Peter Schiff
Encyclopedia
Peter David Schiff (ˈʃɪf; born March 23, 1963) is an American investment broker
, author
and financial commentator. Schiff is CEO and chief global strategist of Euro Pacific Capital Inc., a broker-dealer
based in Westport
, Connecticut
and CEO of Euro Pacific Precious Metals, LLC, a gold and silver dealer based in New York City
.
Schiff frequently appears as a guest on CNBC, Fox Business Channel, and Bloomberg Television and is often quoted in major financial publications and is a frequent guest on internet radio
as well as the host of the former podcast
Wall Street Unspun, which is now broadcast on terrestrial radio and known as The Peter Schiff Show. In 2010 Schiff ran as a candidate in the Republican primary for the United States Senate
seat from Connecticut.
Schiff is known for his bearish views on the dollar and dollar denominated assets, while bullish on investment in tangible assets as well as foreign stocks and currencies.
, a prominent figure in the United States tax protester movement
, Peter Schiff was born and raised in New Haven
, Connecticut. Schiff attended Beverly Hills High School
in California. Subsequently, Schiff graduated from the University of California, Berkeley
in 1987 with a Bachelor
's degree in finance
and accounting.
it in California
and renamed it Euro Pacific Capital. The company today has more than 15,000 clients and six offices nationwide, with its headquarters in Westport, Connecticut.
According to a 2005 article in The Advocate
of Stamford, Connecticut
Schiff relocated the firm to Darien, Connecticut
to find brokers "who think like him". The New York Metropolitan Area, Schiff says, has the biggest concentration of brokers in the country, making it easier to recruit employees. The company has offices in Newport Beach, California
as well as in Scottsdale, Arizona
, Palm Beach, Florida
, Los Angeles
and New York City. Euro Pacific Capital also holds the exclusive rights to broker some Perth Mint
gold products in the United States.
In 2011 Peter Schiff was listed as one of the Who's Who of Wall Street.
In the years of 2006-2008 Schiff appeared on numerous TV new's networks including CNBC & Fox. As he sat on panel's of experts, he was usually laughed at by other's, as he was more pessimistic about financial markets going into the future than others, Saying that in 2007 that "Today's home prices are completely unsustainable. Sky high real-estate prices are going to come crashing back down to earth." Most experts were high on financial stocks & recommended stocks such as Merrill-Lynch & Goldman Sachs. They were also saying that "the worst was over", while Schiff was saying that the fundamentals (of U.S financial markets) were bad & the worst was yet to come. Schiff warned to "stay away from the financials, they're toxic & their earnings are going to disappear." Arthur Laffer
said to Schiff that he would "Bet [him] a penny on this one (on being wrong about a real-estate bubble burst), If you'll sign a letter saying that you were wrong to me on this."
, a school of economic thought generally categorized as heterodox
(or non-mainstream). Schiff voices strong support for the Austrian School, and says it was first introduced to him by his father, Irwin Schiff
.
In a 2002 interview with Southland Today, Schiff predicted that the economic downturn triggered by the bursting of the dot-com stock market bubble
would lead to a bear market likely to last "another 5 to 10 years." In November 2002, US stock indexes began a bull market uptrend which held steady for five years, until reversing course in 2008, when they began a decline to less than half of their peak 2008 values, followed in 2009 by the Dow climbing 61% from its low point over the following year. After interviewing Schiff in 2009, journalist and finance author Eric Tyson referenced various Schiff predictions during the 2000s and stated that "On all of these counts, Schiff wasn't just wrong but ended up being hugely wrong."
In an August 2006 interview he said: "The United States economy is like the Titanic and I am here with the lifeboat trying to get people to leave the ship... I see a real financial crisis coming for the United States." On December 31, 2006 in debate on Fox News, Schiff forecast that "what's going to happen in 2007" is that "real estate prices are going to come crashing back down to Earth".
As part of these exchanges on Fox News and his repeated appearances on financial news network CNBC, Schiff had mentioned factors such as speculators and "the absence of lending standards" which are now seen by many to indeed be contributing factors to the housing crisis which began in 2007. On December 13, 2007 in a Bloomberg interview on the show Open Exchange, Schiff further added that he felt that the crisis would extend to the credit card lending industry. Following this observation, it was soon reported on December 23, 2007 by the Associated Press that "The value of credit card accounts at least 30 days late jumped 26 percent to $17.3 billion in October from a year earlier at 17 large credit card trusts examined by the AP... At the same time, defaults -- when lenders essentially give up hope of ever being repaid and write off the debt -- rose 18 percent to almost $961 million in October, according to filings made by the trusts with the Securities and Exchange Commission."
Since 2007, Schiff has stated many times that if the government doesn't change course there will be hyperinflation in the US. Schiff is one of a minority of economists credited with accurately predicting the financial crisis of 2007–2010 while "nearly all [macroeconomists] failed to foresee the recession despite plenty of warning signs". In his book Crash Proof, he described several aspects of the U.S. economy that would lead to a recession.
