Peter Schiff: Ben Bernanke = Jack Madoff

This video is about investing in the current climate. The discussion of hyper-inflation spooks me. I've been waiting to get back into the stock market. My pension fund, TIAA-CREF, does not permit commodity or UDN (counter-dollar) investment. There is an international stock fund, though, but no commodity fund.

I missed the rally from May until now but I caught it from Thanksgiving until May. Schiff is recommending international stocks. I agree with his basic analysis. I'm not convinced it's straight up for the stock market, but it's suicide to hold bonds and dollars. I'd rather be in commodities and gold than international stocks. In my personal fund, I'm gradually getting back into gold and commodities and in TIAA-CREF gradually back into international stocks.

Also, I rode the dollar rally out in Euros and lost some money, but it's coming back quickly. In the stock market I'm down about 5-6% since June '08 (less since January '08) because of overly aggressive buying of gold stocks in fall '08, which was against my better judgment. But I was right on principle then and now. The dollar is going out the window, unless you trust the Republicrat Socialists to turn around and raise interest rates. That would cause the depression that is going to occur under any circumstances anyway. You can expect further dollar declines. The Republicrats are in a state of denial, and denial compounds pain.

The cause of these problems is the Federal Reserve Bank. Unless Americans decide to change the fractional reserve approach to banking, there will always be booms and busts. Unless they decide to eliminate the Fed, there will always be accentuated depressions. The Great Depression of 1930-1940 was entirely the result of Fed policy, compounded by dumb government fiscal moves by Roosevelt and Hoover.

The geniuses in the Republicrat Socialist Party are turning the United States into a third world feudal estate. The lords of the manor are George Soros, his Messiah, Barack Obama, and, most of all Obama's, Bush's and Henry Paulson's 12 apostles on Wall and Broad, who have been granted many, many trillions of dollars, not only in the recent "bailout", but via the Federal Reserve Bank for the past century.

You will note that the fundamental principle and theme of all academic and media left-wingers is the claim that Federal Reserve transfers to Wall Street are absolutely essential because of the threat of deflation and because they cannot imagine any other system than one in which large sums of money are counterfeited and handed to hedge fund managers. While advocating the Federal Reserve system, they simultaneously shed crocodile tears about income inequality, which is chiefly the result of the Federal Reserve System. Well meaning socialists, who would not be fooled by con men with their own money, happily believe the Ochs Sulzbergers' nonsensical claims of concerns for the poor, as the ideas that they advocate suck the nation dry.

What is the moral sense of people who fight to preserve a system that causes income inequality, and then claim that they hate income inequality? American universities and the American left are the intellectual class for the new feudalism, dictatorial rule by Wall and Broad and their puppet-king, President Obama.

Open Letter to Herbert M. Allison, Jr., Chairman of TIAA-CREF, Re Threat of Future Stagflation to Account Holders' Funds

PO Box 130
West Shokan, NY 12494
May 19, 2008

Herbert M. Allison, Jr.
TIAA-CREF
730 Third Avenue
New York, NY 10017-3206

Dear Mr. Allison:

I hold a TIAA-CREF account through my employment at the City University of New York and have done so since 1991

TIAA-CREF should implement a commodity index fund and a foreign-currency denominated interest bearing fund. Doing so would fulfill your responsibility to be prudent to your account holders. I say this despite current short-term overheating in the commodities markets.

The 1970s were a period of significant challenge to TIAA-CREF because the stock market declined while inflation accelerated. This caused pensioners to receive reduced payments at the very time that inflation posed high costs. TIAA-CREF has a fiduciary duty to take action to anticipate the realistic risk that Federal Reserve Bank policy will again cause stagflation. Conversely, it is imprudent to pretend that stock and interest bearing investments provide all of the diversification that investors need when the Federal Reserve Bank has expanded the money supply by eight percent annually for the past two and one half decades.

To be prudent, you ought to diligently consider the risk of stagflation and take action. Both the stock market and interest bearing dollar denominated accounts are ultra-risky in a stagflationary period, yet those are the only alternatives TIAA-CREF currently has on offer. By failing to diversify into alternative currencies you are shooting craps with shareholders’ accounts. Inflation-indexed bonds are a crap shoot as well because interest rates may skyrocket at the very time that inflation goes up.

Sincerely,


Mitchell Langbert, Ph.D.

Cc: Chronicle of Higher Education

Will TIAA-CREF Participants Put Their Money Where Their Rhetoric Is?

Charles Fishman quotes quite a few academics in his book The Wal-Mart Effect. Fishman argues that Wal-Mart should take various actions that would reduce its profit margins but improve its corporate social responsibility. Such actions might even potentially increase stock prices if the public responds positively to Wal-Mart's better public image. The academics whom Fishman quotes universally believe that Wal-Mart stockholders should live with lower returns in exchange for Wal-Mart's enhanced social responsiblity.

I have previously suggested that academics put their money where there mouths are:

"Why doesn't TIAA-CREF, the college retirement fund, take over Wal-Mart? It probably has the capitalization. Then Wal-Mart can be improved socially,and if the professors' stocks drop 30 percent, they will be glad because they saved the third world, right? I haven't heard any screams from MIT, the University of Missouri or other universities for such a strategy."

In order to pursue this proposal, I have just sent the following e-mail to the governing board of TIAA-CREF:

Dear CREF/TIAA Board:

As a TIAA/CREF participant I would like to put a resolution before the board that CREF should devote a 25 percent portion of its diversified stock portfolio to acquire shares in Wal-Mart in order that university and related professions may influence corporate policy and social responsiblity at Wal-Mart. Asking CREF participants to invest in Wal-Mart to improve the lot of 1.8 million Wal-Mart employees is a small sacrifice.

Would you please let me know how to make this proposal before your plenary meeting? Thank you,

Mitchell Langbert, Ph.D.