Econ 101

This was in 2006.

Listening to Schiff now you have to hear him say I told you so in every paragraph. Which gets a little annoying.

Fact is he did.

This speech is fascinating as he nailed what was going to happen exactly. Then the PhD dude, who spoke before Peter, comes on and they take questions together.

I'm sure the "doctor" is now in hiding.

All that plus the speech was made to "Mortgage Bankers".

Too funny.


Anonymous said...

Not admitting when one is wrong - ego and lack of humility.

Schiff, Janujah, Prechter, Rosenberg, Roubini, Taleb all illustrious victims of ignoring lessons imparted by humility.

She spares no one and harsh is her signature...I am well aware personally of this, continually constant battle to stay humble and devoid of ego...Not easy.

But then again I do not pretend to be a market sage...these media happy clowns don't deserve my respect.

Hendry is lone remaining Eagle.

Solfest said...

Well in Schiff's defence I would say he is due a little "I told you so" after all the mocking he took from the other "experts" before his predictions came true.

DT233 said...

It was a great call on his part. I still remember the knuckleheads on CNBC and FOX making fun of him.

But, if I remember correctly, he did not perform well during the crash. Every asset class dropped and his bets didn't pan out.

Still, a great call.

Solfest said...

Schiff referenced this speech in another vid I watched where he stated he was not invited back to speak at the 2007 mtg bankers conference. :)

Anonymous said...

Pretty much all of them said the same thing.....housing crash, dollar into oblivion, the SPX at 500, Euro at USD parity, Armageddon...blah blah blah. 5 years ago that used to fascinate me....now it's just as bad as politicians...no accountability (not unless these guys put their money where their mouth is). Period.

If I make 20decisions in a day about putting my money at risk, I have make sure I have an exit strategy for being wrong ALL 20times. These hotshots not so.....

But that's why traders trade, while guru's talk. And then never let you forget that they were right that ONE time. And watch how they are gonna jump on the bandwagon when the China bubble finally explodes or Euro finally tanks.

That's why Hendry and Bass are exceptions, they lay out their view and let others poke holes into them. And they make bets on their convictions. Not pie in the sky predictions. The only other guy(s) with accountability would prolly be Chanos and Mish.

Anonymous said...

As I keep boring people with, a stopped clock is right twice a day.

The trouble with all these 'accurate prophecies' is that you don't actually know if they just got lucky or are consistently (or at least better than chance) making good forecasts.

What I might do is say something completely crazy here and then in 2020 if I am proved correct I will get to be a talking head on Bloomberg and will finally be able to afford the air-fare to Canada so I can watch pretty girls on horses all day long.

Here goes...

By 2020 Facebook will have gone bust and e-mail will have been made redundant as we will refuse to hold conversations with people any further from us than 10 metres.


Solfest said...

Oh you sceptics, he got it all right, everything to the letter, you have to give him some credit for that.

He also got the internet bubble right.

You guys are also missing the point in the post title, Econ 101.

His points about what make a real economy are the important ones.

Anyway, I have you marked on my calendar for 2020 LW.

I'm holding you to it.

The best thing that could ever happen to the world would be the demise of facebook.

And twitter.

Anonymous said...

Sceptics...fair enough.

I am just saying it has been suggested that "all this money printing" is the cause of all these bubbles.

Hendry & Mish (and others from Adm Smith & von Mises Institutes) differ in the mechanics of it.

The USD bottomed at 71 in 2007, and is sitting today at 80, not at 50. The gold types have been saying this for 10years now. How about letting price action dictate where its going?

When you listen to Schiff speak, he talks about the Austrian model all the time in his more sophisticated talks, but I think all he does is give lip service to it.

With little detail on actual credit allocations, fractional banking and velocity of money in circulation. I suspect that because he is aware of how dry the subject is, and how few would actually listen to him if he droned on about the subject.

Can't have paying subscribers doze off, who will pay the subscription fees and the attendance dues?

I did miss the point of it though, this is not Econ 101. And he is right about Wealth building (that is another cop out though - that is the first lesson of the Austrian model).

Just abolishing fractional banking alone and raising interest rates slowly to 10 or 20% will fix all them bubbles. We need a newer stronger Volcker!

YM-Trader said...

All this talk of economics is giving me a headache. Just show pretty girls on horses and let it go at that. After a day of making real-world decisions backed by real money, I want some time off. Now where are those pretty girls on horses?

Trin Café said...

Governments will continue practicing/preaching Keynesian economics when the economy is down or sluggish. In a bull market, people will bask in the glow of Adam Smith economics... until the next bubble is formed and pops. There will always be bubbles as long as people are still looking to make a profit. There is no profit to be made unless someone else is willing to pay a higher price for the same thing.