, Fox News, MSNBC
and Bloomberg
, most of which took place from 2005 to 2007. In the video segments Schiff explains the fundamental problems he saw with the United States economy at that time. Schiff's warnings of a coming economic collapse
earned him the moniker "Dr. Doom."
ger and investment adviser Michael Shedlock reported, "I have talked with many who claim they have invested with Schiff and are down anywhere from 40% to 70% in 2008." Other criticisms followed, including the aforementioned Eric Tyson post as well as an article for the investment news site Seeking Alpha
, published on the site two days after Shedlock's blog post. Later that week an article appeared in the Wall Street Journal reporting that Schiff's broker-dealer firm, Euro Pacific Capital Inc., "advised its clients to bet that the dollar would weaken significantly and that foreign stocks would outpace their U.S. peers" and that instead, the dollar advanced against most currencies, "magnifying the losses from foreign stocks Mr. Schiff steered his investors into."
The Director of Communications at Schiff's investment firm responded to the original Shedlock piece by saying, "While it is true, that our accounts have suffered badly in 2008, a fact that we have never disputed or ran from, [Shedlock's] estimates for the size of our typical client losses are exaggerated and unfair." Schiff personally responded to Shedlock's criticism by saying, "to examine the effectiveness of my investment strategy immediately following a major correction by looking only at those accounts who adopted the strategy at the previous peak is unfair and distortive" and called Shedlock's blog entry "nothing more than an overt advertisement (and a highly deceptive one at that) to use my popularity to advance his career," adding that losses were felt mostly by recent clients and not by others.
Schiff responded similarly to criticisms made by Wade Slome of Sidoxia Capital Management, LLC. in a September 2009 blog entry entitled, "The Emperor Schiff Has No Clothes." Schiff stated not only were the losses suffered by his clients in 2008 highly exaggerated, but also that most of those losses have already been recouped, stating that many who where down then are now up, and most long-term clients were never down at all, but merely temporarily lost some of the profits they had earned over the years.
The January 2009 Wall Street Journal article discussed the value of Schiff's predictions, and stated how deficiencies "made mincemeat of investors who took his advice in 2008." In an interview the following week Schiff likened himself to billionaire investor Warren Buffett
, saying they were both "buy and hold" long-term investors. Contrasting his negative press he compared claims about accounts managed under Schiff's firm to the stock market value of Buffett's company, saying: "His approach is you buy stocks and you never sell them—you hope to never sell them—and Berkshire Hathaway
is down 40% in the last thirteen months; I don't see the Wall Street Journal saying 'Warren Buffett made mincemeat out of his clients.'" The Wall Street Journal also published a letter written by Schiff in response to his critics saying: "My central investing premise, a weakening dollar and safety in gold, commodities and foreign stocks, didn't materialize in 2008. But all the ingredients were (and remain) present for those movements to occur. Over the past year, market reactions that I didn't foresee—massive global deleveraging, a knee-jerk 'flight to quality' into U.S. Treasuries and a sharp counter trend rally in the U.S. dollar—have kept the scenario from playing out."
In a November 2009 videoblog, Schiff said that five stocks he picked for Fortune Magazine in January 2009 had gained a total of 360%.
In a March 2009 speech Schiff said that it would be impossible for the U.S. debt
to China to be repaid unless the U.S. dollar's value is substantially diluted through inflation
. In September 2009 Schiff said that "I would not be surprised to see [gold] at $5,000 over the next several years" and that the 2009 stock market rally was a "bear market rally".
's 2008 presidential campaign
. In support of Paul's economic revitalization plan, he said: "We need a plan that stimulates savings and production, not more of the reckless borrowing and consumption that got us into this mess in the first place. Ron Paul's plan is the only one that amounts to a step in the right direction. If you want meaningful change—for the better that is—Ron Paul is the only candidate capable of delivering it."
In 2008, Schiff also endorsed Murray Sabrin
for the U.S. Senate seat in New Jersey.
In an interview in February 2009, Schiff's position was summarized as a nonpartisan critique of American policymakers, comparing former presidents George W. Bush
to Herbert Hoover
and President Barack Obama
to former president Franklin D. Roosevelt
, with neither of the more recent incumbents comparing favorably to the earlier ones.
Schiff supports the reduction of government economic regulation, and is concerned that President Obama's administration may increase such regulation. Schiff says that the economic crisis of the late-2000s
provides an opportunity to transition from borrowing and spending, to saving and producing. He is critical of the U.S. government's efforts to "ease the pain" with economic stimulus packages and bailouts. According to Schiff, the U.S. government's approach of replacing "legitimate savings with a printing press" could result in hyperinflation
.
