The book by Peter Schiff, who is called one of Wall Street's chief prognosticators and global strategists, was edited by John Downes and published by John Wiley and Sons, New Jersey, 2007 (ISBN: 9-780470-043608). The contents are a necessary read and predicted over four years ago today's economic troubles.
"We are going to collapse like the 'dot com' bust of the 2000's, but this is going to be more serious then the depression. And the government can't afford to continue bolstering it up for the inevitable . . . they (the government) want everyone drunk on the Kool-Aid so they do not realize what is happening to our economy."
Schiff is president of Euro-Pacific Capital (www.europac.net), a financial broker. He understands the movement of the dollar and sees that it is steadily declining. According to his website, he holds degrees in finance and accounting from U. C. Berkeley along with FINRA series 4, 7, 24, 27, 53, 55, and 63 licenses. Schiff is an economic theorist and specializes in foreign current. He was an economic advisor to the 2008 Ron Paul presidential campaign. Schiff insists that it is going to get a lot worse before it gets better. He states that "Inflation is out of control, more severe than perceived. The reality is of course many world economies are going to prosper. Non US dollar investments, foreign equity, stocks and conservative companies against the US dollars will prevail." He understands the weight of the American economy.
He has been writing commentaries for the past four years, constantly updating the newsletters, and offering archives of his writings and radio shows. Research reports are available free. His forecasts are more accurate than the mainstream brokerage firms because they heavily advertise their claims. He wants people to know what he said in the past first, before you call him. But we are on a sinking ship and he is offering a life raft.
Schiff gets to the point, "Fundamentals of the economy are not sound." He believes that Obama is accelerating us into oblivion. If we don't stop protecting companies who lied about their worth and were involved in excessive borrowing and abuse of their lines of credit and don't allow the market to settle the score, we are poised for a serious economic collapse. People laughed and scoffed at him on various talk shows programs such as the December 31, 2006 Biz Alert, the Fox News "More for Your Money" segment, the July 2, 2007 "Inflation Fears" on a segment of Kudlow & Company and the August 18, 2007 Fox Studio's "Bottom line: Subprimes and Hurricanes: Financial store or Opportunity!". Nevertheless, all that he said has now come to roost.
He mentions the financial mismanagement of many corporations was eventually coming and would destroy lending as we knew it. He encouraged bankruptcies so we could determine the bottom and encourage borrowers to be charged at the highest interest rates conceivable to discourage borrowing. He said we needed to tighten up our belts and quit purchasing items that we wanted, knowing that we would have to sacrifice for those items we needed. He cautions that Americans need to stop being such heavy consumers of credit and borrowing when we know we do not have the money or the ability to pay it back. He gave examples of how our spending for new comfort toys would eventually come and haunt us.
So what went wrong and what is the government hiding from us?
Schiff said during the real estate bubble, people were being offered liar and Ninja (No Income, No Job, no Accountability) loans. Naturally the assumption was that the value of the real estate would increase and even if lost, the value would increase according.
We have become the great federal corporate and individual debtor nation. We are running out of "non portable goods" because we do not make anything anymore. To see this, we only need to observe what has happened to what was considered the pride of America, the automobile industry. We have become a nation of consumers, not producers. Our currency is being devalued and decreasing in worth. He said that the real estate was in a bubble and would eventually burst and combined with the over leveraging of mortgages would cause many to lose their homes. I believe that we are now aware of this. Look around in your neighborhood and see how many homes are boarded up, with padlocks on the front doors, lawns yellowed, and for sale signs in front of every other house? Have you looked at your property tax statement recently? We may rejoice at having to pay less in property taxes, but at the same time pine away over the corresponding loss of our home equity.
He offered that we are having our mistakes purchased through borrowing from the Japanese and the Chinese. One day we were going to wake up and realize that we are owned by the Japanese, the Chinese and the Arabians since our money will be worthless. They might then decide to massively dump the US dollar onto the world market and make our currency as worthless as toilet paper. "The world", he exclaimed, "will eventually see the over inflated values and realize there isn't any core to our business operations".
The Consumer Credit crunch was part of the solution. After pages and pages of gloom, he presents economic restructuring to solve the solutions:
Rethink your stock portfolios and invest in foreign currencies, they will provide higher yields.
Review your assets, especially gold silver and fine jewels. They are universally accepted in the place of cash.
Keep a reserve of cash and liquidate everything that you do not need. This may be difficult for those with huge consumption habits. The advantage is that you will be in the position to take advantage of the huge sales that will be around the corner.
In addition, there are more suggestions, but you will need to buy the book to appreciate the pearls of wisdom he avails us.
It was revealed on the recent Jon Daily Show that Schiff is considering a political career and is running against Senator Chris Dodd (D-CT). Schiff has also been featured on CNBC, CNN, FOX News, Fox Business Network and Bloomberg TV. He has had his articles published in Barron's, Investor's Business Daily, The Arizona Republic, The Atlanta Journal-Constitution , The Chicago Tribune, The Christian Science Monitor, The Dallas Morning News, , The Financial Times, The Miami Herald, The Philadelphia Inquirer, The San Francisco Chronicle, The Wall Street Journal, and The Washington Post. He is the author of "The Little Book of Bull Moves in Bear Markets: How to Keep your portfolio up when the market is down", published October 2008 by Wiley and Sons.
His company Europac.net is physically located at 10 Corbin Drive, Suite 3B, Darien, CT 06820; Phone: 203-662-9700 or toll free 800-727-7922. Fax: 203-662-9771 with locations in Los Angeles; Newport Beach; New York, Palm Beach and Scottsdale, AZ.
NOTE: The authors have not received or offered any compensation for the writing of this article.
Commodity Radio: http://www.europac.net/media/schiff%20minesite.mp3, www.europac.net
Minerva L. Williams [Formerly of the LA TIMES, BA Journalism, teaching credential] and Todd L. Hoover, [BS in Business Management and BA in Spanish] is a computer system analyst at Northrop Grumman. They are freelance writers residing in the Santa Clarita Valley area of Southern California. They are both webmasters, event planners and avid readers. They enjoy amusing subjects, brainstorming current trends and events, jazz and exploring problem solving.