The Ultimate Guide to Surviving Hyperinflation (Do This NOW!) | Peter Schiff - PT 1

Summary

Episode Overview

Title: The Ultimate Guide to Surviving Hyperinflation (Do This NOW!) | Peter Schiff – PT 1
Date: September 10, 2024
Host: Tom Bilyeu
Guest: Peter Schiff (Economist, commentator, and CEO of Euro Pacific Capital)

In this Impact Theory episode, Tom Bilyeu sits down with famed economist Peter Schiff for a deep-dive conversation on inflation, monetary policy, and the pressing economic risks facing the United States and the world. Schiff systematically unpacks the realities and misperceptions around inflation, critiques government manipulation of economic statistics, and outlines why he believes the U.S. faces potential hyperinflation and social unrest in the coming years. The conversation challenges mainstream narratives and explores actionable strategies for individuals to protect their financial future.

---

Key Discussion Points & Insights

1. What Is Inflation? Who’s to Blame?

• Peter Schiff’s Definition: Inflation is the expansion of the money supply, not simply rising prices ([01:57]).
• Government Redefinition: Schiff explains how the government has “successfully changed the definition” to confuse the public and shift blame from monetary policy to “greedy corporations” or external figures like Putin.

  "If the public understood what inflation was, they would know that it's not caused by grocery stores ... There's only one source of inflation in America, and that's the Federal Reserve." — Peter Schiff ([01:57])

2. Federal Reserve Policy: Capitulation or Control?

• Host Question: Tom asks how to reconcile the Fed’s narrative of rate cuts due to “inflation under control” with Schiff’s view that this is a sign of surrender ([04:16]).

• Schiff’s Response: Fed is “focused on employment,” rates are capped by fragility in the banking sector, and “they have to pretend inflation’s going down.” He highlights manipulated statistics, job numbers “created by moonlighting,” and asserts the Fed will cut rates further and return to Quantitative Easing (QE), which is just “a euphemism for inflation creation.”

  "The only reason that we have more jobs now ... is because so many people have two or three jobs. That's where all the jobs are coming from. ... The prices are going up in response to the inflation that’s been created." — Peter Schiff ([04:38–07:05])

• Indicators: Surging gold prices, weakening dollar signal policy is too loose and inflation is set to rise further ([08:00]).

3. Statistical Sleight of Hand: CPI and Unemployment

• Manipulation of Data: Both host and guest argue that CPI (inflation measurement) and unemployment figures are manipulated to understate economic pain ([09:52–11:00]).

  “The way politicians get elected is, they promise the voters something for nothing.” — Peter Schiff ([11:00])

• CPI "Revisions": Measuring inflation and unemployment differently from previous decades hides the true extent of economic hardship. Schiff claims “if we still counted unemployment the way we counted it before 1994, we’d have unemployment above 10% right now.” ([12:30])

4. Why Not Just Raise Interest Rates? Debt Trap & the Volcker Comparison

• Schiff: Meaningful rate hikes are now politically “impossible” because the debt is far too high.

  "We have a bigger inflation problem now than we had in the 70s… To bring that inflation to an end required 20% interest rates." — Peter Schiff ([16:13])

• At today’s debt levels even 10% rates would "consume most federal revenues" in interest alone, which would create a financial crisis “like 2008 times ten” ([16:13–18:50]).

5. Default vs. Endless Inflation: The Political Playbook

• Why Politicians Choose Inflation: Honest default (cutting benefits, admitting inability to pay) is politically toxic; inflation allows “stealth default” without blame.

  "They pay everybody off, but the net effect is you get less because the money buys less. So you lose through inflation instead of through an honest default." — Peter Schiff ([18:50])

• Price Controls Are Coming: To prevent businesses from visibly raising prices, governments will impose price controls, which only create shortages and black markets ([19:45]).

6. Honest Default: A Moral and Practical Case

• Host Challenge: Tom explores the morality of default vs. inflation; does spreading pain via inflation avoid disorder ([30:58])?

• Schiff’s Moral Argument:

  "It's the honest way to do it… people who loan money are the ones that don't get fully repaid right? ... Inflation just spreads the losses among a broader population. But in many cases it hits hardest the people that could least afford it. So why do we want to create inflation if it's going to create a real hardship for a lot of poor or middle class people?" — Peter Schiff ([32:22])

• Tom's Counterpoint: Slow, hidden inflation may cause less immediate unrest than a cold-turkey default, but Schiff warns this is viable “only until it gets out of hand” ([34:23]).

7. Is There Any Way Out? Hope in Productivity or AI?

• Host Query: Could a productivity explosion—e.g. from AI—let us "grow out" of the debt?
• Schiff’s View: Some possibility, but “numbers are just too staggeringly big… even with incredible growth” ([34:56]).

8. Raising Rates Now: Will It Control Inflation?

• Schiff’s Contrarian View: If government raises rates now (but not high enough to choke credit), it increases business costs and fuels inflation rather than dampening it ([39:26]).

  "Higher interest rates are just another cost, just like raw materials and wages, that get built into pricing structure. So higher rates end up being higher inflation." — Peter Schiff ([39:26])

9. The International Dimension: Reserve Currency Risk

• U.S. Dollar’s Unique Status: Foreign appetite for dollars and Treasuries has masked/watered down U.S. inflation, but if the dollar loses its reserve status, all that money comes home, goods stop coming in, and “prices are going to skyrocket” ([46:50–50:16]).
• Rebuilding Manufacturing: Cannot “snap fingers” and bring production home; will require years or decades ([50:23]).

10. Political Polarization & The Emotional Public

• Public Discontent: Tom and Peter agree that while politicians and media cite rosy statistics, most Americans “feel something is wrong” even if they can’t name it ([51:18–52:48]).

  “The statistics don’t tell the truth... If you take the time to do that and you don’t just accept what amounts to propaganda, but you actually look at it, then you understand why the public is so upset.” — Peter Schiff ([52:52])

• Elections & Emotional Manipulation: Both hosts discuss how public emotional steering, media narratives, and tribal division could produce unpredictable election results ([54:12–55:35]).

---

Memorable Quotes & Moments

• “Inflation is what we pay for the government that we don’t pay for with the income tax, or the Social Security tax, or a sales tax.” — Peter Schiff ([01:57])
• “QE is just, you know, another word for inflation. Just that, you know, it sounds better. It’s like it’s a euphemism.” — Peter Schiff ([07:05])
• “CPI manipulation… is almost certainly happening.” — Tom Bilyeu ([30:58])
• “But the real problem ... is going to be the dollar status as the reserve currency. ... When they don’t want these dollars anymore ... all those dollars are going to come back and they’re going to be bidding up consumer good prices.” — Peter Schiff ([46:50])

---

Notable Timestamps & Segments

• [01:57 – 04:16]: Schiff clarifies the real source of inflation and critiques government narrative.
• [07:05 – 08:00]: Gold prices and dollar index as signals that inflation is worsening.
• [09:52 – 12:30]: Data manipulation in CPI and unemployment, and government incentives for public confusion.
• [16:13 – 18:50]: Debt trap, why real rate hikes are impossible, and the specter of financial crisis.
• [19:45 – 21:50]: Price controls, black markets, and government blame-shifting.
• [34:56 – 39:26]: Productivity, AI, and whether we can “grow out” of the debt.
• [46:50 – 51:18]: Reserve currency risk: what happens when the world gives up on the dollar?
• [54:12 – 60:00]: Political polarization, emotional public, Harris vs Trump, and doubts about polling/narratives.