. Approximately 5,000 people made campaign contributions using the web site. On February 21, 2009, a moneybomb
raised over $20,000 for Schiff's campaign. In a May 2009 video blog, Schiff said that he was seriously considering a run for the senate and when questioned by a Washington Post reporter, he said the chance of him entering politics was "better than 50-50". In June 2009 Schiff commissioned a poll of likely voters which indicated that he trailed Dodd in popularity by four percentage points. On July 9, 2009, Schiff launched an exploratory committee
and an official campaign website. He began accepting donations in an attempt to see if "people who really believe in freedom, liberty, sound money and the constitution are prepared to support that with an actual political contribution or to volunteer their services and work on this campaign." He received over 10,000 donations and many e-mails from around the world.
After giving some hints on The Daily Show
Schiff officially announced his candidacy for the Republican nomination on September 17, 2009, during the MSNBC
Morning Joe
show. By October 2009 Schiff had received more than 10,000 telephone calls and letters and raised over $1,960,000 (USD) in campaign contributions.
At the May 2010 Republican convention, Linda McMahon
received the most delegate votes but not enough to prevent an August primary election
. U.S. Rep. Rob Simmons
received more than the required 15 percent of the total votes necessary to force the primary. Schiff then collected the signatures necessary to earn a position on the August 2010 GOP primary ballot, submitting at least 400 signatures over the state requirement.
In July 2010, Schiff's campaign received endorsements from Steve Forbes
and Ron Paul
.
In the Republican primary, held on August 10, 2010, Schiff lost the nomination to Linda McMahon
.
The results were:
Ultimately, the election was won by the Democratic Party
primary winner, Richard Blumenthal
.
. His book, Crash Proof 2.0, appeared on both the New York Times and Wall Street Journal bestseller
lists.
Investment broker
Investment brokers are individuals who bring together buyers and sellers of investments. They need a license to operate. They act on behalf of buyers and sellers of stock...
, author
Author
An author is broadly defined as "the person who originates or gives existence to anything" and that authorship determines responsibility for what is created. Narrowly defined, an author is the originator of any written work.-Legal significance:...
and financial commentator. Schiff is CEO and chief global strategist of Euro Pacific Capital Inc., a broker-dealer
Broker-dealer
A broker-dealer is a term used in United States financial services regulations. It is a natural person, a company or other organization that trades securities for its own account or on behalf of its customers....
based in Westport
Westport, Connecticut
-Neighborhoods:* Saugatuck – around the Westport railroad station near the southwestern corner of the town – a built-up area with some restaurants, stores and offices....
, Connecticut
Connecticut
Connecticut is a state in the New England region of the northeastern United States. It is bordered by Rhode Island to the east, Massachusetts to the north, and the state of New York to the west and the south .Connecticut is named for the Connecticut River, the major U.S. river that approximately...
and CEO of Euro Pacific Precious Metals, LLC, a gold and silver dealer based in New York City
New York City
New York is the most populous city in the United States and the center of the New York Metropolitan Area, one of the most populous metropolitan areas in the world. New York exerts a significant impact upon global commerce, finance, media, art, fashion, research, technology, education, and...
.
Schiff frequently appears as a guest on CNBC, Fox Business Channel, and Bloomberg Television and is often quoted in major financial publications and is a frequent guest on internet radio
Internet radio
Internet radio is an audio service transmitted via the Internet...
as well as the host of the former podcast
Podcast
A podcast is a series of digital media files that are released episodically and often downloaded through web syndication...
Wall Street Unspun, which is now broadcast on terrestrial radio and known as The Peter Schiff Show. In 2010 Schiff ran as a candidate in the Republican primary for the United States Senate
United States Senate
The United States Senate is the upper house of the bicameral legislature of the United States, and together with the United States House of Representatives comprises the United States Congress. The composition and powers of the Senate are established in Article One of the U.S. Constitution. Each...
seat from Connecticut.
Schiff is known for his bearish views on the dollar and dollar denominated assets, while bullish on investment in tangible assets as well as foreign stocks and currencies.
Early life and education
The son of Irwin SchiffIrwin Schiff
Irwin A. Schiff is a prominent figure in the United States tax protester movement. Schiff is known for writing and promoting literature that claims the United States income tax is applied incorrectly. He has lost several civil cases against the federal government and has a record of multiple...
, a prominent figure in the United States tax protester movement
Tax protester (United States)
A tax protester is someone who refuses to pay a tax on constitutional or legal grounds, typically because he or she believes that the tax laws are unconstitutional or otherwise invalid...
, Peter Schiff was born and raised in New Haven
New Haven, Connecticut
New Haven is the second-largest city in Connecticut and the sixth-largest in New England. According to the 2010 Census, New Haven's population increased by 5.0% between 2000 and 2010, a rate higher than that of the State of Connecticut, and higher than that of the state's five largest cities, and...
, Connecticut. Schiff attended Beverly Hills High School
Beverly Hills High School
Beverly Hills High School is the only major public high school in Beverly Hills, California. Beverly is part of the Beverly Hills Unified School District and located on on the west side of Beverly Hills, at the...
in California. Subsequently, Schiff graduated from the University of California, Berkeley
University of California, Berkeley
The University of California, Berkeley , is a teaching and research university established in 1868 and located in Berkeley, California, USA...
in 1987 with a Bachelor
Bachelor of Business Administration
The Bachelor of Business Administration is a bachelor's degree in Commerce and business administration. In most universities, the degree is conferred upon a student after four years of full-time study in one or more areas of business concentrations; see below...
