The Peter Schiff Show Podcast
Episode 1009: "Powell Fiddles While Inflation Burns"
Date: February 13, 2025
Host: Peter Schiff
Episode Overview
In this episode, Peter Schiff unpacks the latest inflation report, critiquing Federal Reserve Chair Jerome Powell’s response as dangerously complacent and highlighting how mainstream financial media are downplaying worsening economic signals. Schiff examines the implications of persistently high inflation, analyzes the Fed’s policies, dissects political narratives around “Trumpflation” and “Bidenflation,” and considers what these trends mean for markets—especially for gold and gold stocks. As always, Schiff adopts his signature, direct style: blunt, skeptical of optimists, and eager to back his analysis with data and history.
Key Discussion Points & Insights
1. The Inflation Report: Worse Than Expected
- Main Point: January's CPI came in at 3.0% year-over-year (vs. 2.9% expected), with Core CPI at 3.3% (vs. 3.1% expected). The monthly increase was 0.5% (60% above expectations and an annualized rate of 6.2%).
- Trend: This marks four consecutive months of accelerating inflation (from 0.2% to 0.5%).
- Media Response: Financial media is "downplaying" the numbers and Powell did not acknowledge the seriousness in his Congressional testimony.
Quote:
“If you annualize 0.5. Right. If we got 0.5 every month, that's 6.2% inflation. That's three times the Fed's 2% target. This is a big deal.”
— Peter Schiff [04:02]
Quote:
"We've now had four consecutive months where inflation has gone up. Now to me that sounds like a trend. How do you dismiss four months in a row?"
— Peter Schiff [05:00]
2. Powell’s Blind Spot and Fed Policy Failures
- Fed's Stance: Despite the hot inflation print, Powell claims inflation is “in a good place,” signaling no urgency or new policy direction.
- Schiff’s Take: The Fed ended its rate hikes prematurely and is now hopelessly behind the curve.
- Critique of Inflation Expectation Claims: Schiff cites rising consumer expectations (now at 4.1%, highest since 2008) as direct refutation of Powell’s assertion that expectations are "well anchored at 2%."
Quote:
“Their heads are down. They can't see what's right in front of them. Maybe they should look up and take a look at the data.”
— Peter Schiff [07:42]
3. Partisan Blame Game: Trumpflation vs. Bidenflation
- Democrats' Spin: Quickly blamed early 2025 inflation on Trump ("Trumpflation") even though Biden was president for most of January.
- Schiff's Response: Price increases are lagging effects—January’s inflation is still the result of Biden-era policies.
- Warning: Eventually, the new administration will “own” the inflation and the risks of not criticizing your own political allies, drawing parallels to the pre-2008 crisis climate.
Quote:
"The Democrats are already blaming it on Trump, and of course the Republicans are saying it's Bidenflation continuing... At some point, they're gonna own this economy."
— Peter Schiff [09:21]
4. Media Polarization and Lack of Critical Coverage
- Schiff notes he used to be a contrarian voice welcomed across networks. Now, partisan divides mean his critical stance isn’t welcome on either side.
Quote:
“I'm not welcome anywhere in the mainstream media, really... If you want to hear my perspective, which is the truth, you gotta listen to my podcast.”
— Peter Schiff [12:41]
5. Market Response: Stocks, Bonds, Gold, and the Dollar
(Starts [18:12])
- Stocks: Initial negative reaction, but muted. Dow down only ~225 points. Schiff suggests markets still don’t grasp the magnitude of the inflation problem.
- Bonds: Yields spiked, with the 30-year at 4.82% and 10-year at 4.61%. “We’re headed much higher,” implying pressure on mortgages and credit.
- Gold and Gold Stocks: Gold had a textbook reversal, falling $40 on the news but ending higher. Schiff interprets this as a significant change in market psychology: investors now see hot inflation as bullish for gold because the Fed is seen as impotent.
Quote:
"Bad news on inflation is actually good news for gold... It just confirms why you need to own gold, because inflation is running out of control and the Fed's not doing anything about it."
— Peter Schiff [22:54]
- Gold Mining Stocks: Barrick Gold beats earnings, announces $1B buyback. Schiff expects more sector momentum as analysts catch up to improved fundamentals.
- Investor Sentiment: Despite outperformance, Schiff says his funds have seen continuous redemptions, even among his followers—suggesting how out-of-favor gold remains in mainstream portfolios.
Quote:
"The upside potential in gold stocks so dwarfs the downside risk that it's a bet that you have to make and it's a smart bet."
— Peter Schiff [31:13]
6. CRB Index and Commodity Pressures
(Starts [36:54])
- Commodities: The CRB index is up 25% YoY, with acceleration this year. These higher input costs "will work their way into the CPI," supporting sustained inflation.
- Energy: Oil companies are laying off workers, undermining "drill, baby, drill" rhetoric and casting doubt on additional energy-driven inflation relief.
