If they were wrong before, could they be wrong now?

According to the BBC News, "The Federal Reserve has suggested that the worst of the US recession is over." I know that prices across the board for homes have risen on average a little bit, but that only means the foreclosed homes are finally being removed from the inventory list. I still have much concern about inflation since the Fed has printed so much money this year.

Peter Schiff, owner of Euro Pacific Capital, is running against Chris Dodd in Connecticut. I'd vote for him if I lived there. He writes in an article entitled "Experts" Never Learn,

"There is an inexplicable, but somehow widely held, belief that stock market movements are predictive of economic conditions. As such, the current rally in U.S. stock prices has caused many people to conclude that the recession is nearing an end. The widespread optimism is not confined to Wall Street, as even Barack Obama has pointed to the bubbly markets to vindicate his economic policies. However, reality is clearly at odds with these optimistic assumptions.

In the first place, stock markets have been taken by surprise throughout history. In the current cycle, neither the market nor its cheerleaders saw this recession coming, so why should anyone believe that these fonts of wisdom have suddenly become clairvoyant?"

In an earlier article he responds to the "positive" news that recession is showing signs of ending with "Since we have learned nothing from past mistakes, we are condemned to repeat them. As if we have not already suffered enough as a consequence of the Bush/Greenspan stimulus, Obama/Bernanke are giving ever larger doses, which will prove lethal to any recovery. The recession is over; long live the depression!"

Keep in mind that this is the gentleman that was laughed at and mocked as a doomsayer in 2007 when he predicted our current economic crash. Should we laugh at him again? I don't like reporting bad news, but in order to fix problems, we must not only acknowledge there is one, but understand why it is so. The economic problems are caused by government policies that artificial stimulate the economy and never face the reality of bad monetary policies.

Alcoholics must not only admit they have a problem, but have to face the fact that they are responsible for it. And when they go through withdraws for the booz, do we give them a drink to ease their pain? Absolutely not! Funny how the government disagrees with your common sense.

Another side thought, although I enjoy drinking, did you know that alcohol is a poison and that is why you get inebreated? Well, if you drink alcohol enough you develop a tolerance to it's negative effects. In all actuality, the poison is still there, but you don't feel it anymore. Perhaps, our country has been drinking the cool-aid long enough to not feel the pain anymore. The poisonous monetary policies are still there, but we don't feel it anymore. And when the pain emerges of our bad habits, we just drink more to dull it away for a later date.

It's time to toss the cool-aid and return to a healthy economy.

Peter Schiff Was Right 2006 - 2007

I remember being asked the question, "Where were the dissenters during the economic boom? Where were all the naysayers during the economic free-for-all?" To this I would always respond, I was there saying there was no way we could sustain our buying habits. There was no way that houses could keep doubling in price every 6 months. It is impossible to continue as we have and many didn't listen then as they are not listening now.

I will continue to state that we cannot continue spending money as we have putting everything on credit and expect life to continue forever in this way. Social Security is a ponzi scheme that is unsustainable, health care cannot be reformed with a public option, government spending is not the solution to stopping a recession, and you cannot borrow your way out of debt.

I know that I catch a lot of flack for refusing to state things in a more diplomatic way, but if being diplomatic means that I cannot state the reality of our society's condition, then I refuse to be diplomatic. I am willing to be a Churchill while Chamberlain is in office. I don't mind being in the minority as long as America understands that I hold to no party line, but to principles that supersede them, like limited government.

This blog is a small effort to legitimize what Peter Schiff has been saying all along and his day of redemption is coming. Many are finally starting to realize that he knew exactly what he was talking about when the world was laughing at his predictions.

**Raises a glass**

Here's to you Peter, for not following the crowds off the cliff.