's degree in finance
Finance
"Finance" is often defined simply as the management of money or “funds” management Modern finance, however, is a family of business activity that includes the origination, marketing, and management of cash and money surrogates through a variety of capital accounts, instruments, and markets created...
and accounting.
Financial career
Schiff began his career as a financial consultant at a Shearson Lehman Brothers brokerage. In 1996 Schiff and a partner acquired a small brokerage firm that had been founded in 1980, reincorporatedIncorporation (business)
Incorporation is the forming of a new corporation . The corporation may be a business, a non-profit organisation, sports club, or a government of a new city or town...
it in California
California
California is a state located on the West Coast of the United States. It is by far the most populous U.S. state, and the third-largest by land area...
and renamed it Euro Pacific Capital. The company today has more than 15,000 clients and six offices nationwide, with its headquarters in Westport, Connecticut.
According to a 2005 article in The Advocate
The Advocate (Stamford)
The Advocate is a seven-day daily newspaper based in Stamford, Connecticut, USA. The paper shares a publisher and editor with the Greenwich Time; both are owned and operated by the Hearst Corporation, a multinational corporate media conglomerate with $4 billion in revenues.The Advocate circulates...
of Stamford, Connecticut
Stamford, Connecticut
Stamford is a city in Fairfield County, Connecticut, United States. According to the 2010 census, the population of the city is 122,643, making it the fourth largest city in the state and the eighth largest city in New England...
Schiff relocated the firm to Darien, Connecticut
Darien, Connecticut
Darien is a town in Fairfield County, Connecticut, United States. A relatively small community on Connecticut's "Gold Coast", the population was 20,732 at the 2010 census. Darien was listed at #9 at CNN Money's list of "top-earning towns" in the United States as of 2011...
to find brokers "who think like him". The New York Metropolitan Area, Schiff says, has the biggest concentration of brokers in the country, making it easier to recruit employees. The company has offices in Newport Beach, California
Newport Beach, California
Newport Beach, incorporated in 1906, is a city in Orange County, California, south of downtown Santa Ana. The population was 85,186 at the 2010 census.The city's median family income and property values consistently place high in national rankings...
as well as in Scottsdale, Arizona
Scottsdale, Arizona
Scottsdale is a city in the eastern part of Maricopa County, Arizona, United States, adjacent to Phoenix. According to the U.S. Census Bureau, as of 2010 the population of the city was 217,385...
, Palm Beach, Florida
Palm Beach, Florida
The Town of Palm Beach is an incorporated town in Palm Beach County, Florida, United States. The Intracoastal Waterway separates it from the neighboring cities of West Palm Beach and Lake Worth...
, Los Angeles
Los Ángeles
Los Ángeles is the capital of the province of Biobío, in the commune of the same name, in Region VIII , in the center-south of Chile. It is located between the Laja and Biobío rivers. The population is 123,445 inhabitants...
and New York City. Euro Pacific Capital also holds the exclusive rights to broker some Perth Mint
Perth Mint
The Perth Mint is Australia's oldest currently operating mint ....
gold products in the United States.
In 2011 Peter Schiff was listed as one of the Who's Who of Wall Street.
In the years of 2006-2008 Schiff appeared on numerous TV new's networks including CNBC & Fox. As he sat on panel's of experts, he was usually laughed at by other's, as he was more pessimistic about financial markets going into the future than others, Saying that in 2007 that "Today's home prices are completely unsustainable. Sky high real-estate prices are going to come crashing back down to earth." Most experts were high on financial stocks & recommended stocks such as Merrill-Lynch & Goldman Sachs. They were also saying that "the worst was over", while Schiff was saying that the fundamentals (of U.S financial markets) were bad & the worst was yet to come. Schiff warned to "stay away from the financials, they're toxic & their earnings are going to disappear." Arthur Laffer
Arthur Laffer
Arthur Betz Laffer is an American economist who first gained prominence during the Reagan administration as a member of Reagan's Economic Policy Advisory Board . Laffer is best known for the Laffer curve, an illustration of the theory that there exists some tax rate between 0% and 100% that will...
said to Schiff that he would "Bet [him] a penny on this one (on being wrong about a real-estate bubble burst), If you'll sign a letter saying that you were wrong to me on this."
Economic forecasting
Peter Schiff specializes in the understanding of the Austrian SchoolAustrian School
The Austrian School of economics is a heterodox school of economic thought. It advocates methodological individualism in interpreting economic developments , the theory that money is non-neutral, the theory that the capital structure of economies consists of heterogeneous goods that have...
, a school of economic thought generally categorized as heterodox
Heterodox economics
"Heterodox economics" refers to approaches or to schools of economic thought that are considered outside of "mainstream economics". Mainstream economists sometimes assert that it has little or no influence on the vast majority of academic economists in the English speaking world. "Mainstream...
