Deflation Would Be a "Good Thing": Peter Schiff's Plan to Help Struggling American
Posted Jul 23, 2010 07:30am EDT by Aaron Task in Investing, Recession
'The idea deflation would be a "good thing" certainly puts Schiff at odds with most mainstream economists. Then again, that's where he's most comfortable.
And given his view the dollar is a "bottomless pit," it's not surprising Schiff believes inflation is a much greater threat than deflation.
"The real evidence of inflation is that the Fed is creating too much money," he says. "Interest rates are at zero, the Fed's balance sheet ballooned and now they're talking about cranking up the purchases [of mortgage-backed securities and agency debt] again. That's more monetization -- more money printing. That is the very definition of inflation."
As a result, Schiff believes Americans are soon going to be paying more - much more - for food, clothing, energy, healthcare and even consumer electronics. But prices of financial assets and real estate? They're not going anywhere but down in real (i.e. inflation-adjusted) terms, according to Schiff.'
Deflation Would Be a "Good Thing": Peter Schiff's Plan to Help Struggling Americans