Why Libertarians Need Austrian Economics and Peter Schiff

[XESTISS]

O Yea BTW Whee is the $ Collapse? Hyper Inflation? Gold at $5000? Dow 1000? Bond Collapse? QE IIIIIII? China selling the Dollar? Where is all that Austrian Doom and Gloom? No Where in Sight!

$ Lost 94% of its value? What Planet do you live on? Do you not see the BMW's in everyone's Drive way? Stainless Steel granite Top Kitchens with yearly Vacations to Europe? What if we Used Austrian we Would Have 5 BMW in the Drive way? ROFLMAO! No Logic what so ever! Clearly you believe in Flying Unicorns

[ViewpointLibertarian]

@XESTISS I don't know what video you watched, but I never mentioned a dollar collapse, $5,000 gold, etc. If you have a vendetta against Peter Schiff, go comment on his videos. The dollar has lost over 90% of its value since 1913--look it up. We do have a lot of wealth in the US, but isn't it obvious we would have more if we didn't suffer periodic recessions? Is it not bad for the poor and middle class to have their savings eroded? I don't see what "flying unicorns" have to do with anything.

[XESTISS]

@ViewpointLibertarian You‘re missing the point. Why has $ lost "90%" of it’s value? Bc We have increased Production from 36 Billion to 15 Trillion and population from 100 Billion to 300 plus! Money supply MUST increase or you get monetary deflation. If one produced a Chair for $1 is it fair that he produce 10 chairs for .10 cents each? No his better off producing 1 Chair! This is the idiotic thought process of Austrians. $ value can only be reduced By Supply increased! Net effect is the same!

[XESTISS]

@ViewpointLibertarian 2 chairs = $2 according to you and your mythical Austrian math the money supply was increased thus value went down on a per $1 basis by 50%! How can somebody in the year 2012 with all the education available possibly be taken serious using these kind of math? Let alone an economical Theory called "Austrian"? It can't be! This is voodoo economics! Insanity!

[thumm99]

@XESTISS Peter Schiff has his reasons for why he thinks many of his predictions haven't happened yet. You must admit he has been correct on many things that were commonly unforeseen. He never said hyperinflation was inevitable, he just believes it is a possibility... Maybe you are right, maybe he is wrong, but I wouldn't be so quick to jump to conclusions. Time will tell and we will just have to wait and see.

[XESTISS]

@thumm99 Peter Schiff has predicted absolutely nothing. He has said hyper inflation hundreds if not thousands of times. His predictions will never come true for the following reasons. 1. He is clueless in economics, 2. he has the wrong diagnosis, 3. Everything he wants for america is going on in Greece in real time! How is that working out? Catastrophic! 4. US is a currency ISSUER! Not a currency USER like Greece! Like I told you before he is clueless and his crap it will NEVER happen in the USA

[defnotacanadian]

@XESTISS Yeah, Wall Street doesn't leach off of average citizens, banks don't get bailed out, and large corporations don't control the government. Also the USD is prudently monitored and backed by gold. Hyperinflation is impossible. This Schiff guy is an idiot.

[XESTISS]

@defnotacanadian If you only Google "US GDP" you will realize the 15 trillion of GDP is because of the Gov, Bankers, Large corporations, etc. Nonsense There is no Hyper inflation nor will there be. We printed 29 trillion in 2008 where is all the inflation?

In the great depression the US had a surplus and they were on the "Gold standard" Fed never supported the Banks and they collapsed. Exactly what is occurring in Greece today. Again. The US did not repeat their mistake this time around.

[defnotacanadian]

@XESTISS LOL You are gonna be very suprised with how things turn out. Good luck bra...

[XESTISS]

@defnotacanadian There is zero data indicating the world will end. There is 100% data that austerity and what Peter Schiff says is full of shit. One only needs to look at Greece to see Austerity doesn't work! Printing does. Just take a look at the US that is in a double rip "recovery". The sad truth is you are brainwashed by You Tube wanabe economist. Keep staring at the Market rip like a dear in head lights. Near the top you will get bullish because you will feel like a fool missing out!

[XESTISS]

LOL Peter Schiff the clown that lost 60% of his portfolio in 2008! Great Prediction! He is amazing! How does one say he knows the collapse is coming from 2002 till 2008 and Still manage not to Short Housing? O I know Because he did not believe his own BULLSHIT! Hahahahaha! Show me 1 Video of Peter Schiff warning about the "unregulated" Free market Derivatives that caused this mess!

2. Name me 1 Austrian economy on the Planet today? NONE! Bc 99% of the Planet does not believe on Flying Unicorns!

[SirTenenbaum]

@XESTISS The reason Peter's investments tanked in 2008 was because gold dropped sharply in that year, which Peter didn't expect (people flocked to the dollar rather than gold). After 2008, the price of gold shot up to all-time highs because people got scared of the dollar which is what Peter thought would happen initially. In other words Peter totally recouped his losses and made huge gains after 2008. Maybe you should learn the whole story.

