← Tom Bilyeu's Impact Theory
Tom Bilyeu's Impact Theory
The Ultimate Guide to Surviving Hyperinflation (Do This NOW!) | Peter Schiff - PT 2
01:20:41
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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 always gets the win. Call 1-800-GRAINGER visit grainger.com or just stop by Grainger for the ones who get it done.
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When you manage procurement for multiple facilities, every order matters. But when it's for a hospital system,
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they matter even more.
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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 granger.com or just stop by Granger for the ones who get it done. I'm Tom Bilyeu and this is Impact Theory. And today we are diving right back in to part two with the incredible Peter Schiff. How on earth are illegal immigrants going to vote?
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C
Well, they just show up at the polls and vote right? They don't.
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B
Do we have evidence of that or do we just have a cause? Obviously, that would be we know they're voting. I don't know that.
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C
How do we know that they are? And in some states, too, you know, they could get an id, they can get a driver's license without proving they're a citizen or whatever, and then they go and they have an ID and they vote. But, you know, people, I mean, that's one of the reasons that so many illegals are coming into the country. When the Democrats look at all these illegals as new voters that are just coming over, right? Just, you know, coming across the border, they think that's another guy that could vote for me. And so that's what's going on. I mean, who knows how many illegals voted in the 2020 election?
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B
Okay, I think that's going to be a very divisive theory that you're putting out there. Help me.
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C
I don't even think it's controversial at this point. I mean, I mean, it's kind of like a fact that they're coming here and they're voting. That's why there was a bill. They're trying to stop the illegals from voting, but the Democrats don't want to stop them from vot because they're getting the votes.
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B
Peter, I think that might not be controversial in Your audience. But this is very controversial as you go out to a broader audience. Like, there is a violent kickback. I don't know if you saw Elon Musk had a tweet, and, hey, for all of his divisiveness, this one seemed abnormally divisive, where he said, hey, the master plan is to get these guys ultimately a path to citizenship so they can vote. And people still had just a. A flip out over that, like, that he was being asinine. That's absolutely outrageous. And why would they ever suggest that? And so I, again, this may break evenly along party lines, but I think that that is. That's one of the more controversial statements you have thrown out in this interview thus far. Do you have anything. If people want to. If people want to look into this, is there somewhere that they can go that shows data, not just sort of gut sense?
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C
Well, I mean, I know that. That there. A lot of people vote, and they're not necessarily getting checked for IDs. There are a lot of places that you don't even need an ID to vote. And there are ways that you can get IDs and not be a citizen. But in order to vote in a federal election, like, the states could make any laws they want for their own elections, for their local, you know, you know, positions. If they want to allow, you know, just illegals to vote or just, you know, anybody, they can let whoever they want vote in their own state. But when it comes to a national election for a president, for Congress, you gotta be an American. I mean, I can't even vote for the president, even though I am an American citizen. I live in Puerto Rico, and so none of the American citizens who live in Puerto Rico are allowed to vote. Now, if I move back to the US Then I can vote, but I can't even vote. And I'm actually an American. But now we've got a lot of people who aren't even Americans because they happen to be in one of the 50 states. They may be able to get to the polls and vote. And some of them, they don't even have to, you know, they vote, you know, on a ballot, right? They just vote, you know, on the mail. They get a ballot in the mail and they send it in. But I don't think that there is enough going on to prevent people who shouldn't be voting from voting. But hopefully in this election, maybe there'll be more of that. Maybe, you know, people are kind of onto this and they want to make sure that the votes that are cast are legal votes. But you know the big problem too, and you thought that was controversial. The problem is democracy itself, which we're not even supposed to be. If you are familiar with the US founding documents, read the Declaration of Independence, read the Constitution, read the Bill of Rights. The word democracy does not appear once in either of those documents. We're not supposed to be a democracy. The only thing that's in the Constitution is republic. It says in the Constitution that every state in the Union shall be guaranteed a republican form of government. In the Bill of Rights, there is no right to vote. Right? You have freedom of speech, freedom of press. There's all kinds of freedoms. There is nothing in the Constitution that says anybody has a right to vote because nobody had a right to vote. Voting was considered a privilege, and the states decided who could exercise that privilege. There were all sorts of qualifications when our country was first established. There were all sorts of things. Most states, you had to be 21, right? Most states you had to be male. And a lot of states, all states, pretty much you had to be male. But then you had to have property, you had to pay a tax, you had to pass a literacy test. There was all sorts of things that limited who could vote. Because the idea wasn't just everybody voting. The idea was we wanted good government. How are we going to get good government? Well, we have to limit the people who are allowed to vote, because if we let everybody vote, we're going to have idiots in government because, you know, the average person is going to vote for some idiot because they're not going to know. And so they tried to restrict the voting, but of course, we also had all sorts of laws to protect the minorities from the majority. So even if bad people got elected, the government, the Constitution limited what the federal government could do anyway. So even if the population elected somebody that wanted to do something, chances were he was prohibited from doing it by the Constitution because the Constitution was written with very limited powers for the federal government. The federal government's powers are few and defined. Yet now the government does just about everything it wants because the judges don't really enforce the Constitution the way it was supposed to be enforced. They let the government get away with all sorts of stuff. And now all the protections that the Founding fathers created to protect America from the evils of democracy, you know, they called it mobocracy. Those protections, those checks and balances, no longer really exist. And so now we've got everybody voting. And so we've got this horrible economy because people are voting for free stuff. I Forget who said this, but I think it was de Tocqueville that said that an election is an advanced auction on the sale of stolen goods. And that's what people are doing. They're voting to receive the goods that the people they vote for steal from other people and give to them. But, you know, that is the inherent problem is that we're not the republic that we were meant to be. We've become more of a democracy. We're not a direct democracy where, you know, people don't vote directly for every law. We still have representatives that vote for us, but the way those representatives are getting elected is just, you know, one man, one vote. Every, you know, one man, one woman. I mean, the only people who can't vote legally are people who are under 18. But there are a lot of Democrats that want to lower that. They want to, they want to, you know, the rate, the age should be higher. I mean, 21, when they went, when the states had 21, as the age. When a man was 21 in 1800, he had a wife, he had a few kids, he probably been in the workforce for five or six years. You know, I mean, you know, he had a lot more experience than an 18 year old today who's never had a job and lives with his parents. You know, so, I mean, people shouldn't be voting when they're 18. I mean, it should be probably 30 at a minimum.
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B
Wowzer. Okay, well, let's drill down how. What does the. What would you want to see actual regulations put around as it relates to voting? I'm going to guess it isn't men only. I hope not.
