Savage takedown of Peter Schiff by Mish this weekend. The gist: While the celebrated Schiff made a good call on real estate and on the U.S. market crash, he failed clients in that he didn’t adequately protect their assets because too many of his other views were wrong, from decoupling on outward.
Schiff’s Overall Thesis
- US Equity Markets Will Crash.
- US Dollar Will Go To Zero (Hyperinflation).
- Decoupling (The rest of the world would be immune to a US slowdown.
- Buy foreign equities and commodities and hold them with no exit strategy.
Schiff was correct about point number 1 above. The US equity markets crashed. That was a very good call. Unfortunately, his investment thesis centered on shorting the dollar in a hyperinflation bet, and buying foreign equities rather than shorting US equities.
Furthermore, Schiff made no allowances for being wrong and had no exit strategy whatsoever.
What happened in 2008 was that foreign equities sold off much harder than US equities, and a strengthening US dollar compounded the situation.
In other words, Schiff failed where it matters most: Peter Schiff did not protect his client’s assets. Let’s take a look how, and more importantly why, starting with charts of various foreign indices.
Read the whole thing.
Related posts:
The world is far more complex than any human mind can comprehend and control is just an illusion. There are far more possiblities than just the two. "Printing money" is just a figure of speech. There are many ways a devaluation could occur, either by choice or by outside influence. The elements of the global economy are stretched to a limit never seen before, and instability can emerge unexpectedly.
The very "insider market data" you cited earlier could also be used to provide a control on a slow inflation providing just enough feedback to keep the market as oblivious as a frog in a pot of water as the Fed slowly increases the heat. But unanticipated complexity could also spin this effort out of control. There are always aspects of markets which remain hidden–until they appear.