In August 2006, Peter Schiff, president of Euro Pacific Capital, offered what many considered to be an outlier prognosis for the economy: The exuberance would end, real estate prices would crash back down to earth, and consumers would revert to saving from spending. In short, a deep recession was in the works.
As outlandish as he may have sounded at the time, he was right. Four years and the worst recession since the Great Depression later, Schiff stands alone again with a bleaker diagnosis for the economy: an inflationary depression.
In an interview, Schiff, president and chief global strategist of Euro Pacific Capital, a candidate for U.S. Senate in Connecticut, and author of the new book How an Economy Grows and Why It Crashes, said he thinks the government’s policies — massive fiscal stimulus and a zero interest-rate policy — have put the U.S. on a track for a collision course.
As such, to protect one’s wealth, Schiff recommends divesting U.S. assets and dollar-denominated debt in favor of emerging markets. He likes natural resources economies like Australia, Norway, and Canada.
In recent months, GDP numbers have rebounded - primarily as a result of record low interest rates reliquifying the credit market and government stimulus jolting consumer spending. Although the "positive growth" has delighted Obama's economic brain trust, it has done little to boost the fortunes of Main Street. As I have said many times, GDP largely measures spending, and spending is not growth.
Last Friday we received the latest indication that the real economy is not recovering in the slightest. The Labor Department reported that non-farm payrolls increased by 431,000 jobs in May. In a press statement, the President himself crowed at the news, noting that the official employment rate fell to 9.7% from 9.9%. However, just inches below the headline, red flags were everywhere. Only 41,000 of those jobs were generated in the private sector - far below the median forecast of 180,000. Even more troubling was the fact that the Census Bureau alone accounted for 411,000 new jobs, which were almost exclusively temporary positions.
Rather than a recovery, the jobs data seems to indicate that we are still mired in the first economic depression since the 1930s. Back in 1931, two full years after the Crash of 1929, there were still very few people who thought that the recession then underway would one day be called the Great Depression. (See my commentary from March 1st "Don't Bet on a Recovery)
Increased spending, financed by unprecedented borrowing, will prove to be just as temporary as a US census job (unless, in the name of stimulus, Obama decides to make "people counting" a permanent function of the US government.). When the bills come due, the next leg down will be even more severe than the last.
The swelling ranks of the government payroll, and the shrinking number of private taxpayers footing the bill, will guarantee larger deficits and a weaker economy for years to come. In addition, the artificial spending has prevented a much-needed restructuring from taking place, leaving our economy far less efficient than before the crisis began. In other words, we have dug ourselves into a much deeper hole while failing utterly to build any means to climb out.
One reason that we have thus far been spared the full wrath of Washington's poor decisions is that we are still benefiting from problems abroad, particularly in the eurozone. As sovereign debt issues have temporarily caused a flight to the dollar, our economy has benefited from lower interest rates and restrained consumer prices.
However, EU member-states have shown some willingness to confront their problems by cutting government spending - correctly ignoring US government suggestions that they do the opposite.
Just today, newly elected UK Prime Minister David Cameron prepared his constituents for austerity. Citing a budget deficit that is currently running at 11 percent of GDP, Cameron indicated that government spending would have to fall in order to maintain solvency and a high standard of living.
Cameron went on to say, "Greece stands as a warning of what happens to countries that lose their credibility, or whose governments pretend that difficult decisions can somehow be avoided." This type of realistic sentiment is completely absent in our current leadership in Washington, even though the US deficit is 9.9 percent of GDP and mounting. Meanwhile, the tough decisions being made by European governments will start to rebuild investor confidence in the euro.
Once the euro finally stabilizes against the dollar, I expect commodity prices to resume their rise, especially oil. Normally, the uncertainty created by the disastrous oil spill in the gulf, and the resulting moratorium on deep-water drilling, would have sent crude oil prices skyrocketing. However, fears of a global slowdown, euro weakness, and general risk aversion have held prices in check. As Asia continues its growth and Europe regains its footing, I expect a delayed surge in oil prices, which will put yet another obstacle on the road to US recovery.
