Peter Schiff accurately predicted the 2008 meltdown of the mortgage market and financial sector. Before it all hit the fan, though, he was called a doomsayer and was frequently laughed at on the mainstream financial talk shows. But he turned out to be right. The real problem, Schiff argues in this book, is that what happened in 2008 was not actually “The Crash,” but was simply the prelude to it. The dot-com bubble popped at the turn of the century; the housing bubble popped in 2008; Schiff shows persuasively that we are now in what he calls the government bubble. The “recoveries” from each of the first two bubbles were not actually true, healthy corrections in the market; instead, the Federal Reserve used easy money policies to paper over the real issues and delay (and ultimately prolong) the inevitable pain.
Schiff explains very clearly and concisely how government intervention and the Fed’s irresponsible easy money policies are the underlying cause of the mess we are in. Then, moving outward from these specific topics, he goes into a pretty cookie cutter libertarian presentation of all the things government should not be involved in, interventions which most often accomplish exactly the opposite of the stated goals. There’s not much new content here if you’re familiar with libertarian thought, although Schiff’s presentation is readable (listenable, in my case) and compelling, particularly the explicitly economic issues.
But once Schiff got into social policy, I was reminded why I can’t subscribe fully to the extreme elements of “live and let live” libertarianism. For example, I was not convinced to support decriminalizing prostitution or the Schedule I drugs (and beyond).
One major complaint I had was with the reader of the audiobook. During the parts of the book where Schiff was simply explaining financial concepts, the tone was straightforward and pleasant. But during the middle section of the book, containing Schiff’s policy recommendations on a slew of issues, the reader’s voice took on a snarky and condescending tone that was off-putting. I’ve seen Schiff on plenty of videos online, and he’s not an arrogant jerk, but much of the audio presentation sure made him seem that way.
Back to economics. Ultimately, Schiff realizes that his prescription to avoid the pain and fix the financial and governmental mess (as much as we can) are unlikely to be followed, and so we gives advice on how to weather the crash when it inevitably comes. His advice is basically this: get out of the dollar, put resources in gold and foreign investments, and expect the standard of living in the United States to decline markedly. Ultimately, Schiff is not a pessimist, but rather an optimist tempered by realism, recognizing the crash that will come– not if, but when.