Peter Schiff
President of Euro Pacific Capital, Inc.

When business in the United States underwent a mild contraction, the Federal Reserve created more paper reserves in the hope of forestalling any possible bank reserve shortage. The Fed succeeded, but it nearly destroyed the economies of the world in the process. The excess credit which the Fed pumped into the economy spilled over into the stock market, triggering a fantastic speculative boom. Belatedly, Federal Reserve officials attempted to sop up the excess reserves and finally succeeded in breaking the boom. But it was too late – the speculative imbalances had become so overwhelming that the attempt precipitated a sharp retrenching, and a consequent demoralizing of business confidence. As a result, the American economy collapsed.......

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