Thursday, May 14, 2009

Peter Schiff: Allow Recession to Run Its Course

from New Brunswick Business Journal.

""What we should do is let the recession unfold and allow businesses to fail and asset prices to fall," he said during his keynote speech to the New Brunswick Securities Commission Fullsail Summit.

""We don't need more stimulus," he said. "We need to come down from this artificial high and rebuild our economy. And that isn't something that can be combated with monetary fiscal policy."

""It means allowing the recession," he added. "That is the cure and we simply need to allow it to run its course.""

The way out of the recession is to let the recession run its course, and that's unfortunately the very last thing that the government wants to do.

He also cautioned Canadians NOT to follow the US footsteps:

""I think Canada should not have slashed interest rates to the degree that they did," he said. "If they hadn't the Canadian dollar would have risen and a strong currency is a good thing. It means you're wealthy and you can buy more stuff."

"In addition, he said Canada shouldn't be following the misguided footsteps of the United States and offer auto companies bailouts.

"He cautioned that the cash for government stimulus projects will likely come from governments printing more money, which means that even if taxes aren't hiked taxpayers will pay because of inflation and less valuable paychecks."


""A lot of Canadians will end up with second homes down in Miami," he said. "The weather gets pretty cold up here so it will be nice for you to have vacation homes down there.""

That's already happening. (And they are paying CASH.)


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