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Labour + Industry

Economic Clairvoyant

VIDEO: Peter Schiff predicted collapse. He has a new vision.

Ben Shingler 25 Nov

Ben Shingler writes regularly about online video for The Tyee.

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A lone voice of caution in a sea of misinformed optimism.

From the great wash of financial experts across the cable TV spectrum, a clairvoyant has emerged. In several clips from 2006 and 2007, a little-known analyst named Peter Schiff predicted -- to a remarkably accurate degree -- the collapse of the U.S. economy. And those videos are now climbing up the YouTube charts.

"When you see the stock market come down," he says in one early clip, "and the real estate bubble burst, all that phony wealth is going to evaporate, and all that's going to be left is all the debt we accumulated to foreigners."

And in another: "This is going to be an enormous credit crunch. The party is over for the United States."

As the economic situation across the globe has become more dire over the last few weeks, the Schiff montage has amassed half a million views on YouTube (an astounding number, considering the dry subject matter).

Before all this happened, Schiff was just one of many so-called financial experts that made the rounds on TV news. The president of an investment strategy company called Euro Pacific Capital, and a financial advisor to former presidential candidate Ron Paul, Schiff was a rare voice of skepticism during the bull market years, often mocked by cheery analysts that couldn't see more than a few months into the future.

Now, of course, Schiff has been vindicated. The popularity of the montage video caught the attention of cable news networks this week, and Schiff's most recent appearance on CNBC, in which he is introduced through a reference to the video, is now a hit online as well.

Aside from the fact that Schiff clearly understood the financial crisis better than most, the montage video also raises questions about the role the media has played -- and hasn't -- in this ongoing economic downward spiral. Back in 2006 and 2007, most of the other panelists on these shows thought Schiff was out to lunch. Why didn't more experts see this coming, and do something about it?

Take Arthur Laffer -- a well-known economist and head of the research group Laffer Associates. "I think Peter's just totally off base," he says in response to Schiff at one point. "I just don't know where he's getting his stuff."

Or Ben Stein, the sometimes-economist and sometimes-comedian, who advised viewers to ignore Schiff's warnings and buy up financials for bargain-basement prices back in 2007 because they couldn't possibly go any lower. He suggests Merrill Lynch -- and we all know what happened to them.

Now, with the consequences of the credit crisis clear, and the rising economic troubles a constant topic in the media, shouldn't we be worried we're getting bombarded with the same kind of misinformation? It's easy to see how commentators unqualified to assess the situation could further propel the economic downward spiral.

Luckily, we've got Schiff, and his keeper, a YouTube user named jdouche, whose previous videos warned of a corrupt banking system, to set things straight.

By the way, for those with any money left in the bank, Schiff warns the devaluation of the US dollar could be next.

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