Â Peter Schiff talks about his book “Crash Proof” and his motivations for writing the book back in 2005. Discusses the future of the US economy, the US Dollar, and investment strategies to pursue right now.
Â People around the world are piling into the US currency right now. These are the same people who bought sub-prime mortgages, who bout dot-coms. The US is a sub-prime currency. It’s going to collapse just like those mortgages did, becuase the fundamentals underlying the US economy are not sound at all. The only way the US economy is ever going to function properly again is unfortunately with a much lower dollar, because the dollar exchange rate is going to have to reflect the lack of productivity in this country. We simply don’t have the manufacturing capacity that we used to, and the only way we’re going to bring it back is with lower wages, and that’s going to be brough about through the exchange rate.
Once the rest of the world realizes that the US is basically insolvent, the flight to quality to the US dollar will dissipate and people are going to pull out as quickly as they came in.
What’s actually happening is that the world is jumping out of the frying pan into the fire. I don’t think the dollar is going up because there’s any quality. Everybody is nervous about their own currency, so they’re seeking refuge in the dollar, but they’re going to get burned. Once the dollar starts to fall and a lot of the people around the world try to sell there’s not going to be any buyers and the currency is going to drop through the floor. Meanwhile, the Federal Reserve is going to continue printing them.
It seems that the US Dollar is going to be one of the final bubbles to collapse.
Everyone is buying them [bonds]Â looking to sell. They’re just like condo flippers.. There are no real investors in our bond market. They’re simply traders. At some point they’re going to look for an exist.
When that does happen, that’s when the US is going into a recession, or depression.
When this final bubble pops, then reality should really set it in for the American public.
We need tough love from the rest of the world. We need the world to cut us off so we can finally make the tought choices that we need to make to rebuild a viable economy in America.
It’s only a matter of time before countries like China and Japan realize that they are throwing good money after bad. They have their own economic problems to deal with, and at some point, they are going to have to focus their effrots on themselves.
Peter Schiff Investment Strategies:
They’re giving away some of the Canadian stocks right now. I bought some more for my own account. I can’t believe how cheap some of them are right now.
I’m buying a lot of stocks in Hong Kong and Singapore.
I’m buying a lot of the beaten down resource stocks in Australia and New Zealand.
I think that there’s a lot of value around the world. I don’t think there’s a lot of value in America yet. I still think our stocks are expensive. I think we’re headed for an inflationary depression. So, I don’t think that’s going to be good for US stocks.
[Canada] I like the commodities sectors. I’m buying the mining companies. I think some of the energy trusts, particularly in the gas sector are down 80% to 90% off their highs.
As Peter Schiff says: There’s a bull market somewhere!