Peter Schiff: The wealthy are going to invest more abroad

Peter Schiff came with another dark prediction about the US economy on CNBC’s Closing Bell recently. He talked about his recent commentary in The Wall Street Journal, explaining why raising taxes on the wealthy will do nothing to solve the debt problems of the US.

"You know what the wealthy are going to do? They’re going to invest more abroad, they’re not going to work as hard, they’re not going to pay as much in taxes, they’re not going to employ as many people, their employees aren’t going to pay the taxes," stressed Peter Schiff.

Peter Schiff: Patriotic Millionaires Unmasked

Peter Schiff, the CEO and Chief Global Strategist of Euro Pacific Capital, an SEC-Registered Investment Adviser and a full service broker/dealer, shares his thoughts about the post-election landscape in the USA.

Despite the breathless post-election "think pieces" that have drawn sweeping and deeply considered conclusions about the political drift of the country, at its core President Obama’s re-election is easy to understand. He essentially promised millions of middle and working class voters that if he were to be re-elected, they would receive benefits paid for by the rich. You don’t need to read a Time Magazine cover story to untangle this political strategy. Now that he has been given a second term, Obama needs to deliver the goods by raising taxes on the rich and only the rich. He will be "asking" them to pay their "fair share," (as if "asking" and "fairness" have anything to do with it). In reality the wealthy already pay taxes at a much higher rate than average Americans and in many cases will now have to pay more than half of their income in federal, state, and local taxes.

While most people would assume that the wealthy would chafe at such a heavy burden, some affluent individuals have apparently organized spontaneously to express their willingness to help the country. In interviews and articles, these self described "Patriotic Millionaires" have implored Congress and the President to raise their taxes. They claim they can easily afford to pay a little more to save the nation from fiscal insolvency.

Conservative economists believe that an economy is most vibrant when as much money as possible is left in the private sector where it can be used for business investment and job growth. Left wing economists believe that government spending, which they term “investment,” does more good. Through this lens, it’s tempting to see the Patriotic Millionaires as well meaning Americans who have simply subscribed to a misguided economic philosophy. However, the reality may be far more sinister.

Peter Schiff is embracing the fiscal cliff

The fiscal cliff has long been the chief problem of the U.S. economy and the uncertainty has created a volatile marketplace. Each and every political party has its own ideas how to act when the fiscal cliff comes. Peter Schiff not an exception as he has spoken his mind is concerning the U.S economy.

In a time of such worry for the next year’s potential threat to the United States, Schiff is embracing the fiscal cliff.

“The truth is that, regardless of what you call it, going over the fiscal cliff is not the problem, it is part of the solution. Our leaders should construct a cliff that is actually large enough to restore fiscal balance before a real disaster occurs,” he commented.

Moreover, he is of the opinion that the fiscal cliff will inevitably lead to cuts in government spending which would put the country on the right track. Furthermore, Peter Schiff navigates the cliff. Even though markets may get slaughtered and the dollar might endure a crisis, the real assets do offer compelling investment. Schiff, of course, has mentioned many times that he had chosen gold to help his portfolio because he believes that the dollar will bear a major debasement, which would make silver and gold especially attractive to investors.