Peter Schiff: Deflation vs. Inflation Argument on FSN

listen to more FSN episodes here = feeds2.feedburner.com/feedburn... ...also check me out on / peterschiff and / peterschiff

[@Cokie907]

Admittedly, Peter got shellacked on the timing of his predictions but I think most everyone is amazed by how far the FED could kick this can down the road. One important call that Peter nailed was the FACT that QE would become an endless program to keep interest rates near zero in perpetuity. Everyone else thought interest rates would return to normal and monetization of debt could end. IT HASN'T!!! Peter was right...again.

[@Higgs000Boson]

9 years passed and we're still in the same situation. Hello from 2018

[@luunguyen4931]

Hello 2009 citizen

[@danieli9566]

Emerging markets the place to be 2020

[@NathanRyanAllen]

And Peter has been wrong all the way leading up to it lmao

[@firstnamelastname3280]

@@NathanRyanAllen how has he been wrong? Hes right about all the bad monetary policies, all the government intervention, the inflation. It's pretty much impossible for anybody to give you a date and time on when this thing will come crashing down so you cant hold that against anybody. But hes absolutely right

[@Cokie907]

@@firstnamelastname3280 Unfortunately, people will consider Peter as "wrong" up until the point where everything collapses and then we're all f***ed.

[@peterschiff]

I didn't say "now".

[@slym741]

@@AFARDB2012 Shutup.

[@fifteenbyfive]

I concur with the other listeners here...one of the most informative interviews, ever.

[@TensaiFFS]

Also, didn't expect such a professional host. This show is definetly something i would want Schiff to be on again, and watch myself no matter who's on. If only everyone could be this professional....

[@kenner311]

I think it is very good that there is now a discussion about The Fed and the things that are done. Two or three years ago, it seemed like nobody (other than Schiff) on the news talked about. Now people are beginning to take things seriously.

[@beeskneesruiz]

@Deutsche22 that's so awesome you said that, same thing here. I use his analogies all day long and my listeners have some crazy reactions. Ha! They'll believe once it's too late. That's what I love about the easy to understand Austrian economics--you can predict the future! I just listen to Peter's show every day.

[@Shaunt1]

This was great, Peter seems like he can answer anyone's questions.

[@brandonholt-smith8294]

Awesome job, Peter.

[@dzirisenior]

awesome interview ! Learned a lot, it is all true, Peter Schiff is the best

[@bauketek777]

Totally impressed.. Im absolutely speechless how peter could dodge and counter everything thrown at him like a ninja evading every bullet sprayed out of a chain gun at the same time shuriken-ing all mofos. 4 thumbs up !

[@benyaminmiller5504]

Jitsu

[@f01863]

I wholeheartly agree,ESPECIALLY WITH YOUR LAST SENTENCE!

[@Deutsche22]

Peter is dead on. I am a staunch supporter of Peter and find myself repeating verbatim many of his ideas. The result... people think I'm paranoid. Infuriating. People don't want to believe.

[@goejser97]

Saying that keynesianism is economics is like saying creationism is science.

[@feverpitch82]

Here in the UK our equivalent of the " cash for clunkers " programme has made the price of used cars go through the roof, some used car dealers have no stock to sell because the used cars have all been scapped for new ones. They even extended the scheme to allow for cars up to 8 years old!

[@NicosMind]

Peter this is a great interview. Could you tell me how bad the uk is going to be or where to find out that information?

[@tothemax01]

@econom1cs He is referring to the tax brackets. Since the brackets remain at the same numbers (they are not adjusted continuously for inflation), as the wages move up they enter higher brackets, so a greater percentage of the wage is taken as tax.

[@kotash2]

this is fantastic, schiff if brilliant \ Does anyone know where to find the link or thread to the first part with prechter: conquer the crash

[@Burningphoenix888]

Well said my friend. You can't argue with Pete's logic because it is common sense.

[@9pt9]

Peters brilliant. I think he's right on with this.

[@gtele5hev]

That's an excellent discussion, which helped to elaborate a lot of questions regarding deflation vs inflation debate. That's maybe a paradox, but both deflationists and inflationists are right in the current environment, it's just a question in what you the measure the prices: in gold it is a massive deflation, while in fiat currencies thanks to unsound monetary policies of central banks around the world - an inflation.

[@residentzombie]

Schiff doesn't say HYPERinflation is now, he states that we currently have high inflation. He also points out that consumer prices are going through deflation to lure buyers while commodities are having high inflation i.e. food, energy, medical care.

