I recently posted a video of of Mr. Schiff on CNBC to demonstrate a point about the Obama Administrations economic polices. Intrigued by the simple, logical fundamentals of his arguments, I decided to do some more research on Peter himself. What I found was very fascinating.
Probably his most famous video, entitled Why the Meltdown Should Have Surprised No One, opened my eyes to a very common sense approach to explaining economics, and, coincidentally, free market economies. The video is a real eye opener; if American’s would have just opened their eyes the could and should have seen economic and market crash coming 18 months ahead of time!
His common sense approach is on display here as well, where he directly refutes the Greenspan / Bernanke economic theory of cutting interest rates to stimulate the economy.
Peter is a student of Austrian economics, which when broken down to its basics, is a less is more approach. With clear and concise arguments that logically prove government intervention breaks the free market model and ruins economies, it’s hard to argue with this principle. Therefore, I decided to study the mechanics of Peter’s principles, and what I found is fascinating.
The first job of an economist is to tell governments what they cannot do.
Ludwig von Mises
The principle tenants of Peter’s plan.
1. Increase savings, eliminate revolving debt.
2. Become a net producer, increase manufacturing of real goods and exports.
3. Eliminate deficit spending
4. Allow the free market to work including:
- No bailouts
- No stimulus packages
- Eliminate central bank control of interest rates (or the entire central bank itself)
- No mortgage safety – real estate prices are still much too high
- Massively reduce corporate regulation, allowing fear of loss / failure to become actual loss / failure
5. Drastically cut federal income taxes to spur savings and real production
6. Restore the value of our currency. Since 2002, the US dollar has been devalued by nearly 30%.
7. Reduce and eliminate borrowing from foreign countries.
Listen to Peter Schiff explain why the free market is superior to a federally regulated, and insured market:
Unlike the convoluted, academic economics that only the Harvard grads can claim to grasp, these concepts make sense:
Save more than you spend and produce more than you consume.
So let’s take a look at what happened to our economy, in retrospect:
How Do We Profit From This Knowledge
I’m currently working on a new rotational model for trading, and am building a custom tool that’s going to blow you away. Stay tuned!
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