Saturday, October 24, 2009

Peter Schiff - "Get out of the US dollar"

Peter is fundamentally correct, of course. Timing is always an issue, however, and his “red alert” causes my contrarian red alert to sound. Math is a funny thing, when too many people are thinking the same thing, the math gets crowded and a reversal is usually not too far away, witness the descending wedge I pointed out earlier in the dollar. Yes, that wedge can break the wrong way, and if it does, then Peter’s advice is good. If it doesn’t, then Peter’s advice is simply early.

Heeding his warning is the right thing to do regardless UNLESS, like he says, religion is suddenly found (unlikely). How will you know? You will see banks forced to mark to market, to clear out the debts, and you will see the government shrink, bringing the deficits back in line. Those actions are the only way to save our dollar, and likely the only way to ultimately save our entire political and economic systems.

Peter Schiff issues a Red Alert: "Get out of the US dollar"