[@howtogetwell]

Rising costs in health care, insurance and taxes are indicative, not of an explosion in money supply, but an explosion of greed manipulating an ignorant society.

[@brad3378]

Unfortunately, the Velocity of Money drives the cost of goods, so determining the price of goods is more difficult than just looking at the supply of money.

[@jeanpauldupuis]

because the demand for basics like food, clothing, and shelter becomes inelastic as income contracts.

[@kc075086]

Peter you are so right!...i just dont understand why a average american is not able to understand this basic things!!!..I have really become a huge fan of yours over the past few months..i mean when you talk it makes so much sense..I have heard other experts who have the opposite point of viewthan yours and it just ridicules me as to the bs reasons they give for their beliefs..i meanany person who has studied basic economics in school will understand what you trying to explain!!!wake up usa

[@DeaDEye.21]

Back in the days.. He hit on the head we are consumers not Producers

[@TensaiFFS]

I'm just wondering if someone who believes in deflation can rebut what Schiff said about the two examples brought up by Prechter of deflation happening under these or similar conditions? Because if those were the best examples, the deflation argument took a huge hit. Peter Schiff seems to have the answer to everything...

[@MirageScience]

Who on the deflationary side speaks as well as Peter Schiff? I want to hear them for myself. Do they really underestimate the governments ability to put currency into the market? Do they really think the government is going to let businesses fail in their own countries? When the only cost to them is a hidden inflation tax? If any of you know of a great speaker on the other side, please reply. :D

[@indieclock]

my thoughts exactly !

[@ForTehNguyen]

not sure how exactly. Zimbabwe did this and got rid of twelve zeroes on the amount of money in circulation. You could just introduce a new currency which is backed by gold to compete in parallel with the paper dollar. Its pretty obvious what people will flock to.

[@Keyguya]

@LivingAboveCloud9 CPI data; they don't measure half the prices, leaving out housing and other stuff (If i remember correctly). Employment data; they have 3 classes "employed, not looking for work, unemployed", not looking for work are really just unemployed. Also they don't account for part time workers. Khanacademy has a youtube video for how the government counts employment if you want to know the exact details.

[@skibumwilly1895]

In “Occupying Chairlifts” a simple rule tweak on inheritance ends up changing the direction and purpose of modern human life! Here’s a fair way to transition forward to where we’re rewarded for cooperating and creating instead of competing and conquering. It's something specific we can demand. If this isnt the best answer, at least we’re thinking about what might be. Are we really just this close to having it work right? Oh yeah, it's a Ski movie! “Occupying Chairlifts” on KZbin!

[@Samsgarden]

I don't know if Schiff reads these comments but I think he should go on a world tour and spread his message to the four winds. This really is a global argument.

[@howtogetwell]

@jdbrown371 You wrote one year ago, " I'm going to make a lot of money going long on the US dollar then years later I'll ride the short side.  I know what I'm doing." Do you still maintan this position despite exploding silver and gold prices? Or, are you now "riding the short side"?

[@IWashMyOwnBrain]

I am on the deflation side and Peter is right I dont see how gold is intrinsically more valuable than paper money. At times paper could be more usefull to you than gold. The prices of both move up and down with the market. What am I missing?

[@jeruon]

Tell me, when in history has the supply of a monetary unit been increased at a relatively fast pace without an eventual and comparable rise in prices? If you say never, you are correct. Monetary inflation will always lead to a general price appreciation of assets denominated in the respective currency. If somebody defaults on a loan, does the money created to provide that loan disappear? If gold was use for a monetary unit in a loan, and the loan was defaulted on, does the gold disappear?

[@secretbonus]

Defaulting loans are replaced by new CREDIT (not cash) creating a larger credit bubble. Credit cannot expand forever because it requires actual borrowers to take on loans and actual lenders to loan it out. Credit cannot continue to expansion forever. That's why you're seeing every state have to cut budget, austerity measures around the world, government debt is 96% of GDP. They can't even make payments, yet we're supposed to believe that they will continue to inflate the currency indefinately?

[@gtele5hev]

One more thing is a timeframe for which you're trying to foresee things, short to maybe a mid term (1-3 years) a deflationary pressure is enormous, because of the size of the bubble, which Fed was and is desperately trying to prevent from bursting. Yet, that simply distorts the market forces from restructuring the economic system and bringing prices to the more sustainable levels. However, fighting with free market forces is like pissing against the wind - not really worth trying.

