Mish...Schiff was wrong!

[FRED]

Re: Mish...Schiff was wrong!

Here is my response to you:

http://dailybail.com/home/2009/1/25/...following.html

One of our members posted that yesterday as xperts... I don't need no stinkin' xperts.

You'll find 100s of videos on our Video forum.

[FRED]

Re: Mish...Schiff was wrong!

The charts still do not provide any evidence of Mish flip flopping.
I provided a prove of his stance on deflation in the recorded 2006 audio interview. You stated that he changed his view "numerous" times.

Please provide a supporting reference / evidence that he changed his view, if you have any. You've made a statement - back it. Otherwise this is what iTulip does best - fills air with words.

We forecast a period of rising inflation followed by a period of declining inflation, and this is what actually occurred. This is not the first time we were right about this, either.

The previous time we correctly called a future inflation during a period of disinflation, mistaken for deflation by neophytes at the time, was in 2001. Our readers were able to identify the near exact best time in 20 years to buy gold, and EJ did. Lots of it, at $270. So did many of our readers.

Mish entered the scene many years later, calling for deflation starting in 2005. Gold, oil, and later food prices began to spike as the dollar fell and import prices started to push prices up through the pricing structure of the US economy, and other economies around the world. Meanwhile asset prices had started to deflate, and we called the exact top of that asset price inflaton in Housing Bubble Top, after previously calling the top in the previous asset price inflation Internet Bubble Top in March 2000.

During the period of high inflation in goods and commodities prices, and the start of the asset price deflation, in debates Mish refused to admit the massive inflation in commodity prices going on all around him. Here are a few articles that appear before, during, and after.

Still no deflation: Disinflation then lots of inflation

You're not going to believe this: Inflation/deflation debate still alive?

The deflation case: caught, gutted, poached and eaten

Since he refused to admit he was wrong, that in fact a period of inflaton had, as we expected, developed before the period of disinflation that crashing asset prices were due to bring on in the future, we threw up our hands and teased him with the following.

Deflation vs Inflation debate: Part XXXVI - Final

That's all the time I have to tell you what you already know that, as a Mish troll, are trying hard not to find: Mish has been calling for deflation through a period of high inflation and now during the period of disinflation, both periods we accurately forecast. He is now saying that he was right all along, and that deflation will go on for 10 years.

In a year's time when inflation is high again, we wonder what Mish will say this time he's wrong, again. We assume he'll once again, as in the 2005 to 2008 period, pretend the inflation doesn't exist. What else can he do?

[FRED]

Re: Mish...Schiff was wrong!

I really appreciate the time you put into this analysis. I have to re-read it to absorb the info.

The impression I am getting is that nobody really knows how things are going to play out, but analysts like to pretend they do. Keeping an open mind is the key.

When US dollar was falling I remember the iTulips' downward spiral with smart investors flying out of the US in an airplane filled with dollars, that was enough to get anyone with real dollar savings into panic mode.

But what actually happened - investors flew right back into US into Treasuries, deleveraging did not crash the dollar as Schiff was sure it would. Schiff bet against the dollar and put OPM on outside of the US. Look at his client's losses. Long term investments? He now needs 230% gains to recoup 70% losses, is that realistic? The world is in recession. It was the key to recognize that it will be. It's worse in Europe, than it is in US. As far as prices are concerned 2 brand new cars for the price of one is not raising prices. CPI is falling, it is cheaper to buy gas, food, real estate, cars if you have the cash.

The bottom line: doing nothing (sitting in cash) from a year ago would be better than doing anything and it's probably still a good option.

In ten years iTulip has only ever discussed two asset classes worthy of investment:

1) Treasury bonds, via Treasury Direct, starting in 1998
2) Gold starting in 2001

We do make occasional short calls for subscribers, such as "Time to short the stock market" in Dec. 2007 and "Time to short commercial real estate" as in June 2008. Notice we don't say, "Time to get out of the stock market" because we assume readers are, like us, not in the stock market.

