Paul Krugman watches Peter Schiff youtubes All Day

[low preference guy]

Writes Krugman:

Inflation Predictions
Peter Schiff on Glenn Beck, Dec. 28, 2009:

PAYNE: So, where are you then, Peter, with respect to inflation? Do you think this is going to be the big story of 2010?

SCHIFF: You know, look, I know inflation is going to get worse in 2010. Whether it’s going to run out of control or it’s going to take until 2011 or 2012, but I know we’re going to have a major currency crisis coming soon. It’s going to dwarf the financial crisis and it’s going to send consumer prices absolutely ballistic, as well as interest rates and unemployment.

PAYNE: And what does that mean? For people watching this show, what does that mean for the average American?

SCHIFF: It means their life is going to get a lot more difficult. It means things that they need to buy, things like food and energy, are going to be much more expensive. Ultimately, interest rates are going to rise and their entire standard of living is going to plunge.

And I’m hoping the government doesn’t respond to this inflation with price controls because that’s going to make it even worse. Now, you’re going to be waiting in long lines to get basic food items or to get energy because there’s going to be shortages. People might be going to the black market.

PAYNE: You’re talking you’re talking Zimbabwe, Weimar, Germany — I mean, you’re really talking about something like that actually happening in this country.

SCHIFF: It will happen if we don’t change policies. There is still time to change.

PAYNE: Right.

SCHIFF: I mean, I’m running for the United States Senate, so I can try to change that myself. But if we don’t reverse course, if we continue to stimulate, then we will end up with hyperinflation and it will be like Zimbabwe.

OK, strictly speaking the time hasn’t run out — we could, I guess, see an explosion of inflation next year. But with commodity prices down, wages going nowhere, and the dollar actually strengthening against other currencies, it’s kind of hard to see where that’s supposed to come from.

Look, the Austrian/Ron Paul types made some very strong predictions about inflation — and rightly, given their model of how the world works. In their version of reality, it really isn’t possible to triple the monetary base without dire effects on the price level. In my version of reality, of course, that’s not only possible but what the model predicts in a liquidity trap.

So since we did indeed triple the monetary base with nothing much happening to inflation, the right lesson to draw is that their model is all wrong. Unfortunately, I see no hint that anyone in that camp is prepared to consider that possibility.

 

[angelatc]

No wonder they want to regulate the internet....Schiff is obviously giving dangerous advice! (/end snark)

My prediction: Everybody should bookmark this, because it's clearly another Krugman prediction that will score a huge mark in the fail column.

 

[ctiger2]

The problem with your post is that it's based on false data...

http://www.economicpolicyjournal.com/2011/12/paul-krugman-as-evil-jokester.html

I quote directly from the Bureau of Labor Statistics CPI release made today:

Over the last 12 months, the [CPI] all items index increased 3.4 percent.

That's a 127% greater rate of increase over the last 12 months than Krugman gives the impression of via his sleight of hand.
Worse, if you spend a good chunk of your money on energy, such as gasoline and heating oil, you are really getting smacked. Those prices are up, according to the BLS, by 12.4% over the last 12 months. (Gasoline is up 19.9%). Food, bought for the home, is up 5.9%. Apparel is up 4.8%. In fact, of the top 20 categories and sub-categories identified by the BLS, only 1 shows an increase over the last 12 months of less than 1.5%. Four categories (surrounding energy) are up by double digits.

So if you stay at home and do nothing all day but read Paul Krugman posts on an iPad, maybe your personal inflation rate is zero, but if you eat at home or hop in your car, or keep the heat on in the winter, then unless you are a Krugmanite, you know that Krugman is an evil jokester that shouldn't be taken seriously.

 

[low preference guy]

My prediction: Everybody should bookmark this, because it's clearly another Krugman prediction that will score a huge mark in the fail column.

I'm thinking the same. The unraveling of the european situation should occur in the next few months. Then the focus will move to the United States.

 

[Seraphim]

comment (EPIC!):

I remember a line from Jerry Seinfeld...He was asked if it bothered him that the tabloids spread lies about him. He said 'no...because if you're the type of person that reads the tabloids, you deserve to be lied to.'

To the same effect, if a person looks to Krugman for economic advice, then perhaps they deserve to have their seed corn eaten away by inflation.

