← The Peter Schiff Show Podcast
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You make no friends in the pits and you take no prisoners. One minute, you're up half a million in soybeans, and the next, boom. Your kids don't go to college and they've repossessed your Bentley. Are you with me? The revolution starts now. Starts now. We have to pass the bill so that you can find out what is in it. Turn those machines back on. You are about to enter the Peter Schiff Show Me the Money. If we lose freedom here, there's no place to escape to. This is the last stand on earth. The Peter Schiff show is on. Know when they decided that they wanted
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to make a virtue out of selfishness. Your money, your stories, your freedom.
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The Peter Schiff Show. Good evening, everybody. I am live on Sunday night. And over the weekend, Donald Trump dropped a bomb on the markets. Of course, it was highly anticipated. After all, Donald Trump ran a campaign promising tariffs, and he's kept his promise. He is imposing tariffs. Of course, if you hear Donald Trump and the media describe what he did, it's always, Trump has hit Mexico with tariffs. Trump has hit Canada with taxes. Trump hit China with taxes. Right. So this is a offensive where America is winning and Canada and Mexico are losing because of these tariffs. And in fact, everybody seems to believe that that is in fact, the case. Look at the reaction around the world. First of all, the stock markets are getting clobbered. The Dow is off close to 600 points, 580 points right now. That's 1.3%. Nasdaq down a bigger percent, about 2.4%. Hardest hit Russell, 2000. US small caps, they're down 3.4%. But the big story really, I think, is in the foreign exchange markets where the dollar is up across the board. The dollar index is up maybe 1.3, 1.4%. Euro is down 1.4%. Now, Europe isn't even impacted by the tariffs. Right? So why is the euro down? But the euro's down 1.4%. Japanese yen is even down about 0.4%. The British pound is down over 1%. Again, Britain's not involved in this trade war, at least not yet. Australia dollar again, they're not involved. They're bystanders. Australian dollar down 1.6%. Canadian dollar down 1.4%. Even the Swiss franc is down about 0.4%. Mexican peso down close to 3%. That seems to be the biggest loser on the night. The tariffs that have been imposed on goods coming in from Mexico and Canada are 25%. Although energy, oil and gas coming in from Canada. The US Buys a lot of oil and gas comes in from Canada. So the tariffs there are going to be 10%, and the tariffs on China are 10%. But Trump is also promised that if any countries retaliate by imposing tariffs of their own on American imports, that Trump is going to increase the tariffs that he has already imposed. Right. So, but everybody believes that this is great for America because it's not going to cost America anything, because the world, right, Mexico and Canada are going to eat the cost that he's hitting them with these big tariffs because Trump has been saying the world has been taking advantage of us and it stops now. We've got the External Revenue Service. America is not going to tax its own citizens anymore. We're going to tax the rest of the world because the world has been benefiting from our market. The world has been selling us all this stuff and making all this money off of us, and we're tired of getting screwed. And now we want the world to pay up and pay for the privilege of supplying us with all this stuff that we can't produce, and that without this stuff, we wouldn't have it. Right, but it doesn't put it that way. But the world is buying this nonsense. And so everyone thinks this is horrible for Mexico, this is horrible for Canada, and it's great for America. No, it's not. If the currency traders understood economics, they would be selling dollars right now, not buying them. The news is worse for America. These are taxes on Americans. They're not taxes on Canadians. They're not taxes on Mexicans. The dumbest thing that Canada can do is, is retaliate by tariffing their own people. I mean, a trade war, again, it's like a currency war, right? You damage yourself, you shoot yourself, right? All the guns, right? If you're having a trade war, all your guns are pointed at yourself. Trump is hitting Americans with these tariffs. He's not hitting the Canadians. He's not hitting the Mexicans. Now, of course, do the tariffs disadvantage Mexican and Canadian businesses relative to some. Maybe some businesses in Europe that aren't getting hit with the tariffs? They do. But a lot of the stuff that we get from Canada and Mexico, we're not going to buy it from Europe. Let's say avocados, right? We get a lot of avocados from Mexico. America imports 80% of its avocados, right? Mexico is the biggest supplier. Why do we get most of our avocados from Mexico? Because they're cheaper and they don't have to travel that far. Cause Mexico is right down south. And so if we have 25% tariffs on avocados, according to this conventional wisdom, Mexico is just going to eat it. They're just going to reduce the price of their avocados by 25%. No, they're not. I mean, if avocados should be 25% cheaper, they would already be cheaper. There's a competitive market. The prices are what the prices are. And do you think they're making 25% margins on avocados? No, they're not. The margins aren't that high in that, in that business. They are not going to eat the tariffs any more than a store eats the sales tax. Do people believe that if there's a 6 or 7 or 8% sales tax, that that doesn't get passed on to the consumer? Of course it does. The merchants don't eat the sales taxes. Right? I mean, yes. Do sales taxes cause a decline in sales? Of course they do. People don't have an unlimited amount of money. And so if prices are higher for any good, people are going to buy less of that. Good. And so the stores don't say, well, I, I can't pass on this sales tax to my customers because I'm going to sell less stuff. No, they just pass it on. And if they sell less, they sell less. That's how the excise tax works. That's how indirect taxes work. They are passed on to the consumer. Tariffs are exactly the same. They are passed on to the consumer. Who consumes Canadian imports. Americans. Who consumes Mexican imports? Americans. So let's take the example of these avocados that are now going to be subject to a 25% tariff? All right, well, if Americans want These avocados, they're 25% more expensive. Now, is it possible that there