The Coming Economic Collapse | Confronting Peter Schiff in Person.

welcome back to another episode of the

meet Kevin show today we have the honor

of coming to you from inside Peter

schiff's home in Dorado Puerto Rico

Peter thank you so much for inviting me

into your home oh Kevin it's great to

finally meet you in person yes away from

the zoom screen so Peter everybody wants

to know your take you've regularly said

and you've warned about this that once

the inflation Genie is out of the bottle

it's not going back in where are we now

that it seems like inflation has

somewhat peaked and at least we're

trending down even though it may take

longer it seems like we're not going to

the 70s again what say you no I think

we're just starting a decade that is

actually going to be worse than the 70s

from the standpoint of how bad inflation

is and in fact last year if you measured

prices the way they measured them in the

1970s the inflation that we experienced

in prices in 2022 was actually worse

than any year of the 1970s in fact it

was worse than 1980 or 81. so we're

already off to a really bad start but

you have to understand that the

inflation of the 1970s

those seeds were planted mainly in the

1960s with the price caps not the price

caps that was kind of the first attempt

to kind of attack the symptoms of

inflation because remember

inflation is a very misunderstood work

and people think it means rise in prices

it doesn't right the if you get an old

dictionary an old web search dictionary

it doesn't even have to be that old in

the 1970s even 1980s and you look up the

word inflation and it says to expand the

you know expansion of the money supply

expansion is five money in credit

a result of inflation is that prices go

up

but the government

and certain maybe Keynesian politicians

that support government

they wanted to fool the public

so that they really wouldn't understand

where inflation came from so they kind

of redefined it as rising prices because

the government

doesn't raise prices right private

businesses raise prices like you look at

Elizabeth Warren today when she was

tested you know a questioning uh palp

she was you know trying to imply that

prices were Rising because businesses

were gouging their customers right

inflation is not caused by businesses

this is caused by government government

expands the money supply the Federal

Reserve does that in response to deficit

spending from Congress and so it's

government that is the source of all

inflation but by mislabeling it as

rising prices they can deflect the blame

but getting back to why we had the big

increase in prices in the

1970s in the 1960s that's when we had

the Lyndon Johnson

uh real big increase in government

spending both on welfare and warfare we

had the actual war in Vietnam right we

also had you know the Space Race so

we're spending a lot of money on NASA

spending a lot more money on Vietnam

then we get these Great Society programs

and the beginning of Medicare Medicaid

and all this and they call the guns and

butter at the time right we're spending

and then we they started running big

deficits

and where'd the money come from the

finances deficits Fetters are printed it

now because they printed so much money

back in the 60s we were on a gold

standard and because they printed so

much money our creditors realized that

we couldn't make good on our obligations

to play Gold pay gold because all

dollars were ious for gold so in 1971

because there was a gold drain because

our creditors were taking their Federal

Reserve notes and asking for their gold

the official rate was you know 35

dollars got you an ounce of gold but

after a couple of devaluations Nixon

went off the gold standard and then

prices really just spiraled out of

control because there was no restraint

at all on the printing press through the

70s so the money they printed in the 60s

they kept printing more in the 70s and

we didn't really step on the brakes

until volcker came around in the early

80s

but it started in the 60s it showed up

in the 70s now the inflation that we

experienced in 2021 and then worse in

2022 it really had its roots in the

prior decade wow it really started in

Earnest in 2009 following the 2008

financial crisis that's when the FED

lowered rates to zero and launched

quantitative easing for the first time

yeah February of 09 yeah right and and

so basically from February of 09

until like March of last year right yeah

interest rates were basically at zero

maybe it spent a year or two where we

got up to half a percent one percent two

percent you know but it quickly came

back down and you know the balance sheet

went from under a trillion

to what nine trillion wherever it went

to yeah after coveted yeah exactly right

and we just flooded the economy with

inflation right and in fact

the FED wasn't

uh you know they said it was honest

about what it was doing in a way because

all the FED chairman said that we didn't

have enough inflation that we were below

Target right that they the target was

two percent and we were one and a half

oh my God this is terrible we don't have

enough inflation so it was a specific

policy goal of the FED to create

inflation because they said we didn't

have enough of it now part of the reason

was because they lied about it because

the CPI isn't honest you generally have

to double prices

so if the CPI says one and a half it's

three but that means one and also if it

says eight it's sixteen right so we've

got massive inflation if you honestly

make it measure the effect is that

because of the weightings that you were

