Lately, I've been taking my cue on the economy from a man named Peter Schiff. Specifically when he talks about the negative impact the $700-billion bailout will have on our economy -- creating rampant inflation and lengthening the impact of the deep recession which is inevitable -- I listen.
Schiff is a securities broker, so why would I listen to him? You'd think he'd say whatever would benefit the industry, right? So why would he oppose the bailout plan?
The only reason I could think of is because he thinks it will be bad for the nation. He should know. In November of 2006 -- almost two years ago -- Peter Schiff told the Western Regional mortgage Bankers Association that, in a couple of years, they would be facing the exact economic environment they are facing now.
He was probably not a very popular speaker that day, telling a group of over 1,000 mortgage brokers that they were about to be out of jobs. Of course, no one believed him then, with the real estate market booming and the brokers getting wealthy selling Alt-A and subprime loans hand over fist. It didn't matter whether or not home buyers who qualified for their loans based on their word about the income they claimed they were making could actually afford the home. After all, homes would forever more appreciate endlessly, right?
To be specific, I'm adopting Peter Schiff as my economic forecaster. If Schiff could make an economic forecast that turned out to be right on target in spite of how unpopular that forecast was, he's the man I'll listen to about what's going to happen next.