[@adipredescu1990]

@TheAttackRat I am a creationist, I believe there exists a higher force which made the universe and created life on Earth, but I also am a devout follower of Austrian Economics and a huge Peter Schiff fan, whom I greatly admire and appreciate for his spreading the truth about economics. I believe Keynesianism is the root source of our economic problems. This being said, I feel slightly offended that you likened socialism with creationism, as if only stupid believe in it.

[@TheEvolver311]

i find it strange that schiff points to our lack of production etc... and points to our regulations etc.. germany,japan have more regulation than we do and manage to still increase domestic production, and that protectionist policies are why they have not fallen victim to our fate.

[@Fargo358]

OK. Please listen to this again...if you did the first time. All of the things that you bring up in your comment as deflationary are explained away by Schiff. We are in a different situation than Japan was. We are in a different situation than we were during the Great Depression and Schiff is one of the only people talking about it.....or one of the only ones that actually understands it.

[@jeruon]

Price movement is not the definition of inflation/deflation. Rising prices can be a symptom of inflation and falling prices can be a symptom of deflation. Demand changes an capital flow have a varying and sometimes dominant effect on prices. Even if inflation occurs, which can accurately be described as an increase in the money supply, certain asset price can still fall if capital moves into other assets at a fast enough pace. It is disingenuous to describe inflation/deflation as a price change.

[@LisaMurphy]

No. One way or another we will default and they're aware of that.

[@PairoftheSocks]

I think peter should have expanded on the velocity of money. What I would have said is that the money isn't moving so prices wont rise. But the money is still there. Isn't that a scary thought? Once the banks start lending again, its going to be a huge explosion of money. Prices will rise very fast. Just like the price of education because of loans. But the real trigger will be when we finaly have to print to pay off the debt.

[@CarltonGauss]

Wow, I had never even thought about paying more taxes as a result of inflation pushing prices up. Guess I should add that to my list of invisible taxes.

[@vsaldanas]

I dont think homes in most parts of the USA, home prices will go up, when inflation starts to go out of control, because many americans will focus on buying food and good drinking water. Many familes in the USA are shareing parts of their homes with other family members, two familys living in a three bedroom homes. homes will at go up in 2010!

[@IWashMyOwnBrain]

Yes I agree I see prices falling and im selling anyting I have of value that I dont need. i know I will be able to buy back anything I want later.

[@lsa420]

Well for one, you're missing the point that you can't print gold. And zero interest rates, quantitative easing, and dollar depreciation do not make inflation. The CPI and PPI are now on the rise, indicating inflation. And inflation is not a rise in prices, but an expansion of the money supply, which causes the dollar to depreciate. Inflation and deflation can also occur simultaneously, in different assets. Think falling house prices in 2006 - 2007 and rising commodity prices ($147 oil).

[@thomasw78]

I don't understand how money is destroyed even when real estate goes down. Didn't the homebuilder or whoever ended up with all the money that the bank loaned out still have it? It's not like they're going to give it back to the borrower when he defaults...

[@latewire]

What about Disgustion or Duhscussion?

[@CASTILLOM1]

I dont believe what we're going to see will be either inflation or deflation but a combination of the two. We will definitely see inflation for consumer items ie. energy, food etc. and a massive correction in the price of assets. Housing must fall, stocks must fall. Every major American asset with the exception of metals is aritificially high.

[@lsa420]

I think commodity money is the key - something that can't be debased as easily as paper money - because it is real. Gold, silver, oil - immaterial which one it is. Both definitions are probably appropriate depending on context. I'm saying that you can have both rising prices in some areas and falling in other areas. Ask me in 6 months, and we'll whether prices are rising or falling where it matters. I will go with the former and protect myself accordingly.

[@redxii1234]

The entire U.S. is just a storefront for the rest of the world's products. We only employ salesmen, we don't make much of anything ourselves. A 'manufacturer' in the U.S. may merely be an 'assembler'. For example.. computer companies. Sure they employ people to build the PCs, but where are all the parts made? China. Singapore. Japan. Malaysia. India. Mexico. Thailand. Vietnam.

[@IWashMyOwnBrain]

I get what he is saying about the gov. printing money to control deflation but when inflation starts they will stop printing and raise intrest rates to controll it. He seems to think the gov. will not stop printing money? I dont get that.

[@anti0918]

Those all lead to reduced production - inflationary.

[@residentzombie]

Marc Faber, Jim Rogers, Max Keiser, and Gerald Celente are the next closest thing to Peter.

[@Rensune]

@Deutsche22 It's not about belief, but logic. Most deny it.

[@CASTILLOM1]

No it isnt but for the sake of the inf vs. def argument falling prices is deflationary hence the combination of the two. We will see them both...

