno

That article in #175 is from 2009.. I heard Schiff talk about that stuff a long time ago, I don't remember the details but that was not your average account that was down 50%, those were just a few extreme cases and I think he even found out that those people had deviated from his investment advice and I wouldn't be surprised if they were frauds.

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## dannno

> Here is a juicy prediction that Peter served up in 2012:
> 
> *Peter Schiff: Market-Crushing Treasury Collapse To Hit Around 2013*
> 
> http://www.forbes.com/sites/afonteve...t-around-2013/
> 
> Hmm, didn't seem to happen.  Wrong again.  No big deal.  Mr. Schiff cannot predict the future.  Neither can I.


Why are you being so obtusely dishonest? He said "around 2013". Do you know what the word "around" means? That could happen in a year or two and it would be within bounds. Even if it was in 3 years, is anybody else predicting the god damn treasuries are going to collapse??

----------


## helmuth_hubener

> Why are you being so obtusely dishonest? He said "around 2013". Do you know what the word "around" means? That could happen in a year or two and it would be within bounds. Even if it was in 3 years, is anybody else predicting the god damn treasuries are going to collapse??


Don't get worked up, dannno.  I understand that religion can be a very emotional subject.  I am trying to handle it as sensitively as I can while still being loyal to the truth.  I would recommend you simply no longer read my posts on this thread.  Destroying anyone's faith is the last thing I would want to do.

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## helmuth_hubener

> is anybody else predicting treasuries are going to collapse??


Actually: *yes*.  Most definitely yes.  It is, in fact, the consensus in the investment world that treasuries are overpriced and have nowhere to go but down, because interest rates have nowhere to go but up.

Of course, they've been saying this for the greater part of the last 30 years.  Interest rates always have nowhere to go but up.  But then, surprise!, they go down.

So yes, in this case Peter Schiff is very much in line with the conventional wisdom, the mainstream.  He takes a little more of a melodramatic angle on it, but other than that, he and everyone else on CNBC is on the very same page in regards to the prospects for bonds.

But actually: they don't know.  None of them know.  They are all totally in the dark.  It can be disconcerting to realize that all humanity is in the dark together; that none of us know the future.  But I think it's best to accept that as the reality -- indeed to embrace it.  And then to move forward, into the black.

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## helmuth_hubener

> Exactly. I quit listening to him a long time ago. He still has a lot of support on this site. I am uncomfortable with rigid dogmatic thinking no matter where it comes from. The Weimar/Zimbabwe scenario is not panning out, nor is it likely to any time soon.


 Words of wisdom, WillieKamm, words of wisdom.

Guys, here is an important lesson (in my humble opinion) that I would love for you to get from this thread:
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Politics <<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<        |||      >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>  Investments
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|||Do you see that big triple-thick wall between them?  That is the wall of separation that should exist between your politics and your investments.  *Your investments are there to preserve and grow your wealth.*  They are not a means of expressing your political views.  If that's what you're using them for, you're using a soldering iron for a drill-press' job.  It's the wrong tool.  You may think that the Federal Reserve is a horrible idea.  Great.  So do I.  You may think that creating tons of money by fiat is very, very dangerous and makes inflation more likely.  Great.  So do I.  So does Peter Schiff.  But our opinion about these things doesn't affect the market.  It just doesn't.  The market doesn't actually care about what I think.  Neither does it care what you think or predict.  It doesn't even care about what Peter Schiff thinks and foolishly predicts.

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## DFF

This thread sounds like some troll bull$#@! Mike Norman would write. 

Anyway, the only year Schiff has been "wrong" about gold has been last year in 2013. 

But looking back from 1999, Peter is still quite correct regarding precious metals.

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## GunnyFreedom

> Peter in 2007 and 2008 repeatedly predicted that hyperinflation of the US dollar was imminent.  But it wasn't.  Here is just one example of a typical quote from Peter:
> 
> _The whole idea is to get out of the US Dollar. It is on the verge of collapse. The people who don't get out of the US dollar are going to be completely broke and that is obvious. Look at what Ben Bernanke did. Interest rates are zero. Money is free.
> 
> Bernanke is going to run up printing presses as fast as he can. This is pure inflation Latin American style. This is hyperinflation; this is Zimbabwe; this is the identical monetary policy of the Weimar Republic.
> 
> I am just as convinced that people who have their money in US dollars are going to be just as broke as people who have their money with Madoff.
> 
> I do not know how much time you have. With the dollar dropping 5% a week at this point, could it snap back? But what if it keeps falling? What if it's down 5% next week? And 5% the week after that? And then what if it drops 10%? and another 10%? At some point a year from now the dollar could be dropping 5% a day.
> ...


Ehh, I agree Schiff was a little overzealous and a bit quick on the draw, but I don't think the word 'imminent' really means what you think it means.  Something can be 'imminent' for 10 years before it finally happens.  Imminent is a description of 'nearness' rather than 'soonness.'  Something that is imminent can happen tomorrow or in 50 years.  Something can happen 'at any moment,' and remain in that position for decades, and the entire time it is still 'imminent.'

Indeed, the collapse of the US Dollar _is_ imminent, as all it will take is abandonment of the petrodollar.  One nation like Saudi Arabia starts walking away from the petrodollar and the US Dollar starts the death spiral that very day.  Now, Saudi Arabia could stay with the petrodollar for another 20 years (I doubt it, but it could) or they could walk away tomorrow.  Therefore, whether tomorrow or 20 years it's only a single action away.  Thus it is 'imminent.'

To give an example of imminent used correctly, the return of Jesus Christ has been _imminent_ for 1984 years now.  It could happen tomorrow, or it could happen 1000 years from now.  It's been that way for nearly 2000 years.

Just because something is imminent does not mean it's going to happen soon, it simple means something is on the verge of happening.  It can remain 'on the verge' for a very, very long time.

Just to clarify, I am not posting to defend Schiff, I am posting to defend the English language.

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## helmuth_hubener

> Just to clarify, I am not posting to defend Schiff, I am posting to defend the English language.


 Very well.  Understood.  I always appreciate Stalwart Defenders of the English language.  Since you chimed in, though, might I ask: how would one go about making good investment decisions based on such an "imminence"?  Do you have any proposals of actions one ought to take?

It seems like someone coming bringing "insider information" of such imminent happenings, even if they are totally right, is bringing information which is useless from an investment perspective.  It is non-actionable.  It is not valuable.  Someone in 1600 comes to you and tells you the Second Coming is imminent.  OK..... so should I be long on herring or short?  The information is valuable spiritually, but it is not valuable for your investment strategy.

But, like I say, I welcome any ideas you might have.  I certainly may have missed something, and indeed _probably_ have!

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## helmuth_hubener

> This thread sounds like some troll bull$#@! Mike Norman would write. 
> 
> Anyway, the only year Schiff has been "wrong" about gold has been last year in 2013. 
> 
> But looking back from 1999, Peter is still quite correct regarding precious metals.


And the only year that Pick-Your-Commentator who is perpetually long on stocks was wrong about stocks was 2008.  Looking back all the way to 2002, Commentator was and still is quite correct regarding the stock market.

Right?  Would you agree with me, DFF?  I think you have to agree, this is a fair parallel to draw, is it not?

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## GunnyFreedom

> Very well.  Understood.  I always appreciate Stalwart Defenders of the English language.  Since you chimed in, though, might I ask: how would one go about making good investment decisions based on such an "imminence"?  Do you have any proposals of actions one ought to take?
> 
> It seems like someone coming bringing "insider information" of such imminent happenings, even if they are totally right, is bringing information which is useless from an investment perspective.  It is non-actionable.  It is not valuable.  Someone in 1600 comes to you and tells you the Second Coming is imminent.  OK..... so should I be long on herring or short?  The information is valuable spiritually, but it is not valuable for your investment strategy.
> 
> But, like I say, I welcome any ideas you might have.  I certainly may have missed something, and indeed _probably_ have!


Well, the imminence of a US Dollar crisis is certainly useless from a day-trading perspective.  I'd even go further and say that it's mostly useless for forming an overall investment strategy.  However, what it does inform is the importance of hedging.  If you know that the Dollar could collapse anywhere from tomorrow to 30 years from now, then you would put more investment energy into hedges against a Dollar implosion than you would if such a crisis were not imminent.  Instead of putting 5-10% of your investment into hedges, this knowledge might cause you to put 15-20% of your investment into hedges.

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## helmuth_hubener

> However, what it does inform is the importance of hedging.


 I'd like to talk more about this.  Feel free to elaborate.  What do you mean by hedging?  Not everyone may have heard of the concept.  And those of us who have may all have quite different thoughts about what the term means to us.




> If you know that the Dollar *could collapse* anywhere from tomorrow to 30 years from now, then you would put more investment energy into hedges against a Dollar implosion than you would if such a crisis were *not imminent*.


 Ahh, but the opposite of "could" is not "not imminent".  The opposite of "could" is "could not".  Right?




> Instead of putting 5-10% of your investment into hedges, this knowledge might cause you to put 15-20% of your investment into hedges.


 Why these percentages?

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## GunnyFreedom

> I'd like to talk more about this.  Feel free to elaborate.  What do you mean by hedging?  Not everyone may have heard of the concept.  And those of us who have may all have quite different thoughts about what the term means to us.


http://www.investopedia.com/terms/h/hedge.asp

Definition of 'Hedge'

Making an investment to reduce the risk of adverse price movements in an asset. Normally, a hedge consists of taking an offsetting position in a related security, such as a futures contract.

Investopedia explains 'Hedge'

An example of a hedge would be if you owned a stock, then sold a futures contract stating that you will sell your stock at a set price, therefore avoiding market fluctuations. 

Investors use this strategy when they are unsure of what the market will do. A perfect hedge reduces your risk to nothing (except for the cost of the hedge).



> Ahh, but the opposite of "could" is not "not imminent".  The opposite of "could" is "could not".  Right?


huh?




> Why these percentages?


Arbitrary, determined by your own portfolio philosophy.

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## dannno

> Words of wisdom, WillieKamm, words of wisdom.
> 
> Guys, here is an important lesson (in my humble opinion) that I would love for you to get from this thread:
> |||
> |||
> |||
> |||
> |||
> |||
> ...


If that is the case then said person should change their political views because they would then essentially be admitting that they are wrong.

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## helmuth_hubener

> http://www.investopedia.com/terms/h/hedge.asp
> 
> 
> 
> 
>  Originally Posted by Investopedia
> 
> 
> Definition of 'Hedge'
> ...


 Gunny, I was more asking for your personal thoughts about "hedging."  What does it mean _to you?_  Why would a guy do it?  And how?  Do you do it?  Would you recommend it?  How would you explain it to a buddy in a bar?




> huh?


 You say that one possibility is that the dollar *could* collapse.  The other, opposite possibility would be that the dollar *could not* collapse.  Am I wrong?






> Arbitrary, determined by your own portfolio philosophy.


 Exactly what component of the philosophy determines this variable?  To put it in programming terms: on what is it dependent?

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## helmuth_hubener

> If that is the case then said person should change their political views because they would then essentially be admitting that they are wrong.


Sigh.

If anyone _besides_ dannno agrees with this statement of dannno's, please chime in with your agreement and I will bother to discuss why I disagree.

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## Danke

> Sigh.
> 
> If anyone _besides_ dannno agrees with this statement of dannno's, please chime in with your agreement and I will bother to discuss why I disagree.


helmuth_hubener, I know you think you are Uber smart WRT investing.  But sadly, the market is manipulated.  That is why some of us don't trust it and pull away.

I have already shown you Peter Schiff's firm has given my Dad a good return over the last 4+ years.

I listen to his like over a decade ago, and my portfolio is up.  If I had been more active, yes then I could have taken advantage of the recent rally in stocks.  But that is artificial and Fed driven, who could predict that?

I'll stick to the track I'm on.

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## GunnyFreedom

> Gunny, I was more asking for your personal thoughts about "hedging."  What does it mean _to you?_  Why would a guy do it?  And how?  Do you do it?  Would you recommend it?  How would you explain it to a buddy in a bar?


In super simplistic terms, a 'hedge' is a position taken to protect one's self in the event that something goes horribly wrong.  Wearing a bullet-proof vest could be seen as a 'hedge' against being a middle-class white man walking into gangland territory.




> You say that one possibility is that the dollar *could* collapse.  The other, opposite possibility would be that the dollar *could not* collapse.  Am I wrong?


Pretty sure we were talking about the quality of imminence.  Every physically possible thing in the universe can be described in terms of could and could not.  We could get hit by a rogue singularity that sucks the planet Earth into a small black hole.  Then again we could not get hit by a rogue singularity that sucks the planet Earth into a small black hole.  Shifting the terms of the debate into could and could not is a pretty effective way to make everything said completely irrelevant.




> Exactly what component of the philosophy determines this variable?  To put it in programming terms: on what is it dependent?


Risk.  If you think X is a _low_ risk, then you are unlikely to hedge against it's failure.  If you think Y is a _high_ risk, you are more likely to hedge against it's failure.

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## helmuth_hubener

> helmuth_hubener, I know you think you are Uber smart WRT investing.


  I am deeply saddened that you have gotten this impression.  If there is one thing that I am trying to get across, it is how little I know.




> But sadly, the market is manipulated.  That is why some of us don't trust it and pull away.


 I would never discourage or berate anyone from being _too_ conservative in their investments.  If you don't understand something (for instance, the stock market) and are leery of it, distrustful of it, I have absolutely no hesitiation in agreeing with you: *Pull away!  Do not invest in it!*  That was one of Harry Browne's (in case you hadn't noticed, my investment mentor and hero) core 16 Rules of Investing:

*"Rule #9: Don't ever do anything you don't understand.*

"Don't undertake any investment, speculation, or investment program that you don't understand. If you do, you may later discover risks you weren't aware of. Or your losses might turn out to be greater than the amount you invested.

"It's better to leave your money in Treasury bills than to take chances with investments you don't fully comprehend. It doesn't matter that your brother-in-law, your best friend, or your favorite investment advisor understands some money-making scheme. It isn't his money at risk. If you don't understand it, don't do it."

So yes, Harry is saying, and I with him, that there's nothing wrong with simply leaving 100% of your money in that most-conservative-of-all investments: cash (that's what Treasury Bills are).  So if that's what you mean by "pulling away," you'll find no strenuous quarrel from me.  One should remember that even with cash there is some risk, and you will likely be losing some wealth to inflation each year, but at least you won't lose the family fortune in some money-manager's hare-brained investment scheme.

And yes, I see Peter Schiff as one of those hare-brained money managers.  Nothing more, nothing less.  No better than the rest.  Probably quite a bit worse based on past performance, but then "past performance is no guarantee of future results!"

To the extent that you may see gold as kind of an uber-cash, a cash even cashier than cash, even more conservative than cash, I don't really see a problem with you holding all your investment wealth in gold, either.  Build a gold vault and go swimming Scrooge McDuck-style.  But again, as with cash, it would behoove you (you would be well-advised) to educate yourself on the downsides and risks of gold, as well.  All investments have risks.  It is the nature of gold to be very volatile in terms of the US dollar and in terms of real purchasing power.  This is in big contrast to cash.  So it really isn't just a "cashier cash."  It has very different characteristics.




> I have already shown you Peter Schiff's firm has given my Dad a good return over the last 4+ years.


 I don't really know why you keep bringing this up.  I take it that you may think I didn't understand it the first few times?  Maybe you just can't comprehend how I could think that a strategy that happens to have done well for four years, following doing Absolutely, Positively, Adjectives-Fail-Me *HORRIBLY* the previous four years could possibly be wrong.  I mean, it did well for the last four years.  Four whole years!  So it couldn't be wrong!  Sigh.

I am thrilled that your dad has _not_ lost 70% of his money.  I am always glad to see wealth created instead of destroyed.  I don't know that any of what I have written in this thread, or even in this post, makes any sense to you.  But I would just encourage your dad to be cautious and wise with his money.  And to maybe consider the possible downside of entrusting all his life savings to a guru who thinks he knows the future but who has a losing track record that proves otherwise.




> I listen to his like over a decade ago, and my portfolio is up.  If I had been more active, yes then I could have taken advantage of the recent rally in stocks.  But that is artificial and Fed driven, *who could predict that?*


 *WHO COULD PREDICT ANYTHING?* is the very sum and substance of my *POINT!*

Understand:

The advice you are probably listening to from Peter is to sell your stocks and hold gold.  And as I said above, there is at least something to be said for holding 100% gold, although I think it has serious problems, too.  But if you want to own gold, buy actual gold bullion.  Owning gold =/= (does not equal) owning EuroPacific funds.  They are totally, totally, totally, totally different things.  As far as I can see, there is no reason for anyone, ever, to own EuroPacific funds.  You will be getting charged high fees for sub-par performance.  Period.  And if an inflationary crisis _does_ hit, where will be your gold to protect you?  Not in EuroPacific.  

Get bullion.  Scrap the know-it-all guru.

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## Danke

I bring it up because you keep harping how Peter was wrong.  I know first hand how one of his customers has done well.

I also have beaten the Dow by listening to him.

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## helmuth_hubener

Danke,

Did you understand anything that I wrote in my previous post?  Would you care to respond to any of it?  Please quote the sentence you are replying to, then make your reply to it.  As it is, I have no idea whether you had any reading comprehension whatsoever of a single sentence that I wrote.  That is a mildly frustrating situation, of course.  You can sympathize, I'm sure.  So please, reply to my last post to you.  In a line-by-line style using the quote feature, if possible.

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## dannno

> Danke,
> 
> Did you understand anything that I wrote in my previous post?  Would you care to respond to any of it?  Please quote the sentence you are replying to, then make your reply to it.  As it is, I have no idea whether you had any reading comprehension whatsoever of a single sentence that I wrote.  That is a mildly frustrating situation, of course.  You can sympathize, I'm sure.  So please, reply to my last post to you.  In a line-by-line style using the quote feature, if possible.


Your argument is that Peter Schiff's customers did poorly one year... almost EVERYBODY did poorly that year. Older people in upper management at my company were freaking out seeing their 401k's dip down to nearly half their value and they had very conservative investments. At what point would it have been bad advice to begin using Peter's investment advice? I would say never. Wait a few more years, you will see his advice continue to pay off.

The fact is it doesn't really matter when you started using Schiff's advice, after a few years your portfolio will be up no matter what. Danke said he has been following his advice for 10 years and has done fantastic. His dad 4 years, also fantastic.

You are like the anti-bitcoin people in the other threads. Ya, you could have bought bitcoin at the original 260 peak and then watched it collapse to $65... But guess what? It's over $1000 now, and here you are complaining that people said to invest in bitcoin when it went from 260 - $65 when eventually it went up to $1200 and is now at $1000.

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## helmuth_hubener

Dannno, you need to look at the actual numbers, rather arguing from hypothetical imaginary numbers that you make up.  That is, you need to do that if you're wanting to base your investments on reality and empiricism rather than religious faith and dogma.  But either way is valid.  Like I say, I do not want to destroy your faith.

Also, I would encourage you, too, to actually reply to my words in my posts, rather than simply repeating the same thing over and over with no regard whatsoever to what I write.  Try doing a line-by-line quoting and reply.  That always helps the other guy to know that he isn't just talking to a brick wall.

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## toathis

Peter Schiff's 2013 predictions= FAIL

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## Barrex

I agree with Danke.... you are welcome....


People profited from Peters advices:
Danke
Dankes dad


People lost because of Peters advice:
?
?
?

A since I am judging this:

2:0 for Peter.

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## Gaddafi Duck

This thread is a good contrarian indicator. The Schiff-haters come out of the woodwork and tout how "wrong" he's been, when in fact you're up better than 5x if you took his advice and invested in gold vs. if you took any other investor's advice and invested in the Dow or their special mutual fund.

You DO realize gold has outperformed Warren Buffett, right? People laugh at the fact that gold doesn't pay dividends...neither does Berkshire Hathaway. Neither does oil or corn. So that must mean Buffett, energy, and agriculture are jokes, and we should all just consume dividend paying stocks or corporate bonds.

This thread embodies the short-term mindedness of most "investors" aka speculators. The "logic" aka emotional knee-jerk reaction is analogous to why most managed mutual funds fail to outperform index funds...because the focus is so short-term, so quarterly-focused, that if a fund has a down year or two, funds flee, yet investors take for granted the above-average returns that outperformed the market over the course of the past decade. It's a "what have you done for me lately" game...and it's funny because the market acts this way for a reason. It's the most efficient way to allocate capital for a reason...because the bubblicious nature of the current economy has even the loyalists doubting sound investment advice. Gold is being raided by the bears and debt and social media stocks are being ran with the bulls. Of course, one would say social media stocks are ridiculous speculations that are hardly investments, as no company like Twitter could possibly be worth $45 billion when it loses money. 

If your barometer of "who is right" is based on what the stock market has done in very recent short-term memory, then you could make all sorts of ludicrous statements. Bubbles distort loyalist views as it's far more convenient to throw stones when there's a lull in the storm. Again, you're probably looking at a mining stock that went from $8 to $2, and you argue that Schiff's advice would have lost someone 75% of their investment over the past 2 years...yet what if 5 years from now that mining stock is $80? Is it  a bad investment because you got in at $8 vs. $2 and now it's $80? No...certainly, a lower entry point is always optimal, in which case you could say EVERY publicly traded company is a horrible investment because you could have bought in at pennies on the dollar if you discovered Disney when it was started in Walt's house decades ago.

Woz, one of the three founders of Apple, owns millions of shares of the company at a cost of $0.15 per share. If you bought Apple when it was $20/share, are you a "loser" now that it's $500 or so? I suppose everyone is a loser, because you missed out on great returns. Here's an idea: make some money so that you can get involved in private equity deals. Then you could say every publicly traded company is a joke, because the returns in private equity are far greater than anything you'll find on the Shanghai or New York exchanges.


Of course, Schiff was laughed at in 2005 and 2006 for his claims. They didn't come to fruition until 2008. Was he wrong? No. No more than a doctor who says you need to lose weight or you'll have a heart attack because you weight 500 lbs. The doctor tells you that 5 years ago and you're still going strong. Does that mean he's wrong? In your view, yes, because it hasn't occurred yet. Yet if you have a heart attack in Year 6, do you go back and yell at your doctor for being wrong for 5 years?

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## Gaddafi Duck

Back to the doctor analogy...I suppose it's not 100% correct. For instance: some obese people die old without any health problems apart from their weight. No heart attacks, strokes, etc., yet perfectly healthy people die young from ailments that are more common in overweight people.

Unlike the lucky obese guy who eat McDonalds weekly and lives out his life without ever a worry, the economy cannot continue on the path that it's in. Because if that's the case, then the world is turned upside down. Banks can lend to anyone and if they go bankrupt and the loans go bad, the Fed can just print up the shortfall. There's no inflation because theoretically the money supply is destroyed with a defaulted loan, and the Fed only brings the bank back to even. 

Of course, it doesn't work that way. Some people can smoke for 80 years and not have a spot on their lungs...but economics doesn't operate like biological phenomena or freak accidents. In EVERY instance, money printing leads to inflation. Even if the money printing is milder than the increase in productivity, the additional money supply prevents prices from falling further than they otherwise would, thus inflation. In some instances, the obese, the unhealthy, the smokers, never have to pay the piper due to the luck of the draw. In EVERY instance, inflation leads to distortions and higher prices, even if the inflation is mild.

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## Gaddafi Duck

Also, it's very wrong to say anyone can predict a recession because eventually one will happen, and so Schiff is just a broke clock that's right twice a day...

Schiff isn't saying, "we'll have a recession one day," he's saying, "We'll have a recession for these reasons," and in fact we've never left the recession that's been going on for years. He's outlining step-by-step how and why the economy is as in bad of shape as it is, and why certain investments, like commodities, will outperform the conventional asset classes, like equities and bonds. It's day and night difference from what you're arguing. Anyone can say we'll have a recession some day, but not everyone can answer the questions, "Why?" and "Where should I put my money?" 

Jim Cramer was wildly bullish on the housing sector. He was "right" for years until it crashed and you very likely lost most of your income in 2008, when in October he told you sell EVERYTHING on national television. Schiff told you to avoid financials in 2006, and behold in 2007/08/09, they collapsed. He's been buying gold for over 15 years, and over the last 13 you point to ONE down year and say, "A-HAH! HE WAS WRONG!"

It is possible for someone who doesn't understand the subject matter to correctly guess the right letter on a multiple choice question. It's entirely different when the person actually understands the question, and lays out his answer. Mises predicted the collapse of the Federal Reserve. He predicted the collapse of socialized medicine. Yet we've had the Fed for over 100 years, and socialized medicine exists in much of the world, and has for many years. Does that mean he's "wrong"? When in the 1970s where we had high inflation, many Austrian economists said, "THIS IS IT!" and commented on how fiat money was finally out the door. Yet it's 2014 and we still have Federal Reserve Notes, with no major country with a gold standard.

I suppose you could say Mises was entirely wrong because none of his predictions came true. You could also say he's a broken clock because certainly, one day, fiat money will collapse as well as socialized medicine, since everything created by humans wither  away over time. But the difference between Mises saying it and a caveman is that Mises actually explained WHY.

----------


## Madison320

> Of course, Schiff was laughed at in 2005 and 2006 for his claims. They didn't come to fruition until 2008. Was he wrong? No. No more than a doctor who says you need to lose weight or you'll have a heart attack because you weight 500 lbs. The doctor tells you that 5 years ago and you're still going strong. Does that mean he's wrong? In your view, yes, because it hasn't occurred yet. Yet if you have a heart attack in Year 6, do you go back and yell at your doctor for being wrong for 5 years?


That's a good analogy. The Schiff haters are day traders not investors. Yeah, you might have made money in 2011, 2012 or 2013, by investing in bonds, but that ignores the risk that you took. I don't see how people who claim to understand basic austrian economics can deny that there's a huge risk in a dollar collapse.

----------


## Seraphim

^^^^^ What Gaddafi said

----------


## helmuth_hubener

> Originally Posted by DFF
> 
> 
> This thread sounds like some troll bull$#@! Mike Norman would write. 
> 
> Anyway, the only year Schiff has been "wrong" about gold has been last year in 2013. 
> 
> But looking back from 1999, Peter is still quite correct regarding precious metals.
> 
> ...


Just to re-ask: this is a fair parallel to draw, is it not?  Anyone care to disagree?

----------


## dannno

> Just to re-ask: this is a fair parallel to draw, is it not?  Anyone care to disagree?


If you're a Keynesian I suppose.

----------


## helmuth_hubener

> In super simplistic terms, a 'hedge' is a position taken to protect one's self in the event that something goes horribly wrong.  Wearing a bullet-proof vest could be seen as a 'hedge' against being a middle-class white man walking into gangland territory.


 So would it be fair to say a hedge, in your view, is something to keep you safe against possible very bad things that could happen?  An insurance policy protects you in case your house burns down.  A Kevlar vest protects you from being shot (as long as it's in the torso).  A hedge protects you against some sort of eventuality.  Right?




> Pretty sure we were talking about the quality of imminence.  Every physically possible thing in the universe can be described in terms of could and could not.


Not at all.  Every physically *possible* thing can be described in terms of *could*.  If it is possible, it could happen, by definition.  My point is that the dollar *could* collapse.  To take the alternative view, that it *could not*, is hubris.  Take a look at history and we see the debris and wreckage from countless civilizations, governments, monies, religions, and other systems -- all once stable and powerful, all now wrecked and gone, their former glories matters for historians and archeologists.  Clearly all things tend to come to an end, and chances are that the US dollar will be no different.

So if we are settled as to whether it *could* happen, then what we have to determine is how likely to happen it is, and when it will happen.  *Probabilities and timing.*  "Imminence". (Though I'm pretty sure you've defined _that_ term into financial irrelevance).  My point with this thread is that I have been brought, by Harry Browne, to the position in regards to investment that we humans simply can not reliably work out such things.  More often than not, we will be wrong.  There are tons of very, very good reasons why this is so.  Those interested could read about them in:

Why the Best-Laid Investment Plans Usually Go Wrong

and

The Little Book of Common Sense Investing

The solution?  Accept reality.  Accept we do not know the future.  Stop playing a fool's game.

You wrote:




> Risk. If you think X is a low risk, then you are unlikely to hedge against it's failure. If you think Y is a high risk, you are more likely to hedge against it's failure.


 and my response would be that in investing, long experience hath shown that we humans are exceedingly bad at assessing the risks.  Almost none of us have what it takes to be a good speculator.You may think the risk is low, you may think the risk is high, and either way, you are most probably _wrong_.



> We could get hit by a rogue singularity that sucks the planet Earth into a small black hole.  Then again we could not get hit by a rogue singularity that sucks the planet Earth into a small black hole.  Shifting the terms of the debate into could and could not is a pretty effective way to make everything said completely irrelevant.


 Not at all.  I am not trying to shift things into irrelevance.  Let's discuss your scenario and your thoughts here.  So, let's say the Earth could get sucked through a singularity.  In that case, I do not think that any portfolio is going to be doing well.  That is, unless the cosmos on the other side of the singularity are virtually identical to those on this side, in which case portfolio values will be unaffected and this may be happening all the time and we are totally unaware of it.  Let's change it to a comet impact, which we can be more certain would have very bad consequences.  All Earth-bound portfolios would suffer catastrophic post-comet losses.  The only way to diversify away from that (or "hedge against" that) would be to diversify away from Earth.  Indeed, people and assets not on Earth would be safely unaffected by a whole range of natural disasters which would only affect Earth.  

There is no practical way to do this at present.  But if there were, you can easily see that it would be a good idea.  The application for us is that it is always a good idea to have some assets out of the nation in which you live -- safe from any localized natural disasters, and safe from the grasping, clutching hands of your own government.  You cannot avoid the full blow of consequences of a worldwide cataclysm, but you can at least somewhat protect yourself from a nationwide one.

There is another useful thought in your words.  Namely: if we must hedge against everything -- singularities, comets, dollar collapses, midget uprisings, Ron Paul Presidencies, Newt Gingrich Presidencies, Vermin Supreme Presidencies, a lab rat suceeding in his plan for global domination --  then there's hundreds and thousands and maybe millions of possible futures to hedge for.  If I'm right and we can't reliably predict the future, and so even futures that look very unlikely today may end up coming true, then there's hundreds of things we've got to hedge for.  Midget uprising?  Better buy stock in miniature cars and short the Wonka Chocolate Factory.  Etc., Etc.  Each hedge ends up being 1%, or even less.  In which case it's useless.  "Oh great, I only lost everything in 99% of my portfolio.  But the 1% I put into the hedge for the future that ended up happening, that 1% did fantastic!  It doubled, or maybe even tripled!  So that means I only lost 97%.  Whoo-hoo!"

So what's the solution?  What do you think?

----------


## helmuth_hubener

> If you're a Keynesian I suppose.


Ooh!  _Zing!_

So in your view, does Keynesian = being long on stocks?

----------


## helmuth_hubener

> Of course, Schiff was laughed at in 2005 and 2006 for his claims. They didn't come to fruition until 2008. Was he wrong? No. No more than a doctor who says you need to lose weight or you'll have a heart attack because you weight 500 lbs. The doctor tells you that 5 years ago and you're still going strong. Does that mean he's wrong? In your view, yes, because it hasn't occurred yet. Yet if you have a heart attack in Year 6, do you go back and yell at your doctor for being wrong for 5 years?
> 			
> 		
> 
> That's a good analogy.


 Yes, it is a good analogy.  A wonderful analogy.  And the diagnosis, in the sense Gaddafi Duck put it, is exactly what Peter is _right_ about.  Printing money ultimately tends to cause inflation.  Sure.  True.  Just like obesity causes health problems.

What Peter Schiff is wrong about is _this_ analogy: *"Your boss is obese.  He's going to die by the end of the year anyway.  Or maybe sooner.  At any moment, anyway.  It's 'imminent.'  So you should tell him off, quit your job, sell your house, and go work for a skinny boss and invest all your savings in a place with lots of skinny people."*

*That's* the right analogy.  _That's_ what he's wrong about.




> I don't see how people who claim to understand basic austrian economics can deny that there's a huge risk in a dollar collapse.


 As a matter of fact, I have a fair amount of understanding about Austrian economics.  Not only that, I am, myself, an adherent of the Austrian school.  I have read Austrian books, and listened to Austrian lecture courses.  Countless hours, you could say.  The entire Austrian methodology is based on the fundamental insight that economics is not physics.  Humans are not electrons.  Humans _act_.  And act unpredictably.

Yes there is a risk of dollar collapse.

There also is a risk of dollar strengthening.

Indeed, there really are only two possibilities: inflation, *or deflation*.  I am prepared and protected for either.  Are you?

----------


## helmuth_hubener

Guys, I am really glad that so many of you have come to voice your thoughts here.  This is great!  I would just ask that maybe you read some of my posts about _why_ I think Peter Schiff was wrong, and _what_ I mean by that, because otherwise, if you're just replying to the subject title, you may be rubutting something very, very different than what I, and anyone else on this thread, has actually written.

----------


## Travlyr

Peter Schiff Was Wrong

----------


## dannno

> Ooh!  _Zing!_
> y 
> So in your view, does Keynesian = being long on stocks?


In my view a Keynesian who had a Keynesian government run by their preferred candidates in a historically good economy would be long on stocks. I'm going to use the definition 'long' meaning that that everything else being equal one believes that the group of stocks of a certain category such as certain major exchanges which may change in composition over time will continue to perform well indefinitely until something outside of the control of a Keynesian government happens which may be harmful to the economy. Draughts, natural disasters, domestic warfare, etc. They do not believe they will see any major losses from massive liquidations due to decades of malinvestment which will certainly not inevitably happen in the future as the stocks and the markets they are in are perfectly sustainable.

An Austrian would not be long on stocks, if they decide to play short or medium term markets and multi-year bubbles then they might decide to take some short term profits, but other Austrians like Peter Schiff do not participate or recommend them to their clients for many reasons, one of them being ethical reasons.

----------


## helmuth_hubener

> In my view *a Keynesian* who had a Keynesian government run by their preferred candidates in a historically good economy *would be long on stocks*. 
> 
> *An Austrian would not be long on stocks*, if they decide to play short or medium term markets and multi-year bubbles then they might decide to take some short term profits, but other Austrians like Peter Schiff do not participate or recommend them to their clients for many reasons, one of them being ethical reasons.


 Well, that's an opinion.  And as your opinion, it's valid.  As part of your religious worldview, it's valid.  But as a description of reality, it is false.  It is an utter failure.

How do you explain the fact that *the most prominent Austrian economist to ever be a player in the investment world*, who was also the most successful, and the best-selling, and the most prolific, and the best known, that this Austrian *was long on stocks* and recommended to the public and to his clients that they be long on stocks?  How do you explain this?

----------


## osan

> Peter Schiff was wrong, wrong, wrong.  On so many levels he was wrong.  And he still is wrong.
> 
> I, like him, subscribe to Austrian Economics.  I agree with his libertarian political views.  But when he has given investment advice, he has been horribly, horribly wrong.  Reasons:
> 
> 1) Even when he has been right (and if you are a permanent bear, you inevitably get to be right on occasion, when the stock market goes down) those who followed his advice, either by buying overseas stocks and precious metals directly, or by buying into Schiff's EuroPacific Capital fund would have still lost money!
> 2) But, usually you don't have to worry about 1), because his predictions have rarely been right.
> 3) On the most fundamental level, he is horribly wrong because he is trying to predict the future at all.  He is teling people that they should base their investment decisions on his foreknowledge of the future.  But actually, he has no such foreknowledge.  So even if he _wasn't_ usually wrong in his predictions, and even if he _hadn't_ managed to still lose money even when he was right, he still would be following a fundamentally flawed methodology.  This methodology is called "Fortune Telling".
> 
> Schiff's antics on TV are entertaining.  But *his advice is not wise.*  I hope no one on RPF is taking investment cues from Peter Schiff.


I do not trust rigged markets, so I do not invest in them.

That said, you have offered not a shred of support for your assertions to those who do not hear what Schiff has to say.  In case you are not aware, this places your credibility at some risk.  If you can provide credible specific supporting evidence, I would suggest you do so ASAP because you have made a public claim of a broad nature regarding the presumably public statements of another person.  Forget the exposure issue since, practically speaking, there is no likely risk to yourself, and focus on credibility.

----------


## helmuth_hubener

> I do not trust rigged markets, so I do not invest in them.


 The market is bigger than any of us.  No one is "rigging" the gold market -- it is too big to rig.  No one is "rigging" the bond market -- it is too big to rig.  No one is "rigging" the stock market -- it is too big to rig.   And no one is "rigging" the market for holding US dollar cash -- it is too big to rig.  So which market _is_ rigged?  What is this rigged market in which you are refusing to invest?  Beanie babies?





> That said, you have offered not a shred of support for your assertions to those who do not hear what Schiff has to say.


I do not understand your statement, and I do not understand your suggestion.

If you are saying that I have failed to provide any evidence or examples of Peter Schiff being wrong in senses 1, 2, and 3, then my reply must be to simply ask: have you read the thread?

----------


## helmuth_hubener

> Originally Posted by Helmuth_Hubener
> 
> I now keep about 25% of my portfolio in gold.
> 
> 
>  That's more gold than even Peter Schiff recommends. What's up with that?


 How much does he recommend, Madison?  I have tried to find a specific recommendation from Peter as to how much gold to hold.  Does anyone know?  Is Madison right?

----------


## LibForestPaul

> The market is bigger than any of us.  No one is "rigging" the gold market -- it is too big to rig.


So the Hunts were just an apparition, or the silver market is  just the right size..

The market is rigged, because the medium of exchange is an illusion.

----------


## helmuth_hubener

> So the Hunts were just an apparition, or the silver market is  just the right size..


It's the "Huntsman" brothers you're thinking of, not the "Hunts".  They probably were _not_ trying to corner the market, they most certainly did _not_ succeed, and they most certainly _never_ had any hope whatsoever of succeeding at such a ridiculous project, which, again, they were not trying to do.

Their purchasing likely _did_ have some marginal effect on the silver market.  That hardly means the market was therefore "rigged."  But the silver market is much, much smaller than the four markets I stated were too big to be rigged: the world gold market, the US equities market, the US Treasuries market, or the US dollar market.

The Silver Story:

http://www.crawlingroad.com/finance/...o/05-10-23.mp3

http://www.crawlingroad.com/finance/...o/05-10-30.mp3

----------


## dannno

> How do you explain the fact that *the most prominent Austrian economist to ever be a player in the investment world*, who was also the most successful, and the best-selling, and the most prolific, and the best known, that this Austrian *was long on stocks* and recommended to the public and to his clients that they be long on stocks?  How do you explain this?



was

was

was

was

was long on stocks.


Are they still long on stocks? I would hope not, but anyway, then they *would* have been medium on stocks per my definition. You didn't even read my post, did you?

----------


## GunnyFreedom

> It's the "Huntsman" brothers you're thinking of, not the "Hunts".  They probably were _not_ trying to corner the market, they most certainly did _not_ succeed, and they most certainly _never_ had any hope whatsoever of succeeding at such a ridiculous project, which, again, they were not trying to do.
> 
> Their purchasing likely _did_ have some marginal effect on the silver market.  That hardly means the market was therefore "rigged."  But the silver market is much, much smaller than the four markets I stated were too big to be rigged: the world gold market, the US equities market, the US Treasuries market, or the US dollar market.
> 
> The Silver Story:
> 
> http://www.crawlingroad.com/finance/...o/05-10-23.mp3
> 
> http://www.crawlingroad.com/finance/...o/05-10-30.mp3


Yeah, there is legit weirdness going on in silver.  Doesn't JP Morgan Chase have something like more shorts on silver than the physical supply of silver on the planet - mined and still in the crust?  I think I am remembering that right.  In any case, if someone had that much out in short contracts, wouldn't something have to give eventually?  Certainly they couldn't fulfill contracts for more silver than the planet Earth contains.

