Peter Schiff: Americans bought too much, with money they didn’t have

I don’t lend much credibility to information garnered from Comedy Central, but this one was good…

The Daily Show With Jon StewartMon – Thurs 11p / 10c
Peter Schiff
thedailyshow.com

I can’t say I agree with Mr. Schiff on hyper-inflation being right around the corner. I believe he is vastly underestimating how far Americans can and will go to reduce their standard of living. You need not concern yourself with how much credit is being poured into the system if there is no actual demand.

He’s certainly hit the bullseye on this though: stimulus, on credit, is having the opposite effect from what was intended. Look no further than the recent spike in oil prices to understand why. That alone could be the recovery’s undoing.

(h/t The Big Picture)

UPDATE: Arthur Laffer says get ready for inflation and higher interest rates. The latter isn’t going to do much for housing – driven by market expectation (i.e. the selling off of Treasuries we’ve seen as of late), it is leaving Bernanke & Co. in one hell of a quandary.

Comments

Great video. I don’t stay up late enough at night to see things like that. But I think that the point that you are missing is not how much Americans are willing to cut back on their lifestyle, but how much they must. Standard of living is a relative measure. Things were fine in the US when we were exploiting resources around the world. Our “standard of living” was supported on the backs of the poor around the world. But that was a temporary scenario and now we are caught up in the population tsunami. Resources will be strained to the limit and we will have to pay a realistic price, much higher than what we are used to. Hyper-inflation is also a relative word. We will see what happens.
Great photos on your site. Can we post some on our photo gallery?

Agreed – Americans have no choice. But I also think that the rate of consumption is so far beyond most realization that it will have a significant dampening effect on worldwide demand regardless of the balancing act you portend. And as trading nations throw the dollar out with the bath water, resultant rising domestic prices will only further quash that demand.

Thanks on the photo compliments. Use at will – link credit would be nice, but it’s not required.

UPDATE: Chris…I knew the name but didn’t put two and two together until after the fact. Now I realize why some of the pics caught your eye – the nets! Certainly some fans amongst my friends…keep up the great work.

Thanks Michael for the use of the photos. I have stopped supporting tired magazines such as FF. All of the action now seems to be on the web. Check out alexa.com and you will see that you are fairly highly ranked. At least in the flyfishing world- higher than most major manufacturers. What does that mean? You and Corey Kruitbosch seem to be the brightest stars in our biz.

On the issue of what is happening in the US (as a disclaimer I am now living in Costa Rica), we are in hock up to our ears. Medicare alone has a $37 trillion deficit and getting worse by the minute. Meanwhile, the Chinese, Saudis and anyone else with surplus US$ are buying up the rest of the world on the cheap.

Nice to see people paying attention to the contingent liabilities instead of just the right side of the balance sheet (particularly those from the fly fishing world). Have you seen I.O.U.S.A. or absorbed any David Walker commentary?

PS: Thanks for the compliments. I’m just here having fun.

I watched the 30 minute version. Excellent. However, I don’t think that it goes far enough. The number one problem in the world is the population bubble. We have too many people chasing too few goods. Classic supply and demand tells us what will happen. We are already extracting resources at an unsustainable rate. In 30 years we will have eaten every desirable fish in the ocean (that would be the remaining 10%- the last few are hard to track down). A lot of people call what is going on reverse evolution. We eat the fish at the top of the food chain- marlin, tuna, swordfish, shark, dorado, cod, salmon- and allow those lower in the food chain to flourish. So we now see vast schools of jellyfish. What are the fly patterns that we need to catch these? Have you ever seen a sizzling run by one of these creatures?
http://brodin.com/The_Seas.html
The only reason that we are not in worse shape than we are is that we are allowing 25% of the world’s population to starve, thereby reducing demand. All bubbles burst eventually. But if we could let the air out slowly it might not be so bad.
Thank to the Bush-Cheney administration for their work on their behalf.
I’m sure you have read Common Wealth by J. Sachs. He paints dire stats but then says we can work our way out. In the best of all possible worlds, of course.
Enough venting. Let’s move on to better topics.