Peter Schiff says move to Dubai!
Posted on 27 December 2008 with no comments from readers
Reading Peter D. Schiff’s ‘Little Book of Bull Moves in Bear Markets’ it was intriguing to see him become so frustrated with the US economy that he advocated emigration, at least for a few years.
‘If you are more adventurous, you might consider the nations of the Persian Gulf, such as Dubai, Qatar, Kuwait, or the United Arab Emirates,’ he opined. ‘Flushed with petro-dollars and unburdened by taxes or regulation, the Arab world seems destined to reclaim a more prominent role in the years ahead.’
How prescient! Of course, clearly neither Mr Schiff or his proof readers have much knowledge of the region or they would know that Dubai is a city in the United Arab Emirates and not a separate nation.
That much any American reader ought to establish before jumping on one of the excellent new Emirates Airlines’ flights from the States and rushing into business in Dubai, and that is what he suggests, ‘if you’ve ever had any inclination towards entrepreneurial life.’ Well, at least buy a copy of my book ‘Opportunity Dubai’ before taking that advice!
Changing times
The problem is that Mr. Schiff’s world view – only completed this summer – already looks a bit out-of-date. His world then was one of high oil prices, a falling dollar and a US economic collapse isolated from the rest of the world.
What we now know is that high commodity prices insulated commodity producing countries from the sub-prime crisis until the summer. But once commodity prices collapsed – oil from $147 to $34 a barrel – so did these supposedly immune economies.
The city of Dubai’s financial market is 75 per cent down this year, among the worst performers and well ahead of the US decline of 40 per cent for the S&P. House prices in Dubai are down 40-50 per cent this autumn, far ahead of Main Street USA.
Dollar appreciation
The dollar’s devaluation also swung into reverse as capital markets imploded this autumn with a flight to quality and a recovery for the greenback. So much for the US devaluation trumpeted by Mr. Schiff. It is clear that other global economies are also in trouble, and Europe’s debt problem could be bigger than America’s.
However, Mr. Schiff’s free market prescription for US recovery: allowing lame ducks to die, bankrupting major corporations and banks and removing social security, has no chance of being adopted by President Obama.
On the other hand, a very vigorous shake-out is underway in the UAE with expatriate labor summarily dismissed with modest compensation, downsizing of major real estate projects, continued investment in major infrastructure schemes and a rapid reorganization of national debts.
In truth the UAE (and that includes Dubai) can manage something far closer to a free market solution to the economic crisis than the USA can ever hope to achieve. Perhaps Mr. Schiff is right Americans ought to move to the Persian Gulf countries.
Order my book online from this link
no Comments posted by readers:
My son came back to London yesterday after visiting Dubai for the first time, and he is delighted with the business opportunities there among the serious, ambitious, englightened locals, and the English speaking people he met. The Sheiks have a vision; a new dawn will appear for the UAE, and the world.
I think that Dubai lookes like a big construction site at the moment, and perhaps it would have been better to employ a world class town planner/architect before embarking on such an enormous project. However, I have no doubt that it will become a world city. Dubai and Shanghai are the future, one way or another. The sun rises in the East. The 21st century needs this new dawn to enlighten the next great step in evolution, and I’m delighted that my son will be some small part of that.
Peter-
I am personally offended by your bashing of Peter Schiff. He is- in my estimtion- and has been spot on for most of his predictions back in 04′ and if it wasn’t for his miscalculations of timing of foreign investmestments he’d be 100 percent correct.
Geographically, few would know Dubai is a city. I don’t nor do I care. I do agree with his suggestion with leaving the country for a few years.
It is Mish Shedlock that needs to learn that the Federal Reserve IS a privately owned entity, which is far more important than knowing Dubai is a city! The Central Banks of the world is who got us in this mess and need abolished! Schiff on the other hand is well aware of their malevolent machinations but unfortunately never discusses abolishing them.
Additionally, you seem to agrree with the gentleman that cites Fekete and Jim Willie and everything this guy states is basically no different than what Schiff espouses.
Furthermore bashing Schiff will not help you sell him one of your books though it looks as if he sold you one of his. Myself, I bought neither!
Good Day!
Surely you must agree he has been wrong on the dollar, oil and decoupling over the past six months? But then show me anybody with a clean forecasting record in 2008! I have made a horrendous error with Dubai property because I also got the oil price wrong. However, that does not mean that I do not agree with most of what Peter Schiff says, especially on the gold price and US economy. But nobody is going to get it all right – and a bit of humility is a useful hedge in these troubled times.
Peter,
Karl Denninger had a “clean forecasting record” in 2008. His 2009 predictions aren’t pretty. Mish is one of the best economic bloggers out there. Peter Schiff is alot smarter than you or I. Had you tuned-in to the above three back in 2005, you, like me, would be a lot richer today.
http://market-ticker.denninger.net/archives/689-Where-We-Are,-Where-Were-Heading-2009.html
Denninger would have you fully in US dollars at a time when the US is effectively printing dollars to create an inflation to deal with its debt and deficits. Longer term this can not work, short term it might in a further market sell-off – and how will the dollar perform in a US bond market crash when this happens? But it is hard to disagree with him that a cautious approach is advisable for 2009. Your only real hard currency is gold.
Peter Schiff has another critic in Mish, who has a very convincing case to make, see:
http://globaleconomicanalysis.blogspot.com/2009/01/peter-schiff-was-wrong.html