Peter Schiff vs. the World, 2006 to 2007

This video is fascinating for two reasons: 1. Watch as Peter Schiff of Euro Pacific Capital — in 2006 and 2007 — describes with amazing precision the very crisis that unfolded in the past two months. 2. Watch the reaction of reporters and especially other market pundits. It’s not just that they disagreed, it’s that they obviously had no idea what Schiff was talking about.

A caveat: What’s unnerving to me about this video is how certain both Schiff and his critics are that they are right. Obviously Schiff was proven right, to his credit. But at the time, you could agree with Schiff’s general critique of the U.S. economy (that the country is too indebted, for example), but you could find little evidence that it would get as bad as he predicted.

That’s one reason everyone else looks so baffled on this video: At the time, Schiff (who I’ve interviewed) often sounded like he was from another planet. His view of the world so differed from both the market consensus and from certain supposedly objective measures of the U.S.’s financial strength. I don’t think the lesson of the financial panic of 2008 is “always listen to Peter Schiff” or “we need better prognosticators.” It’s “you never really know what’s going to happen,” and “pay attention to evidence, not predictions.”

(via Andrew Sullivan)