Two great commentators, Peter Schiff and Gary Schilling on whether we are going to see inflation or deflation.
The China Bubble
I have maintained for some time that new world orders don’t occur overnight, and that even trends that may appear to be secular don’t necessarily work out if you extrapolate them into the future. Let me explain, in the 70’s everybody said Brazil was going to rule the world by the late 1980’s, they came up with all of the reasons for this, demographic, growth, the education and markets in place etc. then it just didn’t happen.
By the end of the 80’s when Brazil was meant to be the new world power they had been usurped, this time by Japan, now it was the turn of the Japanese to be ruling the world within the next 20 years, then far from taking over Japan imploded and they have struggled ever since.
Today we are told that it will instead be China who rule the world by 2020, and frankly, I don’t believe that this can happen without massive painful adjustment that would set them back years, and it also doesn’t accommodate for the fact that the USA views the …
The Daily Show, Jon Stewart talks to Peter Schiff.
Peter Schiff talking on the Daily Show with Jon Stewart, the scary part is that the Daily Show is comedy! Jon acknowledges that Peter Schiff was right on the money regarding the credit crunch and he shows some clips from the past where Schiff was scorned by co-commentators.
The Daily Show With Jon Stewart Mon – Thurs 11p / 10c Peter Schiff thedailyshow.com Daily Show
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The Meltdown should have surprised no one
The 2009 Henry Hazlitt Memorial Lecture, presented by Peter Schiff. Recorded at the annual Austrian Scholars Conference, Ludwig von Mises Institute, 13 March 2009. Austrian economists tend to have some very conservative views, and while many of them are unpalatable there are many that are equally pragmatic, Keynesian economics are definitely the popular choice as of late, but the free marketers still have valid points and Peter Schiff has a way of describing the economy and the situation in a very simple manner. He shot to fame for being one of the first practitioners in the USA to say that they were in a bubble and how the fallout would begin and what to expect when it did, his vision was almost 20/20.
Why the economic meltdown should have surprised nobody.
Peter Schiff, one of the most vocal commentators in the USA on why we were heading towards a property crash, talks in this piece, he is an engaging speaker and his background is based on both sides of the intellectual divide as both academic and practitioner.
Rock bottom, when you reach it, you won’t know it
Capitulation, the point in the market cycle of emotions when right before despondency. Despondency is actually the point of the opportunity for greatest profit, and reaching that point requires going through a painful process. The primary factor is that before any recovery we will need to see all of the dead-wood clear from the system, and that is not a pleasant process, it is however, an important part of the process and anybody who says we can have ‘painless recovery’ is not telling the truth.
Rock bottom, when you reach it, you won't know it
Capitulation, the point in the market cycle of emotions when right before despondency. Despondency is actually the point of the opportunity for greatest profit, and reaching that point requires going through a painful process. The primary factor is that before any recovery we will need to see all of the dead-wood clear from the system, and that is not a pleasant process, it is however, an important part of the process and anybody who says we can have ‘painless recovery’ is not telling the truth.
MV=PT, quantitative easy in the UK, will it work?
The equation at the heart of prices, the ‘Quantity theory of money‘, centuries old but redeveloped by the likes of Irving Fisher, Ludwig Von Mises and Simon Newcombe, as well as being an equation restated by Milton Friedman which resulted in a Nobel prize. The equation, known as the “quantity theory of money” is MV = PT.
M is the quantity of money, V is the speed money flows round the economy, P is the level of prices and T is the number of transactions.
The formula has had one consistent feature, namely controversy. If you believe V and T are stable, then control of the money supply guarantees control of inflation. Quantitative easing (which they are talking about presently in the UK) raises M, so if V is fixed, it will push up P or T or both.
In today’s recessionary and deflationary world, that would be a welcome result. However, if …
House prices in the near term: Robert Schiller
Economist Robert Schiller of ‘Case Schiller’ report fame says that he believes the housing market will fall further, confidence is everything in the property market and he says that confidence is at a record low and that is one of the primary reasons for his feelings on future prices. This makes for some interesting viewing, his book ‘The subprime solution’ and another called ‘Irrational exuberance’ are both excellent reads if you want to get a view on the current situation from a man who saw this coming. A vital point he makes is that avoiding additional supply is part of the solution.
When will the inflation arrive?
TIPS market (treasury inflation protected securities) are showing a deflated one year but an increase on the five and ten, many feel this is too low and we’ll likely see changes in the bond market soon after stimulus money starts to flow through. This is one trend to pay attention to.