[@tonybonez]

The reason I say that other countries can not not do business with America is Noam Chomskys statement that other countries need America and if the US goes bust the entire world economy goes bust. I dont know if he is correct, but he is smart, and thats where I got the info..

[@paske2001]

you're wrong, the prices of us houses are high because of exactly the effect of inflation

[@cpswyl2]

Where does the x$100's trillions in derivatives factor in this inflation-deflation debate?

[@benyaminmiller5504]

Print rnd?

[@xkguy]

Peter Schiff 1: Other guy: 0

[@themfu]

@TheDestroyerCrom. Peter Schiff's dad Irwin Schiff wrote a comic book explaining how inflation artificially pushes up nominal incomes which pushes people into higher tax brackets and transfers more money from taxpayers to the government. The comic book is called The Kingdom of Moltz and you I think it available for free on the Internet and on KZbin.

[@ForTehNguyen]

probably would have to create a new dollar type. Cant use the old ones to represent gold

[@Gollywog]

America is the country with the most debt, both nationally and individually. Having debt does not make you rich despite buying all the crap.

[@KOPYMEH]

I think we will have both inflation and deflation. In a few years at the most, the US dollar will probably not be accepted as currency by foreigners, but up to that point I believe we will see inflation (increase in prices) in necessities such as food, water, gas etc., and deflation in unnecessary things such as 50" plasma TVs, luxury items etc. And after that the US dollar will be history. I think local currencies will emerge in the US, akin to the Colonial Scrip.

[@ricochetVendetta]

@special1740 options naturally expire worthless, its constantly losing that value

[@ajnako12]

artificially high prices coming down to where they should be isnt deflation.

[@residentzombie]

America's economy is 30% production and 70% consumption, this is a fact.

[@SmartPappnase]

He argues Americans spend to much and invest not enough. So far I agree. :) To solve that he suggests a gold standard which will sharply increase interest rates for lending (this strongly harms investment) and decrease prices??? If something will help than the opposite! The USA inflate more than China in order to devalue the Dollar, so that imports from China get more expensive and exports to China (and the rest of the world) will get more competitive.

[@lsa420]

One more thing. No gold standard? No deflation spiral. The only deflation spiral to occur was 40 consecutive months of CPI deflation - 1929 to 1933. Once we delinked from gold, no more deflation spiral - 72% dollar depreciation. No country since has ever had a deflation spiral. It won't happen this time, either. CPI down 4 months, now back up again....

[@Alberta1stPodcast]

I'm here at the end of 2022 lets see what happens in 2023

[@gnolhsobners]

Harry Dent, Bruce Weide.

[@jdbrown371]

@jaffijoe We don't even have fractional reserve banking anymore. Banks have NO reserve requirements whatsoever after Volcker. The Fed gave up its power to enforce reserve requirements. The Fed was initially created as a compromise between banks and government. Slowly but surely the private banks have been taking it over as they no doubt intended all along. Anyway, fractional reserve would add at least some discipline to banking and would be superior to what we have now. Banks hate it.

[@djb5255]

34:20 Is most profound. Deflation is statistically and logically inevitable - if the historical record is not consulted. History tells us that gov'ts with a monopoly on money supply will almost ALWAYS inflate before enacting austerity.

[@lindabebe835]

People in other countries buy gold here in U.S. because my understanding is most reasonably priced here. In order to do so they must convert their currency to U.S. dollars. Gold sales are up, so yes temporarily $ is strong, but no for long. When gold prices go up, strength of dollar will go down. Gold is the dollars enemy. There is an inverse relationship btwn the two. If you truly understand then you will understand that you, in fact, were standing by your pipe dream. Dollar will collapse

[@RedDelPaPa]

That's great news! I hope you never do catch on so that the gold you could have owned, ends up in the hands of people who do understand. :-)

[@IWashMyOwnBrain]

Good point on the inports that is why the other currancys around the world will follow the dollar down ( when it lets them lol)

[@IWashMyOwnBrain]

Yes you cant print gold lol but you can find new gold mines and when it is used in industry it is taken out of circulation i still dont see how a gold standard is any better than basing values on anything else at one time people traded shells. Ok i see how you define inflation now an expansion of the money supply yes that is definitely happening lol. Wikipedia sez "inflation is a rise in the general level of prices of goods and services in an economy over a period of time". Which one is right?

[@uturniaphobic]

according to the US Constitution, my dollar is worth 371.25 grams of silver on any given day. Now if I just had dollars and not these spooky Fed notes. The US dollar was designed after the Spanish Pieces of Eight silver medallion and that was to be permanent, so what happened? If a dollar were worth that much these days we'd be filthy rich with 20 bucks.

