The boom was the problem, the bust brings the (painful) cure

Peter Schiff is a media commentator, speaker, author. I have not met Peter. According to some reader feedback, apparently his investment timing has been bad (although he has a lot of company there) and I make no defense or endorsement of him. But I have to agree with his comments in this YouTube clip when he says our present problems are more from the boom than the bust. The up side of this down cycle is that it will eventually cure (at least for a while) all the slothful, wasteful, reckless habits that got the world into its present pickle in the first place.

But just so we are clear, my central point is that individuals can understand the business cycle in advance and use it to their advantage. We are not helpless and doomed to suffer blindly through it every 4 or 5 years. It should only take one cycle for rational people to “get it”. Riding the same roller coaster straight up and then straight down time and again without figuring out any system or breakers for controlling our ride is self-destructive, insanity.

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7 Responses to The boom was the problem, the bust brings the (painful) cure

  1. Anonymous says:

    Danielle,
    Peter is a smart guy and saw a lot of bad things happening before they actually did. However, he is nothing but a dirtbag interested in his 3%. And yeah, he is always peddling his stupid books.
    You are being very generous comparing yourself with him.
    Youtube is also littered with videos of his clients complaining about their losses. I should know I have been with him and lost more than 75% in less than a year. I have been to his client-only conferences and met people who invested in stocks that have lost 98% of their value.

  2. Anonymous says:

    I agree you both have had an impressive history of predicting the current crisis. But I see more differences now as Peter seems to be predicting an end to US dollar where I believe I've hear you conclude that the US is in the best position to recover from the current crisis. Do you have any comments on this difference in theory?
    Thanks for a great blog! I always look forward to the updates.
    Thanks,
    Jen

  3. Anonymous says:

    wow, sorry to hear that. Thanks for the tip. I am always amazed to hear when people say one thing but do another with their client capital. D

  4. Anonymous says:

    I have not read his books so I am not sure what he argues about the U$. I know that in the long, long run every past benchmark currency in the world has eventually lost the title. I think the US will too eventually. I just do not see any other country unscathed by the present bust. No one else seems ready to take over as the bench mark in the near or even medium term. And the US still has the most relative wealth and infasctructure to help its citizens get through this downturn. A bust in developing countries means food riots and insurrection. Americans are less poor than most. D

  5. Anonymous says:

    Hi Danielle,
    Yeah, I find it amazing when stock brokers who are multi-millionaires (read someone like Schiff) scam ordinary people out of their life savings just so they can make their 3%. I don't know how these guys sleep at night.
    I don't mean to get preachy, but Danielle, the best kind of money you will ever make is *after* you make an honest attempt on your clients's behalf. As far as I can tell you are on the right path

  6. Anonymous says:

    I listened to the YouTube clip you referenced from the caller who had lost 500K on 80-90% of his life savings. It made me sick to listen to it; I could only get through half of it. The bullying, talking over and word games used to make the caller feel dumb was disgusting. Schiff should have said, you are down 500K because we use a passive investment strategy that doesn't try to time cycles, but tries to profit by keeping your capital fully invested in the stock market for very long periods of time. At least this would have been an honest response. I would delete the entire reference to the “bust is cure” clip, but I still think the message of that clip is correct. I make no recommendation of the messenger, just the message. D

  7. Anonymous says:

    This is horrible. I read Peter Schiff's comments regularly.
    Man, it seems like it's dangerous to have your money with almost anyone these days.

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