Peter Schiff Wants to Go Double or Nothing on His 2006 Bet With Art Laffer (Video)
Economist Art Laffer owes Peter Schiff a penny after losing a 2006 bet.
Now Peter is ready to go double or nothing.
Peter won the penny on a bet he made with Laffer on Larry Kudlow’s TV show back in 2006. Peter said the economy as going to crash. Laffer said the economy was doing great and there was nothing to worry about.
As we know, Peter was right.
Laffer is at it again, claiming that the economy is strong. After the 10-year/2-year Treasury yield curve inverted Wednesday, Laffer told Fox Business he doesn’t think a recession is imminent because the Trump administration won’t likely deviate from the policies that are making the economy hum.
Peter said Laffer is as wrong now as he was then and he’s willing to go double or nothing on that penny bet.
Check out Peter’s 2006 exchange with Laffer. It’s amazing how perfectly he nailed the crash that was just around the corner.
Highlights from the Interview
Peter: “I think [the recession] is going to be pretty bad and whether it starts in ’07 or ’08 is immaterial. And I also think it’s going to last not just for quarters, but for years. You see, the basic problem with the US economy is we have too much consumption and borrowing and not enough production and saving. And what’s going to happen is the American consumer is basically going to stop consuming and start rebuilding his savings, especially when he sees his home equity evaporate. And when you have the economy 70% consumption, you can’t address those imbalances without a recession.”
Art: “The economy has never been in better shape … I think Peter is just totally off-base. I just don’t know where he’s getting his stuff.”
Peter: “It’s not wealth that’s increased in the last few years. We haven’t increased our productive capacity. All that’s increased is the paper value of stocks and real estate. But that’s not real wealth. When you see the stock market come down and the real estate bubble burst, all of that phony wealth is going to evaporate and what’s going to be left is all the debt we’ve accumulated.”
Art: “It’s really not a housing economy. This is an economy that’s driven by good economic policies, by good monetary policy, by good trade policy and it’s working beautifully.”
Peter: “A lot of people have adjustable-rate mortgages that are going to reset over the next couple of years and people are going to see their monthly mortgage rates go up by 50%, 100%, and a lot of that is going to take a lot of spending away from the economy, because people are going to be spending whatever they have on interest rates.”
Art: “I have never heard so many mistakes made in my life, Peter.”
Peter: “The average American is going deeper and deeper into debt. He’s struggling to get by. And all that happens if some appraiser tries to say that your house is worth all this money – this is an illusion.”
Peter: “We can’t just keep accumulating debt, we can’t just put this consumption on a national credit card and assume that just because a crisis hasn’t happened yet it’s never going to happen.”