it's well I don't even know how they

calculated anymore but there's all kinds

of substitution the basket doesn't

remain the same of course there is

hedonics where they you know they claim

that quality is going up right like the

iPhone now might be a thousand dollars

price went up but the utility might yeah

but I mean you know but it's not any

real better for the consumer but there's

so many other products

where quality just goes down I think

about you know air air transportation

you don't have to worry about that

anymore now you're flying around your

private jet but those of us who are

still flying commercial you know little

people

um you know you you know you have to pay

extra you want a blanket you want a

pillow you want to check your baggage

right but they don't put this into

the CPI

you're looking at a ticket fare but now

they're charging you for everything they

didn't bring right and of course you

don't have you know now you have two

connections instead of non-stop you know

you know there's all kinds of delays I

mean so the quality has gone down as

somebody who's

flown I can you know test the fact that

the the quality is much lower than it

was but you know they don't they don't

adjust for that now do you think that is

because of covid and the pilot and plane

shortage no just an example of CPA this

is an example of the CPI not capturing

the degradation and quality yeah you

know I mean and a lot of companies cut

back on you know food companies they'll

give you lower quality ingredients in

the food you know less fresh stuff more

processed you know and it goes not pet

food too you know you they put you know

crappier ingredients there so there's

all kinds of ways that they reduce the

quality instead of increasing the price

or maybe they do a combination of both

but the CPI

doesn't get that I mean I know I did a a

an exercise back in 2013. just I mean

you could see the YouTube video up there

and this was in 2013. and I looked at

the prices of newspapers and magazines

because there's a part of the CPI that

says newspapers and magazines

subscriptions yeah right and according

to the CPI

newspaper magazine prices over the prior

10-year period were up by 30 percent so

I just said well let me check not that

hard to do let me go on the internet go

back to 2003 and look at the New York

Times The Wall Street Journal time

Newsweek you know uh I took like maybe

10 to 20 of the major uncirculated yeah

and I just looked at the prices that

were written on the covers in 2003 and I

looked at the prices on the exact same

magazines on the covers in 2013 and I

compare and the actual increase was 130

not 30 so the question is where did that

other increase go marketing but I mean

it went into the CPI but it didn't come

out right so I don't know the

methodology but I do know that the

Boston commission back in the I think

late 80s they convinced everybody or the

government convinced everybody that the

CPI was overstating inflation so we

needed to fix it so they got it right

well they actually did fix it you know

the fix is now in and now it's

understating inflation I see yeah but

the problem is now inflation is is is so

high that they can't pretend it's under

two percent but the point I was making

is the Fed had a policy goal we want

more inflation well they deliver we got

more inflation a lot more inflation so

they were right well but we didn't is

saying the Fed was right we didn't need

more inflation we needed it like a hole

in the head I mean we needed less

inflation but they were hiding behind a

rigged CPI to claim that we needed two

percent and you know where is this two

percent Powell says that you know uh we

need price stability right and that's

defined as prices going up every year by

two percent right now how is that stable

this is how like that sounds like

escalating prices it's supposed to rate

of change is stable but yeah but but but

prices themselves aren't stable stable

prices would be they're the same that's

stability yeah right but they just

concocted the idea that it was two

percent but

the whole super thin uh number came out

of New Zealand that's where it started

but it started as a ceiling it was not a

Target like we need two percent

inflation like if you don't if you only

have one that's a problem you need to it

was as long as you were below two you

didn't have to worry the minute it got

to two you had to do something about it

so it's almost like your cholesterol

should be under this level but if you're

below it you shouldn't be trying it

exactly exactly but they said we needed

to Target two percent which I always

thought was such a ridiculous

um or the amount of hubris that you

would have to have as a central Banker

to think that if inflation is 1.8 you

could just dial it up a little bit and

hit two percent like right on the money

or if it was 2.1 you just dial it right

back down I mean if if your inflation is

one and a half

that's close enough to two why would you

even like it was even worse with the ECB

because the ECB remember these Mario

draghi comments they said that their

goal wasn't two percent their goal was

to be close to but below two percent so

they were targeted like 1.99 right and

they were saying oh one year I was

talking about my podcast I think it was

2018 or 19. inflation in the Eurozone

was like 1.74 yet they still had

interest rates at negative 40 basis

points they were doing QE because they

weren't close enough to being just under

two percent right and they were 25 basis

points away now they're at nine percent

yeah now they're so far above right but

