Analyst's note: This is an extremely interesting read. I recommend the entire original article. A "down-to-earth" and practicle interview of a man who was raised by his father to know and understand economics and the U.S. Constitution.
"Introduction: Peter Schiff is CEO of Euro Pacific Capital, a full-service registered broker/dealer, member FINRA/SIPC, which specializes in foreign securities. He is recognized for his knowledge of the foreign securities markets as well as the currency and gold markets. Mr. Schiff delivers lectures at major economic and investment conferences, and is quoted often in the print media, including the Wall Street Journal, New York Times, L.A. Times, Barron's, BusinessWeek, Time, and Fortune. His broadcast credits include regular guest appearances on CNBC, Fox Business, CNN, MSNBC, and Fox News Channel, as well as hosting the daily Peter Schiff Show on radio. As an author, he has written five bestselling books, including the recent: "Crash Proof 2.0: How to Profit from the Economic Collapse" and "How an Economy Grows and Why It Crashes."
[....] For example, the US Postal Service today announced they are only going to sell forever stamps, which don't have a value printed on them. Immediately I know this is a scam – the post office is going to lose a fortune because they are selling all these stamps, collecting all this revenue, and spending it now on current expenditures like salaries and rent and their gasoline costs.
But their costs are going up because of inflation, and they are going to have to deliver all this mail and collect no money. Which means the post office is going to be bankrupt. Which means the post office is going to need a huge government bailout. And even if they get approval to raise postage prices, it won't matter because they have already sold the stamps. No one is going to buy the higher priced stamps because they have already bought them! So, I can see right away that here's a future disaster in the making. Many people won't think about it like that; they will think, "Oh, here's the post office selling these forever stamps. Isn't that convenient." They won't see the real problem down the road. So this is a free-market way of thinking.
[....] Peter Schiff: Of course, increased savings and production would help, but unfortunately we're not getting that. We aren't going to get that until we have less government spending and higher interest rates and until we have fewer regulations. Just like if you are obese and you want to get healthy, there is a way to do it – through exercise and diet. We have to stop buying things that we can't afford. We can't keep promising benefits to government workers that expect lucrative retirement and pay for health care. We can't provide all these goodies because we don't have the money.
There are a lot of government workers who are really being paid two or three times what they should and so if we have to cut the salary of government workers, that's an immediate loss to those government workers but it's an immediate gain to all the taxpayers who are footing the bill. But the politicians are afraid of doing that because the people who are going to lose are very organized and will express their displeasure at the ballot box.
[....] The Fed has betrayed American citizens and those that run it should be put on trial. They have damaged the country more than any WikiLeaks cable. This is serious stuff what they are doing.
[....] I recommended that investors do three things: keep some money in foreign dividend-paying stocks, keep some money in physical precious metals, and keep some money in cash, which would be in dollars and foreign currencies. And one of the reasons that I specifically suggest cash is so you can take advantage of any declines that you might get in stocks or precious metals – and you certainly had that opportunity in 2008.
[....] Daily Bell: Is there a small group of banking families behind a lot of the growing authoritarianism in the world? Is the Internet exposing them?
Peter Schiff: I doubt that. I don't think there's any kind of banking conspiracy but bankers certainly act in their own self-interest. They make a lot of money based on the status quo and they donate a lot of money to politicians who help them make money – but I don't think there is a conspiracy. I think it's corruption in government and the way politics work and that is the problem. [....]