Our last remaining leg of support has been the activity of Asian central banks, who have continued in their herculean efforts to prop up the dollar and bail out Americans with low interest rates and cheap imports. However, when sovereign credit risk eventually rears its head in America, look for Asian policymakers to finally wise up. Once that prop is removed, there will be no questions about the gravity of our situation - and little dispute that it amounts to a depression.
The real danger will be if we follow our own foolish advice that Europe appears to have rejected. Treasury Secretary Timothy Geithner has bluntly suggested that European governments should print and spend money in order to keep their economies out of recession. In reality, cutting government spending is a far better stimulus. Maintaining lavish budgets through the use of the printing press will only result in disaster. Not only will such action fail to avert a double-dip recession, but it will practically ensure an inflationary depression.
As I have said before, we can't simultaneously grow the economy and grow government. The latest jobs report shows that we are just growing government. If that trend doesn't soon reverse, investors will start betting on the collapse of the dollarzone.
Two Senate candidates, Rob Simmons and Peter Schiff, are scheduled to speak at Thursday night's Republican Town Committee meeting.
Committee members will also discuss formally endorsing Tom Foley for governor.
Town committee meetings are open to the public.
The meeting will be held Thursday, at 7:15 p.m., at the Crown Corporate Campus Conference Training Center, 472 Wheelers Farm Rd. For information call 203-218-6166.
Peter Schiff is a world renowned economist, and Senatorial Candidate for the seat being vacated by Chris Dodd. Schiff also opened his state campaign headquarters on Old Gate lane in Milford late last year.
After the passage of the Obama Health Care Bill, Peter Schiff left the following comment on his website www.schiffforsenate.com.
"As the health care reconciliation bill heads back to the Senate, it’s evident politics as usual is alive and well in Washington. Our political leaders have once again chosen to offer us an entitlement, instead of solving the underlying problems in our health care system that prior acts of congress helped create.
Common sense dictates that prior to adding a new entitlement Congress should first solve the huge problems in the ones that already exist. Such sheer incompetence reinforces that we need to send people to Washington who aren’t politicians and who understand what drives markets and business, otherwise we’re never going to turn our economy around. We’ll continue to fall back to mediocrity, instead of being the world leader we should be."
No crumpets were served at a City Hall “Tea Party.” Instead, Republican candidates for Senate and Congress helped a crowd dish out a generous dose of anti-government, anti-Obama sentiments and campaign promises—while clashing with a gate-crasher.
About 60 demonstrators gathered outside City Hall Saturday morning to protest health care reform legislation at a “STOP ObamaCare Rally,” an event organized by the local chapter of a national movement pushing Republican candidates to the Glenn Beck right fringes of their party.
The Peter Schiff HQ is off to a great start, and with Dodd out of the race a new playing field in the exciting race for Senate is emerging.
Peter Schiff who opened his HQ in Milford last November has since met up with the Independence Caucus of Connecticut and has begun putting himself on record regarding the issues.
The above clip is one of many now posted on Youtube, but is my personal choice as it pertains to education and school vouchers. There are other videos available and anyone who is interested in learning about the Schiff campaign can visit his website at www.shiffforsenate.com or click on the Shiff banner ad to the upper right of this article.
Peter Schiff is endorsed by Ron Paul, has the unilateral support of the CT Tea Party Movement and the Milford Independent Party. Schiff opened up his HQ in Milford because of the outpouring of support lent to him here.
Thus far to date Peter Schiff has raised 1.4 Million in contributions, dwarfing all of his opponents with the exception of self funded Millionaire Linda McMahon.
To volunteer or lend your support to the Schiff campaign contact Len Greene at (203) 450-8817 or stop by their campaign HQ on Old Gate lane in Milford, CT.
The 2010 candidate for the US Senate, Peter Schiff launched the grand opening of his state central HQ in Milford CT this evening. Some notable local guests were in attendance to lend their warm and welcoming support.
Tom Jagodinski the Milford GOP Chair as well as local alderman Frank Goodrich were present. U.S. House candidate Peggy Rogers showed up, tea party patriots, Ron Paul enthusiasts and virtually every member of the Milford Independent Party.