(or non-mainstream). Schiff voices strong support for the Austrian School, and says it was first introduced to him by his father, Irwin Schiff
Irwin Schiff
Irwin A. Schiff is a prominent figure in the United States tax protester movement. Schiff is known for writing and promoting literature that claims the United States income tax is applied incorrectly. He has lost several civil cases against the federal government and has a record of multiple...
.
U.S. bear market
In his 2007 book Crash Proof, Schiff wrote that United States economic policies were fundamentally unsound, and predicted that the United States dollar would lose much of its value. Schiff believed that the imbalance between the amount of goods the U.S. consumed and what it produced would eventually lead to problems for the U.S. economy. As a remedy Schiff favored increased personal savings and production which he said would stimulate economic growth. Schiff cited the U.S.'s low personal savings rate as one of the causes of its transformation from the world's largest creditor nation in the 1970s to the largest debtor nation in the year 2000. Schiff attributed the low savings rate to higher inflation and the artificially low interest rates set by the Federal Reserve.In a 2002 interview with Southland Today, Schiff predicted that the economic downturn triggered by the bursting of the dot-com stock market bubble
Dot-com bubble
The dot-com bubble was a speculative bubble covering roughly 1995–2000 during which stock markets in industrialized nations saw their equity value rise rapidly from growth in the more...
would lead to a bear market likely to last "another 5 to 10 years." In November 2002, US stock indexes began a bull market uptrend which held steady for five years, until reversing course in 2008, when they began a decline to less than half of their peak 2008 values, followed in 2009 by the Dow climbing 61% from its low point over the following year. After interviewing Schiff in 2009, journalist and finance author Eric Tyson referenced various Schiff predictions during the 2000s and stated that "On all of these counts, Schiff wasn't just wrong but ended up being hugely wrong."
In an August 2006 interview he said: "The United States economy is like the Titanic and I am here with the lifeboat trying to get people to leave the ship... I see a real financial crisis coming for the United States." On December 31, 2006 in debate on Fox News, Schiff forecast that "what's going to happen in 2007" is that "real estate prices are going to come crashing back down to Earth".
As part of these exchanges on Fox News and his repeated appearances on financial news network CNBC, Schiff had mentioned factors such as speculators and "the absence of lending standards" which are now seen by many to indeed be contributing factors to the housing crisis which began in 2007. On December 13, 2007 in a Bloomberg interview on the show Open Exchange, Schiff further added that he felt that the crisis would extend to the credit card lending industry. Following this observation, it was soon reported on December 23, 2007 by the Associated Press that "The value of credit card accounts at least 30 days late jumped 26 percent to $17.3 billion in October from a year earlier at 17 large credit card trusts examined by the AP... At the same time, defaults -- when lenders essentially give up hope of ever being repaid and write off the debt -- rose 18 percent to almost $961 million in October, according to filings made by the trusts with the Securities and Exchange Commission."
Since 2007, Schiff has stated many times that if the government doesn't change course there will be hyperinflation in the US. Schiff is one of a minority of economists credited with accurately predicting the financial crisis of 2007–2010 while "nearly all [macroeconomists] failed to foresee the recession despite plenty of warning signs". In his book Crash Proof, he described several aspects of the U.S. economy that would lead to a recession.
Online videos
A You Tube video entitled "Peter Schiff was right" became popular in late 2008 and 2009. The video consists of a compilation of clips of his many appearances on various financial news programs from networks including CNBCCNBC
CNBC is a satellite and cable television business news channel in the U.S., owned and operated by NBCUniversal. The network and its international spinoffs cover business headlines and provide live coverage of financial markets. The combined reach of CNBC and its siblings is 390 million viewers...
, Fox News, MSNBC
MSNBC
MSNBC is a cable news channel based in the United States available in the US, Germany , South Africa, the Middle East and Canada...
and Bloomberg
Bloomberg Television
Bloomberg Television is a 24-hour global network broadcasting business and financial news. It is distributed globally, reaching over 200 million homes worldwide. It is owned and operated by Bloomberg L.P...
, most of which took place from 2005 to 2007. In the video segments Schiff explains the fundamental problems he saw with the United States economy at that time. Schiff's warnings of a coming economic collapse
Economic collapse
There is no precise definition of an economic collapse. While some might consider a a severe, prolonged depression with high bankruptcy rates and high unemployment an economic collapse, others would additionally look for a breakdown in normal commerce, such as hyperinfalation, or even a sharp...
earned him the moniker "Dr. Doom."
