"What About Money Causes Economic Crises?" with Peter Schiff - Ron Paul Money Lecture Series, Pt 3/3

Rep. Ron Paul sponsored this Congressional lecture on "What About Money Causes Economic Crises?", the concluding lecture in a three part series on the basic principles of money for Congressional staff. As a continuing educational tool this lecture was filmed and is provided to the public. The lecture was delivered by Peter Schiff, CEO of Euro Pacific Capital and author of Crash Proof: How to Profit From the Coming Economic Collapse and How an Economy Grows and Why It Crashes. Mr. Schiff explains the fact that the interest rate is a price and that manipulation of that price results in real changes to the capital structure and structure of production within the economy, causing imbalances, booms, and eventually busts in the economy. His lecture also explores how government intervention through labor and employment policies results in diminished employment and an overall reduction in the standard of living.

Previous videos in this lecture series can be found here:

Pt. 1: "What is Money?" -- http://www.youtube.com/watch?v=vowbrq...
Pt. 2: "What Is Constitutional Money?" -- http://www.youtube.com/watch?v=k6gMkK...

• Category

  News & Politics

[Mark Grisham]

I have to admit, you do know what you're talking about. But me too: I've been acitve in politics for a while as a councilmember in my town, and I can assure you, if you tell the people you want to get rid of anything governmental, they will shut you up immediately, so you won't get anywhere. Furthermore, it will take some years to repair the damage the welfare state has done to common knowledge and self esteem. One step after the other - but big ones, I'm with you on that one.

[Xasew]

Did you just suggest that tax cuts were the reason for the Great Depression? I would love to hear the logic behind that.

All five posts of yours sound like they were copied from bumper stickers. That's an accomplishment, even on YouTube.

[mellowman1001]

Well, he's wrong when he says China gets nothing. They get wealthier, better infrastructure and greater technological capability to name a few. As this goes on, they gain more independence as they develop their own consumer base and (discretely) migrate away from the dollar and then the poo really hits the fan.

[Cimegs5088]

from academic point of view, this is one hella legit.

[HanStanwell]

peter schiff 4:10

[Frederick46M]

It seems to me that the economic crisis is going to keep us company for some time yet. I firmly believe that our politicians should address the issues with greater professionality. Perhaps they should engage the services of specialists in the economic crisis, as some counties already do in the US. By engaging the services of the Orlando Bisegna Index, they have resolved deficit problems and reduced unemployment.

[WoopyGoldbergsHair]

So the US was so productive as to fight a multiple front war, with a military that needed to be built after the war was declared because Europe was destroyed during WWII?? That makes absolutely no sense. The US was massively productive before WWI and WWII, not only after. In reality, WWII probably marks the turning point in US Productivity due to the dollar becoming the World Reserve Currency, globalization, creation of military industrial complex, and the removal of the gold standard.

[Ken Smith]

XYZ XXX are all owned by the same folks. The production in China at no profit is because that is what the owner directed. They can take the profit in a place with no taxes on those profits by this slight of hand. The result is they use the infrastructure in China and the USA without having to pay to maintain it. Its the classic externalization of cost that folks like to do if they can. On a lot of things, it is as much about this as anything. Machines in the US cost no more than in China.

[bagarespecial]

Thanks for the answer, but i still don`t understand. Which part is the XYZ international? and why should XYZ China inc produce a bunch of Widgets without making a profit. I thought it was more like this. Nike for example want to make sneakers and therefore give the production contract in China to the factory that can make it the cheapest

[Ken Smith]

The mistake is to think that a company is "American". Here is what is typically done:

XYZ China inc makes widgets in China for $0.05 each

XYZ China sells the widgets to XYZ international for $0.05 each so that no profit is made in China.

XYZ International marks widgets up to $1.00 making $0.95 profit and sells them to XYZ USA.

XYZ USA sells the widgets in the US for $1.00 making not profit.

Since XYZ international is the only part that made profit, neither China nor the US gets any money. 

[bagarespecial]

Why is it a problem that China manufactures american goods? I mean it`s the american Company that makes the profits and can sell cheaper goods and be more competative, why is this something bad?

[VTaylo]

Best Schiff speak ever.