---

Tone & Style

• The conversation is candid, urgent, and at times combative toward political and media establishments. Schiff’s tone is direct and uncompromising, often veering into warnings for the future (“price controls are coming,” “this will lead to social unrest”). Tom Bilyeu provides thoughtful challenges and seeks to boil down complex mechanisms for the listener. Throughout, the language remains accessible but intellectually rigorous, with both men pushing for clarity amid political noise.

---

Conclusion

This Impact Theory episode pulls back the curtain on inflation, monetary policy, and the deeper systemic risks facing the American (and global) economy. Peter Schiff offers a stark account of how the government”s response to burgeoning debt and economic fragility is not just economic policy but a political strategy designed to shift blame and obscure costs. The discussion demystifies key economic concepts and connects them to real-world consequences—making a compelling case that understanding and acting on these truths is essential for anyone who wants to safeguard their future as the storm clouds of hyperinflation, social fracture, and global upheaval gather.

Transcript

[Host]

Nine out of the 10 largest banks get it. They get that. VantageScore, the modern credit score, is the leader in predictive power, improving mortgage default predictions and saving lenders billions. Better predictions better for your business with VantageScore.

[Grainger Advertiser]

When you manage procurement for multiple facilities, every order matters. But when it's for a hospital system, they matter even more. Grainger gets it and knows there's no time for managing multiple suppliers and no room for shipping delays. That's why Grainger offers millions of products in fast, dependable delivery, so you can keep your facility stocked, safe, and running smoothly. Call 1-800-GRAINGER Click grainger.com or just stop by Grainger for the ones who get it done.

[Tom Bilyeu]

I'm Tom Bilyeu, and this is Impact Theory. I believe we're standing on the brink of some serious economic upheaval. And that's not me trying to be negative. That is me trying to look at the way that history loops. But there is good news. With the right knowledge and strategies, we can navigate these turbulent times. Well, Today we're tackling some of the most pressing issues that could shape the future of our economy and, quite frankly, our entire way of life. To help us understand what's really going on behind the scenes with power brokers and the structure of our economic system and what we can do about it, I've brought in a guest who isn't afraid to say the hard truths. He's here to shine a light on everything from the risks of a collapsing dollar to the actionable strategies you can take to secure your financial future. This. This isn't just about opinions. This is about real, practical advice that you can use to protect yourself and your loved ones. Unfortunately, the way our monetary system is structured, you are forced to become a gambler in order to beat inflation. So if you're ready to unravel the complexities of our current economic landscape and arm yourself with the useful insights you need to thrive, you do not want to miss this conversation. Help me in welcoming Peter Schiff.

[Peter Schiff]

Inflation is a very simple concept. It's just the money supply expanding, and so the more money there is. Right? That's what you're inflating. That's where the word literally comes from. Over time, the government has been very successful in changing the definition of inflation to fool the public as to its source. Because if the public understood what inflation was, they would know that. That it's not caused by grocery stores. You know, when Kamala Harris says it's greedy grocery stores that are causing inflation. If you understand that inflation is an increase in the money supply. Well, you know, it can't possibly be the grocery stores because they don't have a printing press. They can expand the money supply. But if you think that inflation is rising prices, well, yeah, the grocery store keeps raising my prices. So they're causing inflation. They're raising prices because the government created inflation. The prices are going up in response to the inflation that's been created. But by changing the definition of inflation, the government not only confuses the public as to who's creating it, but now they're able to blame it on other factors like greedy corporations or Putin. You know, that was, you know, Biden kept talking about Putin, and Putin was causing the inflation. There's only one source of inflation in America, and that's the Federal Reserve. But the reason the Federal Reserve is creating all that inflation is because the government is running massive deficits. And so the Federal Reserve is financing those deficits by buying those bonds with the inflation that it creates, the money that it prints. And so the best way to look at inflation is a tax. Inflation is what we pay for the government that we don't pay for with the income tax or the Social Security tax or a sales tax. Basically, the deficits, the federal budget deficits, we end up funding them by inflation. And those deficits are about to skyrocket. They've been skyrocketing. And so the inflation tax is going to be much bigger and in 2025 than it was this year, regardless of what the Fed is trying to tell us.

[Host]

How do we look at the Fed signaling that they're going to bring rates down, which we know they do, because inflation has come under control? That's the public messaging. How do we reconcile that, that they're messaging that with you saying, no, no, no, this is them giving up? This is capitulation. And what you're looking at is not what they're saying. How do we reconcile those two views?

[Peter Schiff]

Well, the Fed is now focused on employment. The economy, which has clearly come under a lot of pressure recently, is very close to officially, I think, falling into recession. I think we've been in recession pretty much the whole time. I just don't even believe the numbers, the way the government manufactures them. So I don't think we've ever had a strong economy. I just think that that's just been a statistical anomaly. And even if you look through the statistics, you can actually see a lot of the inherent weakness that is being masked by a lot of these superficial numbers. But when the Fed stopped hiking rates, it was because banks started to fail. If you remember what happened with Signature Valley bank or so Signature Bank, Silicon Valley Bank, a few banks started to fail as a result of rising interest rates. And then the Fed really backed off. And of course they had to have a big bailout program to prevent a lot more banks from suffering a similar fate. But that's really when the rate hikes stopped. And so the Fed kind of kept rates where they were, but kept implying that, look, we're going to cut eventually. We just need enough proof that, that inflation is going back down to 2%. And they said we're not going to wait for 2%, we just have to believe that it's going there. Now, of course the reason they're not going to wait for 2% is because it's never going to get to 2%. And they probably know that. But at this point the jobs numbers are getting so bad. The non farm payroll report that we had, the most recent one was horrible. And now the government fessed up and came back and said, you know, 818,000 jobs that we claim were created, we made a mistake, they're not actually there. And I think they made a bigger mistake. I think there's actually a lot more jobs that they're pretending were created that aren't really there. And in fact the only reason that we have more jobs now than when Biden was elected is because so many people have two or three jobs. That's where all the jobs are coming from. It's moonlighting. And the people that now have two or three jobs, they don't want all these jobs. They'd like to be able to support their family on one job, but unfortunately the rent's gone up so much. The grocery bill, the utility bill, their insurance, everything is now so expensive because of all this inflation that people have to work multiple jobs. And now Joe Biden wants to claim credit for creating those jobs, but the public blames him for the fact that people are forced to work those jobs. But I think it's the weakness in the economy that is prompting the Fed to cut rates, which they're going to do here in September. They've now prepared the markets for these cuts and they're not going to just do one and done. This is going to be the beginning of as many rate cuts as they can get away with. And I think ultimately they're going to return to qe. They've already reduced the size of their quad native tightening program and I think that was the first step to reversing it and going back to qe, which is inflation creation. QE is just, you know, another word for inflation. Just that, you know, it's, it's, it sounds better. It's like it's a euphemism, but that's really what it is. But the Fed has to pretend that it's, it's finished the job on inflation. It can't, you know, be honest and say, look, we still have high inflation and it's going to go up, but you know, we don't care. So they have to pretend that the 3% inflation that we have now is going to go down to 2%. But you know, we've been at 3% now for over a year. Right. We went down from nine to about three, but there's no indication that we're going from three to two. In fact, if you look at the, the market indicators on Friday when Powell delivered his statements, his Humphrey Hawk, his Jackson Hole speech, on that day, gold was at a new record high. The gold price was above 2,500. I mean, as we're speaking here, I think it's around 2520. And the US dollar index on Friday sank to a 13 month low. So when you see a weak dollar and when you see surging gold prices, that's an indication that monetary policy is too easy and that inflation is going up, not down. In fact, the only reason that inflation came from 9% year over year to 3% was because we got a 24% rise in the value of the dollar. That happened. And after that big rise in the value of the dollar, then prices started to come down because the dollar was so much more valuable relative to other currencies. That brought down commodity prices and that brought down the CPI. But now the dollar has already fallen 10% from its peak and it looks like it's going to fall a lot more. This weak dollar is going to be a huge tailwind for inflation. And record high gold prices are telling you that that's exactly what's going to happen.

