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Peter Schiff was Wrong

From Mish.

Schiff's Overall Thesis
  • US Equity Markets Will Crash.
  • US Dollar Will Go To Zero (Hyperinflation).
  • Decoupling (The rest of the world would be immune to a US slowdown.
  • Buy foreign equities and commodities and hold them with no exit strategy.
Schiff was correct about point number 1 above. The US equity markets crashed. That was a very good call. Unfortunately, his investment thesis centered on shorting the dollar in a hyperinflation bet, and buying foreign equities rather than shorting US equities.

Furthermore, Schiff made no allowances for being wrong and had no exit strategy whatsoever.

What happened in 2008 was that foreign equities sold off much harder than US equities, and a strengthening US dollar compounded the situation.

In other words, Schiff failed where it matters most: Peter Schiff did not protect his client's assets. Let's take a look how, and more importantly why, starting with charts of various foreign indices.

I've never understood the reasoning behind a dollar collapse. 

The US dollar is not going to collapse, at least not relative to other fiat currencies.  It cannot without doing enormous damage to the global economy.

Fiat currencies have a natural range by which they are bound.  If the dollar went to three against the euro, the American economy would boom because American goods and services would be enormously cheap relative to the euro.  Conversely, the European economy would collapse because their export markets would disappear. 

So no, the US dollar will not collapse against other fiat currencies.

Against real assets however...

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