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C
Well, it doesn't make. Back in 1790, women voting didn't make sense. It was an easy way to eliminate a bunch of uninformed voters because women didn't work, women stayed at home, they took care of the house. And so, you know, they didn't necessarily, you know, know who to vote for. They might just vote for whoever their husband was voting for. It's a very different world today. So if I were trying to create criteria for who should vote and who shouldn't vote, sex would not make sense to use that as, you know, only males, sex is not something that should matter because women are just as likely to be out in the workforce and knowledgeable about various issues as the men mites because the sex roles are very different today than they were a couple hundred years ago. So that wouldn't be a factor. But age would still be a big factor. I think the voting age should be a Lot higher. Certainly we should have literacy tests. I mean, you should have to be able to read and write. I mean, you'd have to, you know, to be able to vote. You know, I like, you know, property, the property qualifications to say, hey, you know, you have to have accumulated some property, have some skin in the game. I mean, people think, oh, well, why should, you know, the poor people or people that don't own property or why shouldn't they be able to vote? The whole idea is just to have good government, not to have everybody voting. Look, I would rather have qualifications for voting that excluded me, right? That I didn't even meet the qualifications. But I knew that the people who met the qualifications were a good group of people who were going to exercise the privilege to vote in such a way that we were going to have good government, that good government would benefit me even if I didn't get a chance to vote for it. I'd rather have that than have everybody vote where my vote gets canceled out by some idiot and then we end up with really bad government. So I'd rather have good government that I don't vote for than bad government that I do vote for. But the key is too, if you have a government that really can't do anything right, then I don't even have to worry. Because if the government is just there to protect individual rights, private property, my right to life, liberty, just to protect me from people who would infringe on my rights, then even, you know, what difference does it make if I can vote or not? Because the government can't really do anything. The reason that people want to vote now is because they want the government to give them something. They want the government to take money from the people who didn't vote for them and give it to the people who did. But once you take that power away from government, if the government can't give anything to the people who vote for them, well, then there's nothing in it, right? All we want is good, honest government. And you don't get that with one man, one woman, one vote. I mean, there is no historical precedence for forgetting that. The key is to restrict it. And if you look at how America was first founded, the senators weren't elected by the people. They were appointed by the state legislatures. That changed around 1900. They amended the Constitution so that the people could elect the senators, but that wasn't how it was. And even the president, everybody knows about the electoral college, but it wasn't supposed to be a rubber stamp. We were supposed to vote for electors and then the electors were supposed to decide who. Who the president and vice president was going to be. Right. They weren't pledged. There was an actual real convention. And they were supposed to be smarter than the people. And then they would pick who would be there. But we had so many checks and balances, they couldn't do things. We had the Supreme Court that would strike down. If they wanted to do something that was unconstitutional, the Supreme Court would strike it down. They rarely strike down anything anymore because there's so many holes in the Constitution now based on the way they, you know, they redefined the necessary and proper clause or the commerce clause or all these things which basically negated the Constitution and made the whole thing meaningless because of, you know, how they've. They haven't even. They call it interpreting, but they're really ignoring it is what they're doing. They're trying to allow the government to do things that are clearly prohibited by the Constitution. So. But now, you know, you have all this stuff that's being done, you know, and you have, you know, everybody just getting elected, and people keep thinking, oh, it's so important that everybody vote. No, it's not. I mean, why would you want some idiot to go vote, right? And just cancel out, cancel out your vote if they're going to vote, you know, people are going to vote for socialism. I don't want that. Right. I mean, socialism is pretty appealing to people who don't know anything, right? It's very easy to vote your way into socialism. The problem is you can hardly ever vote your way out of it. Usually you have to fight your way out of it. Right? You need an armed rebellion. But a lot of the most tyrannical governments, I mean, Adolf Hitler was elected, right? I mean, how do you think he came to power? A lot of these tyrants are. People vote for them and then they end up with this horrible government. So that's not the type of government, the government I like, where you just vote yourself into a socialist, totalitarian society. I'd rather have a monarchy than that. I mean, I actually think a constitutional monarchy is probably a better form of government than just having a democracy. And I don't think if the framers would never would have gone for democracy, they would have made George Washington a king. In fact, they offered to make him a king. He didn't want to be a king. And so we had a republic. And that's why, you know, Benjamin Franklin, when he was asked, what kind of government did you create for us, Mr. Franklin, he said, a republic. If you could keep it. And the if you could keep it part wasn't necessarily because he thought it might become a monarchy. He was afraid that it might devolve into a democracy. And they knew that didn't work, right? They were unlike today's government officials. They understood history. They studied the failed democracies of ancient Greece. They knew that that didn't work. So, you know, they created a republic. And that worked for a long time in America. I mean, we thrived as we kept democracy in check. We saw the greatest expansion of living standards for the masses in the 19th century. We've never had economic growth since with all of our new technology. We've never had the economic growth that we had in the 1870s, the 1880s, 1890s, 1900s. This is before everybody was voting. And back then, we didn't have an income tax, we didn't have a Social Security tax, we didn't have a minimum wage. We didn't have any of this stuff. We didn't have any of these government programs. Government was tiny. Federal government was an afterthought. And we became the most prosperous nation in the history of the world. It was only after we started voting for all this big government, right, that we've created all these problems and that we've seen such a dramatic decline in our living standards, especially on a relative basis, relative to the rest of the world. I mean, countries that we are way ahead of, we're now behind.
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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 always gets the win. Call 1-800-GRAINGER visit grainger.com or just stop by Grainger for the ones who get it done. 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 always gets the win. Call 1-800-GRAINGER visit grainger.com or just stop by Grainger for the ones who get it done.
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B
I think we're going to have a hard time getting people to wrap their heads around inflation. Going to a constitutional monarchy is probably outside the scope of where we'll be able to influence people. Those are really interesting things to think about. Just to plant my own flag so I don't get swept up in some of those things. I would, I, I am hyper paranoid about people that manage to convince themselves that they're smart enough that they want to tell people how things should go. So I get it. I understand democracy is, is going to have deep and abiding flaws. But yeah, I think that saying these people can vote, these people can't vote in, in a very. Restrict the property was where you lost me. I'll be really honest.
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C
That.
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B
That is a.
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C
Qualifications were pretty common.
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B
You know, owning property, that's how you become feudalistic, man. That, that's how you get this permanent underclass of people that really do fall under the tyranny of people who are going to vote selfishly, as everybody does. And so you rob the one thing from people, which is the ability to express their voice in a nonviolent way, to say, this is the thing that I want. And even if it's just a yardstick, to see the screaming of a group of people that feel that they're not being heard. It's like if you don't let them vote and have that tally at least marked, you're going to have problems. I think anyway, I know we could
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C
go back and forth.
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B
Oh God, Peter, you made such good points. I heard them all. But I want to get us back to something a little more tangible and today, right now. So some ideas that are being floated economically right now are to tax unrealized gains. I found that terrifying. A $25,000 credit to first time home buyers. How could that go wrong? That sounds great, but I have thoughts. Medical debt forgiveness, again, sounds amazing, but I, I have feeling that that goes wrong. What? There, there's a sort of general thing that groups those three things together, which is they all sound awesome. They sound like they're going to make things better for people that are struggling. Why those things? Or maybe they will, but my thesis is those will actually make things worse for people that are struggling. How could that ever be true?