Sitting in gold, Treasury bonds and CDs for ten years may sound crazy to most people, but not to those who have been following this site for ten years. Here's how it turned out for us:

10 year returns for gold and Treasury bonds, the only asset classes that iTulip has favored

10 year returns, per EJ's personal allocation, for each $1,000,000 invested since 1998

You will not find a single reference to buying commodities, oil, commodities funds, or even gold mining stocks, in ten years. Go ahead. Look around.

There will come a time when the "Ka" disinflation part of the Ka-Poom process comes to an end. This event will arrive as a combined political and market phenomena, and thus is so hard to time that so far all we have been able to come up with to protect ourselves is to stay in the very short end of the treasury bond market, 13 weeks, as we have since 1998 so that if bonds sell off and rates rise, we are only exposed to three months' loss of purchasing power of prinicple net of rising interest rates. For the same reason we do not trade in and out of our gold position, even though for long time readers, if they track EJ's allocation, it is now in excess of 30%.

In an economy and market dominated by governments and asset bubbles, it's the iTulip position, going back ten years now, that there is nothing else an investor can do. It's a terrible state of affairs, but there it is.

[deflateIT]

Re: Mish...Schiff was wrong!

I just read what you guys have written. And I must say things became a little bit clearer. I guess I have missed key points over the years by just concentrating on deflation/inflation and made the final conclusion on deflation because that is what appears to be happening at the very moment. The points you are referring cought me off-guard and made me think again.

If I understood correctly, Mish is saying what he is is saying to attract readers and sign them up for Sitka Pacific services? I am trying to understand the intent and purpose of his blog. His blog is free and anyone can read it. Why is it free? Why would he be wasting time writing daily blog? To become famous? Sorry for being naive, but the answer is not apparent to me. The info on his page APPEARS logical and correct and I have been following him, iTulip and other sources to try and make sense out of what is really going on.

Stuff with Schiff and the losses came to be a real shock to me and I listened to him and liked what he was saying, even though never invested how he was investing. Where did Schiff fail? After reading Mish on that subject it again made cense. Not a troll, just IMHO.

[FRED]

Re: Mish...Schiff was wrong!

I just read what you guys have written. And I must say things became a little bit clearer. I guess I have missed key points over the years by just concentrating on deflation/inflation and made the final conclusion on deflation because that is what appears to be happening at the very moment. The points you are referring cought me off-guard and made me think again.

If I understood correctly, Mish is saying what he is is saying to attract readers and sign them up for Sitka Pacific services? I am trying to understand the intent and purpose of his blog. His blog is free and anyone can read it. Why is it free? Why would he be wasting time writing daily blog? To become famous? Sorry for being naive, but the answer is not apparent to me. The info on his page APPEARS logical and correct and I have been following him, iTulip and other sources to try and make sense out of what is really going on.

Stuff with Schiff and the losses came to be a real shock to me and I listened to him and liked what he was saying, even though never invested how he was investing. Where did Schiff fail? After reading Mish on that subject it again made cense. Not a troll, just IMHO.

You are no longer coming at us like as trolls do, so we will stop treating you like one. Welcome.

The reason we do not sell a fund is that a fund forces the market commentary to be marketing for the fund. The editorial can't make observations or forecasts that contradict the structure of the fund. Thus the key messages of market editorial issued by funds falls into five major categories:

Stock Mutual or Index Fund: "Stocks go up in the long run. Buy and hold stocks."

Bond Fund: "Stocks go down and stay there for long periods. Deflation is coming. Buy bonds."

Gold Fund: "The world is coming to an end. Buy gold." and/or "The dollar is doomed, buy gold." and/or "Inflation is coming. Buy gold." and/or "Gold is honest money, buy gold." among many others.

Commodity Fund: ""The dollar is doomed, buy commodities." and/or "The world is growing and commodity demand will outstrip supply, by commodities."

Emerging Markets Funds: "The USA is doomed, BRIC is growing, buy emerging markets stocks." and/or "The dollar is doomed, buy emerging markets stocks."

Most contrarian funds, such as Schiff's, represent a mix of the bond, gold, commodity, and emerging market's theses, and the editorial reflects that.

What's odd about Mish's editorial is that it's a contradictory mix of the deflation message used by Bond Funds and inflation message used by Gold Funds. This quite simply makes no sense. No one else does it.