[Host]

Yeah. This is the part that I want people to understand is that if you are trying to track inflation yourself, if you're trying to understand how prices are going up, there is a lot of manipulation that's happening behind the scenes to control the public's perception of the CPI number, including that a rise or lower in the value of the dollar is going to have an impact on cpi, how they calculate cpi, excuse me, which has changed over time, that's also going to impact things. And what I want people to understand, and please correct me if you think that I'm delusional about this, is that the government is doing sleight of hand. They're manipulating the numbers. They're doing sleight of hand so that they can basically, I'll be aggressive here and use the word, steal money from the people. Not have to get people to vote so that they can keep doing just absolutely outrageous amounts of spending because they can get your dollars from you without having to ask for them by simply driving, pricing power down or purchasing power, excuse me, through inflation, by printing the money now.

[Peter Schiff]

Yeah, well, you know, the way politicians get elected is they promise the voters something for nothing. That's. That's what people vote for. It's like, what are you going to give me if I vote for you? What's in it for me? What do I get? Right? It's not like people are saying, you know, leave me alone. I just want to be free. People want free stuff. It's if, if you're in office, what am I going to. What are you going to give me that I don't now have? Right. Because that's what people are voting for. They're voting for stuff. Free stuff. And so that's, you know, inherently the problem with democracy. And that's a whole different podcast. I mean, that's, you know, we should be a republic and not a democracy. This is the inherent flaw in that type of system. And we're just demonstrating it all over again. Not like we need to. There's history is littered with examples of failed democracies for the same reason that we're failing now. But the politicians want to get elected, and so they want to give voters something for nothing. Well, how do they do that? Well, they create inflation, right? They give voters stuff that they don't make them pay for through taxes. See, if the government said, okay, we're going to give you health care, education, and here's the bill, right? We're going to raise your taxes so that you can get this benefit the people would like. Well, I forget. I don't want that. You know, I don't want my taxes to go up. But when they say, look, we're going to give you this stuff and your taxes aren't going to go up, but you're getting it for free, then that sounds great. Or we'll just tax the rich to pay for it. Well, the problem is they can't get enough money from the rich to pay for all these promises. So where do they get the money? Well, they just create it. So that's inflation. And so instead of taking your money, they just take your purchasing power. And so now everything you want to buy is more expensive. And the difference between what prices would have been without all those government programs and how much higher they are as a result of those programs. That's your tax. But the, the people don't know that they're paying a tax. They just think they're paying prices. And they blame the business and the government. It's great for the government because now the government can say, you see, capitalism is bad. See, these greedy businessmen are gouging you by jacking up your prices when they're not. They're simply passing on the higher costs that they themselves have to pay to stay in business. And those costs are going up because of the inflation that the government is creating. But you know, the government obviously too, since they create inflation, they want to lie about how bad it is. They don't want to acknowledge it. So the way it's measured doesn't come close to capturing the true increase in the cost of living. They've changed the methodology for the CPI over the years to make the number smaller or littler. They did the same thing with unemployment. Unemployment is only low because we changed how we measure it. There are lots of people today who are unemployed who we don't count. But if you go back in the past, those people that we don't count today used to be counted. And so the main reason that unemployment is low now is because so many people that we used to count as unemployed in the past, we don't count them anymore. In fact, we have a lot of those people now that if we still counted unemployment the way we counted it before 1994, we'd have unemployment above 10% right now. So there's no way anybody would be able to claim we've got low unemployment if, if it was 10%. So you take three quarters of the unemployed and you don't count them anymore, and, oh, it's only 4%. And now Biden gets to brag about how low the unemployment is. Meanwhile, we've got a lot of people who are unemployed who are not in the statistics. And the same thing with inflation. Inflation is a lot higher than the CPI reveals. And so even if we can get inflation down to 2%, influence wouldn't be 2%, it'd be 4 or 5%. And right now they're saying it's 3% because it's probably 6%. So it's not even close to the 2% target that the Fed claims it has.

[Host]

Yeah, which is uber devastating. To people's wealth creation in ways that they don't fully understand. And this is why the sleight of hand works is because people don't understand how it's actually playing out. Let me ask you, why can't we just raise rates and solve the problem of inflation?

[Grainger Advertiser]

If you work in university maintenance, Grainger considers you an MVP because your playbook ensures your arena is always ready for tip off. And Grainger is your trusted partner, offering the products you need all in one place, from H Vac and plumbing supplies to lighting and more. And all delivered with plenty of time left on the clock. So your team can always gets the win. Call 1-800-GRAINGER visit granger.com or just stop by Granger for the ones who get it done.

[Peter Schiff]

Well, first of all, in order to really solve the inflation problem, it's going to take a much bigger increase in rates than what the Fed has delivered. And. But the problem is we have so much debt that that's impossible. Go back to Paul volcker in the 1980. I mean, we have a bigger inflation problem now than we had in the 70s. And to bring that inflation to an end required 20% interest rates. Whoa. Now what would happen if interest rates went to 20% now? I mean, we got up to 5%, right? Imagine if they got up to 20%. Well, we've got a $35 trillion national debt that's financed with treasury bills. Even if we had to finance that at 10%, that's three and a half trillion dollars a year in interest on the debt. The US government only collects about $4 trillion a year taxes in total. So we have so much debt. Imagine what would happen to all these corporate bonds if their debt matured and they had to refinance it at 20% or anywhere close to that. Or whole mortgages that got up 10% or 12% or 14%, something like that. We now have so much debt that if you tried to raise interest rates high enough to get rid of inflation, everything would collapse, which is why they're not going to do it. We are stuck with inflation because the alternative is a political nonstarter. Because if the Fed actually got rid of inflation, you would have a financial crisis that would make a 2008 look like a Sunday school picnic. And you would.