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C
Well, first of all, just giving people money to buy houses. You know, again, apart from being unconstitutional, which, which it is, it's just going to increase housing demand. People are going to take that money and use it to bid up houses. And so prices are going to go up. And so if, you know, if the problem is that housing prices are too high, giving people money to buy houses is just going to make those prices even higher. So it is a Foolish, misguided policy that is going to worsen the very problem that they're trying to solve. I mean, the real solution is to get the government out of the housing market completely. They've been very involved in it for a long time, really started under fdr. But all these programs to make homes more affordable have backfired and made them a lot more expensive, which is exactly what the government does. So that is the worst possible policy, other than maybe this tax on unrealized gains, which number one again would also be unconstitutional. Because they want to try to tax unrealized gains as if they are income, but they are not income. They are unrealized gains. That is not income. Income is a realized gain. You have to sell something and received more than you paid for it to have income that is subject to tax under the 16th amendment. See, the reason we have a 16th amendment is because the Constitution basically prohibited an income tax, a direct tax, unless it was apportioned. And the government didn't want to apportion it for all sorts of reasons because the founding fathers didn't want direct taxes. They wanted direct taxes in emergencies like a war. So they made it very difficult for the government to lay a direct tax, which is a tax that the people have to pay directly to the government, as opposed to an excise tax which they thought the government would run on, which is like a sales tax, you know, tax on alcohol, tobacco, gas. You buy a product, the tax is there, you pay it easy. You don't need an accountant, you don't need to file a return, you don't need to, you know, you know, risk going to jail. Right? It's very simple to pay an excise tax. So that was how the government was supposed to run. Well, when they initially wanted to impose the income tax, the politicians said, look, we'll tax the rich and the middle class won't have to pay taxes anymore. We'll get rid of the tariffs that you guys have been paying. And we're going to tax the Carnegie's and the Vanderbilts and the Rockefellers, this income tax. And so that's how we got it, because the public voted for a tax they didn't believe they would ever have to pay. But of course, now the middle class pays taxes that nobody, nobody would have imagined Carnegie and Rockefeller and Vanderbilt would have paid. The initial tax was I think capped at 4% on the billionaires. Right? It was a tiny little tax, but the 16th Amendment is what authorized it. But it has to be on income. So the only direct tax that can be constitutionally levied without apportionment is an income tax. So now if the government says we're going to try to tax the unrealized gains that you have on an asset that you own, that is not an income tax, that is a property tax, they're taxing your stocks, they're taxing real estate tax, they're taxing the asset that has appreciated. So that is completely unconstitutional. But now let's assume that they do it anyway and the Supreme Court, for whatever reason, doesn't strike it down. It would be a complete disaster to impose that type of tax because it would destroy the economy, because anybody that owns these appreciated assets would be forced to sell the assets to pay the tax, and you would destroy the accumulated capital of the country. I mean, the key to capitalism is capital you want to allow capital to accumulate because that's what drives the economy, that's what helps produce all the goods and services, is the fact that we have capital. But if we have to destroy the capital so that we could pay a tax to the government, we're just turning all that capital into consumption. So it would be highly inflationary. It would be very economically destructive. Lots of people would try to figure out how to get the hell out of the country. Nobody would want to start a business here anymore. Nobody would want to own assets here anymore. I mean, it would be a horrible tax economically, even apart from the fact that it's illegal to actually do it. But again, if they do pass something like this, remember, it's the camel's nose under the tent. That's always how a new tax is sold. It's sold to the voter with a promise that you won't have to pay it. Here is a new tax that some rich guy is going to pay, and it's not going to cost you anything. Oh, okay, yes, I'm in favor of that. But then once they get it passed, it rapidly changes, so that now the very people who were told they wouldn't have to pay the tax are the ones that pay the most. The middle class suffers the biggest burden from a tax that they never were even going to pay. And in fact, the withholding tax didn't even start until the second World War. So even though we passed the income tax in 1913, nobody had taxes withheld from their pay until 1943. And that was because we were fighting a war. And so the government said, hey, we need to do this temporarily because, you know, we got to fight this war. We need the money. And so we got that temporary withholding Tax. And of course, we still have it. Here it is 20, 24, and people are still having taxes withheld from their pay. But again, this is why. I mean, if we tied voting to taxation, that would be another way you could do it. Because people is. It's very easy to vote for a tax that you're not going to have to pay, because that's really like voting for theft. A politician says, yeah, vote for me and I'm going to steal money from this rich guy and give it to you. Well, okay, right. Whose vote do you lose? Well, I lose the vote of the rich guy. But there's not as many of those as there are the people who are going to get the stolen money. And so that's what happens. But all these policies that she's proposing, on top of the, you know, the price gouging, I mean, there is no price gouging. The prices are set by supply and demand. I mean, I mean, the prices are what the prices are. I mean, especially supermarkets, I mean, supermarkets, grocery stores are highly competitive. They have razor thin margins. Nobody could gouge because they would go out of business. I mean, you'd go shop someplace else. I mean, every supermarket is trying to give the customer the best deal they possibly can. You know, so prices, prices are low, but the reason they've gone up is because the government's created inflation. And so prices have got to go up when the government creates inflation. I mean, if the supermarkets or grocery stores didn't raise their prices, they'd go out of business. And in fact, that's what these price controls would do. They would result in a lot of grocery stores going out of business, especially in the inner cities, in the communities where they have higher costs. You know, there's higher, higher insurance, higher crime, higher minimum wages. I mean, those are going to be the first stores to shut down. And so, you know, the food's not going to be there, right? There's not going to be any. You know, again, you're going to have to wait in line for a long time because they're going to end up rationing what food they have left. And to the extent that you really want to get something, you're going to buy it illegally on the black market, and you know, it's going to cost a lot more. So everything that she has proposed is just going to make the problems worse. You know, the high cost of housing, the high cost of food is because of the government creating inflation. And everything Harris wants to do is to create even more inflation. In fact, that was the Biggest irony was the Inflation Reduction act was an act to increase inflation. I mean, there's no truth in legislating, right? If there was, I mean, they'd all be in jail for the Inflation Reduction act because it's false advertising. It's lying. The Inflation Reduction act increased inflation because they expanded the money supply. They voted for the government to spend more money that the Fed was going to have to print, right? So that was, that was the creation Inflation Creation Act. In fact, it was really the Green New Deal relabeled so the public would accept it and now they want to claim credit. Hey, we passed the Inflation Reduction Act. Yeah, that was just the title, right? In fact, if you want to know what a government bill is going to do, just read the title. And then it's the opposite. Like, if they pass tax simplification, it's going to make taxes a lot more complicated. They tend to put a title on a bill that is the opposite of what the bill is actually going to achieve.
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B
That's good times. Why? Why are price controls impossible to do? Well, like, if they were going to go in this and really try to be nuanced and, and understand I'm dealing with a company that has razor thin margins, we don't want to crush these small businesses. We know most people are doing it right. We just really want to make sure that everybody's taken care of. Why fundamentally does that still go wrong?
