Peter Schiff For Senate!

[softwareNerd]

The only reason why it "does not make business sense" to manufacture many of the items that China does, is because the policies of the US have forced this type of production out of the country. You'd better believe that many of the specializations of China would be produced cheaper and better in a free market.

What policy?

[brian0918]

What policy?

For starters, minimum wage.

[softwareNerd]

For starters, minimum wage.

That's true, and if Schiff's platform is about getting rid of all welfare,ending government financing of education, removing the minimum wage, and allowing Chinese to move to the U.S. in large numbers, he has my whole-hearted support. I've never heard him put these things front and center.

Added: I should add that when I say "true", I agree that these factors and many others raise the costs of doing business in the U.S. (labor costs and others). Nevertheless, when relative to other countries, most jobs that went to China would still have gone there, because of their relatively lower standard of living. Software-development flows to India despite the fact that most U.S. based software developers are not in the lowest of wage-earners, close to welfare.

Edited September 27, 2009 by softwareNerd

[Andrew Grathwohl]

That's true, and if Schiff's platform is about getting rid of all welfare,ending government financing of education, removing the minimum wage, and allowing Chinese to move to the U.S. in large numbers, he has my whole-hearted support. I've never heard him put these things front and center.

Added: I should add that when I say "true", I agree that these factors and many others raise the costs of doing business in the U.S. (labor costs and others). Nevertheless, when relative to other countries, most jobs that went to China would still have gone there, because of their relatively lower standard of living. Software-development flows to India despite the fact that most U.S. based software developers are not in the lowest of wage-earners, close to welfare.

He advocates all those positions. Keep in mind that he's always spoken on the economy from the perspective of investing, not politics. When he gets more into "politician mode" when he starts campaigning next week, you'll see him bring these issues to the center stage.

Edited September 27, 2009 by Andrew Grathwohl

[gags]

The CATO institute has been putting out this kind of documentation for some time now, but I hate to say I cannot agree with your analysis of the data. For one thing, a lot of "manufacturing output" measurements, like the manufacturing index, simply measure the aggregate of multiple aspects of manufacturing industries, such as price, employment, inventories, etc. Manufacturing sectors could certainly be performing better as a whole without actually increasing gross output.

I'm not writing off your claims, just your evidence provided for those claims. The CATO institute has been arguing this position for some time without ever actually providing the data needed to confirm its findings.

I don't know what CATO has said about this, but more sources than CATO make similar claims. In fact, the graphs from the St Louis Fed show the same trend of generally increasing output except during recessions when manufacturing output declines.

[Andrew Grathwohl]

I don't know what CATO has said about this, but more sources than CATO make similar claims. In fact, the graphs from the St Louis Fed show the same trend of generally increasing output except during recessions when manufacturing output declines.

Even if you took anything a branch of the Federal Reserve Bank said seriously, you'd still be left with the problem of actual proof. So what if the manufacturing index goes up? Does that necessarily imply that the United States has a larger productive output than it used to? The answer to that question is: no. In fact, it's quite possible that the manufacturing index is only up because of government rescues/bailouts (for things like the car industry) - in which case, there would not be any need whatsoever for that rise in the PMI to result from heightened productive output or capacity.

[C.W.]

Peter never said that the dollar holds no value but rather that it is overvalued that our level of production is no where near the value of the dollar. I would like to see your source where he says the Dollar has no value.

Bruce,

My source for this discussion of Peter Schiff is his book, Crash Proof. It is his big, recent public statement, available in bookstores and libraries around the country. I will soon examine his revised book.

Schiff does not say that the dollar is worthless directly. I think that I actually picked up this phrase from Andrew in earlier posts. Schiff says that the U.S. does not produce anything worth buying, as you agree. He says that we cannot pay our debts. If you don’t produce and can’t pay your bills, your currency is worthless. We will experience a “monetary collapse” (p. 2). “The dollar is going to collapse”. (italics in original, p. 6) That is why Schiff says it will crash, and “our purchasing power will be gone”. Examples of his statements about the U.S:

"It’s [the U.S.] analogous to a family…whose breadwinners have lost their jobs. To keep up appearances and maintain the same lifestyle, the family resorts to borrowing and goes deeper and deeper into debt.” (p.2) The U.S. has no job, i.e., we do not manufacture anything.

“Americans are not saving and producing but are borrowing and consuming” (italics in original, p. 4). This is presented as a dichotomy for some reason. If you are only doing the latter two, then there could be a problem, but generally, all four are okay.