[Host]

Yeah, really fast. I just want to say something and then you can pick that back up because we use words like inflation and I think that people get lost. What you're saying is our debt is so high, the only option the government has is to take your Money via inflation. But, but once people understand that, yes, you still have, if you have a hundred dollars in your bank account, it's still a hundred dollars, I understand that, but it buys $90 worth of goods and $80 worth of goods, 70, so on and so forth. And so when you say that the only option the government has, I want to make sure people hear the only option the government has is to take your money. Because once you're like, whoa, whoa, whoa, wait a second, that's not what I want, then people start thinking in the right way. All right, cool. Now that the audience has that in their mind.

[Peter Schiff]

But the point is that they, they can't raise interest rates high enough to fight inflation without creating a financial crisis. And so that's why they didn't do it. That's why they stopped at, you know, five and a quarter. Because the only way that interest rates slow down inflation is by slowing down debt. They have to get people to borrow less and save more. But even though the Fed raised interest rates, nobody borrowed less. You know, the deficit spending at the federal level went up, household debt went up, credit card debt hit all time record highs. So the Fed never actually got to restrictive monetary policy. They never got to a situation where interest rates were so high that governments and individuals stopped borrowing and started saving. But also, if interest rates got to that level, nobody could afford it. We'd have a complete economic implosion and the government would have to default on its promises, including its treasury bonds. But it would have to tell people on Social Security that they're not going to get the money that they were promised. And so none of this is politically viable. So what the politicians are choosing is just to have endless inflation. And that takes them off the hook because they don't have to cut Social Security, they just give you the Social Security benefits and you just can't buy very much because everything costs money, right? They don't default on the bonds, they pay everybody with money they print. So instead of honestly telling people, we don't have the money to pay you, and so we're going to have to pay you less than we promised, they pay everybody off, but the net effect is you get less because the money buys less. So you lose through inflation instead of through an honest default. But that is always the path that the politicians want to go down because they never have to accept responsibility for creating the inflation. They're always going to blame it on somebody else. And that's why I know that price controls are coming. I mean, I talked about this long before Kamala Harris proposed it, that we were going to get price controls because ultimately that's all the government's got, is to blame the businesses and to pass laws to stop people from raising prices. But that never stops the inflation. It just causes the inflation to go underground into the black market. Because legally you can't buy anything because the prices are too low. And so there's a shortage of everything that you need. And, and in order to buy the things that you need, you have to go and buy it from a criminal because they're the only ones who will sell it to you. But now you got to pay through the nose because, you know, the guy who's selling you illegal food risk going to jail.

[Host]

Yeah, this all gets crazy really fast. Let me ask you a super pointed question. Do people want to be lied to?

[Peter Schiff]

Well, you know, maybe it's like, like the Matrix. I mean, people can't handle the truth or that's. That was the Jack Nicholas.

[Host]

A Few Good Men.

[Peter Schiff]

A Few Good Men. They can't handle it. But look, nobody wants to tell the truth to the voters because, you know, again, you know, shoot the messenger. The truth is not pretty. The truth is the government has over promised. The government has made too many promises that the taxpayers can't keep. And so we need to come clean and be honest. And we have to tell our creditors, we borrowed too much money. We can't pay you back. We got to tell people on government pensions, on Social Security, on Medicare, we don't have the money. We can't give you what we promise. But no politician wants to fess up because the minute you do that, you're not getting the votes. And so everybody wants to pretend that nothing's going to get cut and so everything gets cut through inflation, but they have to try to say, well, they're going to fix it. But even Donald Trump, Donald Trump doesn't want to cut Social Security. In fact, he wants to increase Social Security benefits because he wants to eliminate the tax on Social Security, which is like effectively raising Social Security benefits. So he hasn't identified anything that he's going to cut or eliminate. He talks about waste and abuse, but everybody talks about that, but nobody wants to cut anything. Donald Trump talks about increasing the defense budget. Well, where's that money going to come from? Right. So both candidates want more government, and so they're going to end up with more inflation regardless of what they're promising. And of course, you know, Donald Trump is partially responsible for the inflation under Biden because a lot of the money that is being used to bid up prices now was printed when Trump was president because Trump ran enormous deficits. Biden is just running even bigger deficits than Trump. Trump set the record for the most amount of deficit spending by a president in a single term. And Biden is going to break that record when. When it. By the time his term is over. And before that, Barack Obama, he set the record for the most dead under any president. But that's because he had eight years. But now presidents are doing in four years what it took Obama eight years to do. But this thing is just spiraling. That's why we've got all this inflation. It's not a coincidence, it's cause and effect. And when the Biden administration tries to say, well, you can't blame us for inflation, the. Because they've got inflation in Europe. Well, because they made the same mistakes in Europe. They did the same thing. They printed a bunch of euros. They had their own QE program. They called it their asset purchase program. They kept interest rates at zero. In fact, they even had interest rates negative. So all these central banks were operating from the same flawed playbook. They all created massive inflation in the aftermath of the 2008 financial crisis. And. And then up the ante with COVID And now the whole world is reaping the whirlwind as all those inflation chickens come home to roost.

[Host]

Does inflation matter if every government in the world is doing it?

[Peter Schiff]

Of course it matters. I mean, on a relative basis, that's what's keeping the dollar from collapsing against the euro or against the yen or against the pound, because all central banks are inflating. But that doesn't mean we're off the hook. That means we're all suffering together. Right? Everybody is experiencing rising prices, even if the exchange rates don't fluctuate very much because they're all sinking at the same rate. But it means everybody is getting poorer. You need more dollars, you need more euros, you need more pounds to buy a basket of goods.

[Host]

All right, so Raoul Paul, when we did the debate between you and him, said that inflation was preferable to default because it happens more slowly. And that was what I had in the back of my mind when I said, do people want to be lied to? It seems like there might be some truth to, yes, dear government, please lie to me. Take my money slowly. Don't tell me you're doing it so that this plays out over a long enough time frame. That sort of everybody gets used to all the money that they've lost. Do you agree that that's a better strategy or do you think that in reality default is a better strategy?

