Peter Schiff answers Reddit's questions (2 of 2)

[chbrules]

@5:20 is where the gold starts

[CytherLynx]

3:18

LISTEN.

[pieaficionado]

He's spot on about Keynesian Economics.

I only learnt about Ludwig Von Mises and Austrian economics from Peter Schiff and Youtube.

And Ive got a degree in Business and Economics for Chrissakes.How embarrassing is that?

[dkswede]

@pieaficionado May I ask where you got it? Im doing my Ma in Political Economy in England and it's littered with Keynesianism and socialism. I constantly have to fight for my points and im pretty much known as "that guy" in my class. Just wondering if this is a trend all over the world or if it is mostly in Europe

[CytherLynx]

@dkswede seriously, everywhere. you are better off studying by yourself. see mises(dot)org

[pieaficionado]

@dkswede I got my degree from the University of Sheffield in 1995.There was never any mention of any Austrian economics. It's no wonder I found it so hard as none of it makes any sense.

[rexdeodium]

Good work Schiff, I wish you luck.

[TimeWarp66]

9:00 - 9:42

GOLD! So blunt, so beautiful.

[n00bzilla]

whats is he talking about at the end: kansism economics? Does any one know anything about that and how to spell it?

[Nielsio]

Keynesianism

[Lot3ch]

keynesian economics

[bc5620]

the more I know the sadder I get...

[rung3000]

so what did perter schiff say that the usa should do to save itself apart from getting rid of debt

[chbrules]

Inflation is the problem. Who makes inflation in this country? The banks. What to do about that? Outlaw usary and private banking (ie. get rid of the fed).

[studentofsmith]

@chbrules Inflation is usually caused when the government borrows into existence more money than is needed to keep pace with economic growth. While the ability of commercial banks to create loans in excess of deposits contributes to this process it is not the primary cause as they are limited by their reserve requirement. In fact increasing the reserve requirement to 100% would completely eliminate the inflationary effects of private banking.

[utubeboob9]

Well I think if we can get more good fella's like Shiff and Paul maybe we can figure out how to save this thing for our kids and grandkids.You both have my thanks and support!!!

[brek067]

business should remain private. there need to be large taxes applied to use in resources, including drugs. Health care is by default a government institution and so is insurance although those institutions need to become way less intrusive if they are going to be sustainable.

[RetSquid]

Health care and insurance are only a Government institution if you live under a Socialist Government, not a Republic like the U.S.

Do you really want them decide who gets what health care??

If it comes to a totally Government controlled heath care system, They will own your life..."sorry your too fat/old/sick to spend money on just go away and die quietly."

[tjfgermany58123]

Why should corporations be allowed to bribe congressmen? I want the federal government to represent me. I don't want free market Government where the highest briber wins. Schiff would be a good Senator if he can stand up against the Corporate Oilgarchy. Not many have. I'm all for free market, but for example the healthcare industries prices are so inflated there is no way that it is playing by free market rules. I want a Democatic Gov. and a Free market economy not a combination.

[tjfgermany58123]

Mom and Pop bussiness work great with the free market. Monopolies compete? With who? The health insurance monoploy is a cold hearted demon. You blame it on government subsities. Like 170 billion to AIG? If you make to the Senate with their help, you'll vote for giving them money too. Why are you so focused on getting gov. out of bussiness. It is the polar opposite. Big corporations have taken control of the Gov. Ex. G.M. stockholder's were screwed.

[vipero00]

According to your logic all we need is an all powerful benevolent king. unlimited power so he/she can squash those power grabbing big businesses.

[brek067]

I like most of what he says until he gets to the free market crap. You can stimulate the economy by reducing taxes on income and protect it by raising taxes on resources. Very simple yet very powerful.

[vipero00]

All you do with taxing resources is make US industries noncompetitive with foreign markets. Your just a little myopic.

[brek067]

All countries use tariffs and quotas to protect their markets, I would think it necessary. If you don't start taxing abusive use of resources you are going to find yourself in a very bad way. Taxing people for labor is just plain immoral. What am I not seeing here?

[Invirtuo]

No tariffs within the EU

[captainkid1]

I very much liked what he said about the war on drugs. This guy is smart.

[utbvptl]

I am trying to find a right investment anticipating high inflation..I am going to rtp, bhp for now, any great ideas ?

[Nielsio]

How are you going to prevent competitors to undercut you if you raise prices, in a free market? The only way you can do that is if you get special privileges through law or you use outright violence. In both cases, it's not a free market.

[BTbass]

That bobble head = win

Peter's awesome as usual.

[fox20012]

Hi I'm from the future, I just watched peters next blog he will do in the future.