Investment advice
Despite predictions regarding the housing bubble and automotive industry difficulties coming to fruition, as early as 2009 Schiff was receiving criticism due to the performance of some of his client's accounts in 2008, as well as controversies over the predictions themselves. In January 2009, economic blogBlog
A blog is a type of website or part of a website supposed to be updated with new content from time to time. Blogs are usually maintained by an individual with regular entries of commentary, descriptions of events, or other material such as graphics or video. Entries are commonly displayed in...
ger and investment adviser Michael Shedlock reported, "I have talked with many who claim they have invested with Schiff and are down anywhere from 40% to 70% in 2008." Other criticisms followed, including the aforementioned Eric Tyson post as well as an article for the investment news site Seeking Alpha
Seeking Alpha
Seeking Alpha is a stock market blog that provides free stock market analysis primarily from money managers, investment newsletter writers, and the general public. Alpha is a financial term referring to a stock's performance, relative to the market indexes used by fund managers. So, fund managers...
, published on the site two days after Shedlock's blog post. Later that week an article appeared in the Wall Street Journal reporting that Schiff's broker-dealer firm, Euro Pacific Capital Inc., "advised its clients to bet that the dollar would weaken significantly and that foreign stocks would outpace their U.S. peers" and that instead, the dollar advanced against most currencies, "magnifying the losses from foreign stocks Mr. Schiff steered his investors into."
The Director of Communications at Schiff's investment firm responded to the original Shedlock piece by saying, "While it is true, that our accounts have suffered badly in 2008, a fact that we have never disputed or ran from, [Shedlock's] estimates for the size of our typical client losses are exaggerated and unfair." Schiff personally responded to Shedlock's criticism by saying, "to examine the effectiveness of my investment strategy immediately following a major correction by looking only at those accounts who adopted the strategy at the previous peak is unfair and distortive" and called Shedlock's blog entry "nothing more than an overt advertisement (and a highly deceptive one at that) to use my popularity to advance his career," adding that losses were felt mostly by recent clients and not by others.
Schiff responded similarly to criticisms made by Wade Slome of Sidoxia Capital Management, LLC. in a September 2009 blog entry entitled, "The Emperor Schiff Has No Clothes." Schiff stated not only were the losses suffered by his clients in 2008 highly exaggerated, but also that most of those losses have already been recouped, stating that many who where down then are now up, and most long-term clients were never down at all, but merely temporarily lost some of the profits they had earned over the years.
The January 2009 Wall Street Journal article discussed the value of Schiff's predictions, and stated how deficiencies "made mincemeat of investors who took his advice in 2008." In an interview the following week Schiff likened himself to billionaire investor Warren Buffett
Warren Buffett
Warren Edward Buffett is an American business magnate, investor, and philanthropist. He is widely regarded as one of the most successful investors in the world. Often introduced as "legendary investor, Warren Buffett", he is the primary shareholder, chairman and CEO of Berkshire Hathaway. He is...
, saying they were both "buy and hold" long-term investors. Contrasting his negative press he compared claims about accounts managed under Schiff's firm to the stock market value of Buffett's company, saying: "His approach is you buy stocks and you never sell them—you hope to never sell them—and Berkshire Hathaway
Berkshire Hathaway
Berkshire Hathaway Inc. is an American multinational conglomerate holding company headquartered in Omaha, Nebraska, United States, that oversees and manages a number of subsidiary companies. The company averaged an annual growth in book value of 20.3% to its shareholders for the last 44 years,...
is down 40% in the last thirteen months; I don't see the Wall Street Journal saying 'Warren Buffett made mincemeat out of his clients.'" The Wall Street Journal also published a letter written by Schiff in response to his critics saying: "My central investing premise, a weakening dollar and safety in gold, commodities and foreign stocks, didn't materialize in 2008. But all the ingredients were (and remain) present for those movements to occur. Over the past year, market reactions that I didn't foresee—massive global deleveraging, a knee-jerk 'flight to quality' into U.S. Treasuries and a sharp counter trend rally in the U.S. dollar—have kept the scenario from playing out."
In a November 2009 videoblog, Schiff said that five stocks he picked for Fortune Magazine in January 2009 had gained a total of 360%.
In a March 2009 speech Schiff said that it would be impossible for the U.S. debt
United States public debt
The United States public debt is the money borrowed by the federal government of the United States at any one time through the issue of securities by the Treasury and other federal government agencies...
to China to be repaid unless the U.S. dollar's value is substantially diluted through inflation
Inflation
In economics, inflation is a rise in the general level of prices of goods and services in an economy over a period of time.When the general price level rises, each unit of currency buys fewer goods and services. Consequently, inflation also reflects an erosion in the purchasing power of money – a...
. In September 2009 Schiff said that "I would not be surprised to see [gold] at $5,000 over the next several years" and that the 2009 stock market rally was a "bear market rally".
Political career
Schiff was an economic adviser to Ron PaulRon Paul
Ronald Ernest "Ron" Paul is an American physician, author and United States Congressman who is seeking to be the Republican Party candidate in the 2012 presidential election. Paul represents Texas's 14th congressional district, which covers an area south and southwest of Houston that includes...
's 2008 presidential campaign
Ron Paul presidential campaign, 2008
Ron Paul was a Republican Party primary candidate in the 2008 United States presidential election.Initial opinion polls during the first three quarters of 2007 showed Ron Paul consistently receiving support from 3% or less of those polled...
