The one and only Peter Schiff on the dollar, bonds, GM’s IPO, the media and more
* Bond Fund manager and Freddie/Fannie-guaranteed mortgage holder Bill Gross advocated the Freddie/Fannie bailout. He has recently suggested government should 100% nationalize Freddie and Fannie, and allow everybody to refinance at a lower rate.
* Bill Gross argued this would stimulate consumer spending and thereby the economy. Of course, what our economy needs is more savings, not spending.
* Real Estate prices are still too high and should never have been propped up. They need to come down. Artificially high prices for homes deprive more productive endeavors of resources.
* Do not buy Government Motors IPO. Some profit might be made by those with good timing, but they will go bankrupt again. The bailout prevent the restructuring they needed. They company is not run to produce good cars at a profit. It is run to serve labor.
* Dollar strengthens despite bad news based on weakness in stocks. Old habits (like buying dollars on bad news) die hard.
* Congressional Budget Office increases deficit estimate, but the estimate remains complete bullshit. Nothing to do with reality.
* Big Media (Robert Reich) continues to sing the praises of debt, and demonize saving.
* Peter’s predictions about Freddie and Fannie come true.
* Refinancing homes at (artificially suppressed) lower rates is creating a ticking time bomb for banks who will be holding 30-year paper. Once the paper becomes worthless there will be rampant bank failures.
* NY Times publishes BS article about why we won’t have a recession. Sheer propaganda. The implicit argument is that a zero Fed rate will avoid a recession. This is nonsense.
* Bonds remain overpriced, as Americans who attempt to save decide to lend money to the government. Inflation will punish bond-buyers.
* A better scheme for unemployment benefits would be an initial lump sum. This would avoid the disincentive to work. Of course, we’d all be better off if people decided for themselves whether or not to buy unemployment benefits, creating a market for various flavors of unemployment insurance.
* Peter has bet against the advice he gives. If the government actually followed his advice, it would undermine his investments.
* The sooner the crash happens, the better, because the longer the malinvestment persists, the more effort it will take for the economy to restructure.
