The Precarious State of Our
Union
Peter Schiff
Jan 31, 2010
In this week's much anticipated State of the Union
address, President Obama again demonstrated his poor understanding
of the fundamental problems that confront our nation.
By following the advice of the same people who helped guide our
economy to the precipice of total collapse, Obama now threatens
to push it over the edge.
Notwithstanding his well crafted lip service regarding future
spending restraint, the essence of his current program is for
more government spending and larger deficits. For all his
talk about job creation, his policies will further burden those
who might otherwise create those jobs with higher taxes and more
regulation. While he did call for tax cuts for the middle class
and offered what amounts to bailouts for those struggling to
repay student loans, such cuts do nothing to promote growth in
the near term and will add to the deficits in the long term.
The President spoke optimistically about the future, but in reality
there is little evidence to support such an upbeat outlook.
He began his speech by assuring us that the worst of the storm
had passed. General Custer may have said something similar when
the first wave of Indian attacks ebbed at Little Big
Horn.
While Obama did have some harsh words for Wall Street (not exactly
a courageous political stance), he leveled no criticism
at the Federal Reserve or other government agencies that had
financed and guaranteed all the ridiculous real estate speculation
that precipitated the crash. And while he at least conceded
that the prosperity of the last decade was based on illusions,
he continued to endorse the very policies that produced the mirage
in the first place.
To lead us back to brighter days, he articulated a vision of
a centrally planned recovery, where clean energy and a Soviet
style five-year plan to double our exports would make our economy
preeminent once more. He fails to understand that the only
reason our economy rose to the top in the first place is that
the government left it alone.
In the words of the Spanish philosopher George Santayana, "Those
who cannot learn from history are doomed to repeat it."
Since our President cannot even learn from the mistakes of his
immediate predecessor, to say nothing of those he made himself
while in the Senate or during his first year as president, we
are surely doomed to repeat them, perhaps more quickly than Santayana
could have imagined.
Rather than tightening the reins on the reckless monetary policy
that undermined our savings, diminished our industrial output,
inflated asset bubbles, and led to reckless speculation on Wall
Street and excess consumption on Main Street, we are loosening
them further.
Rather than repealing regulations that
distort markets and create moral hazards, we are adding new ones
that do more of the same.
Rather than cutting government spending
to reduce the burden it places on our economy, we are increasing
both the amount of the spending and the size of the burden.
Rather than making government smaller
so that the private sector can grow, we are making government
bigger and forcing the private sector to shrink.
Rather than paying off our debts we are
taking on even more.
Rather than encouraging people to save
we are enticing them to spend.
Rather than creating jobs, we are merely
creating unemployment benefits.
As a result, instead of seeding the soil for a real recovery
we are setting the stage for a prolonged depression.
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Jan 29, 2010
Peter Schiff
C.E.O. and Chief Global Strategist
Euro Pacific Capital, Inc.
1 800-727-7922
email: pschiff@europac.net
website: www.europac.net
Archives
 Mr. Schiff is one of
the few non-biased investment advisors (not committed solely to
the short side of the market) to have correctly called the current
bear market before it began and to have positioned his clients
accordingly. As a result of his accurate forecasts on the U.S.
stock market, commodities, gold and the dollar, he is becoming
increasingly more renowned. He has been quoted in many of the
nation's leading newspapers, including The Wall Street Journal,
Barron's, Investor's Business Daily, The Financial Times, The
New York Times, The Los Angeles Times, The Washington Post, The
Chicago Tribune, The Dallas Morning News, The Miami Herald, The
San Francisco Chronicle, The Atlanta Journal-Constitution, The
Arizona Republic, The Philadelphia Inquirer, and the Christian
Science Monitor, and has appeared on CNBC, CNNfn., and Bloomberg.
In addition, his views are frequently quoted locally in the Orange
County Register.
Mr. Schiff began his investment career as a financial consultant
with Shearson Lehman Brothers, after having earned a degree in
finance and accounting from U.C. Berkley in 1987. A financial
professional for seventeen years he joined Euro Pacific
in 1996 and has served as its President since January 2000. An
expert on money, economic theory, and international investing,
he is a highly recommended broker by many of the nation's financial
newsletters and advisory services.
321gold Ltd
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