----------


## Gaddafi Duck

> How much does he recommend, Madison?  I have tried to find a specific recommendation from Peter as to how much gold to hold.  Does anyone know?  Is Madison right?


www.schiffgold.com front page, there it is. How much Schiff recommends in gold. He's saying at least 5-10%. When you listen to him speak, he has NEVER advocated to pour 100% of your portfolio into gold or gold stocks. Schiff says it varies based on who you are, what kind of investments you are into, and what you are trying to accomplish. If you're looking for a one-size fits all where Schiff says, "Everyone should have exactly 40% invested in gold," then you won't find it. Because it isn't out there. The best you will find is if you call up EuroPac yourself and talk to a broker...that, or go based off of the countless hours I've listened to Schiff and what's posted on his website. Unless you decide to become a client, you won't get concrete numbers...because Schiff is hounded by regulators, and he's careful about giving out specific numbers to the general public, because when he does some dingbat will sue him.

Back to what I've been writing about, though...you seem to have overlooked my 3 posts. I'd love for you to counter my arguments, if you can. You're confused about Schiff and his recommendations.. you're conflating what's "imminent" vs. what's "inevitable". Schiff is telling us the Dollar will crash, that gold will be one of the best investments one can make (surpassed, of course, by start ups that create the next billionaires. Good luck finding the next Facebook from the hundreds of thousands of people working out of their garages). You argue that Schiff saying there will be a recession is no different from a broke clock that's right twice a day, but a broken clock is only "right" as a consequence of incident. Schiff outlining WHY a recession is coming is entirely separate from saying one is coming. 

Plus, Schiff is predicting the next crisis will be "the one" that sinks the phony economy. I just find it comical how you can be nit picky about how you interpret Schiff's warnings as, "He predicted it in 2013, but it didn't happen!" Yet you miss the much bigger point: That the US economy is going to collapse far more than your run-of-the-mill every 4-6 year recession. He's saying the largest economy that has ever existed is going to collapse within the next 5 years. That's a a pretty big deal. And you're complaining he may be 2 or 3 years later than now in his predictions?? So, if someone was sitting around in 470 A.D. saying the Roman Empire was going to collapse, but it didn't happen until 476 A.D., are you going to say, "Wow, that guy was wrong."

I mean, you DO realize this is a collapse of a HUGE trend--that is, American supremacy which has existed since World War I. Who gives if it's this year or next year? If it happens in 2015 vs. 2013, is it that big of deal? As Schiff said back in his Schiff was Right video, he said, in 2006, the 2008 collapse could happen "next year or the year after" as being "immaterial," which is so true! It's immaterial whether the collapse occurs in 2014 or 2015. Heck, even if it doesn't occur until 2017. It's a big deal. It's the end of the American Empire--the largest in world history. A thousand years from now, if there is a thousand years from now, are people going to look back and make a big deal about when the US collapsed? Is the difference between 2015 and 2014 or 2016 a big deal in the grand scheme of things?

----------


## Saint Vitus

I like Peter Schiff, I think he means well.  But I don't take economic advice from him anymore.   Gerald Clemente, Peter Schiff, Lyndon Larouche, anytime one of those people talk about an imminent economic collapse, I tend to roll my eyes.  There's only so many times you can cry wolf.

----------


## Danke

Gold Manipulation 101
http://blog.milesfranklin.com/gold-manipulation-101

----------


## Gaddafi Duck

> I like Peter Schiff, I think he means well.  But I don't take economic advice from him anymore.   Gerald Clemente, Peter Schiff, Lyndon Larouche, anytime one of those people talk about an imminent economic collapse, I tend to roll my eyes.  There's only so many times you can cry wolf.


Ya gotta love the standards people set. On the one hand, they recognize Peter Schiff is predicting the collapse of the largest military and economic empire the world has ever seen, and yet on the other hand they're throwing a fit because it's 2014 and it hasn't fallen yet. I suppose they'll be voicing discontent with Peter Schiff if and when the collapse happens in 2014 or 2015, or maybe even 2016 or 2017.

Again, I don't think people get the magnitude of these predictions. It's not like Schiff is predicting the Jaguars are going to win the Super Bowl every preseason, and this year he's saying, "This is it! This is THE year the worst team in football is going to win the Super Bowl!" He's saying the giant is going to fall. A world the world has known since World War I is about to be turned upside down. No person alive knows what that will be like. And you're throwing a fit and rolling your eyes because it hasn't happened yet and it's 2014? Oh, so sorry the Roman Empire collapsed in 476 AD and not 475 AD! So sorry the American Empire collapsed in 2015 instead of 2013. Is it REALLY a big deal with regard to the timing?? So the largest empire the world has ever seen collapses a  year or two later than expected. So WHAT? You're missing the bigger point: That the biggest empire ever will collapse! But of course, you'll obsess over the timing rather than the story. Again, it's analogous to a doctor saying you need to lose weight today or you'll have a massive heart attack. You ignore his advice and you go on living another 5 years with no problem. Wow, that doctor was an idiot! Then you have a heart attack in year 6 and you scream, "BROKEN CLOCK! It was only a matter of time before a heart attack happened! The doctor was an idiot and not an expert at all. Anyone without a medical degree could have predicted it."

Yet, of course, Schiff isn't arguing about a simple heart attack or a simple recession, but a debilitating one. Whether it happens when you're 29 years old vs. 30 years old is pretty insignificant, dontcha think? I mean, did the Roman Empire collapsing in 476 instead of 475 really change the course of history? Not much...the consequences were about the same. It was a big deal, but not a big deal that it occurred a year after 475...just as there would be incredibly marginal differences if it collapsed in 477 or 478. The same with the United States. If we collapse in 2014, it won't be much different from collapsing in 2015 or 2016 or 2017 in the grand scheme of things. 

Stepping over dollar bills to pick up pennies, as they say...or not seeing the forest for the trees, maybe? You're getting caught up in the microscopic details, yet you don't recognize the card house wobbling.

----------


## Gaddafi Duck

I guess to make another point is this...it's all about perspective. Some people view history as a sequence of set events occurring at various dates in time..others see history in a continuum. One could argue the US is already collapsing. A debt level that has surpassed sustainability, perpetual money printing, 1 out of 6 Americans on food stamps--more than at any point in our history--, 92 million unemployed or underemployed--more than any point in our history--, etc. etc. 

I think people are looking too close to pointing at one specific date, as if "March 24th, 2014, the economy collapsed," I just don't think dates are all that important. It's just as ignorant as saying the Revolutionary War was between 1775 and 1783, when in fact the War was a conglomerate of decades of discontent, and most of the fighting expired in 1781 even though the Treaty wasn't finalized until two years later.

So, it's rather a foolish argument to have...one that simpletons seek out where you can point out the exact date and say, "AHA! This was the exact turning point." It doesn't really work that way. You don't order a termite inspection after you've come across foundational rot. It won't do a whole lot of good..the damage is already done. You could say the house collapsed on Day Z, but Days A-Y were what mattered. Schiff is predicting the inevitable..you're just fussing that it's not as imminent as he thought. Oh, so sorry us mortals can't give you the exact winning lottery numbers for next week's record draw. Get over it. Learn to appreciate the fact that Schiff was one of the very few who saw this crisis coming, and one of the handful who could actually articulate why--unlike most people on this message board and on this planet. 

It reminds me of the overly confident people who smugly call in to debate Schiff, and he easily disposes with them. The guest callers often come on aggressive, and then get tongue-tied and struggle to articulate a word of English...but they'll quickly come on message boards and tout how wrong Schiff was. Go watch his Mortgage Banker's Speech in 2006...pretty damn spot on. Better than you can do. 

I'll bet Saint Vitus' employer rolls his eyes anytime Saint Vitus approaches him with a conversation.

----------


## matt0611

> How much does he recommend, Madison?  I have tried to find a specific recommendation from Peter as to how much gold to hold.  Does anyone know?  Is Madison right?


I've heard Peter recommend 10-20% of one's holdings in gold & silver on his radio show before.

----------


## oyarde

> I've heard Peter recommend 10-20% of one's holdings in gold & silver on his radio show before.


I used to think like that , now I would not be comfortable with less than 1/2 in lead , copper , silver , gold , land etc

----------


## Madison320

> Plus, Schiff is predicting the next crisis will be "the one" that sinks the phony economy. I just find it comical how you can be nit picky about how you interpret Schiff's warnings as, "He predicted it in 2013, but it didn't happen!"


Plus the fact that Schiff rarely puts a timetable on his predictions. Usually he is very careful to point out that he doesn't know when the crash is going to happen. I listen to him all the time and he mentions this almost daily.

----------


## osan

> The market is bigger than any of us.  No one is "rigging" the gold market



Famous last words, my friend.  Nobody was rigging the housing market either.  Nobody was rigging derivatives.




> -- it is too big to rig


Is that like "too big to fail"?




> No one is "rigging" the bond market -- it is too big to rig.  No one is "rigging" the stock market -- it is too big to rig.   And no one is "rigging" the market for holding US dollar cash -- it is too big to rig.  So which market _is_ rigged?  What is this rigged market in which you are refusing to invest?  Beanie babies?


Study the history.  Study the legislative framework within which those markets operate.  To assert that these markets are not rigged is not supportable in a credible way.  The banking markets are rigged, for example.  Try to put out a shingle and act as a bank and see how far you get.  If you do not end up on the wrong end of felony charges, you will still have the problem of getting "in".  Unless you are "in", you don't have the transaction access; cannot borrow from the Fed at below zero interest rates; cannot do a whole boatload of things that those who are "in" do every day.  To suggest that this is not rigging the game by erecting barriers to entry is not even remotely believable.

Our market systems are rigged every which way you might care to consider.




> I do not understand your statement, and I do not understand your suggestion.


The markets are not organically free in any meaningful sense.  They are rigged in all manner of ways - licensing requirements, for example, are a form of rigging.  The ostensible reasons, for example, that securities markets are so heavily rigged is "investor safety", which is pure bull$#@!.  The pragmatic result of these rules has largely been to lend advantage to the larger players and keep new competitors out.  

Consider Sarbanes Oxley (SOX).  It was put in place supposedly to enforce transparency and accountability.  It has done neither, but is HAS driven many smaller players out of business because the onerous nature of the requirements is so costly for the smaller operator that they simply cannot continue.  Large corporations spend hundreds of millions of dollars a year on SOX compliance and while they outwardly complain about it, inwardly they are glad it is there.  It is a price they pay to trim competition.  It is a form of protection money paid to the biggest mob of them all, "government", to keep them safe from those who would do what they do, only better.

Tons of regulations heaped on tons of statues choke the markets and deprive us our rightful freedom to conduct commerce, yet all of it was unable to prevent the all the hocus locus that went on prior to the 2008 "melt down" in the various markets.  I grant that it was not entirely due to "rigging", and yet it was precisely that which served as the foundation upon which the rest of the rot was based and enabled in large part.




> If you are saying that I have failed to provide any evidence or examples of Peter Schiff being wrong in senses 1, 2, and 3, then my reply must be to simply ask: have you read the thread?


I was responding solely to your OP.  Not trying to bust your hump - just pointing out a shortcoming in your post, that's all.  Done in the interest of improvement - people "out there" who are not your friends, who will not look after your betterment and wellbeing will not take the time to point out such flaws, but will use them against you to discredit your arguments, at best, or worse - you.  I express my opinion so that others may see.  I may prove correct, or not.  Either way, we all learn something, even if only marginal value.

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## helmuth_hubener

I'll get back to this thread, I really will!  In the meantime, all of you who are participating, thank you so much!  Good thoughts!  Good disagreement!  Keep the discussion going, by all means!  I think we're making progress, getting somewhere.

