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many of you seem to suffer from the fantasy that Hoover was laissez faire. that couldn't be further from the truth. Hoover instituted massive public woorks projects along with interfering with wage and prices. His treasury secretary,Mellon, resigned in protest because of all the govt. meddling. FDR then simply coontinued many of Hoover's misguided policies; he simply expanded them and created new ones. Reread your history please. (i mean neo-Hoover...really..lol)

The reason to have some gold is because the government can't print gold. It use to be that a buck would buy a handfull of candy bars. Now it buys only one. It's not because candy became more valuable to everyone, it's that the buck became worth less because the government prints them up whenever they want.
As they continue to do this, they become worth less and less - you know, worthless.

Creating money does not create wealth. Think. If you gave everyone a million, or a billion dollars, would everyone be wealthy? No. All the prices of everything would go up to match the "inflated" money supply. The ones that got to spend their millions first, before this happened, would benefit for a bit.

The more people that work, the more goods and services there are available for everyone, and the wealther we all are. That's wealth. Money is just a medium we use to exchange our goods and services, so that we don't have to barter.

Think.

Oh well, Obama is just a politician but at least he has a brain and isn't afraid to use it.

A refreshing change compared to the dunce who got us into this mess with his smiling arrogance/ignorance.

But let's not hope for too much -- spending our ways out is Bush's advice circa 2002.

I can't tell if Schiff actually predicted the economic meltdown the way it happened, or if he got lucky and now wants everyone to buy gold to drive up the price of his own gold stock.

Maybe I missed it, but his model for why things would fail, back before they did fail, spoke nothing to CDOs, credit default swaps, the increasing interdependency between firms, the lack of reserves for the insurance for mortgage-backed securities, the enormous derivatives market, the reason AIG failed, etc..

Anytime someone says that Wall Street OBVIOUSLY should have seen this coming, I ask why AIG failed, or why a couple percent increase in mortgage defaults would cause the credit market to seize up. I usually don't get an answer, and I don't think Schiff knew the answer a year ago either.

Brian,

Your show just highlighted my frustration with the media in this economic mess. Are you journalists or just PR pundits? Journalists are supposed to provide a balanced picture of each story. PR pundits just want to make news. I am still looking for a forum that will provide a factual, intelligent analysis of the statements you hear and see in the media. I hear some politicians state that the majority of economists know that tax cuts are the only thing that will solve our financial mess. I hear other politicians state that the majority of economists know that spending is the only thing that will solve our financial problems. Where are the facts and balanced analysis? Most of the media provide sound bites and quotes that really don't shed any light on the truth. I guess I should not be surprised. Most consumers of today's media are conditioned to sound bites and superficial analysis on TV, radio and internet. Most of these consumers have had little education about the scientific method and the analysis of facts. We get sloppy news because we don't demand better.

I have a savings question:

1. Does it really make sense for the Fed to keep cutting the interest rate so low? Aren't we in a bind because no one saves? Doesn't this remove any incentive to save?

2. In this terrible economy, what is the best way for me to save money? Should I just keep putting it in my savings account and collecting a pittance of 2.25%? I don't have a lot, and as I am a grad student, I have no employer contributions, so it doesn't make sense to touch the ailing market, right?

Currently we are going through both a crisis and a catastrophe. Right now - unequivocally.

Who's feeling sorry for Obama anyway? He asked for the job.

Obviously there will have to bankruptcies of many firms: small, medium, corporate, multinational, et al. That's concrete reality. The key is for the US government to get the global system, which they devised (the US govt./Bretton Woods - get it?), to create the movement of capital flows.

If there could truly be free markets that honor other capitalist systems in other countries and a system that revalues labor, environmental, and human capital to equal that of capital, which it looks like Obama is at least attempting to do, then the economy will have a chance.

#62; Tell that to Obama. Every other word is "crisis," and if don't accept the trillion dollar power grab, it'll be a "catastrophe."
He's going to pass this bill easily and he's talking like this! Heaven help us.