[Peter Schiff]

Well, the best strategy is, is, is not to get into that predicament in the first place. And that's, you know, one of the reasons to be on a gold standard. So governments can't run up that kind of debt. But if the idea is, well, we'll just inflate the debt away slowly, the problem is that it speeds up. It's like, well, we'll just get a little bit pregnant. It doesn't work that way. It starts off slow until it's fast. Once you start going down that road, it's ultimately going to be a disaster. But I always think at any point being honest and having a legitimate restructuring of debt is better than constantly creating inflation. To try to repudiate it, you know. You know, in secret, I just try it. Well, let's, you know, because every time the government creates inflation, they wipe out a good chunk of the debt. We have 35 trillion in debt. If they create 10% inflation, that eliminates 3.5 trillion of the debt. But the problem is by the time they do that, the actual size of the national debt has gone up by more than the 3.5 trillion because of how much debt we're adding to it every year. And eventually the higher inflation causes an increase in interest rates. And that is the problem because all that debt has to be refinanced constantly because much most of the debt is short term. It's not like the government borrowed money for 30 years or 50 years. They borrowed money for 30 days, 90 days a year. And so they have to constantly refinance it. And as rates go up because inflation pushes rates up. Even though you're wiping out some of your debt through inflation, you're accumulating so much more because the government is borrowing the money to pay the interest on the debt. But I just think that an honest default is preferable. And at least with a default. Who loses money in a default? Well, if the government defaults on the bonds, the losers are the people who own the bonds. And a lot of US government bonds are owned by very wealthy individuals who are clipping coupons and have money invested in, in Treasuries. The average American doesn't own any Treasuries, but wealthier people do. And so they're going to lose. They're not going to get back 100 cents on the dollar. But if we just decide to create inflation so that the people who own treasury bonds don't lose anything, well then Everybody suffers. Yes, the people who own treasury bonds, they still lose something because inflation is, you know, reducing the value of the principal that they get eventually and it's reducing the value of their coupon. But now you hit everybody. Now you hit the poor, you hit the middle class. You hit people that don't own any treasuries, that never loaned any money to the government. What's fair about that? I mean, the people who should take the losses are the people who made the loans to a government that was too broke to pay them back. Right, that, that's the people. And you know, as far as government commitments, yes, if the government has to cut Social Security benefits, okay, yes, people that were going to get those benefits are going to lose those benefits or have less benefits, but, you know, that's necessarily better because there are a lot of wealthy people that get Social Security. I mean, I qualify for Social Security. I mean, I'm 61. I'm not taking it yet, but I think I'd be able to start getting it in a couple of years. But it's better for me to lose a lot of my Social Security than some young kid who's struggling to get by has to pay higher inflation so I could get my Social Security benefits. So the government should have a way of reducing Social Security benefits so that the people who are going to get the benefits, they get the loss as opposed to just spreading the loss on everybody.

[Host]

Well, there is a way to, to reduce entitlements without needing to vote for it, and that's CPI manipulation, which is almost certainly happening. So, okay, you're, you're making a what I'll call values based argument. There may be a moral argument in there as well. But for me to know if this is just values, just the way you see the world, or if you have a objective moral standard. What, what is your North Star? When you lay out your argument?

[Grainger Advertiser]

If you work in university maintenance, Grainger considers you an MVP because your playbook ensures your arena is always ready for tip off. And Grainger is your trusted partner offering the products you need all in one place, from H vac and plumbing supplies to lighting and more. And all delivered with plenty of time left on the clock so your team can always gets the win. Call 1-800-granger. Visit granger.com or just stop by Granger for the ones who get it done.

[Peter Schiff]

Well, I think, I think that is the moral way to go. You know, if, if.

[Host]

But anchored by what human flourishing least number of people get wrecked. Like what, what is the metric by which you say that's a moral argument to do default.

[Peter Schiff]

Well, it's, it's the honest way to do it, right? I, you know, the government can't so

[Host]

be honest at all times, no matter what that means we're going to be honest.

[Peter Schiff]

Well, it's honest. And you know, the people that took the risk bear the consequences of that risk. You know, people who loan money are the ones that don't get fully repaid, right? The people that lent out the money. But they're going to lose. I mean if there's inflation, they still lose, right? It's not like they're getting out scot free. But inflation just spreads the losses among a broader population. But in many cases it hits hardest the people that could least afford it. So why do we want to create inflation if it's going to create a real hardship for a lot of poor or middle class people? Just so we can avoid wealthy people taking a bigger hit?

[Host]

You know, I'm just trying to map, totally understand, I'm trying to map how you think through this argument. So because when I look at it the way I would think through this is for me the moral way to look at life is what leads to the largest amount of human flourishing for the largest amount of people. I can define human flourishing. But for now let's just all assume that it, it's roughly well being. And if you look at this from a well being perspective, I have a hypothesis that if you were to default, that you would have an uprising, that there would be literal bloodshed, that there would be a real problem, it would be way more violent, way more abrupt. Whereas doing it the way they're doing it now, which, which I hate and I think the government has a moral obligation not to do this. But when you compare the two things, I have a feeling that slow and steady theft from everybody actually ends up with a People don't revolt as much, they like being lied to, it just works. And so it's why I think the government does it this way. And I still think it's horrendous.

[Peter Schiff]

Well, until it gets out of hand because it only works for so long.

[Host]

Well then let me ask a question really fast so that you can be very pointed with this. Do you believe that the, is there a conceivable way for productivity to rise so much that we can eventually pay for the debt before inflation eats us alive? Or is this a runaway feedback loop and there is no conceivable way for anything to happen other than collapse at the end of this?

[Peter Schiff]

Well, it's more likely the latter. I mean, it's more likely that it's going to run out of control just because of the, you know, the nature of what we're dealing with, just the size of the debt, the exponential growth and what happens to interest on the debt. See, the problem with this, you know, well, let's just have a little inflation every year is that it allows the government to continue to compound the problem because it's able to, you know, hide the consequences. And so it keeps getting bigger and bigger. And so ultimately you have to default to avoid hyperinflation. And if you don't default, then you get hyperinflation, you destroy the currency. And if you think people are going to revolt from default, it's going to be worse when the money is completely worthless. So that's an even more dangerous way to go. And that's inevitably where you end up if you continuously inflate, inflate instead of dealing with the underlying problem. Because if you actually default, that basically brings it to an end. Okay, we can't do this anymore. It's like you're in this giant hole and if you can keep on inflating, you can keep on digging the hole deeper. If you have to default, that's the end of the hole digging, right? Okay, the game is over, right? Everybody, everybody knows now what's been going on. You've had, to be honest, you've had to confess the problems and now we can, we can move on. But that never happens when you paper it all over by creating inflation. Now, is it possible that there's some kind of get out of jail free card that's waiting in the wings that is going to grow productivity so dramatically in such a short period of time that we can actually grow our way out of the debt? And I would assign a non zero probability to that. So it's possible. And the only thing that is on the horizon that potentially could do it would maybe be artificial intelligence. If it could be, you know, implemented if it, if it has the ability and we can effectively do it somehow fast enough that we can now automate so much of the production process and the AI could come up with, because it's more intelligent than we are, could come up with even better, more efficient ways of doing things and we could maybe create enough, you know, robots that were intelligent that could do a lot of work that maybe we could produce so much stuff that the economy can grow so fast that we can actually reduce the debt relative to the economy and we can service it and repay it. I mean, I suppose that that's possible, but I don't think that's the most likely scenario. I mean, I do think that, that, that there's a lot of potential there in enhanced productivity coming from artificial intelligence and robotics and more automation. I think this is all good stuff that is going to increase the standard of living of humanity over time. But I don't know that it can lead to the results that we would need fast enough to deal with this crisis to mean that we don't have a crisis, that we don't have to deal with it because the numbers are just too staggeringly big at this point, I think to grow your way out of it, even with incredible growth.