Our thesis is asset-class independent. For the past 10 years, asset price inflations and deflations have driven the markets. Period. That has come to an end. Now what? We are boiling the ocean to come up with our best forecast.

[Guest]

Re: Mish...Schiff was wrong!

Now now Metalman, please don't be a bore. Everybody here already agrees that iTulip has been an excellent and infallibly early source of market intelligence. Yes of course, I understand you are telling me they were the very first with this analysis and everyone else reiterating these points is second fiddle and therefore needs to shut up and adopt a suitably deferential silence. My only (hesitant and deferential) suggestion for you: just perhaps - to insist on a diet of iTulip alone may be an unnecessary repetition of iTulip's preeminence? Relax a little on this question guy. Let people post some shabby second fiddle notes (particularly when they are in agreement with iTulip) without barking like a territorial yard dog every time, eh?

hmmmmm.

a. mish is NOT a money manager. he's a certified financial adviser. so is my neighbor's 26 yr old son who mowed my lawn a few years ago... who, like mish, also drives a hundai
b. the rest reads like 10 yr old itulip... no deflation or hyperinflation, big inflation, etc.
c. what does tom szambo have to add to the discussion?

i'm dying to read a new view. hudson was a breakthrough... someone on that scale.

i can't remember.... didn't you find hudson? can't you find another one?

[Guest]

Re: Mish...Schiff was wrong!

Fred - coupla thoughts.

Point # 1) The below allocation of investments is strikingly similar to Sitka Pacific's emphasis on gold and treasuries. Although I do take careful note that iTulip's "thesis" is vastly more nuanced and coherent, aka. "just plain right" compared to Mish's "fish-flops" - but after all the hard spade work of theorizing is done, you wind up with the same investments?

Point # 2) "Only two investments - nothing else an investor can do" - what then was that landmark iTulip article "sell everything" about? iTulip has not sold it's gold and treasuries through the last year's upheavals, so what were you recommending people sell? According to your note here, iTulip has never recommended owning anything other than treasuries and gold, despite the fact we recently went through a quite long period of dollar decay and rising inflation.

iTulip's model investment stance owned only a 15% position in gold and the rest was a solid wall of US treasuries - all through 2003, 2004, 2005, 2006, and so forth. Substantively while the stock market boomed through the above four years, it seems iTulip's model portfolio was positioned much like Mish's in gold and treasuries?

Not trying to be speciously argumentative here, but there is a nugget of plain truth in this striking similarity of investments, no? "Treasuries and gold" are the very core recommendations which Mish has suggested for a good while. Meanwhile the preponderance of USD denominated treasuries (85% - held uninterruptedly for a full decade) recommended by iTulip is striking, given that iTulip is one of the most devastatingly effective proponents of the eventual demise of the USD. None of this is a vindication of Mishian "economics", which is worthy of MC Escher in it's occasionally expedient convolutions, but the parallel is striking.

In ten years iTulip has only ever discussed two asset classes worthy of investment:

1) Treasury bonds, via Treasury Direct, starting in 1998
2) Gold starting in 2001

In an economy and market dominated by governments and asset bubbles, it's the iTulip position, going back ten years now, that there is nothing else an investor can do. It's a terrible state of affairs, but there it is

[FRED]

Re: Mish...Schiff was wrong!

Fred - coupla thoughts.

Point # 1) The below allocation of investments is strikingly similar to Sitka Pacific's emphasis on gold and treasuries. Although I do take careful note that iTulip's "thesis" is vastly more nuanced and coherent, aka. "just plain right" compared to Mish's "fish-flops" - but after all the hard spade work of theorizing is done, you wind up with the same investments?

Point # 2) "Only two investments - nothing else an investor can do" - what then was that landmark iTulip article "sell everything" about? iTulip has not sold it's gold and treasuries through the last year's upheavals, so what were you recommending people sell? According to your note here, iTulip has never recommended owning anything other than treasuries and gold, despite the fact we recently went through a quite long period of dollar decay and rising inflation.

iTulip's model investment stance owned only a 15% position in gold and the rest was a solid wall of US treasuries - all through 2003, 2004, 2005, 2006, and so forth. Substantively while the stock market boomed through the above four years, it seems iTulip's model portfolio was positioned much like Mish's in gold and treasuries?