what are they panicking no I mean they

still got interest rates of Two and a

Half they're not even shrinking their

balance sheet and you know they're

there's 700 basis points above their

target yet they were freaking out when

they were 25 basis points below but the

whole idea that you need inflation is

absurd what if we're deflation great I

mean no it you know you're looking at

falling prices but if you go and look at

the CPI in 1900 yeah and look at the CPI

in 1800 prices were cut in half over 100

years so we had falling prices for 100

years through Innovation yes that's

what's good you know and everything I

mean look you got a cell phone here you

remember how much the first cell phone

cost the first phone I am was like a

T-Mobile razor or something

like like I remember you remember I

don't know if you ever saw Wall Street

no yeah yeah yeah he's got this golden

Deco right yeah and that and that thing

back then in the in the mid 80s that was

like a two or three thousand dollar

phone oh my gosh you could have bought I

bought my first car in 19 uh 80. it was

an MGB I paid 3 700 so a cell phone was

about a car right how many people had

them right

why do ever why does everybody have cell

phones now and prices come down yes

that's a good thing because they they

try to tell us that well if prices come

down no one's going to buy anything no

that's how you get more people to buy it

sure more people have TVs more people

have cars like comparing today to the

50s the standard of living would you

argue has gone up no I don't know it's

gone down but the price of TVs have gone

down so it's true okay people have a lot

more TVs today right so if you grow up

in a house you got a TV in every room

but your mom's not there because she's

working two jobs and you never you know

because back in the 1950s if you had a

guy went to high school yeah he could

support his wife four kids

buy a car save for retirement no credit

cards I mean you know you people had I

think a higher quality of life before

government got so big but the free

market the whole time the government has

been undermining our standard of living

the free market has been doing what it

can to improve it and so the technology

has gotten better and so yeah we have we

have uh more computers we have more

cameras of course they're all made in

Japan or China now we used to make all

the cameras ourselves you know we still

have an industry before the government

destroyed that

um but the idea that we need prices to

go up is just completely absurd you know

that we when prices go down people's

standard of living goes up everybody

wants to buy more stuff and the way you

buy more stuff is the price of the stuff

goes down to anybody like if you said to

somebody what do you want do you want uh

um food prices to go up or down right do

you want your rent to go up or down sure

right do you want uh you know Health

Care to be more expensive or less

expensive right everybody wants price to

go down and then they might then they'll

try to say well but if you're uh a

businessman you want higher prices sure

no you don't you want higher margins

right you want lower prices and lower

costs because every businessman knows I

can sell more if I can lower my price

every businessman is trying to lower

their price so they can have greater

volume so the key for a business is the

difference between what it costs me to

produce something and what I can sell it

for so businesses weren't hurt by

Falling prices think about all the money

that these cell phone companies are

making selling false cell phones now at

lower price points than when they were

so expensive you know you had to be you

know Gordon gecko to afford to buy one

right right what would you say to uh the

economic theory that if prices don't go

up then individuals might not be

incentivized to ever buy they would just

wait to buy and that potentially then

lowering GDP and therefore maybe the two

percent Target encouraging no well I

mean if that were true nobody would own

a phone they'd be waiting for the price

to fall indefinitely but we have always

been above uh a zero in terms of

inflating prices no but no but I'm

talking about prices for phones

themselves sure computers right they go

down I see over the time okay that your

question yeah so there's something

called the time value of money sure so

let's say there's a phone and it costs a

thousand dollars and I know that if I

just wait a year I could buy that same

phone used for like eight hundred

dollars sure

why wait a year

full health maybe not you might want the

utility now yes exactly now if I can't

afford the thousand dollars I will wait

but if I have the money I'm not gonna

wait a whole year to you know and

obviously that doesn't that's not the

case with food I mean if you think the

price of food is going to go down you're

not going to starve yourself waiting for

a cheaper Burger sure you're just you're

hungry you're gonna buy the food and

what it costs you is what it costs you

but people don't do that the only people

who wait for prices to fall are people

who can't afford like I remember when I

saw in a store and I remember which was

you know one of the stores like maybe

circus City or something I don't know if

they're in business anymore nope but I I

went to the store

and I was probably in my 20s

and I saw my first high-def television

set

and I remember it was like amazing I was

like this is incredible it's like

looking out the window compared to the

stuff I was used to sure now I really

wanted to buy one

but I couldn't afford it it was like ten