I wanted to comment on his future V blog, but I'm here in the past now :(

but yeah.. his next V blog rocks!

[libertyeconomics]

Like you just said, monopolies exist in states of imperfect competition. What creates imperfect competition? The GOVERNMENT. He made the point that anti-trust laws help PROTECT monopolies. Inefficiency is ALWAYS punished on the UNHAMPERED free market. In an unhampered free market, there are no monopolies.

[fortherichbytherich]

got my vote

[creten69]

are you emo?I mean with your eyeball pic._+

[jsnvoe434]

You guys must check out Hyperinflation Nation. Peter Schiff is featured in the documentary and it already has 47,000 views in five days.

[ReyMatthew]

My question is, why doesn't Euro Pac contact customer that want to start an account?

[relhak]

My question for Peter (sorry, I didn't know about reddit before):

You recently said that the sEC has been keeping you from hiring new people for your firm. Is this because you've taken TARP money or is the SEC now regulating the hiring practices of anyone under their juristiction? If the latter, then is this a new power, or an old one that they're exercising?

[Perceiving]

Great video Peter

[sidrosteel]

Lets hope he runs for Senate... That race would be the absolute most interesting race. Only because Dodd was wrong and Schiff was right!

[ronheri]

Very wise man. Peter Schiff for President.

[stoneeh]

i dont agree at all on his monopoly views

take intel for example. many of their success is based simply on their financial advantage which they put in the production process (smaller transistor sizes etc). AMD might have the better CPU infrastructure design, but intel can manufacture their inferior CPU more efficiently, thus having the greater market share, using the profit to continue to expand their monopoly

so yes. monopoly is one of the few aspects in the market that should b regulated

[rjohnsonfamily]

What you are saying is that the market appreciates intel's efficiency at producing an acceptable CPU at a low price, and so intel is rewarded by the market with near-monopoly market-share (not true monopoly, since there are competitors consumers can turn to). I think you've just supported Peter Schiff's position.

[stoneeh]

well, competitors are seriously handicapped by intel's position and would need a product design not slightly, but MUCH better than intel's to gain market share.

the reason is that profit margins are low because intel can engage in price wars much more efficiently meaning 1. only intel has enough liquidity left to upgrade their factories 2. public awareness for competitors are low because only intel can afford advertisements 3. intel can do better deals with major retailers 4. etc

[stoneeh]

so i think a near monopoly at least in this case is almost as bad as a full blown monopoly. it doesnt reward innovation at all. intel doesnt have to be innovative or push progress near as much as they could, because they are never in danger. they actually want to keep the status quo and not be lightyears ahead of AMD to keep up the illusion of competition alive, which means nobody will intervene and they can still make huge profits while the competition whithers

[Mosier2]

So industry giants will operate at losses for years to knock out competition hoping they can make up for the losses with "monopoly" prices at a later date? Not likely, as the threat of higher prices/profits will bring in new competition leaving the giant again having to operate at losses ad infinitum. Competition contrains prices. Industry giants were the driving force behind anti-trust laws in the US as they were losing market share to newcomers. See Kolko's, The Triumph of Conservatism.

[rjohnsonfamily]

DT Armantano showed in "Myths of Antitrust" that monopolies such as Standard Oil were intensely compeititive, yet competition nibbled away at their market share anyway. The consumers were the winners.

[rjohnsonfamily]

Do you see that your argument supports the idea that consumers are benefiting from intel's efficiency. Consumers, in general, seem to prefer lower prices in lew of higher quality. It is always a balancing act and, if Intel gets it wrong, it will have cornered the market on crap while other companies will have moved ahead with quality. This is what happened to Ford and GM in the 1920's.

[sidrosteel]

but what about competitors? If it was free access to the market, how could Intel keep a monopoly? Competition always is more innovative.

Take the soviets for example. The only places they could compete with us, is where the actually competed!

[rjohnsonfamily]

Do you claim that Intel should be forced to raise its' prices so others can compete? That would hurt consumers.

[TheChinaExpat]

Not to mention that if Intel didn't earn any money b/c of their very low prices (which directly benefit consumers), they would have no money for R&D, and would open the way for a new competitor to come in and overtake them. Intel is more efficient, period. That's not to say they always have the best technology, but that they are best at serving the needs of consumers as they are.

[thomasw78]

How is free access being denied? Anyone can start a semiconductor company if they have the resources. Just because Intel has those resources and most people don't means they should be punished? Or maybe the government should pay everyone's start-up costs anytime they want to start a business to promote competition?

[BlueTunisia]

...

[Atom299]

@stoneeh

There's more to this monopoly issue than readily meets the eye. True free market economics must also be fair, just and ethical. Otherwise it's not truly free.