"This nation did not grow great from feeding upon the malignant pessimist or calamity mongers or weeping men, and prosperity for all our people will not be restored by the voluble wailings of word-sobbers nor by any legislative legerdemain proposed by theorists."

-- Hebert Hoover, 1929

#57; Obama spoke of bankrupting US coal companies last year if they didn't toe the line on environment. Perhaps he focus on bankrupting some foreign firms first in these difficult times? I don't feel sorry for him one bit.
#58; It doesn't take nuance to understand that our goose soon to be cooked. We're almost out of options, and all of last year was spent trying to forestall the recession. Nothing's worked, but let's throw even more money we don't have at the problem, and to hell with posterity? No thanks.
#59; I missed Schiff's advocacy of killing people off, but I guess I mis-heard him. The point is, capital has been misallocated into foolish industries, and getting things back in order will be painful. But, I thought my taxes already paid for unemployment insurance and the like? Isn't that what these programs are for?

Not to hold him responsible for his father, but he is a product of him and his mishegoss can be drawn directly from his father--Irwin Schiff--currently imprisoned leader of the "tax protester" movement. Peter worked with him for years. "Interesting," self-serving ideas seem to run in the bloodlines.

Longstreet --

In an ideal world we would pull govt. meddlers like the FED's "FREE MARKET COMMITTEE"! Talk about a classic commie name! And even the government itself.

Yet --

...doesn't help things when the wealthy minority suggests that the exquisite solution is that poor people simply die.

Everyone is relying on themselves right now longstreet. Do you think any of these posters are getting anything significant from the federal govt.? Students loans? Healthcare?

There will be inflation, but I think that is what happens after years of forcing other countries in the globalized economy to take our shorts while we get the cheap products and have our problems externalized. We in the US are reaping what we have sown.

To think that only citizens, only private business, only politicians, only economists, etc., will solve everything is to misunderstand complicated human structures. All of the parties will have to be involved for any sort of solutions to come to pass and that also means having to do distasteful things like print paper. Economies are based on trust, and so is the value of paper.

Schiffs point was that there is no easy way out. It's either suffer now or suffer more later. no matter which economist is on the show, all these guests are rich. This shouldn't be a republican democrat thing. Both parties are disillusioned. People have to understand what regulations are before criticizing the lack of or excess of them. Some one suggested Wealth redistribution (with fake money?). If we are to have a "bailout" I think the government should buy out consumer debt (if spending is their medicine). That would help more than half the population. Regardless, it's hard to care anymore because everything is sordid. The fed needs transparency more than anything. And just one more thing... Obama talked about re-industrializing the U.S, but now he has to eat his words because we have some horrible "free" trade agreements. This country sold itself to the IMF and it will be very hard to restore productivity. I feel bad for Obama on that.

To the anti-Schiffsters:
Too bad you're willing to write him off. I would implore you all to consider what he's saying. When we have rampant inflation in the coming years, and you did nothing, you won't be able to say you weren't warned. Sadly, most of you will turn your eyes to DC for a solution. That will be bad for you but folks like me will have a chair when the music stops. Rely on yourself, overcome obstacles, and be beholden to no one, especially politicians. You'll never go wrong that way.

I would LOVE to hear him debate Dodd and rightfully rake him over the coals for taking that nice little CountryWide mortgage he didn't know he was getting a deal on. Yeah, right....

Seems like their is a revolution brewing ... looking at the comments here. I am with you lets start passing out the torches and light up the real issues WE need to realize that class warfare has been declared on US ... the have nots!

the age of emipre is over, schiff want$ to cash out!

I contend that the percentages of the population that actually pays taxes (see here:
http://sos-newdeal.blogspot.com/2008/08/topic-of-week-this-week-tax-reform-tax.html

where it also discusses a federal GAO study showing very 66% of all corporations pay no tax.

That's why Corporations AND individuals need to be subjected to this new Minimum Millionaire TAX

1% of your GROSS income is the MINIMUM tax due...
and it goes up for each million dollars in income...

