Wednesday, October 1, 2008

Smack-Down: Peter Schiff - Lawrence Yun


The failed bailout vote is called "unecessary uncertainty" by L. Yun.

Schiff counters with high house prices and hyper-inflation.

Match over, monkey-boy, Yun.


Schiff 10, Realtors/Analysts 0

video

5 comments:

tom12008 said...

I don't think that Chris Thornburg's attempt to stake out middle ground was as all that successful. Lawrence Yun wanted to avoid any engagement of Peter Schiff's points, and looked bad doing it.
I think I'm beginning to get my mind around the possibility of hyperinflation followed by deflation.

Tyrone said...

Interesting thoughts, Tom. I'm still struggling to make sense of it all and how best to prepare. Friend of mine is convinced hyperinflation will hit, and he's fully positioned in gold, silver, food, liquor, etc. My crystal ball is telling me that life will be different, but I can't focus on how different. I was actually thinking deflation followed by inflation/hyperinflation.

Reading today about failed car dealerships... this will start to mushroom into a very bad situation.

tom12008 said...

Ty,
if you feel like expanding on this, please do. Your model could also be correct, based on Schiff's statements. I had been fighting thoughts of a Weimar Germany or Zimbabwe-style hyperinfaltionary model, but this bailout is analogous to the reparations levied on Germany at the Treaty of Versailles; it places a crushing debt upon the American taxpayer.

So, if I follow you and Peter Schiff, as well as history, the short-term credit squeeze could trigger deflation at first. Then, as pressure from America's creditors continues to bear down, the treasury prints more notes, the currency becomes devalues, and inflation takes off.

This is plausible. Let me know if I'm correct or not. Thank you for sharing your ideas here.


Tom

Tyrone said...

the short-term credit squeeze could trigger deflation at first. Then, as pressure from America's creditors continues to bear down, the treasury prints more notes, the currency becomes devalues, and inflation takes off.

Tom, I am by no means an expert on this issue, plus it's very complicated. If we're having huge reductions in house prices, is this deflation? Is it having the net effect of reducing the money supply? But other things are going up in price, and we know the CPI is flawed.

Think back 6 months ago when inflation was hitting restaurants, hard, eating into their profit margin. Shortly after we started reading about this, the prices either stabilized or went down. Is price control being used? I have no proof, just my observations.

And why the dollar rally? Are other governments fleeing to it because they are in worse shape?

Tyrone said...

Here's a thought:
What if the Federal Reserve printed up new dollars to offset the dollars lost in house values, maintaining (or trying to maintain) a constant value?

This doesn't fix the CDS and derivative debacle, however.