are some avocados that are being grown in South America that can be brought up to the US At a price that enables them to be cheaper than the Mexican avocados? Plus the 25% tariffs. Right. And if it is possible to bring avocados up from Brazil or Argentina or someplace like that, and maybe those avocados are only 20% more expensive than the avocados we were buying from Mexico, well, then we're going to be buying avocados from, from South America and paying more for it. Now, there may be some Mexican avocado producers that can sell their avocados and only, you know, and eat 5%. Maybe the most efficient farmers in Mexico are going to continue to supply some avocados into the US Market. And make a little bit less money than they were making before. But Mexico isn't going to stop producing avocados, right? America isn't the only country that likes to eat guacamole or whatever else people do, or, you know, avocado toast, stuff like that. So if they don't sell the avocados to America, they're going to sell them someplace else. Or the Mexicans, you know, they. There's. There's a lot of avocado in Mexican food. So I'm sure that that excess avocado, right, that is not being sent to America. It's not going to be wasted down in Mexico. They're going to eat it. Now, maybe the price will be a little lower than what Americans were paying. So maybe avocado producers won't make quite as much money selling their avocados locally as they were making selling them to Americans. But that's a great windfall for the Mexicans. They get cheaper avocados. Americans are going to pay more money for those avocados. It's not like we're going to be able to start planting these trees and growing our own avocados, because if we could do that, we'd be doing it right now. Same thing with Canada. America imports 70% of its maple syrup. That's just one food item. All right? Our biggest supplier of maple syrup is Canada, right? So if Canadian maple syrup is 25% more expensive, are we going to stop consuming it? It's not like we're going to just produce it ourselves. So the price of syrup has got to go up. Now, maybe some people won't be able to afford to pay 25% more. Maybe they'll put sugar on their. Their. Their pancakes. Except the price of that's going to go up, too, because we import a lot of that. The bottom line is Americans are going to have to pay higher prices for all the stuff that we import. You know, I was reading this article that talked about how, you know, Canada could retaliate by, you know, putting tariffs on American products, which, of course, then just, you know, that then they just shoot their own citizens because now they forced their own people to pay higher prices for what they're buying from the U.S. but the article, the guy that wrote it, and I forget where it was, but he said, you know, the U.S. export is a very small part of the U.S. economy. And so the tariffs, the Canadian tariffs won't hurt the Americans as much as the American tariffs will, will hurt the Canadians. Because Canada, you know, exports from Canada to the U.S. are much more important because it's a much bigger number than what America sends to Canada. But he's got it backwards. The value are the goods. People still don't understand the whole basis for trade, comparative advantage. The reason, and there's only one reason that you export and that's to pay for your imports. Now, when it comes to America, it's a little bit unique because we pay for our imports with the reserve currency, the US Dollar. So in the case of America, people are willing to export to us to earn dollars. But what good are these dollars? We just create them out of thin air. You can't eat them, you can't power a machine with them. It's nothing. It is fiat. But the world has decided that our paper, for whatever reason, has value. And so they're willing to accept it in exchange for what they produce. And what the world seems to think is that the dollar is so precious that the world craves dollars so much that they're not going to raise prices for Americans and price them out of the market that the world is willing to sacrifice. And the reality is, and Trump has it backwards, and I've talked about this, I wrote about it, even going back to my first book, Crash Proof, the US Trade deficit, which is at a record high all time record high merchandise trade deficit December 120 billion. It is a gigantic subsidy. America doesn't take advantage. I mean, the world doesn't take advantage of America. America takes advantage of the world. It's the world that's getting screwed. It's Canada, it's Mexico. And if they try to respond to these tariffs by helping to weaken their currency, although the currency speculators are already doing that, and what's that going to do? That's going to cause more inflation in, in Canada, more inflation in Mexico. But if they respond or subsidize their, their exporters or do anything to mitigate the state thing that these tariffs have on Americans, all they're doing is increasing the burden that they're bearing to prop up the United States. You know, the, the danger is that the world starts to wean itself off of the United States as a market because we're not a good market. See, Trump thinks, oh, we're this great market because we buy everything. We don't buy, we take, we get stuff for free. Buying is paying. And again, paying for imports is exports. That's how you pay. You know, I, I wrote in my, in my first book, in, in, in Crashwood, I, I, I made an example of two farmers to illustrate how this works, because a lot of times you want to look at things simplistically, break it down to its simplest, so you could really understand it. But I had two farmers. One was growing apples, and the other one grows oranges. Now, at the end of the harvest, because both farmers want to eat apples and oranges, but one farmer's got a parcel of land that is very good for. For apples, right? He can't. It's not that great for oranges, so. But it's great for apples. The other farmers got a farm, and the land's not really great for oranges. I mean, for, For. For apples, but. But he can grow oranges. And so rather than both farmers growing apples and oranges, one farmer only grows apples, the other one only grows oranges. And then they trade with each other, right? They trade apples for oranges. And as a result of this, both farmers have more fruit to eat, right? They both have more apples and more oranges than they would have if they each grew both fruits. And so that is why people trade, right? I'm growing extra apples so I can have oranges, right? And. And the other farmer