For example companies who use slave labor to undercut their competitors prices or those who pollute and don't clean up have an unfair market advantage.

I can only touch on this subject here but to ensure free and fair competition these areas must be strictly regulated. Something we don't have yet.

[stoneeh]

@Atom299 regulations must be either non-existent or very simple. everything else is just not free market anymore

theoretically, we have a free market in the US right now. it is just so overregulated, thus distorted, that it has nothing to do with free markets anymore

[Atom299]

@stoneeh

Yes..however the point I'm trying to make is that there needs to be a clear distinction between the amount of regulations and the type of regulations.

i.e. The only regulations needed are those aimed at ensuring a level playing field for all participants e.g. Laws against fraud, artificial monopolies, exploitation of workers and the environment etc.

These laws must be strictly enforced on all players with no exceptions, with appropriate effective penalties imposed on all violators.

[PresidentRich]

Excellent video, I hope Peter does more of these!

I loved the smackdown on Keynesianism at the end!

[BlueSkies360]

Mr. Schiff, Do you have any questions for us? :)

[lenny380]

Gotta like this guy

[andrijbulba]

i would have to disagree with the monopoly theory proposed due to own experience (t-mobile and orange of slovakia, maintaining, until recently, a duopoly with agreed prices (exorbitant prices, compared to rest of europe) making huge profits and slovakia having some of the highest per minute rates in europe, the products being average). they were able to retain the monopoly by strong influence on politics and having potential third entrants not allowed to enter the market.

[andrijbulba]

(the rest of my comment, it cut me of at 500 before i noticed:) i totally agree with the rest of peter's philosophy which directs towards the minimal state, but I do acknowledge that natural monopolies (see wiki for those) do exist and need to be regulated (one of the functions of the minimal state :)

[Nielsio]

That doesn't make any sense as per your example. The situation you cite (even using your word on it) says they could make these profits precisely through government power. And then you say government needs more power.

???

[mikew1200]

I think you misinterpreted him. He only said that monopolies arising from being able to offer a product or service which is so superior to others that others cannot compete are good. He also said that monopolies arising from government influence (such as the examples you stated) are bad.

[czargwar]

so they were able to maintain a monopoly because of unfair advantage of government influence. So the influence was on the power of government to regulate the market. take away that power and competitors should enter.

[andrijbulba]

thanks for your replies. i do realize i brought a flawed example - my bad, it was late hour :) actually you are right because the austrians (direct neighbours to slovakia) allowed any number of entrants into the mobile telephony market, and they until recently had 5 operators in that tiny country, only 1 of them profitable, actually, of course the prices for consumers were among the lowest in europe.

[andrijbulba]

however, what about those network based natural monopolies, like water or electricity. you will always only have one provider running water pipes to your home. without some sort of regulation or creation of artificial competition, they could charge you anything per liter, couldn't they?

[libertyeconomics]

You get that backwards. The utility monopolies are chartered by GOVERNMENT.

[libertyeconomics]

The only way any company can charge "what it wants to" is if it is being subsidized by the government. Even a government granted monopoly can't price gouge without government subsidies. At the end of the day, absent government subsidies, nobody can sell anything for more than what people are both willing and able to pay. If you could charge whatever you wanted, why not just quadruple prices? YOU LOSE SALES, THUS UNDERMINING PROFITS. Market-clearing prices come only in a free market.

[McRocket]

Thanks for answering the questions Peter.

Very helpful.

[Epic878787]

I think Peter needs to clean up his "witch doctor" comment. Maybe something like, "A Keynesian claiming to be an economist is like a witch doctor claiming to be a doctor".

[17Spartacus76]

Personally, I prefer 'Creationists pretending to be scientists'. To each their own though :)

[bowtie728]

economics in one lesson is a good book but it gets booring. "What has government done to our money" is much better. Murry Rothbard is brilliant.

[doorman360]

I own "what has the government done to our money", but I have yet to read it, it seems like a really dry read, so I'm intimidated to start it. what makes that book better than "economics in one lesson"? (I have read neither of them, and I don't "own economics in one lesson") a good book I have read for the basics is "what ever happened to penny candy?" written so a twelve year old can understand. any other recomendations?

[KevinKennedy214]

Well to begin with, neither book is dry reading. Both are very interesting. I'd say start with Hazlitt's book and then move onto Rothbard's. Hazlitt's book has a simple premise and will really make you think about economics in general, whereas Rothbard's book goes into fractional reserve banking and the gold standard.

[bowtie728]

I don't know why but Hazlitt's book killed me, and I love this type of stuff. I've read a ton of these books and that has been the only one that I thought was dry. I love anything by Rothbard and Mises. If you are intimidated you should try Ron Paul's recent book: The Revolution a Manifesto.

