Sunday, August 24, 2008
Schiff versus the Establishment
Peter Schiff is a very interesting guy. He has been basically spot-on for the last few years with his warnings about the US economy. Are you surprised to learn that many big gun finance gurus mocked him along the way? Below are three good examples:
(1) Schiff versus Arthur Laffer (8/28/06)
(2) Schiff versus Steve Forbes (June 2008, I believe)
(3) Schiff versus Bob Murphy (!?!)
Yes, I didn't care for Schiff's explanations on why trade deficits are bad. (I still think his analogies are a bit misleading.) However, in the grand scheme he was obviously right, and I should have realized it much sooner. I don't claim to be omniscient folks, but when I make a mistake I admit it quickly and try not to repeat it.
(1) Schiff versus Arthur Laffer (8/28/06)
(2) Schiff versus Steve Forbes (June 2008, I believe)
(3) Schiff versus Bob Murphy (!?!)
Yes, I didn't care for Schiff's explanations on why trade deficits are bad. (I still think his analogies are a bit misleading.) However, in the grand scheme he was obviously right, and I should have realized it much sooner. I don't claim to be omniscient folks, but when I make a mistake I admit it quickly and try not to repeat it.
Comments:
Hey I just got his book this weekend and I still think you have a valid point against him. After reading the first four chapters, it still seems like he's saying that trade deficits can *never* be good, which you are right to correct.
Also, given how bad he claims America is doing (i.e. being like a farmer that quit growing food and turned his farm into a golf course for his personal use), he doesn't have a satisfying explanation for why Asians are extending the US so much credit that we can't honor :-/
Also, given how bad he claims America is doing (i.e. being like a farmer that quit growing food and turned his farm into a golf course for his personal use), he doesn't have a satisfying explanation for why Asians are extending the US so much credit that we can't honor :-/
Hey Silas,
When I sent Schiff my last article (the one linked in this post), he didn't really object. He said something like, "Fine, we're arguing about how many angels can dance on a needle while the US is imploding" or something. I.e. it seemed he was conceding my theoretical point, but thought I was wasting everyone's time in the crisis.
If you write up a post on your site I can link it here. It's been a while since I read his book, but I think you're right that there is a tension in the people who are arguing (implicitly) that they are smarter than the foreigners who are investing trillions in US assets.
When I sent Schiff my last article (the one linked in this post), he didn't really object. He said something like, "Fine, we're arguing about how many angels can dance on a needle while the US is imploding" or something. I.e. it seemed he was conceding my theoretical point, but thought I was wasting everyone's time in the crisis.
If you write up a post on your site I can link it here. It's been a while since I read his book, but I think you're right that there is a tension in the people who are arguing (implicitly) that they are smarter than the foreigners who are investing trillions in US assets.
Well, I'll post on my blog when I've read more and have more to say. One other nagging concern I've had is whether it's a danger to hold the foreign shares with a US trustee, and whether it's legal to do otherwise :-/ My quest will be blogged as it develops.
For now, I'm going to have to rescind my previous hatred of actively managed funds. If my only foreign equity option in my 401k is FDIVX, I might as well bite the bullet. 1% management fee won't matter against a huge further dollar drop.
Hey, maybe i do have enough for a post...
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For now, I'm going to have to rescind my previous hatred of actively managed funds. If my only foreign equity option in my 401k is FDIVX, I might as well bite the bullet. 1% management fee won't matter against a huge further dollar drop.
Hey, maybe i do have enough for a post...
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