is growing extra oranges so he can have apples, right? That. So it's. He is. You're. You need the extra oranges to pay for the apples because otherwise, why is the apple farmer going to give you the apples, right? He needs to get something of value in return, right? He's going to get the oranges that he's not producing himself, right? He's just focusing on the one fruit that he produces best, which is apples. And then he's using his excess supply of apples to buy to get the oranges. That. That's how trade works. Anyway, I got a quick commercial break. I'm going to continue the analogy on the other side, so stick around. Did you know Fast Growing Trees is America's largest and most trusted online nursery with thousands of trees and plants and more than 2 million happy customers. They have all the plants your yard or home needs, including fruit trees, privacy trees, flowering trees, shrubs, and houseplants, all grown care and guaranteed to arrive healthy. It's like your local nursery, but anywhere. You live with more plants than you'll find anywhere else. 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And so he doesn't have any oranges to trade for apples. Now, the apple farmer, you know, he can't eat all those apples, right? He, you know, he was expecting to trade them for oranges. The orange farmer, of course, has nothing to eat. And so he goes to the apple farmer and says, look, you know, I don't have any oranges, but I'll give you an IOU, right? I just take my IOU IOU and I'll give you an extra 10% more oranges than I normally get you. I'll pay you next year, you know, when I, when I, you know, I have better weather and I get to grow. And so the apple farmer agrees because, you know, he's got more apples than he really needs to eat. And, you know, he doesn't want this other guy to starve. And he's pretty confident that next year, you know, he'll. He'll produce the apples. And so he makes the trade. So he trades his apples for a piece of paper for IOUs, right? So the, the orange farmer didn't actually have anything of value, but he promised to give the apple farmer something of value in the future, which were the oranges. Now, the apple farmer took the piece of paper, the IOUs not because he wants the IOUs, they're just piece of paper. It's because he thought the orange farmer was good for it and that he would get the oranges a year later, right? That's why he took it, right? Well, let's say another year goes by and now, you know, something else goes wrong and he's got no, he's got no oranges. And the, the, the apple farmer makes the same deal, trades his apples for more IOUs. And you know, the apple farmer now is, you know, starting to stockpile these orange IOUs, right, from this other farmer. And let's say several years go by. Every year is a different story, right? You know, something goes wrong and he doesn't have any oranges, but he trades more IOUs for apples. Now, of course, now the, the apple farmers get worried. He's got this big pile of IOU oranges. But to the, to the extent that this orange farmer, right, can never actually supply the oranges does. IOUs are worthless. And the apple farmer should do something else with his land. He shouldn't just keep making apples and getting IOUs for oranges. I mean, what if the orange farmer, you know, starts to take advantage of the situation? He sees that every year he's getting apples and he doesn't have to grow any oranges. Maybe he just decides to turn his orange grove into a golf course and he just plays golf all day long. And the apple, the apple farmer hadn't even noticed that the, that the orange farmer doesn't even have an orchard anymore. He's just got a golf course. And these IOUs are completely worthless right? Now the sooner the, the apple farmer figures this out and cuts off the orange farmer, the better, right? Who's going to get screwed if the trade stops, right? The, the orange farmers eat, eaten for free, doesn't grow any oranges, but he's got all these apples. Meanwhile, the apple farmer is producing all these apples, got no oranges, and he's producing more than he needs. He needs to do something else. He needs to grow, maybe grow oranges himself, even if he can't grow them as good as the other guy used to. He's getting no oranges now and he's got more apples and he knows what to do with. But it's, it's the Trading relationship is the orange farmer is taking advantage of a sucker. Who is the apple farmer? Well, we're the. America is the orange farmer, right? We got the world giving us apples and we just give them IOUs for oranges or everything else. All these dollars that we pay are IOUs. That's what they are. They represent claims on US production. But we don't have the ability to produce this stuff, right? Tariffs, in addition to being a way to raise revenue, it's a way for the government to, to tax its citizens, not foreigners. But tariffs have also been used to protect domestic industries from competition. Now, why does that work? Why does a tariff protect domestic industries? Because it raises the price of imports. Now, if a court, as Donald Trump and all these experts are saying, if the foreigners just eat the tariffs, well, then why do they work as protection? The only reason they work is because the foreigners don't eat the tariffs. They pass the tariffs on to the domestic consumers. And so if I am a US Manufacturer and I make widgets, and now Canadian widgets are 25% more expensive because of the tariffs, then that helps me because now, you know, even if I'm not as efficient a producer as the Canadians, maybe my widgets are 20% more expensive than the Canadian widgets. And because of that, I'm not selling that many widgets, right? People are buying the Canadian widgets because they're cheaper. Well, now with the tariff, if the Canadian widgets are now more expensive, well, people are going to buy my widgets, right, Because I'm now cheaper because my widgets are not subject to the tariffs. So it's a win for me, right, as a US Widget maker. But all of the customers, all the, they lose, you know, because they lost access to the cheaper widgets. They're buying my more expensive widgets. Now the argument is if you protect the US Industry from foreign competition, the US Industries will grow, right? They are going to use that capital, that money they earn that they wouldn't have earned to invest in their business, grow the business, become more productive. And so maybe we could use these tariffs to, to help grow the domestic industry. But in reality, the foreign competition actually helps the domestic companies get better