Peter Schiff supporters packed the room so tightly that it was often hard to move among the crowd. Schiff gave his expected stump speech condemning the wasteful ways of the Washington crowd, he said we need to send "Obama and his entire administration back home." Schiff also gained high praises from the audience when he said he is not intent on "making friends in the Senate" if he "ticked every one of them off thats fine, especially if they stand in the way of progress."
Schiff later pointed to his son and said "the most important reason driving me to run is so that my son has a better shot at a future." Schiff pointed out that volunteers are needed and will be key to victory. He believes he has the support, and unlike McMahon he will not have to "pay his supporters to get the job done," he said "people are going to help out because they believe in the principals of liberty and freedom that I stand to deliver."
Overall the night was spectacular, over 300 people from all over our state attended, one person was notably mentioned as having relocated to Milford, from Las Vegas, just to help Peter make it to the finish line.
Quite sadly the event got little coverage, especially from the CT post who was e-mailed by me personally ahead of this event. Hopefully any reporters reading this post today will take notice of an incredible missed opportunity.
Thankfully, Connecticut Bob shot video of the event, and we will make that available as soon as he posts a link to it.
(Above photo of me (Rocco J. Frank Jr.) and Peter Schiff)
Libertarian Republican Peter Schiff will be opening his campaign HQ in Milford, CT on Old Gate Lane right near the Independent Party HQ on New Haven Ave. Peter Schiff, has raised over $1.25 Million Dollars to run for the U.S. Senate against incumbent Christopher Dodd.
The opening of the Schiff HQ is Thursday December 17th 130 Old Gate Lane Unit A in Milford, CT. Several members of the Milford Independent Party will be in attendance including myself (Rocco J. Frank Jr.) to support Mr. Schiffs bid for the Senate.
The Independent HQ annex will also be working with Schiff's state HQ to assist in getting him elected. There are several contenders for the Republican nomination this year including WWF heavy weight contender Linda McMahon. The Republican State Central also has their favorite candidate Rob Simmons. Independents have entered Dr. John Mertens as their official Party Candidate. Peter Schiff's strategy has been to adopt a policy of Republican infiltration, as he views this as being more desirable than running on a 3rd party platform not embraced by the voters.
This policy was conveyed to the Connecticut Libertarian party where Schiff on occassion spoke. In his previous lecture he advised all Libertarians in the state of Connecticut, that if they were serious about winning elections they would be better off to disband and join forces with a major party. Doing so would provide for the Libertarian philosophy to embed itself into the Republican Party paradigm without taking on a 3rd party handicap.
Peter Schiff was also endorsed by Libertarian Republican Ron Paul, who gave us the now famous H.R. 1207 with 318 Co-Sponsors. This is the bill to audit the Federal Reserve. Paul endorsed Schiff after learning that his understanding of macroeconomic policies, combined with his stellar track record for economic predictions, earned him a position of high honor on just about every financial news network in America.
We encourage all like minded freedom loving people to join us this Thursday to make the event a monumental success and welcome Peter Schiff to Milford. The Official Schiff For Senate website is www.schiffforsenate.com
At a senior living facility in West Hartford on Saturday morning, six candidates challenging U.S. Sen. Chris Dodd gave what were billed as their first stump speeches.
Hosted by the Federation of Connecticut Taxpayers five Republicans and one candidate seeking the nomination of four minor parties made their pitches, shook some hands, and met each other for the first time.
Former U.S. Rep. Rob Simmons said he shook hands with Peter Schiff and said, “I recognize you from TV.” Schiff, the broker and financial pundit who entered the race a few weeks ago after receiving more than $1 million in campaign contributions, said he too recognized Simmons from television.
“He’s a very smart, capable guy with a lot to offer on economic issues,” Simmons said of Schiff.
Schiff, who was the first candidate to speak Saturday, talked about why he entered the race. Having admittedly advised his clients for years to invest their money abroad, Schiff said he’s concerned about what Washington has been doing to the American dollar.
Rather than simply observing as a spectator and trying to protect his 15,000 clients from what’s happening in Washington, Schiff said he decided maybe it was time for him to go to Washington.
“Instead of trying to protect them from the misguided policies in Washington, maybe it’s time I actually went to Washington and tried to do something about it,” Schiff said.