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## helmuth_hubener

OK, guys, thanks to our friend, osan, I have buttressed my opening post with references to all the wrongness.  I think I have proved my points very well, beyond all reasonable doubt, and now all the "see here, here, and here"s make that easy for everyone to quickly understand what I'm saying without wading through the whole thread.  Here is the new, improved version:

~~~

"Peter Schiff was Right!" we all cheer?  This is the right-thinking, Austrian thing to say?  Nope.  Peter Schiff was wrong, wrong, wrong.  On so many levels he was wrong.  And he still is wrong.

I, like him, subscribe to Austrian Economics.  I agree with his libertarian political views.  But when he has given investment advice, he has been horribly, horribly wrong.  Reasons:

1) Even when he has been right, such as 2008 (and if you are a permanent bear, you inevitably get to be right on occasion, when the stock market goes down) those who followed his advice, either by buying overseas stocks and precious metals directly, or by buying into Schiff's EuroPacific Capital fund still lost money!  In the case of EuroPacific customers: LOTS of money.  The vast majority of their life savings.  See here, and here.


2) But, usually you don't have to worry about 1), because his predictions have rarely been right.    For his track record of wrong predictions, see here, here, here, here, here, here, here, here, here, and here.

3) On the most fundamental level, he is horribly wrong because he is trying to predict the future at all.  He is teling people that they should base their investment decisions on his foreknowledge of the future.  But actually, he has no such foreknowledge.  So even if he _wasn't_ usually wrong in his predictions, and even if he _hadn't_ managed to still lose money even when he was right, he still would be following a fundamentally flawed methodology.  This methodology is called "Fortune Telling".  For more explanation of my thoughts on why I think the idea of basing investment decisions on the crystal gazing of gurus is such a disastrously flawed method, see here, here, here, here, here, here, and here.

So to sum up, I say that Peter Schiff is wrong because he makes wrong predictions (the simplest but least important reason); because he loses his clients catastrophic amounts of money even (perhaps especially) when he turns out to be "right," because his all-or-nothing bets are breathtakingly foolish and over-risky; and most importantly because he presumes to predict the future at all.  Again:


*Makes Wrong Predictions**Is wrong even when he's "right"* (that is: his customers lost money)*Predicts the future at all.*

Schiff's antics on TV are entertaining.  But *his advice is not wise.*  I hope no one on RPF is taking investment cues from Peter Schiff.

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## Gaddafi Duck

> 1) Even when he has been right, such as 2008 (and if you are a permanent bear, you inevitably get to be right on occasion, when the stock market goes down)



I just find it ironic how you can possibly subscribe to the Austrian School of Economics, a school of thought centered around free will of man and human action in the open market, a philosophy centered around the sovereign individual where the state flies in the face of everything in the natural order, where the Austrians have built a name for themselves by being Anti-Central Bankers, Anti-Central Planners, and yet after all of Mises' and Rothbard's bearishness of the State, we still have it! The government is still here...paper money is still here...all backed by clueless bureaucrats for decades...

It's cognitive dissonance. On the one hand you're an Austrian and subsequently criticize Peter Schiff because his predictions of the collapse of the largest economy the world has ever seen hasn't happened yet, and yet you completely ignore the rest of those in the Austrian School, like Mises, who said government-controlled health care would fail and socialism would fail. Hey, got news for yah, we have a record number of countries with socialized medicine, and socialism is everywhere! So, you're a  hypocrite. Because if you actually applied your logic for "Schiff was wrong" to other areas of life, you'd find the Austrians are "wrong", too. Because none of their predictions have come true...yet. 

1) Health care is more socialized than ever before, and it's still here.
2) Paper money is more inflated than ever before, and it's still here.
3) The bureaucracy is larger than ever imagined, and it's still here.

So, go start a thread about Rothbard, Mises, Hayek, etc. all being wrong. Because in your eyes, they all are. They predicted collapses, and it's been a long time coming. Why isn't it here yet? Eh? HUH?? And if this all collapses tomorrow, you can easily attribute it to them being permabears. Because obviously every government fails at some point. We don't still have the Roman, Mongolian, or British Empires...so, DUHHHH, obviously it's only a matter of time. Mises has been dead for 40 years...look how long this music has been playing..

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## oyarde

I do not know Peter , but looks to me like he is betting long on a sure thing..... house of cards will collapse I imagine sometime ,  say it does , what will the standard  be ?

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## oyarde

All of you youngsters and novices could end up eating bugs , LOL , I have Danke, he will share some liquor with the old man . LOL

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## Gaddafi Duck

According to helmuth's logic, if you predict the US economy will collapse due to 1) excessive debt 2) excessive money printing 3) excessive consumption, and that people will stop consuming and using debt at the levels they currently are, and if you say this will lead to a recession and it's 2014 and no recession has come, then you're wrong. Then again, if a recession comes in 2015, you can simply chuck it up to sheer coincidence because recessions happen every once in a while, so it was bound to happen.

It's like you take your car to a mechanic and he suggests you get a part fixed because it will fail. You don't heed his advice and you drive the car for 2-3 more years with no problem..then, suddenly, the part fails and you get into  an accident or are stranded. You could say you shouldn't take that mechanic's advice ever again because the part worked fine for a good amount of time...when it failed, oh well, parts always fail! Machines break down! Permabear mechanics are inevitably right because if I drive my car long enough something is going to go bad eventually!

So I'm not sure what helmuth is really saying because he's creating an impossible standard. Mises said central banking would fail and we're decades past him predicting that. Central banks will fail at some point as all things humans create fail. So Mises is incredibly wrong in his predictions because we've had central banks longer than ANY Austrian on the planet predicted decades ago. And when they DO fail for reasons Mises predicted, how do you know that's why they failed? Why couldn't the failure be attributed to "just one of those things" ?? How can a mechanic's advice be possibly right if you fail to get your car repaired and it subsequently breaks down a year later? Even if the specific part that the mechanic pointed out will fail actually does, how do you know it's because of what the mechanic said versus "just one of those things" ? Parts fail all the time. Government programs fail all the time. Companies go bankrupt all the time. Recessions happen all the time. So Peter Schiff was wrong because the markets are still rolling higher, yet when they do crash, you won't give him credit because, duh, every permabear is right if you wait around long enough...just as every doctor or mechanic is right if you live long enough or drive your car far enough. Eventually you'll get sick or have more health problems...eventually, belts will get worn out in your car and oil starts leaking because seals go bad. You don't need a degree for that..you could just grab yourself a trusty medical or mechanical permabear to tell you you need to exercise, fix your car, what have you...because, eventually, medical and mechanical permabears are right, just as economic permabears are eventually right.

But then again, the difference between a permabear on anything versus a good doctor, a good mechanic, or a good economist, is that the good doctor, the good mechanic, and the good economist, will tell you WHY these things will happen. They can diagnose WHAT is the problem and WHAT it will lead to and give you a  blueprint to follow to mitigate or eliminate the contingencies. Can they tell you in 23 hours and 2 minutes that XYZ will occur? No. They can only say XYZ will "likely" occur in the "near future" or perhaps down the road sometime...well, that advice is about as useful as any since you could have just saved yourself the cost of the estimate or doctor's visit or the time it took you to watch a Schiff YouTube video and just went about your life. If the events the doctor, the mechanic, or the economist say come true, well, you could have just avoided the expense and faced the inevitable reality of life: that everything crashes at one point. Cars fail, organs fail, computers fail, markets fail. So what good is a professional opinion when they say to get something fixed because eventually it will fail? Because everything fails at some point. So how do you know when it does fail that it's for the reasons the doctor, the mechanic, or the economist said? Why couldn't it have failed due to just chance as everything breaks down inevitably?

So Peter Schiff is wrong, let's start a thread about him...but let's subsequently say we're in the Austrian School, a School filled with patriarchs who made their names off of saying why paper money will fail and why bureaucracies will fail...yet here we are, years later, using paper money and living with more bureaucrats that ever before. Mises was wrong. Rothbard was wrong. Hayek was wrong. But no, you won't say that..because you don't apply your logic uniformly in life. Again, cognitive dissonance. You have tunnel vision and want to stir the pot on why Peter Schiff was wrong, yet in doing so you point out you don't understand your own logic. Because you say you're an Austrian, yet Austrians have been wrong. In the 1970's they had a heyday with the stagflation and weak economy and paper money...many felt it was the endgame for paper money and we'd *finally* resume a legitimate gold standard or competing currencies...yet here we are, 40 years later...playing the same game. Over a generation later, still have big government and more money printing than ever before...and when it DOES all collapse, how can you possibly give credit to Mises or Rothbard??? They're long gone! They're permabears! DUH! Obviously at SOME point EVERYTHING comes to an end. 

So here we are...at the end of the discussion where I look over to see if anything I've said was inaccurate only to find that no, it's completely 100% on point...that you do in fact apply your logic asymmetrically. On the one hand you pick out and criticize one person for being wrong, yet subsequently say you're a fan of those who were plenty wrong in their greatest bodies of work...predicting the collapse of socialism and paper money. Here we are, with socialism and paper money...nearly 3 generations after their greatest and most notable books predicting the collapse of these institutions. Please, do explain to me how you can say Mises was right while saying Peter Schiff was wrong. Because you can't. Allow me to...laugh. Hahahahh. I win.

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## helmuth_hubener

> I just find it ironic how you can possibly subscribe to the Austrian School of Economics, a school of thought centered around free will of man and human action in the open market, a philosophy centered around the sovereign individual where the state flies in the face of everything in the natural order, where the Austrians have built a name for themselves by being Anti-Central Bankers, Anti-Central Planners, and yet after all of Mises' and Rothbard's bearishness of the State, we still have it! The government is still here...paper money is still here...all backed by clueless bureaucrats for decades...
> 
> It's cognitive dissonance. On the one hand you're an Austrian and subsequently criticize Peter Schiff because his predictions of the collapse of the largest economy the world has ever seen hasn't happened yet, and yet you completely ignore the rest of those in the Austrian School, like Mises, who said government-controlled health care would fail and socialism would fail. Hey, got news for yah, we have a record number of countries with socialized medicine, and socialism is everywhere! So, you're a  hypocrite. Because if you actually applied your logic for "Schiff was wrong" to other areas of life, you'd find the Austrians are "wrong", too. Because none of their predictions have come true...yet. 
> 
> 1) Health care is more socialized than ever before, and it's still here.
> 2) Paper money is more inflated than ever before, and it's still here.
> 3) The bureaucracy is larger than ever imagined, and it's still here.
> 
> So, go start a thread about Rothbard, Mises, Hayek, etc. all being wrong. Because in your eyes, they all are. They predicted collapses, and it's been a long time coming. Why isn't it here yet? Eh? HUH?? And if this all collapses tomorrow, you can easily attribute it to them being permabears. Because obviously every government fails at some point. We don't still have the Roman, Mongolian, or British Empires...so, DUHHHH, obviously it's only a matter of time. Mises has been dead for 40 years...look how long this music has been playing..


 Gaddafi, I _will_ get to all your posts (barring some unforeseen circumstance), don't worry.  I thank you so much for your contributions -- your posts are substantive and welll-thought-out.    I just am extremely focused and busy right now being entreprenurial, bringing to the market something they ain't _never_ seen before!  I'm sure as an Austrian, you'd approve.  So my time for recreational writing is limited.

But I did want to throw up a quick response to this one post about my alleged cognitive dissonance.  Some of the reasons you give for believing me dissonant and befuddled are as follows:




> the Austrians have built a name for themselves by being Anti-Central Bankers, Anti-Central Planners,


 And so am I.  Emphatically so.  End the Central Bank!  End all fractional reserve banking!  Decentralize and voluntarize all human planning and decision-making!  These are my perpetual battle cries.




> yet after all of Mises' and Rothbard's bearishness of the State, we still have it! The government is still here...paper money is still here...all backed by clueless bureaucrats for decades...


 This is not a conflict; this is not a problem.  Just because the world hasn't heeded the words and advice of X -- especially an X they have largely never even heard of -- does not mean that X's advice was not right.  See  Tom Woods on 'The Question Libertarians Just Can't Answer'.  You are raising essentially the same "dillema," which really is no dillema nor mystery at all.




> So, you're a hypocrite. Because if you actually applied your logic for "Schiff was wrong" to other areas of life, you'd find the Austrians are "wrong", too. Because none of their predictions have come true...yet.


 My position will be that you misunderstand Mises' predictions about socialism and the natures of his predictions vs. a Peter Schiff investment prediction.




> So, go start a thread about Rothbard, Mises, Hayek, etc. all being wrong. Because in your eyes, they all are.


  What you are trying to accuse me of believing about these men -- that they are all irredeemably wrong about everything and I reject all their ideas and theories and school of thought -- is false.  I do not believe that.  It would be more accurate to call me a _disciple_ of Mises and Rothbard.  Not so much of Hayek, but he still had insightful and useful things to say.  And with that comment about Hayek, perhaps we open up a little bit of an issue.  You see, just because I do not believe someone to be right about _everything_, does not mean that they are wrong about everything either.  We should take truth where we find it.  Sometimes we may need to combine, mix, match, and scramble ideas from many different directions and thinkers to come up with a more truth-full system of thought.  That's what Mises did.  That's certainly what Rothbard did.  Rothbard in particular basically invented modern Libertarianism as a fusion of many different elements -- historical revisionism, individualist anarchism, classical liberalism, Constitutionalism, natural rights, the anti-war tradition, etc.  Since that's what they did, if I, by contrast, merely read their writings and slavishly regurgitate them, I would not be much of a disciple, would I?  A disciple follows the master; he does not act as a tape playback machine.  No, I will _do_ what they did.  *Think.*

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## Gaddafi Duck

> This is not a conflict; this is not a problem. Just because the world hasn't heeded the words and advice of X -- especially an X they have largely never even heard of -- does not mean that X's advice was not right. See Tom Woods on 'The Question Libertarians Just Can't Answer'. You are raising essentially the same "dillema," which really is no dillema nor mystery at all.


No, no, I didn't say the world needs to heed the advice of Austrians. I said the *predictions the Austrians made have NOT come true*. _Not that the world needs to heed their good advice._ Mises and Rothbard and Hayek were rife with predictions that socialism and paper money would fail. Guess what! They've been dead for decades and we still got socialism and paper money! So how is THAT any different from Peter Schiff saying "avoid financials, avoid social media stocks, buy gold, buy gold stocks, buy energy/agriculture" ???? I'm really, REALLY lost on how that same standard does NOT apply. I mean, you're looking in the short term here...you're saying Schiff made predictions a couple years ago and today you would have been better off doing the opposite of what he said: buy financials, buy social media, sell gold, sell gold stocks...yet you could make the same argument back in the 1990's to someone who said internet stocks were in a bubble. Or real estate in the mid-2000s. Sure! Of course! You could make a boatload more money if you KNEW the Nasdaq would collapse by 80% in March 2000 and you sold in February. Of course! You could have made a bunch of money buying real estate in the mid 2000's and cashed out late 2006. Of course! You could have made a good amount of money buying Twitter's IPO and sold it at the 52 week high. I mean, is any of this $#@! practical?? Knowing the perfect entry and exit points? What are the chances you'll get burned trying to play that game? Probably 99%...because if you were truly THAT good of a trader, you'd have far more money than Rockefeller or Carnegie did, and you'd make Warren Buffett look like a rookie. But according to you Schiff's advice only exists in the spectrum between 2010 and right now, 2014. That 4 year gap he was 'somewhat wrong' because gold rallied, then corrected, but you ignore post-2014 where many of the equities you did buy that Schiff didn't recommend may very well collapse. 

You complain that Peter Schiff's investment advice is bad because gold stocks have gone down and so has gold. Well, for starters, you're still up 5-6 fold if you took Schiff's advice in 1999 to buy gold. How good of a return have other asset classes had over the past decade? You'd be hard pressed to find better returns, unless you of course bought into niche stocks. Apart from a handful of stocks that have returned 10x their initial investment from 10 years ago, you were better off with Schiff's advice, no? So your criticism is unfounded. 

Go watch some videos of Kyle Bass. He made his fortune betting on the subprime crisis. Right now, he's the most outspoken hedge fund manager on why Japan is heading for an imminent collapse. He's been saying that for the past 5 years. Guess what? Japan's stock market is rising. Bass is predicting the currency will fall to 200 Yen to the Dollar within the next 12-16 months when the world wakes up to the fake that Abenomics and Japan's inverted demographics collapse the economy over there. People are criticizing Bass for the EXACT SAME reasons you are. "Well, uhhhh, it hasn't happened yet!" So do you need instant gratification for investments? The second someone makes a market prediction, it has to pan out in the next  couple of months otherwise it's bad advice? Bass also lost hundreds of thousands of dollars when he first started out. He shorted a company, which subsequently rallied and he was squeezed out of his position. Ultimately, Bass was right: the stock was worthless and it later collapsed, but not before he was forced by the market out of his position. It taught him a valuable lesson on shorting equities, and it goes to the old saying: *"The market can be irrational longer than you can be solvent."*

Go read up on some Warren Buffett. He made his fortune investing in broken stocks, and it took years before the market proved him right. Warren Buffett always has said he invests with the mindset that if the markets were closed for 2-3 years, he wouldn't care. His investment strategy is based on the long-term where what happens in the next 5 years is immaterial when he makes his purchases. He buys companies to hold, not to trade like sardines. 

Like I said, Mises made plenty of predictions that haven't panned out. So did Rothbard. Do you need to be a worshipper of these men? No. When did I ever say that? What I DID say was that Mises and Rothbard made predictions. You're an Austrian Economist. That means you have to agree with much of what Mises and Rothbard argue...I mean, if you disagree with their reasoning, that'd be like saying you're a Christian but you don't follow Jesus. It's kinda tough to make that argument...that you follow Mises and Rothbard, but you don't agree with their predictions. Their predictions are based off of their philosophy, sooo...yeah...

I mean you don't understand the concept that every investor is "wrong" at some point in their investment careers. You buy something that ends up going down, but if it ultimately leads to bigger returns in the long run, is it THAT big of deal? You say you're busy doing "entrepreneurial things" yet you seem to lack the understanding of the irrationality of markets and the valuation of businesses...like Buffett says, just because the market gives you a price of a company from one moment to the next doesn't mean you should trade around those numbers. If you own a house, you don't call up your real estate agent on a daily basis to know how much your property is worth and then buy and sell your property on a regular basis based on those numbers. It's absurd. The same with your car...you don't Blue Book it every day you own it...maybe once when you buy it and once when you sell it, and perhaps a few times in between just for curiosity sake, but you don't obsess over it...yet here you are, doing the exact same retarded thing every rookie in the market does who isn't a successful trader: obsessing over short term movements in the stock market, and using those movements to justify your reasoning. It's called reflexivity. It's the reason why the market tries to strip most people of their investment returns because they try to play the game of, "Well I must be right because over the past 2-3 years, the price has done X." 

It's just funny to me because people buy stocks like they are buying just pieces of paper. I want to slap people who say, "Well, durrrr, they're just paper". You're buying OWNERSHIP in a COMPANY. When you take that perspective, which is the only prudent perspective to have in my opinion, then you could care less what the market does over the short term. Yet here you are, with entrepreneurial things you occupy yourself with, yet you don't understand what stocks actually are, and why the stock market generates "noise" to people's ears.

Finally, let me ask you this: if you started a company and if it wasn't publicly traded as most companies aren't, would you be calling up private equity firms and buying and selling your business on a regular basis to them?* OF COURSE NOT!*  But then again, you're arguing that Peter Schiff was wrong...that his stocks he advised people to buy haven't performed for the here and now. So either you are an active trader who buys and sells for the short term, in which case you would buy and sell in the short term in private companies, cars, houses, etc., ORRRR, you hold this cognitive dissonance view that it would be absurd to buy and sell real estate, private companies, cars, etc. in the short term, but you should absolutely buy and sell publicly traded companies in the short term. Because you argue Schiff is wrong, but it's only in the short term, yet it's ridiculous to trade stocks...because they're companies...just like it's ridiculous to call up your real estate agent every day to buy and sell your house, or just like how ridiculous it would be to buy and sell a private company on a daily basis, or your car on a daily basis. But nope! Different standards for publicly traded stocks! Hahahahha

It just blows my mind how people somehow view publicly traded companies different from private companies. Yes, there are regulatory differences, but at the end of the day, were people trading in and out of Facebook before it went public? NOOOO! But now they do on a second, by second, basis! It's a weird form of psychology that I won't understand...but then again, it's cognitive dissonance, which you have clearly demonstrated in your posts...that somehow Mises was a great thinker, yet his major predictions on socialism and paper money failing have not yet come to fruition, yet on the other hand Peter Schiff has terrible investment advice and was completely wrong because over the past 3 years, THREE YEARS, you could have done better doing something else with your money. Ohhh, okay! Nice standard you got. Neglect the previous decade where you far outperformed anyone else on the market. hahahha...

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## Gaddafi Duck

To cut thru everything, this is how I see it. Would you rather have:

1) Someone advises you to buy Stock ABC that goes from $8 to $2 in Year 2, but then rallies to $80 in Year 10, OR...
2) Someone advises you to buy Stock XYZ that goes from $8 to $20 in Year 2, but then settles at $15 in  Year 10

Of course, these are hypothetical numbers, but you get the idea. Schiff isn't investing and targeting for Year 2, but Year 10. The optimal scenario would be to buy Stock XYZ, cash out in Year 2, and then go into Stock ABC. But again, that's like saying it would be best to go from cash in 1995 to the NASDAQ, and then sell in February of 2000, and then go into real estate, and then to cash out of that in 2006 to buy oil and then cash out of that in the summer of 2008 to go into cash and then to buy Las Vegas Sands when it was $1.70 in 2009 and sold it in 2010 for $80, and then shorted gold in 2011 and then went into Netflix last year then to cash out this past summer.

Easier said than done. The point I'm making is you're far better off with long term investments than short term. Because what you're guaranteed in the short term is higher transaction costs, and the active in and out of sector trading is incredibly risky. It's like you run out of your house when there's  a fire, but sure I *guess* you could have ran back in and grabbed a few belongings. Is it REALLY worth it?

*You're stepping over dollar bills to pick up pennies.*  I guarantee you'll be eating crow in a few years if you don't buy gold stocks. Sure, you could have doubled your money if you stayed in the Dow from 2009 until now and lost money in gold stocks...but long term you'll be better off in gold. I'm sure you'll crawl back in a hole when gold rallies.. yet somehow feel convinced you were right by saying Schiff was wrong, because between late 2011 and early 2014, gold underperformed...yet you miss the bigger picture: from 1999 to 2020, gold will have been the best yielding asset to purchase, aside from a handful of stocks that go on to change human lives' forever. When you find out what those stocks are, let us all know. Or better yet, don't tell us, invest in them yourself with everything yah got, and then you can come back here when you're a multi-billionaire and tell us how wrong Schiff was. 

But for the rest of us who don't know the handful of stocks that are going to go up 10,000% in the next decade, it's a bit easier to target good gold companies, or perhaps just the metal itself, than to predict and know the next big thing that will revolutionize an industry.

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## osan

> I just find it ironic how you can possibly subscribe to the Austrian School of Economics, a school of thought centered around free will of man and human action in the open market, a philosophy centered around the sovereign individual where the state flies in the face of everything in the natural order, where the Austrians have built a name for themselves by being Anti-Central Bankers, Anti-Central Planners, and yet after all of Mises' and Rothbard's bearishness of the State, _we still have it_! The government is still here...paper money is still here...all backed by clueless bureaucrats for decades...


Either you are incredibly ignorant of the political history of the human race or you are a troll.  Or perhaps brain damaged, but I will cut you the benefit on that one.

Your reasoning is hopelessly wreckage-like in that you assume that because some condition persists that a model of reality that has not been realized perforce cannot be.  This is the presumption of mutual exclusivity and you are a LONG way from demonstrating it to be the case.




> It's cognitive dissonance.


The only congitive dissonance I experience is that which arises when reading your nonsensical statement.




> On the one hand you're an Austrian and subsequently criticize Peter Schiff because his predictions of the collapse of the largest economy the world has ever seen hasn't happened yet, and yet you completely ignore the rest of those in the Austrian School, like Mises, who said government-controlled health care would fail and socialism would fail. Hey, got news for yah, we have a record number of countries with socialized medicine, _and socialism is everywhere_! So, you're a  hypocrite. Because if you actually applied your logic for "Schiff was wrong" to other areas of life, you'd find the Austrians are "wrong", too. Because none of their predictions have come true...yet.


And it is failing everywhere.  England is heading toward collapse.  You do NOT want to get sick there.  I have family there and they are not amused by their system.  They are wealthy, so can afford to go elsewhere.  Not so much so for most of the rest.  Sweden is in some $#@! because as with all others, they are operating at a loss.  The differentiator there is that they have managed their loss rate better than others and therefore look stable, but they are not.  Norway... on its way. I have family there, too and they are unsure of it all.  That's the best they can do.  My folks in Switzerland are all doctors, so they don't think about it in the least.  My folks in Spain are in some discomfort.  My folks kn France are billionaires who never talk to me so I can't say how they feel about it, but I suspect they are OK because they can afford the best.  My folks in Hungary are in notably worse shape than before and that socialized system is clearly degrading.  My folks in Holland... well, it's Holland and all I can say is "hooboy".  But seriously, they are also operating at a loss.  Haven't queried my cousins in Germany, but knowing the Germans they are also at minimal losses, but I would bet money that they operate on losses in any event.  Nature of the beast.  This is what redistribution DOES.  It is inherent to the nature of the beast.




> 1) Health care is more socialized than ever before, and it's still here.



See paragraph above




> 2) Paper money is _more inflated than ever before_, and it's still here.


Meaningless statement as it gives no baseline frame of reference.




> 3) The bureaucracy is larger than ever imagined, and it's still here.


All three claims tacitly assert that because they remain that Austrian economics must be wrong.  If I have to point out to you in explicit terms the precise nature of your disastrous failure in logic, then I can only conclude you are incapable of doing better or unwilling to.




> So, go start a thread about Rothbard, Mises, Hayek, etc. all being wrong. Because in your eyes, they all are. They predicted collapses, and it's been a long time coming. Why isn't it here yet? Eh? HUH?? And if this all collapses tomorrow, you can easily attribute it to them being permabears. Because obviously every government fails at some point._ We don't still have the Roman_, Mongolian, _or British Empires_...so, DUHHHH, obviously it's only a matter of time. Mises has been dead for 40 years...look how long this music has been playing..


We don't?  Care to demonstrate?  One out of three is equal to random outcome.  FAIL.

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## helmuth_hubener

> Mises and Rothbard and Hayek were rife with predictions that socialism and paper money would fail. Guess what! They've been dead for decades and we still got socialism and paper money!


 Again, my position is going to be that you do not really understand the predictions they made.




> So how is THAT any different from Peter Schiff saying "avoid financials, avoid social media stocks, buy gold, buy gold stocks, buy energy/agriculture" ????


 To be brief?  One loses people their life savings.  The other doesn't.

----------


## helmuth_hubener

Replies!  Replies!  Everybody gets replies!  We'll start with GunnyFreedom, in gratitude for his contributions to the liberty movement in running for office (and winning!) and because it's the most intellectually interesting thread of all the currently dangling threads within this mega-thread.  To review:

*GunnyFreedom* (post 5364878): I'd even go further and say that it's [knowing that the US Dollar could collapse, that is] mostly useless for forming an overall investment strategy.  However, what it does inform is the importance of hedging. ....this knowledge might cause you to put 15-20% of your investment into hedges. -- 

*Helmuth Hubener* (5364888): What do you mean by hedging?

*GunnyFreedom* (5365020): In super simplistic terms, a 'hedge' is a position taken to protect one's self in the event that something goes horribly wrong.  Wearing a bullet-proof vest could be seen as a 'hedge' against being a middle-class white man walking into gangland territory.

We could get hit by a rogue singularity that sucks the planet Earth into a small black hole.  Then again we could not get hit by a rogue singularity that sucks the planet Earth into a small black hole.  Shifting the terms of the debate into could and could not is a pretty effective way to make everything said completely irrelevant.

*Helmuth Hubener* (paraphrasing): As humans, almost all of are relatively poor at determining probabilities and timing, predicting the future, and assessing risk in regards to our investments/speculations.  We can't reliably predict the future.  We don't know what will happen.  Seemingly improbable things end up happening.  What we thought was akin to a "rogue singularity" not worth hedging against, often turns out to be "gangland territory" that we should have hedged against after all.

So, we must hedge against everything.  That's the only rational way to protect your investments an uncertain future with a tendency to surprise us.  But how?  If we must hedge against 100 different possibilities, each will only have 1% or less of our total investment assets, and 1% is not enough to provide real protection to the other 99%.  1% will just not be powerful enough, even if it goes up very, very strongly.

So what's the solution? What do you think?


Gunny hasn't answered, so I will answer myself.  The way to do it is to winnow down the possibilities.  Merge 2 or 3 possibilites into 1.  Find hedges that can take care of many possible outcomes at once.  Come up with categories of future possibilities that are broader somehow.  Get your list of thousands or hundreds down to 20, then 12.  How low could you get it?

Harry Browne's brilliance is that he got it down to 4.  Just four!  Four states that the economy could possibly be in.  They are:

ProsperityRecessionInflationDeflation
These 4 are _comprehensive_.  That is, there simply isn't any other condition that the economy could possibly be in. This insight, this stroke of brilliance allows us to do something very, very powerful:

*Hedge effectively against absolutely everything.*

We can put our investments into four piles, 25% each, and one for each possible condition.  Each pile, we invest in something certain to do well in its economic condition.  We are then prepared for aything.  

This plan has proven to work very well over the decades.

----------


## helmuth_hubener

Next up is Barrex, because he makes a good point:




> I agree with Danke.... you are welcome....
> 
> 
> People profited from Peters advices:
> Danke
> Dankes dad
> 
> 
> People lost because of Peters advice:
> ...


I would first add to Peter's winner column.  People profited from Peter's advice:

Most everyone who first started investing with Europacific Capital in 2009 or later and has stayed in until present.  

Of course, "profited" is relative.  They made money if the alternative was to keep it in a savings account.  They _lost_ money if the alternative was to put it in a stock market index fund.  So... "profited" compared to what?  If Peter's advice convinced them to take money out of their savings account and put it into EuroPac, sure enough: profit ensued.  If Peter's advice convinced them to take money out of some other mutual fund and put it into a EuroPac fund instead, then losses ensued, since EuroPac has performed more poorly than most other mutual funds out there.

People who lost money from Peter's advice:

Most everyone who was invested in Europacific Capital in the year 2008.

This is, of course, extremely shocking since 2008 is the year when Peter Schiff was supposedly proven right.  But it was by far his worst year ever!  The decade leading up to it, he trailed the market, which is always disappointing to an investor, but he did not, as far as I can tell, lead his clients off any cliffs en masse.  In 2008: he did.  His clients were losing 50%, 70%, and even more!  These are _crazy_ losses -- far more even than the losses of the stock market that year!  Since then, he has gone back to just trailing the market -- nothing exciting, but (thank goodness!) nothing catastrophic, either.

Again, "lost" is relative.  In this case, though, EuroPac failed worse than essentially any other major investment out there.  Unless Peter's advice had convinced someone who was previously 100% invested in Lehman Brothers stock, everyone who followed Peter's advice in 2008 lost, and lost _catastrophically_.  Basically non-recoverably.  A 70% loss could take many, many decades to recover from.

So that is a little more complete scorecard for you.

----------


## helmuth_hubener

Gaddafi, I think you are going to be very surprised and off-balanced by some of the things I am going to put in this reply.  I do not think that you have at all an understanding of where I am coming from.  In many ways, I am the _opposite_ of the character you thought you were directing your post at.  So, read on....




> This thread is a good contrarian indicator. The Schiff-haters come out of the woodwork and tout how "wrong" he's been, when in fact you're up better than 5x if you took his advice and invested in gold vs. if you took any other investor's advice and invested in the Dow or their special mutual fund.


 I am not a Schiff-hater.  I supported his bid for the Senate and largely agree with his political views.

If Peter Schiff's advice was just "invest in gold" then you might have a point.  Gold has gone up from around $260/oz in 1999 to $1200 today, which is, yes, more than a 5x nominal return (though less than that in real return, which is more important).  Unfortunately, that's not his advice.  He recommends no more than 20% in gold, and seems to more commonly recommend 5%, 10%, and 15%, according to the reports given in this thread.  What about the other 95%-80%?  *Stocks!*  Stocks in Indonesia!  Mexico!  Japan!  Norway!  Gold mining stocks, of all things!  Look, this is stupidity with a Capital S.  This is the _opposite_ of a safe, secure portfolio.  This is risk, risk, risk, extreme foreign risk, making risky speculative plays in every strange and exotic nation under the sun, and guess what?  I don't think it's a good idea.  He might turn out to be lucky.  He wasn't in 2008.  But lucky or unlucky, it doesn't matter.  It's foolish.




> You DO realize gold has outperformed Warren Buffett, right? People laugh at the fact that gold doesn't pay dividends...neither does Berkshire Hathaway. Neither does oil or corn. So that must mean Buffett, energy, and agriculture are jokes, and we should all just consume dividend paying stocks or corporate bonds.


 I do not laugh at gold.  I think that a safe and balanced portfolio consists of 25% gold.  That's physical gold bullion coins, by the way, not "gold stocks".  And certainly not gold miners.

Warren Buffet has turned out to be a good speculator throughout his life, true.  That does not mean he will be a good speculator _next_ year.  And so I would not give my money to him.  That's not investment.  That's speculation.  Gurus get hot.  Gurus go cold.  Can you tell which ones will be which?  Neither can I.






> If your barometer of "who is right" is based on what the stock market has done in very recent short-term memory, then you could make all sorts of ludicrous statements.


 Indeed.  I am not trying to make ludicrous statements.  My main statement that I am trying to make is that we humans cannot predict the future, and those of us who have money to invest should be more skeptical of those who claim they can, even ones who share our political and economic views.  *As a matter of fact: they can't.*

----------


## helmuth_hubener

> I like Peter Schiff, I think he means well.  But I don't take economic advice from him anymore.   Gerald Clemente, Peter Schiff, Lyndon Larouche, anytime one of those people talk about an imminent economic collapse, I tend to roll my eyes.  There's only so many times you can cry wolf.


Exactly.  Cheack out Harry Browne for a wise, balanced, and agnostic approach.

----------


## helmuth_hubener

> www.schiffgold.com front page, there it is. How much Schiff recommends in gold. He's saying at least 5-10%.


  That is not nearly enough, in my view.  If a bad inflation scenario does come, your little 5% sliver of gold will not be powerful enough to carry the rest of your portfolio -- the other 95%!




> If you're looking for a one-size fits all where Schiff says, "Everyone should have exactly 40% invested in gold," then you won't find it. Because it isn't out there. The best you will find is if you call up EuroPac yourself and talk to a broker...that, or go based off of the countless hours I've listened to Schiff and what's posted on his website. Unless you decide to become a client, you won't get concrete numbers...because Schiff is hounded by regulators, and he's careful about giving out specific numbers to the general public, because when he does some dingbat will sue him.


 Get serious.  Is this statement based on some idiotic thing Schiff has said about regulators not letting him give advice, or something you personally made up?  I can assure you it's not true.  Harry Browne had a radio show and recommended very specific percentages week in and week out in almost every single episode of his show!  Investment advisors can advise; there's no law against it.  Indeed, if they aren't giving advice it's hard to see what good they are!  There are general principles to get across, sure, but at some point you want to get down to talking about specifics.  An investment advisor who won't give specific advice is... what?  Just a useless talking head, might be the most apt description.

----------


## helmuth_hubener

More for Gaddafi:




> This thread embodies the short-term mindedness of most "investors" aka speculators.


 What is the difference between investing and speculating, in your view?  Can you tell me?  Can you draw a hard and clear line between the two?  (I can.)




> The "logic" aka emotional knee-jerk reaction is analogous to why most managed mutual funds fail to outperform index funds...because the focus is so short-term, so quarterly-focused, that if a fund has a down year or two, funds flee, yet investors take for granted the above-average returns that outperformed the market over the course of the past decade.


 That is absolutely not why actively-managed funds do not outperform index funds.  It is no failing on the part of the managers (though many of the managers may have planty of failings).  It is a logical and mathematical issue.  These fund managers _are_ the market.  How could they, then, outperform the market?  They _are_ the market.  How could the market outperform itself?





> Of course, one would say social media stocks are ridiculous speculations that are hardly investments, as no company like Twitter could possibly be worth $45 billion when it loses money.


 Amazon lost lots of money for a long time.  They didn't make any money until years and years after they started.  Was Amazon also "ridiculous" and overvalued in those early years?  There so many different ways to look at these things.  Is Twitter a new Amazon, or a new Toys.com?  Bottom line: no one really knows.  So why risk your life savings speculating on it either way?





> If your barometer of "who is right" is based on what the stock market has done in very recent short-term memory


 It isn't.




> Of course, Schiff was laughed at in 2005 and 2006 for his claims. They didn't come to fruition until 2008. Was he wrong? No.


 If I am a Schiff customer in 2008, let me tell you: give me the years when Mr. Schiff is laughed at, any day.  I want _those_ years back.  I'm OK with _them_.  I never lost 70% of my savings in _those_ years.





> No more than a doctor who says you need to lose weight or you'll have a heart attack because you weight 500 lbs. The doctor tells you that 5 years ago and you're still going strong. Does that mean he's wrong? In your view, yes, because it hasn't occurred yet. Yet if you have a heart attack in Year 6, do you go back and yell at your doctor for being wrong for 5 years?


 I already made my brilliant, incisive point about this analogy.  Again:

Yes, it is a good analogy. A wonderful analogy. And the diagnosis, in the sense Gaddafi Duck put it, is exactly what Peter is right about. Printing money ultimately tends to cause inflation. Sure. True. Just like obesity causes health problems.

What Peter Schiff is wrong about is this analogy: *"Your boss is obese. He's going to die by the end of the year anyway. Or maybe sooner. At any moment, anyway. It's 'imminent.' So you should tell him off, quit your job, sell your house, and go work for a skinny boss and invest all your savings in a place with lots of skinny people."*

_That's_ the right analogy. _That's_ what he's wrong about.

----------


## dannno

> People who lost money from Peter's advice:
> 
> Most everyone who was invested in Europacific Capital in the year 2008.
> 
> This is, of course, extremely shocking since 2008 is the year when Peter Schiff was supposedly proven right.  But it was by far his worst year ever!


His investment advise was not geared toward 2008, it is geared toward a longterm goal of preserving and growing wealth.

----------


## helmuth_hubener

> Back to the doctor analogy...I suppose it's not 100% correct. For instance: some obese people die old without any health problems apart from their weight. No heart attacks, strokes, etc., yet perfectly healthy people die young from ailments that are more common in overweight people.
> 
> Unlike the lucky obese guy who eat McDonalds weekly and lives out his life without ever a worry, the economy cannot continue on the path that it's in. Because if that's the case, then the world is turned upside down. Banks can lend to anyone and if they go bankrupt and the loans go bad, the Fed can just print up the shortfall. There's no inflation because theoretically the money supply is destroyed with a defaulted loan, and the Fed only brings the bank back to even. 
> 
> Of course, it doesn't work that way. Some people can smoke for 80 years and not have a spot on their lungs...but economics doesn't operate like biological phenomena or freak accidents. In EVERY instance, money printing leads to inflation.


 No, again: your doctor analogy is wonderful!  Things _are_ unpredictable.  The logic _is_ a little fuzzy.  In short: it _does_ work that way.  The best, most infallible, sure-thing speculation plans usually fail.

You say money printing leads to inflation in every instance.  But back up and slow down.  

What is inflation?  

A decrease in the price of money.  

What is the price of money determined by?

Hmmm.... well what is the price of absolutely everything determined by?

Supply and demand.  Supply.... _and demand._

If the supply of money goes up, will the price go down?

Yes, all else equal.

Will all else be equal?

Aha......







> Even if the money printing is milder than the increase in productivity, the additional money supply prevents prices from falling further than they otherwise would, thus inflation.


 It is inflation in a sense, in a monetary sense, but it is not _price inflation_.  Price inflation occurs when the prices of goods go up in terms of money.




> In EVERY instance, inflation leads to distortions and higher prices


In every instance it does lead to distortions.  In every instance, it does _not_ lead to higher prices, as you yourself just discussed.  That is, the prices at Time Point B are not necessarily higher than those at Time Point A had been.  They could be lower if, for instance, productivity has gone up, or if the demand for money has increased more than the supply.  What you mean is that the prices will be higher than they would have been in a hypothetical future in which the supply of money had not been increased, but that is fairly useless information from an investing/speculating perpective.  Unless someone invests a parallel universe hopping machine, theories about futures which never wound up existing are not actionable.




> Also, it's very wrong to say anyone can predict a recession because eventually one will happen, and so Schiff is just a broke clock that's right twice a day...


 Actually, it seems pretty right.  If he had only predicted recessions soon before their occurance, and not predicted them at other times when sure enough no recessions ended up happening for years, _then_ this criticism would no longer apply.  Since this is not the case, since he has always been predicting the _same_ thing, for his entire career, he does indeed resemble a clock which is always reporting the same time.  This thing he has been predicting for his entire career has, in fact, never happened, and so you can understand, surely, why some might construe that as being "wrong"  .   If this were any other field other than investment, this would be extremely obvious and not a contested issue.  But, this is investment, so many throw all rules of common sense and understanding of how the world works out the window.





> Jim Cramer was wildly bullish on the housing sector. He was "right" for years until it crashed and you very likely lost most of your income in 2008, when in October he told you sell EVERYTHING on national television. Schiff told you to avoid financials in 2006, and behold in 2007/08/09, they collapsed. He's been buying gold for over 15 years, and over the last 13 you point to ONE down year and say, "A-HAH! HE WAS WRONG!"


  Actually, I have pointed to so many things, I can no longer number them.  The fact that he did horrendously bad in the year when he was supposedly the most "right" and all his clairvoyance supposedly came true is just one thing of all the many, many I've explained, though it _is_ one of the most ironic notes in his career, and one that should strike great fear into the hearts of any potential Schiff customers or advice-followers.





> It is possible for someone who doesn't understand the subject matter to correctly guess the right letter on a multiple choice question. It's entirely different when the person actually understands the question, and lays out his answer.


 Is it really so different?  Does anyone really understand the future, when no one has even so much as been there, much less taken detailed observations?  Sounds like guesswork to me.




> When in the 1970s where we had high inflation, many Austrian economists said, "THIS IS IT!" and commented on how fiat money was finally out the door.


 And they were wrong.  Weren't they?  Surely you can agree with me that this prediction was wrong.  It was obviously wrong.





> You're confused about Schiff and his recommendations..


  Am I?  I'd love for you to show me: Post me up some charts that show the returns of Peter Schiff funds, vs. the returns of other major asset classes.  Show me how wonderful and successful he has been, and how confused I am to think that his strategy has been a losing one.  Or maybe it's not high returns, but low volatility where's his funds have shone.  There must be some aspect where he has done great, since I am so confused.  Are you a happy customer of his, Gaddafi?  Were you a customer all through the 2000s?  If so, were you happy in 2008?  You hang in there, still waiting for him to be proven right?  It's turning out to be a long wait, eh?




> Schiff outlining WHY a recession is coming is entirely separate from saying one is coming.


 In terms of _action_, how is it different?  If a recession is coming, an investor would want to take certain actions.  The reasons that he knows it's coming (time machine, a brilliant guru like Schiff, tea leaves, patterns in thrown sticks) are not very important.  The actions are the same regardless.





> Plus, Schiff is predicting the next crisis will be "the one" that sinks the phony economy. I just find it comical how you can be nit picky about how you interpret Schiff's warnings as, "He predicted it in 2013, but it didn't happen!" Yet you miss the much bigger point: That the US economy is going to collapse far more than your run-of-the-mill every 4-6 year recession. He's saying the largest economy that has ever existed is going to collapse within the next 5 years. That's a a pretty big deal. And you're complaining he may be 2 or 3 years later than now in his predictions?? So, if someone was sitting around in 470 A.D. saying the Roman Empire was going to collapse, but it didn't happen until 476 A.D., are you going to say, "Wow, that guy was wrong."


  Yes.  He was wrong to predict the future at all.  If Peter Schiff turns out to be right, and the economy collapses and the dollar burns, or if the Roman guy turns out to be right and his empire collapes, why will it be that he was right?  Answer: because he was lucky.  Likewise, if not, why will that be?  Because he was unlucky.  





> I mean, you DO realize this is a collapse of a HUGE trend--that is, American supremacy which has existed since World War I. Who gives if it's this year or next year? If it happens in 2015 vs. 2013, is it that big of deal? As Schiff said back in his Schiff was Right video, he said, in 2006, the 2008 collapse could happen "next year or the year after" as being "immaterial," which is so true! It's immaterial whether the collapse occurs in 2014 or 2015. Heck, even if it doesn't occur until 2017. It's a big deal. It's the end of the American Empire--the largest in world history. A thousand years from now, if there is a thousand years from now, are people going to look back and make a big deal about when the US collapsed? Is the difference between 2015 and 2014 or 2016 a big deal in the grand scheme of things?


  It might make a big difference if it doesn't happen for another 20 years, though.  It didn't happen in the _last_ 20 years.  It may fail to happen again.  We just don't know.





> Ya gotta love the standards people set. On the one hand, they recognize Peter Schiff is predicting the collapse of the largest military and economic empire the world has ever seen, and yet on the other hand they're throwing a fit because it's 2014 and it hasn't fallen yet. I suppose they'll be voicing discontent with Peter Schiff if and when the collapse happens in 2014 or 2015, or maybe even 2016 or 2017.


*Great Depression 1990*


...or maybe 1995.  Or maybe 2004.  Or maybe 2016 or 2017.  Or maybe 2022.  Or maybe.....




> Stepping over dollar bills to pick up pennies, as they say...or not seeing the forest for the trees, maybe? You're getting caught up in the microscopic details, yet you don't recognize the card house wobbling.


 Been wobbling for decades.  Doesn't mean it will fall in my lifetime.  All the same reasons you give for collapse were also true in 1980.  And 1970.....




> I guess to make another point is this...it's all about perspective. Some people view history as a sequence of set events occurring at various dates in time..others see history in a continuum. One could argue the US is already collapsing. A debt level that has surpassed sustainability, perpetual money printing, 1 out of 6 Americans on food stamps--more than at any point in our history--, 92 million unemployed or underemployed--more than any point in our history--, etc. etc.


There are good things in the economy, too.  As I mentioned earlier in the thread, one of Peter's most foolish statements was an answer given to a magazine in which he stated there was nothing good to say about the US economy.  Literally, nothing.  I just have to shake my head.




> Schiff is predicting the *inevitable*..


 You think his predictions are *inevitable*?  Then you are wrong.  You should go to the palm-reader booth at the carnival.  She is also predicting the inevitable.  She'll tell you so, after all.  The sign outside the tent maybe even says so.  It's in print -- it must be true!





> You remind me of the overly confident people who smugly call in to debate Schiff, and he easily disposes with them. The guest callers often come on aggressive, and then get tongue-tied and struggle to articulate a word of English...but they'll quickly come on message boards and tout how wrong Schiff was.


 Yes, the callers of _every_ radio show can very easily be made to look like bufoons by the host if he so chooses.  The host controls the format.  He controls the whole show.  He is in the Power Seat.  Haven't you ever listened to Rush Limbaugh or Mark Levin or any of the other loud-mouth talk jocks, or do you only listen to Schiff?  Look, even the relatively inarticulate and stupid Sean Hannity can make his callers look stupid and inferior.  Making your callers look bad is no virtue nor mark of greatness for a talk show host.  I would say the opposite.  Being rude and demeaning to your callers, abusing your more powerful conversational position, shows a lack of character and class.  I think it's a sign of class when the host can make his guests and callers sound good; when he's not so insecure he always has to make everyone around him sound stupider than him, to tear them down.  That takes dignity and intelligence to make _other_ people sound good.  That's the kind of man that could command _my_ respect.

[QUOTE=Gaddafi Duck;5377983]




> I just find it ironic how you can possibly subscribe to the Austrian School of Economics, a school of thought centered around free will of man and human action in the open market,


  Free will and open-ended human action = no *"inevitable!"* futures for humans.





> According to helmuth's logic, if you predict the US economy will collapse due to 1) excessive debt 2) excessive money printing 3) excessive consumption, and that people will stop consuming and using debt at the levels they currently are, and if you say this will lead to a recession and it's 2014 and no recession has come, then you're wrong.


 You are correct!  You actually portray my view correctly, for perhaps the first time this thread.  Though not fully, and not deeply.  Here is why such a person is "wrong":

*Because he presumed to predict the future at all.*  

This is the most important and fundamental reason such a man is wrong.  Whether or not his prediction comes true is really an irrelevant detail.  If he's right, it's because he was lucky, not because he knew the future.  If he thought he knew the future, if he thought it was *"inevitable!"* that he'd be proven right, in the event that then his prediction happens to pan out, that doesn't change the fact that he was fundamentally wrong in his arrogant delusion about the inevitability.  It was never inevitable.  He just got lucky.





> Then again, if a recession comes in 2015, you can simply chuck it up to sheer coincidence because recessions happen every once in a while, so it was bound to happen.


 Recessions do seem to happen sometimes.  No one knows when or if they will happen.  If I want to know when the next recession will happen, should I ask:

1. The local palm reader
2. Peter Schiff
3. Jim Cramer
4. Warren Buffet
5. Ron Paul

My answer?  None of the above!  Obviously!  They just don't know!




> So I'm not sure what helmuth is really saying because he's creating an impossible standard.


 How so?




> Mises said central banking would fail and we're decades past him predicting that. Central banks will fail at some point as all things humans create fail. So Mises is incredibly wrong in his predictions because we've had central banks longer than ANY Austrian on the planet predicted decades ago.


 You are totally misunderstanding and misrepresenting Mises.  I take umbrage, as I respect Mises greatly.  Why don't you find me a quote, any quote, _a single solitary quote_, from the voluminous works of Ludwig von Mises, predicting whatever it is you think he predicted, and then explain to me what, precisely, in the quote he said which turned out to be untrue.  Thanks.





> How can a mechanic's advice be possibly right if you fail to get your car repaired and it subsequently breaks down a year later? Even if the specific part that the mechanic pointed out will fail actually does, how do you know it's because of what the mechanic said versus "just one of those things" ? Parts fail all the time. ...eventually, belts will get worn out in your car and oil starts leaking because seals go bad. You don't need a degree for that..you could just grab yourself a trusty medical or mechanical permabear to tell you you need to fix your car.
> 
> But then again, the difference between a permabear on anything versus a good doctor, a good mechanic, or a good economist, is that the good doctor, the good mechanic, and the good economist, will tell you WHY these things will happen. They can diagnose WHAT is the problem and WHAT it will lead to and give you a  blueprint to follow to mitigate or eliminate the contingencies. Can they tell you in 23 hours and 2 minutes that XYZ will occur? No. They can only say XYZ will "likely" occur in the "near future" or perhaps down the road sometime...


 I love the car mechanic analogy.  Another wonderful analogy!  You have a talent for coming up with these things!

In car mechanics, we have a bottom line: does the car get you to work every day?  If it doesn't, guess what?  The mechanic failed (assuming you're rich and there is a mechanic who you put in charge of such things).  If the car runs smoothly, the mechanic did a good job.  If it runs lousy and breaks, he is a failure and a lousy mechanic.  Very simple.

In investment, we also have a bottom line: are you able to preserve and grow your wealth in a safe fashion?  The bottom line is... the bottom line.  You can look at the last line on your balance sheet and see whether your investment strategy/advisor is good or not.  If you make money over the term in which you wish to make it, in the amounts you wish to make it, then your strategy is good.  It's getting the results you want.  What better barometer than that?  If you lose money, though, then your investment advisor has done a bad job.  You didn't want to lose money.  That wasn't the goal.  He has, to an extent, failed.

Now every advisor and every mechanic will fail from time to time.  We humans fail.  But a mechanic who, for his entire career, was never able to cause any car to run longer than it would have had the car simply been left alone, we would look at that mechanic and say he was a failure.  Would we keep bring our cars to him if he never fixed their problems?  Would we invent a thousand different excuses and apologia to explain why the utterly ineffectual mechanic was really the best mechanic around after all?  That he was way better than all the other mechanics in town, maybe even than all others in the world (other than a few others like him) because he understands some things the other mechanics don't?  Would you tell your friends: "You just have to be patient.  Ole Greasy Pete will be proven right in the end.  You'll see.  Yes, I know your car motor just blew up after he worked on it because he forgot to put in oil.  But eventually, the whole world will see that Pete's right and that oil isn't the best lubricant.  Maybe not this year, maybe not next year, but soon.  "Imminently".  In the meantime, you might have to send a couple more cars to the junkyard after being destroyed, sure.  But in the long run, Pete will be proven right.  He is the best mechanic in the business, hands down and that's truth."

Would you say that?

I would say that Peter Schiff has been unsuccessful in gaining his investing (I would say speculating) clients good results *for his entire career.*  A mechanic who fails to fix a single car for his entire career would be considered an utter and total failure.  By this same measure, using your beautiful analogy, Peter Schiff is.... what?




> On the one hand you pick out and criticize one person for being wrong, yet subsequently say you're a fan of those who were plenty wrong in their greatest bodies of work...predicting the collapse of socialism and paper money.


 Again, find me one single, solitary quote.  I am not afraid to admit that all great men can be wrong.  But what you think Mises was wrong about, he was not wrong about.  If you're so sure he was wrong, you should be able to quote me the chapter and verse where he blundered.




> You complain that Peter Schiff's investment advice is bad because gold stocks have gone down and so has gold.