The best example from Schiff is the parable is you have quoted. The “American” in the story produces nothing, gives out paper worth nothing. This is Schiff’s view of the American economy. I have some strong things to say about this parable, which I shall save for later.

You need to specify your explanations and how it conflicts with Schiff's. Schiff gives several reasons why foreigners hold our debt. One of the main reasons is to create a favorable trade balance for exporter nations. However, most of the real wealth in the US has dried up and this practice is losing validity.

In Crash Proof, the only reason that I saw Schiff offer as to why foreigners were accepting dollars was that the U.S. was pulling the wool over their eyes. There was some allusion to China and its current mercantile policy, but that only pertains to China. I saw no other explanation.

My two explanations of why foreigners accept and hold dollars are that the dollar is the only international currency which is a value, and that holding the dollar is often better than holding the domestic currency, are both inconsistent with Schiff’s claims that the dollar offers no value. The dollar debts cannot be paid and there is nothing produced worth buying and, consequently, that it is really one of least valuable currencies on the planet. His advise is to divest yourself of dollars. Schiff says hold gold, hold foreign currencies, hold foreign stock, anything but dollars. I suppose that Schiff might say that there are many currencies that are worse off than the dollar. Perhaps his comments about the rest of the world are meant to refer only to the “Asians”. From his book, it isn’t clear.

Peter says there will be a decline in the value of the dollar however he states it will take place over time and that we may see inflation as high as the double digits.

The dollar will decline a significant amount though ( I think you agree with that) its impossible to maintain its current value (even though its fallen 40% since 2001).

Schiff rarely says that it will decline over time. He says collapse. He says crash. He says “hyperinflation” (italics in original on p. 6; p. 9).

A collapse in the dollar and thus the U.S. economy will hit other countries very hard. By devaluing the dollar to near zero their reserves will be wiped out. The results will be similar to what happened to banks when their reserves were wiped out by securitized mortgage bonds written on sub-prime criteria. The world financial system is based upon the dollar.

Many countries unlike the US especially in Asia still have the capacity to produce wealth.

You see, you consider the U.S. to be a worthless place. Sir, you are wrong.

You must realize that the U.S. is actually a country that depends upon international trade to a much smaller amount than any other industrialized country. The trade deficit is only about 5% or our total economy. Trade is about 25%. So we export about only 20% of our production. We aren’t getting all the good stuff from overseas. Go to the library and ask to look at the current edition of the Thomas Register, scan it, then look for your geographic area, and go visit those companies. Learn something about America.

Okay, some specifics:

The U.S. debt owned by foreigners that has put us into trouble is federal government debt. Of our federal debt, in mid-2008, foreigners held about $2.6 T, or about 24%, the Fed about $600 B, of a total federal debt of about $10.3 T, which means that U.S. citizens, business, and banks held $7 T. Foreigners are said to be financing our debt only because the interest rate would need to be a lot higher to attract the money necessary within the country. (I found my information by Googling. It conflicts with Sniff’s chart on p. 6 which is apparently 2006 information.)

The U.S. is a net debtor, meaning that we owe more than we are owed. Foreigners also borrow from us. If you look at non-government borrowing, the U.S. is a huge net lender.

Incidently, through most of the 19C we were net borrowers in the private sector. The reason it is bad today is again, that it is government debt, not productive debt.

[C.W.]

He is an example from crash proof I think is relevant.

"Let us suppose six castaways are stranded on a desert island, five Asians and one American. ....

Do you consider this “example” is representative of yourself? Does it accurately reflect your friends or relatives? Does anyone you respect or admire fit this example? Aside from some government employees, have you seen anyone who fits into this example. Does any working person, including housewifes fit? What do you think that this proves or illustrates?

If Schiff does run for office, his opponent would not have to do anything other than take this “example” to every working person of any talent or capacity, saying that this is what Schiff thinks of Americans, and he would win hands down.

I think that if Ayn Rand were to have seen this she would have been outraged.

I would expect this “example” from one of our enemies, say Castro.

It is insulting. I am insulted.

It does not offer any argument or justification to think that the U.S. is in serious trouble. (We are, but the Current Account Balance isn’t the reasons. It is a problem.)

It certainly doesn’t offer any reason to think that the crash of the dollar won’t be a crash of the world system.

[C.W.]

Every sophisticated economy needs a manufacturing base before it can begin any focus on service-sector industries.