When speaking about the current economic crisis and the housing bubble that burst, Schiff said, “all of this is the consequence of the stimulus under Bush.” He said the only difference between President George W. Bush’s stimulus and President Barack Obama’s stimulus is that Obama’s “is bigger and is going to do more damage.”
Schiff said Bush embraced the rhetoric of a free market system, but in reality was “the Herbert Hoover of our generation.”
While Schiff played up his financial expertise and downplayed partisan politics, Simmons talked about his military experience, his opposition to taxes, and his disdain for the policies of the current administration.
“I didn’t spend 20 months in Vietnam and I didn’t spend 10 years in the CIA fighting communism during the Cold War to come back home to my country, to come back home to my home state, to see the principles and the values for which we fought now put aside,” Simmons said.
Simmons, who has embraced the tea party movement, said he added a tea bag April 15 to the copy of the U.S. Constitution he carries around in his pocket. He said one of the biggest problems the country faces is apathy and now with the tea parties and town halls people are engaged in the political process.
“I’ve have done my best to oppose higher taxes, which I say take away our freedom,” Simmons said.
John Mertens, the Trinity College engineering professor who is seeking the nomination of the Green, Libertarian, Independent and Connecticut for Lieberman Party nominations spoke about how sending candidates from the two major parties has not solved “our huge, long-term” problems.
“I offer you calm, intelligent, nonpartisan problem solving,” Mertens told the crowd. He went on to talk about his solutions for Medicare, Social Security, and the national debt.
He advocated for getting rid of the alternative minimum tax and increasing the top tax rate as the only way to deal with the national debt.
None of the first three candidates even uttered Dodd’s name until state Sen. Sam Caligiuri spoke.
Caligiuri, the youngest of the candidates and perhaps the underdog on the Republican side, received several bursts of applause during his speech.
He talked about his career in politics in Waterbury and Hartford, his family, his desire to push for Congressional term limits, and the need to defeat Dodd.
“I believe Chris Dodd has failed us by not doing his job,” Caligiuri said, adding that when Obama was asked the reason for the economic crisis during his first few weeks in office, the president cited the housing bubble and the credit crisis.
“He’s right,” Caligiuri said, “but when he said what he said, he was indicting Chris Dodd’s failed leadership as chairman of the Senate Banks Committee.”
He said Dodd stopped doing his job because “he came to take our vote for granted a long, long time ago.”
“We’re not just going to hit Chris Dodd hard and on the issues, but I’m willing to take us into the future and away from what Chris Dodd has come to represent, which is career politicians that have been in power for so long and with so little accountability that they literally think they can do and say anything they want and still get themselves re-elected,” Caligiuri said. “I’m telling you, my friends, as sure as I’m standing before you this morning, that I am committed to changing Washington in ways career politicians simply cannot do.”
Caligiuri who said he has refused to take campaign contributions from political action committees, said he knows he is looking at a huge fundraising disadvantage. However, he said the power of his message ultimately will win him the Republican nomination. He said he knows he needs money to get his message out to voters, but also that the positive response he received Saturday from the breakfast crowd was “not the exception, it was the rule” thus far in his travels across Connecticut.
Both Simmons and Caligiuri said they understand the political process better than the other GOP candidates and have been seeking delegate support to win the Republican primary, while self-funded candidates like Linda McMahon have been blanketed the state with advertising.
McMahon was accompanied Saturday by lobbyist and campaign strategist Patrick Sullivan of Sullivan and LeShane.
McMahon spoke mostly about what motivated her to get into the race and she didn’t appear to stray far from the dialogue in her campaign commercials where she talks about going through a bankruptcy and rebuilding her company.
McMahon, the World Wrestling Entertainment CEO who stepped down from her post last week to focus on the race, said, “I’m running because I think our country is at a point of crisis.” She talked about the mounting national debt, how difficult it is for businesses to get credit, and the recent headlines about a New York terrorism plot.
“I can’t sit on the sidelines. I’ve got to jump into the fray. I’m not a career politician, I’m a business woman,” McMahon said. “I built a company from the ground up, from sharing a desk in the basement to having a company now that’s traded on the New York Stock Exchange. I know what it’s like being a young entrepreneur who can’t get credit. I’ve been there when your house gets auctioned off.”
