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Peter Schiff

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Peter Schiff
Nationality United States
Academic career
FieldMacroeconomics, Financial Economics
InstitutionLudwig von Mises Institute (1999–present)
School or
tradition		Austrian School
Alma materCalifornia
InfluencesIrwin Schiff, Ludwig von Mises, F.A. Hayek, Murray Rothbard, Ayn Rand, Ron Paul

Peter David Schiff (born March 23, 1963) is an American stock broker, economist, author, commentator and popular video blogger who regularly appears on numerous financial news networks. Schiff is the president of Euro Pacific Capital, a brokerage firm founded in 1980 and later reincorporated in 1996, now headquartered in Westport, Connecticut.

Schiff is widely known for his genuine counterview of economic and social policies. He was an economic adviser for Ron Paul's campaign in the 2008 Republican Party primaries, through which he expressed support for sound money, limited government, and free-market capitalism. Schiff was influenced by his father Irwin Schiff's libertarian ethos and fiscally conservative views, becoming a vocal supporter of the Austrian School of Economics and the Ludwig von Mises Institute.[1]

In response to an online grassroots movement in early 2008 dedicated to drafting him for U.S. Senate, Schiff began considering a run for the Republican nomination to challenge Democrat Christopher J. Dodd, Connecticut's five-term senior senator, in the 2010 U.S. senate election and on 9 July 2009 formed an exploratory committee to solicit contributions and general feedback.[2] Schiff officially announced his candidacy on Sept. 17th, 2009, on the MSNBC Morning Joe show.

Personal life

Peter Schiff was born in New Haven, Connecticut and was raised in Manhattan and Miami. He identifies himself as Jewish.[3] His father Irwin Schiff is a notable American tax protester. He graduated from the University of California, Berkeley in 1987 with a degree in finance and accounting.

Schiff currently has a fiancee. He also has a son, Spencer, from a previous marriage.

Career

Schiff began his career in brokerage with Shearson Lehman Brothers.[4] He launched Euro Pacific Capital in 1996 when he bought a broker-dealer in Florida without clients or revenues and then reincorporated the business in California. In 2005, Schiff relocated to Darien, Connecticut in order to find brokers "who think like him" according to an article in The Advocate of Stamford, Connecticut. The New York Metropolitan Area, he said, has the biggest concentration of brokers in the country, making it easier to recruit them.[5]

The company retains an office in Newport Beach, California as well as in Scottsdale, Arizona, Palm Beach, Florida, Los Angeles and Manhattan.

Euro Pacific Capital typically recommends an investment strategy which accords with Schiff's view of the U.S. economy, focusing heavily on non-U.S. stocks and precious metals, specifically gold and silver.

Euro Pacific Capital holds the exclusive rights to broker certain Perth Mint gold products in the United States.

Schiff makes frequent appearances on television shows.[6] He also has his own internet radio broadcast,[7] and has appeared on Jim Puplava's internet radio show numerous times.[8][9]

Economic views

In an August 2006 interview Schiff generated controversy when he repeated his long-held investment thesis: "The United States economy is like the Titanic and I am here with the lifeboat trying to get people to leave the ship... I see a real financial crisis coming for the United States." On Dec 31, 2006 in debate on Fox News, Schiff forecast that "what's going to happen in 2007" is that "real estate prices are going to come crashing back down to Earth". In fact, the median price of an American single-family home did fall in 2007, for the first time in decades.[10] As part of these exchanges on Fox News and his repeated appearances on financial news network CNBC, Schiff had mentioned factors such as speculators and "the absence of lending standards" which are now seen by many to indeed be contributing factors to the "housing crisis" of 2007-2009. On December 13, 2007 in a Bloomberg interview on the show Open Exchange, Schiff further added that he felt that the crisis would extend to the credit card lending industry.[11] Following this observation, it was soon reported on December 23, 2007 by the Associated Press that "The value of credit card accounts at least 30 days late jumped 26 percent to $17.3 billion in October from a year earlier at 17 large credit card trusts examined by the AP... At the same time, defaults -- when lenders essentially give up hope of ever being repaid and write off the debt -- rose 18 percent to almost $961 million in October, according to filings made by the trusts with the Securities and Exchange Commission."[12]

