Remember when Bush wanted to privatize Social Security? Hard to believe this was once thought to be a good idea.

It’s good to see this guy getting some credit. He was predicting this crisis so early.

Buy Gold and protect your money for the wave of inflation that is coming…

Hey, what the heck is a pundit anyway? Since I started watching the news, all I hear about are pundits and how they fail at everything they say. Why are we listening to them still?

So… he’s been right about our economy for several years, then. What’s your point?

Your fees clearly get you the services of a professional Nostradamus.

Anyway, Google Trends says he is getting more attention.

“But, I do think that the bail-out will allow us to pay down our debt and start saving with a prolonged recession but without a depression.”

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Never mind.

Floor traders and pit bosses are encouraged to validate/refute.

Clinton started it, Bush continued it, Obama’s already appointing Clinton people and making it clear that he wants to continue the tradition.

But reality is knocking at the door like some Lovecraftian monster, and it won’t take “Hope! Change!” as an answer.

Hey, maybe you can figure out a way to blame this on Obama! Get cracking!

Get off your high horse about political bullshit. People are suffering here.

If someone told you every day that “Something bad is going to happen to you,” and eventually you got into a car crash or found out you had cancer, common sense would not consider that a display of predictive power.
But if someone told you, “Sometime within two to three years, a helicopter is going to crash onto your home” and then two years later a helicopter crashed into your home, I don’t know about you, but I would consider that a predictive hit. Schiff was very specific about what was going to happen and why it was going to happen. So I don’t think the “even a stopped clock is right twice a day” cliche applies here.

(#45) “While these clips do make him look pretty good, Peter Schiff’s investment strategy isn’t exactly panning out as well as one might think”

Even if that were true (and I am not saying that it is), diagnosing a problem and identifying a solution are two separate acts.

Economist A: A train is coming. I advise getting off the track.
Economist B: A train is coming. I advise throwing the switch to divert the train.
Economist C: A train is coming. I advise trying to stop the train with your arms.
Economists D-Z: There is not a train coming.

Economists A, B, and C understood the problem. Economists A and B might have decent solutions. But, even though I just said that diagnosing a problem and identifying a solution are separate acts, I think I’m going to listen to what economists A, B, and C have to say before I throw all my money at the solutions proposed by economists whose ideologies prevented them from even seeing the train coming in the first place.

Unfortunately, economists D-Z are in control, and from all indications that’s not going to change anytime soon.

Also, gold is one of the safest investments out there. Very little risk involved.

I have still to hear how the bailout (which one?) is going to help.

You said the bailout will help us pay our debt, consider this: if somebody was debt ridden, had run credit cards to the rim and defaulted, was not paying his mortgage and had increased his debts by 25% more in the last couple of years, would you think that the solution to that person’s problems is yet another loan?

No, the solution would be to go bankrupt, sell your assets and get started from scratch, with the help of friends, family and perhaps charity organizations.

Alternatively that person could cut spending severely and live under his means. This option is the difficult one, which is why no politician is advocating it.

How is that you cure a debt ridden economy piling more debt?

It just does not make sense.

But no worries, there are serious economists (not the bozos on the clip arguing with Schiff) who are advocating exactly that, so no wonder we, the general public, are equally confused.

But think, does it make to give a debt addict yet another loan?

Does it make sense to give more money to the people (banks) that “engineered” the current situation?

Does it make sense to tell to the public to go shopping when is exactly that what put the US trade balance in such a sorry state?

Does it make sense to devalue the dollar (it will devalue, its current run will not last) by the US government getting into yet more debt (i.e. flooding the market with money, which will make it cheaper)?

To me it doesn’t.

I really don’t know if a purist laissez fare solution (letting things run its natural curse, i.e. allow banks to default, companies to go broke, etc) would work, we will know soon enough …

This is not a random crisis which no one could foretell. We have numbers and we have causes, and they do correlate.

The root cause is ideological. After the financial collapses of 1871 and 1929, it became apparent that the financial markets could not be allowed to do whatever they liked, devil take the hindmost. Regulations were passed. The usual suspects screamed communism, and spent a dreary half century demonizing those who created the regulated market.

Milton Friedman, creator Chicago School of economics, created the era of super-capitalism, the unregulated (as much as they could) bubble economies.

His boy, one Ronald Reagan, cut taxes, killed social spending, deregulated the markets as much as possible, increased military spending, and ran up the debt like a drunken sailor. Good times for those who made out like bandits. Savings and Loans companies were the first explosion of the unregulated market. Taxpayers bailed them out.

Clinton came in, cut spending, increased the taxes back to saner levels, pulled the economy out of the tailspin, and actually started to pay down the debt. Largest expansion of an economy in world history. Also, he was a free-marketer, and started deregulating trade, tho not so much the financial markets.

Bush enters, and out-Reagans Reagan by simply installing the foxes in all the regulatory henhouses. The actual laws passed under Clinton and Bush are irrelevant, as they were not enforced, so not pertinent to the discussion of blame. The financial markets learned to leverage debt with unsecured insurance, and became rich. The “money” made was leveraged and re-leveraged in a dizzying spiral; derivatives went from a seven trillion dollar pile in 1999 to over seventy trillion in 2008. This money was all bits and bytes, cross-hatched financial cats-cradles made of imagined wealth based on the housing bubble.

All bubbles end. But the Fed, under Ayn Rand boy, kept lowering the rates to keep a hot housing market that should have cooled in 2003 going until 2006. The economy had no growth in the uh-ohs but for the money “made” in rising home values. A guinea pig that could read the newpaper on the bottom of his cage could predict what would happen next.

The price of oil spiked, because of the wonderful new game that commodity players learned through the example of Enron; choke supply, don’t build refineries, and prices go up.

The economy constricted, and home prices finally slowed and then started to collapse. No money, no purchases, supply and demand. SOMEthing had to burst the bubble.

Big bit: 2005, Congress makes it all but impossible for consumers to go bankrupt. Uh-ohhhh….

So, the poorest or more unlucky – usually health care costs cause bankruptcy – started to default. This was inevitable, and NOT the product of laziness or greed or stupidity. In a gas leak, the weakest respiratory systems die first. That’s all. When the bubble breaks, the weak go first.

The collapse that we are gloriously observing had to happen at some time. The house of cards, the vaporous pile of “cash” that was leveraged into every aspect of out lives, did not really exist except on the books of con men.

Those con men, having merged their businesses without government constraint for decades, were so large that their falls would collapse the world’s economy. So we are now pledged to pay them – directly! – with no strings – almost eight thousand billion dollars right now, more than all the wars, land purchases, foreign aid and NASA budgets combined in all our history. And that’s just the start. The businessmen who ruthlessly gamed an unregulated market are now literally being handed the keys to our treasury and all our future wealth as a token to assuage their failure. And still no regulation.

And key: the supply-side tax cuts were supposed to enable those who had wealth to create industry and jobs for all. This did not happen. They exported jobs to countries employing, practically, slave labor, killed retail by consolidating into superstores, stole the pension funds, killed the unions, slashed wages and health care, and told those who gave warning to grow up and learn a new trade. The money made in the economy was not invested in jobs, but in new forms of wealth. Our standard of living drops.

This was all ideology and politics. The neo-cons, the deregulators, the tax cutters, those who demanded that the government spend itself to literal death are winning. Our country will be sold, is being sold, for pennies on the dollar. We’ve been conned.

You are not witnessing a failure of ideology, but a triumph of planning. They are charging us top dollar to execute ourselves.

http://www.reuters.com/article/pressRelease/idUS255917+25-Jan-2008+BW20080125