Forget about official inflation figures, which show consumer prices rose only 1.5 percent last year, says Peter Schiff, president of Euro Pacific Capital.
“Inflation is here,” he tells Yahoo’s Tech Ticker.
“The first place you would expect to see it is in commodities, particularly agricultural commodities and precious metals. That’s exactly what we’ve seen.”What’s causing inflation? “It’s all because of (expanding) money supply, quantitative easing and stimulus,” Schiff says.
"This is the consequence of what the government has done to try to stimulate the economy by running huge deficits. The Fed prints money to buy up Treasurys. That expands the money supply and diminishes the value of money.”
So it’s we citizens who pay for government stimulus efforts. “We are paying for the government through a debased standard of living and a higher cost of living,” Schiff says. (more)
China’s Innovative Way of Skinning the United States!
ReplyDeleteMark Twain is credited with an early use of the cliché "more than one way to skin a cat" in A Connecticut Yankee in King Arthur’s Court, as follows: “she was wise, subtle, and knew more than one way to skin a cat, that is, more than one way to get what she wanted”. Thefreedictionary.com defines beggar-thy-neighbor as: an international trade policy of competitive devaluations and increased protective barriers that one country institutes to gain at the expense of its trading partners. Under the guise of fostering ‘indigenous innovation’, the Chinese government has creatively used a non-conventional, subtle version of beggar-thy-neighbor. Its version doesn’t entail the competitive devaluation of its own currency, which would enhance China’s exports and inhibits its trading partners’ exports. China’s version perpetrates an over-valuation of the currencies of one or more of its trading partners. This negatively affects all the trade of the pegged trading partner(s), not just trade with China. During the recent period China pegged its currency to the U.S. Dollar, its version of beggar-thy-neighbor was 8 times as damaging to the U.S. economy as what the media refers to as “China keeping it currency undervalued”.
In November 2003, Warren Buffett in his Fortune, Squanderville versus Thriftville article recommended that America adopt a balanced trade model. The fact that advice advocating balance and sustainability, from a sage the caliber of Warren Buffett, could be virtually ignored for over seven years is unfathomable. Until action is taken on Buffett’s or a similar balanced trade model, America will continue to squander time, treasure and talent in pursuit of an illusionary recovery.