Peter Schiff, The Party is Over
Peter Schiff, The Party is Over
More than just a mere liquidity or credit crisis, the current financial storm represents the death throes of the old global economic order, and perhaps the birth pains of a new one. The sun is setting on the borrow and spend culture that has all but defined us for a generation. Our long ride on the global gravy train is finally coming to an end, and once it does nothing will be the same. The sooner we come to grips with this the better.
Despite the myriad of proposals that are coming from Washington and other world capitals, we must understand that this crisis cannot be cured by governments. In the United States, credit is gone because savings are gone. Our shallow pool of savings has been depleted through bad loans, and we can no longer entice foreigners into lending us their available savings. Given that we are already too loaded up on existing debt that we cannot realistically repay, who can blame them for not wanting to lend us more?
As a result, the free market is trying to put an end to our spending spree. Without savings or home equity to fall back on, Americans struggling with rising prices are finally being forced to curtail their spending. This has terrified our leaders and is causing them to dismantle the remaining structure of our free enterprise-based economic system.
Were the government to allow market forces to work, Americans would now have to pay cash for their consumption. That would mean no instant credit for new cars, plasma TVs, appliances, consumer electronics, clothing, furniture, etc. Unless buyers actually had the cash in their checking accounts these purchases would have to be deferred. From an economic perspective this is precisely what the doctor ordered. But for an economy based 72 percent on consumer spending, the medicine will go down hard.
Good article. Read it.
And Buy Peter Schiff’s Book Crash Proof: How to Profit From the Coming Economic Collapse
Peter Schiff Versus Stephen Leeb – Party’s Over – America
Peter Schiff Says America On Brink of Economic Collapse (from back in April ’08)
The Rest is Up to You…
Michael Porfirio Mason
AKA The Peoples Champ
AKA Your favorite International Playboy on the Rise’s favorite International Playboy on the Rise
The Guide to Getting More out of Life
http://www.thegmanifesto.com
Redman ft The Mary Jane Girls – Cant Wait
13/10/2008 at 7:58 pm Permalink
Hi,
I’m just getting started with my new blog. Would you want to exchange links on our blog-rolls?
BTW – I’m up to about 100 visitors per day.
14/10/2008 at 9:47 am Permalink
Couldn’t agree more with this. I have been watching this unfold with glee, as I purchase pretty much everything with cash and firmly believe in leveraging your own capital for success, not others. I was actually a little disappointed to see the stock market rally yesterday, I think most of the advanced economies of the world (and their citizens) are upside down, and it’s going to take a lot of pain to shake it out.
When I was a young pup, I knew a kid who bought a $1200 watch for himself. Entirely on credit. The concept that you would finance a watch, or even that a 17 year old kid needs a $1200 watch… it blew my mind at the time.
This all has to unravel.
17/10/2008 at 2:42 pm Permalink
Thought you’d find this interesting:
Lahde Quits Hedge Funds, Thanks `Idiots’ for Success (Update1)
By Katherine Burton
Oct. 17 (Bloomberg) — Andrew Lahde, the hedge-fund manager who quit after posting an 870 percent gain last year, said farewell to clients in a letter that thanks stupid traders for making him rich and ends with a plea to legalize marijuana.
Lahde, head of Santa Monica, California-based Lahde Capital Management LLC, told investors last month he was returning their cash because the risk of using credit derivatives — his means of betting on the falling value of bonds and loans, including subprime mortgages — was too risky given the weakness of the banks he was trading with.
“I was in this game for money,” Lahde, 37, wrote in a two-page letter today in which he said he had come to hate the hedge-fund business. “The low-hanging fruit, i.e. idiots whose parents paid for prep school, Yale and then the Harvard MBA, was there for the taking. These people who were (often) truly not worthy of the education they received (or supposedly received) rose to the top of companies such as AIG, Bear Stearns and Lehman Brothers and all levels of our government.
“All of this behavior supporting the Aristocracy, only ended up making it easier for me to find people stupid enough to take the other sides of my trades. God Bless America.”
Lahde, who managed about $80 million, told clients he’ll be content to invest his own money, rather than taking cash from wealthy individuals and institutions and trying to amass a fortune worth hundreds of millions or even billions of dollars.
“I do not understand the legacy thing,” he wrote. “Nearly everyone will be forgotten. Give up on leaving your mark. Throw the Blackberry away and enjoy life.”
Request for Soros
He said he’d spend his time repairing his health “as well as my entire life — where I had to compete for spaces at universities, and graduate schools, jobs and assets under management — with those who had all the advantages (rich parents) that I did not.”
He also suggested that billionaire George Soros sponsor a forum in which “great minds” would come together to create a new system of government, as the current system “is clearly broken.”
Lahde ended his letter with a plea for the increased use of hemp as an alternative source of food and energy that segued into a call for the legalization of marijuana.
“Hemp has been used for at least 5,000 years for cloth and food, as well as just about everything that is produced from petroleum products,” he wrote. “Hemp is not marijuana and vice versa. Hemp is the male plant and it grows like a weed, hence the slang term.”
`Innocuous Plant’
He added, “The evil female plant — marijuana. It gets you high, it makes you laugh, it does not produce a hangover. Unlike alcohol, it does not result in bar fights or wife beating. So, why is this innocuous plant illegal? Is it a gateway drug? No, that would be alcohol, which is so heavily advertised in this country.”
Lahde said the only reason marijuana remains illegal is because “Corporate America, which owns Congress, would rather sell you Paxil, Zoloft, Xanax and other addictive drugs, than allow you to grow a plant in your home without some of the profits going into their coffers.”
Lahde graduated from Michigan State University with a degree in finance and holds an MBA from the University of California, Los Angeles. He worked at Los Angeles-based hedge fund Dalton Investments LLC before founding his own firm two years ago with about $10 million.
Lahde wasn’t available for comment. A woman at his firm, who asked not to be identified, confirmed the authenticity of the letter.
17/10/2008 at 2:45 pm Permalink
You could post a column on your blog about this under the money, people and even dope categories.