Peter Schiff, that Austrolibertarian guy on Wall Street who was right about a whole lotta stuff, just so happens to run a full-service, registered broker/dealer specializing in foreign markets and securities. His firm caters to exactly the kinds of strategies he outlines in his prescient book from 2006, Crash Proof, in which he provides a rundown on the state of the economy and suggestions on appropriate investment strategies.
His firm, the aptly-named Euro Pacific Capital, offers an outlook similar to to that found in his book. Take a look.
Meanwhile, detractors point to the dollar’s rally in 2008 as reasons to discount Schiff’s investment strategy, which is based on projected foreign de-coupling from the U.S. economy and rising gold and commodity prices relative to the dollar. Schiff and others maintain that the 2008 rally was a bear market aberration that will prove to be a blip in an otherwise uninterrupted downward trend for the dollar.
Who do I believe? I think you know, at this point, that I’m on Schiff’s side with this one. For the rest of you, take some time to check out some of the arguments the Austrians are making; chances are you’ll find a lot to agree with – and you just might get nervous eyeing that dollar sign in your savings account.
It is indeed a scary time to be investing with the dollar. As much as I like to think that it is smart to diversify into less dollar-based investments, I have a little part of my American pride that says, “NO! DON”T DO IT! SUPPORT AMERICA!.” Is that illegitimate? Logic says no, but I can’t help but feel just a little bit guilty when I am thinking about folding my faith in the American currency. This might be something I wind up folding on in the name of good reason, but for now…I just can’t completely support it.
correction…Logic says “yes, this is illegitimate”
Not to inject excessive ideological fluff into the matter (though I suppose such abstraction is hard to avoid when discussing notions of “patriotism”), but I’d like to believe that “true patriots” disdain the need to pay lip service to a dying fiat currency – the continued mismanagement of which now threatens the livelihoods of millions of Americans in a very real way – and instead work to help themselves and their countrymen understand the difficulties ahead so that we may all be better prepared. In my eyes, the ideal patriot is someone who actively works to safeguard his own livelihood and that of his family and loved ones, while doing his best to educate those around him in an earnest manner. A community of financially-secure Americans can do far more for their country than could the alternative; commandeering a lifeboat for yourself and for fellow Americans helps far more people than choosing to go down with the ship.
Ultimately, it comes down to whether you are in agreement with Schiff and the other free-market analysts in their outlook on the global situation. I’ve posted a few thoughts on the subject in recent days; perhaps you’d find their arguments worth looking into.