With the Dollar cratering this week, the last shoe in Peter Schiff’s Austrian-based prediction set from 2007 may finally be dropping.
In his latest video blog (July 15th), Peter Schiff comments upon the 9% drop in the Dollar Index this month, with the Dollar showing particular weakness against the Euro, the Yen, and the New Zealand Dollar.
Schiff thinks this Dollar Index drop may be the direct result of the recent G20 meeting, where a clear split opened up between the American stimulus-and-spend position and the European austerity-and-save position — dare we say the Krugman versus Schiff divide? — which has subsequently weakened the Dollar outlook versus the Euro outlook, despite the earlier problems with Greece et al.
Mr Schiff has faced much criticism in the past two years because of his 2007 conviction that a forthcoming crash, on the bursting of Greenspan’s bubble, would be accompanied by US government bailouts, bank failures, Fannie and Freddie bankruptcy, zero percent interest rates, massive government borrowing, quantitative easing, and record deficits. Under these predicted conditions, he saw it as highly unlikely that the Dollar would increase its strength relative to other currencies; yet this is exactly what happened.
The financial world turned in panic to the Dollar as a ’safe haven’, thereby pushing up the Dollar Index value, when virtually everything else crashed almost exactly in line with Schiff’s many other predictions, all based upon his long-term analysis of the Greenspan bubble and its necessary eventual bust, according to the tenets of the Austrian Business Cycle Theory (ABCT).
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