"Most people are in arrested development and cannot use logic." Jacob.
"Competition and capitalism are hated to-day because of their tendency to destroy poverty and privilege." William Hutt
"America is unique in that our economy is totally dependent on global charity." Peter Schiff

Tuesday, September 20, 2011

Mark Matson "Destroys" Peter Schiff

http://www.markmatson.tv/ , the Sep 16, 2011 episode.

His arguments:
1. The markets have already taken into consideration everything Peter Schiff says about the govt being a disastrous influence on the economy. Billions of people around the world already know and agree with everything Peter Schiff is asserting. Therefore all prices already have his knowledge factored in.
Only random, unpredictable events can possibly change prices from now on.

But Peter Schiff is saying the market has it wrong, and that he, Peter Schiff, knows what the real price should be, and that he can predict the future and say what the price will be. Which is a big mistake. The world, including the Fed, is just too unpredictable and chaotic etc. to be predictable at all. Saying one knows what will happen next is saying one has The Mind of God. Chuckle chuckle.

Rebuttal: Top quality foolishness. Peter is not talking about the price of anything in the clip Matson shows, but rather saying that the economy will be in a recession despite govt attempts to fix things, which certainly came true.

As for the philosophy that the world is too unpredictable, what evidence does he give for that? Will he deny the predictions of Sir Isaac Newton that F=ma because the world is too unpredictable? Just asserting that the world is unpredictable does not prove someones predictions wrong. So we await hard evidence that Peter Schiff was wrong. Let's see more of the show: 

2. Schiff's early 2009 prediction was wrong. He predicted that the market would crash, and it didn't.   Chuckle chuckle.

Rebuttal: Nowhere does Peter say in the clips that the market would crash. Matson equates the country being in a recession, which Peter said would continue through 2009 and on, with the stock market crashing. They are not the same thing. Ask the unemployed people you know about this. Ask Obama if he is confident of re-election because the stock market did not crash.

3. March 5, 2009. Peter says to get out of US assets and out of the US dollar. [US dollar index then at 85.50. Today, Sep 20, 2011 it's at 77.47, down 9%. Dow Jones Industrial Index was at 6,627, now at 11,335, up about 100%. Not sure how foreign markets did in that time period. Then the Dow was worth about 8 ounces of gold. Today it is worth about 6.]

4. Matson says he believes in a portfolio that has "the highest expected returns", but does not believe in "forecasting the future".

Rebuttal: Huh? What do you think the word "expected" means?

5. Peter has minions, one of which is Michael Pento, whom Matson "always calls Pinto Bean". In June 2009 [when Pento was not working for Peter Schiff, but was somehow one of his minions nonetheless], Matson predicted on national television that the American character will lead us out of the recession, and Pento says that the basic problem plaguing the economy, huge debt to the tune of 34 trillion dollars, has not gone away. Matson replies that since this an investing show, that proves that the stock market will improve in the long run. [Yes, he said this!] The market has gone up 40% since the beginning of the year, and all that Pento is saying is already included in the price.

Matson's minions on his TV show say that Pento was wrong about his prediction. They point out that since so many people have made incorrect predictions over the years, therefore all predictions by anyone are unreliable. [Exercise for the reader. What logical fallacy is this?] They also mock people who buy gold.

Rebuttal: Are we watching the same video of Michael Pento? What was he wrong about? Has the recession ended? I know people who have just been told their work week is being reduced to four days from five, with corresponding reduction in pay. Obama is terrified that the economy will be his downfall. How is Pento wrong?

Later, Matson says that Pento "obviously said that the market couldn't continue to go, that stocks are going to be terrible". Which of course he didn't. Same fallacy of confusing rising stock market prices with an end of recession.

By the way, Peter shows in his book, Crash Proof, how the govt figures about inflation are totally wrong. He has stated many times that stocks may retain their nominal value due to inflation, but since the dollar has lost real value, so have the stocks. He uses the price of gold as a rough measure of the value of the dollar. note that stocks have declined using that metric.

6. He shows a video from "last week" where Matson says gold is a terrible investment long term. It's only for speculators. He mentions a few statistics that prove stocks and bonds are a better investment. Gold was $1,757 an ounce that day, down from $1,900. Peter replies that you have to look at the length of time we are talking about. He says that, compared to ten years ago, gold went up and stocks went down. [Gold was $280 and ounce and is now $1,800. The Dow was at about 10,000 and is now at about 11,400].

Peter says Bernanke will print more money. Matson misquotes him as saying "Bernanke will SAY he will print more money."

He mocks Peter's assertion that equities did not make any money over the last ten years. [The official govt stats say inflation from 2001 to date is 28% [source: http://www.usinflationcalculator.com/]. So that the rise in the Dow of 10% is more than wiped away by 28% official inflation].

He says that Peter "cherry picked" ten years to measure gold prices. Rebuttal: Here is a chart of gold prices going back 20 years:

Pick any time segment you wish ending in the present. What do you think?

BTW, heres a chart for the Dow from 2000 to date:

7. One of the minions.... but you get the idea. It's late. Nighty night.

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