 When in the world did I ever complain that?  You think that you are arguing against someone totally, totally different than you really are.  That is completely not why Peter Schiff is wrong.  If he is wrong because of that, I am even _more_ wrong, because I think his 5% gold recomendation is puny and diminutive and recommend instead 25%.  So while he is 5% wrong when gold goes down, I am 25% wrong.  I accept that.  I embrace it.




> Well, for starters, you're still up 5-6 fold if you took Schiff's advice in 1999 to buy gold. How good of a return have other asset classes had over the past decade? You'd be hard pressed to find better returns, unless you of course bought into niche stocks. Apart from a handful of stocks that have returned 10x their initial investment from 10 years ago, you were better off with Schiff's advice, no? So your criticism is unfounded.


 Yes, that 5-10% (your words, Gaddafi!) of your portfolio would have done very well.  The part that's in in Indonesian mining companies?  Not so hot.  Peter's funds have not done well.  You beg to differ?  Show me the charts!  _Prove_ me wrong!  Don't just bluster.





> Go watch some videos of Kyle Bass. He made his fortune betting on the subprime crisis. Right now, he's the most outspoken hedge fund manager on why Japan is heading for an imminent collapse. He's been saying that for the past 5 years. Guess what? Japan's stock market is rising. Bass is predicting the currency will fall to 200 Yen to the Dollar within the next 12-16 months when the world wakes up to the fake that Abenomics and Japan's inverted demographics collapse the economy over there. People are criticizing Bass for the EXACT SAME reasons you are. "Well, uhhhh, it hasn't happened yet!" So do you need instant gratification for investments? The second someone makes a market prediction, it has to pan out in the next  couple of months otherwise it's bad advice? Bass also lost hundreds of thousands of dollars when he first started out. He shorted a company, which subsequently rallied and he was squeezed out of his position. Ultimately, Bass was right: the stock was worthless and it later collapsed, but not before he was forced by the market out of his position. It taught him a valuable lesson on shorting equities, and it goes to the old saying: *"The market can be irrational longer than you can be solvent."*


Kyle Bass does not know the future.





> Go read up on some Warren Buffett. He made his fortune investing in broken stocks, and it took years before the market proved him right. Warren Buffett always has said he invests with the mindset that if the markets were closed for 2-3 years, he wouldn't care. His investment strategy is based on the long-term where what happens in the next 5 years is immaterial when he makes his purchases.


 Warren Buffet does not know the future.




> He buys companies to hold, not to trade like sardines.


 Do people really trade sardines?  




> Like I said, Mises made plenty of predictions that haven't panned out. So did Rothbard. Do you need to be a worshipper of these men? No. When did I ever say that?


 And when did anyone say that you did?  And just for repitition's sake, remember, I am calling you out on this bogus claim of false Mises predictions.  *One single solitary quote.*




> yet here you are, doing the exact same retarded thing every rookie in the market does who isn't a successful trader: obsessing over short term movements in the stock market, and using those movements to justify your reasoning.


 No, I am not.  You misunderstand me so profoundly and thoroughly, I think you must not have read much of anything I have written in this thread.  Nor in others.




> It's just funny to me because people buy stocks like they are buying just pieces of paper. I want to slap people who say, "Well, durrrr, they're just paper". You're buying OWNERSHIP in a COMPANY. When you take that perspective, which is the only prudent perspective to have in my opinion, then you could care less what the market does over the short term. Yet here you are, with entrepreneurial things you occupy yourself with, yet you don't understand what stocks actually are, and why the stock market generates "noise" to people's ears.


 So what do I not understand about what stocks really are?  I freely admit I do not understand many things.  If there is something important you think I do not yet know about stocks, then please teach me.  But first, you might consider _actually reading my posts_.





> Finally, let me ask you this: if you started a company and if it wasn't publicly traded as most companies aren't, would you be calling up private equity firms and buying and selling your business on a regular basis to them?


 No.




> * OF COURSE NOT!*


  Well if you already knew the answer, why ask? 




> But then again, you're arguing that Peter Schiff was wrong...that his stocks he advised people to buy haven't performed for the here and now. So either you are an active trader who buys and sells for the short term, in which case you would buy and sell in the short term in private companies, cars, houses, etc., ORRRR, you hold this cognitive dissonance view that it would be absurd to buy and sell real estate, private companies, cars, etc. in the short term, but you should absolutely buy and sell publicly traded companies in the short term.


 None of the above.  Neither describe me accurately.  Try reading my posts.




> Because you argue Schiff is wrong, but it's only in the short term, yet it's ridiculous to trade stocks...because they're companies...just like it's ridiculous to call up your real estate agent every day to buy and sell your house, or just like how ridiculous it would be to buy and sell a private company on a daily basis, or your car on a daily basis. But nope! Different standards for publicly traded stocks! Hahahahha


  Calm down, friend.





> It just blows my mind how people somehow view publicly traded companies different from private companies. Yes, there are regulatory differences, but at the end of the day, were people trading in and out of Facebook before it went public? NOOOO! But now they do on a second, by second, basis! It's a weird form of psychology that I won't understand...but then again, it's cognitive dissonance, which you have clearly demonstrated in your posts...that somehow Mises was a great thinker, yet his major predictions on socialism and paper money failing have not yet come to fruition, yet on the other hand Peter Schiff has terrible investment advice and was completely wrong because over the past 3 years, THREE YEARS, you could have done better doing something else with your money. Ohhh, okay! Nice standard you got. Neglect the previous decade where you far outperformed anyone else on the market. hahahha...


 So now you are just laughing at me over and over?  No, you are laughing at the imaginary character you've invented to argue against and mock.  Please, come to reality.  Read my posts.  Learn what I'm saying.  _Then_ demolish it.  That's all I ask.





> But again, that's like saying it would be best to go from cash in 1995 to the NASDAQ, and then sell in February of 2000, and then go into real estate, and then to cash out of that in 2006 to buy oil and then cash out of that in the summer of 2008 to go into cash and then to buy Las Vegas Sands when it was $1.70 in 2009 and sold it in 2010 for $80, and then shorted gold in 2011 and then went into Netflix last year then to cash out this past summer.
> 
> Easier said than done.


Indeed.  Market timing does not work.




> But for the rest of us who don't know the handful of stocks that are going to go up 10,000% in the next decade, it's a bit easier to target good gold companies, or *perhaps just the metal itself*, than to predict and know the next big thing that will revolutionize an industry.


 _Perhaps?_  Gold companies will not necessarily prosper in an inflationary situation.  Their stock will not necessarily go up.  Gold bullion coins is what I would recommend to protect you against inflation.

----------


## helmuth_hubener

> But again, that's like saying it would be best to go from cash in 1995 to the NASDAQ, and then sell in February of 2000, and then go into real estate, and then to cash out of that in 2006 to buy oil and then cash out of that in the summer of 2008 to go into cash and then to buy Las Vegas Sands when it was $1.70 in 2009 and sold it in 2010 for $80, and then shorted gold in 2011 and then went into Netflix last year then to cash out this past summer.


  Of course, one correction: the asset to be in in 2008 was not cash.  2008 was a deflationary crisis.  What does well in deflation?  According to Harry Browne: long-term US Treasury bonds.  Sure enough, what did well in the first and maybe only serious deflationary episode in post 1971 fiat money world?  US long-term Treasury bonds.  The Harry Browne Permanent Portfolio performed exactly as designed, even in a situation the likelihood of which perhaps no one really took seriously.  I mean: deflation in a fiat money regime?  What are the chances?  Well, who woulda thought.

Note: other types of bonds did not fare so well.  Again, just as Harry had always said.

----------


## helmuth_hubener

> But again, that's like saying it would be best to go from cash in 1995 to the NASDAQ, and then sell in February of 2000, and then go into real estate, and then to cash out of that in 2006 to buy oil and then cash out of that in the summer of 2008 to go into cash and then to buy Las Vegas Sands when it was $1.70 in 2009 and sold it in 2010 for $80, and then shorted gold in 2011 and then went into Netflix last year then to cash out this past summer.


  Of course, one correction: the asset to be in in 2008 was not cash.  2008 was a deflationary crisis.  What does well in deflation?  According to Harry Browne: long-term US Treasury bonds.  Sure enough, what did well in the first and maybe only serious deflationary episode in post 1971 fiat money world?  US long-term Treasury bonds.  The Harry Browne Permanent Portfolio performed exactly as designed, even in a situation the likelihood of which perhaps no one really took seriously.  I mean: deflation in a fiat money regime?  What are the chances?  Well, who woulda thought.

Note: other types of bonds did not fare so well.  Again, just as Harry had always said.

----------


## helmuth_hubener

> I do not know Peter , but looks to me like he is betting long on a sure thing..... house of cards will collapse I imagine sometime ,  say it does , what will the standard  be ?


 In many (though not all) kinds of total collapse or disaster situations we might imagine, gold would be a pretty useful and profitable thing to have.  A little bit of silver as a temporary emergency supply could be useful, too.

----------


## oyarde

> In many (though not all) kinds of total collapse or disaster situations we might imagine, gold would be a pretty useful and profitable thing to have.  A little bit of silver as a temporary emergency supply could be useful, too.


Pretty much.

----------


## helmuth_hubener

> That's a good analogy. The Schiff haters are day traders not investors. Yeah, you might have made money in 2011, 2012 or 2013, by investing in bonds, but that ignores the risk that you took.


 How is it "ignoring" any risk? I, for one, certainly do not think I am ignoring the risk.  As I see it, the main risk is that inflation will increase and interest rates will increase, thus greatly decreasing the value of your bonds.  Another risk would be that the US government defaults on their bond obligations.  This would be a seismic financial event, equivalent to a worldwide level-12 earthquake, and would amount to the end of the US government as it now exists.  But it could happen.

Are there any other risks of which you are aware which I have overlooked?




> I don't see how people who claim to understand basic austrian economics can deny that there's a huge risk in a dollar collapse.


 People who understand Austrian Economics will readily accept and understand that there is a risk both of a dollar collapse, and a risk of a dollar non-collapse.  The wise would be prepared for both risks.

----------


## helmuth_hubener

> was
> 
> was
> 
> was
> 
> was
> 
> was long on stocks.
> ...


 Yes, I did read your lovely, lovely post, dannno.  I thank you for asking.  And thank you for your post.  Please don't get your delicate feelings hurt.

To answer your question: he is dead.  But he kept the investment philosophy he had settled on after a long and brilliant career to the end of his days.  And so, in a way, the correct answer to your question would probably be: yes.  And no, he was not recommending holding stocks for the "medium," much less "short" term.  He recommended holding a portion of your portfolio in stocks, always, permanently.  Permanent is super-long-term.  The longest of the long-term.  Infinite-term.

It's OK.  I know you don't understand.  And it's OK.

----------


## helmuth_hubener

> His investment advise was not geared toward 2008, it is geared toward a longterm goal of preserving and growing wealth.


dannno, put on your thinking cap.  

Let's say you start out with $100,000 which you have painstakingly saved up over many years.

OK?

You still with me?

Then you decide to invest it with Peter Schiff.

Then, the next year, you have $30,000.

You started with $100,000.  Now, you have $30,000.

Again, here are the three things that happened.  I'm making it as simple as I can here:

1. You save up $100,000
2. You invest it with Peter Schiff
3. You now have $30,000

Explain to me how this is effective at achieving a long-term goal of preserving and growing wealth.

----------


## Barrex

> dannno, put on your thinking cap.  
> 
> Let's say you start out with $100,000 which you have painstakingly saved up over many years.
> 
> OK?
> 
> You still with me?
> 
> Then you decide to invest it with Peter Schiff.
> ...


Pulling "facts" out of thin air? People who posted here said that they earned above average from Peters advices. You make up people that are losing money. (already adressed but you keep bringing it up and running in circles.)

----------


## helmuth_hubener

*Peter Schiff's Clients Down in 2008, Too*


Sure his on-air sparring makes for some great TV. And his pointed criticism of the stimulus plan is spot on, especially at a time when people believe the answer to our pile of debt is to spend like crazy. But that doesn't mean Peter Schiff has been an amazing steward of his clients' cash.

Michael Shedlock punctures the Schiff aura, saying he's heard from several clients who claim losses of 40%-70% after investing with EuroPacificCapital. How could this be? Hasn't Schiff been bearish during a horrible year for US equities? Yes, but that negative on US equities was just a part of his overall strategy

Shedlock sums Schiff's complete thesis:

    US Equity Markets Will Crash.
    US Dollar Will Go To Zero (Hyperinflation).
    Decoupling (The rest of the world would be immune to a US slowdown.
    Buy foreign equities and commodities and hold them with no exit strategy.


Schiff was correct about point number 1 above. The US equity markets crashed. That was a very good call. Unfortunately, his investment thesis centered on shorting the dollar in a hyperinflation bet, and buying foreign equities rather than shorting US equities.

Furthermore, Schiff made no allowances for being wrong and had no exit strategy whatsoever.

-- http://www.businessinsider.com/2009/...-this-year-too

----------


## helmuth_hubener

Barrex, I replied to you here:

http://www.ronpaulforums.com/showthr...=1#post5380159




> Pulling "facts" out of thin air? People who posted here said that they earned above average from Peters advices. You make up people that are losing money. (already adressed but you keep bringing it up and running in circles.)


Is this man imaginary?

Early last year, *Richard De Gennaro, a retired Harvard University librarian*, put $100,000, about 15% of his assets, into a Euro Pacific account that included Canadian Oil Sands Trust, which focuses on crude-oil projects in Canada, and the India Capital Growth Fund, which holds investments in companies that do business in India.

Both investments took big hits in 2008, compounded by the fact that the Canadian dollar and the Indian rupee fell 18% and 19%, respectively, against the U.S. dollar. The 83-year-old retiree's account is now worth about $37,000, *a 63% plunge*. Mr. Schiff "goes around saying that he was right," says Mr. De Gennaro. "He was right about one thing and wrong about everything else."

--http://online.wsj.com/news/articles/SB123327685671031439

Is this man lying?

*AJ* says:	

I noticed that you have Peter Schiff as one of the people who called the 08 crash. I was a client back then and my stocks went *down over 70%!* A couple of stocks just totally got wiped out over 90%! One of them never came back. I listened to his radio shows and he never once warned any of his clients. In fact, he said after the fact from angry clients that if he would have known that would happen, he would of told everyone to move to cash. A few months before the crash, I read a book by Bert Dohmen, Prelude to Meltdown and he correctly called the 08 crash. I’m sorry I did not take his advise and instead listened to Peter Schiff. I think you need to remove his name as one of the people who called the crash back then because that is soooo not true.
Thank you.
BTW – You’re website is very informative – thank you for you’re hard work.

-- http://x22report.com/the-economy-is-...act-episode-4/

Did this Schiff client who made his portfolio public just make it up?



-- http://2.bp.blogspot.com/_nSTO-vZpSg...-portfolio.png

Is this man "made up"?

 Anonymous says:	
December 3, 2008 at 7:45 pm	

Danielle,
Peter is a smart guy and saw a lot of bad things happening before they actually did. However, he is nothing but a dirtbag interested in his 3%. And yeah, he is always peddling his stupid books.
You are being very generous comparing yourself with him.
Youtube is also littered with videos of his clients complaining about their losses. I should know I have been with him and *lost more than 75% in less than a year*. I have been to his client-only conferences and met people who invested in stocks that have lost 98% of their value.
http://www.youtube.com/watch?v=9kW64YYcUso

-- http://jugglingdynamite.com/2008/12/...-painful-cure/
The Youtube link is a caller calling in to Peter's show, having *lost 80 to 90% of his savings*, a total loss of $500,000.  Unfortunately it's been deleted, but here's the Wayback Machine page:

http://web.archive.org/web/200811061...?v=9kW64YYcUso

Barrex, these people are real.  Peter Schiff has never denied it.  He openly admits that his clients lost huge sums of money in 2008, and that 50%-70% was typical.  Schiff is an honest man.  He is not lying about these losses, and that is to his credit.  But the losses occurred.  They clearly occurred.  The evidence is overwhelming and clear.  Those on this thread who listen to Schiff regularly have probably heard him admit that his clients lost big in 2008.  So they can confirm that for you, too.

If you still don't believe that real Schiff clients lost real big amounts of real live money in 2008, then I would just encourage you to call Peter Schiff's radio show yourself and ask him.  Like I say, he is honest and I have no doubt that he will tell you.

----------


## Gaddafi Duck

You're sitting here kicking and screaming that X% of his portfolio is in Stocks X, Y, or Z. Yet you're pulling all of these numbers out of your ass. You didn't even know Schiff recommends *AT LEAST* 5-10% in physical gold. Yet here you are, spouting off that the other 90-95% he recommends is foreign stocks in Japan, Norway, and Mexico. Of course, you're oblivious to the fact that Schiff owns land in the Bakken and PRIVATE companies there...you don't realize he owns millions in real estate, and that he also has money in foreign corporate bonds.

So here I am, trying to debate with someone who is tossing around artificial numbers (90-95% stocks) in artificial places (apparently, only Japan, Mexico, and Norway, yet most of his foreign investments are NOT in these countries, let alone his entire portfolio).

I'm not going to rebuild Schiff's portfolio in front of you. But let's face it, you don't listen to the guy enough to have a clue what you're talking about, and what's more hilarious is the fact that you're tearing down his recommendations, yet you don't understand how he has allocated his capital. He has SOME money in gold, SOME money in gold stocks, SOME money in foreign and domestic real estate, SOME money in foreign and domestic private equity, SOME money in foreign corporate bonds, SOME money in foreign currencies, SOME money in foreign stocks. Quite a far cry from the 5-10% in gold/90-95% in Norway, Japan, and Mexico like you're spazzing out about. I'll bet you weren't even aware than Peter Schiff owns some domestic, American companies. So, you're completely off base with your rambling.

In conclusion, I'll say this: call up a EuroPac broker. Have a conversation. Then come back and tell us how much of their advice was close to your 5-10% gold/90-95% Norway, Japan, Mexico stocks assumptions you came on here with. Then we can all laugh at you for starting a thread where you 1) didn't have firm numbers of investment allocation Peter Schiff gave, and so you had to depend on my research 2) completely made stuff up as you went along.

It's like you're having a debate about something you've only had surface exposure to and that you're learning as you go along by debating with people who actually have accounts with EuroPacific Capital who have profited more from Schiff's advice than if we had purchased index funds or mutual funds. 

When you actually have an idea about what Schiff's recommendations are, please come back and tell us how wrong your assumptions were.

----------


## Gaddafi Duck

Hahahah, I love you posting a portfolio of someone who invested in the summer of 2008, who then posted a screenshot of their account in October/November of 2008. I mean, great job at focusing on a period of time where the US stock market plunged over 50%. Hahahhah..wow. The ONLY people who care about what happens to their investments between now and 3-6 months after now, are those who aren't investors, and those who are preparing to die. Because unless you're on your death bed or day trading stocks, WHO CARES? Are you putting your life savings into a company in the Spring and plan to cash out in the Summer and retire? Jesus...I mean, this is beyond retarded that I'm even arguing with someone who cannot see the ridiculousness of someone screenshoting an incredibly brief period of time where the most chaos has ever existed in financial history. Again, you setup impossible standards..because I can screenshot every portfolio of every human on the planet and in every single one, I guarantee you I will find periods of terrible performance, ESPECIALLY THE MONTHS DURING A FINANCIAL CRISIS! Hahahhaha! This is truly just unbelievable...do some rational thought: it was the autumn of 2008. Everything was a firesale. Everything got dragged down, except the US Dollar. It's hardly prudent to recommend people to put 100% of their portfolio into US Dollars. It's incredibly stupid to make your portfolio designed to "thrive" in an economic collapse...by that, I mean betting on the markets dropping significantly. For one, it's incredibly expensive and risky to "short" the market. You need a lot of capital to do it, unless you have crystal ball timing and short the day or month before a collapse. Kyle Bass is betting the Japanese economy will entirely implode, sending the Yenollar ratio to 200:1 with the Nikkei collapsing in real terms. Of course, even though Kyle Bass is 100% certain this will happen, and says it will occur within the next 18 months or sooner, he only has 1-2% of his clients' portfolios on that bet, even though he's more certain of the Japanese collapse than he was with the US mortgage market collapsing where he made his fortune...yet he says his current Japanese short position has the potential to pay out 300/400-to-1, meaning a 30,000% gain if he is right. Now, why not allocate a significant amount of his portfolio to shorting JGBs? Because he's a fiduciary. It's NOT prudent to make a sizable amount of his portfolio a bet on anti-Japan. So, he doesn't.. My point being is this: every portfolio suffer in 2008. Every asset class tanked. That doesn't mean Peter Schiff was wrong...you have to understand who and what Mr. Market is. Just because the stock market spits out prices every second doesn't mean you have to take those prices. Work with Mr. Market when he's irrational/insane..when he's selling everything, and avoid him when he's buying everything. The problem is you don't understand the market. You assume, somehow, the market validates someone's investment philosophy, which is true in the long run...yet you snippet out 1 or 2 portfolios that got into the market at the worst possible time versus the tens of thousands of clients EuroPac has with happy portfolios. Oil tanked down to $33/barrel in October/November of 2008. So are you going to laugh at everyone who bought oil? Everything went down. It was forced liquidation. I guess you could laugh at all those who bought oil at $150 and sold it at $33. Then again, your net worth is pretty insignificant, so I'm not sure who you're laughing at.

The only portfolios you could have posted that showed significant gains during that period would be those who 1) were 100% in US Dollars, in which case the gains were negligible: they just didn't lose money or 2) Who had allocated short positions in financial institutions.

But of course, shorting stocks requires a lot of cash, because you'll be squeezed out in the short run if you don't. So you're left with people who spend significant capital on options and rolling contracts. Is that prudent? I wouldn't think so. Over 90% of option purchases, whether you buy puts or calls, is lost. The real money in options is being the seller, but then you assume far greater risks. 

Warren Buffett would've lost tens of billions of dollars if he didn't lobby Congress to bailout the banks. 

So, you would've been screwed if you invested like Buffett or Schiff and only obsessed over the 3-6 months of the crisis. How about 3-6 years after the crisis? The first stocks to recover from the 2008 crash were gold and foreign stocks; not blue chips.

And you say "Schiff clients lost big in 2008," Yeah, any nimrod who bought anything in January of 2008 and cashed out in December 2008 lost big. Anyone who buys high and sells low loses. Who the HELL is the moron that sells his assets during a financial crisis? I mean, ho-ly-sh-it. Who makes these arguments? It's not a loss until you take it. If you bought in 2007 and didn't sell a single share, did you lose anything?? No!. It's not that hard to understand. It really, REALLY isn't. The ONLY people who lost money in 2008 were the idiots who sold at the bottom. Did clients buy into the market at the worst time (the top) and cashed out at the worst time (the bottom)? Yep! Happens all the time! If you're that stupid, truly  that stupid, then no investment advisor can help you. But for those who just ride out storms and accumulate more during a collapse, you don't lose anything. How completely dumb is that? 


I'm done sorting this all out for you.

----------


## Barrex

> Barrex, I replied to you here:
> 
> http://www.ronpaulforums.com/showthr...=1#post5380159
> 
> 
> 
> Is this man imaginary?
> Early last year, *Richard De Gennaro, a retired Harvard University librarian*, put $100,000, about 15% of his assets, into a Euro Pacific account that included Canadian Oil Sands Trust, which focuses on crude-oil projects in Canada, and the India Capital Growth Fund, which holds investments in companies that do business in India.
> 
> ...


EVERYONE LOST MONEY IN 2008!!! (except bailout $#@!s). Investing is not 2 days or few months.
Nothing you posted is evidence. It is just rambling of anonymous entities without any evidence. You are basing your argument on statements that are not backed by anything:
1. Needs login to read;
2.Pro Shiff article and 1 anti-Shiff anonymous comment;
3.Picture works but like Gaddafi Duck points short time span in worst possible when everyone was losing. 1 account in such short time says nothing; 
4.This youtube video is not available;
5."Sorry, the Wayback Machine does not have this video archived".
6."My intuition is gold is on its way down long term as an investment."- intuition as argument???

"According to some reader feedback"=someone wrote something in comment section without any evidence.

Even those comments (not evidence) are addressed:

Jawzzy 				 (8 hours ago)  				 				 			

 					 	  		 0  		  
  			 	 	 			Reply        	

 			 				 					 						just a cheap spam, bashing Peter name. 					



basementsafe 				 (2 days ago)  				 				 			
 					 	  		 0  		  
  			 	 	 			Reply        	

 			 				 					 						I doubt this guy is even a client of his, he sounds awfully confused. 					



Xasew 				 (2 days ago)  				 				 			
 					 	  		 0  		  
  			 	 	 			Reply        	

 			 				 					 						Daniel:
"If something goes down in price I've made a loss."
Sounds  more like speculation than investing. When you invest money, you don't  care about short term price fluctuations. You care about what you  actually own(i.e. a part of the company). If the company behind the  stock doesn't change and your dividends keep coming, why would you care  if the price is down for a few months or even years? The markets will  smell profit sooner or later and it'll come back up anyway. 					



grapplerke 				 (3 days ago)  				 				 			
 					 	 		+3  		  
  			 	 	 			Reply        	

 			 				 					 						This guy that invested in his portfolio have absolutely no idea  what's going on with the market. I would suggest he leave his money with  Peter and just stop panicking. 					


Only thing that is left that can be even remotley considered as evidence is that picture you posted. I am too lazy to search it my self but Peter dissected that picture in one of his youtube videos. Those stocks bounced back and if his client held onto them he would made profit from them.

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## helmuth_hubener

Dear Mr. Gaddafi,

Thank you so much for your reply!




> You're sitting here kicking and screaming that X% of his portfolio is in Stocks X, Y, or Z.


 I am not kicking and screaming.  I _am_ sitting, and quite contentedly.  I feel like I'm making calm, well-thought-out, rational points.





> Yet you're pulling all of these numbers out of your.


 I think I have provided sufficiently throrough documentation and references to my claims to show that this is not the case.  Certainly if you feel like I have made some claim which I've insufficiently buttressed, point it out!  We're here to improve ourselves and learn.   Iron sharpeneth iron, but it does it with steady, intentional strokes, not random empty jabs.




> You didn't even know Schiff recommends *AT LEAST* 5-10% in physical gold.


 Oh, I did have a pretty good idea, but I was hoping for some documented recommendation, preferably in writing.  Very knowledgeable Schiff people gave a variety of different figures.  You gave the best info, because it's documented in writing on an official Peter Schiff site:  "I have always advocated that investors hold at least 5 to 10% of their portfolio in physical precious metals — gold and silver bullion and coins."  Of course, "at least 5-10%" is a mathematically ridiculous statement, encompassing all numbers from 5% to 100%.  Such intentionally obfuscatory statements are annoying, but common in marketing bologna.  So, it's technically almost meaningless... but it's something.

All in all, the fact that the only written official statement is intentionally vague marketing bologna, and the fact that knowledgeable Schiff followers gave different figures, point to the conclusion that Mr. Schiff is not really a fan of hard, specific numbers in his recommendations.  Which, for very practical people like myself, makes his advice very close to worthless.  *Specific, Mundane, Actionable.*  These are the watchwords of success and productivity.




> Yet here you are, spouting off that the other 90-95% he recommends is foreign stocks in Japan, Norway, and Mexico.


 No, not at all.  I once again politely and patiently suggest that you read my posts.  Perhaps you are using some speed-reading technique in which you skim over and see only key words?  These were all simply examples, of course.  Mr. Schiff also has investments in India, in South America, in short in most every corrupt, bankrupt, third-world basketcase one might care to name.  Now I am not sure he has any holdings in Libya; that may be an exception.  You would know better about that.

Like I say, these were just examples.  The salient point was that if following Schiff, *80 to 95% of ones portfolio is in something other than gold*, whatever that may be.  Australian corporate bonds?  Loans to third-wrold governments around the globe?  Oil and other commodities?  Whatever it may be, it is not gold.  *And so pointing, as you were, to the outsized success of gold the past decade as proof that investing with Mr. Schiff would have been successful is fallacious.*  The 5-20% of your portfolio in precious metals may have done well, at least the portion of that that was in _gold_.  Whatever part you put in silver and platinum would not have experienced the same performance.  Whatever was in gold mining stocks almost certainly did poorly.  Yes, the gold bullion did well.  But the other 80% or more of your portfolio, whatever it was in, was not in gold.




> Of course, you're oblivious to the fact that Schiff owns land in the Bakken and PRIVATE companies there...you don't realize he owns millions in real estate, and that he also has money in foreign corporate bonds.


 Actually, I am not oblivious to these things.  I was aware of them all, other than the specific trivia about the Bakken.  Thank you for teaching us all something!



> So here I am, trying to debate with someone who is tossing around artificial numbers (90-95% stocks) in artificial places (apparently, only Japan, Mexico, and Norway, yet most of his foreign investments are NOT in these countries, let alone his entire portfolio).


  Not at all.  Again, these were axamples of: *things that are not gold.*  You brought up some more examples.  Bully!  If I were in your playbook, I could say: "But you left out agriculture stocks and oil!  You think Peter only has land, real estate, foreign private companies, and foreign corporate bonds!  You're oblivious to him having other agriculture stocks and oil.  What a fool you clearly are."  But that wouldn't make sense, now would it?





> What's more hilarious is the fact that you're tearing down his recommendations, yet you don't understand how he has allocated his capital. He has SOME money in gold, SOME money in gold stocks, SOME money in foreign and domestic real estate, SOME money in foreign and domestic private equity, SOME money in foreign corporate bonds, SOME money in foreign currencies, SOME money in foreign stocks.


  Yes, I do know that.  That is pretty elementary.




> Quite a far cry from the 5-10% in gold/90-95% in Norway, Japan, and Mexico like you're spazzing out about.


 Actually, 5-20% in precious metals are the numbers we've heard from loyal Schiff listeners and readers, and that leaves 80-95% in things other than gold bullion (or even higher if some of the precious metals allocation is in things other than gold bullion).  Again, Norway, Japan, and Mexico were just *examples*.  I'm sure this was just an honest misunderstanding on your part.  I'm so glad I could clear it up so we're on the same page now. 





> In conclusion, I'll say this: call up a EuroPac broker. Have a conversation. Then come back and tell us how much of their advice was close to your 5-10% gold/90-95% Norway, Japan, Mexico stocks assumptions you came on here with.


 Oh, I don't think you really want me to do this.  You want me to have even _more_ ammo?  But it's not a bad idea.  I could record the conversation....




> Then we can all laugh at you for starting a thread where you 1) didn't have firm numbers of investment allocation Peter Schiff gave, and so you had to depend on my research 2) completely made stuff up as you went along.


 1) No one else has firm numbers either.  This seems to be because Peter Schiff does not believe in giving firm numbers.  This is a major failing, in my book, for an investment advisor.  The firmest numbers we do have are the actual dollar amounts some people have lost with him.  We do have _those_ numbers.
2) What, please, have I completely made up?  I am anxious and ready to either retract it or to reference solid evidence for it.




> It's like you're having a debate about something you've only had surface exposure to and that you're learning as you go along by debating with people who actually have accounts with EuroPacific Capital who have profited more from Schiff's advice than if we had purchased index funds or mutual funds.


 I do not think that anyone who has posted on this thread has an account with EuroPacific capital.  Danke's father does.  That's the closest thing.  Or perhaps the account is in Danke's name.  But that is the only one.

I have been exposed to Schiff for many years.  I had the IFollowSchiff app on my iDevice, until it broke.  It is not that I am altogether in the dark, I am just realistic enough to realize that I am also just an ignorant human and so I am willing to learn from anyone who may know more than me on any particular topic.





> When you actually have an idea about what Schiff's recommendations are, please come back and tell us how wrong your assumptions were.


 If you believe I have written anything inaccurate about Mr. Schiff or his recommendations, please quote the offending falsehood.

Thanks again for coming back to reply.  This is a good debate!

----------


## helmuth_hubener

> EVERYONE LOST MONEY IN 2008!!! (except bailout $#@!s).


 Well I didn't, I don't think.  But anyway, are you admitting now that:

People who lost money with Peter Schiff=people who had investments with him in 2008?

Because that's really the bone of contention.  I say that that's true.  You say that.....???

----------


## oyarde

> Well I didn't, I don't think.  But anyway, are you admitting now that:
> 
> People who lost money with Peter Schiff=people who had investments with him in 2008?
> 
> Because that's really the bone of contention.  I say that that's true.  You say that.....???


I figure I "lost money" in 08 if I look at the values of the stocks I held. I lost no money on metals of any kind .Even today overall , gold was around $1259 yesterday , $1240 today , silver around $20 , copper , near $3.40. I have alot of copper , I did not pay any where near $3.40 for any of it , I have lead , I have alot of silver , some of it I pd more than $20 for , but I am not selling it , some of it I pd less than $9 for ...... just this week I bought four silver Isle of Man Crowns for under spot .

----------


## Gaddafi Duck

> *Like I say, these were just examples. The salient point was that if following Schiff, 80 to 95% of ones portfolio is in something other than gold, whatever that may be. Australian corporate bonds? Loans to third-wrold governments around the globe? Oil and other commodities? Whatever it may be, it is not gold.* And so pointing, as you were, to the outsized success of gold the past decade as proof that investing with Mr. Schiff would have been successful is fallacious. The 5-20% of your portfolio in precious metals may have done well, at least the portion of that that was in gold. Whatever part you put in silver and platinum would not have experienced the same performance. Whatever was in gold mining stocks almost certainly did poorly. Yes, the gold bullion did well.* But the other 80% or more of your portfolio, whatever it was in, was not in gold.*


Nahhh, you're backtracking now. Here, let me paste what you said:




> * What about the other 95%-80%?  Stocks!  Stocks in Indonesia!  Mexico!  Japan!  Norway!*  Gold mining stocks, of all things!  Look, this is stupidity with a Capital S.  This is the _opposite_ of a safe, secure portfolio.  This is risk, risk, risk, extreme foreign risk, making risky speculative plays in every strange and exotic nation under the sun, and guess what?  I don't think it's a good idea.  He might turn out to be lucky.  He wasn't in 2008.  But lucky or unlucky, it doesn't matter.  It's foolish.


This is just caricaturing. Just like how Kyle Bass gets annoyed with people obsessing over the 1-2% of his portfolio (betting on a Japanese collapse), you, sir, are obsessing over less than 10% of Schiff's portfolio. You're shouting, *Stocks! Stocks in Indonesia! Mexico! Japan! Norway!* when in fact the majority of Schiff's FOREIGN STOCK investments aren't even in these countries, for one. Two, who cares where the companies are headquartered? I mean, obviously you have different sets of regulations in different countries, and one jurisdiction may be better than another; however, it's entirely possible to have good companies located all over the world. Again, by implying that somehow it's irresponsible to invest in Mexico or Norway because the broader markets there are not doing so well (which isn't the case: Mexico and Norway are doing incredibly well) is painting a nice general brush. You see: good companies exist everywhere. Using your logic, you would be laughing at someone who invested in the US in the 1920's and 1930s because it wasn't until 1954 when the Dow returned to its 1929 level NOMINALLY. Yet there are numerous companies who did incredibly well in the 1930's when the Dow wasn't. Likewise today, *Peter Schiff is known for recommending commodities, foreign stocks, foreign bonds, and real estate, because he thinks the US economy will collapse*; however, *Peter Schiff STILL owns some US stocks*. It's not a paradox at all. Like I said, there are P*LENTY of American companies that will thrive in an economic collapse*; just like how there will be *PLENTY of Norwegian or Mexican or Japanese stocks that will do well*. You just assume it's irresponsible to recommend investing in anything in Indonesia, Norway, Mexico, or Japan, otherwise you wouldn't've said it would be irresponsible to do so.

You don't have any idea what companies Peter Schiff is recommending people to invest in. You just hear he has "some stocks in countries A, B, and C" yet you assume because you don't like countries A, B, C for investing that the stocks certainly must be bad. That's analogous to me saying I own US stocks from 2009-present and you assuming, "WOW! You  have good returns!" because the Dow has more than doubled and the S&P nearly tripling. Yet there are plenty of US stocks from 2009-present that have collapsed. *You can't ASSUME the stocks I have or Peter Schiff has are doing well or poorly just based on what an overall index is doing.* 

Like I said, you don't have a clue what Peter Schiff is recommending. You admit you "have an idea" but that's like me saying I have an idea about astrophysics; therefore, I feel like I can criticize the theories of an astrophysicist. You're learning as you go along in this thread about what exactly Peter Schiff is recommending, so it's entirely understandable that you don't have a clue and are spouting off overly generalized recommendations

----------


## Gaddafi Duck

> Well I didn't, I don't think.  But anyway, are you admitting now that:
> 
> People who lost money with Peter Schiff=people who had investments with him in 2008?
> 
> Because that's really the bone of contention.  I say that that's true.  You say that.....???


Whoa! You DIDN'T lose money from the summer of 2008 to December of 2008? What were you investing in, do tell!! Because even gold bullion declined over that period. So either you had significant short positions to offset your losses in your overall portfolio, or you had 100% of your portfolio in cash (because even 99% in US Dollars and 1% long in anything else would have netted you negative vs. 100% in US Dollars), ORRR, you're making our point for us...one point that I made before:

*You didn't lose any money in 2008* BECAUSE *you didn't buy pre-2008 and then sell during the autumn of 2008*. Convenient omission on your part! Because you come here posting portfolios of people who took a snapshot of their portfolio over a 6 month time period, and therefore you are deriving "OHHH! THESE PEOPLE LOST A FORTUNE!" Yet *you* are *NOT* applying those *same standards* to *YOUR* portfolio. Convenient! I didn't lose money in 2008 either, I agree with you...because like you (if you even had investments at all in 2008), I didn't sell a single share in 2008. But if I showed you a picture of my portfolio, certainly everything was down from January 2008 to December 2008. 

So it's nice and convenient how you can brag that you did better than Schiff because you didn't lose money in 2008. Yet, of course, you didn't sell in 2008, and neither did Peter Schiff, and are posting pictures of people's portfolios and saying, "AHA! See! They lost big!" yet I guarantee you if we took a picture of your portfolio during 2008, it wasn't in the black. But you can say you didn't lose money in 2008 because you didn't realize those losses by SELLING into the collapse, yet I could say the same about Peter Schiff because he not only didn't sell in 2008, but he bought MORE during the crisis! Soooo..nice double standard!

What's perhaps the funniest part of all of this thread is how you're criticizing Peter Schiff and his investment strategy, yet you adhere to Austrian Economics. Austrian economics suggests the free market is good at self-regulating where the bad go bankrupt and get flushed away while the good prospers. And yet here we are...in a post-2008 world...and yet Peter Schiff's company is far larger than it was in 2008...he has opened a number of new offices since then...he's created multiple new businesses in different countries...and he has more clients than ever before. If he was as truly as incompetent of an investor/advisor as you suggest, then he's one hell of a con artist because he's somehow managed to convince many people more people to invest with him!

Of course, you could say so did Bernie Madoff. But then you could have said that about Buffett before he became world-renowned. You could say it about anyone who today is a nobody but in 20 years may replace Buffett's fame. But one thing is for sure: if Peter Schiff is a money loser in the interim as you are suggesting, then he's managed to convince people to give him more money to underperform the market...something that not even Bernie Madoff could do...because Madoff convinced people to invest with him more during a period of time when assets were rising. Far easier to grow a business when you aren't losing client money..so either Peter Schiff is a great salesman and can sell you money-losing ideas, orrr...he's positioning his clients' portfolios appropriately, otherwise they'd pull their funds yesterday.

You also miss the point that Schiff recommends investing in foreign stocks that pay dividends...

----------


## Gaddafi Duck

Wait, isn't helmuth recommending _more_ money into physical gold??? HAH! WOW! He's been wrong, hasn't he?! Gold's down over 35% from its peak in 2011..let's start a thread about how WRONG helmuth is! 

Ohhh, but once again, helmuth doesn't operate with his own logic. His arguments of other people don't apply to him. Because he can troll Schiff with ONE person's portfolio during the worst financial crisis in human history (which if you took a screenshot of those companies today, you'd be in the green), yet I can take a picture of a 2 year period from September 2011-present of gold and laugh all the way to the bank about helmuth. Because he recommends gold and gold's been down over a 2 year time period! Not just down, but down 35%, plus it doesn't pay dividends! PLUS, you don't even factor in inflation! So, really, his investment is down over 50%!! 

Hahahahhhh...this is too good. Like I said, your points about posting one or two people's portfolios during, quite conveniently for you, the WORST FINANCIAL CRISIS EVER, as some sort of trump card where you stand up and throw your arms open and say, "I win!" doesn't seem to apply to you. Because 2011-today has been pretty quiet economically...yet, gold has collapsed over 50% in real terms.

Let's all point and laugh at helmuth. Ha. Ha. Hah. 

Learn to understand that every investor, even Warren Buffett, looks like an idiot if you choose to extract a snapshot of a 6 month period during one's investment career. Of course, you could say gold stocks were the greatest thing to invest in from 2000-2008, because you were up 20x the market in many cases. Why can't you post those portfolios? Ahhh! Only the portfolios of those who chose to get into the market in 2008. 

lol @ that

----------


## Peter4Paul2016

You do not need an economist to understand that our debt is dangerously high, it's only getting worse, the dollar continues to lose value, and that this behavior is not sustainable...  So whether or not we're on the cusp of an "imminent" threat or not...  Long term, we'll find that Schiff is on the money.

----------


## Gaddafi Duck

> You do not need an economist to understand that our debt is dangerously high, it's only getting worse, the dollar continues to lose value, and that this behavior is not sustainable...  So whether or not we're on the cusp of an "imminent" threat or not...  Long term, we'll find that Schiff is on the money.


Yeah, time will tell who is going to be eating crow. According to helmuth's arguments, what happened during 6 months of 2008, where Schiff did NOT recommend people dump their assets, trumps Peter Schiff's returns over the course of 15 years. Case-in-point, the guy is a multi-multi millionaire worth tens of millions, and not too many years ago he was an unemployed college kid taking welfare. Obviously, Schiff is a much shrewder investor and businessman than helmuth is. It's nothing to be ashamed of...we all have our strengths and weaknesses. I just find it ballsy to mock another's investment strategy when they've made their fortune on it, and could easily retire several lifetimes over as opposed to helmuth who may never retire in this lifetime.

It's like Rothbard said: it's okay to be ignorant of economics, that's fine. What's not fine? To be ignorant of economics AND to attempt to discuss it. Just like how I'm not an aerospace mechanic I don't get involved in telling an aerospace mechanic how to do his job, helmuth should be a bit more aware of reality..that he's spouting off how wrong a multi-millionaire investor is with his investment strategy, when helmuth's net worth is negligible. Helmuth says to buy gold, but I truly wonder how many ounces, better yet grams, of gold helmuth actually owns himself.

I'll argue that Warren Buffett's economic intelligence is completely flawed...but I won't say his financial intelligence is anything less than incredible. Likewise, I'd be more quick to laugh at helmuth's net worth than I would Peter Schiff's, as well as attempting to listen to helmuth break down a company's balance sheet and income statement versus Peter Schiff. Because Schiff actually took Accounting and actually looks at the financials of companies he invests in. One has to wonder how much homework helmuth does when investing in stocks, given how he talks about stocks in this thread. Helmuth may very well understand that stocks are actually ownership in companies, but he makes the ignorant flaw of thinking that somehow a brief period of time in the marketplace justifies or proves wrong an investor's portfolio. Like I said before, only a handful of companies are publicly traded on exchanges. Most companies in the United States and the rest of the world do not have ticker symbols. So since most companies do NOT have second-by-second ticks on the NYSE, most people only have ballpark estimates on what their company is worth. The people who own their companies private are not sitting there obsessing over what their company is worth on Thursday versus Friday, but helmuth apparently does when it comes to publicly traded stocks. Likewise, private companies could care less what their company is worth in the summer of 2008 vs. the autumn of 2008, unless, of course, they plan on selling in the summer of 2008 vs. the autumn of 2008. But private companies rarely change ownership, and if they do, it's not like it is in the public markets where you can buy a company in the morning and sell it at lunch. 

So with that in mind, most companies don't care what their business is worth month-to-month. They're in it to build wealth long term.Their view is 2 years, 5 years, 10 years out. The only people who get wrapped up in shorter term time horizons are people like helmuth, day traders, and noob speculators who obsess over investment reflexivity where if the market is going up, they justify themselves buying more, and when the market goes down, they justify themselves selling more, because that's what everyone else is doing.

Of course, I would assume helmuth is more intelligent than to check the value of his real estate on a day-by-day basis, if he even owns any real property himself. But if he did, I very much doubt he'd be obsessing over the value of his house on Tuesday vs. Monday. Likewise, if helmuth truly is doing "entrepreneurial things" I doubt he's hiring an investment banker to value his company on a daily or month basis. It's just funny how those scenarios are ridiculous, where hiring a professional to value your real estate, your private companies, etc. is completely absurd, yet it's completely logical for helmuth, in his eyes, to pull out a snapshot of a portfolio filled with publicly traded stocks which are valued by the market on a second-by-second basis, and how the stocks are trading during the worst bear market in human history. 

It's clear to me that helmuth doesn't "get it". Stocks are ownership in companies. You only care what a stock is worth when you buy it and when you sell it. Do you buy into private companies and sell them on a monthly or quarterly basis? of course not. Just like how you don't buy a house with the intention of selling it 3 months later. Yet here we are...with helmuth's argument...that somehow it's perfectly acceptable to flip the logic around and say, "Of course Schiff clients lost money! Look at this ONE portfolio out of the thousands his firm manages, during half a year in the worst financial crisis in human history!" 

To which, as I said before, I laugh. Because helmuth truly is one of those people in the general public who use the irrationality of financial markets to justify their strategies. Who think just because a stock goes down after an advisor recommends buying them that obviously the advisor is horrible...yet helmuth doesn't understand that when you buy a stock, you must accept the fact that it will inevitably go lower before it goes higher. Because the only time you buy a stock and it never drops below your purchase price is when you buy at the absolute bottom going forward. That's more or less dumb luck than it is investment intelligence. I very much doubt even Warren Buffett has bought companies at the lowest entry point possible, apart from when he announces buying the entire company and the stock rallies above his offer price.

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## Madison320

I think I have Helmuth figured out. He thinks he's got a great investment "formula" that works no matter what the happens in the future (by having a perfectly diversified portfolio). This contradicts investors like Peter Schiff who feel there's a good probability of "X" happening in the future, and therefore you should avoid "X".

Of course in this case "X" is a collapse of the dollar. Basically Schiff's strategy, (and Ron Paul's by the way) is to be diversified, but avoid investing in the dollar.

I tried to have an intelligent argument with Helmuth, specifically I wanted to know why he thinks the dollar is not going to devalue, but it was impossible. Let's just say he exhibits troll-like behavior. But what really bothers me is his lies about Schiff. Unless he's just a complete moron he is lying his ass off.

----------


## Gaddafi Duck

> I think I have Helmuth figured out. He thinks he's got a great investment "formula" that works no matter what the happens in the future (by having a perfectly diversified portfolio). This contradicts investors like Peter Schiff who feel there's a good probability of "X" happening in the future, and therefore you should avoid "X".
> 
> Of course in this case "X" is a collapse of the dollar. Basically Schiff's strategy, (and Ron Paul's by the way) is to be diversified, but avoid investing in the dollar.
> 
> I tried to have an intelligent argument with Helmuth, specifically I wanted to know why he thinks the dollar is not going to devalue, but it was impossible. Let's just say he exhibits troll-like behavior. But what really bothers me is his lies about Schiff. Unless he's just a complete moron he is lying his ass off.


Yeah, well he just doesn't fully understand his own logic. That's the problem. He goes on here posting one portfolio a disgruntled investor had, which was a snapshot during the worst financial crisis in history. Then helmuth goes on to paint a nice broad brush and say, "Schiff investors lost BIG in 2008," when the only people who lost anything in 2008 were those who sold, in which case that's entirely their prerogative as Schiff has no control over whether or not people get cold feet and bail. Otherwise, you didn't lose money if you road out 2008 and didn't sell just like how you don't make any money if you ride out a bubble and don't sell and then it subsequently collapses.

But like I said, helmuth doesn't understand his own logic. Because he would agree it's ridiculous to have his house quoted every day. He would agree its ridiculous to have his one-person business valued each day, too. But for whatever reason, it's completely logical to obsess over the values the market spits out for publicly traded companies during a financial crisis. So he posts a portfolio that was live during the crisis and is using it to say how wrong Schiff was, when in fact Schiff wasn't managing the portfolio--rather, one of his brokers was. That's like saying Bill Gates is wrong when a Microsoft salesperson suggests to a customer to buy Antivirus Program A vs. B because of XYZ. 

Regardless, helmuth doesn't have a clue what's in Peter Schiff's portfolio. He just assumes it's 5-10% gold and 90-95% stocks in Norway, Japan, Mexico, and Indonesia. Forget the fact that Schiff owns millions of dollars worth of real estate, blue chip U.S. multinationals, foreign oil producers, gold miners, foreign corporate bonds, foreign currencies, etc.

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## dannno

> Did this Schiff client who made his portfolio public just make it up?
> 
> 
> 
> -- http://2.bp.blogspot.com/_nSTO-vZpSg...-portfolio.png


I believe I recall that the people who posted their portfolios didn't really take a lot of advice from EuroPac and ended up steering their own investments. Just look at the investments that went down vs. the ones that went up. The investments in gold and foreign stocks fared pretty well, it is the other ones that seem to have lost the most.

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## helmuth_hubener

Wow, endless insults, anger, vitriol, and accusations of dishonesty.  Sometimes I wonder why I bother always being civil in return.

Then I remember, and I am happy.

----------


## helmuth_hubener

> I think I have Helmuth figured out. He thinks he's got a great investment "formula" that works no matter what happens in the future (by having a perfectly diversified portfolio).


 Excellent!  Ding, Ding, Ding!  Winner!  Really, I should not be too hard to figure out.  I have only written this (what you figured out) about a hundred times, sometimes in very large, bold lettering.

Yes, my investment philosophy is this:

1) We do not know the future.
2) So it's a good idea to protect the money that's precious to us in a safe, diversified portfolio, so that it will be safe no matter what comes.

That's it!

It's really pretty simple.




> This contradicts investors like Peter Schiff who feel there's a good probability of "X" happening in the future, and therefore you should avoid "X".
> 
> Of course in this case "X" is a collapse of the dollar. Basically Schiff's strategy, (and Ron Paul's by the way) is to be diversified, but avoid investing in the dollar.


 Yes, point 1) contradicts the alternative view: that we do know the future.  If you think that you, or Peter Schiff, or Ron Paul know the future, Madison my friend I love you, but you are sadly mistaken.





> I tried to have an intelligent argument with Helmuth, specifically I wanted to know why he thinks the dollar is not going to devalue, but it was impossible. Let's just say he exhibits troll-like behavior. But what really bothers me is his lies about Schiff. Unless he's just a complete moron he is lying like crazy.


  It is not that I think the dollar is not going to devalue.  That's what was (and still is) frustrating/confusing to you.  I don't think it _will_ devalue; I don't think it _won't_.  I take no position on it either way, in regards to investing.  *I am agnostic.*  And just as it is agnostics who most frustrate and infuriate everyone on both sides of religious debates, so too in investment debates.

Haven't you noticed that both the stock lovers (like Zippyjuan), and the gold bugs (like, oh I don't know, most everyone else), that both groups disagree with me?  Neither like what I'm saying.  Because I am agnostic.  I'm not preaching that the collapse is coming.  And I'm also not saying that it isn't.

So that's where I'm coming from.  That's where I've wound up, after a lot of study and thought.  It's totally understandable that you're upset and frustrated by such a view, and don't really get it.  It's a very strange, unorthodox view.  But I hope that eventually you may come to understand.  

P.S.: Did you ever get around to listening to those Harry Browne radio shows I linked you to?

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## helmuth_hubener

> Long term, we'll find that Schiff is on the money.


 Actually, both long-term and short-term, we really don't know what's coming.

Welcome to the Forums!  Excited for Rand Paul 2016 campaign, I see?  Great!

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## helmuth_hubener

> Whoa! You DIDN'T lose money from the summer of 2008 to December of 2008?


 Nope.




> What were you investing in, do tell!!


 Mostly in my business.  Make money, pump it back into the business, that was my modus operandi.  I also had some savings in gold bullion coins.




> Because even gold bullion declined over that period.


 Actually, gold was up.  In 2008 it went from $846.75 to $869.75.  Check it:



So, that graph would be the graph of my "passive" investments in 2008, which was essentially all gold, plus whatever random amounts happened to be in my checking account, I suppose.




> *You didn't lose any money in 2008* BECAUSE *you didn't buy pre-2008 and then sell during the autumn of 2008*.


 NOpe, nope, nope.  No verbal subterfuge nor nonsense about realized vs. unrealized.  I didn't lose money.  My net worth went up (as best as I can tell, looking back).  Period.

*BUT...*

This was before I came to be aware of and believe in my current favored portfolio allocation.  I was all in gold (and some silver, and some cash), because I didn't know any better.  I happened to be lucky.  But here's how my current favored portfolio did:



2008: *-0.7, baby!*

That is: Harry Browne's plan performed like a champ.  It gave a smooth, nice ride all through the craziness.  That's what it does.  That's why it's the best.

How did it do it, you ask?  Well, Gaddafi, you write that there were no asset classes going up during 2008.  But you mistake.  There was one.  I even posted a chart of it already (twice, accidentally).  Boom:



*Long-term Government Bonds.*  Up 22.5%.  Long-term government bonds do well in deflation.  That carried the portfolio through.  That's why we hold all the assets, all the time.  Because you just never know.  Because, see, Peter Schiff did not actually "call the crash".  He was not predicting *deflation*.  A deflationary crisis would have been the last thing on his radar.  He would have guffawed at anyone who suggested that on TV, I think.

But, yet: _surprise!_  That is what happened.  Deflation.  Who'd a thunk?

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## IDefendThePlatform

> Actually, both long-term and short-term, we really don't know what's coming. Yes, point 1) contradicts the alternative view: that we do know the future. If you think that you, or Peter Schiff, or Ron Paul know the future, Madison my friend I love you, but you are sadly mistaken.!


Curious if you subscribe to the "efficient market" theory? That is, no one can consistently beat the market so it's better to do what you are currently doing, ie have an asset allocation strategy and just stick to it. 

I personally prefer the Warren Buffet belief that there are "pockets of inefficiency" and it's possible to root them out and beat the market with skill, patience and hard work. 

I also would like to say that you and your detractors may be talking past each other slightly, as at least one of them stated they believe there is a PROBABILITY of X happening, and you replied that we can't KNOW the future for sure. 
I'm currently listening to Nate Silver's book on predictions and he's a pretty big proponent of using Bayesian probabilities as models for future predictions.

----------


## oyarde

Well , maybe you guys should try putting on some Iggy Pop and having a beer while investing  LOL

----------


## Gaddafi Duck

> *Long-term Government Bonds.*  Up 22.5%.  Long-term government bonds do well in deflation.  That carried the portfolio through.  That's why we hold all the assets, all the time.  Because you just never know.  Because, see, Peter Schiff did not actually "call the crash".  He was not predicting *deflation*.  A deflationary crisis would have been the last thing on his radar.  He would have guffawed at anyone who suggested that on TV, I think.


The question isn't how much did long-term government bonds go up, but *how large was your portfolio in government bonds?* Because you only realized the full 22.5% gain IF you had 100% allocation. Suppose you had 50% in long-term government bonds. That's less than a 12% return. And I know you didn't have 50% of your net worth in government bonds, so certainly everything else in your portfolio, aside from the few hundred dollars in cash, tanked, which negated whatever gains in bonds you would have realized. So I find your returns to be as absurd as your analysis of Peter Schiff's portfolio, of which you have very little understanding of.

