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Posted on 06/14/2009 11:53:47 AM PDT by rabscuttle385
CHICAGO, June 14 (Xinhua) -- Taking issue with the Obama Administration's contention that the economy is showing signs of recovery, Peter Schiff, a well-known American economic commentator, firmly believes that this economy will never recover unless the government changes its policies of taxing, spending and expanding the government.
Schiff, currently serving as president and chief global strategist of the brokerage firm Euro Pacific Capital Inc, told Xinhua during an exclusive interview on Saturday that "the things the government is doing with the economy only put us into deeper debt and deeper trouble. All they will probably do is buy us time, interfere with the current situation and postpone the unpleasant consequences in exchange for more damage in the future."
Regarding recent numbers showing slight growth in retail sales and a dip in first-time jobless claims, Schiff said, "they're depending on that to reign in the massive deficits they're creating. But they aren't doing anything that will lead to recovery; they're doing the opposite!"
As an expert on money, economic theory, and international investing, Schiff is best known for his prescient predictions of the economic crisis of 2008. He is one of the few investment advisors to have correctly called the current bear market before it began.
He said, "the Obama Administration will be like Jimmy Carter's. They're going to tell everyone to 'sacrifice' to support a government that is just too large and too powerful. Regarding interest rates, Schiff noted, "We may have reduced interest rates now, but with higher inflation, we will have to raise them in the future. Then, we will have recession, rising prices, and no available credit. This will smother any potential for recovery."
Turning to the unemployment rate, Schiff pointed out, "the current headline unemployment rate of 9.5 percent does not truly capture the situation on the ground because it ignores those who are 'marginally attached' to the workforce; 16 percent is more realistic representation of the situation, and I estimate about a 20 percent unemployment rate by the end of this year."
Commenting on the government's stimulus plan and its effect on job creation, Schiff said: "The kind of jobs created by the government stimulus are not productive and viable for the economy, but the private sector is forced to subsidize them. Not only are they a drain on the real economy via taxation, they also divert human capital from private businesses."
Then what should the government do to bring the economy back on track? Schiff advised: "If the government changes its policies, the economy will start to recover immediately. But the symptoms will get worse before they get better. It's like ripping off a band-aid -- they're so worried about the pain that they're pulling it off slowly. If they just ripped it off, it might hurt a lot for a second, but then it would be over and we could move on."
Schiff criticized the Federal Reserve as the ultimate culprit in this crisis. He said, "in response to the dot-com bust, Alan Greenspan kept interest rates artificially low to stimulate the economy. The only thing he stimulated was an artificial boom in real estate and stocks. Now, we're paying for that with a recession."
"Instead of allowing this restructuring to happen, Ben Bernanke has dropped interest rates to near-zero and started intervening directly in the market. He's 'monetizing' Treasury debt to make up for a drop in foreign demand. These policies will lead to a collapse in the dollar, which will be much worse than the current crisis," he added.
Schiff is a supporter of the Austrian School of Economics and the Ludwig von Mises Institute, and was an economic adviser for Ron Paul's campaign in the 2008 Republican Party primaries, through which Schiff also expressed support for sound money, limited government, and free market capitalism.
fyi
Hey, I’ll trade you this sack of potatoes for one hog.
Ping
How can anyone have the nerve to challenge His Oneness? He’s clearly “unpatriotic”.
***Commenting on the government’s stimulus plan and its effect on job creation, Schiff said: “The kind of jobs created by the government stimulus are not productive and viable for the economy, but the private sector is forced to subsidize them. Not only are they a drain on the real economy via taxation, they also divert human capital from private businesses.”***
I think a real measure of the economy should subtract out government expenditure or taxation (whichever is higher in a given year, though almost always it’s spending). GDP without government spending.
... Schiff said, "they're depending on that to reign in the massive deficits they're creating. But they aren't doing anything that will lead to recovery; they're doing the opposite!"
It doesn't make any sense ... unless it's part of the Cloward-Piven Strategy. In short, create chaos in order to take advantage of it. The worse things get the less people will critically examine 0bama's absurd proposals and extra-Constitutional strong arming.
If you realize both parties in Washington think our money is theirs and you trust them to do the wrong thing, this list is for you.
If you think there is a Santa Claus who is going to get elected in Washington and cut a few taxes and spend a few trillion and jump start the economy, and get our lost money back, this list is not for you.
You can read past posts by clicking on : schifflist , I try to tag all relevant threads with the keyword : schifflist.
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LOL I know what you mean. But if he really is running the Cloward-Piven Strategy, which I think he is, then the crises will come so fast and furious, on so many fronts that people won’t have time to analyze where it’s all coming from. Keeping the masses off balance and downright dizzy with changes and challenges is the plan IMO.
Well, it’d be a first in my lifetime. 45 years of spending, spending, spending. Hard to believe Obama’s been in office all that time.
“The Chinese must be laughing at 0bama.”
And perhaps the only one’s reporting on opposition to Obama’s delusions of grandeur.
Yeah, people should save up for that new BMW and pay cash...It should only take most people 25 years to save up.
It's better to buy within your means, and get some used Toyota for 18k. That should only take them about 10 years to save up.
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