Not trying to be speciously argumentative here, but there is a nugget of plain truth in this striking similarity of investments, no?

Four major differences:

1. If Mish came up with the right allocation but for the wrong reasons, he was lucky. We'll take luck when we get it, but we don't count on it.
2. iTulip.com has been in this position since 1998 for Treasuries and 2001 for gold. How long has Mish been in these positions?
3. "Sell Everything" was aimed at readers who were still playing in the traffic.
4. Following the iTulip model: no fees, no transaction costs, and you could have slept for 10 years to get 7.7% annual return.

[Guest]

Re: Mish...Schiff was wrong!

Yes Fred, but if iTulip and Mish both recommend scaling out of USD and more heavily into gold for instance, when the bond bubble bursts and the really high inflation kicks in, your distinction that he "was right for the wrong reasons" will become yet a little more blurred. Effectively you and Sitka Pacific will have wound up recommending exactly the same core moves for the better part of a decade, such as to make the theoretical wrestling irrelevant. Mish has recommended gold and treasuries for quite a few years. Effectively the elaboration of "right for the wrong reasons" fades into the background and the core investment stances become very similar for long enough as to be functionally indistinguishable.

Four major differences:

1. If Mish came up with the right allocation but for the wrong reasons, he was lucky. We'll take luck when we get it, but we don't count on it.
2. iTulip.com has been in this position since 1998 for Treasuries and 2001 for gold. How long has Mish been in these positions?
3. "Sell Everything" was aimed at readers who were still playing in the traffic.
4. Following the iTulip model: no fees, no transaction costs, and you could have slept for 10 years to get 7.7% annual return.

[FRED]

Re: Mish...Schiff was wrong!

Yes Fred, but if iTulip and Mish both recommend scaling out of USD and more heavily into gold for instance, when the bond bubble bursts and the really high inflation kicks in, your distinction that he "was right for the wrong reasons" will become yet a little more blurred. Effectively you and Sitka Pacific will have wound up recommending exactly the same core moves for the better part of a decade, such as to make the theoretical wrestling irrelevant. Mish has recommended gold and treasuries for quite a few years. Effectively the elaboration of "right for the wrong reasons" fades into the background and the core investment stances become very similar for long enough as to be functionally indistinguishable.

As far as I know, Mish started in 2005 not 1998.

Treasury Direct charges no fees.

Buying 13 week TBills that roll over 10 times automatically in a Treasury Direct account covers you for both disinflation and inflation with no fees.

Buy gold once and hold since 2001 and your portfolio value rises with no transaction costs or fees from re-balancing.

Did I mention that doing this the iTulip way that there are no fees?

[Guest]

Re: Mish...Schiff was wrong!

Fred - The amount of smoke, fire and brimstone spewed out of the underpinning theory debates stands out in stark contrast to the curious similiarity of actual investments. I believe you take my point therefore, about the extraordinary congruence of actual investments between you and Michael Shedlock at least over the last four years? The differences you note below are the "finer points". The substantive point is that out of a reasonably varied universe of available investment types, you've both picked the same two! As to "who recommended first" I well know that iTulip has been a precursor on these analyses by a long stretch to many others. I even have a diligent and selfless weekly reminder of this point here at iTulip, from the indefatigable Metalman!

As far as I know, Mish started in 2005 not 1998.

Treasury Direct charges no fees.

Buying 13 week TBills that roll over 10 times automatically in a Treasury Direct account covers you for both disinflation and inflation with no fees.

Buy gold once and hold since 2001 and your portfolio value rises with no transaction costs or fees from re-balancing.

Did I mention that doing this the iTulip way that there are no fees?

[bart]

Re: Mish...Schiff was wrong!