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C
Well, first of all, in order for the government to, you know, try to figure out what the price should be of any given item. Because first of all, there's so many different items on the shelf, right? So some government bureaucratic board is going to have to be appointed and they're going to have to figure out what the price of a banana should be, or, you know, what the price of, you know, a can of Coca Cola should be, or, you know, all these different items, who's going to do that? How much is that going to cost? And then how are the supermarkets going to comply with these rules and regulations? How are they going to prove to the government that the prices they're charging are within what their requirements are? All of this is going to cost a lot of money to administer. Where's that money going to come from? Where are the grocery stores going to get all the money? They're going to have to hire a bunch of people now to fill out forms and to keep track of numbers and to get the permission from the government to charge. Where are they going to get all that money? They got to raise their prices so anything that the government does that imposes more regulation on a business is going to result in higher prices for whatever business is being regulated. But also, they don't need to do that. They can't do that. We already have something called supply and demand and we have competition. Those things together set prices and it prevents somebody from ripping off the customer. Because while I don't think everybody is smart enough to vote, I do think everybody is smart enough to shop. You see, the people who want everybody to vote think that people are a bunch of idiots and the government has to protect them from everything. I think they're smart enough not to shop at a grocery store. That's overcharging, right? So you know, you're a consumer, right? You have choice. There's a free market and if one grocery store is too expensive, you won't shop there. You'll go someplace else. In fact, you've got the Internet now. You can shop around. You can see where the prices are the best. So it's competition that is going to make sure no one gets ripped off. When the government comes in, everybody gets ripped off. Everybody gets ripped off by the government. Instead of Kamala Harris worried about non existent price gouging by the free market, she should worry about the actual gouging that's being done by the government on the people. The people are being gouged with inflation and taxes and they have no way around it, right? The government creates it in the free market. It's all voluntary. Nobody can exploit me, no one can gouge me because nobody owns my business. I can take my business anywhere I want. I'm going to go to the company that offers me the best deal, the highest quality, the lowest price. That's where I'm going. And the market is going to make sure. But with the government, when they have power and they have the guns, I don't have a choice, right? I have to pay their inflation tax no matter what. If they tax my income, even if I get a lousy deal, I can't opt out, right? I'm paying the tax. I'm being forced to pay that tax. So the government takes my money by force. A grocery store gets my money because I volunteered to give it to them. They didn't force me. They didn't come to my house with a gun and forced me to shop at their store and pay their prices. They convinced me to stop at their store because they had the best prices or they had the cleanest aisles or the shortest line or whatever it was that caused me to go to that grocery store. I went there voluntarily. I could have gone to any other store, but I chose the one that I went to. I'm not going to choose the one that's ripping me off. Right? Nobody is that dumb. But the government somehow thinks we're all that dumb. And. And we're all going to make dumb decisions unless they come in and protect us. Yet we're all smart enough to vote, right? We're too dumb to know where to buy groceries, but we know how to pick the president. See, I think it's the opposite. We're smart enough to know how to buy groceries, but everybody shouldn't be picking the president. Whether it's a birthday trip, a family
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- [34:15]
B
All right, if we know that we're in an everything bubble and it is destined to burst because of what's going on with the debt, so inflation, interest rate, that whole conundrum and the policies that are on the horizon are not anything that's going to save us from that. In fact, from what you're saying, there is no saving us from that other than an honest default, which isn't really saving. How do people navigate this moment? Well, what do people do in an inflationary environment with terrible government policy?
- [34:48]
C
Yeah, well, I mean, the advice that I've been given to people for years, first of all, when it comes to goods that don't perish, I've been advising people even before the pandemic. I've been saying this consistently is you stock up on things, everything that you need, right? Let's say razor blades. They don't go bad, right? If you buy the razor blades that you're going to use over the next five or 10 years, you just buy them and put them in the, you know, in a storage closet or something. Then you could just use those razor blades instead of going out and buying new ones because the new ones are going to keep getting more and more expensive. So you might as well stock up on them, you know, bars of soap or cleaning Detergent or certain food items that, you know, that have a long shelf life. If you buy the things that you need in the future, but buy them now, they're, you know, it's like, it's like an investment. I mean, if, if I buy a can of beans and a year from now, that can of beans is 20% more expensive than it was. If I buy it now, it's like a 20% return on my investment. Right. And I don't.
- [36:00]
B
This is doomer prepping. Are. Is that really your go to advice right now or is.
- [36:05]
C
Well, that's.
- [36:06]
B
If I'm honest, I thought the answer was going to be something like getting gold and other things that are resistant to inflation, but we went to buy razor blades and canned beans. Peter, this is not the answer I was expecting.
- [36:20]
C
A lot of people don't have enough money to buy gold, right? So, like, you know.
- [36:25]
B
But then can they buy a bunch of beans and razor blades?
- [36:28]
C
Well, they, they know what they're going to need. If you know that you're going to want things, why wait till the price goes way up? If you have a little extra cash, you could just, you know, keep a bigger supply of those things in your house. Now, obviously, if you've got a lot of extra money, if I've got $10,000 at the end that I didn't spend, I'm not going to buy $10,000 worth of beans and razor blades. Now I can start buying some gold and silver because I could use that to buy food or buy razor blades in the future because those prices will go up too. See, if razor blades are 20% more expensive in the future, gold might be 20% more expensive, too, or maybe 30%. So I could use my gold in the future to buy razor blades, or I could sell my gold and I could use the cash to buy razor blades. You can protect yourself from inflation by buying the goods that you need now or by buying things like gold and silver that will go up in value and you'll be able to use them to buy more expensive goods. You don't want to save cash. You don't want to take your dollars and put them in a bank and spend them a year from now, because they'll buy a lot less a year from now than they would buy right now. So either spend those dollars right now on goods or turn them into real money that you could save instead of fiat currency like gold or silver, which you could do. And that's why I've got shift gold. I mean, I'm telling people all the time. You know, give us a call at shift gold, buy some precious metals if you have any savings, if you have money that you haven't spent. Problem is so many people have nothing left over. They can barely get by. They've got credit card debt, you know. So for those people, you know, just buying some extra things at the market, you know, that, that might be all they could do just to have a, you know, good supply of stuff that not only could it get more expensive, but it could be out of it. They could, they could be shortages of some of these things, especially if we end up having, having price controls. Now, if you have even more money, right, if you have hundreds of thousands, millions of dollars that you want to protect right now, you need a bigger plan. Now you need a bigger strategy. And that's what I do at my asset management company, Europe Pacific Asset Management. When you have inflation, inflation destroys paper assets and it transfers wealth from creditors to debtors, right? Debtors win. When you have a big run of inflation and creditors lose. We talked about that earlier. The US Government wants to wipe out its debt with inflation. Well, when the US Government wipes out its own debt, it's also wiping out everybody else's debt. So the debtors win with inflation. The creditors lose. The people who own the debt or who loan the money, they're the losers. So you want to have a portfolio that will protect you from inflation. So what don't you want to own in your portfolio? You don't. You don't want U.S. bonds, you don't want municipal bonds, you don't want Treasuries, you don't want corporate bonds. None of the interest rates that you are earning on those bonds will come anywhere near returning the purchasing power that you lose to inflation. So you want to get rid of all those things and you want to have a portfolio of assets that will retain their value. And what I've been recommending, what I do is I look around the world for companies that I think represent good investment value, that pay high dividends to their shareholders, which would be me and my clients who own the stock. And I want companies that have pricing power, that can raise their prices when inflation raises their costs. They can pass those higher costs onto their customers and their customers won't leave. Right? Because what some things that happen with inflation is you have to raise prices high enough and you lose your customers because they can't afford your product anymore. Well, I want businesses that are selling products that people need so they're going to buy them no matter what I mean, they may buy a little less, but they're going to give up something else because they need those products. So you want to own businesses that are selling goods and services that are in real demand, that consumers are going to keep buying even if the prices go up. And then your dividend is going to go up. So you'll have cash flow that will go up to help with your rising cost of living. And the stocks that I'm buying are almost all outside the United States, because now I have the added benefit of earning foreign currencies that I believe are going to appreciate dramatically against the US Dollar, especially once the dollar really loses its reserve currency status. And you see a huge decline in the dollar, not just absolute terms like it has been falling, but in relative terms where the dollar really starts to fall against the other fiat currencies. And the last piece of that puzzle is when the dollar loses its status as the reserve currency. I think that basically removes a giant burden from the rest of the world because while America benefits from this status with a huge subsidy, the rest of the world bears that cost. They have to pay us. We live beyond our means, but that means that the rest of the world collectively lives beneath its means to make it possible. We consume stuff that we didn't produce, they produce stuff that they don't consume. But when the dollar crashes, then we're going to consume a lot less in America, but the rest of the world's going to consume a lot more, in particular the emerging markets. So I think there's a lot to be gained because as Americans see their standard of living decline, you're going to see a lot of other people in the world, particularly in those emerging markets, that are going to see their standard of living rise. Because now they're going to be able to buy goods with their money instead of US Treasuries or whatever else their governments have been recycling their trade surpluses into. So you want to own companies that are going to profit from that. And so I'm building these portfolios, dividend paying portfolios of real assets that I think will preserve wealth. I think a lot of people are going to get wiped out. A lot of people in my generation that have large portfolios that they're living on, where they're clipping coupons on their muni bonds and corporate bonds. I think they're going to get wiped out. I think inflation is going to completely destroy them. That's why they should get rid of their dollars while they can, sell out these assets while they can, and get a portfolio that is positioned to deal with the level of inflation that I see coming.