because they have to be better than the imports. It pushes them. Like, one of the reasons that US Automobiles that were crappy got a lot better is because of competition from Japanese cars or German cars. If we had responded to the growth of the automobile industry in Japan and in Germany with tariffs to protect General Motors or protect Chrysler. And plus, why do you want to protect A mature industry. The idea is that if you have a nascent industry that's just trying to grow, maybe they need protection. But we dominated the automobile market, but it was foreign competition that made us better. So I don't even think the tariffs necessarily work. And of course, a lot of companies, American companies that try to compete globally, if a lot of their components of their production go up in price, we're going to hit Americans with tariffs on a lot of things that are coming in from Canada. Energy. Well, now US Energy is going to be more expensive. Well, now a US Company that needs energy is going to have to pay more money for oil and gas. Doesn't that reduce the competitiveness of that company relative to other companies who could buy energy without having to pay those UF tariffs? So I don't think it's a necessarily a great way to protect your own business. But the reason in theory that it works is because it increases prices of foreign imports, which is exactly what is going to happen. Look, you know, a lot of houses burn down in California that they need to be rebuilt. Well, a lot of that lumber comes in from Canada. Well, now that lumber is going to be subject to a 25% tariff. So that is going to increase the cost of building. It's going to increase the cost of insurance. Because if your house burns down, they have to rebuild it. Well, if it's made of wood, and the wood is going to be a lot more expensive because of these tariffs, don't you think the insurance companies are going to raise their premiums because they know that the tariffs have increased the cost of wood? And even if the wood that is used in a particular house didn't come from Canada, it's still going to be more expensive because the domestic wood is going to be more expensive because there's going to be less competition from the Canadian wood. Right? There's going to be less lumber coming in. So the domestic supply of lumber is going to go down and so prices are going to go up. Now, look, the US has to eventually produce more. I mean, the world is going to cut us off on their own. Eventually they're going to get tired of accumulating these IOUs. They're going to realize that our orchard is gone and we have a golf course. Right? We don't have the factories. We don't have the capacity to make good all these IOUs. We are living off of the charity of the rest of the world. They're supplying us with all this stuff that we do not produce. You know, also think about it this way. What if Donald Trump raised the tariffs not to 25%, but to 200%, 300%. Right. What if Donald Trump made the tariffs so high that no more imports at all came into the United States? Right. Imports were now so expensive that no goods whatsoever came into the United States. Who was the biggest loser in those circumstances? Is that a big win for America? Ha ha. Yeah. The world can't screw us over anymore. We're not going to take any of their stuff. Remember, I went over on this podcast a long list of all the things that we import. 90% of the of the shoes or 90% of the toys or 80% of this. I mean, there's a lot of things that we import, almost all of it. What would happen to the US Economy without those imports? Right. Do you think we could just magically produce them? I mean, if, if America had the capacity to produce this stuff, we wouldn't be importing it. The reason we're importing it is because it's cheaper. Right. We have to bring goods from halfway around the world. If we could produce the stuff that we're importing from China, we would do it. It makes a lot more sense. If we could produce it here in America, wouldn't it be cheaper than having to ship it from China? And in fact, what has to happen is the ships have to come all the way over here from China, unload all their stuff, and then go back to China empty because we've got nothing to put on the ships. So we have to cover the round trip cost of a massive container ship to bring all this stuff over here. I mean, obviously we have a cost advantage to produce it here because it's already here and we don't have to pay for all this trans Pacific or transatlantic shipping. But even with all those costs, it's still cheaper to buy the stuff from China because that's how expensive it is to make it here. So if we got cut off from all these imports because we imposed these big tariffs, the US Economy would completely implode. What would happen if you went to Walmart, you went to Costco and there was nothing there. The shelves were completely empty. Retail sales in America would completely implode. If nobody was selling stuff to America, what about all the jobs that we have? They'd all be gone, right? What is a cashier going to do if there's nothing to buy? Right. All those jobs are gone. All the retail jobs go away. If we can't import all this stuff now, we may have to start doing it ourselves. Well, we got to build a factory. Where's the money going to come from to do that? Right. We have to borrow a lot of money. That drives up interest rates. We got to suck capital away from other areas, mainly consumption. Credit card rates are going to soar. You think they're high now at 24? They'd be much higher. Mortgage rates would go to the double digits. Right. Because we have to redirect capital to building factories that we don't now have. We've got to, you know, recreate all these supply chains that we don't have. We got to train workers who don't know how to make any of this stuff. Right. It would be a complete disaster if we were cut off from the world's products. Now I'm going to take a quick commercial break and I'm going to talk about how that would impact the rest of the world if they stop sending us all their stuff. So stick around. I'll be right back. Quince has the everyday essentials I love with quality that lasts. Lightweight cashmere sweaters, short sleeve Mongolian cashmere polos, linen bottoms and shorts. Tees in 100% Pima cotton and European jersey linen. These are the versatile pieces that make a wardrobe actually work season to season. Quince works directly with top factories and cuts out the middlemen. You're not paying for brand markup or fancy retail stores, just quality clothing. They only partner with factories that meet rigorous standards for craftsmanship and ethical production. I'm genuinely impressed with the golf pants I recently got from Quince. They look and feel great and the price is unbelievable for the quality. 