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The media is not happy that Peter Schiff was right, and they're surely not happy that the famous YouTube has been viewed over 2 million times.
But there's a another story, of another Schiff, who most definitely got it wrong. And though you may not have heard of him, the economic pain that you see around you has a lot to do with the actions that he took 100 years ago.
His name was Jacob Schiff, and he was the man who ignited the drive for The Federal Reserve.
Jacob was born in Frankfurt, Germany. He moved to the U.S. in 1865, and ten years later became a partner at Kuhn and Loeb in New York City. Schiff made his fortune with Edward Henry Harriman in the railroad industry. He also financed Rockefeller's Standard Oil company as well as Carnegie steel.
So, it's easy to see that Jacob Schiff was no slouch, but someone firmly entrenched in banking and industry.
Murray Rothbard will take it from here:
The campaign for a central bank was kicked off by a fateful speech in January 1906 by the powerful Jacob H. Schiff, head of the Wall Street investment bank of Kuhn, Loeb and Co., before the New York Chamber of Commerce. Schiff complained that, in the autumn of 1905, when "the country needed money," the Treasury, instead of working to expand the money supply, reduced government deposits in the national banks, thereby precipitating a financial crisis...An "elastic currency" for the nation was therefore imperative, and Schiff urged the New York Chamber's committee on finance to draw up a comprehensive plan for a modern banking system to provide for an elastic currency.Schiff also told the New York Chamber of Commerce that "unless we have a Central Bank with adequate control of credit resources, this country is going to undergo the most severe and far reaching money panic in history."
That sounds so familiar....
Well, Jacob Schiff got it wrong.
Contrary to his warnings, the central bank that Schiff agitated for would cause a Great Depression less than two decades later. (Read the finest work on the depression for free). It would be followed by artificial booms and busts up to (and including) the present day.
We're now 100 years since the creation of the monster.
May we be closer to the end, than the beginning.
Bob, great piece. I'm glad to see others picking up on the New York Chamber of Commerce angle:
ReplyDelete”By the control of its rate of interest and of its issues of notes it would be able to exert great influence upon the money market and upon public opinion. Such power is not now possessed by any institution in the United States. “
https://unicornpoo.wordpress.com/2012/06/25/what-bankers-want/
The above quote is so important because it's a rare admission by the bankers of 1906, and all ages, that all they want is power.
Tickets to piss on his grave should be sold, proceeds should go to the poor he impoverished.
ReplyDeleteKeep dreaming that America is waking up. We will collapse just like any other empire in history. Massive welfare and expensive wars will lead us to bankruptcy. In America, just like Rome people are so happy in their ignorance that they do not bother with the dangers of our current economic nd foreign policies
ReplyDeleteGary North does not think there will be hyperinflation, because it would wipe out the pensions of the Fed and government workers. He thinks that they will put on the brakes well before that happens, but doesn't rule out massive price inflation of 20% or more, per year.
ReplyDeleteHe also says that the possibility of a metal (gold) standard is highly unlikely. I tend to agree with him. The public is aware of gold and silver, but large numbers of people are not buying it.
I wonder what will happen, because our current system is a disaster. Right now, there is nothing better than choosing a gold or silver standard; then let the people choose what money is, floating in relation to a single metal standard.
There are a bunch of people out there (mainly those of the Greenbacker set) who are spreading the false notion that Peter Schiff is related to the banker Jacob Schiff talked about here. Of course, they ignore the fact that Peter has explicitly said that his grandfather Jacob is not *that* Jacob Schiff, and that for those whose surname is Schiff, Jacob is a very common first name. I'm surprised that none of these accusers have popped their heads into this thread yet.
ReplyDelete"the country needed money," the Treasury, instead of working to expand the money supply, reduced government deposits in the national banks, thereby precipitating a financial crisis"
ReplyDeleteThough I managed to plow through that book it's amazing how much information can be built into a single sentence I missed at the time. If I read this correctly our friends in DC found a way to "cause" a problem that they could then "solve." (Not that the whole book wasn't about that to begin with...)
I am now inspired to learn more about this event.