Isn't this contradictory? Then why do so many believe that? I'm talking libertarians and economists. They somehow believe real estate is immune to inflation and will keep following the trend of the past few years. There are even some (Jim Willie) who believe that both hyperinflation and declining property values will happen concurrently.
Check at 1:03:21
This was in March of 2009. Obviously since that time stock prices and commodity prices have shot back up...just like he always said they would. But real estate has not...largely because of the extraneous factors he names that are keeping them down (while government influences like "first time homebuyer tax credits" and the like are helping to keep them from falling even farther). But ultimately nominal prices will go up. Real values will still go down.
Schiff's portfolio screwed up big during the `08-09 meltdown. But I guess he's done better since. I hope he's learned his lesson and will be better positioned during the next meltdown.
You mean the 08-09 meldown when everyone's portfolio went down? You obviously have no idea what you're talking about and are just regurgitating talking points you heard in the blogosphere. Pick a bigger time horizon. He's already more than made up for any drops incurred in those years...and you really can't be better positioned for the true meltdown than he is. (Legitimately, anyway.) I'd take Schiff's 2000-2011 portfolio over pretty much anyone else's. It's similar to (but I would assume even better than) Ron Paul's. Listen to these numbers and tell me who's done better and who needs to "learn a lesson":
<<You mean the 08-09 meldown when everyone's portfolio went down?
John James, Peter Schiff was supposed to protect his clients during the meltdown. Isn't that why they invested in his fund in the first place? He was right about the US market meltdown. However he was DEAD wrong about decoupling and just about everything else. This is what stung investors. He wrongly thought that China would continue to improve in the face of the crisis in the US, but in fact Chinese stocks actually did worse. HIs commodity picks were terrible as well.
<<He's already more than made up for any drops incurred in those years
I don't think it's too hard making money during an economic recovery. I'm more interested in what he can do in a crisis.
<<you really can't be better positioned for the true meltdown than he is
Really? Well if the next crisis is a repeat of the previous, I know I don't want to be invested in his fund. His clients lost between 40-70% during `08-09.
Al_Gore the Idiot:John James, Peter Schiff was supposed to protect his clients during the meltdown. Isn't that why they invested in his fund in the first place? He was right about the US market meltdown. However he was DEAD wrong about decoupling and just about everything else. This is what stung investors.
Al Gore the idiot, Peter Schiff has made the vast majority of his clients much better off because of his investment recommendations. The only people who saw an overall decline were those who didn't listen to him when he was predicting what would happen for the better part of a decade and got in at the last minute before the collapse. (And even then, all they have had to do is hang on to what they bought (and buy more) and they've been sitting pretty ever since.)
He was exactly right about the housing bubble, what caused it, the fact that it would burst, the fact that it was not confined to subprime, he was right about the financial institutions not being sound, he was right about fnma and fhlmc being insolvent, he was right about the complete lack of lending standards in the housing market, he was right about saying that what everyone else said was "wealth" was actually phony, and not any more real than the "wealth" of all the dot-coms in the Nasdaq in the late 90s. He has been right about government intervention making things worse and exacerbating the problems that caused the mess, he has been right about the Fed's monetary policy being inflationary and destructive, he has been right when he says destruction like 9/11, Katrina, tsunamis, and earthquakes do not create wealth and stimulate the economy.
Do I really have to go on?
Watch him dissect the 2008-2009 mortgage crisis...in 2006:
Again, you have no idea what you're talking about.
He wrongly thought that China would continue to improve in the face of the crisis in the US, but in fact Chinese stocks actually did worse. HIs commodity picks were terrible as well.
Wow. Again, pick a bigger time horizon than the single worst year in decades, and he outperforms virtually any other metric by a mile. Schiff was a bear on the U.S. economy in 2000. So what did he do? In large part he bought mining stocks. And what did the bulls do? They bought the S&P 500. And where are we now? The HUI Index is over 600. Back then it was under 50. That's an 1100% increase.
Where's the S&P? In 2000 it was just under 1400. Today it's just over 1200. And then we get to adjust it for inflation
You didn't listen to any of those numbers did you. What you're literally doing is taking something that has increased 12-fold over ten years, looking at the one year it went down, and saying "Look! What a terrible investment." I would really hate to see your portfolio.
I don't think it's too hard making money during an economic recovery.
a) The vast majority of the losses were made up by 2009.
b) If you seriously think we're in an economic recovery I'd say you (1) should probably get a CAT scan, (2) need to spend some more time around here and keep your eyes open.
I'm more interested in what he can do in a crisis.
Again, how about predicting the crisis and telling you what you need to do to be protected in the long term. If you're talking about timing the market year by year, I think you need to be looking for your advisor in Middle Earth somewhere.
And of course, you have proof of this?
No, of course you don't, because (a) Schiff doesn't have a fund, and (b) client information is protected by law, meaning that info has never been publically released, otherwise Schiff would possibly be in prison and his firm wouldn't exist. You're getting this info from a hack financial blogger who decided to ride on Schiff's coattails when he started gaining popularity and claims to have spoken to two clients of Schiff's firm, both of whom became clients in roughly in late 2007.
Again, Al Gore, the idiot, you have no clue what you're talking about. But then again, I suppose that makes sense.
The OP cherry picking. Singling out 08-09 is no more arbitrary than singling out yesterday, when gold fell $40.
Also, it's not as if his clients jumped in at the height of the bubble in 2008. Even if they did, since then they have doubled up on gold and silver, up 20% on gold miners. It also depends on how the money was allocated.
Also, he might have had clients that were short housing and financials. I know I was and this was because of Schiff and Rogers. Hell, he probably has clients that sold their house back in 07-08 and, thus, were saved from losing money.
To paraphrase Marc Faber: We're all doomed, but that doesn't mean that we can't make money in the process. Rabbi Lapin: "Let's make bricks!" Stephan Kinsella: "Say you and I both want to make a German chocolate cake."
I remember listening to his radio show back in 08-09 when a couple of his clients called him asking just what happened because they felt like they lost a lot of money. He'd respond that they're still getting paid dividends from the stocks they bought which is the real reason he had them invest in those stocks- and that the stock prices themselves will jump back up in due time and its a great time to buy. He was right. Schiff always talked about earning dividends from the stocks you buy anyway- he's not an advocate of holding and selling which is why he never ever talks about short-term fluctuations and focuses on long-term.
That's another facet of the same point. Not only did they not lose anything, they were still getting paid the whole time. The only way anyone lost money was if they bought in late, and then sold off when the price went down...as in, they bought high, and then right when it went low, they sold. Again, if you're that much of an idiot (like, say, Al Gore), I would say you deserve to lose money.
Seems there are two topics in this tread. To answer the title, refer to this write-up of Hyperinflation during the Weimar Republic
http://www.usagold.com/germannightmare.html
Real Estate: Farmers and holders of urban property seemed to benefit if their property was mortgaged; the inflation soon wiped out the mortgage debt. However, they received no income, as noted above, since rents were frozen. After the stabilization, heavy new taxes and the urgent need for cash forced most holders to remortgage their property, often more heavily than originally, so that their gains were illusory. Still, those who held real estate throughout managed to save the capital thus invested. However, those who sold during the inflation (often through desperate need for cash) fared poorly. Because it brought no income, real estate sold at extremely low real price levels during inflation.