[doorman360]

funny, I've got that book too! ron paul's I mean, I've read about half of it, great stuff, too bad the politicians never listen to reason when it comes to Ron Paul. I do intend to read "what have they done to our money" eventually, I also happen to to have "the creature from Jekyll island", but I have yet to read it (too many books!) currently reading "world war II: the rest of the story and how it effects you today" same author as "whatever happened to penny candy?" great stuff.

[bowtie728]

good to know other people read this stuff too! i dont know how the government allows these books to exist.

[arkadinho]

Great answers to questions 5 and 10! Would love to hear some more about why you're so 'anti-Keynesian'. There must be some truth in Keynes' theories, why else would they have become so popular? I'm assuming your answer is "Because it's all a fantasy and people like living in Fantasy-Land". In case this isn't your answer, could you please elaborate on this issue in another video?

[17Spartacus76]

Keynesian economics is built on mathematical models and formulas that have absolutely no bearing on events in the real world. They have absolutely no predictive value whatsoever. It was designed from the bottom-up to justify massive government intervention and spending. Keynes was a leading member of the Fabian Socialist Society and a collaborator with Henry Dexter White, a Soviet agent.

[AFRIKTODAY]

And he was a Mathematician by training! Could define inflation, the fool! Way to go "the greatest economic mind of the 20th century" according to Paul DRUG-MAN!

[ajnako12]

I think Keyensian econ has become so popular because it justifies giving politicians and their crony economists the power they want. Also, doesn't it sound so simple when the government could easily whist away the problems of society. A lot of people have labeled the free markets as brutal and cut throat (they simply punish the inefficient and lazy) while the goverment is benevolent and will restribute wealth to ease suffering. I'm currently reading "Economics in One Lesson" and it absolutely

[imigrantpunk]

The fact that some idea is popular does not say anything about its truthfulness. :) For example, most of the world's population subscribe to some elaborate system of ideas about a particular deity. Majority of them are wrong by default just because of fundamental disa

[TheVampirella]

Love your answer regarding monopolies.

The post office is a monopoly and STILL cannot operate at a break even point let alone a profit.

[norfair18]

The monopoly question was insightful.

[bonkers45]

Hah! I loved the end. I hadn't thought of it in that way.

[NicosMind]

For recomended books and lectures go to MisesMedia here on youtube and subscribe. They do Austrian economics(what Peters learnt) And if you go to Mises org and into the store youll find all Austrian books including the one Peter recomended. Henry Hazlitt's Economics in One Lesson.

Other good starting books Gene Callahan's Economics for Real People, And a little more advanced Murry Rothbard's The Mystery of Banking.

I like Austrian economics. It makes complete sense.

[WatchDogxx]

"The theory is that will not happen in the real world." I love that.

[davincij15]

Turns out the bonds were real.

[shawner69]

The minister of finance in Canada actually came out that he was very worried about the US right around the time that those others were saying they had confidence in it. It didn't seem to get traction though.

[Tasadaru]

I don't know how he can keep a straight face.

"The . . . anti tribot." LOL! XD

[Nielsio]

I made a narrated version of 'How an Economy Grows and Why it Doesn't'. I posted it as a video response to this video. Hopefully you can allow it.

[NicosMind]

Ive read it before. Its very good. Its out there in PDF format. Dare say others can find it by searching "How an Economy Grows and Why it Doesn't" with PDF and it should probably turn up. Cant be assed looking for it myself cause ive already downloaded it :P

[overlordsshadow]

Amazed daily by your intelligence:)

[youpick4me]

That old man who owned the roads in the Parker Brothers' Monopoly game must have been a government Bureaucrat not an entrepreneur !!!

[MayadaJeffery]

8:54 :)))

[Blackjack555]

Outside Independence Hall when

the Constitutional Convention of 1787 ended,

Mrs. Powel of Philadelphia asked Benjamin Franklin,

"Well, Doctor, what have we got, a republic or a monarchy With no hesitation whatsoever, Franklin responded,

"A republic, if you can keep it."

-- Benjamin Franklin

[brattymack]

The bonds are real. The simple fact that nobody could dream up such a ridiculous scheme makes them legit in my opinion. Or, I know - I'm going to smuggle a mini time machine into Switzerland...ya...I'll do that! Because I used to work in the Japanese government and now I smuggle pretend time machines into Switzerland and someone will want to buy it for a gazillion dollars. I'm so smart.

[kihjin]

lol anti-tri-bot

[MooseOfReason]

The uhh... anti tribot!

Can't blame him, though. :D