Tags: Schiff | crisis | Fed | financial

Euro Pacific Capital's Peter Schiff Warns of The Great Crash

By    |   Tuesday, 19 Aug 2014 03:10 PM

One could fill a long shelf of books, maybe even a whole room, with books about financial panics past as well as predictions of future ones. This writer enjoyed The Crash of '79 by Paul Ehrlich and thought that perhaps it should have a clock that would update it every year.

Journalists, pundits and sell-side bulls have chided bears for having been early in predicting the next crash, much as many of us predicted the last one, only to hear the authorities at the Treasury and Federal Reserve claim it came out of thin air and then take credit for saving the country.

Peter Schiff, CEO of Euro Pacific Capital, stands out as one of the most engaging and convincing of the permabears, and he recently gave a presentation of his book at a time when the Treasury and Fed are constantly reassuring investors and financial markets that this time the authorities have the circumstance well in hand and will be able to engineer a smooth adjustment to higher interest rates once the economy strengthens sufficiently to allow the Fed to raise rates.

Schiff appeared at FreedomFest at Planet Hollywood in Las Vegas to talk about his book The Real Crash: America's Coming Bankruptcy — How to Save Yourself and Your Country, which warns that the next crisis will dwarf that of 2008. He quipped that he had been attending these conventions since the beginning, and Americans have a lot less freedom to celebrate than they had years before. Normally what happens in Vegas stays in Vegas, but this event was carried by C-SPAN.

John Browne, senior economic consultant at Euro Pacific, introduced Schiff as someone who has three talents from which the audience can benefit: 1) the ability to see through the smoke and mirrors of government propaganda, cooked statistics and the supportive media establishment; 2) the ability to explain complex issues in simple terms and the courage to tell the truth about them; and 3) the ability not only to see the looming problems but also to offer real solutions.

In a somewhat rambling delivery, Schiff laid out themes that have also been presented in these articles regarding the poor quality of the so-called "recovery," the shaky condition of the financial system due to the very actions taken supposedly to rescue the economy from the 2008 episode of the ongoing financial crisis and the prospect that when the next episode occurs, the authorities will not be able to administer the next round of bailouts without destroying the currency.

Schiff reiterated a theme of these articles, that quantitative easing will never end, but the tolerance of the market for dollar-denominated assets will end and bring about the next crisis episode. He exhorted his audience to move their assets out of dollars and into currencies from Asia and Northern Europe where governments have made "fewer mistakes" than we have made, perhaps because their central bankers are less delusional than ours are.

The allotted time ran out before Schiff could talk about his vision of an aroused America reinstating sound values. This writer is more pessimistic. Having returned from a trip to Argentina 35 years ago I said, "I've seen the future, and it doesn't work." The result of an extended period of bad government will be a lower standard of living for most Americans.

(Archived video can be found here.)

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Robert-Feinberg
One could fill a long shelf of books, maybe even a whole room, with books about financial panics past as well as predictions of future ones. This writer enjoyed The Crash of '79 by Paul Ehrlich and thought that perhaps it should have a clock that would update it every year.
Schiff, crisis, Fed, financial
560
2014-10-19
Tuesday, 19 Aug 2014 03:10 PM
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