[Host]

Yeah. So the AI revolution I think is a very interesting thing that people are holding onto. It's probably part of why some very smart people are not sounding the alarm bell as hard as I think. But walk me through why. What will happen if the government starts raising rates again? Will inflation come down? Because I've heard you put forth that even if you raise rates, inflation will go up. Which is. You're the only person I've heard say that.

[Peter Schiff]

Well, if you just raise rates the way they did. Yes, because those higher rates are part of the cost structure of businesses. I'm a business and I have all sorts of costs. I have raw materials, I have rent, I have labor costs and I have interest. Maybe I borrowed some money to, you know, build out the business to buy some capital equipment. And so I have debt and the interest on that debt is what are my costs. And if my interest goes up, well, you know, my costs have gone up. So that's something I'm going to pass on to the consumer with higher prices. And that's especially true for real estate. If I own some rental property. Most people who own rental property have a mortgage on the rental property and as they're mortgage rates go up. Because if you own a bunch of rental property, you probably didn't have a 30 year fixed rate mortgage. You probably had, you know, a mortgage with a five or seven year term and they reset and you have to, you know, get a higher rate. So if I'm a landlord and my interest expense has gone up, well how do I recover that? I raise my rent and I get it from my tenant. So higher interest rates are just another cost, just like raw materials and wages that get built into pricing structure. So higher rates end up being higher inflation. And that's going to happen. I mean, rates are higher now than they were when they were zero. And so that's going to affect prices. But also the U.S. government has this massive amount of debt that has to be financed at higher interest rates. And the higher interest rates are, the bigger the deficits are because all the money that goes to pay the interest is borrowed. And so as interest rates go up, the deficits go up. And that means there's more debt. And now you're going to have to print more money to monetize it. And so there's going to be more inflation. And also those rising deficits are going to put downward pressure on the dollar, which we're now finally seeing. For a while, higher rates were supporting the dollar, but now that's not the case anymore. And the dollar is starting to fall, and it's going to fall a lot more because of the enormity of the deficits. And as the low yielding debt matures, even if the Fed is cutting a bit, you're still getting debt that was borrowed at 25 basis points maturing and now has to be rolled over at 3 or 400 basis points. So the debt is exploding because of higher interest rates, which is putting more downward pressure on the dollar, which puts upward pressure on consumer prices. But if they raised interest rates high enough to really cause a decline in aggregate demand because people stopped borrowing money, and if we had an increase in our savings rate, if people actually were like, hey, interest is so high, I'm going to earn some interest, I'm going to put my money in the bank, I'm not going to go spend it, I'm going to earn some of this high interest, then that would help fight inflation. But we never even got close to that point because the savings rate is near an all time record low and debt is at an all time record high. So what does that tell you? That interest rates are too low. And so when Powell comes and said, we've had this tight money for a long time, money never got tight. It was less loose, but it was never tight. That's why the debt kept growing and that's why the inflation problem is going to get a whole lot worse.

[Host]

All right, is there enough money, enough Runway for inflation that they can just keep grinding inflation, grinding inflation, grinding inflation until they have paid off the debt?

[Peter Schiff]

You don't pay it off. You mean you wipe it out. Right. You make it so eliminate the debt. So it's not a burden anymore. Right. It doesn't go away. But I don't see how they do that without impoverishing the whole country in the process, because they'd have to create so much inflation in order to do that, because the debt is now so big and it's rising so rapidly. Right? It's rising by maybe $3 trillion a year. So even if you had 10% inflation, the debt would just stay the same in theory, but it wouldn't stay the same because the budget deficits are going to go up. But you just have to create so much inflation. I mean, the public is not going to be able to survive the amount of inflation that that they would have to create to wipe that debt out in any kind of meaningful way.

[Host]

Is there any reason why? I understand that this would draw a lot of ire. People would get weird. But I've seen people get over amazingly bizarre stuff. Is there a fundamental mechanism that would stop the Fed from saying we're going to give the US Government loans at one rate and we're going to give everybody else loans at a different rate?

[Peter Schiff]

Well, if they're buying Treasuries. See, the only way the Fed can monetize debt, it has to go into the market and buy Treasuries. So I don't see how it could buy them from the government because it doesn't actually buy them directly from the government because it's not allowed to do that in its charter. Because they didn't want the Federal Reserve to be able to directly monetize debt. So they were afraid of that. In fact, when the Federal Reserve act was initially passed, it wasn't even legal for the Federal reserve to hold U.S. treasuries. Even if they bought them in the secondary market, they couldn't do it. They were prohibited from holding them because they didn't want the Fed to be able to help the government go into debt. They changed that soon after the Federal Reserve act was created to help the government finance the First World War. They gave the Federal Reserve the ability to hold Treasuries. And, and so then the Federal Reserve goes into the market and it works through primary dealers. Right? It goes through Goldman Sachs or JP Morgan and Morgan Stanley to buy its Treasuries. It doesn't go treasury direct. Right. It has to go through these middlemen. So I don't see how it's possible because they can't differentiate whose bond is whose. Right. They're just buying in the market.

[Host]

Okay, so this is probably just my naivete and I don't understand something, but it seems pretty trivial for the government to go, hey, everybody, guess what? We're going to default. Just kidding. The Fed's going to buy it from you. But the Fed's going to buy it from you at a discounted rate. So if you're holding bonds, treasury right now, instead of giving you the five and a quarter percent that we promised, we're going to give you one and a quarter, but we are going to buy it. And if I'm listening to this podcast and I'm a government agent, I'm like, that is a great idea that seems inevitable because that is far more palatable than default.

[Peter Schiff]

There's another point here. Even though the Federal Reserve, the US Government pays interest to the Federal Reserve, it gets the money back, right? Because the Federal Reserve has to pay its profits back to the US government in attacks 100%. The Fed is allowed to earn a certain return on its capital and then everything it earns in excess of that is given to the US Government. Now the problem is now, yes, they're earning interest, but they're all. The Fed is also losing a fortune on its bond portfolio right now. So the Fed is not making money anymore to pay the U.S. treasury like, like they used to. But they do get the interest back. Just like when the Federal Reserve pays interest to the so called Social Security trust funds, it just takes the interest right back. It just yanks it right out of the trust funds and spends it. So it's a much bigger burden in the short run when the public owns the Treasuries because now that's a net drain on the current expenses of the government because they actually have to pay the interest to a third party that they don't get it back. But the real problem though is going to be the dollar status as the reserve currency. Because as the rest of the world wakes up to the reality of endless inflation and endless money printing and knowing that the government is not going to honestly deal with the debt, we're never going to cut back government spending, we're just going to keep creating inflation. Then there is no justification for the dollar to be the reserve currency. And it won't. It will lose that status. And that is going to accelerate the spiraling of inflation out of control. Because one of the reasons that we've been able to print so much money, create inflation, and haven't had an even bigger impact on our prices is because a lot of that money has been exported. You know, we have a trillion dollar a year trade deficit. So these are goods that we didn't have to produce that come into the country every year. And we send our money out. We take dollars that we print and we send them to China, we send them to Japan, we Send them all around the world and they send us back real stuff. So that keeps the supply of goods up and the price of goods down because we get the goods and the rest of the world gets the inflation. They get our money. But now what do they do with that money? They loan it back to us. They buy bonds, they buy treasury bonds, they buy corporate bonds, or they buy real estate, they buy stocks, or they buy these financial assets. But that's helped keep asset prices high, that's helped keep interest rates low. But when they don't want these dollars anymore because they're not the reserve currency, then all those dollars are going to come back and they're going to be bidding up consumer good prices. People are going to try to buy what they can, they can take home. But more importantly too, all the goods stop coming in. So if we can no longer import a trillion dollars worth of stuff every year, what's going to happen to prices? Prices are going to skyrocket because we're not going to have stuff. And so there's going to be a lot less stuff yet. Everybody's going to be trying to buy stuff that's not there. So the prices of the stuff is going to go way up.

