Peter Schiff Was Right (again)

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Kshartle
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Re: Peter Schiff Was Right (again)

Post by Kshartle » Fri Sep 27, 2013 12:13 pm

moda0306 wrote: If gold does another stretch like '81 to '2000 and you lose your job you could hit some huge solvency issue.  Leverage isn't the only cause of insolvency.
If gold does plumment like that then we would have an ultra strong dollar, fear about the economy gone because it's doing so well and people are not looking for safety don't you think?

This would be awesome. How likely is it?
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Re: Peter Schiff Was Right (again)

Post by Gumby » Fri Sep 27, 2013 12:36 pm

Kshartle wrote:
moda0306 wrote: If gold does another stretch like '81 to '2000 and you lose your job you could hit some huge solvency issue.  Leverage isn't the only cause of insolvency.
If gold does plumment like that then we would have an ultra strong dollar, fear about the economy gone because it's doing so well and people are not looking for safety don't you think?

This would be awesome. How likely is it?
It will likely happen, eventually. We just don't know when. The ongoing (sine wave like) private sector credit cycles were well illustrated by the Ray Dalio video that Mdraf posted.

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When the deleveraging in the private sector is finished, and the private sector starts re-leveraging, you're going to see a lot of spending/economic activity pickup as private credit improves — just as the video explains. Government spending is simply trying to "reflate" the damage in private credit.

It could take up to a decade to reflate a private credit hole of 2008's magnitude, but eventually it will happen. But, the nature of private credit is that it tends to be fragile. And then when the private credit bubble reaches the end of its next cycle, Peter Schiff will correctly predict the next private credit bubble, after years of wait-and-see predictions — and then somehow claim he was right about everything all along. And his followers will eat it all up.

In a way, the PP uses those sine-waves to smoothly motor itself along.
Last edited by Gumby on Fri Sep 27, 2013 12:42 pm, edited 1 time in total.
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Re: Peter Schiff Was Right (again)

Post by Kshartle » Fri Sep 27, 2013 12:42 pm

Gumby wrote: Government spending is simply trying to "reflate" the damage in private credit.
The only thing the government can do to help the economy is leave it alone. Now how likely is that?

I'll sell my gold when everyone is convinced the dollar is finished and the printing will never end. That's probably when they'll end it. Not because they printed an improved economy.
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Re: Peter Schiff Was Right (again)

Post by Gumby » Fri Sep 27, 2013 12:50 pm

Kshartle wrote:The only thing the government can do to help the economy is leave it alone.
First of all, that's your political bias talking. It's a bad idea to base your investments off of your political biases.

See: Why politics and investing don't mix

Secondly, did you watch the video? How else do you propose that we reflate private credit? Private credit is the most important part of the economy — it's practically the entire economy.
Kshartle wrote: I'll sell my gold when everyone is convinced the dollar is finished and the printing will never end. That's probably when they'll end it. Not because they printed an improved economy.
If you had that attitude in 1980, you would have lost big. Clearly you either didn't watch or didn't understand the lessons of the video. They will stop printing when private credit is reflated — just like every other time this reflationary policy has been used. It's that simple. ...And then, at some point, the next crash will happen as the cycle continues.
Last edited by Gumby on Fri Sep 27, 2013 12:58 pm, edited 1 time in total.
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Re: Peter Schiff Was Right (again)

Post by Kshartle » Fri Sep 27, 2013 12:58 pm

Gumby wrote: Private credit is the most important part of the economy — it's practically the entire economy. .
Credit is the economy? Not productivity?
Kshartle wrote: I'll sell my gold when everyone is convinced the dollar is finished and the printing will never end. That's probably when they'll end it. Not because they printed an improved economy.
Gumby wrote:
If you had that attitude in 1980, you would have lost big.
In 1980 people were panic-buying gold because they thought inflation would never end. It was the perfect time to sell what are you talking about?
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Re: Peter Schiff Was Right (again)

