The Real Crash: Why Peter Schiff Is (Still) RightSubmitted by Marc Clair on Wed, 01/09/2013 - 16:36
I used to find finance really boring. I didn’t understand investing and didn’t really care to. It was just “mumbo jumbo” to me. Yes, I knew that like a good citizen I should have a 401K and be sure to funnel as much money as possible into mutual funds that I knew nothing about. I should save up my money in a savings account or maybe some CDs, only to one day spend it all on a big down payment for a house and spend the next 30 years after that paying it off. Then I’ll have my cozy 401K just sitting there waiting for me, and by then surely all those mutual funds will be worth millions! Finally, when I am old and tired from working my whole life, I can sell the house, move to Florida, and drive really, really slow to my bingo game every day for the rest of my life until I die.
Does the above sound boring? It does to me to, which is why my interest level in finance and investing was always very low. It always seemed like a pre-scripted game where the outcome of my life was both inevitable and incredibly boring. But I didn’t know any better, so I did what I was supposed to do. I saved my money. I signed up for the 401K program at my job at the time. I was doing all the right things and it was all for my future, so why was I so ambivalent about it at all?
Probably for the same reason that I was pretty ambivalent about politics until I started reading a weekly column called “Texas Straight Talk” about 10 years ago by some Ron Paul guy you may have heard of. Ron Paul’s column made sense and he seemed like the only politician worth listening to. Following Ron Paul led me to the work of Peter Schiff, his economic adviser for his 2008 Presidential Campaign. Hey, if this guy was good enough to advise Ron Paul, maybe he was good enough to advise me, I figured. I picked up a copy of Crash Proof: How to Profit From the Coming Economic Collapse and immediately looked at finance and investing in a whole new light. Thanks to Peter Schiff, I soon found learning to understand economics and finance just as exhilarating as learning about the ideas of liberty.
There is of course a good reason for this, as there is a strong connection between Peter Schiff’s ideas on finance and the philosophy of liberty. Though he never once mentions Austrian economics by name in his works, it is clear that Schiff is a follower of the Austrian School of economic thought pioneered by Carl Menger and Ludwig Von Mises. Austrian economics recognizes individual human action as the most efficient supplier of goods and services, and therefore Austrian economists typically advocate for free markets. Austrian economists also recognize the dangers of centralized planning on the economy, particularly the manipulation of the money supply and how it inevitably creates unsustainable bubbles. It should be no surprise that Austrian economists saw the bursting of the housing bubble coming years before the mainstream media financial pundits even recognized that this was a problem.