Schiff also discusses the role of the U.S. consumer in the world, saying that the U.S. consumer thinks he's doing the world a favor by consuming what the rest of the world produces. He is quick to point out that this relationship will come to an end much sooner than people imagine, and with negative consequences for the U.S. Schiff has been quoted as saying: "Consumption is its own reward for Production"[citation needed]—meaning that without production, the US cannot indefinitely sustain its ongoing consumption. Schiff, and other adherents of Austrian economics, promote savings and production as "the engine of economic growth—not consumption".[citation needed]

Schiff has said on numerous occasions that the current economic crisis is not the problem; it is the solution. He claims the transition from borrowing and spending to saving and producing cannot be accomplished without a severe recession, given the current imbalances of the U.S. economy. But according to him, that transition needs to happen. He also thinks the government is doing no one a favor by trying to "ease the pain" with stimulus packages, bailouts and such. Schiff believes these actions will only make the situation worse and possibly result in hyperinflation if the government continues to "replace legitimate savings with a printing press."[13]

Schiff is a firm believer in reducing government regulation of the economy. Schiff worries that Barack Obama will increase such regulation.[14]

Schiff points to the low savings rate of the United States as its worst malady, citing the transformation from being the world's largest creditor nation in the 1970s to the largest debtor nation by the year 2000. The low savings rate can be attributed commonly to higher inflation and artificially low interest rates by the Federal Reserve.

In a March 2009 speech in Omaha, Nebraska, Schiff stated that it was impossible for the massive US debt to China to be repaid unless the US Dollar's value was substantially diluted by creating ("printing") new dollars. Schiff believes that gold will reach USD 5000 within a few years and that the 2009 stock market rally will not last.[15][16]

Responses

In January 2009 financial blogger Mike Shedlock claimed that Peter Schiff's investment strategies have resulted in some of his Euro Pacific Capital account holders losing 60% to 70% of their value in 2008,[17] a claim Shedlock made based on a single client's results. Schiff responded to this claim by stating, "to examine the effectiveness of my investment strategy immediately following a major correction by looking only at those accounts who adopted the strategy at the previous peak is unfair and distortive."[18] He adds that losses were felt mostly by recent clients and not by his long-standing investors.

In an interview on Yahoo Tech Ticker on February 6, Schiff's position was summarized as a nonpartisan critique of American policymakers, comparing former President George W. Bush to Herbert Hoover and President Barack Obama to FDR, and neither in a favorable way.

In The Wall Street Journal, on February 11, Schiff responded to his critics:

"My central investing premise, a weakening dollar and safety in gold, commodities and foreign stocks, didn't materialize in 2008. But all the ingredients were (and remain) present for those movements to occur. Over the past year, market reactions that I didn't foresee—massive global deleveraging, a knee-jerk 'flight to quality' into U.S. Treasuries and a sharp counter trend rally in the U.S. dollar—have kept the scenario from playing out."[19]

On February 13, 2009, nationally syndicated newspaper columnist Eric Tyson analyzed Schiff's recommendations from a U.S. News & World Report magazine interview from May 2008 as well as other Schiff recommendations.[20] The article assessed how Schiff came to hold his economic views.

