Peter D. Schiff president of Euro-Pacific Capital, a Connecticut-based brokerage urged his clients to get their money out of U.S. stock and bond markets and look for safer investments outside of America or put their nest eggs into silver and gold. Here he is interviewed by the Financial Post:
Financial Post: How bad is the economic downturn going to get?
PS: As of right now, we are headed for a depression, meaning a protracted period of economic contraction with elevated levels of bankruptcies and unemployment. It's not going to be a recession the way we've come to know them. Whatever we call it, we're still going to be in it at the end of [U.S. presidential contender Barack] Obama's term. He's going to be known as a depression-era president. Unfortunately, [things he's proposing to do] could make it worse and drag it out. The economy will be the issue when he goes for reelection...We have to restructure the economy in a different way. That's going to involve a lot of pain. We haven't seen the full extent of the doom and gloom in real economy. It's showing up on Wall Street first because they funded all of the extravagance...But the bigger picture is the party is over. We're going to have to get used to a different lifestyle. We're going to have to start saving money again.
FP: When might the U.S. stock market bottom out?
PS: The U.S. stock market is still fairly expensive, especially if you factor in what future earnings are going to be. I think [the Dow] still has a long way to go down. Is it 7,500, 6,000, 5,000? I don't know, but I don't think we're there yet. Adjusted for inflation, I think in five years the Dow is going to be below where it is today.
I say we grab some cheetos, beer and toilet paper and head for a shack in the woods! great post :)
ReplyDeleteNice Posts, A lot of people are very concerned that we are pushing into depression. Our Lame Policy Makers are hard pressed to even use the word recession. Once we are looking backward on this, we are going to be really unhappy with how the officials pushed everything under the rug....
ReplyDeleteI ran something on Washington's reluctance to use "recession" a couple days back, sorry bunch if you ask me....
It is definitely getting worse, I know that for sure; just not sure about a depression just yet!
ReplyDeleteJesse W.
http://www.subprimeblogger.com
It is always scary to hear things like this from people in the know - let's just hope things hang on until we can get back on our feet!
ReplyDeleteGood thoughts.
ReplyDeletehttp://consumerzoneblog.blogspot.com/
considering all thats propping up the worlds economy right now is the usa taxpayers going into debt many trillions of dollars. I don't see any easy way out of this yet.
ReplyDeleteExcept maybe the usa goes into bankruptcy and clears its debts. Which is what will keep the usa down for decades if nothing tough isn't done now.