Mr. Schiff ideas sounds like neo-Hoover solutions. Has any one considered how hollowed out the US economy is?
Where are this country’s major industries? Where can a working person find meaningful work? At Burger king?

The losses will fall on everyone with the collapse of huge financial institutions. To think that risks will not be spread around the entire country, not matter what, is myopic. It's happening right now.

Schiff seems to assume that opening up consumer credit and will lead to the freewheeling spending that was going on in the previous 10+ years. It's not. As he stated, the financial industry is balancing itself out, yet he seems to be forgetting that the same is happening with consumption.

we're not ready for him to be a senator either!!!!

Had no idea he is such a kook, thanks for airing him.

But he still he gets props for taking those Fox gut punches.

Maybe I missed it, -- would have liked to have heard him crow on his 15 minutes of Youtube fame.

Quick suggestions on WHAT to do:

1) ban CDO's and all stuff based on securitizing consumer/home/student loan/credit card debt.

Immediately, as fast as possible...

2) force Detroit to become a supplier of green mass transit to allow our country to again MANUFACTURE stuff.

3) The Minimum Millionaire's tax: (MMT)
The MMT would be based on GROSS income and would be ONE percent for EVERY million dollars in GROSS income...

AND no exceptions... for the 66% of the corporate and private population that pays NO taxes on their multi-millions.

ALL the stuff is in my blog...

I can barely stand to listen to this ranting lunatic, but I am broad-minded.

My question for him is "where were you during the Bush years"? Aiming his vitriol at Obama and Geithner seems rather misplaced, since it was not they who turned a budget surplus in to an unprecedented string of deficits or presided over the near-collapse of the U.S. financial system.

Right, we caused this meltdown. We spent too much. Right. Obama doesn't know anything. Right.

Schiff: Buy gold and bury it coffee cans, make a treasure map- brilliant. Why is this guy on the radio?

Japan's lack of economic growth is due more to its declining population and graying population.
Why not point that out?
Inflation comes about when supply doesn't meet demand. As long as we produce surplus food and shelter, and get a handle on energy production. Inflation is not the real problem. and speculation in gold should be outlawed as it is a basically useless metal, that we spend hundreds of millions to dig out of a whole in the earth in one place in order to bury in hole someplace else... what is the value added in that?

My teenage son took the car and got a DUI.

Now that he has his license back, he says we should have fewer rules about his taking the car.

Who ran this country's car off the road?

Now you want more DE-regulation?

Explain why we should trust you, before we agree.

Why you taking this guy seriously?

@Mike from UES. You are 100% correct. The money is there.

Listen to the people whining about how they couldn't possibly live on $500,000 a year. Here's what you'd do, you'd take your kids out of their $40k a year grammar schools, sell the $6m house and the other $6m house oh and the $2m house too.

The problem is that redistribute the wealth can't happen in the US without major re-education of the people.

Peter Schiff sounds very certain -- he was equally certain in advising his clients to by high yielding foreign stocks. Brian -- ask him how they have fared in the last two years! They've been nearly wiped out.

This guy has some very good points, but he's a supply-side wack-job. The FDIC, thank heaven, is there for good reason. REGULATION was and is the key, and it's been sorely lacking. Free markets are just fine, it's unfettered (unregulated) free markets that have been the problem.

The government is interfering with the process? Huh????

THAT LACK OF GOVERNMENT REGULATION (he calls it "interference". cute.) IS PRECISELY WHAT GOT US HERE IN THE FIRST PLACE.

We need smarter government, not less government. Get government "out of the way" and we get more of what we had during the Bush years. Oh Goody.

Wouldn’t we be more competitive if the government were to take over all non-wage labor costs, like pensions and health care? That way, our companies can focus on what they do best and we would clean up in world trade.

Laissez Faire means this guy and his ilk living in Penthouse Apts or their vacation homes in CT (where they illegally declare residence to skip out of taxes) while the rest of us work in "deregulated" dead-end jobs to support their largess. Truely a globally competitive system.