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It's only possible because we've outsourced all of our manufacturing or most of our manufacturing, and if we have no access to those goods, then the whole thing implodes and it's a massive recession, financial crisis. I mean, it'd be, you know, it's something that's going to happen eventually anyway. But this is just to illustrate the point. But now what happens to the rest of the world, right? Because people think, oh, the world, they're really screwed because we were their best customer. No, we weren't. The best customer is the one that pays. We're the worst customer. We're like, you know, from Popeye, the character wimpy. I'll gladly pay you Thursday for a hamburger today. Right? Because he never pays, right? But he gets to eat for free. Well, that's us, you know, we're. We're wimpy. But what would happen to the rest of the world? Well, they'd have more of everything, right? They. They have more goods, right? All the goods that they were no longer shipping to America, they'd have them now. What. What do you think they're going to do with them? Are they just going to destroy them? Hey, we've got these cars that the Americans don't want. Let's smash them up, right? We've got these radios, we've got cell phones. Yeah. I mean, we can't sell them to America. Let's just destroy them. Of course not. They're going to use them. Somebody is going to buy these products that is not buying them now, right? The world doesn't produce an unlimited amount of stuff. So people in other countries are going to buy those goods, right, instead of Americans. They're not going to just destroy them. What about the food, right? You think the food that Mexico and Canada doesn't send here, is it just going to rot? Are the people in Mexico? Oh, we don't want to eat that food. Of course they're going to eat it. The world is going to just have more stuff. All we're going to have is more paper, right? We're going to print a bunch of paper and it's going to stay in America, right? And they're going to produce a bunch of stuff and it's going to stay outside of America. And of course, once the world is no longer trading with the United States, what the hell are they the dollar for anyway? Right? The dollar will then crash. There's no point in getting dollars if you can't do anything with them. Everybody knows, like, you know, so the whole game would, would be over, right? It'd be like an Emperor has no clothes moment for, for the world. And then of course, all this dollar debt that people like to talk about wouldn't be an issue because you paid off for next to nothing because the dollar would, would implode. Right? So everybody has just got this wrong. And I guess as long as people don't understand, then, yeah, you know, oh, this is terrible for Mexico. This is terrible for, for Canada. And maybe Trump isn't going to stop there, right? Maybe that's why the euro is down. Oh, maybe we're going to get hit next, right? We're going to get hit with these tariffs and we're going to have to pay. Right. The External Revenue Service is coming to get us. Right. Because Trump is doing. The people don't realize that what he's doing. Right. Is hurting America. It's not hurting them. Now, of course, look, we have huge deficits. We got to pay for them somehow. So we need higher taxes. But those higher taxes are going to push the economy into a recession now. Yeah, we need the recession. I mean, we don't need it, but it's a requirement to fix what's wrong with the economy. So if we try to balance our budget by raising taxes, it's going to cause a recession, which of course unbalances the budget because the minute we're in a recession, the government spends more money, right? So unless we're willing to allow a recession without any stimulus, unless the government's going to say, hey, you got to tough it out, we gotta go through this recession. Sorry, there's no stimulus checks, there's no government jobs program. We're just gonna have to work our way through this long overdue and badly needed recession. Of course, that's never going to happen. So these tariffs, of course, if we increase import prices, we're gonna have a recession. Americans are gonna spend less. They're already broke. I mean, look at some of the economic data that came out over the week. We got the GDP numbers a couple of days ago for Q4, way below estimates. I mean, they came out at 2.3%, but the only reason it was that high was because personal Consumption jumped by 4.2, way above estimates. The consensus was 3.1. Why did consumer spending shoot up so much? Because prices are up. That's why prices are much higher. Now, according to the government, the deflator that they use to calculate GDP was 2.2%. There's no way that prices were only up by 2.2% annualized during Q4. They were up at least double that, if not more, which really means the US economy was in a recession in Q4, which is why people voted for Donald Trump, because we're in a recession. And in fact, we got the personal income and spending numbers. Incomes were up 0.4 and spending was up 0.7. Why? Because of higher prices. The savings rate collapsed. It's now like near record low. Right. We manufactured some phony savings when Biden was president to try to get Harris elected and all that stuff has been revised away. The savings is collapsing. People are borrowing and dipping into a very shallow savings pool in order to pay these higher prices that are going to get a lot higher as a result of these tariffs. Every item that is imported into this country from Mexico, Canada or China, and those are some of our biggest suppliers of goods. Right? And the reason, one of the reasons that Mexico and Canada are such big suppliers is because they're so close. And yes, if Canada has to find the next highest bidder, it could be problematic for certain things like energy, the energy that they're sending to America. You know, it's going to be harder to send that money, that energy to Europe. Right? So, but certain things. What about gold? I mean, people have asked me, this is going to be a boom for the Canadian gold mining industry because gold right now, even though it's down about 14 bucks now, it was up 14 earlier, now it's, you know, it's at a record high in Canadian dollars, a record high. It got the high that it hit. It hit a record high on Friday. It got