See the following video of a Russian TV English interview with Peter Schiff, an investment manager in Connecticut. When someone starts talking like this, run don't walk away. Or change the subject. There is no hope of talking any sense on the subject.
If you can't see the embedded video: Click Here
This is an egomaniacal idiot who's dead wrong and severely misguided in his judgment. Many many people could see the current housing crisis coming; Schiff is no sage. Nobody wanted to hear a party-pooper though, as Krugman said. And too many people were getting rich playing the game to stop. It was a gambling addiction, pure and simple.
So it wasn't the housing bubble that needed foretelling. Who couldn't see it? Nobody knew when it was going to end exactly, and that was the problem. So what exactly really needed foresight that was nowhere to be found?
It was the $50 TRILLION DERIVATIVES MARKET.
We could solve the housing problem in no time if that's all it was.
The real economic threat was the shadow side-bets-with-no-bookie market of derivatives enabled by former Sen. Phil Gramm, a Republican congress with Democratic enablers, and a Democratic and then Republican administration. See the Commodities Futures Modernization Act of 2000, earlier discussed on this site.
Moreover Schiff thinks the U.S. is in isolated economic dynamics and pays no heed to the fact that the rest of the world is DEPENDENT on a U.S. RECOVERY, and so yes, the world will lend us whatever we ask for... for now.
You can bet this guy's firm is shorting the dollar and so he benefits by talking it down. In other words, if America loses, he wins.
He is only stating the obvious about the nature of the crisis without making any progress into what legitimate options we have to work our way through it.
That's always a fool's position. What we can't tell is whether he's really a fool or simply a traitor.