I wish there were a way for these right wing millionaire ideologues to live through a depression without the privileges the money they inherited brings to them.

Who has benefited from the consolidation of the banking industry. Hasn't this "too big to fail" model just concentrated the risk to the financial industry?

So just how badly will the US economy be effected if the domestic war machine, currently producing planes, weapons, etc. at 110% for Iran/Iraq, were to be slowed or shut down?

What percentage of our exports include Iran/Iraq taxpayer supported war exports?

Can't be too hard to calculate.

Schiff's argument that the bailout plan is just re-inflating old bubbles is quite persuasive -- and worrisome. Thanks, Brian, for asking the key question: what happens without it? Do we let society fall apart while we wait for a new equilibrium?

Why should I listen to this rich guy? He is going to make a lot of money not matter what happens.

about caller for what to produce in our country?

USE the REMAINS of the auto industry to FORCE THEM to convert to GREEN producers of MASS TRANSIT.

Look HERE for an editorial from automobilemag.com
http://sos-newdeal.blogspot.com/2009/02/more-sources-auto-mag-says-make-it.html

and to confirm exactly what I said in NOVEMBER of last year.
http://sos-newdeal.blogspot.com/2008/11/next-prediction-save-car-companies.html

We need Detroit to again become the manufacturing capital of the world,
with GREEN, energy efficient, mass transit that will span ALL major highways in the USA

I work in the Silicon Valley, and my company has a branch in China. I am directly competing with coworkers there, and I like it. This is good, because I have to produce more than they do. So far, I'm OK.

Isn't a *lack* of regulation what got us to the place we are now?

I'm not an economist. I've been reading about the Depression in order to understand what FDR did that "worked." He moved very slowly on the banks; he did not nationalize them, although many people, including economic experts, called upon him to do so. He tried to weed out the bad from the good.

I think that the guest is an ideologue. I am much more comfortable with Obama's more cautious approach.

schiff's hard medicine approach seems to overlook the fact that many investors who would suffer under his proposal actually live on main street.

with company funded pensions essentially eliminated since the 80's, a lot of folks have had to fund their own retirments by investing in 401Ks, IRAs, etc. so, it's not just fat cat wall street types who suffer under his proposal, it's average working people like me.

laissez-faire has failed. why do we have to hear this wacko dribble??

Let the banks fail and let the too many finance sector workers find other jobs sounds great. (And I totally 100% agree with the idea that we have too many non productive workers in the US, a la KEvin Philips.) Until all of people who depend on finance sector jobs also lose their jobs. What then?

How easy it is for people like Mr. Schiff to say that people HAVE to lose their jobs, people who never worked on Wall Street. I am tired of these free market pundits saying that the solution resides in the very system that got us to where we are. We need a bailout and we need regulations to ensure these money-mad pirates never get the chance to do this again.

Yeah ok .. Now that the super rich have consolidated all the cash and assets, they want to drive the prices down dirt cheap as well as break our wages down as low as they can so that they can step in and buy everything back at the lowest price. Wealth redistribution is what is needed. The "money" is there, its just all consolidated in too few hands to create a working economy. Spread these billions to the bottom, and watch the economy come back to life.
Fact is folks you OWN very very little and OWE most of what you THINK you have. As the old song says: You "owe your soul to the company store"

Brian, you mentioned that your guest is "aligned with Ron Paul." He also sounds like he is joined to the hip with Herbert Hoover. Pure balderdash.

aren't these losses just on paper?

no FDIC? no fed? sorry you just lost all credibility.

This guy sits in Darien, Connecticut (the Gold Coast) and he talking to us about putting our savings to open factories. What was he doing with his money the last eight years? I suspect the same as the greedy guys on Wall Street.

Isn't it clear that productive investment is not the problem since the economy is operating far below capacity? What is lacking is consumer demand. A stimulus plan now has to operate on the demand side of markets, contrary to Schiff's criticism.

