Is Peter Schiff wrong?
Peter schiff did a phone interview with CNBC on Tuesday, where he went on to skewer bitcoin as a "modern day tulip mania". This was in response to Tyler & Cameron Winklevoss's statement about bitcoin being gold 2.0. There might be some excitement in bitcoin right now, but it's on a very small scale, given the vast majority of people are not aware of bitcoin, and certainly don't own any.
I have a lot of respect for Peter Schiff, as I've sent him several clients, including myself. However, his lack of understanding in regards to bitcoin is glaring. In his very matter-of-fact way of speaking, Schiff goes onto show his dismay that some people in the "Hard money" community have embraced bitcoin. It's difficult to discern if he's maintaining his status quo for his client base, or if he really doesn't understand the implications that bitcoin has.
I think the reason people are buying bitcoin, is because they think they are going to make money, they think the price is going to go up, and the price probably will go up, it will keep going up until it implodes. ~ Peter Schiff CNBC
One point that Schiff doesn't understand, is that people are investing in freedom. Sure they are investing in bitcoin to make money, but more importantly they are investing in bitcoin to achieve freedom from central banks, and errant governments. They are investing in bitcoin to avoid to-big-to-fail-banks, and their fractional reserve & mark-to-market nonsense. For Peter to cry out for more freedom, yet at the same time he dismisses bitcoin, which was created to achieve just that.
Schiff recommends you own gold, and silver, and I agree. Although, what happens when the financial crisis hits, and the largest bubble in world history is finally popped? Does he believe that the gold won't be confiscated by the government, like in 1933? Of course he realizes this potential, so he recommends holding your gold outside of the United States; however, when this bubble pops, his "gold-on-paper" won't be available either. Physical gold is the only gold worth owning, yet how many ordinary people own gold coin & bullion? Not to mention it's at a high risk for confiscation too.
They come in the end of the pyramid scheme....it's no better than a fiat currency. ~ Peter Schiff CNBC
For Schiff to call bitcoin a pyramid scheme is laughable. Who does he think the central authority behind it is? I'm not even touching the "Fiat" statement. It appears he doesn't like a true free market in which bitcoin exists. It's fully decentralized, peer-to-peer currency & payment system rolled into one. Whether bitcoin's potential exists as a currency, or as a transaction protocol it really doesn't matter, either way it will disrupt the current system, and provide for great wealth, and freedom at the individual level. Never before has there been a opportunity like this on a global scale.
You can see the interview here