. In support of Paul's economic revitalization plan, he said: "We need a plan that stimulates savings and production, not more of the reckless borrowing and consumption that got us into this mess in the first place. Ron Paul's plan is the only one that amounts to a step in the right direction. If you want meaningful change—for the better that is—Ron Paul is the only candidate capable of delivering it."
In 2008, Schiff also endorsed Murray Sabrin
Murray Sabrin
Murray Sabrin is a professor of finance in the Anisfield School of Business, Ramapo College of New Jersey,. In 2008 he was a candidate for the Republican nomination for the United States Senate in New Jersey, the seat currently held by Democrat Frank Lautenberg...
for the U.S. Senate seat in New Jersey.
In an interview in February 2009, Schiff's position was summarized as a nonpartisan critique of American policymakers, comparing former presidents George W. Bush
George W. Bush
George Walker Bush is an American politician who served as the 43rd President of the United States, from 2001 to 2009. Before that, he was the 46th Governor of Texas, having served from 1995 to 2000....
to Herbert Hoover
Herbert Hoover
Herbert Clark Hoover was the 31st President of the United States . Hoover was originally a professional mining engineer and author. As the United States Secretary of Commerce in the 1920s under Presidents Warren Harding and Calvin Coolidge, he promoted partnerships between government and business...
and President Barack Obama
Barack Obama
Barack Hussein Obama II is the 44th and current President of the United States. He is the first African American to hold the office. Obama previously served as a United States Senator from Illinois, from January 2005 until he resigned following his victory in the 2008 presidential election.Born in...
to former president Franklin D. Roosevelt
Franklin D. Roosevelt
Franklin Delano Roosevelt , also known by his initials, FDR, was the 32nd President of the United States and a central figure in world events during the mid-20th century, leading the United States during a time of worldwide economic crisis and world war...
, with neither of the more recent incumbents comparing favorably to the earlier ones.
Schiff supports the reduction of government economic regulation, and is concerned that President Obama's administration may increase such regulation. Schiff says that the economic crisis of the late-2000s
Late-2000s financial crisis
The late-2000s financial crisis is considered by many economists to be the worst financial crisis since the Great Depression of the 1930s...
provides an opportunity to transition from borrowing and spending, to saving and producing. He is critical of the U.S. government's efforts to "ease the pain" with economic stimulus packages and bailouts. According to Schiff, the U.S. government's approach of replacing "legitimate savings with a printing press" could result in hyperinflation
Hyperinflation
In economics, hyperinflation is inflation that is very high or out of control. While the real values of the specific economic items generally stay the same in terms of relatively stable foreign currencies, in hyperinflationary conditions the general price level within a specific economy increases...
.
2010 U.S. Senate campaign
In December 2008, Connecticut citizens created a website encouraging Schiff to campaign against the incumbent Senator Christopher DoddChristopher Dodd
Christopher John "Chris" Dodd is an American lawyer, lobbyist, and Democratic Party politician who served as a United States Senator from Connecticut for a thirty-year period ending with the 111th United States Congress....
. Approximately 5,000 people made campaign contributions using the web site. On February 21, 2009, a moneybomb
Moneybomb
Moneybomb is a neologism coined in 2007 to describe a grassroots fundraising effort over a brief fixed time period, usually to support a candidate for election by dramatically increasing, concentrating, and publicizing fundraising activity during a specific hour or day...
raised over $20,000 for Schiff's campaign. In a May 2009 video blog, Schiff said that he was seriously considering a run for the senate and when questioned by a Washington Post reporter, he said the chance of him entering politics was "better than 50-50". In June 2009 Schiff commissioned a poll of likely voters which indicated that he trailed Dodd in popularity by four percentage points. On July 9, 2009, Schiff launched an exploratory committee
Exploratory Committee
In the election politics of the United States, an exploratory committee is an organization established to help determine whether a potential candidate should run for an elected office. They are most often cited in reference to United States Presidential hopefuls, prior to the primaries.Exploratory...
and an official campaign website. He began accepting donations in an attempt to see if "people who really believe in freedom, liberty, sound money and the constitution are prepared to support that with an actual political contribution or to volunteer their services and work on this campaign." He received over 10,000 donations and many e-mails from around the world.
After giving some hints on The Daily Show
The Daily Show
The Daily Show , is an American late night satirical television program airing each Monday through Thursday on Comedy Central. The half-hour long show premiered on July 21, 1996, and was hosted by Craig Kilborn until December 1998...
Schiff officially announced his candidacy for the Republican nomination on September 17, 2009, during the MSNBC
MSNBC
MSNBC is a cable news channel based in the United States available in the US, Germany , South Africa, the Middle East and Canada...
Morning Joe
Morning Joe
Morning Joe is a weekday morning talk show on MSNBC, with Joe Scarborough discussing the news of the day in a panel format with co-hosts Mika Brzezinski and Willie Geist. It was created as the replacement for Imus in the Morning, which was canceled in April 2007 after simulcasting on MSNBC since 1996...
show. By October 2009 Schiff had received more than 10,000 telephone calls and letters and raised over $1,960,000 (USD) in campaign contributions.