above 28, 20 and, and now it's back to 27.85, but it's at a record high in Canadian dollars. And wages are going down in Canada right now for gold miners because the Canadian dollar is weaker, right? And so relative to the price of gold, it's cheaper to hire Canadian workers. Now, of course, the Canadian workers are going to be demanding way, you know, pay hikes because prices will go up for certain things, but for certain things they're going to come down, right? Because now, you know, they're not going to be sending as much food down to America. So that food will be cheaper for them, right? Because they'll have more supply domestically. And so the price will be, will be lower. But think about these gold mining companies in Canada. Gold is soaring and their energy costs are going to go down, Right. If Canada exports less oil and gas to America because Americans can't afford to buy it, that means there's a greater supply of oil and gas in Canada for Canadians to use at a lower price. And so if you're a mining company and your labor costs are down and your, your energy costs are down, so now Canada can focus on mining more gold, right. And ultimately producing less oil and gas. Because what can they do with that gold? They can send it right to China. See, it's very easy to send China gold. It's not as easy to send them oil and gas, but it's very easy to take that oil and gas and use it to mine gold and then put the gold on a plane and send it over to China because they're happy to buy it. Right. And so the Mexican economy, the Canadian economy, yes, over time, they will find alternative uses for their resources, for their capital, for their labor. If they're not going to sell stuff to Americans, they'll do something else. Right. And ultimately that is in their best interest. Right. The sooner the world realizes that they're being taken for a ride by the United States, that they're accumulating dollars that are eventually going to collapse and, you know, and they're not going to buy anything. So they are wasting their scarce resources satisfying the needs of Americans when they should be using those resources to satisfy the needs of their own citizens or of citizens in other countries who can actually pay for what they've got to sell. Because they make stuff that the Canadians need. They make stuff that the Mexicans need. So all this is going to happen over time, but, you know, in the very short term, yes, there's always going to be losers from the tariffs and winners from the tariffs. And the politicians always pay attention. So when Trump puts tariffs on imports, there are some domestic businesses that will benefit from those tariffs, and those are the businesses that are making the donations to the politicians, even though the broader interest is hurt. And the biggest losers from these tariffs are the middle class and the poor. Right. Because they're the ones that are most impacted by higher energy prices, higher food prices, higher prices for all these goods. Right. The rich, they don't really pay attention to a lot of these prices, but they really hit the poor in the middle class. But the politicians don't care about the broad interest. They care about the special interest of their donors. And to the extent that Canada retaliates and tries to put tariffs on some American products, that may benefit a narrow interest in, in Canada because businesses will be hurt in Canada because they're going to earn less money because of the tariffs now, they're, they're not going to earn no money. Again, let's Say I sell maple syrup, you know, to, to America. And let's say because of the tariffs and the increase in the price of maple syrup, maybe my sales go down in america by, by 20% because Americans cut back on their maple syrup. They just put a little less on their pancakes because it's more expensive. So they got to conserve, right? But I'm still going to sell maple syrup. I'm not, maybe not as much, but now I got to find someplace else to sell the other 20% that Americans can't afford anymore. So maybe I got to ship that to Europe or maybe I'm going to sell that in Canada for a little less than I used to sell in America. And now Canadians could afford to put a little bit more syrup on their stack. And so my profits may be a little lower on that 20%, but it's not the end of the world. Most of us are trying to get healthier, better diet, better habits, maybe a few supplements. But let's be honest, half the time we're just guessing. What if you could measure how your body is actually aging and get a clear plan based on real data? That's what True Diagnostic does. They test your biological age plus key health markers like vitamins, inflammation and nutrient levels. Then give you a personalized 90 day plan showing what your body needs. No guesswork, just science. Order online and the kit ships right to your door. I recently took the test myself. 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the impact is far greater in the United States. And the danger for the United States, right, is the longer the tariffs are left in play, the more time the countries have to try to find alternative buyers for their goods than the United States. And once those alternative buyers are in place, and even if we remove the tariffs, it may not help because once trade deals are made or different trade routes are established, and now all of a sudden we get rid of the tariffs, the prices might not go back down to where they were because now it's going to be more expensive and these countries are now less reliant, at least in the sense of these businesses aren't looking to the American customer because they've already found a replacement. Because the easy thing to do is buy. Consuming is the easy part, right? That's what America supposedly is good at. The easy part. Anybody can consume. It doesn't take any resources, right? Economics is about how do you satisfy unlimited human desires with limited resources. So desire is unlimited. Everybody wants stuff. The key is to produce the stuff. It's the producers that have the cars, not the consumers. People keep saying we hold all the cars because we buy everything. No, the world holds. Holds the cars. The countries that produce are holding the cars because that's what the world needs. That's what's scarce. Demand is infinite. Supply is scarce. It's the ability to create supply that adds value. Demand adds no value because it's there. Everybody wants stuff, right? Americans are not unique in wanting things. The whole world wants stuff. What's unique about Americans is we can get stuff without producing it because the rest of the world is willing to live beneath its means to make it possible for Americans to live above their means. You know, I was looking at the farm prices that came out in December, we got the month over month increase, which was 5.3%. Farm prices in one month. The prior month, they were up 6.8%. For all of last year, all of 2024, farm prices were up 12%. Now the government is telling us there's no inflation. Farm prices are up 12%. How is there no inflation? That's a big increase in the price of food. 12%. That's 1% per month. 