2 thoughts on “Peter Schiff on the Economy: Stubborn but Right

  1. Scott, actually gold has hit $1000 and ounce since Schiff (and a slew of other economists from the Austrian school) made the prediction but the point is moot. The massive global deleveraging we’ve seen over the last 6 weeks has driven down the price of everything except for the dollar (because redemption notices to US Hedge funds caused a huge flow into dollars) so gold priced in dollars has been artificially low. But, in terms of the Australian Dollar, the British Pound and the Canadian Dollar, gold has been hitting record highs. Regardless, the current strength of the dollar is illusory (nothing more than a short-covering rally) and once the deleveraging cycle ends, gold and silver prices could spike. I’m thinking by mid-2009 but it could happen as early as late November/early December. And, when I say spike, I’m not talking in the $1000 range, I’m looking at the $1500 range. Likewise, we are entering one of the greatest inflationary periods in our history (regardless of what people who confuse asset deflation with monetary deflation say) and, within 5 years, we could see $2000 an ounce gold. I would suggest that you take advantage of the recent rout in the markets by converting more of your cash to hard assets (commodities and agriculture will perform very well over the next decade). Even though I was out of the country on vacation for the last two weeks, I still took advantage of the bottoming in gold prices to increase my position.

    Schiff (nor any of the other Austrian School economists) predicted an exact date for the collapse of the dollar so, if that is your only criticism (strawman), you might want to start reading some Mises, Hayek, Rothbard, etc.. Or, you can continue listening to the Keynesians even though they have been consistently wrong (99% of the time). It makes no difference to me.

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