At the May 2010 Republican convention, Linda McMahon
Linda McMahon
Linda Marie McMahon is an American professional wrestling magnate and politician. She is notable for her career developing WWE with her husband Vince McMahon. She was in the company from 1980 to 2009. During this time, WWE grew from a small regional business in New York to a large multinational...
received the most delegate votes but not enough to prevent an August primary election
Primary election
A primary election is an election in which party members or voters select candidates for a subsequent election. Primary elections are one means by which a political party nominates candidates for the next general election....
. U.S. Rep. Rob Simmons
Rob Simmons
Robert Ruhl "Rob" Simmons is a retired U.S. Army Colonel and former U.S. Congressman from Connecticut. He served as a member of the United States House of Representatives from 2001 to 2007, representing Connecticut's Second Congressional District as a Republican.Simmons ran as a candidate for the...
received more than the required 15 percent of the total votes necessary to force the primary. Schiff then collected the signatures necessary to earn a position on the August 2010 GOP primary ballot, submitting at least 400 signatures over the state requirement.
In July 2010, Schiff's campaign received endorsements from Steve Forbes
Steve Forbes
Malcolm Stevenson "Steve" Forbes, Jr. is an American editor, publisher, and businessman. He is the editor-in-chief of business magazine Forbes as well as president and chief executive officer of its publisher, Forbes Inc. He was a Republican candidate in the U.S. Presidential primaries in 1996...
and Ron Paul
Ron Paul
Ronald Ernest "Ron" Paul is an American physician, author and United States Congressman who is seeking to be the Republican Party candidate in the 2012 presidential election. Paul represents Texas's 14th congressional district, which covers an area south and southwest of Houston that includes...
.
In the Republican primary, held on August 10, 2010, Schiff lost the nomination to Linda McMahon
Linda McMahon
Linda Marie McMahon is an American professional wrestling magnate and politician. She is notable for her career developing WWE with her husband Vince McMahon. She was in the company from 1980 to 2009. During this time, WWE grew from a small regional business in New York to a large multinational...
.
The results were:
- 49% Linda McMahon
- 28% Rob Simmons
- 23% Peter Schiff
Ultimately, the election was won by the Democratic Party
Democratic Party (United States)
The Democratic Party is one of two major contemporary political parties in the United States, along with the Republican Party. The party's socially liberal and progressive platform is largely considered center-left in the U.S. political spectrum. The party has the lengthiest record of continuous...
primary winner, Richard Blumenthal
Richard Blumenthal
Richard Blumenthal is the junior United States Senator from Connecticut and a member of the Democratic Party. Previously, he served as Attorney General of Connecticut....
.
Books
Peter Schiff is the author of five books published by John Wiley & SonsJohn Wiley & Sons
John Wiley & Sons, Inc., also referred to as Wiley, is a global publishing company that specializes in academic publishing and markets its products to professionals and consumers, students and instructors in higher education, and researchers and practitioners in scientific, technical, medical, and...
. His book, Crash Proof 2.0, appeared on both the New York Times and Wall Street Journal bestseller
Bestseller
A bestseller is a book that is identified as extremely popular by its inclusion on lists of currently top selling titles that are based on publishing industry and book trade figures and published by newspapers, magazines, or bookstore chains. Some lists are broken down into classifications and...
lists.
- Crash Proof: How to Profit From the Coming Economic CollapseCrash Proof: How to Profit From the Coming Economic CollapseCrash Proof: How to Profit From the Coming Economic Collapse is an investment book by Peter Schiff that predicts an imminent decline in the value of the American dollar and advises readers to invest in foreign securities and precious metals....
, February 2007, ISBN 978-0-470-04360-8 1 - The Little Book of Bull Moves in Bear Markets: How to Keep your Portfolio Up When the Market is Down, 2008, ISBN 978-0-470-38378-0 2
- Crash Proof 2.0: How to Profit From the Economic Collapse, 2nd Edition, September 2009, ISBN 978-0-470-47453-2 3
- The Little Book of Bull Moves, Updated and Expanded: How to Keep Your Portfolio Up When the Market Is Up, Down, Or Sideways, 2010, ISBN 0470643994 4
- How an Economy Grows and Why it CrashesHow an Economy Grows and Why it CrashesHow an Economy Grows and Why it Crashes is an illustrated introduction to economic theory by Peter Schiff and Andrew Schiff. The book allegorically explores such topics as inflation, deficit spending, central banking, international trade, and the housing bubble and credit collapse of 2008...
, 2010, ISBN 978-0-470-52670-5 5
External links
- Euro Pacific Capital US Brokerage Firm Website
- Euro Pacific Precious Metals Coin Company Website
- Schiff for Senate Official Campaign Website
- Peter Schiff Online, Official book site for Peter Schiff
- Peter Schiff radio, Schiff's daily radio show
- Peter Schiff blog
- The Peter Schiff Blog