Peter Schiff’s 3 Reasons Why Financial Reform Will Fail

Peter Schiff a/k/a “Dr. Doom” is known for extremely bearish views on the United States stock market, bond market, the US dollar, and the United States economy in general. He tells Yahoo Finance why the Dodd-Frank financial regulation reform law will fail:

1. The bill doesn’t get to the root causes of the crisis. Schiff blames former Federal Reserve Chairman Alan Greenspan’s ‘too low for too long’ interest rate policy, combined with government-guaranteed mortgages for the rise and fall of the housing market. “That’s continuing today, it’s untouched by this bill. In fact, the Fed is more reckless today with zero percent interest rates than when they were one percent,” he tells Aaron in this clip.

Plus, with so many private lenders out of business, the government is guaranteeing an even greater percentage of the mortgage market and has given Fannie Mae and Freddie Mac an unlimited line of credit until 2012.

2. The law fails to end ‘Too Big to Fail.’ “This law now guarantees that in the future even if they don’t want to bailout these banks they actually have to,” Schiff protests. “Designating a federally supervised wind-down process for major financial firms, the new structure signals to creditors that lending money to large financial firms will provide more security than loaning to firms too small to qualify for the program. As a result, these firms will enjoy continued advantages in the marketplace which will ensure the continued industry dominance.”…

[continues at Yahoo Finance]


Majestic is gadfly emeritus.

Latest posts by majestic (see all)

6 Comments on "Peter Schiff’s 3 Reasons Why Financial Reform Will Fail"

  1. Hadrian999 | Jul 23, 2010 at 12:27 pm |

    so you mean to tell me the people that wallstreet gives truckloads of money to every year
    aren't taking steps to kill the golden goose, this is an outrage.

  2. justagirl | Jul 23, 2010 at 1:55 pm |

    in order to reform properly, one must get completely toe up.

  3. I've been wondering why the Tea Party people, who are so outraged by the bailout, haven't been turning out to support meaningful financial regulation to prevent it from recurring. You'd think all that anger would get channeled into a bill to fix the problem…yet the right has mysteriously reverted back to signing the praises of the free market.

  4. John Myers | Jul 24, 2010 at 12:29 am |

    Peter Schiff feels insulted. Please donate to Euro Pacific Capital.

  5. Wow it’s like the corporatocracy doesn’t want to commit suicide.

  6. Wow it's like the corporatocracy doesn't want to commit suicide.

Comments are closed.