Friday, January 16, 2015

Schiff Predictions and Bitcoin Bubble Revisited

Peter Schiff had predicted that in 2014 the Fed would stop tapering and reverse course, launching additional QE.  At the time he was making these predictions, I called him out. I suggested he'd likely be proven wrong.  He was proven wrong.

Do I think he owes me an apology?  (He stated that I owe him a legitimate apology!)  No.  A vow to stop making rash predictions would suffice.

A few years ago, I made some rash predictions about the silver market that were proven wrong.  I learned my lesson.  Has Schiff learned his?

On Feb. 8, 2014, Schiff put out a video (featuring his CNBC interview on Feb. 4) titled Market Headed Lower Until Taper Reversed.  That was right near the lows for the year in U.S. stock indexes.  The market headed higher, and the taper wasn't reversed.

On Dec. 28, 2013, I uploaded a video called Bitcoin: A Mania in Nothing.  That was right near the top in Bitcoin, which I warned was in a mania that would end badly.  Did I accurately call the top and predict Bitcoin's subsequent fall by more than 70%?  In all honesty, no. The neat timing of my video's release at the top was as much luck as skill.

That's how it is with "successful" prognosticators.  Sometimes good luck  makes them look smart.  But no one can outsmart the market consistently.  Peter Schiff demonstrates the validity of this generalization via his track record as a contrarian forecaster.


  1. Hi Libertarian Realist,

    I have been a fan of your work for a number of years now. I used to be a fan of Peter Schiff and was even a paying member of his radio show. While Peter is a smart guy and is good at explaining the benefits of a free market, he has an incredibly hard time admitting when he has been wrong. Because of this, anything that doesn't fit into his Austrian school of economics mind-set, he totally misses and clams that not he, but the market is wrong. Crazy. He is also really bad at reading charts. I remember during his radio show he would sometimes talk about how a chart for something looks. He would say something like "Looking at this pattern for chart X, it looks like X is going to start taking off soon." Soon after that, X would tank. I remember he did a video back in 2012 where he recommended buying silver on the day of the high for the year! It has only gone lower since then! He literally could not have picked a worse day of 2012 to put out that video! Of course you have just pointed out his "Market Headed Lower Until Taper Reversed" bad call, too.

    More -----

  2. --------- Continued from above -------

    I have been the commenter that posted a couple of things here before about Martin Armstrong. Since my first time posting here about him over a year ago, his calls have been pretty damn spot on about the movements of different markets and sectors around the world. While one shouldn't follow anyone religiously, I think a lot of his points about history demolish much of the Austrian school about 'sound money'.

    Martin Armstrong just did a 22 min interview with the Mises Institute, conducted by Ron Paul's former Chef of Staff. I think you should check it out and let me know if you have any thoughts on it.

    Also, here are a number of short blog posts written by Armstrong that I think you would enjoy and maybe learn some cool and useful stuff from.

    It first one of the blog posts shows that the Austrian idea that money gets it's value from intrinsic value is wrong-headed. It is based on confidence, so people everywhere want the currency of whomever the central economic power is. I thought the picture with the phony Roman coin made in India that had even more gold in it then the Roman coin had was really interesting. It wasn't that the people wanted the gold, but the currency of Rome, the main power.

    There are also some posts in there that talk about the different kinds of inflation and what causes them that you may find interesting. He even talks about how when a country has metal coinage like gold or silver, and then continues to debase it, it can lead to deflation, not inflation, as people hoard the older coinage.

    There was another post that I have NOT linked but I thought I should quickly talk about, where he shows that the price of wine is crashing like the oil price. Back around 2007 or so, the price of wine was high so vineyards started expanding and have produced a glut going into this deflationary event. It is kind of like how all the oil fracking has produced a glut going into weaker demand, and because oil rich countries have these high budgets they created during the time oil was high, they now have to keep pumping just to try to meet them which is driving the price even lower. Even Iraq with all of its problems is pumping more oil then ever before, plus ISIS is, too, in order to fund it's war. Anyway, please let me know what you think about the first linked post and any of the other blog posts that you read.

    Take care and keep up the good work!

    1. So, what do you think?

      BTW, he just did another good interview here in which he touches on some other things:

    2. He has quite a track record. I wouldn't differ much with his current forecasts, but I remain open for the potential for them to go wrong.

  3. Peter Schiff: "Why Silver Is A Buy Now" Oct 2nd, 2012.

    Check out the chart at: "" and put it on the 3y setting. See where silver has gone since Oct 2nd, 2012.

  4. I was skimming the web and found this comment from Richard Nisbett ins 1995:


    The hysterical response to The Bell Curve is, in my opinion, the major reason the book is being paid any attention on the question of race and IQ. The scholarly critiques that will be coming out in the years to come will show how terrible the science in the book is. In the meantime, a great deal of damage has been done—to rational policy discussion and to relations of trust between blacks and whites.


    Just what has come out in the last 20 years to show that The Bell Curve is wrong?

    Mark Martinson

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  6. Just so you know for the record, a lot of those wild prediction type traders really do have a talent for gunning for home runs. Like, seeing a 20% probability where everyone else sees 5%, and using options/leverage to exploit it. They're almost always wrong, but when they're right they nail it.

    Peter Schiff helped a lot of people get set for life in the 00's, if they went in big when it mattered, and he was at his peak. Those tail events are the heart and soul of investing.

    Demographics explains the weirdness of the market. It could be arbitrarily high, but there's simply a limit to how much an individual can consume in real terms. The ultra rich paradoxically tend to turn into hoarders, or they spend loads of money on things like New York parking spaces. It's insanely low velocity funny money, not economic reality, and it is the normal situation in every country where fertility is negative. So, even a good theory about a commodity might not ever be accurately reflected in the market's price, but it has indirect effects on the entire system's behavior; the current oil situation is like this.

    Wealthy women lose respect for beta males and refuse to reproduce with them. Population growth requires a modest amount of poverty, ignorance, and religious authoritarianism, and I include communism as a religious belief here. What always results in death, is nihilism.

  7. He's worse than a broken clock in that he is never right. Good for entertainment value and little else.

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