Thursday
Aug202009
Peter Schiff Takes On Warren Buffett's Debt Machine
Schiff responded quickly to Buffett's NYT editorial with a broadside launched on FBN. Schiff's thesis is the same as ours: only after advocating wasteful, borrowed stimulus spending has Buffett gotten religion on debt and deficit issues. Excellent short discussion.
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Aug 20, 2009 at 2:56 AM
Reader Comments (10)
http://dailybail.com/home/warren-buffett-warns-were-going-to-be-crushed-by-a-mountain.html
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As for Warren, he's one of those guys with one foot in each camp:
* It's class warfare, my class is winning, but they shouldn't be.
o CNN Interview, May 25 2005, in arguing the need to raise taxes on the rich.
* There's class warfare, all right, but it's my class, the rich class, that's making war, and we're winning.
o New York Times, November 26, 2006.
http://en.wikiquote.org/wiki/Warren_Buffett
I think his highly-advantageous investments in Goldman Sachs and GE (the other vampire squid, remember?) speak for themselves.
But consider a few things. One, The United States is the basic model for capitalism in the world with around 25% of world GDP. Europe, which is quasi-socialist and with a long history of authoritarianism, feudalism, civil wars and ethnic cleansing, has about 30% of world GDP but no unity at all.
What's left? China and Russia, our traditional 20th century enemies, or feudal India?
If the United States implodes, then world capitalism will implode and free markets will be denigrated. In that case, currency values will probably be set by politicians, the black market and military officials, and the exchange of goods and services will become more socialistic and dictated by military force (who controls energy, water, illegal importations, etc.)
Schiff is correct nominally but he filters everything through a very simple model.
If we collapse, which is certainly possible, Europe, which is our parent, will scoff at us, hold us at a distance with a long leash, but fail dismally as an economic example just as they always have. (England is an exception and Germany for several short periods.)
What does that say for the dollar? It might simply plunge along with every other currency on the planet but at an even slower pace and everyone knows what that means.
"Like how you posted the "love doll" shot of her! "
I do what I can for the troops.
And yes, Warren is conflicted except when it comes to getting a Buffett deal.
That was outstanding analysis. I continue to believe the dollar will lose 5-8% annually of its value as long as our out-of-balance borrowing continues vs. the rest of the world.
When we get spending, deficits and borrowing finally controlled it will come back in favor.
Unless of course, China gets their way and a new world currency is established. In that case, all bets are off. The dollar could potentially implode.