Andrew,

This statement just seems to be an unsupported claim. Besides, Schiff does not claim that we didn't have a manufacturing base before we began to "focus" on a service sector. He claims that it went away, and the service sector by itself is not sufficient.

Some of the responders on this forum have disputed Schiff's claim that we have no manufactuing capacity to speak of. We do. I think that the trade figures listed in earlier posts support our position. Plus consider that only about 20% of our economic activity is in imports. Such a small percentage would at least suggest that we do a lot of manufacturing, in spite of Schiff’s claims. Please give us Schiff's supporting evidence for his postitions.

[C.W.]

What you don't realize is that the private services are being funded by foreign debt through the t-bills and the fed. The money that's there for goods and services would not be near as close to where it is without foreign debt. The amount of wealth and production in this country comes no were close to the amount were accurately consuming.

Bruce,

I know that the first part of your statement is what Schiff says, but I cannot see how that works. Foreign purchases of our government debt do finance government activities, just as domestic purchases do, but how it then connects to services, I don't see. Our services exports are not a large part of our exports anyway, so it his argument is way off.

The last sentence about wealth and production is unsupported. Evidence, please.

The issue is that people need to buy goods, not just services. If the only thing Americans make are services then goods must be produced elsewhere. This means that the net money flow is out of the US; i.e. the huge trade deficit. If Americans manufactured goods then the money would stay within the economy.

This isn’t supported either. In addition, the sentences are non sequiturs. The first sentence is not what you mean, you meant to say that people need to produce goods. That is a point in dispute, the U.S. does produce. Go look at Thomas Register. Look at actual production figures.

[C.W.]

Schiff's Asian-American island example is meant to demonstrate the absurdity of the claim that the Chinese economy relies on the US economy....

The example fails. It merely restates what he has already claimed without support. It merely insults. I do not know why Schiff offers this “example”. Have you shown it to any Americans and told them that you think that way about them?

But remember that Peter writes those books for the every-day person - he writes much more straight-forward in his Euro Pacific Capital articles and newsletters.

This is not a very smart thing to do. Now you’re saying that his attitude toward the “every-day person” is insulting. That he can’t really explain himself. That the “every-day person” isn’t smart enough to understand the real world, especially today’s mess. Not smart.

[C.W.]

None of this has to happen, because people can change.

SoftwareNerd,

Schiff says that it is irreversible: “[The U.S.] is fighting a losing battle against trade and financial imbalance that are caused by dislocations too fundamental to reverse.” (p. 1, Crash Proof) A collapse is unavoidable. We are doomed.

[Andrew Grathwohl]

The example fails. It merely restates what he has already claimed without support. It merely insults. I do not know why Schiff offers this “example”. Have you shown it to any Americans and told them that you think that way about them?

I'm an American and agree with his claim. Americans produce hardly anything of value - period.

This is not a very smart thing to do. Now you’re saying that his attitude toward the “every-day person” is insulting. That he can’t really explain himself. That the “every-day person” isn’t smart enough to understand the real world, especially today’s mess. Not smart.

Frankly, the every-day American doesn't understand economics. Peter does. You've probably never read a single thing by Peter on your own, other than the examples posted by your Objectivist buddies here. If you read his professional articles on his company's website (www.europac.net) you'll see he's incredibly well-versed, can explain himself entirely, and absolutely spot-on in his predictions.

In fact, speaking of his predictions, let me go ahead and post this now...

This is a speech from 2006. He spoke in front of over 2,000 mortgage bankers and real estate investors, telling them what was coming. He got it all right.

He slams Greenspan for abandoning his "Ayn Rand roots."

Edited September 29, 2009 by Andrew Grathwohl

[C.W.]

...this claim that the US doesn't manufacture anything anymore is a common misconception. In fact, the real value of US manufactured goods has generally grown.

Phil, this is an excellent point.

Unfortunately, Schiff claims that U.S. increasing productivity is a myth. Sorry. See “The Productivity Myth” (p. 38) in Crash Proof

[gags]

Unfortunately, Schiff claims that U.S. increasing productivity is a myth. Sorry. See “The Productivity Myth” (p. 38) in Crash Proof

C.W., I haven't read his book. How does he explain that increasing US productivity is a myth?

[softwareNerd]

SoftwareNerd,

Schiff says that it is irreversible: “[The U.S.] is fighting a losing battle against trade and financial imbalance that are caused by dislocations too fundamental to reverse.” (p. 1, Crash Proof) A collapse is unavoidable. We are doomed.