The fact that Krugman is attacking Ron Paul with his B.S. articles shows that the establishment is concerned.

 

[brandon]

Will someone with a login please leave a comment explaining that the Austrians use a paxeological approach instead of a "model" like Krugman keeps saying. Let him know why all models are incomplete and doomed to failure, and all logically valid economic theory must be a priori.

 

[rockandrollsouls]

Oh boy...this should be interesting to follow. The problem with Peter is he tends to over exaggerate. However, this doesn't mean he's wrong.

The change in the price of gold usually acts as a precursor to inflation.
Just wait until those excess reserves are lent out....banks are hoarding them right now.

 

[Steven Douglas]

The problem with Peter is he tends to over exaggerate.

I don't think that's the problem. He certainly didn't over-exaggerate the magnitude of housing bubble crash. He was spot on with his predictions, though completely ridiculed in 2006 by expert academic economists who were "much wiser, and much better informed" doncha know. Of course houses only go up in value. They might come down a bit, but those are just perfectly natural market corrections. But please - a loss in value of up to 60-70% in some cases?! Maybe on your planet, Schiff. Not in the real world.

The housing bubble crash comes like a hurricane that passed overhead with some fairly destructive force. OK, even a broken clock is right sometimes. Could have flipped a coin for that one (and there were economists who said essentially that).

So now Peter Schiff says not to start cleaning up so fast -- that we need to batten down the hatches even more, as the very worst is yet to come. Obviously, the idiot did not bother to walk outside and look upward to see beyond the damaged landscape. The birdies are chirping, the sky is clear, the air is calm, and things are obviously looking up. Get a straight-jacket for Schiff as he is obviously out of his mind with all this nonsense about all hurricanes having an "eye". Let's do political cartoons showing this idiot painting all-seeing-eyes on storm clouds, to show just how stupid and prone to exaggeration Schiff really is.

Peter Schiff describes the end dynamics of extremely unstable systems as inevitabilities which are based on core fundamentals, the ultimate certainty of which is not in question in his mind, but only the timelines and triggers involved. If you keep jolting a box of sweaty dynamite, it may not explode. But eventually, especially as it continues to sweat nitroglycerin, even as you continue to feel safer and safer moving it around more recklessly and with impunity (given it has not exploded yet, so all must be well), it will eventually go off. That prediction is a no-brainer. The timing, or prediction of which particular jolt will prove catastrophic, is the only problem -- not the magnitude of the explosion in the event of a catastrophic trigger.

 

[rockandrollsouls]

Generally what I mean when I make that statement. We'll have inflation, but we won't be the Weimar Republic. I agree with your assessment his timeline can be skewed, but it must also be noted he is not an economist; Krugman doesn't seem to understand that.

If he wants a spirited challenge, let him speak with someone from the Mises institute...not an argumentative financial planner.

Schiff's a great guy who is often right, but once again he's not an economist.

I don't think that's the problem. He certainly didn't over-exaggerate the magnitude of housing bubble crash. He was spot on with his predictions, though completely ridiculed in 2006 by expert academic economists who were "much wiser, and much better informed" doncha know. Of course houses only go up in value. They might come down a bit, but those are just perfectly natural market corrections. But please - a loss in value of up to 60-70% in some cases?! Maybe on your planet, Schiff. Not in the real world.

The housing bubble crash comes like a hurricane that passed overhead with some fairly destructive force. OK, even a broken clock is right sometimes. Could have flipped a coin for that one (and there were economists who said essentially that).

So now Peter Schiff says not to start cleaning up so fast -- that we need to batten down the hatches even more, as the very worst is yet to come. Obviously, the idiot did not bother to walk outside and look upward to see beyond the damaged landscape. The birdies are chirping, the sky is clear, the air is calm, and things are obviously looking up. Get a straight-jacket for Schiff as he is obviously out of his mind with all this nonsense about all hurricanes having an "eye". Let's do political cartoons showing this idiot painting all-seeing-eyes on storm clouds, to show just how stupid and prone to exaggeration Schiff really is.