[Host]

Yeah, maybe temporarily, because then we bring manufacturing back. But I don't want to derail on that. Well, I know you're going to.

[Peter Schiff]

That's going to take time. That's going to take a long time. You just can't bring manufacturing back snapping a finger. It's going to take years, maybe decades, because you have to rebuild the factories, rebuild the supply chains, train the workers. Where's the money going to come from to do this? And if we already have a huge government with lots of regulation and lots of taxes, it's going to be very difficult. I mean, that's where the AI could really come in and be helpful if we had to, you know, start over again and rebuild our industrial base. But again, this is going to be a very difficult process that is going to take time. And in the meantime, a lot of people are going to lose a lot of money. And that's going to put a lot of pressure on a lot of politicians to do things that are going to be very harmful and very destructive to that recovery.

[Host]

Yeah, I just think that the, the way that this will probably play out is something like this. We keep inflating. We're just going to gobble up as much money as we can by lying to you. You're going to feel that something is wrong, but you won't know exactly what it is, despite all these podcasts where I'm trying to walk people through exactly what is happening. But people aren't going to en masse. They are not going to understand what's happening. They are going to get hyper tribal because they feel like something is wrong. Apparently the DNC is going to play the role of blaming business people and then they're. The economy is going to turn to trash for reasons we are going to get into great detail on in a minute and people are going to revolt. There is going to be, if, like, this all goes well, there will simply be massive tribal divisions between the left and the right and we'll see, saw the government back and forth until people do slowly get away from the dollar. But I think this will all be a feeling and it won't be a thing that the logical brain will engage in. To your point about an honest default, that's never going to happen. That's logic. Everyone's going to steer by emotion and it's going to manifest this political violence that that's how I think this will actually play out. Because people can feel something is wrong, but it is way too hard to wrap their head around things like how the government manipulates CPI to get more money from you. Yeah, okay, I want to go back to this. Go ahead.

[Peter Schiff]

I said the public already knows that things are wrong. Right.

[Host]

That's why they just know something feels wrong, but they don't know what it is.

[Peter Schiff]

Yeah. The politicians and a lot of the people in the financial media who still don't get it, you know, they look at these, you know, phony statistics and accept them on face value and then they look at the public and the public is so pessimistic. You know, Biden's approval rating is so low. People are pessimistic and they don't understand why. They say, you know, don't they understand how great everything is? You know, why. Why aren't they giving credit to the Biden administration for this great economy? And that's because the economy's not great. They're blaming Biden for the lousy economy because the economy actually is lousy. The statistics don't tell the truth if you just accept them on face value, which is why you shouldn't do that. You always have to look beneath the surface to find out what's actually happening. And if you take the time to do that and you don't just accept what amounts to propaganda, but you actually look at it, then you understand why the public is so upset. Right? Because we have High unemployment, we have high inflation, and we don't even have any economic growth. We actually have a contracting economy. And if you actually counted gdp, and we're going to get more GDP data later this week, but if you honestly reported the economy, it would be contracting. It is not growing. That is the problem.

[Host]

Yeah. Nonetheless, people think emotionally. They do not think logically. And because of that, it becomes a question of who's going to better steer their emotions. So people are upset with Biden, but they have pulled a flip on the American people that is unreal to behold. Moving everybody over to Kamala Harris, and everybody's like, yeah, word. Like, I can feel the enthusiasm now coming out of that camp.

[Peter Schiff]

It.

[Host]

People are excited. They're revitalized. They believe it. And I'm looking at the. The words that she's saying and the economic policies that she is proposing, that they are terrifying. And people are here for it. They are super excited by it. And so my thing is. Okay, hold on. As somebody who actually wants to see people go somewhere that is. That leads to human flourishing, I'm just like, wait, there's a lot of excitement for policies that will not lead to, in my estimation, human flourishing. And it was very easy to. For the government, to the DNC very specifically to pull a fast one, like to just be, hey, here's a new shiny object. So what do you make of that? To me, it is that that is the most human story ever.

[Peter Schiff]

I think all this has been manufactured by the media. I can't believe that Harris is really as popular as everybody claims. I mean, she was the most unpopular vice president in history before she got the nomination. And so I don't see how she can go from being, you know, so unpopular to being popular. The reason that Biden was unpopular was because the economy was lousy. Well, I mean, she's a big part of that. The economy is just as lousy as it was. And so how they could just think, aha, this is great. We got Harris. And in fact, Harris is simultaneously claiming that Bidenomics is a huge success, but now we need to elect her because she's going to solve all these problems. Well, what problems? If Bidenomics was such a success, there should be nothing to solve. She's talking about all the things that she's going to do if she's elected. Well, why aren't they doing those things right now? Why didn't Biden do those things? You know, why aren't, you know, I mean, I don't know how you could. You could fool the public, I mean, the voters are dumb, but are they really that dumb? Dumb, you know, that she's going to somehow be an agent of change, that we have great policies, but vote for me, because I'm going to save you from all the problems that you. You now have without accepting responsibility for having created those problems in the first place. So, you know, I don't see how she's as popular. I mean, I think these polls, you know, I don't know. I mean, I don't know how they're running these polls, who they're polling, who they're not polling. I mean, I know the media wants Camilla Harris to win. And so I think one of the ways they think that they can help her win is by convincing everybody that she's so popular so that they just jump on the bandwagon. And so maybe they found a way to create these polls so that they're skewed more towards a Harris. You know, I don't know. I just. It just seems hard that Biden would be so far behind, and then all they do is flip it to Harris, and now all of a sudden she's got a lead or a big lead, and Trump's Trump's behind, especially given the assassination attempt, which I think really elevated Trump to almost, you know, like a living folk hero. And I think a lot of people maybe didn't like Trump have got to, you know, at least, you know, be impressed with the way he handled that situation. And so I think that would have turned people. And now that you got a Robert Kennedy Jr. You know, throwing his support behind him, I mean, that's got to deliver some voters to Trump that, you know, he didn't even have before, and now he's got those voters. So, you know, I would think that Trump would have a big lead over Harris, especially given, you know, how bad the economy is and how much they want change, I don't think that they're really going to be dumb enough to believe that voting for four more years of what they've got now is change. And in fact, if anything, it's going to be worse because Harris is likely to be even more to the left of Biden. And just look at, you know, the guy she picked for vice president. I mean, about the most liberal guy that she could have found from the most liberal state. It wasn't even like the Democrats needed Minnesota. I mean, they had that one in the bag. But Minnesota, you know, that's, you know, some, you know, McGovern was from Minnesota, Mondale. I mean, a Lot of real left wing politicians have hailed from, from Minnesota. So I think the, the Harris Walsh duo is even worse than Biden Harris. So things are just going to get worse if the public votes for more of that now. The problems are going to blow up under Trump too. But Trump's got a better chance of workable solutions in the aftermath because at least he may be advised by people who believe in capitalism and believe in the free market and want to try to restore it. Harris is going to be surrounded by socialists who are going to use the crisis as an excuse to blame it on capitalism, to tell the people that capitalism doesn't work and we need to reinvent the country under a socialist economic model because this proves that capitalism doesn't work. Right. So I don't want people running the country who don't even believe in capitalism. Right. Which, and obviously Harris doesn't. You know, that's why she wants price controls. But she was raised by a communist. I mean, you know, the apple doesn't fall far from the tree. And plus she was taught communism since she was a little kid, you know, so she never, she never, you know, grew out of it.