- [43:14]
B
All right, so if you're the dividend side, I understand, but if you're getting foreign currency into your portfolio, I'm assuming you're only doing that in foreign currencies that you have reason to believe are not going to inflate their curr at the same rate that the US is. What are currencies that you have that level of faith in?
- [43:36]
C
Well, all the currencies are going to be inflated. So it's not a question of even the Swiss franc. The dollar is very close to hitting an all time record low against the Swiss franc. But they have inflation. In Switzerland, when we went off the gold standard, you could buy 23. It cost you 23 cents to buy a Swiss franc in 1971, and now it cost about $1.20 to buy a Swiss franc. So you know, it costs five times as much. The dollar has lost 80% of its value relative to the Swiss franc. But even during that period of time, the Swiss franc doesn't buy what it used to. So it's a question of I'm investing in currencies that I think will lose value more slowly than the dollar, which means they'll appreciate versus the dollar. But I'm still investing in companies in those countries that I believe can raise their prices. And when you own a business, you own the real assets of that business, and so those assets maintain their value. What you don't want to own is the bonds of that business because then you get wiped out to inflation. But if you own the business, which means you own the plant and equipment, you know, the intangibles, the patents, you know, whatever they have that's real, you own that. And so if the government just prints money, well then you don't lose any of that. The prices of all that stuff just goes up to reflect the fact that there's more money. But if you own bonds, you get completely screwed when they create inflation. In fact, a lot of people look at Treasuries and they sell. Treasuries are a safe haven. Not from inflation. They're not a safe haven from that. You're right in the line of fire, right? You're, you're, you're ground zero. Right? The people who are going to lose the most to inflation are people who think they're playing it safe in US Treasuries. They get wiped out to inflation.
- [45:34]
B
Okay, a couple mile markers. So one, that would be true of Treasuries. If and only if the rate of inflation is higher than the return that you get. Otherwise I would expect that to sort of be on par, that you're sort of treading water. How do you, what specific examples can you give us of currencies that you are happy to be intaking flows in understanding that it's a differential between how much the US inflates and how much they inflate?
- [46:05]
C
Yeah, I mean, look, the country, the currencies that are probably the best, you know, the, the Singapore dollar, the yuan and South Korea, the Scandinavian currencies, the franc. But you know, we've got income coming in in euros, in pounds. I mean these currencies are still experiencing inflation and so I expect that that's going to continue. We also have earnings coming in from Southeast Asia from a number of currencies, you know, Thailand, the Philippines, Malaysia. I mean, you know, we're earning income, our businesses are selling products in these markets. And so all those, all those dividends, when we get paid, we convert them to dollars to give them to our customers. But obviously the lower the dollar is, the more dollars we get when we convert the dividends. And the companies, if it's a multinational company and if it's based in the uk, we're getting pounds. But that company's earnings may not be in pounds. If, you know, let's say it's a UK company but 80% of its sales are outside the UK. So then you got to look at where are the sales coming from because that's where they're earning their income. But I think that the dollar is going to lose value relative to that basket of currencies, especially when it's no longer the reserve currency because we enjoy this privilege. And so the dollar has an artificially high value based on that status. And so when that status is lost, it's going to be huge. And when you talk about, you know, I'm in Treasuries and I'm getting 3 or 4% and inflation is 3 or 4%. Well, it's not 3 or 4% if the government says it's 3 or 4%, it's 8 or 8%. So you're not, you're not treading water, you're actually going down. But I think we're going to see a sudden spike in inflation that is completely unanticipated by the bond markets where all of a sudden we can go from single digit to double digit inflation, but where the first digit is not a 1. So all of a sudden we have a Couple of years where inflation's 30 or 40% and that wipes out bonds almost completely. Like you just destroy the value in just a couple of years. You just wipe out the value of bond portfolio because you just get a sudden and unexpected burst in inflation and you know you're locked into your yield. Right. You got a three year.
- [48:35]
B
What would cause that?
- [48:37]
C
A big drop in the dollar. Yeah. If we have, if we have a precipitous drop in the dollar. Let's say the dollar dollar index right now is at 80, right. Not, excuse me, at 100. So let's say 101. Let's say the dollar index got cut in half over the next couple years down to 50, which could happen. Right. It's never been that low. The all time record low is about 70. But if you saw a precipitous drop in the value of the dollar because there was a run on the dollar and there was people were worried about Treasuries, then you could see a massive increase in prices in the United States very quickly. I mean you've seen that in other countries. You see that when their currency gets clobbered and then they have massive inflation. Especially with the US we import so much stuff, we rely so heavily on imports.
- [49:30]
B
Yeah, but this is a confidence game. So I'm just curious what you think would shake the global market's belief in the dollar. Is this something like brics where hey, they're like, let's let me just run a pretend scenario. You tell me if I'm on the right path here. China announces, hey, we faked you guys out with not buying gold for a month, but now we're actually buying at three or four times the rate. We're going to be announcing a new brics currency that's pegged to gold. And Russia and a bunch of other countries are like 100% of our purchasing of petrol is going to be in this new petrol bricks, dollar, whatever. And people like, oh God, it's all happening and now the value of the dollar goes down. Is it going to be something like that?
- [50:15]
C
Well, you know they always say it's never a problem until it's a problem. Right, of course, then it's a crisis. But if you look at anybody that's had a sovereign debt problem or currency problem, it comes on very suddenly. Look, I'm here in Puerto Rico and for years and years Puerto Rico was borrowing a lot of money. And it was obvious that they were borrowing more money than they could repay. But the bond market didn't care. The lenders kept loaning Puerto Rico more money. And so Puerto Rico kept spending it and borrowing more. And then all of a sudden the market started to worry about the ability of Puerto Rico to repay its debt. And so people didn't want to loan more money to Puerto Rico. And the people who already loaned their money wanted it back. And then there was a crisis and Puerto Rico defaulted on the debt. Same thing happened in Greece. Greece had a big problem, but they were broke for a long time before anybody cared. I mean, it's like, you know, you can keep on borrowing money until you get that, that point. And there's going to come a point in time where the world doesn't want to loan any more money to a bankrupt nation that has no ability to repay its debts. The only way that we can pay our debts is by creating inflation, which doesn't count. I mean, people think, well, the US Government will never default, which, you know, they might again, that's better than inflation. But we have defaulted in the past. In 1971, we defaulted on our commitment to pay gold. We had made a promise to the world. We told the world, if you have 35 Federal Reserve notes whenever you want, you can get an ounce of gold. That was the deal we made with the world. Our Federal Reserve notes were like IOUs for gold, for real money. And in 1971, Nixon told the world, we're defaulting on that promise. If you own Federal Reserve notes, you can't get anything for them anymore. So that was a real default. So it's not like we haven't done that before. We've done it, but most people just assume that because we have a printing press, there's no point in the US Government ever defaulting. We'll just print money. Well, at some point the world is going to realize that, yes, America is going to print a whole bunch of money. And that means the bonds I have are going to lose a lot of value because the dollars that denominated are going to lose a lot of value. And so now everybody wants out of the dollar, all these dollars, all these Treasuries that are owned all around the world. And not just Treasuries, but corporate bonds. Any paper that's dollar denominated, people no longer want to own it. They want to get rid of it before it loses too much value. And now, of course, everybody's trying to dump dollar denominated debt at the same time. And so it collapses. And it happens very quickly, Right? That old saying, how did you go broke? Well, slowly at first, and then all at once. And so we have a crisis, we have a sovereign debt crisis, we have a currency crisis. It's something like, you know, the emperor has no clothes. I don't know when this moment is going to hit because it's already overdue. You would have thought that somebody would have come to this conclusion a while ago. Now. There are some people who have like I have, but there's not enough of me. I'm in such a small minority that the fact that I don't trust the US Government and I don't want to buy the bonds, that's not enough to break the market. But there's going to be a critical mass when enough people, it doesn't have to be the majority of people, but a large enough minority come to this conclusion and that's it, the game is over.