Further, the concept of "owning every asset" is completely ridiculous autopilot investing. You look at it the common man way: that if you own everything, you're bound to be bailed out by one sector. Yet you're ignoring the very point of investing: to make money, not mitigate losses. By owning every basket, which you don't, you hedge yourself into no return. You limit your upside severely. Because if you had allocation in stocks and bonds and interest rates go up, you have no protection. A higher discount rate reduces the profitability and increases the opportunity costs to capital, which reduces the returns on equities and bonds. So no, this idea of "owning everything" only ensures you'll underperform in a rising rate environment. 

The key isn't to diversify and own everything. Again, your logic is contradictory. On the one hand, as a "business owner" that you apparently are, you know it's important to focus on a few core competencies and not get distracted with tertiary ventures. Yet at the same time, you adhere to the theory that conglomeratizing your portfolio is a good idea. That's analogous to sprinting before you're even out of the womb, let alone crawling yet.

Warren Buffett's returns are gradually waning because his portfolio is gradually becoming the market, because he owns damn near everything. It's hard to outperform everything (the market) when you own everything. Warren Buffett didn't make his money owning everything, just as how Bill Gates or Jim Rogers didn't make their money diversifying. Diversification, as I mentioned, is lazy autopilot investing. Any chump can do it. It's not a mystery; it's the entire structure of the modern 401(k) system where you own baskets of funds that invest in 30-40 different companies. 

You want to know what I think of diversification? It's that you own barely enough of a great story, and too much of a bankrupt one. I do enjoy you posting about US Government Bonds being a good returning asset during 2008, because I clearly pointed out that US Dollars did well, so obviously US Dollars with a 0 + x maturity are along the same lines. But let's face it: you didn't invest 100%, much less 50%, of your portfolio into US Government Bonds. So your claim of a 22.5% return is absurd, because the only ones who realized a 22.5% return were those with 100% allocation into bonds, which you did't have.

Then again, if you did, you're far better at market timing that 99.9% of the population, to which, of course, I laugh at considering here we are....5 years after the fact. Shouldn't you be on a yacht? I mean, if you had known the world was going to flock to US Government Bonds when the US economy was collapsing with the most bankrupt government ever, you must have had some incredible insight that people would run to the storm during a financial hurricane.

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## Gaddafi Duck

> Mostly in my business. Make money, pump it back into the business, that was my modus operandi. I also had some savings in gold bullion coins.


Hahah!! I  LOVE this!! So, you made my point for me: you made money "mostly in your business" (whatever that is. A blog of some sort?). This is the point I made earlier:

*Did you hire someone to do enterprise valuation on your company on a regular basis?*

Of course not! No one does that with private companies! Just as nobody hires a real estate agent to do daily appraisals of their house! But yet here you are, talking about how much money Schiff clients apparently lost when I'm sure most didn't sell shares during the crisis, using NYSE market cap valuations as your guide. 

As I said, and you keep side-stepping this, you don't understand investing. You don't understand the hypocritical nature of your analysis. You take a snapshot of a Schiff client's portfolio during a financial crisis, a small window of time in one's investing career mind you, to make some sort of trump-card point, yet at the same time you don't apply that logic to other businesses that don't have daily market valuations like publicly traded companies do---like the "company" you own that probably has yet to turn a profit.

I'll spell it out: it's asinine to get excited about a 6-month time period of a portfolio. Unless you plan on buying today and selling in half a year, then it's all just market noise. And if you're buying stocks, which is buying a company, and planning to sell it in half a year's time, then you aren't investing but speculating. 

Because nobody buys a house or a company with intentions of selling it half a year later. Can you? Sure you can! If the market pays you a significant premium, why not? But without knowing the future, you could care less what the value is 6 months from now. It's funny that you make the common man's mistake of using short term benchmarks, like a portfolio snapshot over a few month's time, as justification for any of your points. And people wonder why there's so much groupthink on Wall Street! Because people like helmuth hound money managers with screenshots of other money managers and scream, "HEY! This guy outperformed you last quarter. I'm pulling my funds and going to him!" So now you have an industry motivated on reflexivity.

It's a weird psychology. Because stocks are ownership in companies, real companies, but people like helmuth just cannot connect that in their minds. For whatever reason, the NYSE ticker symbols just create a wall in logic. Because helmuth would agree it's absurd to value a company on a short term basis, yet when it comes to public companies, he's quick to pull out short term charts. Hahhaahahhha

And if helmuth does really have a successful business, then the returns must be somewhat atrocious. Assuming he started the company before 2008, which he had to have if he invested money in it during 2008, and now it's 2014, then he's making marginal profit at best. Which is funny because the opportunity costs to capital would suggest he would have made significantly more money investing in other people's businesses than his own, but I'm sure he'll brag about phantom returns in his business, because earlier he said he was "Doing entrepreneurial things," which to any businessman listening to that would know that's code for, "I'm going to school, but taking general studies. Not too sure what I want to do yet, and I've been in college for the past 5 years."

Then again, I don't know helmuth. He may very well be successful in his business. I have my doubts, though, as a successful businessman running a 5+ year old business certainly wouldn't have time to go out of his way to post how Peter Schiff was wrong on an internet message board, and to continuously follow up on it over the course of several months.

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## Gaddafi Duck

So wait, I did a little calculating of the "permanent portfolio":

25% in LT Government bonds yielded less than 6%.
25% in cash yielded 0%; in real terms, negative
25% in gold yielding marginal gains of 2-3%
25% in stocks...well...considering the S&P tanked by over 50%...yeah...

So nobody believe helmuth's numbers as even the nominal numbers yield negative returns. I wonder what the inflation adjusted numbers are. They don't add up. He says he gained 22.5% in LT government bonds, yet he subscribes to the permanent portfolio which would have reduced that "gain" by 25%, assuming, of course, he sold at the end of 2008, which he didn't. So these gains are just phantom gains, just like how people who bought and held Pets.com made millions, when in fact they held past the bankruptcy.

Also, 50% allocation to cash + bonds? That's a lot of exposure to country-specific risk. No thanks.

Of course, helmuth selectively ignores gold stocks from 2000-2008, where you made 10-20x your money if you just threw a dart at the board and bought a random junior. So his story of Schiff being wrong revolves around 

1) No one taking profits in 10-20 baggers in gold mining stocks
2) Investors cashing out at the bottom in 2008
3) Buying back into gold stocks at the peak in 2011
4) Selling gold stocks last month at the bottom

Unless you sold at the bottom, which Schiff never advocated selling in 2008..unless you bought gold stocks and sold them at the trough, which he never recommended, then you followed Schiff's advice and haven't lost money. If I buy Microsoft at $30 and it drops to $20, but I don't sell until it reaches $50, helmuth would say I lost money between $30 and $20. How do you figure? I'm collecting dividends in the meantime. The IRS sees me making a capital gain as I didn't sell at $20. Yet helmuth assumes, by posting a fake Schiff-advised portfolio, that people lost money. Again, you only lost if you sold at the bottom, in which case you always lose if you sell at the bottom. You cannot bank on buying a stock at the absolute bottom that will only continue upward from there. Everytime you buy a stock, it goes down. Unless you time it 100% correctly, you always have a stock go below your entry point.  So how could he be wrong in scenarios you're suggesting that he never advised people to do?

----------


## Gaddafi Duck

Don't look now, but emerging markets whooped every index for 5 consecutive years:

http://www.callan.com/research/downl...free%2F655.pdf

2003: 56%
2004: 26%
2005: 34%
2006: 33%
2007: 40%

5 years running. Looks like Schiff was right. And you're bragging about 25% of  a 22.5% gain in LT government bonds with a 3% coupon for one year? 

75% of the "permanent portfolio" yields 0% dividends/interest. That's horrible. My only upside to the permanent portfolio is solely on capital gains? You DO realize upwards of 80% of all the gains on the S&P over the last 50 years has been in dividends, right? 

Meanwhile, Peter Schiff has advocated investing in high-dividend paying foreign stock. Companies that spit out 6-10% dividends in foreign currencies that will rise as the Dollar depreciates, so it's a double-whammy. Meanwhile, the permanent portfolio says buy 25% into gold (no dividend), 25% into cash (no interest), and 25% into bonds (no yield). The other 25% into stocks, but of course, most stocks don't pay a dividend. Many that do on the US exchanges pay on average of less than 2.5%

Such an imprudent portfolio. When interest rates rise, bonds crash so there goes 25% of your portfolio. If real interest rates rise above 0%, then gold is hammered with the cost of carry. If interest rates rise, your other 25% in stocks will be clobbered as the cost of capital rises for companies restricting and limiting marginal NPV projects, so less value is created for a business resulting in less enterprise value.

So you're left with cash, which does well with higher rates. But what kind of cash? I do wonder. Do you own the US Dollar? Even with higher rates, what if the US Dollar crashes? So there goes your final 25% of your portfolio. Sure, you could say if the Dollar crashes your value in gold skyrockets, but only in Dollar-terms. That's like saying you own a billion shares of Pets.com, but does that really mean anything? It's a bankrupt company. Likewise, if you own a billion dollars worth of gold, but those dollars are worthless, then the question becomes how much gold do you own relative to other currencies, and what are the costs to convert and hold those currencies?

So the permanent portfolio does okay in a low interest rate environment. Surprise! Everything other than cash does well in a low rate environment! The true test is how the portfolio performs during an environment with rising rates. Where values are discounted away and market caps, debt, and cash can all collapse relatively easily.

Suppose the US government defaults. 25% of the portfolio is gone. Poof. Now you're at 75%. Chances are if that event occurs, there will be a run on the Dollar by countries redeeming it. So now you have a deluge of dollars entering the US borders. Poof, another 25% chunk gone. Now you're down to 50%. Oh, but gold will do well! Even if it did, it would have to double just to break even. And if the dollar collapses, one would assume equities would do fine, right? In Zimbabwe they did...nominally. But there will be plenty of companies that get washed away in the flood. So, say your 25% chunk in stocks drops to 20% because the 5% collapsed. Probably more than that as most of the economy depends upon the current model to survive, and the chain reactions that occur. So now a majority of your assets are either worthless, or have diminished so much in value that your ultimate hedge is: gold. 25% in gold.. whereas if you took Peter's advice and bought foreign stocks, you very likely would have great companies with great balance sheets still chugging' along.

----------


## helmuth_hubener

Gaddafi, Gaddafi, Gaddafi, you had there for a while there.  Scratching my head.  Intentionally dropping signs that you have, in fact, read my posts, but then entirely focusing on sentences which you so grossly and obviously misinterpret that the misinterpretation seems it must be intentional as well.  I get it now (I think).  You're Fraa Lodoghir at the Plenary.*  Intentional misinterpretation, intentionally wrong arithmetic, character attacks, all are just useful debating tools for you, and you'll use them along with any other rhetorical trick in the book.  It's nothing personal; you're just playing.  You're here to mock and laugh and see how people react, and then laugh at that reaction, too.  Am I right?  Do I win?  And was my reaction entertaining enough for you?




> Originally Posted by brandon
> 
> 
> I'm not here to make any excuses. I own no bitcoins and never have. I have no skin in the game. I'm not a fanatic and I try to always remain realistic. Because some other people said stupid things is not a reason to discredit what I say.  Are you interested or capable about having a real discussion or are you just here to laugh at people?
> 
> 
> I'm here to laugh.


* _Id been shocked, a few hours ago, when Lodoghir had wandered up to me during Periklyne and begun chit-chatting about our encounter on the Plenary stage. How could he come anywhere near me without body armor and a team of stun-gun-brandishing Inquisitors? How could he not have foreseen that Id devote the rest of my life to plotting violent revenge? Which had forced me to understand that it really wasnt personal, for him: all the rhetorical tricks, the distortions, salted with outright lies, the appeals to emotion, were every bit as much parts of his tool kit as equations and syllogisms were of mine, and he didnt imagine Id really object, any more than Jesry would if I pointed out an error in his theorics._

----------


## helmuth_hubener

> Curious if you subscribe to the "efficient market" theory? That is, no one can consistently beat the market so it's better to do what you are currently doing, ie have an asset allocation strategy and just stick to it. 
> 
> I personally prefer the Warren Buffet belief that there are "pockets of inefficiency" and it's possible to root them out and beat the market with skill, patience and hard work.


 We are humans.  We are imperfect.  So of course there are going to be things -- assets, companies, items at garage sales, whatever -- which are either undervalued or overvalued.  "Under" or "over" _what,_ is, of course, another question.  Value is, of course, subjective (one of the foundational insights of the Austrian School) and so in theory it's all a bit fuzzy.  But in terms of investment, it's undervalued if it's about to go up in price, and it's overvalued if it's about to go down.  Obviously there are "pockets of inefficiency".  There may be huge swaths of inefficiency!  Peter Schiff, for instance, believes there's a huge, gargantuan inefficiency called "the US bond market is several trillion dollars too high yet people keep buying bonds!"  He very well could be right!  It may collapse at any time!  It certainly did (a little bit) _this_ year!

So yes, there's lots of imperfection in the market.  But I'm a practical man.  What does this _mean?_  What should I do about it?  Is it likely that I can take advantage of the inefficiency and beat the market and make oodles of money?

*"Even investment professionals don’t generally beat the markets. The Hulbert Financial Digest tracks the results achieved by the published model portfolios of hundreds of investment newsletters — written by people who spend 8-12 hours a day watching and studying the investment markets. 

"Each year only a handful of newsletters outperforms the Dow Jones Industrial Average. And the handful changes from year to year, so there’s no way to know which advisor will have a 'hot hand' in the coming year. 

"Professionals are consumed with the job of tracking investments, and they have easy access to far more information than you do. If they can’t consistently beat the investment markets, how can you? The answer is: you probably can’t."*  -- Harry Browne, in _Fail-Safe Investing_





> I'm currently listening to Nate Silver's book on predictions and he's a pretty big proponent of using Bayesian probabilities as models for future predictions.


 Will Nate Silver have the "hot hand" in the coming year?  Will his strategy be one of the very few who beat the Dow?  If so, will it do it again next year?  And the year after?

This is a loser's game.  If you want to take risks and speculate, take risks and speculate in your career.  _That's_ where you can have a big pay-off.  _That's_ how you can become rich.  Start a business.  Learn a new skill.  Ask for a raise.  Whatever.  But taking risks in investing?  _Why?_

----------


## Madison320

> Further, the concept of "owning every asset" is completely ridiculous autopilot investing. You look at it the common man way: that if you own everything, you're bound to be bailed out by one sector. Yet you're ignoring the very point of investing: to make money, not mitigate losses. By owning every basket, which you don't, you hedge yourself into no return. You limit your upside severely. Because if you had allocation in stocks and bonds and interest rates go up, you have no protection. A higher discount rate reduces the profitability and increases the opportunity costs to capital, which reduces the returns on equities and bonds. So no, this idea of "owning everything" only ensures you'll underperform in a rising rate environment. 
> 
> The key isn't to diversify and own everything. Again, your logic is contradictory. On the one hand, as a "business owner" that you apparently are, you know it's important to focus on a few core competencies and not get distracted with tertiary ventures. Yet at the same time, you adhere to the theory that conglomeratizing your portfolio is a good idea. That's analogous to sprinting before you're even out of the womb, let alone crawling yet.


Exactly. Being diversified protects you from losses but it also limits your gains. If all you had to do was follow an "investment formula", then everyone would make money investing. But I believe the key is to have more knowledge about what is likely to happen in the future, compared to other investors. And I believe that the collapse or at least serious devaluation of the dollar is inevitable.

----------


## helmuth_hubener

> Exactly. Being diversified protects you from losses but it also limits your gains. If all you had to do was follow an "investment formula", then everyone would make money investing. But I believe the key is to have more knowledge about what is likely to happen in the future, compared to other investors. And I believe that the collapse or at least serious devaluation of the dollar is inevitable.


Hi, Madison!  Speaking of gaining more knowledge, did you ever listen to those Harry Browne radio shows I linked you to?  You had sounded excited to do so.




> I'll check it out, I like Harry Browne. One thing to remember when you are investing is that the more diversified you are the less likely it is that you are going to make big returns. My investment strategy is based on the dollar losing value. If I was diversified in dollars and non-dollars and the dollar crashes, my gains would be offset by my losses.


Here, again, are the two shows I recommend to start with for an overview:

16 Golden Rules of InvestingAn Introduction to the Permanent Portfolio Concept

And the whole archive:

http://www.harrybrowne.org/Archives/...investment.htm

Let me know what you think!  I will be very happy to discuss it with you, even if you think the ideas are terrible and strongly disagree.  In fact, all the better if you disagree.  Let's just disagree with knowledge and understanding.

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## toathis

Peter Schiff finally comes clean "I have a hard time making money"

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## helmuth_hubener

> Because, see, Peter Schiff did not actually "call the crash".  He was not predicting *deflation*.  A deflationary crisis would have been the last thing on his radar.  He would have guffawed at anyone who suggested that on TV, I think.


Lest anyone doubt this (it would have to be someone unfamiliar with Schiff), let me offer up some evidence that he did not consider the possibility of deflation a serious threat:

*"THE DEFLATION RUSE"
...
"The disturbing reality: Deflation risk is pure bunk designed to distract us from the real problem, which is inflation and which the Fed cant effectively counter by raising interest rates because consumers are too close to the edge.

"In 2003, the Fed invoked the threat of deflation to take the stinger out of reported inflation figures. Now theres a strawman if there ever was one."* -- Pages 36-37 of _Crashproof_, by Peter Schiff.  He was wrong.

He was wrong.  He didn't take the possibility of deflation seriously (really, that's an understatement), and he and his customers paid the consequence for that arrogance -- yes, arrogance -- in 2008.

Here's another passage:

*"Bogus Deflation Threat"

"The government says that an increase in official inflation is okay because it shows were successfully avoiding deflation. Theyve got to be kidding.  Ive touched on it before, but the use of a bogus deflation threat to advance the inflation disinformation campaign is something I find especially galling. Its one thing to make a bad thing seem less bad, but its another to make a bad thing out of a good thing.  And that is exactly what our government, with some help from Wall Street, is doing by representing positive inflation figures as somehow being salutary because they militate against deflation."* -- _Crashproof_

And then he goes on to explain why gradual deflation is natural and is actually positively beneficial.  And I agree with him on that.  Jörg Guido Hülsmann has done great work on deflation.  But natural, gradual free-market deflation with sound money (as we saw in the 1800s USA) is very different than deflation under a non-convertible money standard.  Deflation under such a paper money regime (like the one in the US) can be very bad.  See 1929-1945 and 2008-? for the examples that prove this.  Deflationary depressions and deflationary crises are hardly, as Peter put it, "a good thing."

*'Bogus Deflation Threat.  The Deflation Ruse.  Now theres a strawman if there ever was one.  They've got to be kidding.'*  Writing all these things, on the eve of the biggest deflationary crisis in history (to my knowledge): I'd say that falls firmly into the "*Wrong*" category.

----------


## dannno

> Peter Schiff finally comes clean "I have a hard time making money"


Yes I heard he had to sell his third yacht.

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## Gaddafi Duck

> Yes I heard he had to sell his third yacht.


hahahhhha

Remember, people bought individual tulip bulbs for around 10x the annual income of skilled craftsmen. 

Just like how Snapchat founders were offered, what? $2 billion for a nonproprietary technology and a company with zero earnings?

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## toathis

> Yes I heard he had to sell his third yacht.


Hard to buy a Yacht when your entire portfolio is in free fall. Peter Schiff, "Gold stocks and inflation have never been cheaper in my lifetime".

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## Gaddafi Duck

> Hard to buy a Yacht when your entire portfolio is in free fall. Peter Schiff, "Gold stocks and inflation have never been cheaper in my lifetime".


Meanwhile, in space above Tatooine...

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## fearthereaperx

> I believe I recall that the people who posted their portfolios didn't really take a lot of advice from EuroPac and ended up steering their own investments. Just look at the investments that went down vs. the ones that went up. The investments in gold and foreign stocks fared pretty well, it is the other ones that seem to have lost the most.


This is BS. 

HTE(Harvest Energy) was bought out at a 47% premium. BTE(Baytex Energy) is up 150% since 10/2008--not accounting the 5%+dividend it pays out too.

CEF is exactly the same price it was--although it went up 100% in 2011--back in 3/2008 where it is today--not including the dividend payments.

CPGCF(Crescent Point Energy Trust) is up 100% since 3/2007--also, not including the 5%+dividend it pays out annually.

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## oyarde

All I can say is , I have never lost money on gold or bought a yacht , but I have eaten Yak .

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## helmuth_hubener

> This is BS. 
> 
> HTE(Harvest Energy) was bought out at a 47% premium. BTE(Baytex Energy) is up 150% since 10/2008--not accounting the 5%+dividend it pays out too.
> 
> CEF is exactly the same price it was--although it went up 100% in 2011--back in 3/2008 where it is today--not including the dividend payments.
> 
> CPGCF(Crescent Point Energy Trust) is up 100% since 3/2007--also, not including the 5%+dividend it pays out annually.


Feather, this screenshot was taken in January, 2009, not today.  It was to show that Schiff clients lost overwhelming amounts of money in 2008 (the year when Schiff was "right," according to popular myth).  Do try to keep up.

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## helmuth_hubener

Mr. Schiff never admits he is wrong.  That in itself is wrong.

Of course, when you have made predictions that turned out to be incorrect, and simultaneously have the compulsive need to claim to have never been wrong, you will begin resorting to more and more convoluted apologia as to why it is that you _are not_ and _never have been_ wrong in the slightest.  Exhibit:


*A 2-Sentence Proof That Peter Schiff Is Wrong About Inflation*
Earlier we posted a video of gold advocate Peter Schiff getting destroyed on Larry Kudlow's show while talking about inflation, and when it might come.

Schiff's view is that it's not a manner of when inflation will come because it's already here, and that the government is lying about how low it is. That claim, that the government is lying, is why Schiff doesn't feel the need to make a mea culpa.

Anyway, Schiff was on TV with economist professor Scott Sumner, who writes the Money Illusion blog, and who is the leading proponent of Nominal GDP targeting, which in this current environment would call for more easing.

In a blog post responding to his interaction with Schiff, Sumner provides a neat proof that Schiff is wrong on there being significant inflation now.

Why? Because if there were high inflation right now, then real GDP would have to be currently negative.

And we know that's not true, because...

1.  More than 2 million new jobs a year in recent years, and (contra Schiff) the average work week is stable.

2.  Rising industrial production and rising output in all sorts of other sectors like housing and oil and autos and retail and services.

Unless you believe that literally every data point is being faked, then the inflation truthers are just full of it.

-- http://www.businessinsider.com/peter...#ixzz2rk8wuJaF

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## helmuth_hubener

More specific predictions:

*"the depression will be full on by 2012.....inflation will be raging out of control.....we'll have millions more unemployed.....people think that the recession is ending....they see the stock market up, they think, oh, this is a sign of recovery -- this is nonsense.....2 months before the recession the market made all time highs.....the market is clueless.....just because the market is rallying now doesn't mean anything....."* -- from Peter Schiff's radio show, February 3rd, 2010

*"The Depression will be 'Full-On' by 2012."*

Verdict?  *False*.  2012 came and went. Source: http://hikoo.net/haiku/137277
There was no generally-acknowledged depression.  There seems to be no good grounds for believing that the economy was in the state of a Depression in 2012.  Much less that it was "full-on".  Source: http://www.theatlantic.com/business/...charts/266467/

----------


## helmuth_hubener

I really would like to reiterate this again, because I believe it's so important to understand.  And in fact, it is the point of this whole thread.  Yes, that's right, the point of the thread is not Peter Schiff.  My objective in making this thread actually had nothing to do with Peter Schiff per se.  The thread is a gift from me to RPF, trying to help those with significant money from losing that money in investment schemes -- a scenario which is all too common.  Hopefully using Peter as a muse has enabled me to make my point in a way that some have understood.

So, once again, the point of all this:

*"Even investment professionals don’t generally beat the markets. The Hulbert Financial Digest tracks the results achieved by the published model portfolios of hundreds of investment newsletters — written by people who spend 8-12 hours a day watching and studying the investment markets. 

"Each year only a handful of newsletters outperforms the Dow Jones Industrial Average. And the handful changes from year to year, so there’s no way to know which advisor will have a 'hot hand' in the coming year. 

"Professionals are consumed with the job of tracking investments, and they have easy access to far more information than you do. If they can’t consistently beat the investment markets, how can you? The answer is:** YOU PROBABLY CAN'T."*  

-- Harry Browne, in _Fail-Safe Investing_

----------


## Gaddafi Duck

> Feather, this screenshot was taken in January, 2009, not today.  It was to show that Schiff clients lost overwhelming amounts of money in 2008 (the year when Schiff was "right," according to popular myth).  Do try to keep up.


AHHAHAHH!!!

Game. Set. Match. Booyah! helmuth just got 0wned, as evidence by the fact that he followed up with multiple replies, the final one being in 72 pt font. Look at me! I can shout too!! hahahahhahaah

Oh, and it's not a loss until you take it. You say the screenshot was taken at virtually the absolute bottom of the market in 2009 when the person put money into these stocks in mid-2008. That's convenient. Nice 4-5 month time window. 

And who lost money?? Helmuth, once again, ASSUMES they were dumb enough to sell in January of 2009. If you are THAT dumb to sell 4 months into a panicked bear market, then no amount of investment advice will help you. You're borderline retarded. What, you DIDN'T sell when the Dow was dropping 700 points daily in October? You held out another 2 months and threw in the towel? Holy hell...

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## Gaddafi Duck

> I really would like to reiterate this again, because I believe it's so important to understand.  And in fact, it is the point of this whole thread.  Yes, that's right, the point of the thread is not Peter Schiff.  My objective in making this thread actually had nothing to do with Peter Schiff per se.  The thread is a gift from me to RPF, trying to help those with significant money from losing that money in investment schemes -- a scenario which is all too common.  Hopefully using Peter as a muse has enabled me to make my point in a way that some have understood.
> 
> So, once again, the point of all this:
> 
> *"Even investment professionals don’t generally beat the markets. The Hulbert Financial Digest tracks the results achieved by the published model portfolios of hundreds of investment newsletters — written by people who spend 8-12 hours a day watching and studying the investment markets. 
> 
> "Each year only a handful of newsletters outperforms the Dow Jones Industrial Average. And the handful changes from year to year, so there’s no way to know which advisor will have a 'hot hand' in the coming year. 
> 
> "Professionals are consumed with the job of tracking investments, and they have easy access to far more information than you do. If they can’t consistently beat the investment markets, how can you? The answer is:** YOU PROBABLY CAN'T."*  
> ...


Yeah, Harry Browne sounds like an investing dumbass. As Doug Casey says, he's an idiot savant. Maybe a bright guy, but he's clueless.

Case in point: David Einhorn outperformed the market at a 24% compound annual rate since the 1990's. Warren Buffett's compound annual return is something like 22% for decades. How do you explain the countless of people who became multi-millionaires/billionaires when they only had a couple grand to start out? *Because they all outperformed the market.*

In Harry Browne's view, just do index investing. YEAH! 

*Every company in the S&P or Dow or NASDAQ demonstrates you can outperform the market. Because they wouldn't be on those indices if they didn't!!*

----------


## helmuth_hubener

> AHHAHAHH!!!


 Oh, good.  I am glad I am so amusing to you.  Always gratifying to help someone accomplish their goal in life.




> Game. Set. Match. Booyah! helmuth just got 0wned


 Certainly I do not see it that way.

But then, we retards often see things differently than you clever people.

----------


## helmuth_hubener

> How do you explain the countless of people who became multi-millionaires/billionaires when they only had a couple grand to start out? *Because they all outperformed the market.*


 I do not have to explain such people, because I do not believe that they exist in the wild.  I have never known one.  Have you?  Warren Buffet didn't do it.  I do not know anything whatsoever about David Einhorn, yet this phenomenon (supposedly so common) is so exceedingly rare I feel totally safe and confident in saying that he didn't either.

There's a lot of people that make fortunes giving investment advice.
There's a lot of people that make fortunes writing investment books.
But there are _not_ lots of people who make their fortunes merely by investing their own money.  I have never known anyone who took $2,000 and turned it into $1 million, much less billions.  Neither did Harry Browne, who spent more than 40 years in the investment industry.  Neither, I venture to say, do you.

You make your fortune in your career.  You don't make it in your investments.  Your investments can help you.  But your money comes from your career.  You are not going to take $2,000 and turn it into $1 million.  That simply doesn't happen.  It is a myth and a lie and a totally unrealistic expectation, and that unrealistic expectation causes many people to lose huge, huge quantities of money every year.

Thank you so much, Gaddafi, for reminding me to make this point more strongly.

----------


## Gaddafi Duck

> *I do not have to explain such people, because I do not believe that they exist in the wild.  I have never known one.  Have you?  Warren Buffet didn't do it.*  I do not know anything whatsoever about David Einhorn, yet this phenomenon (supposedly so common) is so exceedingly rare I feel totally safe and confident in saying that he didn't either.
> 
> There's a lot of people that make fortunes giving investment advice.
> There's a lot of people that make fortunes writing investment books.
> *But there are not lots of people who make their fortunes merely by investing their own money.*  I have never known anyone who took $2,000 and turned it into $1 million, much less billions.  Neither did Harry Browne, who spent more than 40 years in the investment industry.  Neither, I venture to say, do you.
> 
> You make your fortune in your career.  You don't make it in your investments.  Your investments can help you.  But your money comes from your career.  You are not going to take $2,000 and turn it into $1 million.  That simply doesn't happen.  It is a myth and a lie and a totally unrealistic expectation, and that unrealistic expectation causes many people to lose huge, huge quantities of money every year.
> 
> Thank you so much, Gaddafi, for reminding me to make this point more strongly.


Whoa! Warren Buffett DIDN'T outperform the market?? Wtf..so what you're saying is if I put $10,000, which is what Warren Buffett started with, into the S&P, then I too can be worth $60 billion after 50 years? 

You're so blinded by dogma it's ridiculous. OBVIOUSLY Warren Buffett far outperformed the market. Here's the actual numbers:



Let's see...hmmm..compound annual gain of 19.7% vs. the S&P 500 WITH dividends at 9.4%. Yeah, I'd say he outperformed!

----------


## Gaddafi Duck

Lol...look at those overall gains.

*Buffett: 586,817%
S&P 500: 7,433%*

Which number is bigger, helmuth? Buffett, right? So, that would mean he outperformed the market...quite significantly, too. So it's entirely possible to far outperform the market consistently, and you don't just have to be Warren Buffett to do so.

----------


## helmuth_hubener

> Whoa! Warren Buffett DIDN'T outperform the market??


 Oh Mr. Gaddafi, thank you so much for your reply!  I do not know how you do things in Libya, but here on RPF when we "reply" to someone, that means we address what they actually said.  That's what makes it a valid "reply."

As with so many other of your replies, you have taken something I said, twisted it into something I did not say, mixed it with vitriol and over-the-topness, and made an unquestionable conclusion, the same conclusion all the rest of your posts have come to: that I am an idiot.

So that's fine -- wonderful, in fact!  I am wondering, though, before I reply to your "replies," what you are wanting out of this conversation.  Do you want:

1) For me to actually reply, line-by-line, to all your posts.  If so, would you do me the courtesy of reciprocating?
2) For me to "reply" as you do: by skimming through your post, and then writing whatever I want, or misrepresenting something you have written if possible.
3) For me to come to accept some truth or other that you are trying to get across to me.  If so: what?
4) For me to get fed up and descend into anger and start replying in kind to your prodding.
5) Something else.

Just tell me what your ideal outcome would be.  What would be most entertaining to Mr. Gaddafi, leader of the Free North-African World?  What would make you laugh the most?  I live to serve.

Your servant,

Helmuth

----------


## helmuth_hubener

In the meantime, awaiting guidance from Gaddafi, let me mention that I know a little bit about Warren Buffet's life.  Especially about his genesis (his early years).  And I will just reiterate what I said before: Warren Buffet did not get rich by putting his own money at risk.  Anyone interested could perhaps, oh, I don't know: _read a book._

----------


## helmuth_hubener

> Hi, Madison!  Speaking of gaining more knowledge, did you ever listen to those Harry Browne radio shows I linked you to?  You had sounded excited to do so.
> 
> 
> 
> Here, again, are the two shows I recommend to start with for an overview:
> 
> 16 Golden Rules of InvestingAn Introduction to the Permanent Portfolio Concept
> 
> And the whole archive:
> ...


Madison?  Paging Mr. Madison!

----------


## Gaddafi Duck

> Oh Mr. Gaddafi, thank you so much for your reply!  I do not know how you do things in Libya, but here on RPF w*hen we "reply" to someone, that means we address what they actually said.*  That's what makes it a valid "reply."


Ohh kiss my ass. I could copy and paste exactly what you said and you'll say "gee, that's not what i said!" Example:

helmuth_hubener: Warren Buffett did not outperform the market.
Gaddafi Duck: Warren Buffett DID outperform the market, see, here are the results
helmuth_hubener: THAT'S NOT WHAT I SAID. It'd be nice if you replied to what I actually said.
Everyone else reading my posts: +1 rep to Gaddafi Duck

----------


## helmuth_hubener

> helmuth_hubener: Warren Buffett did not outperform the market.


So, am I to understand that you are _not_ just playing rhetorical games, but truly and sincerely believe that the above is what I said?  That is, that I claim that "Warren Buffett did not outperform the market"?

I'm just trying to figure out where you're coming from.  Also, still wondering how you would prefer me to reply to you, and what your ideal conversational outcome would be.

----------


## Gaddafi Duck

> In the meantime, awaiting guidance from Gaddafi, let me mention that I know a little bit about Warren Buffet's life.  Especially about his genesis (his early years).  And I will just reiterate what I said before: *Warren Buffet did not get rich by putting his own money at risk.*  Anyone interested could perhaps, oh, I don't know: _read a book._


Hah, this is actually quite interesting. You see, back in college I met Warren Buffett personally and had lunch with him as I live in Nebraska and took a class specifically on Warren Buffett's investment theology where I read multiple books on Buffett. They only took the top 10 students in the class to meet him. I was one of them. I'm quite aware of Warren Buffett, who he is, and how he made his money. Otherwise, I don't know how I'd make it in the top 10 of a Warren Buffett investment class and get the opportunity to meet him, have him pay for my lunch, if I didn't know about his strategy considering that's what the entire class was about.

Your point about *Warren Buffett did not get rich by putting his own money at risk.* is completely MOOT (and I'm sure you're going to reply with "THAT'S NOT WHAT I SAID!"). 

Because your original points, and quotes of Harry Browne, was this:




> "Professionals are consumed with the job of tracking investments, and they have easy access to far more information than you do. If they can’t consistently beat the investment markets, how can you? The answer is: YOU PROBABLY CAN'T."


Yet Warren Buffett did beat the market. Quite considerably. 500,000%+ vs. 7,000% on the S&P 500. 

Now YOU are trying to sidestep it by saying, "He didn't get rich investing his own money." Who CARES where he got the money---He beat the market WITH whatever money he had! That's the point! *HE BEAT THE MARKET* Now you're trying to say, "Oh, it wasn't his money" 

No $#@!? Every hedge fund and  mutual fund in existence uses OTHER PEOPLE'S MONEY to make money. That doesn't negate the fact that there are numerous hedge funds and mutual funds and individuals who consistently beat the market. You're trying to make two different arguments, and you don't even get it!

----------


## Danke

Maybe not in the past, but in recent years Warren Buffett has been bailed out by government intervention.

----------


## Gaddafi Duck

> So, am I to understand that you are _not_ just playing rhetorical games, but truly and sincerely believe that the above is what I said?  That is, that I claim that "Warren Buffett did not outperform the market"?
> 
> I'm just trying to figure out where you're coming from.  Also, still wondering how you would prefer me to reply to you, and what your ideal conversational outcome would be.


Hahahah this is too comical! Yes, you DID say Warren Buffett did NOT outperform the market. Scroll up to your post, or here, I'll copy and paste it for you:




> *How do you explain the countless of people who became multi-millionaires/billionaires when they only had a couple grand to start out? Because they all outperformed the market*.





> *I do not have to explain such people, because I do not believe that they exist in the wild.* I have never known one. Have you? *Warren Buffet didn't do it.* I do not know anything whatsoever about David Einhorn, yet this phenomenon (supposedly so common) is so exceedingly rare I feel totally safe and confident in saying that he didn't either.


Sooo...what the $#@! did you mean by that if you didn't mean what I said you said! hahahhah, this is ridiculous!! You back track like none other

----------


## helmuth_hubener

So, any reply, Mr. Gaddafi, sir?

----------


## Gaddafi Duck

> So, any reply, Mr. Gaddafi, sir?


Read above. I destroyed your points. Warren Buffett outperformed the S&P. Benjamin Graham's "Intelligent Investor" illustrated that it is entirely possible to consistently beat the market, because the market trades irrationally.

----------


## helmuth_hubener

> Read above. I destroyed your points. Warren Buffett outperformed the S&P. Benjamin Graham's "Intelligent Investor" illustrated that it is entirely possible to consistently beat the market, because the market trades irrationally.


 No, I mean to post #306, and also to #310.  In order to reply to you in the best possible way, that will cause you the most possible pleasure, I need to know in what way you want me to reply.  What do you want to have happen here?  What are you trying to accomplish?  Well, we know that: to laugh.  But what will cause you to laugh most heartily?  That is what we all need to know.

Thanks!

----------


## Gaddafi Duck

> No, I mean to post #306, and also to #310.  In order to reply to you in the best possible way, that will cause you the most possible pleasure, I need to know in what way you want me to reply.  What do you want to have happen here?  What are you trying to accomplish?  Well, we know that: to laugh.  But what will cause you to laugh most heartily?  That is what we all need to know.
> 
> Thanks!


I guess we're done here then. Feeding at the troll zoo is over.

----------


## helmuth_hubener

> I guess we're done here then. Feeding at the troll zoo is over.


 I'm just trying to talk to you like a human being.  Do you really have nothing but ugliness to hurl?  Surely there must be some *purpose* to you visiting this thread.  Do you want to convince me of something (other than my overwhelming ignorance and stupidity, of which I am already convinced!)?  Do you want to defend Peter Schiff particularly?  Are you an acolyte of his?  Seems unlikely if you studied Warren Buffett and are a fan of _his_ strategy.  But who knows!  It's certainly possible.  I, of all people -- an Austrian starting a thread about Peter Schiff being wrong -- should know about unexpected juxtapositions.  Perhaps you are working on a way to create a fusion of Buffett's strategy and Schiff's.  If so, I am sure we would all be interested in hearing about it.  I, for one, would be.

I have no need to prove you wrong.  I have no desire to make you angry.  Yet you have seemed incessantly and increasingly angry and hateful ever since I welcomed you into my humble thread.  So, is it not logical for me to ask you what you want from me?  How do you want me to respond to you?  What do you want to have happen here?  I made extremely detailed replies to you in posts #244, 246, 247, and especially 249.  That was after you specifically requested that I please reply to you:



> Back to what I've been writing about, though...you seem to have overlooked my 3 posts. I'd love for you to counter my arguments, if you can.


But then you never replied to any of those posts.  All of which were very civil, and (I think) thoughtful and substantive, just as yours had been.  You just went crazy about how I am stupid to think that Peter Schiff is exclusively invested in Norway and its liederhosen sweatshops.

And then you got really very excited about your revelation about realized vs. non-realized gains.  No one ever loses anything until they sell.  Just because the value of an investment goes down doesn't mean you lost money, as long as you don't sell it.  Well this was a very profound insight, and I'm sure all readers of the thread thank you greatly for your enlightenment.  However you kept making it again and again, becoming more and more hostile about how impatient you were with having to explain it to us.  That seemed unnecessary, but whatever.  Perhaps it will help you regain inner calm to know that I do understand this concept, and I think many other RPFers do as well.  I would point out to you, however, that just because an asset has gone down as you held it does not mean it is going to feel any obligation to you to go _up_ in the future.  Sometimes things go down and _stay_ down.  Always kind of discouraging, that.

Anyway, despite the announcement that:



> I'm done sorting this all out for you.


....you continued to "sort it out" for me by making various inaccurate or insulting statements.

Yet never replying to the posts I specifically wrote for you.

Here they are again, should you wish to continue the conversational thread:
#244,
246, 
247,
 and especially 249

If not, and your latest pronouncement that "I guess we're done here then. Feeding at the troll zoo is over." turns out to be more true than the other(s), then I will probably just go through at my leisure and reply, line by line, to the rest of your posts, correcting your errors and applauding your truths.

----------


## helmuth_hubener

dup...

----------


## helmuth_hubener

I suppose I'll do things a little bit backwards, at least to start out, and start at the end here.  Gaddafi posted:




> Hahahah this is too comical!


 Oh, good!  Laughter is good for the soul and the body.




> Yes, you DID say Warren Buffett did NOT outperform the market.


 Well, certainly that would be a preposterously false thing to say.  How did you possibly come to the conclusion that I said it?  Probably not through just reading, dispassionately, my words and *trying to understand* what I was saying.  If you had done that, you probably would have realized I was saying something else.  But, I already _knew_ you were not doing that (fairmindedly trying to understand) and so I take full responsibility for leaving you an opening to intentionally misunderstand/misconstrue.    My bad.

Here is what gave you the opening:




> Scroll up to your post, or here, I'll copy and paste it for you:
> 
> 
> 
> 
> 			
> 				Originally Posted by Gaddafi Duck
> 
> How do you explain the countless of people who became multi-millionaires/billionaires when they only had a couple grand to start out? Because they all outperformed the market.
> ...


Thank you so much for asking.  It was a simple problem of miscommunication, helped along by your anxiousness, indeed giddyness, to read any lines from me that could possibly be misconstrued.  I will now clarify this and fix the miscommunication problem.

*People Don't Get Rich by Playing the Stock Market* 

I have never known of someone who saved up at least 2,000 dollars, took that $2,000 and put it in the stock market, or in gold, or in any _passive_ investment, and ended up a few years later, or even a few decades later, with over 1 million dollars.  I have never known such a person.  This is just one reason I do not think this is a realistic expectation.  

*Warren Buffet's Takeover Career Does Not (and Will Never) = Grandma's IRA Strategy*

I do not see Warren Buffet as an exception to this.  For one thing, I do not know him, nor anyone like him.  People like him are exceedingly, exceedingly rare.  For another thing, Warren Buffett did not take $2,000, invest it passively into some company or companies, and then go about his life and come out the other side 50 years later with billions.  Rather, he was doing very active, involved things like buying up whole companies and selling them off for parts, or taking control of their boards and changing how they were run, etc., etc.  _This was his career._  What I said was: "You don't make your fortune in your investments, you make it in your career."  This fits in perfectly with that.  Grandma is not going to buy up the whole map company and sell it for parts.  Regular people can't do what Buffett did.  They can't take 60 hours a week to run a company.  They have a different career they are focusing on, and should focus on.  Buffett focused on _his_ career and became a master at it.  We should follow his example _in that sense._

*Should We Chase Exception Rainbows, or Follow Proven Rules?*

My point was: don't try to make your fortune by investing.  It's not going to happen.  It virtually never happens.  

I could give you a couple "exceptions to the rule" even better than Warren Buffett, men who did just passively invest and make fortunes, far outpacing the market, but I won't because readers like Gaddafi will latch onto them as "the rule" they want to follow; proof the plan can work.  No, they are exceptions.  You cannot follow in their footsteps.  No more than you can decide today to become an NBA star, read a few books or maybe take a class like Gaddafi did, and then get drafted and start playing center forward for the Lakers in 2015.  Not going to happen.  Speculating is a talent, an inate inclination, like playing basketball.  You don't get it from reading books.




> hahahhah, this is ridiculous!!


 Well, it certainly is unorthodox.  It's a perspective you're not going to get at financial education colleges.  But ridiculous?  Try: *proven*.  The data does not lie.




> You back track like none other


  Gasp!  _Backtrack!_  Seriously?  Scandalous!  Outrageous!  _Stone the sinner!_

I mean, what great sin do you think you're accusing me of here, by saying I "back track."  Could any sensible person possibly care?    We're seeking for truth here, not practicing for a middle-school debate club.

----------


## helmuth_hubener

*"A well-known study out of UC Berkeley by organizational behavior professor Philip Tetlock found that television pundits—that is, people who earn their livings by holding forth confidently on the basis of limited information—make worse predictions about political and economic trends than they would by random chance. And the very worst prognosticators tend to be the most famous and the most confident"*

-- Quiet: The Power of Introverts in a World that Can't Stop Talking, by Susan Cain (download free)

See also an article from the Philip Tetlock, How Accurate are _Your_ Pet Pundits?  One excerpt especially relevant for our topic:

*"First, as the skeptics warned, when hordes of pundits are jostling for the limelight, many are tempted to claim that they know more than they do. Boom and doom pundits are the most reliable over-claimers. 

Between 1985 and 2005, boomsters made 10-year forecasts that exaggerated the chances of big positive changes in both financial markets (e.g., a Dow Jones Industrial Average of 36,000) and world politics.... They assigned probabilities of 65% to rosy scenarios that materialized only 15% of the time. 

In the same period, doomsters performed even more poorly, exaggerating the chances of negative changes in all the same places where boomsters accentuated the positive, plus several more.... They assigned probabilities of 70% to bleak scenarios that materialized only 12% of the time."*
This research all certainly lines up with the prediction results of Peter Schiff that all of us have found and painstakingly documented in this thread.  Peter is a doomster if ever there was one.  Napolean, The Brain, and Lebron James excel Peter not one whit in the confidence category.  And making a usefully correct prediction about 12% of the time?  That sounds about right.  If anything, it might be a little high.

So the next time Peter Schiff -- or any other pundit -- is brashly and confidently proclaiming exactly what is coming, exactly what all the incicators and all his knowledge makes _obvious_... take your Magic 8 Ball in hand.  Ask it about the prognostication topic in question.  Give it a shake.  Read the answer it gives.  And then, if you are determined to make a financial decision based on a prediction, make it based on the prediction of the Magic 8 Ball.  The Magic 8 Ball will do a better job for you.  The Magic 8 Ball will be right more often than the pundit.  The Magic 8 Ball will more successfully shepherd your precious funds.  Yes, in a head-to-head prognostication matchup of Schiff vs. 8 Ball: *The 8 Ball wins.*

----------


## helmuth_hubener

Starting with Gaddafi post #1 in this thread:




> This thread is a good contrarian indicator.


 Contrary of what?  Indicating what?  Do you mean perhaps that when this thread is getting a lot of activity, it means that the "contrary" is true: events are about to transpaire proving Peter Schiff not wrong, but right?  I would think the lifetime of the thread is too short to show very much like that.  But, all you market-beater geniuses have to have your "indicators," so if I by my simple posts can provide you with yours, I am only to gratified to be your guiding star.  "May the Indicators Be Ever in Your Favor."




> The Schiff-haters come out of the woodwork and tout how "wrong" he's been, when in fact you're up better than 5x if you took his advice and invested in gold vs. if you took any other investor's advice and invested in the Dow or their special mutual fund.


 Let's parse this out.  You make several claims.  

1. We are Schiff-haters.  Verdict: *False*.  I am not a Schiff-hater.  I do not hate Peter Schiff.  I like Peter Schiff.  Source: I am the world's leading expert on my onw emotions and opinions.

2. Though we are not Schiff-haters, whoever we are we are touting how wrong Peter has been.  Verdict: *True*.  I am touting this, exactly.  Proving how wrong Peter Schiff has been, and thus hopefully convincing people to stop putting their trust in pundits -- even their favorite pundits whom they agree with and love -- and thus hopefully helping them to preserve their wealth from catasprophic losses, has been the purpose of this thread.

3. "[Y]ou're up better than 5x if you took his advice and invested in gold".  Verdict: *Highly Misleading Statement*.  Peter has at no time recommended putting 100% of one's portfolio into gold.  Rather, in fact, he has many, many times strenuously declaimed such advice.  Thus, no Peter-Schiff-advice-following portfolio could have gone up by 500% (5x) due to the 500% rise in nominal gold prices since 2000.  To sum up simply: his advice was _not_ to invest solely in gold, and so if you took his advice, you did _not_ in fact get the returns that Gaddafi is referencing -- returns one would have _only_ got if he were invested solely in gold.  And even then one would have _only_ got this 500% return _if_ he invested 100% of his funds in gold all exactly at one precise, particular moment in time -- the year 2000.  If he invested in 2002, or 2004,  or 2006 (or 1990) the returns would have been less.  

Peter Schiff does not recommend holding enough gold, in my view.  In this thread, we Schiff fans and detractors (and fan-detractors) all put our heads together and we have found no instance where Peter recommended holding more than 20% of one's assets in gold bullion coins.  More often, it is 10% or even 5%.  That is far too low.  And what's more, whatever the percent -- 5%, 10%, what-have-you -- it is always the total precious metals-related assets.  This includes gold futures, silver ETFs, coins, and futures, platinum ETFs, coins, and futures, and gold, silver and platinum mining companies, including junior mining companies.  This is way off-track, in my view.  It is a poor strategy indeed.  That junior mining company you invested in may very well not do so hot, even if hyper-inflation occurs -- perhaps _especially_ if hyper-inflation occurs!  A full 25% in solid, physical gold bullion coins (no silver, no platinum, no futures, no miners, no mess): that is a more safe and reasonable strategy, as best as I can tell.

4. "[Y]ou're up better than 5x... vs. if you took any other investor's advice and invested in the Dow or their special mutual fund."  So with this line, you seem to not only be claiming that followers of Peter Schiff's advice have generally seen their portfolios' worths quintuple (which is false; see 3. above) but that their portfolios have gone up 5 times _more_ than _any other_ investor's advice!  A remarkable claim.  Verdict: *False*.  Obviously.  I need only find one investor's advice which has not been a full 5 times worse than Peter Schiff's to prove this wrong, when obviously there are legions to choose from.  I will choose my favorite, of course: Harry Browne.  Has a Peter-Schiff-advice-following portfolio outperformed this:



Hmm?  No, it hasn't.  Peter Schiff has been beaten by a super-safe, non-risk-taking, super-conservative, low-return strategy, advocated by an investment advisor who has the distinct disadvantage of _being dead!_  A dead man cannot react to market events and trends, change and tweak his recommendations, optimize his allocation,... he can't do _anything_.  But yet, Browne's portfolio just keeps chugging along:



Yes: Schiff lost to a dead man.  Forget outperforming him by 5 times.  Forget outperforming anyone _living_ by 5 times.  Schiff loses to the Magic 8 Ball.  And Schiff loses to a corpse.




> You DO realize gold has outperformed Warren Buffett, right?


 I did not realize this specifically, but certainly I recognize that gold went up dramatically in the "aught" decade (2000-2010).  What will it do 2010-2020?  It could go up substantially again.  That is certainly a possibility.  It could also go down substantially.  I am prepared for either possibility.  Are _you_?




> People laugh at the fact that gold doesn't pay dividends...


 I do not laugh at that.  Gold realizes gains via something called "capital appreciation".  If I bought it for $1,000 and can sell it for $2,000 (in real terms, accounting for inflation/deflation), then I gained.  Does it really matter that it didn't pay any dividends?  Well yes, it does matter: because there were no dividends paid, I don't need to pay any dividend _tax_.  Advantage: gold.




> neither does Berkshire Hathaway. Neither does oil or corn. So that must mean Buffett, energy, and agriculture are jokes, and we should all just consume dividend paying stocks or corporate bonds.


  How, pray tell, would one "consume" a stock?  Eat the stock certificate?




> This thread embodies the short-term mindedness of most "investors" aka speculators.


  Oh does it, now?  I have managed to somehow capture and embody that spirit, have I?  How did I do that?  I am surprised by this acheivement you are attributing to me.  What exactly have I written, or has anyone else here written, which is "short-term minded"?    Please get back to me on that.  I can wait.  I am in no hurry.  Oh, wait: maybe I am!  I forgot about my short-mindedness already!  Drat!  




> The "logic" aka emotional knee-jerk reaction is analogous to why most managed mutual funds fail to outperform index funds...because the focus is so short-term, so quarterly-focused, that if a fund has a down year or two, funds flee, yet investors take for granted the above-average returns that outperformed the market over the course of the past decade.


 This is a simplistic, almost infantile, level of understanding and analysis of the investment issues involved in "why most managed mutual funds fail to outperform index funds".  There are mountains more to say on the subject.  Try reading _Why the Best-Laid Investment Plans Usually Fail_.




> It's a "what have you done for me lately" game...and it's funny because the market acts this way for a reason. It's the most efficient way to allocate capital for a reason...because the bubblicious nature of the current economy has even the loyalists doubting sound investment advice.


  This reads like total gibberish to me.  Have you switched to a different language in mid-post?




> Gold is being raided by the bears and debt and social media stocks are being ran with the bulls. Of course, one would say social media stocks are ridiculous speculations that are hardly investments, as no company like Twitter could possibly be worth $45 billion when it loses money.


  What you are saying is that you know better than all the very wealthy, very smart, very informed people who disagree and think Twitter _could_ possibly be worth $45 billion.  And that maybe gold _is_ over-valued.  And that maybe social media _is_ of great value.  Come now.  Even blind hubris can only take you so far.  Are you really so sure that you know so much more than everyone?  If so.... you're just lost.

And your money will soon follow you. (and likewise be lost, I mean)




> If your barometer of "who is right" is based on what the stock market has done in very recent short-term memory, then you could make all sorts of ludicrous statements.


  I think a good barometer would be: who has reliably made clear, precise, actionable statements which were correct, which have been proven correct, and which (best of all) have reliably resulted in people protecting and growing their wealth?

Don't you think that would be a good barometer?




> Bubbles distort loyalist views as it's far more convenient to throw stones when there's a lull in the storm.


Busts distort loyalist views as it's far more convenient to throw stones when there's a lull in the long-term general upward trend.




> Again, you're probably looking at a mining stock that went from $8 to $2, and you argue that Schiff's advice would have lost someone 75% of their investment over the past 2 years...yet what if 5 years from now that mining stock is $80?


 Well, I'm looking at a little bit different of an issue, namely that he doesn't know the future and shouldn't be delusionally claiming that he does, but let's look at your imaginary mining stock.  Just because the stock has gone from $8 to $2, is it going to feel any obligation to go back up to the "right" level, the $8 price?  Is it even going to be any more _likely_ to go up, since well, after all: consider the heights it was at before?  Well, let's see: what are the chances of flipping a 'heads' after landing on 'tails' 9 straght times?  What about after 99 tails?




> Is it  a bad investment because you got in at $8 vs. $2 and now it's $80? No...certainly, a lower entry point is always optimal, in which case you could say EVERY publicly traded company is a horrible investment because you could have bought in at pennies on the dollar if you discovered Disney when it was started in Walt's house decades ago.


 You are blowing my mind, here, Gaddafi.




> Woz, one of the three founders of Apple, owns millions of shares of the company at a cost of $0.15 per share. If you bought Apple when it was $20/share, are you a "loser" now that it's $500 or so? I suppose everyone is a loser, because you missed out on great returns. Here's an idea: make some money so that you can get involved in private equity deals. Then you could say every publicly traded company is a joke, because the returns in private equity are far greater than anything you'll find on the Shanghai or New York exchanges.


  Blowing.  My.  Mind.




> Of course, Schiff was laughed at in 2005 and 2006 for his claims. They didn't come to fruition until 2008. Was he wrong? No.


  Actually: Yes.  Because they _didn't_ come to fruition in 2008.  Not at all.  Not even close.  He predicted inflation.  Instead, we got deflation.    He predicted US government bonds would crash.  Instead, US government bonds were fantastically strong, putting in one of the best performances in the entire history of US bonds.  He predicted he would keep his customers protected and in fact grow their wealth.  Instead, their portfolios plummeted.  In 2008, Peter Schiff was horribly, horribly, *wrong*.