thousand dollars right and that was like

back then when ten thousand dollars was

a lot of money now of course I have high

def televisions in pretty much every

room I got one in the bathroom right so

does everybody else and then your

pressure chamber yes I do right I've got

one in my hyperbaric chamber but why why

do I have them now well they're cheap

yes no actually I have more money so I

actually could afford to buy one if it

was ten thousand dollars right but

a lot of people

who are in their 20s who are at the same

point in life that I was are buying

these televisions that I didn't buy I I

it wasn't that I didn't want it I just

couldn't afford it and if I couldn't

afford it at ten thousand dollars if it

went up to eleven thousand or twelve

thousand it would have been even less

affordable right so the fact that prices

came down that's what helped me from 10

to say nine eight it wouldn't have made

a difference as prices come down more

and more people enter the market yeah

yeah of course until you reach a point

where they're low enough you know for

Mass distribution so you would

definitely argue the theory that uh some

inflation is good to be stimulative and

help reward people who take on debt for

their businesses and and try to advance

the businesses sooner you're super anti

that's all Bs and of course you know

inflation does reward debtors oh yeah

but only if the inflation is higher than

what was assumed when the loan was

originated phenomenal because there's

going to be

hey you're going to pay a higher rate of

interest to borrow money again when the

the law the lender knows there's

inflation because it's going to be built

into the yield right what benefits the

debtor is let's say you and I enter into

a loan let's say I I loan you ten

thousand dollars sure and we expect two

percent inflation right and so I charge

you four percent so I can make two

percent after inflation

let's say inflation ends up being 10 I

was wrong we were both wrong yeah well

you know I'm screwed and you've got a

windfall I win because you're uh you're

not paying me enough interest to offset

my loss of purchasing power right so

inflation can reward the debtor but it

also punishes the lender

and you know the the real key to

economic growth and Rising living

standards is productivity you have to

have more productivity well where does

that come from it comes from capital

investment well where do companies get

the money to invest it comes from

savings it comes from under consumption

so to have a really strong economy where

you have Rising living standards you

need to have a lot of savings well

you're not going to have a lot of

savings if you're punishing the Savers

with inflation

you know or artificially low interest

rates like we have I mean we don't have

real economic growth in this country

because we we punish Savers and so we're

dependent on the rest of the world where

they do save right that's why all this

we have these huge trade deficits

because we don't have the industrial

capacity because we didn't have the

savings to do the capital Investments uh

to build the stuff ourselves now we we

happen to issue the world's Reserve

currency for now and so the rest of the

world is dumb enough to exchange all the

stuff they make for the paper we print

is your thesis then that at some point

in the future the dollar will no longer

be the reserve currency or I mean

historically every currency to have ever

existed has has gone to zero has gone

bankrupt and can put do you expect that

to happen for the dollar as well yeah

well there hasn't been a fiat currency

in the history of the world that hasn't

gone to zero now

the Fiat currencies that exist today

haven't got the zero yet right but

they're also newer right yeah but the

ones that are around 200 years ago 300

years ago they're they're pretty much

all gone but real money is you know

Eternal I mean gold I mean if you find a

gold coin that was you know lost by some

Roman Centurion who dropped it somewhere

and you find that

you know gold coin you could buy pretty

much what what you know you could buy

back then right I think Roman toga was

about an ounce of gold a really nice one

wow and now you can get a pretty nice

suit for an ounce of gold but if you

find some paper money I don't think they

had any back then but if you find some

paper money from some bankrupt Nation

from a few hundred years ago it's worth

nothing I mean maybe if it's in pristine

condition maybe it's like a collectible

or something but it doesn't have any

real well your expectation is we might

go into that sort of Direction well I am

sure

that far enough into the future what we

currently use as a substitute for money

Federal Reserve those will have zero

value to anybody

the question is how long is that process

going to take right two years ten years

100 years well I'm sure they'll have

value in two years ten years 100 years

tough to say okay but how much value I

mean if you look at what value the paper

currency has today versus 100 years ago

sure it's lost 99 of its value so

something that costs you a penny 100

years ago you need a dollar to buy it

you know something that costs you a

dollar you need a hundred dollars that's

basically but in terms of gold or silver

the prices are relatively constant but

what's more I think important is not

whether the dollar is going to have any

value

but how much of its value will it lose

and how quickly and a lot of that is a

function of how much longer the dollar

will stay as the primary Reserve

currency

that's a 64 trillion dollar question I

mean do you think that aligns with how

