Peter Schiff: “The Boom Is The Problem, The Bust Is The Solution”

This 10 minute video compilation was brought to my attention by HousingDoom. Someone pieced together analogies that Peter Schiff has been using to describe our current economic crisis. I have typed a transcript of my favorite analogies, although I have to say that they are all brilliant. I recommend you take the time to listen to these analogies to get more acquainted with the situation we find ourselves in and pass it on.

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Now real quickly I will explain business cycles and how they work. Contrary to what most people think, the boom is the problem. The bust is the solution. A boom is like an artificial high. Like if you take heroine. You shoot yourself up with heroine and it makes you feel real great. At least that's what they tell me. But anyway, that's artificial. You want to get healthy, right? You have to go to rehab or detox and you have to go cold turkey. Then you go through withdrawal. The withdrawal sympton is very unpleasant, very painful. Again that's what I hear. But it's necessary if you want to remove these toxins from your system and get healthy.

The same thing happens in a business cycle. When you have a central bank and the central banks made the same mistakes as in the 1920's. When you have monetary policy that's too inflationary and you create an asset bubble and you create mal-investments, the mal-investments need to be purged. The incompetent economy needs to be re-balanced.

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If you're a heroine addict and you want to get healthy, you can't do that without going through withdrawal. The withdrawal symptons are not fun, but the government's solution is shoot up with more heroine so we can delay the withdrawal. Of course, they risk killing the economy with an overdose. Which is what we might get. And an overdose as far as monetary stimulus, is HYPERINFLATION. Believe me that is a real possibility and we do not want to live through that.

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This crisis cannot be managed. We NEED the free market. You've got these cronies in Washington, they're like little kids with a chemistry set. And they keep on throwing these chemicals together trying one thing after another, they're hoping they are going to stumble on a miracle. But they are going to blow us all up.