Defenestrating Thoughts from the Bivouac

This video is from 2 years ago; it’s your typical business talk show with analysts.

In the video, Peter Schiff is spot on. He was able to see this mess coming. And everyone else? Listen to them laugh at him.

Keep this in mind when you try to figure out what you think.

Are you listening to the guys that saw this coming? Or are you listening to the guys that were blindsided by this?

Remember, the White House, Paulson, and Bernanke were just telling us a few weeks ago that the economy is strong!

Austrian economists, however, saw this coming. They also saw the Great Depression coming. Maybe we should listen to them now.

Ron Paul saw this coming for a long time. Here’s what he said about Fannie and Freddie in 2003 (read the whole article):

Ironically, by transferring the risk of a widespread mortgage default, the government increases the likelihood of a painful crash in the housing market. This is because the special privileges granted to Fannie and Freddie have distorted the housing market by allowing them to attract capital they could not attract under pure market conditions.

…

Like all artificially created bubbles, the boom in housing prices cannot last forever. When housing prices fall, homeowners will experience difficulty as their equity is wiped out. Furthermore, the holders of the mortgage debt will also have a loss. These losses will be greater than they would have otherwise been had government policy not actively encouraged over-investment in housing.

And here’s a link to his explanation of what happened and how to fix it.

No bailout required. :-)