[Host]

Yeah. I think that the important thing for anybody trying to predict the future here is to understand that humans are an animal designed to use emotions to, to steer in an incredibly complicated world. And I don't think it's a matter of the public being dumb. I think it's a matter of we are emotional creatures. If you selectively damage the region of the brain that generates emotions, people cannot make decisions. It's not like they have a hard time making decisions. They can't do it. So emotions are fundamental to our ability to make a decision. Now you have this incredibly clean narrative with Kamala Harris, with she's not Joe Biden. And so it's new, it's changed. No one's gonna think about, oh, she's been there for a long time if. Because it's not even her. It's the party on the DNC that really does things, whatever that blobby sense of party is. And so they have the narrative they need to trigger the emotions. And this is the reason that I think they, both Trump and Harris have doubled down on their VP Being like core to their base is that's where we are going. Meaning the tribal split is becoming extreme because people can feel something is wrong. And this is you and I and other very successful capitalists have got to accept the system as it is today is broken. For the average person, young people feel completely alienated they're not even engaging, they're not even seeking romantic partners. Like, it's just a level of apathy that is utterly terrifying. And so you have this split in these camps. They're doubling down. The economy isn't working in the way that it should because of the debt away. Overspending, money printing is the problem. It's not the free market. The free market, in my estimation, is not the issue. But we have an economy that we call capitalism that is leaving a lot of people out in the cold. And, and because of the manipulations, it is so complicated that the average person who is steering by emotions is not going to be able to identify how the magic trick is even being done. So they can just tell something is wrong. Fuck you guys. Burn it down. Whatever normal is. Gotta go. And so I'm gonna go with Harris, and if she's saying that she's gonna stop you from gouging me, which is clearly happening because of what I see at the pump, what I see in the grocery stores, then great, I'm here for that. That is what's going to happen. And so if she wins or loses or Trump wins or loses, I think it will be by a razor thin margin because the country is effectively split in half.

[Peter Schiff]

Well, I think if Harris wins, it's the votes that are going to put her over the top are the immigrants, particularly the illegals that are here that are able to vote. Because remember, Donald Trump is promising to deport the illegal immigrants and Harris wants to not only give him asylum, but give them all kinds of freebies. So if you're an illegal alien and you're in this country, you're voting for Harris. Now, of course, you're not even supposed to vote, right? The whole thing is if you're not an American citizen, legally, you can't vote, but they're voting anyway. So I think that Harris is going to win the overwhelming number of the illegal votes. And so if she wins, that's going to be the only reason. I just can't see an honest election where just American citizens are able to vote. I can't see how Harris wins that election because, you know, Trump is not actually promising to cut any government programs. He should be right, that's what we need to do. But he's not promising to cut anything.

[Host]

Right?

[Peter Schiff]

And so he shouldn't be alienating anybody. You know, if he was running an honest campaign. Look, we gotta cut Social Security. He may risk losing some votes of people who are getting Social Security, but he's not, he's not promising that at all. He's promising to raise Social Security. He's not saying we're gonna cut, you know, Medicare. No, he's, you know, he's talking about, you know, no tax on tips, which is a tax cut for a lot of people. So Trump is not saying, vote for me, I'm going to take away any of your government benefits. So he's promising more government also. It's just that, at least he's different. Everybody now the economy is so bad, people are struggling. Everybody is going to vote to throw the bums out. Who are the bums? It's Harris and it's Biden. And so Biden's taking himself out of the game, but Harris is still there. They got to throw her out. She's got to be fired. And so the electorate is going to get rid of Harris if it's a fair election, if it's an honest election. So the question is, if she doesn't win is, you know, it's because you've had these illegals voting, or they somehow rigged the system and, you know, they found some votes, you know, and she was able to win, because I don't. I don't see how she would win given the realities of how bad things are. And a lot of people could just remember what things were like when Trump was president. It wasn't that long ago. He was president four years ago. Everybody knows things are a lot worse today than they were four years ago. So if it's a litmus test on are you better off today than you were four years ago, very few people could say, yes. Most people are gonna say, no, I was better off four years ago. And so I'm voting Trump. And so that's what's going. That's what should happen in a fair, honest election. And not that things are going to get better under Trump, things are going to get worse regardless of who wins the election. But the voters don't know that. They're not smart enough to realize. Trump says, I'm going to get rid of inflation on day one. The voters might believe him even though he can't do it. He's not going to do it with the policies he's proposing. But it sounds more believable than Harris doing it. How is Harris going to get rid of it? She was there when it happened. I mean, Trump could say, look, when I was president, inflation was 1%, right? Technically, you know, according to the CPI, right, that's where it was. And so now it's much higher. And so it's easier to, you know, to hang that on Biden Harris. So he should win. But again, the problem is nobody would win an election telling the truth. If Donald Trump says, look, I'm going to solve the problems, that we're going to have massive cuts to government spending and people who are getting checks from the government, you're going to get smaller checks. I got to cut Social Security, I got to cut government pensions, I got to cut defense. I don't think you win on that ticket. On that, things have to get really, really bad. See Milei in Argentina, he was able to win on that because things had been so bad for so long. The public finally decided that, you know what? Let's try that. We've tried everything else. We've tried all these government solutions, and none of them have worked. So maybe let's try capitalism, let's get rid of all this government because it can't get any worse. And let's try it this way. Let's try cutting government instead of expanding government, and. And let's try freedom instead of socialism. And so they're trying it, and hopefully they stick with it because it's going to work. But Americans, we haven't had enough socialism yet to be sick of it. We still don't get it. We still think the government can solve our problems and don't recognize that all the problems we want the government to solve, the government created.