----------


## helmuth_hubener

Hey, what do you know?  A whole series of brand-new wrong-headed statements from Peter Schiff!  They may come true, they may not, but what is wrong-headed about them is: he thinks he knows.  He does!  He actually thinks he knows!  Sigh, sigh, head-shake and face-palm.

People think this is a head fake or a dead cat bounce.  Instead, it’s the resumption of the (gold) bull market. [uh huh.  I'm sure it is.  Unless it isn't.  In which case, Peter Schiff will give a new interview and admit he was wrong.  Of course.  Right?  Ah, ha, ha, ha, ha.]

So, I think there is a tremendous opportunity for people who want to hit a home run in gold and silver to get into the mining companies. . . . The best performing stock funds so far in 2014 are the gold funds. [Let's check back at the end of 2014 and see whether this turned out to be a home run or a foul ball.]

The budget deficits are going to get bigger than ever. [Unlikely, considering "than ever" would have to exceed 1.4 trillion dollars a year.]

We’re going to be hit with a tsunami of inflation. . . . I think we’re going to be stuck with a lot of the money, which means it will bid up consumer prices.  New Fed Chief Janet Yellen said she wants more inflation. Well, she’s going to get it. [Wolf!  Wolf!  Well, the wolf may come someday... but it just may not come _this_ day.  A thing about wolves: they don't always follow our time schedule.]

The economy is going to be so bad by the November mid-term elections that he’s not sure the Republican’s will take back the Senate. [Or it could be really good.  Either way, I am sure Peter Schiff will claim to be right.  100%.]
-- http://www.lewrockwell.com/2014/02/g...-of-inflation/

----------


## helmuth_hubener

Post #2.  I already replied to it here: http://www.ronpaulforums.com/showthr...=1#post5371710 , but let's do it again for redundancy.




> Back to the doctor analogy...I suppose it's not 100% correct. For instance: some obese people die old without any health problems apart from their weight. No heart attacks, strokes, etc., yet perfectly healthy people die young from ailments that are more common in overweight people.


 As I did say once before, but I'll repeat it: I think it's a terrific analogy, and I congratulate you on it.  It definitely hits upon some of the truth of the situation.  And the reason that you now give for wanting to toss out your analogy is one of the very truths it illuminates: the world is uncertain.  Human beings are diverse.  Human experience is diverse.  Just because a general principle is correct does not mean that the future can necessarily be predicted with exactness.




> Unlike the lucky obese guy who eat McDonalds weekly and lives out his life without ever a worry, the economy cannot continue on the path that it's in. Because if that's the case, then the world is turned upside down. Banks can lend to anyone and if they go bankrupt and the loans go bad, the Fed can just print up the shortfall. There's no inflation because theoretically the money supply is destroyed with a defaulted loan, and the Fed only brings the bank back to even.


 _Why_ can the economy not continue on the path that it's on?  Can you explain that to me?  And can your explanation please remember to account for the fact that it _has_ been "continuing on the path it's been on" for longer than either of us has been alive?  How do you know that it will not continue for at least that long again?




> Of course, it doesn't work that way. Some people can smoke for 80 years and not have a spot on their lungs...but economics doesn't operate like biological phenomena or freak accidents.


 Well, economies are made up of biological agents.  Namely: humans.  Does not the nature of the components affect the nature of the system?  If I build a clock out of Snickers bars, it will smell like chocolate, and maybe peanuts.  If I instead cut its gears out of bismuth, it will be diamagnetic.  The properties of the components out of which a system is built will assuredly affect the properties of the whole.

Also, since economic history appears to be positively _replete_ with accounts of "freak accidents," an understanding of those would seem to not be entirely out of order, either.  Wouldn't you say?




> In EVERY instance, money printing leads to inflation.


 What does that mean?  Most importantly: what do you mean by inflation?  By the standard Austrian definition, your statement is wrong.  By that definition, increased money supply _is_ inflation.  It doesn't "lead to" it.  That's what it is.

If you're talking about price inflation, well, the supply of US dollars probably went up in 2008, but yet prices went down.  So "EVERY" instance would seem to be an exaggeration.  Unless you are using a non-standard definition of "EVERY".




> Even if the money printing is milder than the increase in productivity, the additional money supply prevents prices from falling further than they otherwise would, thus inflation.


 _Is_ that really inflation?  What do you mean by inflation?  Could you please define the term?  Thanks.




> In some instances, the obese, the unhealthy, the smokers, never have to pay the piper due to the luck of the draw. In EVERY instance, inflation leads to distortions and higher prices, even if the inflation is mild.


 So, there is no "luck of the draw" or uncertainty when it comes to human action?  Is that what you have got from Mises?  I must say, I have picked up a rather different message.

As to your second sentence: again, please define inflation.  As it is, it seems like perhaps you are saying that in EVERY instance inflation leads to inflation.  Which is tautological, but..... maybe not that useful.

----------


## dannno

> Post #2.  I already replied to it here: http://www.ronpaulforums.com/showthr...=1#post5371710 , but let's do it again for redundancy.


Are you paid by the word or the character count?

----------


## helmuth_hubener

> Are you paid by the word or the character count?


 By the dollar.

----------


## Zippyjuan

> Yeah, Harry Browne sounds like an investing dumbass. As Doug Casey says, he's an idiot savant. Maybe a bright guy, but he's clueless.
> 
> Case in point: David Einhorn outperformed the market at a 24% compound annual rate since the 1990's. Warren Buffett's compound annual return is something like 22% for decades. How do you explain the countless of people who became multi-millionaires/billionaires when they only had a couple grand to start out? *Because they all outperformed the market.*
> 
> In Harry Browne's view, just do index investing. YEAH! 
> 
> *Every company in the S&P or Dow or NASDAQ demonstrates you can outperform the market. Because they wouldn't be on those indices if they didn't!!*


Note that such people are rare.  The market is the sum of all investors so the average investor will get the average return.  For every dollar that Buffet outperforms the market, there is somebody underperforming the market by an equal dollar.  This ignores any transactions costs which will lower returns so actually if those are factored in, the average investor will underperform the market.  The more one trades, the higher the transaction costs and the lower the real returns.  Buffet tends to buy what he feels are undervslued companies (usually not popular with "mainstream" investors- like when bad news drives down the price of a stock- early in the financial crisis when bank shares were crashing, he was buying) and tends to buy and hold which keeps his costs low. 

Beating the market does happen- if somebody was invested in the right thing at the right time.  But staying there is incredibly difficult. Beat the maket one period and trail the market the next as what is "hot" changes.  I made my largest stock investment of 2009 in March of that year- the very week the market hit its lowest level of the economic crash.  Was I "smart"?  No.  Could I do it again? Not likely.  It was simply luck. 

But if you want, you can buy a share in Berkshire Hathaway for $750,000 (the current price).

----------


## Mini-Me

> But if you want, you can buy a share in Berkshire Hathaway for $750,000 (the current price).


They're not really big on buying partial shares either.

----------


## helmuth_hubener

> $750,000
> 			
> 		
> 
>  They're not really big on buying partial shares either.


Huh?  Where are you guys getting your information?  BRK-A is $177,650, Zippy.

You can always buy B-class stock.  About $118.  Or you could buy micro-shares (fractional shares) from various firms offering them, such as Folio Investing or ShareBuilder.

Loyal3 also has it (for BRK-B), apparently with no fees:

https://www.loyal3.com/signup/stock/...f-f0c852ffbc66

I don't recommend any of this, of course.

----------


## Mini-Me

I was making a joke based on what I thought was the case, but you ruined the funny with facts I wasn't aware of.

----------


## helmuth_hubener

Here's some more juicy predictions from Peter Schiff:



(Thanks to Bryan in this thread)

"But the problem is, the people who are expecting lower gold prices are probably wrong." -- Peter Schiff, video above, 4:52.

The contrary position: "But the problem is, the people who are higher lower gold prices are probably wrong."

Which will be right?  50-50 chance.  100% chance, though, that Peter will claim to have been right _no matter what happens._  Reality does not affect that, not in the least.  Objective reality and empirical facts simply do not play into it.  His rightness is disprovable -- it is a religious tenet.

"The stock market is... now headed lower in terms of gold, and that is a trend that I am convinced will continue."  -- Peter Schiff, video above, 21:59

The contrary position: "The stock market is... now headed lower in terms of gold, but that is a trend that is going to reverse."

Which will be right?  50-50 chance.  100% chance, though, again, that Peter will claim to have been right _no matter what happens._

"[Some foolish people think] the US economy is on the verge of a protracted period of economic growth.  All that is nonsense." -- Peter Schiff, video above, 5:35.

The contrary position: "Some people think the US economy is on the verge of a protracted period of economic growth.  That is not nonsense, rather it is one possibility."

In this case, Schiff is _already_ wrong.  To dismiss even the mere possibility of protracted prosperity as "nonsense" is arrogant beyond belief.  To even _entertain_ the thought of prosperity, to even _consider_ this possibility, _that_ is supposedly "nonsense" and "foolish"?  Unbelievable.  And if we're sitting in 2016 having just went through years of relative prosperity and no collapse, will he admit to having been wrong?  Of course not.

----------


## helmuth_hubener

> Also, it's very wrong to say anyone can predict a recession because eventually one will happen, and so Schiff is just a broke clock that's right twice a day...


 OK.... why?  It would only be a "wrong" thing to say if his information were more _useful_ than that of the broken clock.  As it happens: it isn't.




> Schiff isn't saying, "we'll have a recession one day," he's saying, "We'll have a recession for these reasons,"


 OK, so he has some reasons.  Are those reasons actionable?  Does it matter for an investor what the _reasons_ are that some clueless person is claiming to know the future?  Either your prediction is right or wrong.  If you're wrong, you're wrong.  It may make you feel better to tell yourself "Well, but there were some really unassailable reasons that the prediction _should have_ come true," but it will _not_ make your pocketbook feel better.




> and in fact we've never left the recession that's been going on for years.


 Well, that raises the question: what exactly _is_ a recession in Peter Schiff's mind, and how will we even _know_ if one occurs and he is thus proven right?  We were in a recession in 2004?  2005?  2012?  2013? If yes to all of those, how about 1984?  1999?  1995?  I mean, what even defines a recession?  Based on what you just wrote, recession=everything.  Objective data and facts don't matter.  The only question to ask is: Did a year just occur?  It was a year of recession, then.  By definition.  All years are years of recession.




> He's outlining step-by-step how and why the economy is as in bad of shape as it is, and why certain investments, like commodities, will outperform the conventional asset classes, like equities and bonds.


 Yes, that is very nice of him.  Unfortunately, he is usually wrong.




> It's day and night difference from what you're arguing. Anyone can say we'll have a recession some day, but not everyone can answer the questions, "Why?" and "Where should I put my money?"


  That is true.  Peter Schiff can't.  This is empirically demonstrated by the returns his customers have gotten over the years by following his advice.




> Jim Cramer was wildly bullish on the housing sector. He was "right" for years until it crashed


 Peter Schiff was wildly bullish on the gold mining sector. He was "right" for years until it crashed.




> and you very likely lost most of your income in 2008, when in October he told you sell EVERYTHING on national television.


 Why would you think that?  Why would I even be aware of what that particular entertainer was saying?  I wasn't.




> Schiff told you to avoid financials in 2006, and behold in 2007/08/09, they collapsed.


  He also told you to invest in foreign equities in a variety of developed nations and so-called emerging markets (impoverished third-world jungles).  Lo and behold!  In 2007/08/09, they collapsed.

Whoops.  Minor glitch.

"But, but, some of them went back up in the years since," the Schiff-apologists have so often responded.  "You can't invest for the short term.  You have to ride out the storms."

And that point is not entirely untrue.  Y'all seem to apply it awfully selectively, however.  You never seem to mention, for instance, that financials have also climbed back up in the years since, just like Peter's speculative foreign stocks have.  Why is recommending one "right" and the other "wrong"?  They both look equally right to the pocketbook.




> He's been buying gold for over 15 years, and over the last 13 you point to ONE down year and say, "A-HAH! HE WAS WRONG!"


 Nope.  Didn't do that.  I think you're making up imaginary things.  That can be fun.  A good imagination can be a real asset in life.




> It is possible for someone who doesn't understand the subject matter to correctly guess the right letter on a multiple choice question. It's entirely different when the person actually understands the question, and lays out his answer.


 Is it really so different?  Is it different _for your pocketbook_?




> Mises predicted the collapse of the Federal Reserve. He predicted the collapse of socialized medicine.


 No, he didn't.  I have not read him make such predictions.  It was a lot more sophisticated than that.  Mises was not an investment advisor.  He was not telling people, "Short the Federal Reserve by selling all your dollar-denominated assets.  She's gonna blow!"  Nope, Mises didn't say that at all.  Peter Schiff did.  But Ludwig von Mises did not.

What Mises said was that global, universal socialism cannot support an industrial-level society, because it cannot calculate.  Pockets of non-global, non-total socialism _can_ survive, because they can still emulate market calculation to an extent.

So, you have simply misunderstood Mises (and Rothbard).  I told you this before, and hinted that I would explain to you how you had misunderstood it.  You now have that explanation.




> Yet we've had the Fed for over 100 years, and socialized medicine exists in much of the world, and has for many years. Does that mean he's "wrong"?


 Nope, just means you misunderstood him.  The Fed could last another 100 years.  That wouldn't contradict anything Mises ever wrote, as far as I know. 


> When in the 1970s where we had high inflation, many Austrian economists said, "THIS IS IT!" and commented on how fiat money was finally out the door. Yet it's 2014 and we still have Federal Reserve Notes, with no major country with a gold standard.


 Yes.  Exactly.  They were wrong.  Can you _admit_ they were wrong?  I mean, it's now 40 years later.  Is it not obvious enough that they were wrong?  We can look back with the benefit of a full _40 years_ of hindsight -- 40 years with good historical records and somewhat good economic data (as good as it ever has been, at any time in history).  What they predicted did not happen.  It is clear as crystal that these people were wrong.  That is the whole point of this thread.  These people were at least as smart as Peter Schiff.  They were brilliant, some of them.  They were in the right economic school.  They had all the right ideas, according to you.  Yet they were disastrously and utterly wrong.

Isn't it possible that Peter Schiff is wrong, too?  If they were wrong, couldn't he be wrong?  Isn't it worth it to accept that fact and take it into consideration when planning your investments?




> I suppose you could say Mises was entirely wrong because none of his predictions came true. You could also say he's a broken clock because certainly, one day, fiat money will collapse as well as socialized medicine, since everything created by humans wither  away over time. But the difference between Mises saying it and a caveman is that Mises actually explained WHY.


 You could say that if you misunderstood Mises, as I believe you have.  See above for an explanation of Mises' actual view.

And one more time: the pocketbook doesn't care why it's empty.  A gain is a gain.  A loss is a loss.

  Let's be wise, not foolish.  Let's make gains, not losses.

----------


## helmuth_hubener

> I was making a joke based on what I thought was the case, but you ruined the funny with facts I wasn't aware of.




Sorry!

----------


## toathis

Funny video of Peter Schiff responding to a caller in regards to accurate predictions

----------


## helmuth_hubener

"The fact that it hasn't _already_ happened, that's what's the amazing part of it." -- Peter Schiff, March 5th, 2014

Some have been being amazed for 40 years or longer now.

That's too much amazement for me.  I don't think I can take that kind of protracted amazement.  I'll just accept that I don't know the future and then 10 years down the road if Peter Schiff's predictions still haven't come true I won't have to suffer an amazement heart attack.

----------


## helmuth_hubener

> The question isn't how much did long-term government bonds go up, but *how large was your portfolio in government bonds?*


 Easy: 25%.



> Because you only realized the full 22.5% gain IF you had 100% allocation.


 Bingo, bingo.  You've got it exactly.  Good job.



> Suppose you had 50% in long-term government bonds. That's less than a 12% return.


  Specifically, the gains from the bonds push up the overall portfolio 11.75%.  Again, good job.  You are saying all kinds of true things in this post.




> And I know you didn't have 50% of your net worth in government bonds, so certainly everything else in your portfolio, aside from the few hundred dollars in cash, tanked, which negated whatever gains in bonds you would have realized.


 Oh, man, Gaddafi!  You were on such a roll!  Why've you got to go and mess it up?  Stick to the truth!  1: You almost certainly don't know anything about what 50% of my net worth was or wasn't in, other than what I've told you, which you seem to not have read.  I actually did tell you in a previous post, however, and if you _had_ read it, you would have learned that 2: the bulk of my long-term liquid savings were in gold in 2008.  Also if you had read my posts, you would have learned that 3: gold, far from "tanking," went up in the calendar year 2008. 4: I don't know what few hundred dollars of cash you're talking about.

Glad to clear some things up.




> So I find your returns to be as absurd as your analysis of Peter Schiff's portfolio, of which you have very little understanding of.


 What returns?  You find my returns to be absurd?  Which returns?  What is absurd about them?  Are they too high for you?




> Further, the concept of "owning every asset" is completely ridiculous autopilot investing.


 Well, certainly you have proven that you are able to ridicule it.  So it can be said to be "ridiculable".  Whether it is actually ridiculous will depend on what you're seeking, I suppose.  If you're seeking the impossible -- a safe, reliable way to consistently beat the market and make a fortune -- then I suppose anything that fails to give you that and instead only gives you the _possible_ would indeed seem ridiculous.




> You look at it the common man way: that if you own everything, you're bound to be bailed out by one sector. Yet you're ignoring the very point of investing: to make money, not mitigate losses.


 Actually, I am not "ignoring" that.  I am disagreeing with that.  I am repudiating that.  I believe that a very, very important role of investments _should be_ to mitigate losses.

You are not going to make a fortune investing your money in the stock market.  That doesn't happen.  It's not a realistic expectation.  It's chasing unicorns.




> By owning every basket, which you don't, you hedge yourself into no return.


 You seem to have misunderstood me.  I do not mean that we should own every asset in existence.  I mean that we should own all of the four Permanent Portfolio assets all the time.  Those four assets are stocks, bonds, gold, and cash.  That's few enough baskets that you can keep a hefty percentage in each -- about 25%.  So I think your point is excellent, and it's totally true, and I'd like to applaud it.  I myself made the same point in my conversation with GunnyFreedom.  But the point does not argue against the Permanent Portfolio.




> You limit your upside severely. Because if you had allocation in stocks and bonds and interest rates go up, you have no protection. A higher discount rate reduces the profitability and increases the opportunity costs to capital, which reduces the returns on equities and bonds.


 Yes, higher interest rates are generally bad for stocks, and they are always very bad for long-term bonds.  What gives you the protection from higher interest rates -- that is, from high inflation?  Gold, of course.  25%.




> So no, this idea of "owning everything" only ensures you'll underperform in a rising rate environment.


 Well, look at the actual data and tell me that.  We had a decade of rising rate environment called the 1970s.  Who came out of that decade smelling like a rose?  You guessed it: Harry Browne.  His Permanent Portfolio, far from "underperforming," over-performed by a large margin.  So, empirically: *you're wrong.*  Sorry!




> The key isn't to diversify and own everything.


 Why not?  Key to what?  How about owning just 4 things?  Is 4 too high a number for you?




> Again, your logic is contradictory. On the one hand, as a "business owner" that you apparently are, you know it's important to focus on a few core competencies and not get distracted with tertiary ventures. Yet at the same time, you adhere to the theory that conglomeratizing your portfolio is a good idea. That's analogous to sprinting before you're even out of the womb, let alone crawling yet.


  Sprinting before you're out of the womb..... I will again applaud you.  You have an excellent ability for coming up with these colorful metaphors.  But I do not see how this one applies.  I really don't understand.  Are you saying that by conservatively diversifying I am trying to expand my wealth too quickly?  "Sprinting in the womb" as you put it?   I would think you'd want to criticize me for the opposite: not aspiring to go fast _enough_.

You will just have to explain this one to me, because I don't get it.




> Warren Buffett's returns are gradually waning because his portfolio is gradually becoming the market, because he owns nearly everything. It's hard to outperform everything (the market) when you own everything.


 Well, that is one theory, I suppose.  I don't think that Buffett owns even close to everything, but there is likely a grain of truth in what you are saying.




> Warren Buffett didn't make his money owning everything, just as how Bill Gates or Jim Rogers didn't make their money diversifying.


  Right.  True.  Good job.

Now how did they make it?  *Their careers!*  By being tremendously productive and successful in their careers!  Not by choosing the right stocks for their IRA.




> Diversification, as I mentioned, is lazy autopilot investing. Any chump can do it. It's not a mystery; it's the entire structure of the modern 401(k) system where you own baskets of funds that invest in 30-40 different companies.


 Any chump can do it, very few do, even fewer do it well, and all of that is irrelevant to my pocketbook.  My pocketbook doesn't care how many hours I spent poring over financial reports and reading Warren Buffett and Benjamin Graham biographies.  All it knows is: how much money is inside me?  It doesn't matter if what I did was easy.  It doesn't matter if I didn't sweat and labor and agonize.  It doesn't matter whether or not a "chump" could duplicate my results.  What matters is how much money is in the pocketbook.




> You want to know what I think of diversification? It's that you own barely enough of a great story, and too much of a bankrupt one. I do enjoy you posting about US Government Bonds being a good returning asset during 2008, because I clearly pointed out that US Dollars did well, so obviously US Dollars with a 0 + x maturity are along the same lines. But let's face it: you didn't invest 100%, much less 50%, of your portfolio into US Government Bonds. So your claim of a 22.5% return is absurd, because the only ones who realized a 22.5% return were those with 100% allocation into bonds, which you did't have.


 Sir, you have falsely characterized what I wrote, perhaps intentionally.  I stated that bonds went up 22.5%.  I did not claim that _I_ owned any of them.  Your burning anger at me apparently made you blind.  I hope you are now calm and rational enough to have some reading comprehension and so this clarifies things for you.




> Then again, if you did, you're far better at market timing that 99.9% of the population, to which, of course, I laugh at considering here we are....5 years after the fact. Shouldn't you be on a yacht? I mean, if you had known the world was going to flock to US Government Bonds when the US economy was collapsing with the most bankrupt government ever, you must have had some incredible insight that people would run to the storm during a financial hurricane.


  Yachts are boring.  Well, unless they're going to Antarctica.  Anyway, some of us have more exciting things to do than trucking about on yachts.

I look forward to your reply!

----------


## helmuth_hubener

> Hahah!! I  LOVE this!! So, you made my point for me: you made money "mostly in your business" (whatever that is. A blog of some sort?)


Something like that (not really).  I appreciate the compliment, though (that I write well enough that you think it's plausible that I might do it for a living).




> This is the point I made earlier:
> 
> *Did you hire someone to do enterprise valuation on your company on a regular basis?*
> 
> Of course not! No one does that with private companies! Just as nobody hires a real estate agent to do daily appraisals of their house! But yet here you are, talking about how much money Schiff clients apparently lost when I'm sure most didn't sell shares during the crisis, using NYSE market cap valuations as your guide.


  I'm sorry, but this is just a very strained point.  I say: Such-and-such performed extremely and dramatically poorly during such-and-such time-frame.  Your "point," as you say, that you counter that with is... wait for it... "It doesn't matter!  As long as you didn't sell, and I'm sure that most Schiff clients didn't, then poor performance doesn't matter."

Now I and other denizens of the Permanent Portfolio are the #1 poster children for not checking on your portfolio and not worrying about short-term swings.  We check even less than the Bogleheads, I'd say.  Holding on, staying the course, not jumping ship with every swing, is a good long-term strategy.  But performance matters.  Just because you don't slavishly check on it every day doesn't mean it doesn't matter.  If I had an emergency and needed to cash out my portfolio today, guess what?  The value of it today would matter.  It would affect pretty directly how much money I could get from it.

Things go up, things go down.  But just not worrying when they go down and just staying the course is not a surefire recipe for having them go up again!  Did you know that?  Sometimes stocks or other assets go down _and never come back up_.  We may not like it, but we ought to deal with it.





> As I said, and you keep side-stepping this, you don't understand investing. You don't understand the hypocritical nature of your analysis. You take a snapshot of a Schiff client's portfolio during a financial crisis, a small window of time in one's investing career mind you, to make some sort of trump-card point, yet at the same time you don't apply that logic to other businesses that don't have daily market valuations like publicly traded companies do---like the "company" you own that probably has yet to turn a profit.


 Wow, you really want me to hate you, don't you?  Sorry: I don't!  But feel free to keep making unfounded insult attempts.

I do not and never did claim that Schiff is somehow a failure at investment just because he failed to increase his clients' value during one "small window of time".  You have misunderstood me, or perhaps are just intentionally mischaracterizing me.  Let me try to explain it more simply:

1) Peter Schiff frequently claims, proudly and loudly, to have been the man who correctly predicted the 2008 crisis.
2) His advice lost his clients lots of money during 2008.
3) If his prediction really was correct, if he had really known what was going to happen, then why did he give advice that would fail so badly?

My conclusion is that his prediction was actually not correct_ in any useful way._




> I'll spell it out: it's asinine to get excited about a 6-month time period of a portfolio. Unless you plan on buying today and selling in half a year, then it's all just market noise. And if you're buying stocks, which is buying a company, and planning to sell it in half a year's time, then you aren't investing but speculating.


 Yet people do.  We know that people do.  This is why, for instance, I do not share your complete surety that most Schiff clients didn't sell their positions in 2008.  If you look at the Quantitative Analysis of Investor Behavior, you should see very clearly that actually many/most people do sell off during and shortly after panics.  They do get excited about 6-month time periods.  Volatility matters.

And it doesn't just matter to "speculators" and people planning to get rich quickly (people such as yourself).  Many, many normal people with very long time horizons who had been saving up for retirement for decades took their money out of their stocks in the end of 2008 and 2009.  They'd lost 30% of their life savings already.  They didn't have any desire to wait around seeing if they could lose the rest.  That didn't seem fun to them.  Go figure.




> Because nobody buys a house or a company with intentions of selling it half a year later. Can you? Sure you can! If the market pays you a significant premium, why not? But without knowing the future, you could care less what the value is 6 months from now. It's funny that you make the common man's mistake of using short term benchmarks, like a portfolio snapshot over a few month's time, as justification for any of your points. And people wonder why there's so much groupthink on Wall Street! Because people like helmuth hound money managers with screenshots of other money managers and scream, "HEY! This guy outperformed you last quarter. I'm pulling my funds and going to him!" So now you have an industry motivated on reflexivity.


 This paragraph does not make sense nor follow logical principles.  You are essentially characterizing me as a crazed yield-chaser, thinking very short-term.  This is very far removed from reality.

I do agree that very short-term thinking may not be very useful is investing.  I just don't know why you are putting me in that short-term camp.




> It's a weird psychology. Because stocks are ownership in companies, real companies, but people like helmuth just cannot connect that in their minds. For whatever reason, the NYSE ticker symbols just create a wall in logic. Because helmuth would agree it's absurd to value a company on a short term basis, yet when it comes to public companies, he's quick to pull out short term charts. Hahhaahahhha


 Well, I'm glad you know everything about me.  I'm just all about the short term!  Why think about tomorrow?  Live in the moment!




> And if helmuth does really have a successful business, then the returns must be somewhat atrocious. Assuming he started the company before 2008, which he had to have if he invested money in it during 2008, and now it's 2014, then he's making marginal profit at best. Which is funny because the opportunity costs to capital would suggest he would have made significantly more money investing in other people's businesses than his own, but I'm sure he'll brag about phantom returns in his business, because earlier he said he was "Doing entrepreneurial things," which to any businessman listening to that would know that's code for, "I'm going to school, but taking general studies. Not too sure what I want to do yet, and I've been in college for the past 5 years."


 LOL, yes any businessman would know that.




> Then again, I don't know helmuth. He may very well be successful in his business.


 Wait, that would be impossible.  That would contradict what every businessman knows.




> I have my doubts, though, as a successful businessman running a 5+ year old business certainly wouldn't have time to go out of his way to post how Peter Schiff was wrong on an internet message board, and to continuously follow up on it over the course of several months.


 Well, perhaps he _shouldn't_.  But perhaps it's a form of recreation for him.

----------


## helmuth_hubener

> So wait, I did a little calculating of the "permanent portfolio":
> 
> 25% in LT Government bonds yielded less than 6%.
> 25% in cash yielded 0%; in real terms, negative
> 25% in gold yielding marginal gains of 2-3%
> 25% in stocks...well...considering the S&P tanked by over 50%...yeah...


 Your calculations are completely wrong, and because they are very transparently wrong, they are likely _intentionally_ wrong.  Or, alternative explanation: you are just not very intelligent.

Long-term US government bonds were up about 22.5% according to the Simba spreadsheet.  Actually, if you were holding the bonds via an ETF, you did much better.  Here's a chart showing the iShares ETF for long term government bonds (ticker TLT) as the red line:


Up about 35%.  The 6% number obviously bears no particular resemblance to reality.  Perhaps you just made it up and 6 is a favorite number of yours?

Bonds +22.5% (or as high as +35%)
Gold +5%
Cash +6.7%
Stocks -37%

Result: -0.7

Pretty much break-even.  It carried steadily through a year that, for most investors, was very tumultuous -- one of the most severe crises in our lifetimes.  That is pretty good.  Pretty impressive.  It performed exactly as designed.




> So nobody believe helmuth's numbers as even the nominal numbers yield negative returns.


 What numbers?  What numbers have I presented which nobody should believe?  Did I not include enough random made-up numbers for you?  Not enough 6s?




> I wonder what the inflation adjusted numbers are. They don't add up. He says he gained 22.5% in LT government bonds, yet he subscribes to the permanent portfolio which would have reduced that "gain" by 25%, assuming, of course, he sold at the end of 2008, which he didn't. So these gains are just phantom gains, just like how people who bought and held Pets.com made millions, when in fact they held past the bankruptcy.


 You're just intentionally misunderstanding.  I will not be goaded into being tedious.




> Also, 50% allocation to cash + bonds? That's a lot of exposure to country-specific risk. No thanks.


 Yes, it is a lot of exposure to certain assets with certain well-understood and predictable risks -- that is, that behave in certain ways during certain economic conditions.  The way that they behave and the times in which they do it happen to be very valuable to a well-designed portfolio.




> Of course, helmuth selectively ignores gold stocks from 2000-2008, where you made 10-20x your money if you just threw a dart at the board and bought a random junior. So his story of Schiff being wrong revolves around


 Umm, I have not ignored gold from 2000-2008.  I have been addressing it quite thoroughly throughout this whole thread.




> 1) No one taking profits in 10-20 baggers in gold mining stocks
> 2) Investors cashing out at the bottom in 2008
> 3) Buying back into gold stocks at the peak in 2011
> 4) Selling gold stocks last month at the bottom


None of these four items has to do with why Peter Schiff is wrong.  I explained why he is, was, and will be wrong, as I see it, in my first post of the thread.  You could review it if you like.




> Unless you sold at the bottom, which Schiff never advocated selling in 2008..unless you bought gold stocks and sold them at the trough, which he never recommended, then you followed Schiff's advice and haven't lost money. If I buy Microsoft at $30 and it drops to $20, but I don't sell until it reaches $50, helmuth would say I lost money between $30 and $20. How do you figure?


Actually, I wouldn't say that.




> I'm collecting dividends in the meantime. The IRS sees me making a capital gain as I didn't sell at $20. Yet helmuth assumes, by posting a fake Schiff-advised portfolio, that people lost money.


 Actually, I don't assume that.  I try to assume very little.  What I _have_ done is post factual information.  Peter Schiff can confirm to you that his clients lost money during 2008.  It really isn't that complicated.  It's a fact, a very simple fact, a very easy-to-understand, inescapable, non-disputed fact.  Yet you're trying to dispute it.  To do so, you are putting yourself through all kinds of rhetorical contortions and backflips.

Instead, just accept the truth: it is not reasonable in any useful way to say that one's investment advice was "right" in a year when your investment advice led to large losses.  Thus, it is not reasonable to say that Schiff's advice was "right" in 2008, when in fact his advice led to large losses.

Realized or not is a completely unrelated and ridiculous issue to bring up.  If his advice had led to large _gains_ in 2008, it would not have mattered whether those gains were realized by all the clients, and of course they wouldn't have been.  We would still say that his advice had been "right," and we'd say so correctly.




> Again, you only lost if you sold at the bottom, in which case you always lose if you sell at the bottom. You cannot bank on buying a stock at the absolute bottom that will only continue upward from there. Everytime you buy a stock, it goes down. Unless you time it 100% correctly, you always have a stock go below your entry point.  So how could he be wrong in scenarios you're suggesting that he never advised people to do?


 You are confusing yourself by trying very hard to bring in this issue of realized vs. unrealized gains as some sort of trump card, as if its existence somehow helps Mr. Schiff. It doesn't.  This issue is not unique to him.  He is not somehow on the side that understands and profits from the existence of realized vs. unrealized gains/losses, while I am on the side that doesn't and doesn't.  It's just ludicrous.  You're trying to confuse people who may not understand all these issues very well by simply spewing out words to misdirect attention. 

"It's not fair to say that the stock market went up 29% last year, because it only went up if you sold!  It's not fair to say that Peter Schiff's customers' portfolios went down 40% in 2008, because it only went down if you sold!"  Both of these statements are equally ridiculous.

----------


## helmuth_hubener

> Don't look now, but emerging markets whooped every index for 5 consecutive years:
> 
> http://www.callan.com/research/downl...free%2F655.pdf
> 
> 2003: 56%
> 2004: 26%
> 2005: 34%
> 2006: 33%
> 2007: 40%


 You make a good point.  I do wonder if the MSCI Emerging Markets fund bears any resemblance to Peter Schiff's recommendations.  And I think that it probably does not.  But I do applaud you for using using some actual data, linking to it, and then not even totally misrepresenting what it says.  Bravo.  If only you could reach such high standards for your treatment of my posts, we would have had so much more productive and enlightening of a conversation.  We both might have had valuable insights and thoughts to share with each other.




> 5 years running. Looks like Schiff was right.


 Well, here you make a somewhat unwarranted conclusion.  Does the MSCI Emerging Markets fund bear any resemblance to Peter Schiff's recommendations?  Please let us know.




> And you're bragging about 25% of  a 22.5% gain in LT government bonds with a 3% coupon for one year?


 I would say that bragging is too strong a word.  But I have expressed appreciation for the performance of the Permanent Portfolio during 2008.  This was appreciation for the entire portfolio, as a whole.  Looking at the components separately is missing the point.  The Permanent Portfolio is a package.




> 75% of the "permanent portfolio" yields 0% dividends/interest.


  That's very true  - if were to you change 75% to 25%.  _That_ would be a very accurate statement.  So, you were very close.  I applaud you coming very close to making an accurate statement.

Just a few percentage points off.




> That's horrible.


 I don't see why.




> My only upside to the permanent portfolio is solely on capital gains? You DO realize upwards of 80% of all the gains on the S&P over the last 50 years has been in dividends, right


 Oh, you are so sure of yourself.  If only you could take a deep breath and listen to something outside yourself.  Your statement is false.  The different assets gain in different ways.  Interest, dividends, and capital appreciation all play a role.




> Meanwhile, Peter Schiff has advocated investing in high-dividend paying foreign stock. Companies that spit out 6-10% dividends in foreign currencies that will rise as the Dollar depreciates, so it's a double-whammy. Meanwhile, the permanent portfolio says buy 25% into gold (no dividend), 25% into cash (no interest), and 25% into bonds (no yield). The other 25% into stocks, but of course, most stocks don't pay a dividend. Many that do on the US exchanges pay on average of less than 2.5%


 The stock market went up more than 29% this year.  How much did Peter Schiff's recommendations go up?

These individual foreign stocks have the potential to outperform the US stock market.  But anything that has the potential to outperform also has the potential to underperform.  This risk is not all plus and no minus.  It works out if Peter Schiff is right.  It fails if he is wrong.  I personally don't know which one will happen this year, nor this decade, nor this lifetime.

Do you?




> Such an imprudent portfolio. When interest rates rise, bonds crash so there goes 25% of your portfolio. If real interest rates rise above 0%, then gold is hammered with the cost of carry. If interest rates rise, your other 25% in stocks will be clobbered as the cost of capital rises for companies restricting and limiting marginal NPV projects, so less value is created for a business resulting in less enterprise value.


 _If_ interest rates rise, bonds will do poorly and gold will do very well.  The good performance of your gold will outweigh the bad performance of your bonds.  

That's the theory anyway.  And for the last 40 years (as well as all the historical back-testing Browne did before recommending the system): it has worked.  So it's been a very successful theory.




> So you're left with cash, which does well with higher rates.


 Actually, cash is a loser during a time of high interest rates -- that is, during a time of high inflation.  Your cash could be losing quite a bit of value due to inflation.




> But what kind of cash? I do wonder. Do you own the US Dollar? Even with higher rates, what if the US Dollar crashes? So there goes your final 25% of your portfolio. Sure, you could say if the Dollar crashes your value in gold skyrockets, but only in Dollar-terms. That's like saying you own a billion shares of Pets.com, but does that really mean anything? It's a bankrupt company. Likewise, if you own a billion dollars worth of gold, but those dollars are worthless, then the question becomes how much gold do you own relative to other currencies, and what are the costs to convert and hold those currencies?


 *If* there is a Catastrophic Event (which you seem to think is inevitable and imminent, but I am not convinced of your 8-ball's reliability), then gold will go dramatically up in real terms.  There are very good theoretical reasons to believe this.  But, as the US dollar has never completely crashed and ended in oblivion before, I cannot guarantee nor prove that it will work out this way.  But I think there are good reasons to believe that it will.




> So the permanent portfolio does okay in a low interest rate environment. Surprise! Everything other than cash does well in a low rate environment! The true test is how the portfolio performs during an environment with rising rates. Where values are discounted away and market caps, debt, and cash can all collapse relatively easily.


 For its entire history, the Permanent Portfolio has performed well during every type of economic environment it has encountered, except for brief periods of recession.  This is exactly as planned and designed.  And even during recessions, it has performed relatively well compared to _other_ portfolio strategies, because the cash smooths out the bump and carries you through.  Nothing reliably does well during a recession, so the best thing that we can do is to just wait it out, and by *hugely, dramatically, terrifically decreasing volatility*, the PP allows real, live investors to do exactly that.




> Suppose the US government defaults. 25% of the portfolio is gone. Poof. Now you're at 75%. Chances are if that event occurs, there will be a run on the Dollar by countries redeeming it. So now you have a deluge of dollars entering the US borders. Poof, another 25% chunk gone. Now you're down to 50%. Oh, but gold will do well! Even if it did, it would have to double just to break even. And if the dollar collapses, one would assume equities would do fine, right? In Zimbabwe they did...nominally. But there will be plenty of companies that get washed away in the flood. So, say your 25% chunk in stocks drops to 20% because the 5% collapsed. Probably more than that as most of the economy depends upon the current model to survive, and the chain reactions that occur. So now a majority of your assets are either worthless, or have diminished so much in value that your ultimate hedge is: gold. 25% in gold.. whereas if you took Peter's advice and bought foreign stocks, you very likely would have great companies with great balance sheets still chugging' along.


 I personally believe that almost everything about your analysis of this scenario is wildly unrealistic and completely wrong.  The US stock market is going to collapse into chaos, but the foreign emerging markets are _not_?  That requires a preposterous misunderstanding of how the world works.  These foreign stocks are not divorced from what happens in the US.

But yes, in a Catastrophic Collapse Situation, "your ultimate hedge is: gold."  That is an accurate statement.  I applaud you for making an accurate statement.  Bravo.

May you make many more.

----------


## Madison320

> 1) Peter Schiff frequently claims, proudly and loudly, to have been the man who correctly predicted the 2008 crisis.
> 2) His advice lost his clients lots of money during 2008.
> 3) If his prediction really was correct, if he had really known what was going to happen, then why did he give advice that would fail so badly?


Schiff was expecting the dollar to crash shortly after the stock market and housing market crashed. He admits all the time that he was wrong on the timing. But he still thinks that the dollar crash is coming and as a long term investor it won't make much difference that there's a lag between the initial crash in 2008 and the coming dollar crash. 

As usual you are cherry picking one small time horizon where Schiff's strategy did worse than the "normal" strategy and ignore the other 90% of the time. What's up with that?

I think the "permanent portfolio" works great under certain scenarios where all the investment categories are going up and back down. But I think that strategy is not going to work if we get many years of high inflation without a correction (deflation). The "permanent porfolio" worked in 1980 because a miracle occurred and interest rates were raised to 20% to save the dollar. That won't happen again, it's impossible with our current level of debt. I think it's a near certainty that the dollar is going to experience a huge and permanent loss of value. How would the "permanent portfolio" have worked in Italy before the lira collapsed? Greece before the drachma collapsed? Argentina before the peso collapsed? Venezuela? Zimbabwe? Etc? Etc? It seems to me you'd have a few scraps of gold along with a mountain of paper if you used that strategy in any of those countries that experienced a collapsing currency.

You always say that you can't predict the future and I would agree most of the time. However I don't think this a normal situation where it's tough to make a prediction. This is an extraordinary situation. Our levels of debt, trade imbalances and money printing are off the charts. It's not like I'm predicting a 50% of rain for this weekend. That's tough to predict. This is more like having a Cat 5 hurricane heading straight for you. I feel safe in predicting high winds and lots of rain when you're about to have the eye of a hurricane pass over you.

----------


## helmuth_hubener

Hi, Madison!




> Schiff was expecting the dollar to crash shortly after the stock market and housing market crashed. He admits all the time that he was wrong on the timing.


 I have never once heard Peter Schiff forthrightly and humbly admit to being wrong.  About anything.  Not even once.  I have heard Peter Schiff talk a lot.  Peter Schiff talks a lot.  He's a talker.  You would indeed think that sometime, somewhere in all those millions of words he would have said something like what you're claiming he says "all the time."  You _would think_ he would admit to the obvious.  That he would say "Well, I was mistaken in 2008 about the dollar collapsing.  It actually didn't collapse."  Something like that.  But I do not recall him ever saying that.  Not once.  Much less "all the time."

I will be glad to be corrected.  To hear him own up in a manly way to making a mistake would increase my already high estimation of him a great deal.  I just don't think I've ever heard that.




> But he still thinks that the dollar crash is coming and as a long term investor it won't make much difference that there's a lag between the initial crash in 2008 and the coming dollar crash.


 It would make a great deal of difference _if it never comes_ -- a possibility which is very real but for which his view makes absolutely no provisions nor takes any precautions.  Also, how long-term is long-term?  _I_ am all for making thousand-year plans, but I don't know that most investors in general are.  If they're beginning depletion upon their retirement, their term is only 40 or maybe 70 years long at most.  In that length of a "long"-term, there is a very big difference indeed between 2008 vs. 2018.  A very big difference.




> As usual you are cherry picking one small time horizon where Schiff's strategy did worse than the "normal" strategy and ignore the other 90% of the time. What's up with that?


 No, Schiff is cherry-picking this one tiny time window to point to and say "Look!  Here's where I was proven right!"  For instance:

*Daily Bell*: As a broker, you were prescient about the economic crisis. How come you don't get more credit?


*Peter Schiff*: Economics at the academic and policy level is still almost completely dominated by Keynesians who believe in government's ability to steward economic growth through fiscal and monetary policy. The fact that *I predicted the current meltdown, and they did not*, is seen by many to be nothing more than a "stopped clock" finally being right. Of course, this dismissal ignores the *detailed accuracy of my forecasts* and the performance of my investment choices over the decade preceding the crash.

*I'm proud of my predictions*, for instance, regarding the housing bubble and subsequent housing crunch. The housing collapse, however, is front-and-center everywhere you look in the business sections of newspapers and magazines. Denied and minimized throughout the 2000s, the proverbial chickens have come home to roost. What is both exasperating and astonishing is that very few predicted the aggressiveness of the problem or the seriousness of its unraveling. *We got it right* when others were either avoiding the issue or lacked the courage to confront it head on.

You know, until very recently, despite the unraveling of the US mortgage market, the official line remained upbeat. And today, there's a chorus about green shoots. There aren't any green shoots. Just as the current real estate market is no buying opportunity, or not unless you want to spend your life organizing renters and waiting up to a decade or longer for the housing market to recover.

The American mortgage market is in full-scale retreat, and that's an alarm we sounded over and over. We were correct then and we were correct about our analysis of the bailout as well.
Also:

"How do you think I knew the crisis was coming?  How do you think I was on CNBC in 2005 and 2006 warning about it?  I understood what the Fed was doing..." -- from this video
Also, the write-up he has had made for getting speaking engagements states that he is available to speak on the following topic:

*How I Predicted the 2008 Economic Crash & What I See on the Horizon*

Peter Schiff made a huge splash when he became one of only a few elite economists to accurately forecast the mortgage crisis in 2007 and the subsequent recession.... The economic collapse that Peter Schiff had long foretold has finally come to pass.
Far from admitting that he gave less-than-perfect advice in 2008, he continues to toot his horn far and wide and make hay off of supposedly being right in 2008.  In 2008, specifically.  2008 was his banner year, when everything he had predicted came true, the chickens came home to roost, and all the people who had laughed at him had to eat his words (and maybe theirs, too).  See this video, which Peter has talked about and recommended people watch on many occasions, and in fact has now reposted and essentially endorsed:







> I think the "permanent portfolio" works great under certain scenarios where all the investment categories are going up and back down. But I think that strategy is not going to work if we get many years of high inflation without a correction (deflation).


 I understand your concern, but it did work during the 1970s, which was a period of high price inflation.  It worked terrifically well.  You would have been glad to have a Permanent Portfolio protecting your money during the 1970s.  It either did work, or would have worked, during every period of time in American history.  In back-testing, they could find no period longer than about 18 months I believe it was wherein a Permanent Portfolio would have gone down.  It showed very good, steady performance.  Now back-testing can't prove a theory, but it can disprove it, and it does not disprove the PP, and now there's been about 40 years of solid, real-world, in-the-wild performance data for us to look at.  It's been performing just as designed for that entire 40 years.  What more do you want?

*I* don't have to do nonsensical back-flips about "but you can't ever criticize losses because losses don't matter because, because... realization!"
*I* don't have to make excuses for why my preferred strategy lost lots of people lots of money.
*I* don't even have to be right in any predictions, about anything, because this theory makes no predictions.  _Peter Schiff_ has to be right.  _I don't_ .  He and his followers have a lot riding on whether or not he's right -- mostly his followers, since Peter makes his money via advice and management fees, not mainly by investing his own personal money.  Yes, Peter Schiff _has to be right_ about the future in order to be right in his investment advice.  *And that is why he is wrong.*  Betting it all on a guru being right is just too dangerous.

I just have a lot of solid theory and rock-solid verifiable real-life data, showing that this seems to be a pretty good way to invest.  That's all I have.  But I don't know what more an investment theory could possibly have.




> The "permanent porfolio" worked in 1980 because a miracle occurred and interest rates were raised to 20% to save the dollar.


 Actually, it worked in the 1970s, when price inflation was high.  It worked tremendously well.  Do I need to post another graph of the Permanent Portfolio during the 1970s?




> That won't happen again, it's impossible with our current level of debt. I think it's a near certainty that the dollar is going to experience a huge and permanent loss of value.


 And that could happen.  And if it does, the Permanent Portfolio would do well.  You would be protected.  That's why we hold 25% in gold.  That's also why we hold some assets outside of the country in which we live.




> How would the "permanent portfolio" have worked in Italy before the lira collapsed? Greece before the drachma collapsed? Argentina before the peso collapsed? Venezuela? Zimbabwe? Etc? Etc? It seems to me you'd have a few scraps of gold along with a mountain of paper if you used that strategy in any of those countries that experienced a collapsing currency.


 This is a very good question!  The Permanent Portfolio system is to hold 25% in long-term (as long as possible) US bonds, 25% in US dollar cash (T-bills or money market account), 25% in a total US equity market fund, and 25% in physical gold bullion coins.

To address your specific examples is actually difficult -- it would be easy, but most of these countries have had _multiple_ currency collapses (!!) and so I cannot be sure to which collapse you are referring!  But let's just choose some at random.  Let's say you were meaning the Italian Lira collapse of 1985.  An Italian who had his savings invested in a Permanent Portfolio would have not even experienced a blip.  Not a blip.  in fact, due to good performance in stocks _and_ bonds _and_ cash that year, you would have been up 20.2% in nominal US dollar terms, about 18% in real terms.  Real terms is really what matters, but in terms of Lira: Italy experienced an average of 9.21% inflation in 1985 -- very bad inflation -- and so in Lira terms your portfolio's value would have gone up about 27% (18% real gains, plus 9% lira losses that didn't really affect you at all -- they just mean your investment is worth that much more in terms of the Lira).

Let's do one more: Argentina.  Argentina has had so many currency problems, I couldn't begin to guess which one you mean.  The motto of Argentina's Central Bank: "Hey, at least we're not Brazil!"  So let's just pick the most recent difficulties, which they are still it the midst of, I believe.  One year ago, ARS was .19 dollars -- today, it's .12 (see here and change the chart to 1Y).  So it's hard times in Argentina.  But if you as an Argentine invested your precious savings in a Permanent Portfolio, you would have been basically flat this past year in real terms -- slightly down because gold and bonds both took very big hits, but surprisingly only _slightly_ down -- and in terms of the Argentine Peso you'd be way up, of course.

OK, one more: Zimbabwe's currency collapse really took off in 2007 and 2008, but it had very bad inflation all through the 1990s and 2000s.  If you, as a Zimbabwean, had had your savings tucked away in a Permanent Portfolio in 2008, you would have been down less than 1% that year, real terms.  Not bad, considering your country's inflation rate reached 89,700,000,000,000,000,000,000% in mid-November.  None of that touched your savings.

So, it's performed well in all the examples I chose to address, and probably in all the dozens of examples you unwittingly cited.  All that said, the PP was really not designed for people overseas.  It was designed for Americans.  The US is in a unique position in the global economy, and the PP takes advantage of that in some very smart ways.




> You always say that you can't predict the future and I would agree most of the time. However I don't think this a normal situation where it's tough to make a prediction. This is an extraordinary situation.


 I would think that in an _extraordinary situation_ it would be even _more_ difficult to predict the future with reliability.  The very qualities that make the situation extraordinary make it volatile and highly unpredictable.  It's uncharted territory.  But that's just how it seems to me.




> Our levels of debt, trade imbalances and money printing are off the charts. It's not like I'm predicting a 50% of rain for this weekend. That's tough to predict. This is more like having a Cat 5 hurricane heading straight for you. I feel safe in predicting high winds and lots of rain when you're about to have the eye of a hurricane pass over you.


  That's why it's good to be protected.  It's good to take precautions.  I am confident that if your predictions come true and the hurricane hits and the dollar is destroyed this year, the money that's precious to me will be protected and weather the storm.

----------


## helmuth_hubener

Thanks for your thoughts, by the way, Madison.  You made some very thoughtful points and even though we may not see these things exactly the same, I think at last we at least understand where each other are coming from, and I can certainly respect your point of view.  I would certainly not fault you for being *too* prepared for the worst!*  Being prepared is a good thing.  

*(Like Mr Gaddafi does to me, saying that 25% gold is far too much because it's not earning any dividends and is even more than Peter Schiff recommends and doesn't get any interest and whatever other confused reasoning.  Then again he seems to also think that a PP is not prepared _enough_ for a US dollar collapse.  He seems to be of two minds, or schizophrenic, or hasn't quite thought things through.  Or is simply criticizing and insulting without caring about being consistent.)

----------


## helmuth_hubener

Since I'm going through and replying to things and you so kindly dropped by, Madison, I'd like to go back to some points you made a while back that I never replied to:




> Exactly. Being diversified protects you from losses but it also limits your gains. If all you had to do was follow an "investment formula", then everyone would make money investing.


  Everyone _can_ make money investing!  The market rewards holders of wealth for refraining from spending that wealth, making it available to others.  That is what they teach you in "Introduction to Investment" seminars: "Look at this exponential graph of the growth that your money would have had if you'd left it in the stock market for the past 50 years, or in bonds for the past 50 years.  Don't you want that?"

That's the foundation of investing: getting on the right side of compound interest.  Anyone can harness the tremendous power of compound interest in order to cause huge increases in his wealth via nothing more complicated than *patience*.

You don't _need_ to beat the market in order to get the superlative results of long-term compound interest.  All you need to do is *patiently let the gains pile up*.  That's it!  That's all you need to do!




> But I believe the key is to have more knowledge about what is likely to happen in the future, compared to other investors. And I believe that the collapse or at least serious devaluation of the dollar is inevitable.


 The key... to what?  The key to making even _more_ money than the market in general, true.  But you don't need to do that.  Getting greedy like that, chasing yield, is precisely what gets investors into trouble.  The vast majority of layman investors do not make as much money as the overall market.  They fall short.  By trying to beat the market, they instead get pummeled.  This is all because of arrogance.  Pride.  Their pride made them think that they _did_ know more than a mere average investor.  They became convinced that they _did_ "have more knowledge...compared to other investors."  But the statistics show that actually: _they didn't._

The investor that instead can find within himself the humility to admit and realize that he might _not_ know more than Wall Street, that is the investor who can protect and grow his money safely and effectively.  *Humility* is a virtue with a huge pay-off in investing.

*Patience.

Humility.*

These are two cardinal virtues of investing that will serve us all well, I think.  Let us be contented with the return the market can provide, rather than messing that all up for ourselves by trying to get even more.

Also, Madison, did you ever listen to Harry Browne explaining his investment ideas and the PP?  Here, again, are the two shows I recommend to start with for an overview:

16 Golden Rules of InvestingAn Introduction to the Permanent Portfolio Concept

And the whole archive:

http://www.harrybrowne.org/Archives/...investment.htm

Let me know what you think!  I will be very happy to discuss it with you, even if you think the ideas are terrible and strongly disagree.  In fact, all the better if you disagree.  Let's just disagree with knowledge and understanding.

----------


## helmuth_hubener

> Lol...look at those overall gains.
> 
> *Buffett: 586,817%
> S&P 500: 7,433%*
> 
> Which number is bigger, helmuth? Buffett, right? So, that would mean he outperformed the market...quite significantly, too. So it's entirely possible to far outperform the market consistently, and you don't just have to be Warren Buffett to do so.


 By trying to get the 500,000% gain, you miss out on the 7,500% gain.  A 7,500% gain is pretty good!  It's extremely good, in fact.

There's no _need_ to get greedy chasing yield.  All you have to do is be patient.  99% of the time, by chasing yield, trying to be the next Buffet, the investor ends up instead of getting the 7,000% yield, getting the loss of his shirt.

I like my shirt.  7,000% is enough for me.