[@tonybonez]

I don't know though, I dont see how we can keep borrowing and printing money without some countries saying. OK no more dollarss, they are worthless. It might hurt them for a while, but it is also hurting them to be invested with dollars. I trust Peter Schiff a great deal becasue he saw this current economic collapse before anyone. I agree, gold and silver seem to be going up right now and will continue to do so. Look at Obama he says healthcare for everybody, dont worry about the price!!!

[@KiheiLawyer]

On what day can I officially tell you that you were wrong?

[@jdbrown371]

Inflation is inevitable but it's a matter of timing. People aren't borrowing much anymore, saving at record rates, defaulting on mortgages, getting foreclosed and defaulting. All of which are deflationary. Deflation first, then inflation. Inflation will begin only after 99% of experts and your non trading friends become firmly convinced of the reality of deflation and consider you crazy to think otherwise.

[@CASTILLOM1]

Where does the changover to a new currency stand in the middle of all of this inf/def argument?? Could it be that the Amero is real?? Since the dollar is a terribly flawed currency is it possible we may soon hear of a replacement?? Possibly Special Drawing Rights issued by the IMF with a gold or silver backing?? If America switches currencies couldnt the issue of inflation/deflation also be solved/addressed?? Im glad I bought metals when I did. Currently 85% of my net worth.

[@f01863]

I don't know,the chinese,japanese, india,so-called arab allies,also agree it's time to replace the dollar.

[@IWashMyOwnBrain]

Good question imo The whole world economy is based on the dollar when it goes down so does everything else. All these countries know The U S controls it and it will never default on a loan as long as you can print money. It is simply the safest place to be.

[@TheEvolver311]

once were considered the greatest center of capitalism not because we didn't have regulations but because we had strict regulations. our markets were preceived as open and fair with strong mechanisms for combating fraud,insider trading, and various other market skewing actions. now corporatist have convinced many that these regulations are unhealthy and have lobbied for over 40yrs to revoke various regulations. Usery has been made legal due to deregulation.

[@TheEvolver311]

@jjrglobal actually lots of major coprorations pay no taxes and get rebates from the gov to the sum of multimillions of dollars. and the real reason that US companies wanted to move production over sea's is simple economics, it is much more profitable to make $15 jeans in over sea's because you can sell them for well over $50+ in america after you have racked up transport. and your point on regulations isn't a point at all its a big "na huh" or " i know you are but what am i"

[@pntrain5]

have them buy our properties and jack up the property taxes....that'll solve all our debt

[@jeruon]

You mean the dollar that bought a corvette for $8000 in 1980? If by reign you mean lose value at the pace of money creation you would be correct. Do you believe the trillions of dollars in reserves on the accounts of foreign central banks will never be transferred into other assets? Right now those dollars are only buying US bonds, which have an infinite supply. Wait until they buy those other assets and bid the price up of the input used to manufacture the every good we consume.

[@WayAboveYou700]

@special1740 When the optionjs pyramide collapses not much will happen. We'll just have to start over and not from scratch but with a new, sound money system that will promote honest saving people.

[@Rensune]

@TheAttackRat Not exactly. I can find a lot more validity in Creationism or Intelligent design than those economic blunders.

[@edsonusa75]

The problem is that all the factories have been sent to China. How are we going to do that. One way to solve our problem would be to buy U.S. made products only; the few left. The reality is that we need to become what America was when nike used to make shoes in the U.S. That will take a long time though.

[@f01863]

Nice point,but that's why gold is a better buy than investing in the shrinking u.s. dollar.One can only hope that the "powers to be in washington",realize that thier spending is killing the dollar,though I doubt it.

[@jdbrown371]

Lastly, creating money out of debt is a good idea but it requires honesty and discipline. The derivatives used to control risk CDOs and CDSs have been steadily debauched creating the false sense of a riskless mortgage industry. When you buy a corn or soytbean contract, it represents something. The CDOs didn't contain actual mortgages. Banks cooked up a phony portfolio and sold it! . When these CDOs looked great it lowered the perceived risk and banks went on overdrive selling mortgages

[@jdbrown371]

@jjrglobal No position presently, waiting for a good entry point, long or short. Forex "trends" the best and is easier to trade than most other contracts. I use CME futures products to trade Forex.

[@tonybonez]

that by nature can not possibly happen, don't worry!!

[@brad3378]

Why doesn't Japan & China just start trading our debt for American made products? Wouldn't that help everybody?