[XESTISS]

@SirTenenbaum Don't give me excuses! According to Schiff printing = inflation = Gold appreciation no? We printed 29 TRILLION in 2008 Yet Gold went down and people flocked to the $. What does that tell you? 1 FIAT is more valuable! 2 Printing reserves does Not cause inflation! 3 Peter Schiff is Clueless and predicted Nothing! John Paulson Predicted right and made 32 Billion in housing collapse! See the difference? I hope so.

[GeorgeWHutton]

Great video. I'm about 3/4 through "Man, Economy and State." It's my understanding that interest rates are directly correlated to people's time preferences, which is why interest rates drop when people save money. More (saved) money is put into (capital) production, thereby increasing the length, or steps of production. How does that relate, specifically, to an increase in available money causing the decrease in interest rates? Are they both sides of the same coin?

[ViewpointLibertarian]

@GeorgeWHutton I might be misunderstanding your question, but I think you're thinking about it too much. People don't want to consume now and save instead (time preference). People's savings mean more funds for banks. This increase in funds for banks, which comes from savings, increases the supply of loanable funds which means interest rates fall (supply goes up, price goes down). If people save (which is related to their time preference), interest rates fall. If people don't save, rates rise.

[aliaandreadi]

@ViewpointLibertarian hmmm not quite so straight-forward; Since when do banks lend out others' deposits? 90 per cent of it is created outta thin air thru fractional reserve banking- Thus "loanable funds" are NOT integrally dependent on supply/amount of deposits, rather on available "credit"; Additionally printing does NOT equal hyperinflation necessarily; as long as the banks contract lending (which they have) deflation can and may occur. Most cash is digital peeps, not paper!

[hayekian]

I could not agree more. It is not just Libertarians, every human being should have an understanding of Austrian economics. I also highly recommend Meltdown. Anyone reading this who has not read it should just get it now, period!

[ZoneofA]

Housing bobble bursted simply because liquidity of targeted market (homeowners) was not enough to generate demanded returns on investment in that sector. In another words for that mes you should blame stagnating incomes, sudden and deliberate cutoff of refinance credit and excessive interest rates and fees for housing credits.

[ViewpointLibertarian]

@ZoneofA You need to look further back. Why did homeowners and banks make all these enormous malinvestments into projects that were later realized to be unsustainable and prone to default? The source was artificially low interest rates that brought about the speculative boom in the housing sector. Without the manipulation of interest rates through monetary creation by the central bank, these (later realized) malinvestments would not have been undertaken by entrepeneurs and homeowners.

[ZoneofA]

@ViewpointLibertarian Bankers did not realize those loans will be nonperforming after the fact, they knew it from start. They knew they could pocket the profits immediately by selling packed securities based on those loans before default becomes apparent. Buyers of those AAA securities took majority of the losses. In short we have classical predatory lending entrapment of the borrowers with added trick of securing that debt with third parties to offset expected losses.

[SirTenenbaum]

@ZoneofA What? The banks holding those toxic assets during the crash certainly didn't profit. They were bankrupt! The housing boom was a binge period that was enabled by the liquor served up by the Fed in the form of easy credit. Everybody was mistaken during the housing crisis and the banks were too. The malinvestment came from the false signals of the Fed. I'm not supporting bank bailouts, but your statement that banks knew the real estate assets were bad from the start is simply false.

[ZoneofA]

First mistake that you make is assumption that supply of lended money is function of savings, this is not true. Liquidity, or lack of it, in entire or part of economy, is purely reflection of interest of those that control money creation, and can be set at any level for any length of time independently of savings. Your second mistake is assumption that state controls money supply, this is not true. In all modern capitalist oligarchies money supply is in private control.

[ViewpointLibertarian]

@ZoneofA Uh, did you watch the whole video? In a healthy economy, lent funds come from savings. In our current unhealthy economy, lent funds do not come from savings but from monetary creation through the Fed (in the case of the US) just like you said. And private interests have stakes in the Fed--Wall St. banks put board members on the board of the Fed. So we agree! (Importantly, lent funds through monetary creation is basically the cause of the speculative boom).

[ZoneofA]

@ViewpointLibertarian In no economy that practices fractional reserve banking (and that means all industrial countries during last few centuries) is lending based on savings. That is entire point of fractional banking: decoupling of savings and lending. It is separate issue why do you consider that “unhealthy”. Also it is mistake to focus on Fed alone as source of monetary inflation as amount money created directly by private banks is is bigger.

[SirTenenbaum]

@ZoneofA Lending should be based on savings because that's the only source of sustainable lending and investment because savings represent a pool of real resources to draw from for investment projects. Listen to the Austrian explanation of the business cycle again. The bubbles come from artificially low interest rates which come through monetary creation through central banks and fractional reserve banking when sustainable investment only comes through savings. Tom Woods also has a good video.