Post by Gumby » Fri Sep 27, 2013 1:02 pm

Kshartle wrote:
Gumby wrote: Private credit is the most important part of the economy — it's practically the entire economy. .
Credit is the economy? Not productivity?
I meant in terms of its representation for the health of our economy. Just watch the video already. And if you already watched it, why are you asking me questions that were fully explained in the video?
Kshartle wrote: In 1980 people were panic-buying gold because they thought inflation would never end. It was the perfect time to sell what are you talking about?
You said you wouldn't sell your gold until the dollar was "finished". That implies that you would have waited too long to sell your gold in 1980 (since the dollar was never "finished").

Your problem is that you let your politics guide your investments. It's a terrible idea.
Last edited by Gumby on Fri Sep 27, 2013 1:14 pm, edited 1 time in total.
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Re: Peter Schiff Was Right (again)

Post by Kshartle » Fri Sep 27, 2013 1:03 pm

Kshartle wrote: I'll sell my gold when everyone is convinced the dollar is finished and the printing will never end. That's probably when they'll end it.
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Re: Peter Schiff Was Right (again)

Post by Gumby » Fri Sep 27, 2013 1:06 pm

Kshartle wrote:
Kshartle wrote: I'll sell my gold when everyone is convinced the dollar is finished and the printing will never end. That's probably when they'll end it.
So.... why in April of 1980 would you have been "convinced" that the dollar was finished? The dollar wasn't ever finished. The boom/bust cycle simply carried on.
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Re: Peter Schiff Was Right (again)

Post by Gumby » Fri Sep 27, 2013 1:08 pm

KShartle, did you ever watch the video?
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Re: Peter Schiff Was Right (again)

Post by technovelist » Fri Sep 27, 2013 1:11 pm

moda0306 wrote: I'm amazed that nobody I've ever met knows who Harry Browne or the PP is.

Tech,

You still have expenses don't you? 

If gold does another stretch like '81 to '2000 and you lose your job you could hit some huge solvency issue.  Leverage isn't the only cause of insolvency.
I can meet my mandatory expenses from Social Security.
Another nod to the most beautiful equation: e + 1 = 0
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Re: Peter Schiff Was Right (again)

Post by Gumby » Fri Sep 27, 2013 1:17 pm

technovelist wrote:
moda0306 wrote: I'm amazed that nobody I've ever met knows who Harry Browne or the PP is.

Tech,

You still have expenses don't you? 

If gold does another stretch like '81 to '2000 and you lose your job you could hit some huge solvency issue.  Leverage isn't the only cause of insolvency.
I can meet my mandatory expenses from Social Security.
Wouldn't that be ironic! :)

(Though, I certainly hope it doesn't come to that for you)
Nothing I say should be construed as advice or expertise. I am only sharing opinions which may or may not be applicable in any given case.
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technovelist
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Re: Peter Schiff Was Right (again)

Post by technovelist » Fri Sep 27, 2013 1:58 pm

Gumby wrote:
technovelist wrote:
moda0306 wrote: I'm amazed that nobody I've ever met knows who Harry Browne or the PP is.

Tech,

You still have expenses don't you? 

If gold does another stretch like '81 to '2000 and you lose your job you could hit some huge solvency issue.  Leverage isn't the only cause of insolvency.
I can meet my mandatory expenses from Social Security.
Wouldn't that be ironic! :)

(Though, I certainly hope it doesn't come to that for you)
I'm not sure why it would be ironic. I have been forced to pay into the SS pyramid scheme for my whole life; if I had my "contributions" and my employer "contributions", I could have bought a real annuity that would pay about the same amount per year. But since I didn't have a choice as to "participating", I see no problem with getting as much of my money back as possible. (Yes, I know it was spent already, so you don't have to enlighten me on that.)

And I think it is very unlikely that it will come to that, as I have substantial other assets that I could tap if necessary. However, the longer I can postpone that, the better off I will be overall.
Another nod to the most beautiful equation: e + 1 = 0
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