12%. And farm prices are about to go up much faster. Right, because we just slapped 25% tariffs on some of our biggest suppliers of food come in from Mexico and Canada. And so food is about to get a lot more expensive. One of the reasons that Donald Trump got elected was because of high grocery prices. Well, Donald Trump is setting those prices much higher. And if we have to grow the food ourselves, right, that we're no longer importing from Mexico or Canada, where are we going to get the workers? Because we're trying to kick them out. Right. A lot of the people who are working the fields are here illegally. And so if we manage to get rid of them, how are we going to produce this stuff? I mean, now we've made it even more expensive and more difficult to produce ourselves what we aren't importing. So we're probably going to have to keep importing it. We're just going to pay the 25% tariffs. And what's going to happen to the US economy? Because people have to eat, right? People need energy. So if we end up having to pay higher prices for food and energy and a lot of other products that we import, Americans are going to have less disposable income for other things, mainly for services. So Americans are going to have to cut back on their spending because a lot of the stuff they buy is going to be more expensive. So how does that impact the economy? What about all the people who lose their jobs because so many people can no longer afford to buy their services because of the big increase in the cost of goods? So the weak economy that we have is going to get weaker because of these, these tariffs. Look again, the bubble economy that we have is based on consumer spending. Well, real consumer spending has to go down if the cost of the stuff we're buying goes up. And there's no way around higher prices for consumption when you have tariffs. Now, one of the things that's also interesting, I was thinking about this. Those tariffs are going to apply to the gold that we import from, from Canada, right? Canadian maple leaves. We sell Canadian maple leafs at shift gold. Now, right now, we haven't had to increase our prices. The wholesalers haven't raised the prices of those maple leafs yet because they're already in the country, they've already been imported and as a result, there was no tariff. But when we run out of maple leafs and we need to buy more, they're going to be subject to a 25% tariff, which means there's not going to be any more maple leaves for sale in the United States because nobody is going to pay a 25% premium over the spice of gold to buy a maple leaf. We'll just buy coins from Australia. Right? Or we'll buy u. S Made gold coins. Now, once maple leaves are off the market in the United States, the premiums for a lot of the coins that compete with the maple leafs will go up. Now, it's not like it's going to make a big deal to Canada because again, if America doesn't buy those coins, they'll sell them to someplace else. There's plenty of demand in Europe and in Asia for Canadian maple leaves and so they'll ship them over there. So it's not going to be a big problem, you know, for the gold industry. Again, it's going to be a boom because the production cost to make the gold to go into the maple leafs is going to go down because Canada is going to have all that extra energy that they're not shipping down south to mine for gold. And their the wages are relatively lower because the, the price of gold in Canadian dollars is skyrocketing right now. And so this could ignite a boom in the gold mining industry in Canada. But I think if you want to get Canadian maple leafs, now's the time to do it if you want to have some of those. And they'll probably trade at an even bigger premium in the future if you wanted to resell them. Because if you have Canadian maple leafs and we can't import anymore because of the 25 tariff, then the ones that you own will have a greater value. So I would recommend getting some of these maple leafs now, you know, before they're subject to the tariffs. And you know, by the way, premium is in general evil on us Eagles are very low. I mean, it's, there is a low premium. Despite the fact that gold hit a new all time record high on Friday. The demand has been very, very low in the US Retail. Right. Obviously there's demand worldwide or we wouldn't have hit a record high in the price of gold. But the Public is not buying and the public buys coins, right? The central banks don't buy 1 ounce coins. They buy these big 100 ounce bars. But retail customers buy these smaller denomination coins. Well, because they're not buying. The, the premiums have come down. So it's. Even though gold is at a record high, you can get a deal on these coins because the premiums that you pay have come down. Now, I don't think they're going to stay down, especially when in America we lose access to all these maple leaves. But gold, I think is, you know, gonna go ballistic here. This trade war, the winner is going to be gold for sure. I mean, gold's going much, much higher and eventually the dollar is going lower. Again, this is all a bunch of noise. The currency traders who are reflexively selling dollars because they program their computers to believe that when the U.S. imposes tariffs and it's good for the dollar. Right. Well, if that was true, just impose more, right? Make the dollar go way up. Right? That's great. When your currency goes up, that is a good thing. You are richer. You can buy more with your dollars. You don't have to export as much to pay for your imports. Everybody should want a strong currency. Strong currency is good. It's a weak currency that's bad. What countries have weak currencies? Poor countries, right? They have weak currencies. Strong countries with good economies, right. They have a strong currency. If you could just tariff yourself into a strong currency, everybody would do it. Right? That is not the key. You don't just slap tariffs on your own people and then you get a stronger currency as a reward for taxes. But