- [53:59]
B
Yeah, it's very interesting that people have not come to that conclusion yet. It feels like it's because there's so much momentum around the dollars just used everywhere, petrodollar, et cetera. So many nations own that debt. It's sort of like the whole idea that everybody talks their book, it behooves everybody that holds US dollar debt, US dollars to not see the music stop. And so this feels like something that we would be able to see coming. This is why I'm a little surprised that people aren't more concerned about de dollarization. It felt like what happened when we put sanctions on Russia, that, that was just like a starting gun to something very bad. Because if I'm a foreigner looking at that, I'm like, huh? If they don't like my policies or something that I'm doing, then they could just freeze billions of dollars of assets. I don't like the sound of that. And I'm going to unwind it. But that unwinding process is excruciatingly slow. It is happening, but it's very, very slow, which tells me that it isn't easy, which tells me that
- [55:13]
C
this could
- [55:13]
B
be naivete, and I'm certainly willing to entertain that. But it feels like they're going to be this confluence of things adding up. And as long as you don't just keep holding your breath as it gets weirder and weirder, that you really will have a long off ramp with which to exit. You were an early exit ramper. You took one of the first ones. It feels like more and more people are taking it, whether to bitcoin, if you're somebody like me, or gold. I also hold gold. But there are people that are losing faith in the government, that's for sure. And then finding other ways to get out.
- [55:51]
C
One thing I'd like, exit ramp that you're talking about. It's been a very, very long one. In fact, I think it's been so long that's part of the problem because there's a lot of complacency that's been built up over the years because people including me have been warning about these problems and the inevitable consequences for a long time. Yet to a lot of people, hey, the Dow's at an all time record high, everything is fine and so there's nothing to worry about. You know, when Ross Perot, you know, got as many votes as he did, he ran on a campaign about, you know, the debt is unsustainable and it was only a couple of trillion back then, but here it is now 35 trillion. And people think, well, you see, well what's the problem? Why can't it go to 100 trillion? It got to 35 trillion. And so people just have a false sense of complacency that it's gone on for this long. So it's going to go on forever and you know, it won't. Nothing that's unsustainable is going to go on forever. The fact that it's gone on as long as it has though, has gotten people to believe that. But it just means that, you know, we're that much closer to the collapse and when it happens it's going to be even worse because we're collapsing from a much higher level. Right? We have a much bigger bubble now. And so it's far more catastrophic when the air comes out than would have been the case had it happened 10 years ago, 20 years ago. And in fact, the more catastrophic it obviously is, the more pressure there is on the powers that be to delay it even more because it's like so bad. I mean, and we keep saying, well, it's our dollar, it's your problem. And to an extent it is everybody's problem. But the longer they stay with it, the bigger that problem gets. And we certainly accelerated it by weaponizing the dollar. I mean, as if people didn't have enough economic reasons to de dollarize Biden gave them a big political reason to do that by weaponizing it, by threatening sanctions and to kick you off a swift or to confiscate your treasuries. So pretty much we told the world, get rid of your dollars. Right? I mean, that's what you know, which is the dumbest thing that we could have done because that's the only reason that the whole thing isn't imploding, because the world has been dumb enough to, to stockpile our dollars and we just gave them another powerful incentive not to do that. So we know it's happening. The question is, when will the pace quicken? And I think as the dollar starts to fall, and it's just started now, again, the dollar index is off about 10% from its peak, which is set, you know, a little over a year ago, a year and a half ago. And again we're close to an all time record low. Against the Swiss franc. We only have to drop another maybe 7.5% to hit an all time record low. And that's going to be the first currency, I think, that the dollar hits a record low in, but it's not going to be the last. More currencies. But I think once the dollar index really starts to break down, maybe the breaking point is 80, maybe it's 70 somewhere around there. But once the dollar starts to fall faster and when inflation rears its head in a bigger way in the U.S. but the Fed doesn't do anything about it because we're in recession and the unemployment rate is up and the world kind of comes to this conclusion that we can't pay, inflation is never going away and the last man stuck with dollars is the loser. Right now, people, the central banks around the world are slowly divesting of dollars because there's no real urgency, right? The dollar's not crashing. And so they could slowly work their way out of the problem. But as the dollar starts to fall more, it creates a bigger sense of urgency that I better get out because the longer I sit here, the more I'm going to lose. And so that's going to accelerate the rush to get out of the dollar, which is why eventually it's just going to implode because now so many people want to get out and there's nobody to get in to take the other side of the trade.
- [60:14]
B
When that unholy hell begins to break loose in the U.S. what does that look like from a sector's perspective? What sectors are most vulnerable? Where are we going to start making investments? Like for instance, are we going to then start investing in manufacturing at home? What does that moment look like as we start to build our way back out of it?
- [60:37]
C
Well, remember, we have built this consumer focused economy based on the dollar's reserve status. Better than 70% of our GDP comes from Americans just spending money and they spend a lot of that money on imports. When the dollar crashes, those imports are just not coming in anymore. And so all of these stores are just going to have empty shelves. And so when there's empty shelves, they don't need their employees anymore. Right. So, I mean, this whole service sector economy is going to be the hardest hit by the dollar crash because the consumption is going to come to an end. And that's the lion's share of our phony economy. It's all based on services. And that's where you're going to see the biggest hit. Now, if you're manufacturing, right, if you're manufacturing stuff that you can export, you're going to benefit from that, you know. Yeah. Your costs, some of your costs will go up. Your labor costs are going to collapse. Right? Because the wages that you're paying your workers have crashed, because the dollars have crashed. Your raw material costs, you know, they could go up because they're, you know, you're globally, you know, when you're a business, you're competing globally for resources, raw materials, but labor is pretty much, you know, captive. Right? So if I'm a worker and I'm in, you know, Illinois and, you know, my choices for employers are there, I can't go to Japan. If they have higher wages, I can't just up and move to Japan. I just got to accept, you know, the kind of the best job that that's within my reach. So wages are going to come way down in America on a global scale. And so that will help a lot of job businesses become more productive. You know, factories that. And so maybe companies that now are producing goods and selling in America, they'll start shipping those goods abroad and selling them to foreigners and making them here. So that, that will help. So those industries will do better. That's why if I was going to be investing in the US I would want to invest in businesses that produce products or services that are in demand outside the United States that could be sold, exported. So that part of the economy is going to do better. Unfortunately, that's a smaller part of our economy. Right. So much of it is based on distribution of imports and even a lot of service sector jobs where they're not selling goods, where they're providing products. A lot of the stuff that they use in the provision of those services are imported. And of course, energy is just going to go way up because even the energy that we produce ourselves, if the dollar crashes, most of the energy that we produce, we're just going to export it to other countries because those people can pay more. Right. We don't just compete with one another. We compete with the whole world. And so right now we're at a competitive advantage with the world. We've got strong dollars and we outbid a lot of people for resources. A lot of resources we get because we could pay more because the dollar is worth more. Well, when the dollar collapses, all of a sudden we're going to get outbid for a lot of things that we used to be able to afford. So it's going to be very disruptive to go back to reality. But in the long run, of course, the sooner we do that, the better, because the longer it takes, the worse it's going to be. It's like we're in this giant hole and we just keep digging and digging and digging. Eventually we're going to have to be, you know, confronted and get out of this hole. So let's stop digging. Right? That's the first rule of holes, right. When you're in one, you stop digging. Well, that's what we have to do. As of now, we're continuing to dig this Grand Canyon of holes and we're making it even deeper.