And, of course, he's wrong if he says it is inevitable. Perhaps he actually means that people in the U.S. will not (as opposed to cannot) change in time to avert a crisis. With someone who uses hyperbole, it is tough to know his real position.

In fact, people can change really fast. We already see the private saving rate going above generational highs. If there were to be a change in the economics of manufacturing some item (say shoes) which has gone off-shore, one will find U.S. based production come on line in a matter of years.

The only jokers in this story are the governments involved, and people in their role as voters. Demanding change from their government is a different matter. I don't think one can predict how that will play out. Time and again, countries have shown that they can keep enduring more and more pain, while sticking to the same old political philosophy. On the other hand, time and again, countries have shown that they can change their political direction.

[khaight]

Every sophisticated economy needs a manufacturing base before it can begin any focus on service-sector industries.

The term "economy" here needs to be unpacked, I think. An "economy" is not some kind of collective organism; it is an aggregation of the voluntary exchanges of the individuals who make it up. When we say that an economy has a "manufacturing base", what we mean is that there are some people in it who make physical objects and offer them for trade with others. A "service-sector worker" is a person who performs services in trade with others. That's all.

Now, because human beings have physical needs that can only be met by physical objects with certain characteristics, it follows that if *nobody* is making the relevant physical objects then everybody is going to die. Duh. That's the grain of truth in your claim. But an individual who does not himself make physical objects can survive by obtaining them through trade with others -- as long as such trade is possible. If a person whose physical needs are met through trade rather than direct production is cut off from trading, he will need to shift to meeting his physical needs directly or die.

I think this notion of the lack of a manufacturing base being problematic stems from the fear of trade shutdown. What if there's something you can't make yourself, and you can't get it by trading with others? You can do without services if you must, but you can't do without food, therefore the service producer is vulnerable in a way that the food producer is not. I think this objection proves too much, however. Merely because you are producing something physical ("have a manufacturing base") doesn't mean you will be able to trade whatever you have manufactured. In a sophisticated economy, the vast majority of manufacturers are just as vulnerable to trade breakdown as the service producers. And if there is no trade breakdown, there's no functional difference between value created in the form of physical objects and value created through services.

[Jake_Ellison]

I'm an American and agree with his claim. Americans produce hardly anything of value - period.

If that were true, you could not possibly know it, since you wouldn't have the tools to compile all the data required to make such a determination. Those tools, such as Media and the Internet, available to so many Americans, are of great value.

Plus, I personally know plenty of people who are very productive, not to mention all the incredibly productive people who are famous in my profession, or even globally, in the media, for their massive talent and ability to produce vast ammounts of what people objectively value.

The one person I can actually take your word on, without contradicting what I know, is you yourself. Why aren't you producing anything of value?

[khaight]

Plus, I personally know plenty of people who are very productive, not to mention all the incredibly productive people who are famous in my profession, or even globally, in the media, for their massive talent and ability to produce vast ammounts of what people objectively value.

For that matter, I'm an American and I produce things of value. Frankly, I resent the presumption of somebody with no knowledge of what I do flatly asserting that I'm not doing it when I know perfectly well that I am. All that does is make me lose respect for Andrew's judgment.

[Andrew Grathwohl]

SoftwareNerd,

Schiff says that it is irreversible: “[The U.S.] is fighting a losing battle against trade and financial imbalance that are caused by dislocations too fundamental to reverse.” (p. 1, Crash Proof) A collapse is unavoidable. We are doomed.And, of course, he's wrong if he says it is inevitable. Perhaps he actually means that people in the U.S. will not (as opposed to cannot) change in time to avert a crisis. With someone who uses hyperbole, it is tough to know his real position.

In fact, people can change really fast. We already see the private saving rate going above generational highs. If there were to be a change in the economics of manufacturing some item (say shoes) which has gone off-shore, one will find U.S. based production come on line in a matter of years.

The only jokers in this story are the governments involved, and people in their role as voters. Demanding change from their government is a different matter. I don't think one can predict how that will play out. Time and again, countries have shown that they can keep enduring more and more pain, while sticking to the same old political philosophy. On the other hand, time and again, countries have shown that they can change their political direction.