that's what they've been led to believe because again, Donald Trump claims that this is great for America and it's going to harm the rest of the world. And so that's what they believe. Oh, this Donald Trump wouldn't be doing it if it wasn't a good thing. Look, politicians do a lot of things that aren't good things, right? And this is one of them. And so ultimately the dollar is going to go down and that's going to be a bigger boom to gold. But in the meantime, the price, even though it's at a record high, think it's still cheap. But the premiums are low. They're not going to stay low. So, you know, call up shift gold or go to the website and get some more gold. Silver too. Silver is still very cheap. In fact, let me see now, gold's down 20 bucks, silver's down 40 cents. It's back below $31 an ounce at $30.94. You know, buy. We get silver Maple Leafs too, you know, but buy, you know, buy, buy silver. Silver's an even better buy than gold. And I think to the extent that foreign stocks are gonna take a hit, which they are right now, I mean, there's been very little change in the stock futures. Dow futures still down about 580 points. That's about where they were almost an hour ago when I started talking. But all the global markets are down. This is a much bigger negative for the US Especially if this is just the beginning of more tariffs and if it's the beginning of a trade war again. Everybody thinks that America can't lose a trade war because we're the biggest importer. That's exactly why we can't win. We are not in a position to fight a war because we're benefiting right now from these trade deficits. The rest of the world has to bear the burden of financing those trade deficits. And not only does the world supply us with the goods that we don't produce, they loan us the money that we don't save. Right. So we're taking them all for a ride and, and, and, and basically trying to bite the hand that feeds us without realizing that we're being fed. And when the world, you know, wakes up and again, this is like maybe a wake up call to get them to, you know, to shock them into doing the right thing. But there's going to be some noise. I don't know how much more to the dollar rally there is, but take advantage of it. And the US Stock market has been a bubble for a long time. Maybe Trump finally supplied the pin that it's been looking for with the tariffs. There's a lot of air in this market that can come out.
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And by the way, the biggest bubble is bitcoin. Bitcoin is getting clobbered as I'm talking. It's now down at 92,000. In fact, when I started the podcast an hour ago, it was 96,000. So it's dropped another 4,000 and it's really getting hit right now. Again, it's a long way down. Bitcoin got a huge pop on the idea that the US Government was going to buy it. Ain't going to happen again. Donald Trump set up a committee to study a bitcoin reserve precisely because he has no intention of actually creating one. He has no intention of buying one. And so he was able to basically throw the supporters a bone by setting up a committee. As I said, that's what politicians always do when they don't want to do something. They set up a committee to study it because then they can act as if they've done something. Well, there's not going to be a recommendation to do anything. And even if there was, it wouldn't be followed. But based on who's on the committee, there's no way they're going to come out with a recommendation. And there's no way Congress is going to pass that Loomis bill. In fact, now Loomis said that they're going to have hearings, which I really hope they do have hearings. I can't wait for that. I'm hoping to be invited. I think I will be invited. I've already testified twice before Congress. I'd love to go there and testify a third time against the establishment of a bitcoin strategic reserve. And maybe my testimony alone will kill it. But I doubt again, I don't even think it needs to be killed. It's dead on arrival on its own. But, you know, so there's a lot of Air that's going to come out of this bitcoin bubble. Maybe gold has crashed this Bitcoin 100,000 party and maybe that's the end of it. I think, you know, if bitcoin starts trading below 90,000, we may never see a hundred thousand again. But remember, 90,000 is still a great price. You know, I heard somebody was looking at the price of gold that was at a record high. It was Anthony Pompeiano on X and he said, hey, gold's at a record high. It's a great time for the US Government to sell gold and buy bitcoin. Well, bitcoin's at a record high too, or at least it was. And it's at a record high in terms of gold. So, you know, it makes no sense to sell gold which is still relatively cheap, even though it's at a record high to buy nothing that's way overpriced. At least gold is something. You know, it's too bad the Canadian government, they sold a lot of their gold that they had as reserves. What fools they are. Look at the price of gold at Canadian dollars. You know, I bet they wish they had that gold back. They'd be in much better shape now. The currency would be in much better shape if they hadn't unloaded it when they did. Just like, just like the British. You know, maybe the Canadian government could buy up some more gold because again, there's going to be more gold production because there's going to be more energy available in Canada, produce it if they don't ship it down south to America anyway. That's it. Again, go to shift gold. Buy some gold. Buy, buy some silver. Go to europe.com. take advantage of the strong dollar while you can. Use it to buy real value stocks around the world that are going to benefit dramatically as all the air finally comes out of the bubble. We have our day of reckoning. We have the real crash. We have the dollar crisis. We have the sovereign debt crisis. All of this is coming. And the fact that we've been able to kick the can down the road for as many years as we have simply means it's going to be a lot worse. And again, don't forget to sign up for the newsletter@shiftsovereign.com there's going to be a lot of good content coming. Again, a lot of misinformation. Most of the financial media has no idea how to report what's going on and what's going to go on. So you want to make sure you stay informed with information that is accurate and that is the type of information you're going to get at Shift Sovereign and the type of information you're going to get from me if you keep on listening to this podcast. And make sure to tell your friends to listen to it too. Bye for now.