Last night, Peter Schiff spoke to an audience of about 250 people here in Utah. The event was put on by the local Campaign For Liberty. As always, he had some extremely interesting things to say and I was very glad I was able to go listen to him, it was a very informative night.
I took notes the entire time – he spoke for over 2 hours – and tried to get down the things I thought were important, educational and/or revelatory as quickly and as accurately as I could. For this post, I’m going to basically paste in my notes and add some contextual commentary to some of them.
For context, in general, he was speaking about the current state of the economy, how we got to where we are and what he sees happening in the very near future. My notes here will not be in the chronological order in which he presented them but rather in the order that I see them as most pertinent to Preppers. Please do not consider these exact quotes, I got as close as I could but some of them may have minor misquoting – however, the idea should still be there correctly and be sound.
Question from Audience: Can you tell us 4 things we should be doing to prepare for a major economic collapse?
- Financial; get out of debt, save, buy gold and silver. Buy other currencies and stocks in other countries (their values won’t plummet when ours does). Save pennies! Pennies pre-1981 are currently worth about 3 cents in copper
- Store food and stock up on other non-perishable items. If costs are going up in the next several years, buy them now. Toiletries,batteries, etc
- Move out of big cities, there is going to be major unrest from the dependent generations as they lose their entitlements; things will get very dangerous in the big cities – but Salt Lake seems rural compared to New York – things should be fine here.
- Spread the word politically, help people understand why it (the coming collapse) happened so that after it happens the right people are there to fix it correctly
A recession is the economy making natural corrections. When we avert a recession, we only prolong the correction and make it much worse.
On why government spending doesn’t get us anywhere and will bring about it’s own inevitable end:
Too many of our resources go into services like housing, education, bureaucracy etc and not into actually producing anything.
On why government controlled stimulus distribution doesn’t work:
The stimulus money goes where the government wants it not where the free market wants it
How can our economy grow when nobody is saving and nothing is produced in America?
It’s because the rest of the world is saving and producing and will let us purchase from them on credit.
The only way we can live above our means is that the rest of the world lives below their means – once they figure this out, they aren’t likely to be willing to keep doing it.
When the housing bubble burst in 2008 it was a result of the averted recession (due to government economic policies) of 2001. Had they not bailed everyone out (this time) and let them fail (like they let the .com’s fail) the downturn would have been much more difficult but would have ultimately fixed things.
What is in store for us now us even worse because of the government’s bad economic policies – which have put our economy in a position that is now three times worse than it was in 2008.
(To correct the economy), Interest rates have to go way up and real estate has to fall hard.
The government is now growing at an unprecedented rate. The problem is, politicians think that they are necessary, they couldn’t even agree to cut the federal budget by $80 billion – saying it was “too draconian” – when they actually need to cut it by well over a trillion. $80 billion wouldn’t even make a trickle of a difference.
We are currently pumping up a new ‘government bubble’. Previous bubbles (.com and real estate) left us with something tangible (a couple companies and housing) but the government bubble will leave us with nothing and there is no one and nothing to bail them out.
Oil, food, everything is going way up, to record highs which is a consequence of printing huge amounts if money. Bernake is a fool and believes in ‘quantitative easing’ and thinks that if oil and food go up, the solution is to print more money – which always has the opposite effect on prices.
Obama is projecting that were going to borrow 8 trillion dollars over the next 5 years. He’s a moron and is assuming the the economy will grow (over the next five years) at three times the amount it did in the last several years.
We are exporting our inflation to the rest if the world.
The whole economy HAS to collapse in the next five years. It is MORE likely that it will collapse in the next TWO years than in the following two years.
You can’t have a reserve currency in perpetual decline or with a zero percent interest rate (which is where the dollar HAS to be right now) and other countries are going to quickly realize this. When they switch off the dollar as the reserve currency, we will fail almost immediately.
The reason Bernake HAS to keep interest rates as zero is that if interest rates go up, the government can’t make payments on its debt.
Sovereign debt is the problem with all the currently failing countries around the world – that is what is bringing them down. We will be no different.
Greece and other countries are being bailed out by the European Union; Nobody can bail out the United States and they won’t.
China and other countries can now start to see that boosting the US is hurting their own economies so they will bail soon and when china bails the others will bail.
All we’ve done in thus last two tears as our ‘recovery’ is borrow, print and spend money – building up the bubble even more and raising our debt dramatically
All banks that were bailed out will fail again in the next crisis, when interest rates finally go up
In 2008 free markets and capitalism were blamed for the crash and more regulation was claimed to be the solution – we HAVE to make sure in the next crash that people understand what actually happened.
This coming crisis will probably be bigger than anything since the civil war.
A lot of this is covered in his book, Crash proof – how to profit from the coming economic collapse.
The odds of making it five more years is astronomical. Most likely in the next two years, less likely in the following two.
The more money the fed prints to buy bonds, the bonds are worth less
The reason we are in trouble as a country is that we have been taught to not save and to spend like crazy. The current ideology is that to “stimulate” the economy, we have to spend and that those who save are being ‘horders’.
Gold and silver aren’t expensive, they show us the true purchasing power of the dollar, or lack thereof
Real economic growth that ended the great depression was not because of or during the war, but when the government actually quit spending money on the war (after it was over) and that money started going into producing goods.
When the world no longer wants the dollar (reserve currency) we will collapse.
The reason prices will skyrocket is that supply will collapse (because we import everything). The rich will be able to buy them but the poor will do without.
During war, the government pulls off things we wouldn’t normally let them do – like taxes. The first income tax and paper money came from/during the civil war. Tax Withholding came during 2nd war. Excise tax came during Spanish American war.
The founding fathers saw the federal government as being relevant ONLY during times of war, they expected it to be inconsequential at all other times. We have managed to turn that completely around.
We should stop building strip malls and start building factories but it’s not economical. Governments – state and federal – have put too much regulation and law against businesses and wages are way too high. This results in factories being completely uneconomical to build.
Paying people not to work means people will not work (entitlements and unemployment)
Companies open abroad because if less regulation.
A person with a bulldozer can make me more money than a guy with a shovel. It’s the bulldozer that makes it so I can earn more and pay more.
You get less if what you tax and more of what you subsidize – so why do we tax things we want (jobs, earnings, estates, etc) instead of taxing consumption? And why do we subsidize things that we WANT? (like food, farms, etc). The government does things completely backwards.