~~~


Well, it looks like I have answered all of our dear Glorious Libyan Mallard's ridiculous posts.  If anyone else has any examples of something that Peter Schiff is wrong about, or that you think he's right about, come chime in!

----------


## helmuth_hubener

Bump.

----------


## devil21



----------


## Dforkus

> By trying to get the 500,000% gain, you miss out on the 7,500% gain.  A 7,500% gain is pretty good!  It's extremely good, in fact.
> 
> There's no _need_ to get greedy chasing yield.  All you have to do is be patient.  99% of the time, by chasing yield, trying to be the next Buffet, the investor ends up instead of getting the 7,000% yield, getting the loss of his shirt.
> 
> I like my shirt.  7,000% is enough for me.


I'm glad you noticed that, 7500% on your money (and does that even account for dividends?) "WHAT A SCAM". talk about "burying the lead"..
Warren Buffet and his team at Berkshire Hathaway are the definition of extraordinary.. Using them to throw shade on the index is like using Tiger Woods to throw shade on the local 1 handicapper when you can't break 100...

This has really become the theater of the absurd: 

Peter Schiff made calls about the housing market in 2007 that were very prescient.. Good for him..

Peter Schiff, both before and after that period has made calls that are demonstrably false..

His calls on the collapse of the US dollar were wrong...
His calls on Europe in this time frame, comically wrong.
His calls that there was no money in US equities in 09, 10, and 11, just as we were entering what has turned out to be one of the best bull markets in US history were **HORRIBLE**.. 

No, I'm not interested in hearing any "just you wait" equivocations.. He messed up, bad... and following that advice would have lost you money..

It happens, this is economics, not religion, people are fallible, and if you make enough predictions about the markets the chance of you being wrong approaches 100%..

----------


## Madison320

Instead of asking "Is Peter Schiff wrong?" a much better question is "Do you think socialism, debt and QE are good for the economy?". Apparently a lot of Ron Paul fans think so.

----------


## CaptainAmerica

> "Peter Schiff was Right!" we all cheer?  This is the right-thinking, Austrian thing to say?  Nope.  Peter Schiff was wrong, wrong, wrong.  On so many levels he was wrong.  And he still is wrong.
> 
> I, like him, subscribe to Austrian Economics.  I agree with his libertarian political views.  But when he has given investment advice, he has been horribly, horribly wrong.  Reasons:
> 
> 1) Even when he has been right, such as 2008 (and if you are a permanent bear, you inevitably get to be right on occasion, when the stock market goes down) those who followed his advice, either by buying overseas stocks and precious metals directly, or by buying into Schiff's EuroPacific Capital fund still lost money!  In the case of EuroPacific customers: LOTS of money.  The vast majority of their life savings.  See here, and here.
> 
> 
> 2) But, usually you don't have to worry about 1), because his predictions have rarely been right.    For his track record of wrong predictions, see here, here, here, here, here, here, here, here, here, and here.
> 
> ...


I was never a fan of Schiff, he seems like a generic entrepeneur that rides coat tails (ron pauls)

----------


## helmuth_hubener

> Instead of asking "Is Peter Schiff wrong?" a much better question is "Do you think socialism, debt and QE are good for the economy?". Apparently a lot of Ron Paul fans think so.


 Like who?

Peter Schiff being wrong in his "investing" (really, _speculating_ -- he isn't investing at all) philosophy and methodology does not equal socialism, debt and QE are good for the economy.  Does not compute.  The two are not the same.  No one on this thread has said that socialism rocks.  Unless I missed it!  Maybe you think it rocks, Madison?

----------


## cocrehamster

> Like who?
> 
> Peter Schiff being wrong in his "investing" (really, _speculating_ -- he isn't investing at all) philosophy and methodology does not equal socialism, debt and QE are good for the economy.  Does not compute.  The two are not the same.  No one on this thread has said that socialism rocks.  Unless I missed it!  Maybe you think it rocks, Madison?


Apparently if you disagree with someone who Ron Paul likes you're a socialist around here. I think the Austrian school in general needs to evaluate why they were so wrong about the effects of QE and the economy since the recovery began. I'm not saying QE was good policy but it certainly has not delivered anywhere near the consequences that the Austrians were predicting. If anything, it seems to me that both Keynesians and Austrians overestimated the power of what QE could do, just in different ways.

----------


## The Gold Standard

> I think the Austrian school in general needs to evaluate why they were so wrong about the effects of QE and the economy since the recovery began. I'm not saying QE was good policy but it certainly has not delivered anywhere near the consequences that the Austrians were predicting.


What did the Austrian school say about QE that was wrong?

----------


## cocrehamster

> What did the Austrian school say about QE that was wrong?


I guess you could start with it's impact on the USD. The price of gold is another example. Look at Bob Murphy's predictions, as well as Schiff's. When you predict high or even hyper inflation year after year, and inflation ends up being below historical average, something must be flawed in your model or way of understanding the monetary system. I'm not saying I'm anti Austrian, but there is nothing wrong with re-evaluating, especially in a "science" like economics, where there is still a lot that we don't understand.

----------


## acesfull

Pardon my ignorance but is this the same Peter Schiff that was battling the IRS some years back?

TIA

----------


## cocrehamster

> Pardon my ignorance but is this the same Peter Schiff that was battling the IRS some years back?
> 
> TIA


I think that was his dad, Irwin, and he's currently in prison for not paying taxes.

----------


## acesfull

> I think that was his dad, Irwin, and he's currently in prison for not paying taxes.


Thank you for your reply.

----------


## The Gold Standard

> I guess you could start with it's impact on the USD. The price of gold is another example. Look at Bob Murphy's predictions, as well as Schiff's. When you predict high or even hyper inflation year after year, and inflation ends up being below historical average, something must be flawed in your model or way of understanding the monetary system. I'm not saying I'm anti Austrian, but there is nothing wrong with re-evaluating, especially in a "science" like economics, where there is still a lot that we don't understand.


Those are predictions by people, not the "Austrian school". All the Austrian school says about inflation of money and credit is that it creates asset bubbles that will burst, which is exactly what we have. Murphy and Schiff just doubted the stomach the world has for even more dollars, but as long as they need dollars to buy oil, dollars will always have a leg up on the other toilet paper currencies of the world, so we shouldn't have to worry about hyperfinflation. Two people making guesses about what will happen has nothing to do with how Austrian economics views our current policies.