The fundamentals of the United States economy are completely unsound. The strength of our currency is based fundamentally on the fact that it is the reserve currency of the world. The United States' paper market is its largest export. We specialize in nearly nothing in the world that some other country cannot produce faster, better, and cheaper. Knowing this, how can you say a massive depression is not inevitable? We're going to be running deficits of 2 trillion dollars a year for the next 10 years. Do you understand how much inflation that is going to produce? We had many opportunities in 2007 to correct this problem - to not arrive at an inevitably perilous conclusion - but we squandered those chances with the massive money creation we engaged in last year.

If that were true, you could not possibly know it, since you wouldn't have the tools to compile all the data required to make such a determination. Those tools, such as Media and the Internet, available to so many Americans, are of great value.

The "hardly" in my sentence may help you re-think your interpretation of that quote.

All things considered, American cable and internet service providers constitute a relatively small amount of the product of American industries. Our cars aren't valuable - we can get better cars for cheaper from foreign nations. Our technology isn't valuable - India's IT sector outperforms the United States, Japan's and South Korea's consumer electronics sectors outperform the United States. Our agricultural market is pathetic - based mostly on low-quality mass-manufactured garbage riddled with corn-derived materials (lacking in nutrients). Our tobacco industry is no longer the most profitable or highest-volume manufacturer in the world. Need I go on?

What do we still produce that is valuable? Well, we have a damn good porn industry, and Hollywood and the American music industry still serve as the international popular entertainment providers.

So tell me again: what is it exactly that America produces that is so valuable? Did I miss anything?

Plus, I personally know plenty of people who are very productive, not to mention all the incredibly productive people who are famous in my profession, or even globally, in the media, for their massive talent and ability to produce vast ammounts of what people objectively value.

What do you do?

A "service-sector worker" is a person who performs services in trade with others. That's all.

Services are performed only because we have manufactured goods that need/benefit from these services.

[Jake_Ellison]

What do you do?

I'm a computer programmer.

Your previous claim was that hardly anything is being produced where you live, in America. So let's start with the center of your Universe. Why aren't you producing anything, or hardly anything?

All things considered, American cable and internet service providers constitute a relatively small amount of the product of American industries. Our cars aren't valuable - we can get better cars for cheaper from foreign nations. Our technology isn't valuable - India's IT sector outperforms the United States, Japan's and South Korea's consumer electronics sectors outperform the United States. Our agricultural market is pathetic - based mostly on low-quality mass-manufactured garbage riddled with corn-derived materials (lacking in nutrients).

You keep speaking for other Americans, and their values. You're an American, what do you have, that's valuable, and how did you get it, if you have no value to offer in return? Did you steal it?

Or, if you have nothing that's of value, how do you survive?

[Rearden_Steel]

Bruce,

I know that the first part of your statement is what Schiff says, but I cannot see how that works. Foreign purchases of our government debt do finance government activities, just as domestic purchases do, but how it then connects to services, I don't see. Our services exports are not a large part of our exports anyway, so it his argument is way off.

The last sentence about wealth and production is unsupported. Evidence, please.

This isn’t supported either. In addition, the sentences are non sequiturs. The first sentence is not what you mean, you meant to say that people need to produce goods. That is a point in dispute, the U.S. does produce. Go look at Thomas Register. Look at actual production figures.

All right I have more questions then I do time so I will only address a couple at a time.

What your not understanding is that the foreign debt doesn't just concern the government but the whole economy as a whole. The problem in two pronged because it both sends false signals to the economy as well as destroys wealth.

As the Fed sells T-Bills, the revenues go into the Fed balance sheet. Banks then borrow the money from the Fed through short term loans and commercial paper. Roughly $212 billion in loans was made available from the fed to banks just this past week alone, the same goes for the previous week. If there is a lot of money in the economy, interest rates will drop because banks will have an easier time of procuring money to loan.

Due to the nature of Fractional Reserve Banking, the rate set by the Fed winds up increasing the money supply. Meaning as the rate is lowered, more money is "printed" into existence. The creation of all this new money has the artificial effect of lowering rates for things like mortgages because the supply of money just got that much bigger - hence demand falls, so rates need to fall as well to attract borrowers. The important thing to understand is that this increase in deposits at banks was not the natural result of savings - instead it was because of the artificial "money creation" following the Feds rate adjustment.

In a free-market, interest rates provide crucial information about the state of the economy, just like prices. Low interest rates signal that money is plentiful, without monetary intervention, that would actually mean that our economy is in a state of prosperity, which is an environment that is more favorable to risk taking. The fed effectively tricked the market into thinking it was a good opportunity to take part in risky behavior because they think their is increased savings.