Dear Mr. Schiff:

THANK YOU SO MUCH for the truth you are telling. It's hard, true. But thank you for doing it.

I saw the youtube clips, in which you stood there and took derision from IDIOTS, while perfectly predicting what would happen.

Thank you, thank you, thank you.

FDR didn't nationalize the banks. He insured deposits and put government money into the good banks and let the bad banks fail or be acquired. Isn't this what Obama is doing? It sounds similar to me. All that's missing is mortgage insurance for those with inflated ARMs who could afford to pay lower rates.

I DO NOT TRUST MR. GEITHNER, I BELIVE HE IS IN BED WITH WALL STREET AND ALL THE CEO'S HE HAS RELATIONSHIPS WITH, PRESIDENT OBAMA GOT IT WRONG BY CHOOSING HIM AS TREASURE SECRETARY HE IS A SELF MOTIVATED INDIVIDUAL WHO ONLY CARES ABOUT WALL STREET, NOT THE AMERICAN PUBLIC, AND WE THE AMERICAN PUBLIC WILL ALL SUFFER FOR IT.

wall st is playing games right now
stay the course

I agree with some of what the guest is saying- but what about the deflationary period we are going into? how would he avoid that? how would we get out of it- without massive spending?

Whereas in your last segment Obama was accused of "speaking slowly." Mr. Schiff speaks to breathily fast to sound remotely plausible. Tell the man to slow down.

This is guy is completely full of it. Its people like this who scream let it fail- until it actually fails. Then it turns out to be a really stupid idea to let banks fail.

I'm sure I'm very nearly diametrically opposed to Mr. Schiff politically, but I agree with him entirely on the inflammatory character of the Geithner, Paulson, Summers 'plan'.

Clay: There were many experts who dismissed Robert Shiller's calls on the stock market and real estate bubbles as well - before they both crashed. For all our sakes, I hope you are correct about Schiff.

SOX: too weak, too strong, just right or irrelevant?

Isn't transparency, regulation, and even true capitalism actually the enemy of today's Wall Street capitalists -- who, instead of transparency, count on the recipe of society-wide greed, trust in hype, combined with a fake skin of transparency that actually hides the biggest prizes for a select few -- outside the reach of the masses?

(Put another way, the old 3rd world saying, "the biggest fish are found in the muddiest waters...")

It's about time Peter Schiff is on the show. Really, clay? Austrian school CULT? What do you call our current structure? The Austrian school is the economic system this country was initially founded on.

Brian,
Thanks in advance for having Mr. Schiff on the show. Perhaps he can comment on the following:
The fed has doubled the monetary base in the past year, but nearly all of that money is still with the fed. The banks are going to be forced to lend, as Obama and Geithner are repeatedly making clear, which means this money will soon become available to the public. This will get the fractional reserve system cranked up again and those dollars will soon be flooding the markets. The primary concern here is not just inflation, but hyper-inflation.
Since DC can always be counted on to take the easiest way out of all problems, this to me means printing money to pay the bills. Which means, Argentina, here we come, with a hat tip to Zimbabwe's Dr. Gono along the way. I don't see any way out this and am wondering if Mr. Schiff does.

Michael Shedlock points out 12 ways Peter Schiff was wrong last year:

12 Ways Schiff Was Wrong in 2008

Wrong about hyperinflation
Wrong about the dollar
Wrong about commodities except for gold
Wrong about foreign currencies except for the Yen
Wrong about foreign equities
Wrong in timing
Wrong in risk management
Wrong in buy and hold thesis
Wrong on decoupling
Wrong on China
Wrong on US treasuries
Wrong on interest rates, both foreign and domestic

http://seekingalpha.com/article/116694-peter-schiff-s-euro-pacific-capital-down-40-70-in-2008

Peter Schiff had a couple of good youtube clips. That's it. And those clips where more about his interlocutors being idiots than Schiff being smart.

He's part of the Austrian school cult, a Ron Paul advisor, and borderline survivalist.

If you're going to have him on WNYC, treat him like the oddball that he is.