While we watch the country's top economists flounder to and fro in their various stabs at fixing the troubled economy, one has to wonder where they were two years ago when perhaps steps could have been taken to avoid the turmoil which we are now facing.
Peter Schiff, former economic advisor to Ron Paul and President of Euro Pacific Capital, frequently appeared on various news shows including CNBC and FoxNews, back in 2006 and 2007, clips of which have been cut into a video which is a must see. Schiff predicted a recession due to "too much consumption and borrowing and not enough production and saving." In a clip in which economist Art Laffer told him that he was completely wrong, Schiff went on to say "...the disease is all this debt finance consumption. The cure is that we stop consuming and we start saving and producing again and that's a recession. Sometimes medicine tastes bad but you gotta take it.
When you see the stock market come down and the real estate bubble burst, all that phony wealth is going to evaporate and all that's going to be left is all that debt we've accumulated to foreigners."
When asked about whether home prices would continue to increase, Schiff had this to say:
"Today's home prices are completely unsustainable...Sky high real estate prices are gong to come back crashing down to earth."
The video includes various economic experts advising the public to buy financials including Merrill Lynch and Goldman Sachs, while laughing at Schiff for suggesting that people should stay away from financials and stocks.
Finally, Schiff warned that the financial mess would move on to auto loans and credit card debt.
Ron Paul definitely had something on the other Presidential candidates -- an economic advisor who knew what he was talking about. Someone should send his resume to David Axelrod before it's too late.
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