Peter Schiff – Financial Sense News Hour – January 17, 2009

by | Jan 18, 2009 | Peter Schiff

Do you LOVE America?


    Some notable quotes precede the video.

    On the government stimulus:

    All the government’s going to do with their stimulus package is stimulate more of the problem. It’s going to lead to an increase in spending, an increae in debt.

    Schiff on stimulus packages to the states:

    Barrack Obama said we’re going to give more money to the States so they don’t have to reduce their spending. But, we want the States to reduce their spending.The states are spending too much. The states are bloated.

    On stimulating the economy:

    The economy does not benefit when we spend money. The economy benefits when we save money, when we add to our productive capacity. When we make capital investment. So, it’s not the economy that’s being stimulated. It’s consumption that’s being stimulated.

    Peter Schiff nails this one. It’s amazing that the rest of our government, from the Federal level all the way down to the local level, doesn’t get this simple Economics 101 concept.

    On the government bailing out falling home prices:

    Remember, falling home prices wasn’t the problem. Rising home prices was the problem. Falling home prices is the solution.

    Here you have the government whose chief motivation is to maintain housing unaffordability. They want to m aintain housing at an artificial level.

    Of course when you maintain prices at an artificial level, nobody’s going to want to lend anybody money to overpay for a house.

    On government intervention in our economy:

    They’re going to create another great depression. What Barrack Obama wants to do is dramatically increase government’s role in the economy. We want the government targeting the industries for success and those for failure. We want the government picking which companies get bailouts and which companies don’t. Theyre basically taking control over the resources of this country, over the distribution of wealth, and over the factors for production.

    And for those who don’t think this is what’s happening, considering government’s hand in home ownership (Fannie, Freddie), healthcare (AIG), automobiles and banking. This is just the tip of the iceberg. We will see government in more and more industries, including industries like oil & gas, other energy sectors, infrastructure mining and even agriculture.

    Peter Schiff tends to agree:

    If we thing we’re going to erect this gigantic Federal government, that’s going to creep its way into every aspect of our economy, and that somehow that’s going to produce meaningful economic growth… that we’re all going to be better off because we adopt the principles of Marx and abandon the principles of Adam Smith — that’s nonsense.

    On where Schiff would be putting his own money given the above:

    Anywhere but here.

    We’re going to be an economic wasteland for years to come – maybe decades to come.

    If we thought the 1930’s were bad. If we thought the Great Depression was bad, wait till you see what the government creates this time around.

    On the past stimulus packages and stimulus packages of the future:

    The government knows of only one way to put out the fire. And that’s to throw more gas on it.

    For some reason they can’t connect the dots of the firing getting bigger and throwing more gasoline on it.

    On Wall Street receiving bail outs:

    Wall Street is on board with the government plan because they’re benefiting from the largess. They’re getting all this money. These firms should be going bankrupt.

    On the new government incentive system:

    How can you run a free market economy when that’s your invecentive system. If you succeed we tax the hell out of you. If you fail miserably we shower you with money.

    These companies are being kept in business so that they can continue to lavish their executives with huge paychecks. The actual shareholders are getting nothing.

    Peter Schiff discusses the bright spots for investors:

    I think the buying opportunities now, especially in the Asia markets and natural resources markets are the best I have seen in my career. Take advantage of the fire sale going on in global markets.

    Peter Schiff called this economic collapse several years ago and he believes the worst is yet to come. Taking a serious look at investments like precious metals, commodities and Asian companies should pay off in the mid to long term. 

    Part 1/2:

    Part 2/2:


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