Quote:
"How can the Fed possibly believe that they've won the war on inflation? And prices are going to go back to only up 2% when commodity prices are up 25%?"
— Peter Schiff [37:39]
7. Trade Policy & Tariff Implications
- Trump has announced new steel and aluminum tariffs, with more threatened. Schiff details why protectionism raises costs for domestic manufacturers and does little to help overall competitiveness or inflation.
Quote:
"The government won’t collect much money from these tariffs… but we’re going to pay more. And that’s a negative for the companies that use steel and aluminum."
— Peter Schiff [39:58]
8. Congressional Testimony: What Powell Isn’t Saying
- The real purpose of the Fed chair’s congressional hearings should be to give honest policy feedback—which Powell refuses, citing “political neutrality.”
- Schiff mocks this, arguing that if the Fed’s purpose isn’t to warn of policy mistakes, then hearings are just partisan grandstanding.
Quote:
“If he's not gonna answer these questions, what is the purpose of these hearings? It's a waste of time.”
— Peter Schiff [44:29]
Notable moment:
“The funniest quote was… a congresswoman said Trump and Musk want to turn the Fed into an agency that helps the rich get richer and the banks get bigger. I mean, what do you mean ‘turn it into that’? That’s what it is!”
— Peter Schiff [45:52]
9. The Debt Bomb and Unheeded Warnings
- Powell equates the U.S. debt spiral to falling from a skyscraper and not worrying until hitting the ground.
- Schiff: “By then, it's too late—you are done. So he should be doing everything he can to... get us to do the right thing now”
Quote:
"You jump off the top of the Empire State Building and on the 50th floor on the way down, you're on an unsustainable path. But clearly you're headed for disaster."
— Peter Schiff [48:08]
10. Future Scenarios: Stagflation and Policy Dead Ends
- Schiff doubts the Fed has any tools for likely stagflation (rising inflation + rising rates + recession).
- Predicts more QE, possibly even with rates above zero if bond yields spike further.
11. US Gold Revaluation Proposal
- Schiff addresses new proposals to revalue U.S. gold and “print” against it.
- He calls this "pure inflation" and warns it would spark a self-fulfilling gold price spiral.
Quote:
"If the government takes advantage... by having The Fed print $800 billion so they can spend it, then the price of gold is going to be 4,000 or 5,000. And then what happens if every time the price of gold goes up, they ask the Fed to print more money?"
— Peter Schiff [52:41]
12. January Deficit Explosion
- The January 2025 federal budget deficit was $128.6B, a 500% increase YoY (from $22B in Jan 2024).
Quote:
“2025 I think is going to be the biggest annual increase in the national debt in history. But the record won't last long because we're going to break it in 2026.”
— Peter Schiff [54:39]
Notable Quotes & Memorable Moments
- On market psychology shifting for gold:
“The markets are waking up to this reality that bad news on inflation is actually good news for gold.” ([22:54]) - On Powell’s role in Congressional hearings:
“What the hell? I mean, so he's saying that even if I think you're about to do something really stupid that's going to be harmful to the economy, I'm just going to bite my tongue and let you do it.” ([44:12]) - On partisan grandstanding:
“So the Democrats spent all their time criticizing Trump and the Republicans spent all their time criticizing Biden. But nobody is dealing with the actual problem.” ([46:50]) - On the debt spiral:
“You can't just say, well, we don't have to worry about it because it hasn't blown up in a complete, unmitigated disaster yet.” ([48:59]) - On gold stocks:
“All the fundamentals, all the technicals, everything is aligned. I think we're going to get more of these earnings reports... maybe we should actually put a buy rating on one of these gold stocks.” ([32:40])
Timestamps for Major Segments
- [02:14] — Opening analysis of latest inflation data and Fed/media response.
- [09:21] — Partisan political blame: “Trumpflation” vs. “Bidenflation.”
- [12:41] — Schiff on media polarization and his outsider status.
- [18:12] — Market response: stocks, bonds, gold, mining stocks; why the dollar’s rally is a “head fake.”
- [22:54] — Shift in gold market narrative: hot inflation = gold bullish.
- [36:54] — Commodities, CRB index, and the inflation pipeline.
- [39:58] — Analysis of new Trump tariffs and reciprocal trade policies.
- [44:12] — Powell’s Congressional testimony: what’s missing.
- [45:52] — “The Fed helps the rich get richer”: Schiff’s historical perspective.
- [48:08] — On the unsustainable U.S. debt “path.”
- [52:32] — US gold revaluation scheme, risks of monetary (and gold) inflation.
- [54:39] — Record January deficit and why debt records will keep falling.
Final Thoughts
Schiff closes with urgent advice: investors must wake up to the magnitude of the inflation problem and the Fed’s fecklessness. He remains extremely bullish on gold and gold stocks, arguing that the underlying trend is only now being recognized by the market, and that waiting for policy “fixes” (from either party) is futile.
Tone throughout: Blunt, skeptical, data-driven; often sarcastic about media, government, and partisan narratives.
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End of Summary.