- [64:24]
B
How do you evaluate the companies that you invest in? You talked about one, they're going to have to pay dividends. Two, ideally, if they're American, they're exporting something that's still going to be in demand post any sort of crash in the dollar. But what specifically are you looking for? Like if you were going to create a fund and you had to come up with a way to identify these types of companies, what are the three to five characteristics that they have beyond that, they pay a dividend?
- [64:53]
C
Yeah. Well, firstly, I don't do all this myself. I have a whole team of portfolio managers that work for me at Euro Pacific Asset Management. I have specific portfolio managers that manage each individual fund. Right. And so these guys are out there and they're doing that kind of research. But it is like a basic, value oriented, Warren Buffett kind of stock picking style. To really get familiar with the business, its balance sheet, its prospects for the future. Look at all these various qualifications that you could look at. And first we have computer models that screen all the universe of stocks, like for certain criterias that would evidence that we're getting a good price. You can relay the price of the stock to all sorts of metrics based on revenue or cash flow or earnings or book value and try to narrow your universe to a subset of stocks that meet some type of criteria that you think would indicate that there's potential value there. But then do A deeper dive into the businesses, into the industries. I mean I kind of have a bigger picture look at like what kind of sectors do I think will be the best to invest in? And so I kind of let my team, hey, I like this sector. Whether it's metals and mining, energy, you know, consumer, you know, non cyclical defensive stocks or pharmaceutical stocks, hey, I like this sector. Find the best stocks. You guys are experts in portfolio analysis or individual stocks, so find me stocks. And I think we have a great team of stock pickers of value oriented stocks. I mean people think, hey, the stock market is a great investment. It can be, it could be, it, but depends on what you pay. If you overpay, it could be a very bad investment. Now of course, people have been overpaying for stocks in the US for a long time and the prices keep going up anyway, so so far so good. But you know that that can come crashing down. I think it will come crashing down more so in real terms than nominal terms. Because if they create enough inflation, stock prices are never going to have a meaningful decline in dollars. Where you're going to have the meaningful decline is in dollars. And so that can really destroy the value of your portfolio. So I want to invest in companies that actually represent good investment value. Just like, you know, if you're in the real estate market, you know, you're not going to, you don't want to buy real estate if the rental income isn't there. You know, you want to try to find income producing real estate where you can buy the property and you get a good enough return on your investment in the rent. So I look at dividends on stocks now. Some companies, if they have a lot of earnings, they have the potential to increase their dividend in the future. So I'm not only concerned about today's dividend, but what about tomorrow's dividend? Because some companies may have to cut their dividends in the future if they don't have enough income. So you don't want to just have companies that are paying dividends, but companies that are retaining enough income and investing in a growing business so they can continue to pay those dividends in the future and in fact increase those dividends in the future.
- [68:07]
B
A very complicated game as you get deeper into it. But that all makes a lot of sense as the local gold bug. What is your thinking on the price of gold? We're at, I think you said 2520 roughly right now, 2,520. We going up from here? Are we going down? What's your prognostication Yeah.
- [68:31]
C
I think gold is still early in an incredible bull market. The first big bull market from gold was when it went from $35 in 1971 to 850 in 1980. I mean, think about the size of that increase in a relatively short period of time, especially when, if you look at where the price of gold was before that. When the country was established in 1789, when the Constitution was ratified, gold was $20 an ounce. It was still $20 an ounce when we formed the Federal Reserve in 1913. And it was still 20. Yeah.
- [69:15]
B
Wow.
- [69:15]
C
And it was still $20 an ounce when we got into the Great depression in the 1930s. But then Roosevelt, after he made it illegal for Americans to own gold, devalued the dollar. And it was $35 to buy an ounce of gold, and it was still $35 until Richard Nixon devalued the dollar in early 1970s. And so the official price of the dollar right now on the books is like $42 an ounce. But that's the official price, but the real price is 2500. So we had this big move from $35 to $850. Then the price of gold really came down for 20 years in 1980, 82,000, 2001. Gold was under 300. It was 270. Think in January 1st of 2021 of 2001. Then we went on a big move for 10 years. We went from 270 to 1900 into 2011. We pulled back to a low of 1000 and 50 in 2015. We finally broke through the 2011 high. Really this year. I mean, we got above it briefly during COVID Briefly, and then we came right back down. But really the high was close to 2000. We didn't really take that out until this year, 2024. And now the Fed is about to throw gasoline on the gold fire by cutting interest rates and then going back to qe. So I think that we're about to explode higher in the price of gold. 10,000, 20,000, maybe more. You can also relate the gold price to the Dow Jones. It's, you know, the Dow has been around for a long time. In 1929, the peak of the Dow was 20 ounces of gold. In 1932, the Dow was one ounce of gold. That's taking the Dow and dividing it by the price of gold. The price of gold got. The Dow got back up to $20, 20 ounces of gold in the mid-1960s and then got down to 1 ounce of gold again. In the early 1980s, it got up to about 42, 43 ounces of gold in 2000 at the peak of the bubble. Right now it's about 16, I think it's about 16 to 1. And so I think the Dow is going down close to one to one again, you know, just say two to one, you know, just to keep it safe. So if you were going to say the Dow is going to be worth 2 ounces of gold, the Dow is 40,000. So that if the Dow stays where it is, that means gold can go to 20,000 and the Dow just stays where it is. But it's a moving target. I mean, the Dow can fall to 20,000, then gold only has to go to 10,000. The Dow can go to 50, the Dow can go to 100,000, and then gold has to go to 50,000 to be 2 to 1. But you're going to see a huge rise in the price of gold relative, I think, to stocks. But it's going to be even worse relative to bonds, I mean, because bonds are going to get obliterated. Right? At least stocks will have some value. But I think gold is very underpriced and I think gold is going to be remonetized. I mean, gold hasn't really been the reserve, it's been the dollar. And as I said earlier, I think the dollar is going to lose its status as the reserve currency. Now, one of the reasons that a lot of people are very complacent and don't think that's going to happen is they don't think there's another currency that could take its place. They say, well, the euro, the yen, the pound, or the Chinese rmb. None of these currencies would make sense to be the reserve currency. And I agree none of those currencies should be the reserve currency either. But what everybody overlooks is the elephant in the room, which is gold. Gold can be the reserve asset just the way it was before it was the dollar. And again, the only reason that the world accepted the dollar as the reserve initially was because it was backed by gold and redeemable on demand in gold at a fixed quantity. So even when we were on the dollar standard, we were still de facto on a gold standard. We just trusted the US government to keep its word, which turned out to be a big mistake. So I think that when the world goes off the dollar standard, it doesn't go on the euro standard or the yen standard. That makes no sense. It's going to go back to the only standard that works and that's a gold standard. And to remonetize gold means a much higher price for gold. And so that's why I want to own my gold now before it's remonetized and everybody else owns it.