Fred - The amount of smoke, fire and brimstone spewed out of the underpinning theory debates stands out in stark contrast to the curious similiarity of actual investments. I believe you take my point therefore, about the extraordinary congruence of actual investments between you and Michael Shedlock at least over the last four years? The differences you note below are the "finer points". The substantive point is that out of a reasonably varied universe of available investment types, you've both picked the same two! As to "who recommended first" I well know that iTulip has been a precursor on these analyses by a long stretch to many others. I even have a diligent and selfless weekly reminder of this point here at iTulip, from the indefatigable Metalman!

The real differences will show over a much longer time period. Just like Schiff will likely do well over a long period of time, I suspect that EJ & iTulip will out perform Mish by quite a bit... and did last year, in spades.

Class acts always do, and I can't even vaguely imagine EJ doing something like what Mish did to Schiff.

I also note that other class acts like Harry Schultz were down 70% last year... but very few bother to also note at the same time that he's up well over 6x since 2000-2001 and the bottom in his model portfolio.

[Masher]

Re: Mish...Schiff was wrong!

Fred - The amount of smoke, fire and brimstone spewed out of the underpinning theory debates stands out in stark contrast to the curious similiarity of actual investments. I believe you take my point therefore, about the extraordinary congruence of actual investments between you and Michael Shedlock at least over the last four years? The differences you note below are the "finer points". The substantive point is that out of a reasonably varied universe of available investment types, you've both picked the same two! As to "who recommended first" I well know that iTulip has been a precursor on these analyses by a long stretch to many others. I even have a diligent and selfless weekly reminder of this point here at iTulip, from the indefatigable Metalman!

Now I get it. In 2005 Mish picked up the gold and Treasury Bond portfolio idea from iTulip, but he didn't understand why iTulip chose these way back in 1998 so he made up his own reasons. Explains the jumble of awkward and self-contradictory analyses. Just a theory.

If true, it's not the last idea Mish picked up from iTulip. Remember this?

Monday, October 22, 2007
Economic Chicken vs. Mutually Assured Destruction

Is the ongoing game Mutually Assured Destruction (MAD) or is it Chicken? I suggest economic MAD is more like the game being played. All of the world's the central banks are involved as players. The current path is a massive economic failure at some point in the future. However, a peculiarity of the current game is that the first major player to "swerve" immediately causes his own demise as well as the demise of the other players.

Versus

China versus U.S.A.

Economic equivalent of M.A.D. may end with a bangby Eric Janszen - April 19, 2006

Easy to confuse the commitment of one nation to another for an act of friendship. As mid-19th century British Prime Minister Lord Palmerston once commented, nations don’t have friends; nations have interests. The mutual interests of China and the U.S. are the kind that kept the U.S. and the Soviet Union from going at each other with nukes during the Cold War.

China and the U.S. are running inter-dependent bubble economies, relying on the economic equivalent of Mutually Assured Destruction (M.A.D.) to keep one from blowing up the other’s economy. Whether by intent or accident, sooner or later market forces will assert themselves and both economies will go through tough transitions. How will the world look after that?

See Mish's attribution of EJ? Neither do I.

[Mega]

Re: Mish...Schiff was wrong!

Fred, might i apply for the job of "Professional Thread starter"?....we discuss wages later.
Mike

[Spartacus]

Re: Mish...Schiff was wrong!

for the first time in a LONG time I Read Mish again.

To refresh our memories, when we left Mish, the definition of deflation seemed to have stabilized at deflation is ALL ABOUT and ONLY ABOUT money supply (including credit)

He's writing about the China / GE joint venture that will introduce competition into the aircraft market.

Finally, look for large commercial jet prices to drop. That's what competition does, and that's the good side of this deal. Regardless of how you see it, we can safely add this news item to the list of deflationary pressures.

So now we're back (AGAIN !!!!!) to lower prices are deflationary

BUT HOLD ON ... it's not quite that lower prices are deflationary, if you read between the lines ... COMPETITION is deflationary

And he's not even debating anyone ... is this the way Mish actually thinks, changing the definitions he works with on the fly, for no good reason? THIS is analysis? sheesh.

Reminds me of something my mom said about leopards (or was it hyenas?)

EDIT: Good thing for Mish that his readership is a bunch of gullible tools that'll swallow anything he shoves down their gullets.