Political activity

Schiff was an economic adviser to Ron Paul's 2008 presidential campaign. Schiff made the following statement concerning Paul's economic revitalization plan: "We need a plan that stimulates savings and production not more of the reckless borrowing and consumption that got us into this mess in the first place. Ron Paul's plan is the only one that amounts to a step in the right direction. If you want meaningful change—for the better that is—Ron Paul is the only candidate capable of delivering it."[21]

Schiff also endorsed Murray Sabrin for the US Senate seat in New Jersey.[22]

2010 Connecticut Senate campaign

Main article: United States Senate election in Connecticut, 2010

In December 2008, some fans of Schiff from California put up a website to encourage Schiff to challenge incumbent Connecticut Senator Christopher Dodd.[23][24] Roughly 5,000 people contributed to the site.[24] On February 21, 2009, a moneybomb raised over $20,000 for the grassroots movement.[25]

In a May 2009 video blog, Schiff told his supporters that he is seriously considering a run for the senate. On May 26, when questioned by a Washington Post affiliate about the likelihood of his running, Peter revealed that “It’s better than 50-50," and that he’d decide soon.[26] On June 9, 2009 as a guest on The Daily Show with Jon Stewart, Schiff again mentioned that he was considering a challenge to Sen. Chris Dodd in Connecticut.[27]

A June 2009 poll of likely voters in Connecticut commissioned by Schiff showed the political novice trailing the veteran Dodd by four percentage points.[28] On July 9, 2009, Schiff announced in a video blog the launch of his senate exploratory committee and an official website. Schiff stated "Well, you know, I'm thinking about running. If anyone wants me to run, send me some money and maybe I'll run".[24] He began accepting donations in an attempt to see if "people who really believe in freedom, liberty, sound money and the constitution are prepared to support that with an actual political contribution or to volunteer their services and work on this campaign." He received over 10,000 donations and a lot of e-mails from people all around the world.[24]

Schiff officially announced his candidacy on September 17, 2009, on the MSNBC Morning Joe show. He is seeking the Republican nomination.[29][30]

To date, there have been over 10,000 telephone calls and letters of support raising over $1,300,000 (US) on his behalf.[24] Peter Schiff states, "I plan to bring my dedication and experience to the taxpayers of Connecticut. I may make mistakes in this campaign—but I will not make mistakes in representing you in the Senate. I look forward to an exciting race where I can share my vision with the people of Connecticut."[31]

Democratic Party spokeswoman Colleen Flanagan has responded by stating "Despite his groupie-like following, Schiff actually has few qualifications to run for the Senate and has publicly admitted that he can't even remember the last time he voted".[32] Schiff has responded by stating that "The fact that I haven't had experience ruining the country, that I haven't brought the banking system to its knees, that's my greatest attribute."[33]

Writings

Peter Schiff is the author of three books published by John Wiley and Sons. His latest release, Crash Proof 2.0, is a NY Times and Wall Street Journal Bestseller.

  • [4]Crash Proof: How to Profit from the Coming Economic Collapse, February 2007, ISBN 978-0-470-04360-8
  • [5]The Little Book of Bull Moves in Bear Markets: How to Keep your Portfolio Up When the Market is Down, 2008, ISBN 978-0-470-38378-0
  • [6]Crash Proof 2.0: How to Profit From the Economic Collapse, 2nd Edition, September 2009, ISBN 978-0-470-47453-2

