Oh Boy! Stimulus!

Peter Schiff talked about the ills of government economic influence in a discussion on CNBC, 12/28/2008.

While others on the panel attempted to argue for accepting the “inevitability” of more financial regulation, Schiff urged that such measures be resisted. The other establishment talking heads bizarrely promoted the idea of accepting government mandated measures despite the fact that they have proven to make the problem worse in the past and have done nothing to stimulate the economy over the second half of 2008. This is akin to being in a car hurtling towards a brick wall and not slamming on the breaks but preparing for the “inevitability” of crashing through it.

“The problem was in the 1920’s, the Federal Reserve blew up a stock market bubble, when it burst we needed to have a severe recession but Hoover wouldn’t let that happen, he tried to intervene, he tried to prop up companies, he tried to keep companies from failing, he was the most interventionist president up until that point - he started the Great Depression,” said Schiff, adding that Roosevelt then compounded the problem through the rest of the 30’s.

Schiff predicted that the ultimate bottom for the Dow would mean it was worth just one ounce of gold and that it would hit a low of value between five and seven ounces of gold next year.

“It’s gonna be a huge decline in the price of stocks and a huge rise in the price of gold as well,” said Schiff, adding that the creep away from the dollar would soon turn into a “stampede”.