Anonymous said it best..."a stopped clock is right twice a day."

YM, I like the "After a day of making real-world decisions backed by real money, I want some time off." Pretty girls on horses would not be a bad idea either. lol

Anonymous said...

Trin Cafe....Austrian economics gets slammed with reasons like that....the accusation is incorrect. In the strong money model it would be impossible to see sustained growth greater than 0.5%/YOY GDP over any 7year period (mean).

The GDP would grow only based on the real purchasing power of society not fueled by the drug of credit.

No bubble will ever with that sort of growth. What it also means is that everything is purchased with cash. No free houses, cars and gizmos for anybody. No one could afford them.

Its stupefyingly boring and blase, compared with car crash nature and glamour of Keynesian addiction. But it is also means real purchasing power is retained. Money retains its value and there are no bubbles.

There is no free lunch. It is unfortunate that the Austrian model gets blamed for not being able to provide answers to the blow ups made by Keynesians.

PS - Can anyone tell me who makes Chrome's dictionary? It won't recognize so many words. Stupid thing keeps telling me my words are wrong. Damn machines!

Trin Café said...

Sandy, you are clearly way smarter than I am. When was the last time civilized man used real purchasing power?

Anonymous said...

I am glad you asked....consider this short link....and the page as a whole...


Friedman was clear (as were Fisher, Hayek and the Austrians) - earn money via labour and manufacturing output, creating tangible value without the use of credit or paper money. The period 1850 - early 1900 was the clearest example of Austrian style growth (before banks grew large and corrupted everything).

There are other examples in human societies - Rome before it grew into a militaristic society. China (infancy of the Ming dynasty which was the latter part of the Imperial Era, vast stretches of the Indian civilization, including and up to the invasion by the British east India Company)

Probably parts of the British Empire (although I do not know much about them islanders). If you consider the socio-economic period of almost any society that went from a pre-dominantly agrarian economy to an industrial economy, there is almost inevitably a period of pure Austrian Growth before the banking sector corrupts it all. The parallels exist in varied and diverse societies across time and geophysical diversities.

Point is, this stuff exists and it is the ONLY way to grow responsibly without the boom bust cycle. The problem is human nature (we are greedy bastards who look for short-cuts whenever available)

The bankers know this, and this will never change. But for the select few that can recognize this and act on it...leaves them in a slighter better position to guide their lives.

I use the mob mentality example again, because 99 people live a certain way does not make it right. That 1% is either a nut job or he can see further than the 99 wildebeest.

Clearly way smarter? I seriously doubt that ..lol :)

Solfest said...

I like to look at pretty women on horses.

Trin Café said...

What will it take to go to a real purchasing power?

Aristotle described the story of Thales, a poor philosopher from Miletus who developed a "financial device, which involves a principle of universal application". Thales used his skill in forecasting and predicted that the olive harvest would be exceptionally good the next autumn. Confident in his prediction, he made agreements with local olive press owners to deposit his money with them to guarantee him exclusive use of their olive presses when the harvest was ready. Thales successfully negotiated low prices because the harvest was in the future and no one knew whether the harvest would be plentiful or poor and because the olive press owners were willing to hedge against the possibility of a poor yield. When the harvest time came, and many presses were wanted concurrently and suddenly, he let them out at any rate he pleased, and made a large quantity of money.

Tulip mania is my favorite bubble story.

I'm still looking for the pretty women on horses.

Solfest said...

Look down.

Anonymous said...

Andrew Schiff (Peter's brother) and director at Schiff Capital is in trouble. He doesn't make "enough" money.


Solfest said...

He'll just borrow to make up the diff.

No one goes down in income.

They just invent ways to pretend it's the same.

Trin Café said...

I can almost relate to Andrew Schiff, I recieved a "corrected" tax statement from the IRS.

According to their records my taxable Income line 43 should have been $93,513, they claim I owe $17,544!!! LOL!!!

I have to laugh, I wish I made that much money to be taxed 93+ THOUSAND!

I'm done.

Solfest said...

Trin you might be done, the IRS does not make mistakes.

Now pay up.

Redistribution does not like to wait.

Anonymous said...

I would like to laugh in sadness with what Trin said (I got a re-assessment from CRA 3days ago for taxes in 2010!) and I owe them 12K extra, and then of course I owe them 2011 taxes......).

Like I said, I would like to laugh, but instead I only feel bitter. It's as if my bank account has a hole in it...money keeps disappearing from it. And most of the time I don't know where.

What a great world we live in.

Solfest said...

Sandy did the govt confiscate your blog?

Anonymous said...

Nah....I think I am done updating it....and done having it up there....don't know what to say....