In closing her speech Saturday, McMahon — who decided to spend her own money to fund her campaign — said she will accept donations from supporters of $100 or less, and that she will not accept money from political action committees.
The final candidate to speak Saturday was Tom Foley, the Bush administration’s former ambassador to Ireland who also was one of Bush’s top fundraisers. According to his bio, Foley also served in Iraq as director of private-sector development for the coalition provisional authority. He oversaw state-owned businesses and developed a plan to re-establish a private-sector economy.
Foley walked through the doors Saturday just in time to hear McMahon before he spoke about getting his son ready to go to college. As his son was filling out college applications last winter, Foley said it occurred to him that his son may not have the same opportunities that were available to prior generations.
“That got me thinking about making sure our government gets this right,” Foley said. A Greenwich businessman with a degree in economics, Foley jumped into the race in June.
He said he’s not as worried that the “wheels are going to come completely off” the financial and economic system, but is more concerned that the current administration thinks last November’s election was a mandate to push through its policies.
“There’s a movement toward a Europeanization, if you will, of this country, which I don’t think the voters support and I certainly don’t support,” said Foley, who served as ambassador to Ireland from 2006 until January of this year.
He said he’s been traveling all around Connecticut this summer and believes there’s a gathering storm to make change in 2010.
As Foley left the senior living facility Saturday, he turned to Republican Party Chairman Chris Healy and asked if there were anymore candidates getting into the race.
Healy shook his head and said, “Not that I know of.”
The long wait is finally over, Peter Schiff the economist and CEO of Darien's Euro Pacific Capital officially put his hat into the ring this morning. Peter also sent out the e-mail below to his supporters as of last night:
Based upon the unbelievable support that I have received from 10,000 supporters like you, I have decided to throw my hat into the ring to challenge Chris Dodd for the honor of representing the state of Connecticut in the United States Senate. I will announce my candidacy on MSNBC's Morning Joe show on Thursday, September 17 at8:15am eastern time. Sorry for the short notice, but its important to honor commitments and keep these things under raps until the day the news breaks.
At this time last year I could not have imagined that that I would be making such an announcement today. I had never intended to become a candidate for public office. But these are extraordinary times. Our economy is falling apart in front of our eyes and Washington seems intent on making the wheels come off even faster. At a time when we desperately need adult supervision, the economically illiterate are running the show. As I love my country, it now seems clear that I must try to do something help. The emotional and material support I have received from across the country has made the decision much easier.
So today it begins. As I'm sure you are aware, the rules in politics bear only scant resemblance to those which govern polite society. As a result, I am wading into strange waters, and I'm sure strange things will happen. But I promise to maintain my composure and give it my best shot. Based on the support that I have received thus far, I fully expect to be facing down Chris Dodd in the general election just 14months from now.
As my campaign takes flight, I appreciate the patience and trust that you have shown. To commit time and money to a long shot candidate for high office is a hard choice. I hope to repay that trust with a first class campaign.
I look forward to your feedback and your continued support.
Peter Schiff
On a quick personal note I would like to thank Peter and his Brother Andrew who spoke to me in detail on several occasions regarding the Schiff Campaign and the support pledged to him by the Connecticut Independent Party, the CT Tea Parties, and the US Campaign for Liberty.
Senator Dodd in an effort to recover from the repercussions of the "Dodd Clause" of the AIG contract is still drawing fire. Dodd was accused of allowing AIG executives to pay contractual bonuses with taxpayer bailout money.
For obvious reasons, the general public is outraged over this practice. Had AIG entered bankruptcy protection chances are that none of those bonuses would have ever been paid. Under bankruptcy law AIG could have been forced to restructure itself, and as a result been able to legally not give bonuses to the people responsible for the global economic "Melt Down."
The pandemonium of fear in Washington however, took control of AIG and nearly 3/4 of its stock. AIG was deemed too important of a company, and as such categorized as of "too big to fail." Federal Reserve Bank Chairman Ben Bernake (A self proclaimed expert on the Great Depression) said the "bailout was the right thing to do because a lack of a bailout during the Great Depression is what induced the economic hardship on Main Street."
