Friday, January 23, 2009

Right Again, Again

You have seen clips like this from me before, but here is another good compilation. A "greatest clips" vid of ever-dooming Peter Schiff predicting a brutal recession and massive credit crunch while prominent debate partners, such as writer and actor Ben Stein and former Reagan economic adviser Art Laffer, make what now sound like laughably optimistic counterarguments:

As I see it, here's what we're looking at: we have an economy based on the same principles as Bernie Madoff's investments: a Ponzi economy. Overall, we don't save and we don't produce anything tangible anymore. We simply borrow from each-other or the rest of the world, and then we spend it. We've had a giant party. We bought all these plasma TVs and iPods. We remodeled our houses and took vacations.

But you know what's next? The bills are coming in: it's time for the post-party hangover. A multiyear recession is ahead marked by rampant inflation, a steadily weakening dollar, soaring commodities prices, slumping U.S. stock indexes, and falling wages.

Sounds like fun. So glad we are bailing out the bankers in a manner that will re-enable the problem. The U.S. economy has (and will) only grow grimmer while the federal government throws unprecedented amounts of capital into circulation to prop up banks and car companies. A predictable response (one Schiff also predicted). Everything the government is doing now is going to make the situation much, much worse because they're trying to reflate the bubble. The recession itself is not the fatal wound: the government's reflation response might be.

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