Edited September 30, 2009 by Rearden_Steel

[cliveandrews]

Do any of you have a problem with Schiff running as a Republican? Or the fact that he was Ron Paul's economic advisor?

[C.W.]

C.W., I haven't read his book. How does he explain that increasing US productivity is a myth?

I'll let him tell you, from Crash Proof (p. 38).

THE PRODUCTIVITY MYTH

The comforting distorting: Productivity gains mean higher sustainable growth rates, lower inflation, and lower unemployment.

The disturbing reality: What productivity gains?

So maybe we do have a problem with sustained economic growth, with inflation, and with diminished production, but won't these problems be alleviated by the technology-driven economic phenomenon known as productivity?

...

A great deal has been made of U.S. productivity gains and how they are supposed to translate into sustained higher economic growth rates, lower inflation, lower unemployment, and less pronounced business cycles. Productivity enjoyed its highest level of hype just before the dot-com bust, as part and parcel of the heralded but now discredited "new economy."

Productivity means output per unit of imput, input referring to labor or to time. Whatever the fallacies of the new economy argument, productivity should theoretically improve as technology enables deeper levels of analysis that managers can use to achieve higher levels of efficiency. The questions are (1) how significant a factor higher productivity has actually been and (2) why, if it is true that we are more productive than our trading partners, our trade deficit gets bigger, not smaller.

...

After a decade of analysis, however, it has been generally concluded that while computers and technology have accomplished wondrous things, higher industrial productivity is not notably among them.

Because computer technology has advanced so rapidly, hedonics analysts decided to recognize these advances using a formula to adjust the productivity numbers of computer manufacturing a new computer has 10 times the power of the model it replaced, the manufacturer's productivity is increased by a factor of 10. In other words, the employee who put the computer together has improved his output 10 times over, an obvious and ridiculous (but real) distortion of the productivity statistic.

...

When measuring productivity, it's the production of consumer goods, not of capital goods, that counts, the sole purpose of the latter being merely to facilitate the production of the former.... The key factor is not how fast or sophisticated the computers themselves are, but how many more consumer goods businesses actually produce as a result of using them.

So, because computers turned out, according to his sources, to be not as productive as promised, there was no increase in productivity. I wonder how he thinks increases in productivity occurred before computers? I mean, he seems to think that only computers could have created more productivity. Or, the productivity increase during the 90's was measured. Schiff has now declared that since computers weren't as important as first thought, the measured increase in productivity doesn't exist. I don't think that this is the only example of Schiff's thinking like this.

Another important point, he says, "...why, if it is true that we are more productive than our trading partners, our trade deficit gets bigger, not smaller." I do not understand why he thinks there is a direct connection. There are echoes of this thinking elsewhere in his book and in earlier posts from his supporters. He sees our trade deficit as a result of our needing manufactured goods (no one offers any actual support for this contention). All we really see is dollars going overseas that don't come back, well, at least until recently. We only have to look to the Fed to see the reason. Imports are financed by bank loans. The Fed has expanded bank loans like crazy for decades. We have been exporting our inflation.

[C.W.]

SoftwareNerd,

Schiff says that it is irreversible: “[The U.S.] is fighting a losing battle against trade and financial imbalance that are caused by dislocations too fundamental to reverse.” (p. 1, Crash Proof) A collapse is unavoidable. We are doomed.And, of course, he's wrong if he says it is inevitable. Perhaps he actually means that people in the U.S. will not (as opposed to cannot) change in time to avert a crisis. With someone who uses hyperbole, it is tough to know his real position.

In fact, people can change really fast. We already see the private saving rate going above generational highs. If there were to be a change in the economics of manufacturing some item (say shoes) which has gone off-shore, one will find U.S. based production come on line in a matter of years.

The only jokers in this story are the governments involved, and people in their role as voters. Demanding change from their government is a different matter. I don't think one can predict how that will play out. Time and again, countries have shown that they can keep enduring more and more pain, while sticking to the same old political philosophy. On the other hand, time and again, countries have shown that they can change their political direction.

SoftwareNerd,

I agree with you. You add in a little freedom, and our prospects can change quickly. I was amazed that Schiff would say what he did.

I don't try to figure out what someone means, I take them at what they actually say. Of course, I personally often have to back track, cuz there are gaps between the brain and fingers. But I don't have a book on the market that has gone through editors, etc.