Peter Schiff, a potential contender against Chris Dodd and expected to have raised his first One Million Dollars on line, said that "Bernake's actions just put off our economic problems to a later date and more severe consequences are later expected." Schiff suggested the Federal Reserves motto ought to be "What America has succeeded in creating is not an economy impervious to shocks, but merely one which enables their consequences to be postponed to a later date." Schiff may be running against a full slate of Republican contenders, including Rob Simmons, Linda McMahon (Owner of the WWF), and others who have yet to formally announced.
The Connecticut waters are certainly filled with sharks, and a wounded Chris Dodd is entrenched in a moat as he is under fire from his many critics. One such critic Senator John Cornin put this advertisement on Google titled "Dump Dodd." These public criticisms in tandem with the public view are responsible for eroding his approval rating to a record low of under 41%. and many political science experts are of the opinion this very well could be his last term.
Dodd has also announced that he is ill with prostate cancer, and as such earned the kind supportive words of many local leaders including Gubernatorial candidate Jim Amann and all who wish him well. Some are concerned that Dodd may have an epiphany and realize his re-election is futile. He may ultimately decide to retire on his own terms. However honorable this may be, (especially in lieu of the acrimonious nature of the general public and their sentiments toward is work in the last few years) it is not likely to happen.
Well all that is left to say is that Dodd's ego is even bigger than his Prostate. Read the story below...
Peter Schiff, the Darien resident and CEO of Euro Pacific Capitol, is all over the web with mounting support calling him into political service. Peter was a previous speaker at the Connecticut Libertarian Party, and a regular commentator on several national news programs.
Schiff is often referred to as the man who was later determined to have been right in his economic predictions. There is no doubt that he has developed an impressive and loyal following. Personally I would find it great to see Lieberman a party outcast face another Independent like Peter Schiff in the 2010 Senate race.
Recently I contacted his office to see if the Milford Independent party could offer their services since he would be campaigning in our districts. Mike Telesca our state Independent Party chairman said he thought Schiff would "make a better candidate for Connecticut Governor" and asked me to make the offer. When I called his Euro Pacific Capitol office and told his receptionist the nature of my call, she indicated he was out of town and was put through to his brother instead. The details of which happened next are currently confidential, however I will say that support is building for Peter's push to run for the Senate. Peter Schiff has not formally announced he will run but money and people are organizing to get him to do so hopefully we will hear the magic words that he will run.
Peter is truly a dynamic individual who has a keen insight on world affairs, sound economic policy, and a strong bond with our country to continue to fight for what we believe in. Even if Peter opts out of the Senate race he will still continue on to the airways where he will be a formidable force in challenging the flawed views of misguided economists.
Andrew Schiff and I made contact today and Peter Schiff is more interested in challenging Chris Dodd than Joe Lieberman. Andrew also mentioned that he is not ruling out a Republican endorsement but will announce his intentions soon.
Also Schiffs supporters have struck a nerve with angry liberals who wrote this recent Hit Piece about Peter Schiff. Perhaps they have not yet seen this video by Aaron Russo.
Peter Schiff Founder and CEO of Euro Pacific Capital was born in nearby New Haven and currently lives in Darien. His message below is a weekly address on the state of the U.S. economy and its impact on local residents their pensions and future dollar value. Peter gives us an interesting assessment and a somber warning.
This was followed by a letter from Ron Paul earlier this week calling for all CT state representatives to support his bill that calls for an audit of the Federal Reserves reckless monetary policy instituted by the private central bank. The bill HR 1207 an S. 604 has no support from our state representatives and is under the review of U.S. House Speaker Nanci Pelosi.
Please Call our CT representatives and demand they support this bill and give the public an accounting of the Trillions of taxpayer dollars that are in question. Our CT leaders are officially being put on notice by the Campaign For Liberety (AKA Tea Party Organizers) that they "either take action to rein in an out of control Fed, or face the wrath of angry patriots." through their defacto support.
In August 2006, Peter Schiff, president of Euro Pacific Capital, offered what many considered to be an outlier prognosis for the economy: The exuberance would end, real estate prices would crash back down to earth, and consumers would revert to saving from spending. In short, a deep recession was in the works.