See also

References

  1. ^ Interview with Peter Schiff
  2. ^ http://www.youtube.com/watch?v=I_IMuxMXd3E
  3. ^ http://www.youtube.com/watch?v=JZi7uquwZKQ
  4. ^ [1]Official biographical sketch of Schiff at Euro Pacific Capital Inc. Web site, accessed August 20, 2006
  5. ^ "Prophet of Doom? Darien market bear says U.S. investors' ship is sinking," article by Julie Fishman-Lapin in The Advocate of Stamford, Business section, August 6, 2006, pp. F1, F6
  6. ^ "Euro Pacific Capital". www.europac.net. Retrieved 2009-03-04. {{cite web}}: Text "Video Archives" ignored (help)
  7. ^ "Euro Pacific Capital". www.europac.net. Retrieved 2009-03-04. {{cite web}}: Text "Weekly Radio Broadcast" ignored (help)
  8. ^ "Financial Sense Newshour's Ask The Expert: Peter D. Schiff 03.10.2007". www.financialsense.com. Retrieved 2009-03-04.
  9. ^ "Peter Schiff - FSU Editorial Archives". www.financialsense.com. Retrieved 2009-03-04.
  10. ^ Grynbaum, Michael M. (January 24, 2008). "Home Prices Fell in '07 for First Time in Decades". The New York Times. {{cite news}}: Cite has empty unknown parameter: |coauthors= (help)
  11. ^ Peter Schiff's accurate forecast of credit card market trouble
  12. ^ December 2007 Associate Press Story on Credit Card Defaults validates Schiff's gloomy predictions
  13. ^ [2] Wall Street Unspun 11-05-08
  14. ^ [3] November 2008 The Reagan Counterrevolution
  15. ^ Blodget, Henry (Sep. 25, 2009, 11:39 AM). "Peter Schiff: U.S. Stock Rally And Dollar Doomed, Gold Going To $5,000". The Business Insider, Inc. Retrieved 2009-09-26. {{cite web}}: Check date values in: |date= (help)
  16. ^ Weisenthal, Joe (Sep. 25, 2009, 9:30 AM). "Why Peter Schiff Could Never Be Elected To Office". The Business Insider, Inc. Retrieved 2009-09-26. {{cite web}}: Check date values in: |date= (help)
  17. ^ Europac accounts lose 60% to 70% in 2008
  18. ^ Shinkle, Kirk. Peter Schiff Responds, U.S. News, January 30, 2009. Accessed September 5, 2009.
  19. ^ Schiff, Peter. Our Investing Plan Is Right, if Slightly Ahead of the Times, The Wall Street Journal, February 10, 2009. Accessed September 5, 2009.
  20. ^ Tyson, Eric. “...I Don't Think I've Been Wrong on Anything”
  21. ^ "Peter Schiff Named Economic Advisor to the Ron Paul 2008 Presidential Campaign". Reuters.com Online News. Reuters. 2008-01-25. Retrieved 2008-10-08.
  22. ^ "Paul stumps for Sabrin in Newark". PolitickerNJ.com. 2008-04-28. Retrieved 2008-10-17.
  23. ^ Peter Schiff for Connecticut Senator 2010
  24. ^ a b c d e Ahran, Frank (Sunday, October 4, 2009). "Hard-Core Free-Marketeer A Conversation With Peter Schiff: Investor, Critic, Candidate". Outlook & Opinions. Retrieved 2009-10-03. {{cite news}}: Check date values in: |date= (help)
  25. ^ Peter Schiff Money Bomb a Success!
  26. ^ "Analyst Who Predicted Meltdown Leaning Towards Challenging Chris Dodd". theplumline.whorunsgov.com. 2009-05-26. Retrieved 2009-05-29.
  27. ^ Cadei, Emily (June 10, 2009). "Schiff Discusses Potential Dodd Challenge on Daily Show". CQ Politics. {{cite news}}: Cite has empty unknown parameter: |coauthors= (help)
  28. ^ "Survey: Peter Schiff Competitive With Chris Dodd, Rob Simmons" (Press release). Wilson Research Strategies. July 1, 2009. Retrieved 2009-11-17.
  29. ^ Altimari, Daniela (September 17, 2009). "Peter Schiff Launches Senate Run". Hartford Courant. Retrieved 2009-11-17.
  30. ^ Peter Schiff. It's official, I'm in (Flash) (Video). SchiffReport. Retrieved 2009-09-20. {{cite AV media}}: Unknown parameter |date2= ignored (help)
  31. ^ "Peter Schiff Announces Bid for US Senate" (Press release). Peter Schiff for Senate 2010. September 17, 2009. Retrieved 2009-11-17.
  32. ^ Baldwin Chapman, Joan (September 21, 2009). "Records That Don't Inspire Confidence". The Hartford Courant. Chesire. Retrieved 2009-09-23.
  33. ^ Slajda, Rachel (September 17, 2009). "Economist Peter Schiff Announces Run Against Chris Dodd". TPMDC. Talking Points Memo. Retrieved 2009-11-01.
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