Peter Schiff describes the end dynamics of extremely unstable systems as inevitabilities which are based on core fundamentals, the ultimate certainty of which is not in question in his mind, but only the timelines and triggers involved. If you keep jolting a box of sweaty dynamite, it may not explode. But eventually, especially as it continues to sweat nitroglycerin, even as you continue to feel safer and safer moving it around more recklessly and with impunity (given it has not exploded yet, so all must be well), it will eventually go off. That prediction is a no-brainer. The timing, or prediction of which particular jolt will prove catastrophic, is the only problem -- not the magnitude of the explosion in the event of a catastrophic trigger.

 

[mojobo]

Generally what I mean when I make that statement. We'll have inflation, but we won't be the Weimar Republic. I agree with your assessment his timeline can be skewed, but it must also be noted he is not an economist; Krugman doesn't seem to understand that.

If he wants a spirited challenge, let him speak with someone from the Mises institute...not an argumentative financial planner.

Schiff's a great guy who is often right, but once again he's not an economist.

Just because he's not an academic economist doesn't mean he isn't an economist or relies heavily on accurate economic models. The difference between an academic economist and a financial economist is that you actually have to get it right as a financial economist or else you lose money and your research is worthless. It's like the saying goes those who can, do. Those who can't, teach. I'd much rather have an economist who's research is credited by the market than one who's research is credited with a nobel prize.

 

[Johnnymac]

anyone ever notice when ever the dollar has a really good day, everything else crashes? hmmmm

 

[trey4sports]

isnt the majority of the new currency still in reserves and yet to circulate?

 

[Seraphim]

Yea this.

Schiff is most definately an economist, he's just not a academic/professor type. Practical economics.

Just because he's not an academic economist doesn't mean he isn't an economist or relies heavily on accurate economic models. The difference between an academic economist and a financial economist is that you actually have to get it right as a financial economist or else you lose money and your research is worthless. It's like the saying goes those who can, do. Those who can't, teach. I'd much rather have an economist who's research is credited by the market than one who's research is credited with a nobel prize.

 

[Seraphim]

Correct.

isnt the majority of the new currency still in reserves and yet to circulate?

 

[Seraphim]

Every currency in the world is backed by the USD. Problem solved. Save for about 4 countries.

anyone ever notice when ever the dollar has a really good day, everything else crashes? hmmmm

 

[Steven Douglas]

Yep. It is not an economy liquidity trap, but a bank liquidity trap - where the Keynesian nightmare fantasy of the Paradox of Thrift actually comes true.

 

[rockandrollsouls]

No, he's a financial planner and he's stated this in his own words. Economics goes far beyond what Peter does. It entails research in more areas than picking a prudent investment. Those working within the Mises institute are practicing Austrian economists.

You both misconstrue my statement he is not an economist (to which he agrees) as implying he doesn't use mathematical models. My statement had absolutely nothing to do with economic models.

Not saying he's wrong, but I believe there are far better individuals to speak on behalf of the Austrian school.

Yea this.

Schiff is most definately an economist, he's just not a academic/professor type. Practical economics.

 

[low preference guy]

Not saying he's wrong, but I believe there are far better individuals to speak on behalf of the Austrian school.

Like who? Robert Murphy, austrian economist with a PhD, disputed Schiff's predictions of the crisis in 2008. Who was right? Peter. If there is some other obscure Austrian economist who knows more than Peter, I doubt they'll have better debating skills, so from what I've seen so far, Schiff and Ron Paul are the best individuals to speak for Austrian Economics.

 

[mojobo]

No, he's a financial planner and he's stated this in his own words. Economics goes far beyond what Peter does. It entails research in more areas than picking a prudent investment. Those working within the Mises institute are practicing Austrian economists.

You both misconstrue my statement he is not an economist (to which he agrees) as implying he doesn't use mathematical models. My statement had absolutely nothing to do with economic models.

Not saying he's wrong, but I believe there are far better individuals to speak on behalf of the Austrian school.

If you are saying he doesn't create mathematical models to fit real data and isn't critiqued in peer review journals then your right. What I'm saying is while he is not an academic economist he is more a financial/market economist. As someone with a degree in Economics I think its way more valuable to have someone like him who has his theory tested by real world markets than by academic peers.

 

[Diurdi]

anyone ever notice when ever the dollar has a really good day, everything else crashes? hmmmm

When dollar grows stronger, everything denominated in dollars will have it's nominal value lowered.