[aliaandreadi]

@ViewpointLibertarian money creation does not originate exclusively in the fed- most money is created DIGITALLY thru private and commercial banks and brought into existence thru fractional reserve lending ;) This is why the massive printing has not yet caused inflation (the banks r not lending) ;)

[ZoneofA]

Austrian economics LOL

[clintcastle]

Very good video

[iori666]

Can you please make a video on required reading for Austrian economics. In order to fully understand the subject on a higher level. I along with many others would like to learn the Austrian way. So a video about reading material would be hugely appreciated. Thank you. 

[AceObrin]

"The Austrian school provides a sound explanation of the business cycle and a consistent philosophy for libertarianism in general." Consistent mathematical theorems are great but Austrianism neglects the physical context and makes nondisprovable assumptions about human behavior, hence, it's pseudo-scientific rubbish. An isolated business cycle is useless, because all humans and hence all businesses depend upon earth systems and thermodynamics in general. Try thermoeconomics and biophysics.

[SirTenenbaum]

@AceObrin Can you say exactly why the Austrian explanation of the business cycle is incorrect? :)

[AceObrin]

@SirTenenbaum I can at least attempt as much, your highness. Praxeology eschews empirical treatments of large-order human behavior on the presumptive basis that individual decisions are too relativistic to confer discrete, cardinal action-potentials on a large scale. Austrianism's rejection of empirical methodology and likewise dismissal of falsifiable theorization has brought much condemnation from various subfields of both social and natural science. Among these...

[AceObrin]

@SirTenenbaum is the approach of Evolution Thermodynamics: the ability of any organism to persist in its environment is a function of the amount of energy that organism can use to perform work. Von Mises contends that humans are unique in that they are conscious, voluntary economic actors and not mere creatures of stimuli and instinct, when in fact, it has been found that self-preservation and stimuli-association are intrinsic to all organisms in wildly varying degrees...

[AceObrin]

@SirTenenbaum ...and it is that wild variation of degree that may give the illusion that humans, uniquely, are conscious and able to act "voluntarily," as humans have been found to be capable of a high degree of stimuli-association. In the final analysis, however, it is not up to anyone to disprove the validity of Austrianism, but rather, to prove that it is valid. To do so, it must be formulated so as to allow for falsification rather than as a set of vague axioms that may apply to anything...

[AceObrin]

@SirTenenbaum ...In other words, for Austrianism to be considered scientific, its axioms must obtain a falsifiable level of specificity. Until then, asking anyone to disprove it or otherwise say it is incorrect is like asking someone to disprove some vague statement of theology: "prove that Yahweh didn't create Jesus," "prove that earthquakes aren't triggered by God," etc.

[SirTenenbaum]

@AceObrin I don't see how biology refutes Austrian economics. Mises's axiom is "humans act" which is necessarily true--attempting to refute it is action. Derived from this axiom is that human action is purposeful/a response to stimuli. Are you trying to argue that human action isn't purposeful? This is praxeology, which I'm not very interested in. You don't have to accept praxeology to think the Austrian explanation of the business cycle is correct. And it is not an appeal to the supernatural...

[SirTenenbaum]

@SirTenenbaum ... so your analogy involving God is false. The bottom line is: the Austrian explanation of the business cycle is an explanation of the business cycle just like the monetarist or Keynesian or Marxist schools. It seems to me that the Austrian explanation is the correct one.

[AceObrin]

@SirTenenbaum I agree 100% that humans act and do so based on stimuli. As far as an explanation of the business cycle of capitalism, the Austrian School probably offers the best. However, insofar as the Austrian School relies on markets, it is amenable to political corruption and various forms of overshoot. These are underlying weaknesses of using an exchange medium for commodity valuation in general and not any one school of traditional economic thought in particular.

[TheMontroseMan]

we have had the lowest interest rates in recent memory...where is the money then for investment? Seems as if the banks are hoarding it, and investing to make profits for themselves...

[fictionweaver81]

@TheMontroseMan The Fed, trough several programs, has inflated the reserves held by banks, but to prevent inflation, it also pays them interest on those same reserves. Because of these uncertain times, banks are afraid of lending out that money, so they just sit on it, while at the same time making money from the interest paid to them by the Federal Reserve.

[tigranvartanovitch]

Shouldn't have mentioned Hayek had a Nobel Prize. Krugman has one too.

[Skyler827]

@tigranvartanovitch The nobel prize had a lot more dignity back then than it does now. Also, Krugman's Nobel Prize was for his theorem showing how international free trade brings countries out of poverty, which is always a good thing to support.

[Nielsio]

Youtube has recently made it possible to have annotated links that open in a new tab/window. You could use it.

[Xenthoid]

Coherent and clear. Great video.

[CelticAlphabet]

No wonder why Ron Paul says "capitol can only be gained by savings" Thankyou for explaining this better. I always understood the basics of AE but this video really clears things up.

Ron Paul predicted that shit in 2001, not only that but also the wars, entanglements in other countries, the threat of losing our liberties. etc

[ahenne752]

Austrian economics is the bomb! Mises, Hayek, Rothbard forever!

[SuperViewer101]

concise and very informative! thanks!