----------


## cocrehamster

> Those are predictions by people, not the "Austrian school". All the Austrian school says about inflation of money and credit is that it creates asset bubbles that will burst, which is exactly what we have. Murphy and Schiff just doubted the stomach the world has for even more dollars, but as long as they need dollars to buy oil, dollars will always have a leg up on the other toilet paper currencies of the world, so we shouldn't have to worry about hyperfinflation. Two people making guesses about what will happen has nothing to do with how Austrian economics views our current policies.


I'm referring more to the Austrian economists who made the inaccurate predictions than the Austrian school. People sure like to take credit for the Austrian school when Schiff predicted the housing bubble though, so its hard to completely separate the two when they are wrong.

----------


## devil21

> I guess you could start with it's impact on the USD.


Yeah, it's not like countries are slowly but surely systematically dumping the dollar or anything.  




> The price of gold is another example.


How so?  Gold was $840/oz when QE started.  It's been as high as nearly $2000/oz and currently around $1300/oz and looks to be on the way back up again.  Are you suggesting gold hasn't been greatly affected?  This is even with obvious and proven manipulation by central backs and bullion banks playing paper games.  If you're suggesting that some thought the price of gold would be even higher, blame them for underestimating the lengths banks will go to manipulate it.




> Look at Bob Murphy's predictions, as well as Schiff's. When you predict high or even hyper inflation year after year, and inflation ends up being below historical average, something must be flawed in your model or way of understanding the monetary system. I'm not saying I'm anti Austrian, but there is nothing wrong with re-evaluating, especially in a "science" like economics, where there is still a lot that we don't understand.


Oh you're a "price inflation" Keynesian.  When the Fed and other CBs are literally pumping 100's of trillions into markets just to maintain the status quo, it's safe to say the currencies have been hyperinflated by Austrian standards.  Can you please point out what the current M3 is?  Oh yeah, you can't, because they stop counting.  

Btw, nice 1-2 punch troll tactic there to try to discredit Schiff over the IRS stuff.  acesfull/cocrehamster

----------


## ChristianAnarchist

> "The fact that it hasn't _already_ happened, that's what's the amazing part of it." -- Peter Schiff, March 5th, 2014
> 
> Some have been being amazed for 40 years or longer now.
> 
> That's too much amazement for me.  I don't think I can take that kind of protracted amazement.  I'll just accept that I don't know the future and then 10 years down the road if Peter Schiff's predictions still haven't come true I won't have to suffer an amazement heart attack.


Ya, I'm one of those people.  I never expected the ponzi schemes to last this long.  I was WRONG (about how long until the collapse).  I'm NOT WRONG about the collapse coming.  Eventually the confidence will be gone from this confidence game and the house of cards will come down.  The world will still turn and people will still live (most of them).  Some people who have made no preparations will struggle to feed their families and some will even die.  It's not that any of us WANT this or even hope that we are right.  I'm tickled to death that my "predictions" have so far been premature.  I even hope that I'm COMPLETELY wrong and there will never be a collapse and the goons in D.C. will find "religion" and get their budgets in order and stop taxing everyone to death...  I think we all know that's not very likely...

----------


## Occam's Banana

> I guess you could start with it's impact on the USD. The price of gold is another example. Look at Bob Murphy's predictions, as well as Schiff's. When you predict high or even hyper inflation year after year, and inflation ends up being below historical average, something must be flawed in your model or way of understanding the monetary system. I'm not saying I'm anti Austrian, but there is nothing wrong with re-evaluating, especially in a "science" like economics, where there is still a lot that we don't understand.


As far as I know, the only particular "prediction" Bob Murphy made with respect to inflation and QE was the bet he made with another economist about what the official CPI number would be at a particular date. His prediction was wrong - and he owned it so and ponied up on his bet. Your claims to the contrary notwithstanding, Bob Murphy does NOT run around predicting "hyperinflation year after year." (I cannot speak regarding Schiff one way or the other, as I do not follow him - but Schiff is not an Austrian economist so much as he is a "fellow traveler." Assigning criticism to Austrian economic theory on the basis of whatever predictions Schiff or other "Austrian-style" or "gold bug" businessmen, investment advisors and "market watchers" happen to make is inapt and misguided.)

Furthermore, Murphy's specific prediction in that one particular case was NOT based on Austrian economics _per se_. Murphy did not ever say that "Austrian economic theory tells us that inflation will be this or that particular value at this or that particular point in time." (In fact, Austrian economists explicitly reject the idea that that sort of "prediction" is even possible to begin with.) Murphy's prediction was informed by Austrian economics, but it was not derived from Austrian economics. It was derived from psychology (in the light of Austrian economics). That is, it was based on Murphy's personal expectations about how investors and others would react to QE - but he failed to anticpate that banks would hold on to as much QE-created reserves as they did. And that is exactly the sort of thing that makes consistent and reliable economic predictions of that sort and specificity so impossibly fraught to begin with. (Being familiar with Murphy's work and style, I very seriously doubt that it's a mistake he'll ever make again.)

As for your assertion that "when you predict [higher inflation and inflation ends up being lower] something must be flawed in your model or way of understanding the monetary system": it does NOT follow that "something *must* be flawed in your model." That is merely one possibility. Alternatively, it may be that the veracity or accuracy of inflation measurements is what is flawed - or it may be that your application of your model with respect to those inputs is what is flawed. (It is this latter alternative that tripped up Bob Murphy, not any "flaw" in Austrian economics.)

----------


## The Gold Standard

> I'm referring more to the Austrian economists who made the inaccurate predictions than the Austrian school. People sure like to take credit for the Austrian school when Schiff predicted the housing bubble though, so its hard to completely separate the two when they are wrong.


Schiff is not an economist. He does know of the Austrian business cycle theory though, which is why he could predict the housing bubble, and why I can tell you there is a bubble in stocks, and there is a huge bubble in U.S. debt. They will both burst, but I don't know when, and the bond bubble will be harder to pop because we have our guns pointed at anyone thinking about abandoning the dollar.

----------


## cocrehamster

> Yeah, it's not like countries are slowly but surely systematically dumping the dollar or anything.  
> 
> 
> 
> How so?  Gold was $840/oz when QE started.  It's been as high as nearly $2000/oz and currently around $1300/oz and looks to be on the way back up again.  Are you suggesting gold hasn't been greatly affected?  This is even with obvious and proven manipulation by central backs and bullion banks playing paper games.  If you're suggesting that some thought the price of gold would be even higher, blame them for underestimating the lengths banks will go to manipulate it.
> 
> 
> 
> Oh you're a "price inflation" Keynesian.  When the Fed and other CBs are literally pumping 100's of trillions into markets just to maintain the status quo, it's safe to say the currencies have been hyperinflated by Austrian standards.  Can you please point out what the current M3 is?  Oh yeah, you can't, because they stop counting.  
> ...


1- the dollar has done nothing but become stronger in recent years.

2. I'm simply observing and commenting on predictions I've seen. According to schiff gold should be $5k now and the US government should be insolvent.  

3. What is a "price inflation keynesian"? I don't label myself under any school of economics.

4. Are you claiming acesfull and I are the same person? Another conspiracy lol.. sorry to disappoint you but you're wrong again. 

I really don't care if you continue to follow these guys, but like it or not they have been wrong on pretty much everything since the financial crisis began. 

Does Murphy even use a model for his predictions or does he just pull them out of his ass? I would think that economic forecasts from an Austrian economist would be based on Austrian economic theory.

----------


## The Gold Standard

1. It's called a bubble. For 25 years housing did nothing but get stronger until it didn't. 

2. What specific predictions people make means nothing to me. And the U.S. government is insolvent.

I don't follow anyone. I research for myself. And Austrian economics doesn't have models. If you need models then you need to pay more attention to the scumbag professor in whatever Macro 101 class you are taking.

----------


## cocrehamster

> 1. It's called a bubble. For 25 years housing did nothing but get stronger until it didn't. 
> 
> 2. What specific predictions people make means nothing to me. And the U.S. government is insolvent.
> 
> I don't follow anyone. I research for myself. And Austrian economics doesn't have models. If you need models then you need to pay more attention to the scumbag professor in whatever Macro 101 class you are taking.


1. Would you have been better off calling the housing market a bubble for the last 25 years or buying a house 25 years ago? If bubble predictions don't actually happen within a pretty short period of time then they are pretty worthless. 

2. I'm not in a macro 101 class but I do study economics, mainly financial economics. If they don't have models then any predictions are pulled directly out of their asses. No wonder they have been so wrong.

----------


## Zippyjuan

> 1. It's called a bubble. For 25 years housing did nothing but get stronger until it didn't. 
> 
> 2. What specific predictions people make means nothing to me. And the U.S. government is insolvent.
> 
> I don't follow anyone. I research for myself. And Austrian economics doesn't have models. If you need models then you need to pay more attention to the scumbag professor in whatever Macro 101 class you are taking.


The housing bubble didn't really begin until about 1999. Until then, the price of housing tended to rise at pretty much the same rate as everything else.  

But rapidly rising housing prices were a bubble.  Peter Schiff was not the only to recognize that.  He did fail to recognize a similar bubble in the price of gold though- and continues to say "this time it is different!  Gold will always continue to rise!  It has to!" which is exactly what bubble deniers also say (and Schiff criticizes them for while doing it himself).

----------


## ctiger2

> The housing bubble didn't really begin until about 1999. Until then, the price of housing tended to rise at pretty much the same rate as everything else.  
> 
> But rapidly rising housing prices were a bubble.  Peter Schiff was not the only to recognize that.  He did fail to recognize a similar bubble in the price of gold though- and continues to say "this time it is different!  Gold will always continue to rise!  It has to!" which is exactly what bubble deniers also say (and Schiff criticizes them for while doing it himself).


HAHAHA! keep 'em coming. Comedy gold. Gold is simply the inverse of the dollar. Saying Gold is in a bubble simply means the USD is way way undervalued.

Here's your precious USD chart. Expect a waterfall decline before this decades out.

----------


## TheCount

> Here's your precious USD chart. Expect a waterfall decline before this decades out.



Care to put a date on that?

----------


## ctiger2

> Care to put a date on that?


Sure, by 12/31/2019 it will have already happened.  

The beauty of the market is that noone knows when.

----------


## devil21

> 1- the dollar has done nothing but become stronger in recent years.


Compared to other failing currencies, the dollar has periods of up and down.  The dollar itself has not become stronger compared to the dollar in the past.  The DX is very high right now but, strangely outside of a gas pump, the strengthening dollar isn't buying me anymore than it did when it was lower.  My purchasing power should be higher now, right?  Strengthening dollar and all!  Look, it is a constantly depreciating asset, by design.  I'm also still waiting on that M3 chart to prove no hyperinflation.....can you direct me to it?  How can either of us argue what's going on without the most basic of evidence to interpret?




> 2. I'm simply observing and commenting on predictions I've seen. According to schiff gold should be $5k now and the US government should be insolvent.


Gov't is insolvent and has been for a long time but I won't turn this into a history lesson.  Besides in the real world, outside of fantasy bank world where money just appears out of thin air, having more liabilities to pay than revenues to pay with _is_ insolvency.  When regular people live on credit to make up for shortfalls, consumer banks call it debt pyramiding and shut off your credit.




> 3. What is a "price inflation keynesian"? I don't label myself under any school of economics.


What is your definition of inflation?  That's the measure of whether you're a keynesian.




> 4. Are you claiming acesfull and I are the same person? Another conspiracy lol.. sorry to disappoint you but you're wrong again.


No, I didn't say you and acesfull are the same person.  I said it's a 1-2 punch troll tactic and an obvious one.  Btw, if I were alleging you and acesfull are the same person, that would not be a conspiracy.  A conspiracy requires at least two people.  Perhaps you should learn what the word 'conspiracy' means and it's root word 'conspire'.  




> I really don't care if you continue to follow these guys, but like it or not they have been wrong on pretty much everything since the financial crisis began.


What they're not wrong about is the dollar heading for a brick wall.  The rest is details, up for individual interpretation and action.

----------


## cocrehamster

> Compared to other failing currencies, the dollar has periods of up and down.  The dollar itself has not become stronger compared to the dollar in the past.  The DX is very high right now but, strangely outside of a gas pump, the strengthening dollar isn't buying me anymore than it did when it was lower.  My purchasing power should be higher now, right?  Strengthening dollar and all!  Look, it is a constantly depreciating asset, by design.  I'm also still waiting on that M3 chart to prove no hyperinflation.....can you direct me to it?  How can either of us argue what's going on without the most basic of evidence to interpret?


When did I claim there was deflation? And do I really need to prove to you that we are not experiencing hyperinflation in the USD? What planet are you from? You can argue about how well CPI represents the price level, but it's a better measure than the money supply. If the productive capacity of the economy increases along with the money supply, is that still inflation in your world? A lot more than just the quantity of money matters when you're talking about the strength of a currency.





> Gov't is insolvent and has been for a long time but I won't turn this into a history lesson.  Besides in the real world, outside of fantasy bank world where money just appears out of thin air, having more liabilities to pay than revenues to pay with _is_ insolvency.  When regular people live on credit to make up for shortfalls, consumer banks call it debt pyramiding and shut off your credit.


Definition of insolvency according to Investopedia:
"DEFINITION OF 'INSOLVENCY
When an individual or organization can no longer meet its financial obligations with its lender or lenders as debts become due. Insolvency can lead to insolvency proceedings, in which legal action will be taken against the insolvent entity, and assets may be liquidated to pay off outstanding debts."

Having more liabilities than revenue is not insolvency, if it were, many perfectly solvent institutions and people, including most people with a mortgage, would be insolvent. The US is not insolvent, again, at least on this planet.




> What is your definition of inflation?  That's the measure of whether you're a keynesian.


Well by your definition, if you're not an Austrian, you're a Keynesian. The generally accepted definition of inflation on this planet is the price level. It's probably better at this point to just call your definition monetary inflation or another term 




> No, I didn't say you and acesfull are the same person.  I said it's a 1-2 punch troll tactic and an obvious one.  Btw, if I were alleging you and acesfull are the same person, that would not be a conspiracy.  A conspiracy requires at least two people.  Perhaps you should learn what the word 'conspiracy' means and it's root word 'conspire'.


Well then I have no idea what you're talking about, I saw someones post and replied to it. 




> What they're not wrong about is the dollar heading for a brick wall.  The rest is details, up for individual interpretation and action.


[/QUOTE]

Up until today all of their predictions and timelines on the subject have been wrong. I guess we'll just have to keep waiting, I'm sure it's right around the corner, just a few more years....

----------


## cocrehamster

And for the record, I think that the Austrian school has a lot of insight to offer, and I'm not trying to completely bash it. Hayeks use of knowledge in society is probably my favorite academic paper I've ever read. I just don't think they (or any "school") have all the answers and they should be called out like anyone else when they make doomsday or other outlandish predictions that don't happen.

----------


## devil21

> When did I claim there was deflation? And do I really need to prove to you that we are not experiencing hyperinflation in the USD? What planet are you from? You can argue about how well CPI represents the price level, but it's a better measure than the money supply. If the productive capacity of the economy increases along with the money supply, is that still inflation in your world? A lot more than just the quantity of money matters when you're talking about the strength of a currency.


Since all you talk about is prices, it is assured that you are a keynesian.  Thank you for clearing that up.  Perhaps you are on the wrong forum?  What is your desire to argue with those that subscribe to the Austrian school?  To answer your question, any increase in the money supply is inflation and is a devaluation of the money.  Passing out more of it to more people doesn't make it worth more.  It just makes it worth less, especially when we're talking about pieces of paper and numbers in computers.  This is plainly obvious by examining historical purchasing power.




> Definition of insolvency according to Investopedia:
> "DEFINITION OF 'INSOLVENCY
> When an individual or organization can no longer meet its financial obligations with its lender or lenders as debts become due. Insolvency can lead to insolvency proceedings, in which legal action will be taken against the insolvent entity, and assets may be liquidated to pay off outstanding debts."
> 
> Having more liabilities than revenue is not insolvency, if it were, many perfectly solvent institutions and people, including most people with a mortgage, would be insolvent. The US is not insolvent, again, at least on this planet.


This would be accurate if the borrowing ever stopped and a budget was eventually balanced or showed a surplus.  Perpetual borrowing to maintain a facade is indeed insolvency.  The only question is when the creditor stops supporting it and calls the debt.  Besides "wealth" can not be created in a computer....that is an illusion of wealth.  If a father dies and his son inherits his father's ability to borrow large sums of money, does that mean the father has passed down wealth to the son?  I think not.  He has passed down a privilege that can be revoked at any time.




> Well by your definition, if you're not an Austrian, you're a Keynesian. The generally accepted definition of inflation on this planet is the price level. It's probably better at this point to just call your definition monetary inflation or another term


For the sheep, prices are the definition of inflation.  That is intentionally misleading.  Indeed, I am referring to monetary inflation.  I thought that much was clear.




> Up until today all of their predictions and timelines on the subject have been wrong. I guess we'll just have to keep waiting, I'm sure it's right around the corner, just a few more years....


Depends on the scale.  Will there be a "dollar" in the US for a long time to come?  Certainly.  There is no question about that.  What form it will take, what value it will have, and other variables is the question.  Will the dollar be the global reserve currency for the _rest of the world_ for a long time to come?  No way.  Anyone paying attention knows this to be true.

The goal of keynesian economics is to confuse economics to the point that it is not understood by the masses at all, so they will go along with whatever the controllers deem appropriate.

----------


## EndTheFed.Org

Timing financial markets is not easy. No matter how clear the fundamentals are, you can't always predict how the masses will react.  I bet the majority of Peter's predictions will be proven right with time.

----------


## helmuth_hubener

> Timing financial markets is not easy. No matter how clear the fundamentals are, you can't always predict how the masses will react.  I bet the majority of Peter's predictions will be proven right with time.


*The truly astounding thing* is that the time when he was "totally right," the time when he was completely vindicated at last, the time when all the unorthodox things he'd been saying were proven true, the time when the chickens he'd been prepping for showed up on the doorstep to roost -- that very time, when "Peter Schiff was Right!" was precisely the time when *you would have been losing prodigious amounts of money* if you had it invested with Peter's EuroPacific Capital, or even were just independently following his advice!  Can you believe that?  It's unbelievable but true!  Can you imagine that?  Peter is suddenly an all-star, is gloating on every channel about how right he is, and meanwhile staggering sums of cash are draining, draining, right out of your pocket.  60%, 70%, even 80%, Poof!  Gone!

That is Peter Schiff's most embarrassing failure.  If I were him, that is what I would be most embarrassed about.  That's what I would reflect upon: "How could my investment advice have failed so thoroughly and utterly at the very time when my forecasts of collapse were coming true?"

As I told Danke and dannno earlier: if you've got money with him (and Danke's father does) you'd better hope he's not right _again!_  In the past, when Peter was "wrong," when everyone was laughing at him, 2000-2006 for instance, his investments dis pretty OK.  Also now, for that matter, 2009-2015.  Nothing to write home about, but at least you're not getting wiped out.

*No, if you're investing according to Peter Schiff's advice, you had better hope and pray he's not "right" ever again.*

----------


## helmuth_hubener

> I was never a fan of Schiff, he seems like a generic entrepeneur that rides coat tails (ron pauls)


I, on the other hand, actually like and admire Peter Schiff.  Wrap your heads around that!

----------


## helmuth_hubener

> I guess you could start with it's impact on the USD. The price of gold is another example. Look at Bob Murphy's predictions, as well as Schiff's. When you predict high or even hyper inflation year after year, and inflation ends up being below historical average, something must be flawed in your model or way of understanding the monetary system. I'm not saying I'm anti Austrian, but there is nothing wrong with re-evaluating, especially in a "science" like economics, where there is still a lot that we don't understand.


I notice that you never replied to Occam's Banana, who had the best response for you, shedding the most light upon what you're asking.  I'd encourage you to do so!

In the meantime, here's a little more thoughts from my little brain:

You are looking at economics as a science.  OK.  And so it should be judged by the same standard as other sciences.  Seems reasonable.  In physics, if you have a theory, how do you know if it's true?  Easy: it predicts the future!  That's it.  That's the sum total of how we decide what's true and false in physics.  

And so you're applying that same standard to economics.  As you say, if you predict one thing, but a different thing happens, then your theory is bogus, plain and simple.  It may _seem_ right.  You may have a bookshelf full of Keynes explaining why it _should_ be right.  Just so, you may have a bookshelf full or Aristotle explaining the spontaneous generation of life, or why women have fewer teeth than men.  But if it fails to predict the future -- if next year you count all the teeth in all the mouths of Athens and the tally is grossly off -- then your theory is wrong.  (In the actual history of science, what will most likely happen at this point is that you or someone else will come up with a mitigating factor explaining why the amazing properties of the water in Athens causes women to have an unusual amount of teeth, almost as many as men, in fact, and that the original theory is still totally sound and correct.  But ideally, at that point you should instead start rethinking everything, and be willing to toss the theory out entirely.)

And that's all great! About the false predictions disproving the theory, that is.  All Austrians would probably agree with you.  Here's the kicker, though: Austrians, true Austrians, don't make predictions.  At least not as Austrians, they don't.  Not scientifically they don't.  No scientific predictions are coming out of the Austrian School.  Austrian economics is not an empirical science.  It does not make future predictions.  Its theories are not of the kind that can be confirmed or disproven by predicting or failing to predict the future.  The entire methodology of the Austrians is completely different.

So, in what sense is economics a science, you ask.  In the same sense as mathematics or logic.  You can't disprove Pythagoras by measuring a bunch of triangles.  Mathematics is not fundamentally an empirical science.  Neither is economics, though both do have very solid, empirical consequences.

Here's the methodological insight -- the break-through! -- of the Austrians: humans are not billiard balls.  They are unpredictable.  They'll do something different every time.  They're always learning.  Or forgetting.  The situation's always different.  You just don't know what they'll do.  And so you can't predict their future.  You can predict the future of that ball rolling down the ramp, but you can't predict the future of that child in the bassinet.  Much less 6 billion of them.  You can't predict the interest rate next year.  You can't predict inflation.  You can't predict the global currency markets.   You can't even predict the local haircut market.  It all just depends on the individual choices of billions of independent, unpredictable, out-of-control human beings.

The other schools of economics do not accept this.  And so they do make predictions.  And their predictions will generally be wrong, one way or another.  If they get something right, it will probably be by luck or coincidence.  Only the Austrians step out of that game.  Only the Austrians have recognized the fundamental difference between physics (and chemistry, and astronomy...) and economics.

The Keynesians predict.  The New-Keynesians predict.  The Post-Keynesians predict.  The Monetarists predict.  All these "main-stream" schools predict.  And they get it wrong, over and over and over.  And so, of course, they come up with excuses about remarkable tooth-proliferating properties of the Athenian baths.  Just as neo-Ptolemaic theories prevailed for almost 200 years after Copernicus, neo-Keynesian variants still control economics and government policy today.  It's amazing, but it's true!  They are so obviously failed and wrong that at some point maybe someone will notice.  Maybe in 200 years.  As for the Austrians: we noticed already.  

For the investor, these things have very real consequences!  It's not just academic!  If you believe that this gaggle of New-Keynesians and Post-Keynesians and Old Keynesians have correct theories you likely will lose money!  Their theories predict the future, and that future will not come true (except by random chance).  If you believe that someone -- anyone -- has an inside track to the future, you will likely lose money.  Jim Cramer doesn't know the future.  Warren Buffet doesn't know the future.  Paul Krugman doesn't know the future.  To the extent that Peter Schiff predicts the future, he is not an Austrian, he's just another crystal ball-gazer.  His predictions are just as foolish and wrong as the rest.

The reason I picked Peter Schiff as the subject of this thread is just to point out: no one is immune from this lack of knowledge of the future actions of humans.  Even people we like and with whom we agree.

----------


## Bossobass

> Look, it is a constantly depreciating asset, by design.


End of story. 
______________________________________

Helmuth,

Schiff predicted a few years ago, when it was $1,400/Oz, that gold will be $10,000/Oz (7X). That's not nearly as outrageous as predicting gold would rise from $35/Oz to $800/Oz (23 X) within a decade, when Friedman advised Nixon that removing the $ from gold would stabilize fiat currencies.

40 years since of massive, unrelenting debt through a fiat currency that's designed to constantly depreciate and was only tied to petroleum through massive bribery and military action. 

Is 40 years the limit, or do we have another 40 years?

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## helmuth_hubener

> Is 40 years the limit, or do we have another 40 years?


That's precisely what I explicitly claim to _not know!_

I mean, was this guy right?



All the same factors he outlined for why there was a Coming Great Depression are the same ones that exist today.  And yet, 1980 came and went, and no Great Depression.

Or how about this guy:



Once again, the 1990s seem to have gone a little differently than he expected.

How about this:



Here's a guy that got the '90s right, unlike Ravi!  He called it, that the '90s were going to be a huge boom.  Surely _he_ knows what he's talking about, right?  And yet, how come no one has heard of this "Internet Depression" he told us was coming?

OK, OK, some guys were wrong, but what about this:



This guy surely knows what's going to happen.  He's read his Rothbard.  Well, OK, so had Casey back in 1980.  But this time will be different.  Right?  There has to be somebody who can tell me the future!  Take my money, please!  Sell me your newsletter!  Charge your advisement fees!  Just tell me what's going to happen, already!!!

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## devil21

> End of story. 
> ______________________________________
> 
> Helmuth,
> 
> Schiff predicted a few years ago, when it was $1,400/Oz, that gold will be $10,000/Oz (7X). That's not nearly as outrageous as predicting gold would rise from $35/Oz to $800/Oz (23 X) within a decade, when Friedman advised Nixon that removing the $ from gold would stabilize fiat currencies.
> 
> 40 years since of massive, unrelenting debt through a fiat currency that's designed to constantly depreciate and was only tied to petroleum through massive bribery and military action. 
> 
> Is 40 years the limit, or do we have another 40 years?


At least 40% of the world's population and the recently declared "largest economy in the world", China, has already committed to remove the dollar as reserve.  This will keep spreading and it is not accidental.  Davos level bankers have no loyalty to any country.  They sap a country of it's wealth (gold, resources, and labor) then move on to the next one to start the cycle over again, like a swarm of locusts.

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## Zippyjuan

> HAHAHA! keep 'em coming. Comedy gold. Gold is simply the inverse of the dollar. Saying Gold is in a bubble simply means the USD is way way undervalued.
> 
> Here's your precious USD chart. Expect a waterfall decline before this decades out.


Housing prices: 


http://seekingalpha.com/article/2452...housing-market

Gold prices: 


http://www.kitco.com/charts/livegold.html

Look familiar?  One is a bubble and one is not?

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## helmuth_hubener

Didn't mean to kill off the conversation!  Thanks for all your input, everyone.  Keep it coming!

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## ctiger2

> Look familiar?  One is a bubble and one is not?


Comparing Apples and Oranges maybe? 

Houses are a commodity.

Gold is money, that's why central banks all over the globe possess/hoard/accumulate it.  

You will find out soon enough when the reset occurs.

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## Zippyjuan

Gold is a commodity as well. Is gold money?  Can you take to the store and buy something?

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## ctiger2

> Gold is a commodity as well. Is gold money?  Can you take to the store and buy something?


You're confusing Money (Store of value) and Currency (Money substitute used in commerce). Sometimes in history you can use Money as both a store of value and in commerce as well. At this point in time, because of Govt laws, we are forced to use a Currency in all commerce. However, that will change soon after the reset.

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## Zippyjuan

Money is not a store of value but a medium of exchange.  The value of money is free to change over time.  It has whatever value people give it. Gold is a commodity.  Its value too changes over time relative to other things.  While it has been used as money in the past, it is not money today.

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## devil21

> Money is not a store of value but a medium of exchange.  The value of money is free to change over time.  It has whatever value people give it. Gold is a commodity.  Its value too changes over time relative to other things.  While it has been used as money in the past, it is not money today.


"Tradition"

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## ctiger2

> Money is not a store of value but a medium of exchange.  The value of money is free to change over time.  It has whatever value people give it. Gold is a commodity.  Its value too changes over time relative to other things.  While it has been used as money in the past, it is not money today.


Money is a store of value AND a medium of exchange, among other things. Sometimes currency is used as a money substitute as it is today. This argument you try to make over and over is just silly. Silver and Gold have been traditional forms of money for thousands and thousands of years. Umm, they're in the Bible even. Federal Reserve notes unbacked by Gold have been around for 40 years. If we use history as our guide... thousands and thousands of years vs 40 years. You will see it soon with the Global currency reset that's looming.

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## Zippyjuan

If gold is money, can you take it to a store and buy stuff with it?  If no, then it isn't money. It is a commodity.  Yes, it is true that it has been used for money in the past but isn't today.  Actually most money today isn't even paper or metals but digital numbers. Only about ten percent is "currency".  Seashells have also been used for money as has rice among other things.

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## dannno

> If gold is money, can you take it to a store and buy stuff with it?  If no, then it isn't money. It is a commodity.


That's only true because of legal tender laws, not due to the nature of gold itself.

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## ctiger2

> If gold is money, can you take it to a store and buy stuff with it?  If no, then it isn't money. It is a commodity.  Yes, it is true that it has been used for money in the past but isn't today.  Actually most money today isn't even paper or metals but digital numbers. Only about ten percent is "currency".  Seashells have also been used for money as has rice among other things.


If the Govt suddenly passed a law stating that humans don't need water anymore. Would humans suddenly not need water?

Government laws are GARBAGE

I actually don't think we'll be using silver/gold as currency themselves at stores in the future. What's more likely to happen is I'll go to the bank and deposit my 100oz of silver and be issued a Silver Debit card. Then I'll go to the grocery store and they'll be 2 prices listed. You can buy this loaf of bread for $50 US Treasury Notes/Dollars OR 1/10 oz of silver. I'll swipe my Silver Debit card and 1/10th oz will be deducted from my 100oz. No one will be the wiser.

Alan Greenspan: 'Intrinsic currencies like Gold and Silver for example, are acceptable without a third party guarantee'

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## ChristianAnarchist

Peter Schiff was wrong, you were wrong, I was wrong... Even Ron Paul has been wrong.  What's the big deal?  Does anyone think that someone can accurately predict the future?  I think "prophets" went out with the old testament...

I wish I could get a silver dollar for every time I have been "wrong".  I'd have a tidy retirement, that's for sure.

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## devil21

> If gold is money, can you take it to a store and buy stuff with it?  If no, then it isn't money. It is a commodity.  Yes, it is true that it has been used for money in the past but isn't today.  Actually most money today isn't even paper or metals but digital numbers. Only about ten percent is "currency".  Seashells have also been used for money as has rice among other things.


See what I mean about confusing economics so much that it's difficult to understand?  Changing definitions of words and forcing the definition adoption at the point of gun (legal tender laws) is the bread and butter of a Keynesian.  Next, the digital will no longer be money, it will be "credits".  In fact, banks have already determined that money deposits aren't even money any more once the bank takes possession of it.  They are now "shares" in that bank, not money.  Right Zip?

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## Bossobass

> If gold is money, can you take it to a store and buy stuff with it?  If no, then it isn't money. It is a commodity.  Yes, it is true that it has been used for money in the past but isn't today.  Actually most money today isn't even paper or metals but digital numbers. Only about ten percent is "currency".  Seashells have also been used for money as has rice among other things.


You can take a $100 FRN bill into an establishment and change it for smaller FRN denominations. 

You can take an American Gold Eagle coin into an establishment and change it for smaller FRN denominations.

There isn't a country or a currency on earth that this simple analogy doesn't hold true in.

What's the question?

The Gold Bullion Coin Act Of 1985:




> *The act was passed by Congress pursuant to its exclusive power to coin money and set its value*, set forth in Article I, Section 8, Clause 5 of the United States Constitution. It was signed by Ronald Reagan in 1985.


Reads, in part:




> “(3) For purposes of section 5132(a)(1) of this title, *all coins minted under this subsection shall be considered to be numismatic items*”.



Definition of numismatic:




> nu·mis·mat·ic
>  (no͞o′mĭz-măt′ĭk, -mĭs-, nyo͞o′-)
> adj.
> *1. Of or relating to coins or currency.*
> 2. Of or relating to numismatics.

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## Zippyjuan

> You can take an American Gold Eagle coin into an establishment and change it for smaller FRN denominations.


So I can give you ten $5 bills in exchange for your $50 gold piece?  Where can we meet and how many do you have?

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## TheTexan

Peter Schiff was also right about something, probably

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## Bossobass

You wouldn't know what to do with a $50 gold piece, otherwise, I'd just give you one.

You'd probably scurry it off to your bosses at the FED to hold in their vaults to keep tradition alive.

Bull$#@! aside, gold is money and always has been and always will be, seashells and digital credits notwithstanding.

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## helmuth_hubener

> Ya, I'm one of those people.  I never expected the ponzi schemes to last this long.  I was WRONG (about how long until the collapse).  I'm NOT WRONG about the collapse coming.  Eventually the confidence will be gone from this confidence game and the house of cards will come down.  The world will still turn and people will still live (most of them).  Some people who have made no preparations will struggle to feed their families and some will even die.  It's not that any of us WANT this or even hope that we are right.  I'm tickled to death that my "predictions" have so far been premature.  I even hope that I'm COMPLETELY wrong and there will never be a collapse and the goons in D.C. will find "religion" and get their budgets in order and stop taxing everyone to death...  I think we all know that's not very likely...





> Peter Schiff was wrong, you were wrong, I was wrong... Even Ron Paul has been wrong.  What's the big deal?  Does anyone think that someone can accurately predict the future?  I think "prophets" went out with the old testament...
> 
> I wish I could get a silver dollar for every time I have been "wrong".  I'd have a tidy retirement, that's for sure.


The point is not to "pile on" and rub salt on Peter Schiff and other true-believing gold bugs.  Nor -- emphatically! -- to crow about somehow being right.  "I was right, you were wrong, nyah-nyah-nyah-nyah-nyah-nyah."  No!   *My point is to try to expose more people to a different way of thinking about investing that will hopefully help them keep more of their hard-earned money.*

We are good liberty people here.  The more resources and wealth libertarians have, the better, in my view.  So, let's get good returns.  Let's not fritter away hard-won life savings following fortune-tellers and broken methodologies.

This stuff is likely really relevant to you, ChristianAnarchist.  You probably _have_ an investment strategy right now.  You have something to lose, and something to gain, real money on the table.  I'd encourage you to look into the Permanent Portfolio concept.  Post-It Note version:

*There's four possible conditions the economy can be in:

1. Inflation
2. Deflation
3. Prosperity
4. Recession

There's four assets to hold which will carry you through and and all four of these conditions:

1. Gold (for inflation)
2. Bonds (for deflation)
3. Stocks (for prosperity)
4. Cash (for recession)*

It's a strategy that's proven its mettle for over 40 years now.  Good, steady returns.  Low volatility.  Ready for anything.

----------


## ChristianAnarchist

> The point is not to "pile on" and rub salt on Peter Schiff and other true-believing gold bugs.  Nor -- emphatically! -- to crow about somehow being right.  "I was right, you were wrong, nyah-nyah-nyah-nyah-nyah-nyah."  No!   *My point is to try to expose more people to a different way of thinking about investing that will hopefully help them keep more of their hard-earned money.*
> 
> We are good liberty people here.  The more resources and wealth libertarians have, the better, in my view.  So, let's get good returns.  Let's not fritter away hard-won life savings following fortune-tellers and broken methodologies.
> 
> This stuff is likely really relevant to you, ChristianAnarchist.  You probably _have_ an investment strategy right now.  You have something to lose, and something to gain, real money on the table.  I'd encourage you to look into the Permanent Portfolio concept.  Post-It Note version:
> 
> *There's four possible conditions the economy can be in:
> 
> 1. Inflation
> ...


I think that looks pretty good.  You did leave out one even more valuable asset and that is talent or skill.  The best thing someone can carry is in their mind.  They need to have some marketable trade with them so in any community or situation they will have something of value to "trade".

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## helmuth_hubener

> I think that looks pretty good.  You did leave out one even more valuable asset and that is talent or skill.


That is a thousand times more valuable than the rest.

----------


## AngryCanadian

Fact is the Market is rigged.

----------


## A Son of Liberty

> Housing prices: 
> 
> 
> http://seekingalpha.com/article/2452...housing-market
> 
> Gold prices: 
> 
> 
> http://www.kitco.com/charts/livegold.html
> ...


Housing _naturally_ returned to its pre-bubble prices, a bubble the Keynesians advocated, advertised, pumped and delivered.  Gold is as subject to manipulation as any other good on the planet, but you'll note that $1200/oz is still a helluva lot more than people were paying 13 years ago when our _Wise Overlords_ began openly and in earnest to suck the value out of the FRN.  So, no - it doesn't look familiar.  




> If gold is money, can you take it to a store and buy stuff with it?  If no, then it isn't money. It is a commodity.





> That's only true because of legal tender laws, not due to the nature of gold itself.


Oops!  Looks like you forgot to respond to dannno.  I'm sure that was an innocent oversight.  

Because surely no one as intelligent as yourself would fail to realize that the *only* reason you cannot carry a gold coin into a store to make a purchase is OBVIOUSLY "legal tender" "laws", right?  RIGHT!?  

Right.

----------


## DamianTV

> If gold is money, can you take it to a store and buy stuff with it?  ...


Okay there Ben Bernanke.  Why dont you just go print up some more fiat currency and steal the value of the existing currency for yourself?  It is people like you that perpetuate this ponzi scheme economy, and I suspect greatly that you stand to profit heavily from it.  Its also why very few here believe a single statement you make.  You forward their agenda, and the ideas you propose are more dangerous than standing armies because you are an ENABLER of the biggest scam in human history.

You are an Enemy of Liberty, Independence, and real Freedom.

----------


## Zippyjuan

> Housing _naturally_ returned to its pre-bubble prices, a bubble the Keynesians advocated, advertised, pumped and delivered.  Gold is as subject to manipulation as any other good on the planet, but you'll note that $1200/oz is still a helluva lot more than people were paying 13 years ago when our _Wise Overlords_ began openly and in earnest to suck the value out of the FRN.  So, no - it doesn't look familiar.  
> 
> 
> 
> 
> 
> *Oops!  Looks like you forgot to respond to dannno.  I'm sure that was an innocent oversight.  
> 
> Because surely no one as intelligent as yourself would fail to realize that the only reason you cannot carry a gold coin into a store to make a purchase is OBVIOUSLY "legal tender" "laws", right?  RIGHT!? * 
> ...


Gold and Silver Eagles are legal tender at their face values.  From the US Mint: 

http://www.usmint.gov/mint_programs/...can_eagle_gold




> American Eagles are imprinted with their gold content and *legal tender "face" value.*


http://2008silvereagle.com/are_ameri...gal_tender.htm




> Since they don’t circulate and weren’t issued through banks, are silver eagle coins “legal tender” for all debts public and private, like paper money? 
> 
> According to research done by Numismatic News*, even though the face value is well below the market price of US eagle coins, *these coins are ‘legal tender’ for all debts public and private.*  The legal tender value is the amount printed on the coin (not the metallic value). 
> 
> American Eagle coins are legal tender  
> 
> In today’s market a person would be considered foolish to spend a silver eagle  dollar for its $1.00 face value, although you could technically do so.  However, why spend a silver eagle dollar for $1.00 when you could sell it for many times that for the silver that it contains?

----------


## A Son of Liberty

You're trying to get off on a technicality, while ignoring the rest of the points.  Transparent.

----------