- [74:06]
B
Why, why would that be true? Why does remonetizing, what is remonetizing exactly? And why does it equal a higher price?
- [74:14]
C
Well, that means that governments back their currencies with gold. So instead of having big forex reserves of dollars or pounds or euros, they have big gold reserves and that's what's backing up your currency. And if you're, and if you want to even go one better, you tie your currency to a fixed weight of gold. And what that does is that's going to restore confidence in the money. Because right now money has no real value. It's just fiat, just paper. You can just print it and it derives its value from the fact that we all believe it has value. Now also, governments mandate its use and they require the payment of taxes in it. So that's also part of why we all believe it's going to have value. But at the end of the day, it's a belief system because there's no intrinsic value in the paper at all. There was when it was backed up by gold, but now it's backed up by nothing. And so when there's a general loss of confidence in fiat currencies, which could easily happen, how do you reinstill confidence? How do you get the public to have confidence in something where they've lost confidence? Back it by gold. I mean, the way some countries now, let's say it's a South American peso, some country, and the people lose confidence. What do they do they have, oh, we're going to back it by dollars, we're going to have a peg, we're going to peg the currency to the dollar to try to instill some confidence that we're just not going to print because we're going to peg it to the dollar. Well, you know, when big, when the euro or the yen or all these currencies, when people don't confidence them, they're not going to peg it to anything. They're not going to peg it to the dollar, so they have to peg it to gold. But that could stop the presses and reinstill the confidence. Because even if the governments try to stop the presses, the velocity of money could pick up dramatically. If nobody has confidence in it, it becomes like a hot potato. Right? The minute you get your money, you want to spend it, you don't want to hold onto it for any length of time, even for a day, because you're so afraid of how much value it's going to lose during that day. And so then everybody wants to get rid of the money. That's really what happens with the hyperinflation. And how do you, how do you, how do you change that dynamic? Well, introduce gold and say, okay, now the currency is gold and we have real money backing it up. And then that could create some confidence when the confidence is gone.
- [76:39]
B
Peter, as always, this is incredibly enlightening. Where can people follow along with you?
- [76:45]
C
Well, I'm pretty easy to find. You know, I'm on the Internet. I do a lot on social media, particularly on X. That's my, the platform where I tend to post a lot of my thoughts, you know, in real time as I have them. I've done now a couple of the spaces. A lot of people have tuned into those. So you know, my Twitter handle is, you know, er, Schiff. You'll see me there. I've got just over a million followers now and so you can join that group and follow me there. But I'm also on Instagram and Facebook and my YouTube channel is still growing more slowly. I have about 500, I think 80,000 people who subscribe to the YouTube channel. It's a good place to watch my podcasts. I do one or two of them usually per week. And so you can, you know, they're live now, so I do the podcast live so you can watch live as I do it or you could just tune in on any time on the YouTube channel and just watch it, you know, after the fact. You can also listen to it on Schifferadio.com it's, you know, or the podcast, the Peter Schiff Sub podcast. Anywhere that they have podcasts, you can download it. A lot of people are listening to it, but I think it's a great, a great place to hear my, my thoughts as far as. If you want to do business with. Oh, I also have a new newsletter now we have a free newsletter that comes out@shiftsovereign.com you can go to that website. My last name, sovereign.com. it's almost a daily letter. It's free. A lot of good information. We have a premium letter that's, you know, I think it's eight, nine bucks a month, something like that. Shift Sovereign Premium. So you, you take a look at that. You get, you know, there's a free trial. So if you don't like it, you can cancel, no questions asked. As far as becoming a client of mine, I mentioned shift gold. You know, I recommend highly that people, if you don't own any gold or silver, that you buy some. It's not an investment, it's a form of savings. It's an alternative to saving dollars or euros or yen or any other fiat currencies. You want it, you want to keep your dry powder in gold and silver. If you keep it in a fiat currency, it'll be all wet. It won't, it won't buy you very much. So everybody should have some gold and silver. You should have some physical gold and silver that you have control and possession of. And that's what we sell. And you don't need to buy rare coins, numismatic coins. If you want to be a coin collector, you can do that. But if you're just looking to have gold as a store value, as an inflation hedge, then you just want bullion. You want bullion bars and coins and we'll help you get the right ones there. If you have a bigger portfolio and you want to have investments, if you want to generate returns, if you want to get income on your investments, which you don't get from physical gold, then you want to contact my representatives at Euro Pacific Asset Management so we can go over your portfolio and you know, we're a registered investment advisor and we could take your current portfolio, whether it's in a taxable account, an IRA type account, and get it into the type of investments that I believe will endure and thrive during the inflationary times that lie ahead. I think most people are completely ill prepared. You know, they're in the indexes in the US they may be their 6040 portfolio, they've got a lot of overpriced US tech stocks. They got a bunch of money in US dollar dominated bonds. I think these portfolios are going to get destroyed the way they did in the 1970s. You know, people that followed the investment prescription of the 1960s that worked great in the 50s and 60s. It was the Nifty 50, it was the Xerox and the Polaroids and all these stocks, they got decimated in the 1970s. But if you had a portfolio of resource stocks, gold and silver, oil, if you invested in Japan in emerging markets in the late 60s, you killed it during the 1970s. So I think this is going to be the 1970s on steroids. And another thing that happened too as a result of the 1970s, that's why so many women ended up working in the 1980s and the 1990s. They didn't work. In the 50s and 60s, married women because their husbands could afford to support them, but they lost so much money due to the inflation of the 1970s that now one paycheck couldn't support a family. So now you had all these women that had to join the labor force to earn the money that their husbands lost. They lost it to inflation, they lost it to taxes, and that's been part of the degradation in our standard of living. You know, a lot of people, when they think, oh, we haven't suffered a crisis, we have because we've destroyed a family. We have two people that have to work and now they don't even have one job. Now we have two people working four or five jobs and they can't even make ends meet. Not only do you have the husband and wife both working and both working second and third jobs, but they have no savings and they have massive credit card debt. You didn't have that. People didn't have credit card debt in the 1950s and 1960s. They had savings. So people are not, you know, are overlooking the financial collapse that has happened and we're just living off of extra labor and extra debt. But this whole thing is, is, is going to implode. But you definitely want to do what you can. I can't stop this from happening. It's pretty much inevitable. I could just brace for the impact of the collapse and I can protect to the best of my ability the value of my assets, right, my savings. I could get them out of harm's way. I can get them into quality stocks around the world, get good dividends. So that's what you should do. And so you contact me there at Euro Pacific asset management@europact.com is the website. There's a phone number there. You can, you know, just call us up or send us an email or something and somebody will get back to you and start, you know, going over the way that we can help improve your portfolio and get it into the types of assets that did very well in the 1970s and that I think will be even do even better in the decade ahead.
- [83:00]
B
I love it, brother. Thank you as always for your time. I really appreciate it. Everybody out there, if you haven't already, be sure to subscribe. And until next time, my friends, be legendary. Take care. Peace.