Peter Schiff, president of the brokerage firm Euro Pacific Capital and author of the recent Little Book of Bull Moves in Bear Markets (Wiley), has become famous as the man who correctly predicted the housing bubble collapse and subsequent financial crisis, years before it happened.His critique of unsound monetary policy should sound familiar to those who followed Ron Paul’s 2008 presidential campaign, which he advised. reason asked Schiff for three economic predictions about President Barack Obama’s first term.
1.) More Borrowing: “Obama’s going to try to borrow money from the Chinese or the Japanese or the Saudis. Hopefully they’ll have the good sense not to lend it to us. Eventually people are going to realize that lending money to the U.S. is like lending money to Bernie Madoff, because we’re not going to give it back.”
2.) More Spending: “Is it really so bad if Americans stop buying things? Does it mean that people’s houses will go down in value? Yes. Does it mean that people who work in the service sector will lose their jobs? Yes. But right now we’re living in a fantasy.”
3.) More of the Same: “In 2003 the greater economic disaster that I predicted wasn’t the economic crash that has already happened. It was what the government was going to do after the crash happened. All the people who are telling us that we need the stimulus plan now are the same people who were telling us how great the economy was then. They’re going to make mistakes.”