long the United States might be the

largest economy in the world

well I I think China is probably I'm not

sure what to I mean maybe by GDP we're

still bigger right right

um than China

but you know on a purchasing power

parity basis probably not I mean you

know but yeah I I do think by the end of

this decade yeah China will be a larger

economy the United States in total

um and that aligns with your 10 years

yeah I mean and it may well be that

before the end of this decade the dollar

is no long Reserve currency I mean you

can see

a lot of Nations including China you

know Russia India uh even cut even in

the Middle East now uh moving away from

the dollar trying to reorient their

their trade in other currencies

um and I think what we've done recently

with the sanctions on Russia only

highlights to the world how important it

is to de-dollarize I mean they should

have done it anyway because they mean

it's distorting the whole global economy

where everybody is warehousing dollars

and the longer the dollar Remains The

Reserve currency the bigger our

imbalance has become we have record

trade deficits we have you know we're

the world's biggest detonation a huge

card account deficits all this is being

fueled by the dollars Reserve currency

status and so the longer it Remains The

Reserve currency the bigger our external

liabilities become

and the more money the rest of the world

is going to lose when we default sure

right because right now we're all

talking about oh we can't default on the

debt

right well we can't pay the debt either

that's one thing right so we will

eventually default the question is how

we're more likely to default through

inflation than legitimately you know not

paying because that is what's going to

happen what would that look like because

we expect obviously the debt ceiling to

be raised we can't say it with certainty

but we expect that of course it will be

raised so what you know what do you mean

then yeah how do we default but the the

problem is the debt the ceiling in

theory would be part of the solution the

problem is they raised the ceiling

whenever we get there so there really

isn't a ceiling but

when they say we have to raise the debt

ceiling because we have to pay our bills

right that's not why we want to raise

the debt ceiling if we paid our bills we

wouldn't have any debt the reason they

want to raise the debt ceiling is so we

can continue not paying our bills right

we go into debt instead of paying our

bills right so if we didn't raise the

debt ceiling we'd be forced to pay our

bills the problem is we can't right so

that's why we have to go deeper into

debt but just raising the debt ceiling

doesn't mean that we're not going to

have to deal with these consequences it

just means we can kick the can down the

road right while the problem gets worse

because eventually we're going to hit a

lending ceiling and that we can't raise

that's like the lenders are like no Moss

we're not lending you any more money

because we're not throwing any more good

money after bad because you know

you can't even pass back but what you're

saying is people would then stop buying

treasury bonds yeah and in fact we've

admitted it I mean you know you listen

to the the Senators and the congressmen

today talking to Powell if we don't

raise the debt ceiling we're going to

default right now

what if

what is what are we telling our

creditors we're telling our creditors

will only repay or only pay you back if

we can find some other sucker that'll

lend us the money sure but the minute we

can't borrow money from

somebody else we're not going to pay you

so that's an admission that it's a giant

Ponzi scheme right there is the US has

no ability to pay its debts all it can

do is find new lenders to lend it the

money to pay off the old lenders but now

who's gonna how are they gonna repay the

new lenders well they got to find

another group of suckers who will lend

the money knowing that the only way

they're going to get it back is if

there's an even another grade of Greater

fools well willing to lend so this is

you know it can't go on Ponzi schemes

are illegal because they don't work is

it just because the government runs it

doesn't mean it's going to work is it

possible our economy grows such that the

debt that we have outstanding today is

nominal relative to economic product no

that's not possible because the debt is

growing much faster than GDP

um the only way they're going to reduce

the debt is through massive inflation so

we owe 30 trillion

or 30 what almost 32 trillion let's say

and by the end of the decade we'll own

more than oh more than 50 trillion okay

well I mean if we had hyperinflation

yeah and a cup of coffee was a trillion

dollars well that's no big deal it's

like 50 cups of coffee and we're good

yeah you know so obviously you know if

we don't have hyperplates but even if

let's say prices go up 10 times let's

say the government creates enough

inflation that the dollar loses 90 of

its value

between now and the end of the decade

and so everything costs 10 times you

think inflation is bad now everything is

10 times as expensive well now that 50

trillion dollar debt is like five

trillion in real in real terms so that's

how they get out of debt you know if you

look at you know what we mentioned

earlier

inflation benefits debtors and punishes

creditors who is the biggest debtor in

the world one thing that States

government yes and the United that's why

the United States government is creating

all this inflation but it doesn't want

to accept responsibility for the

inflation because obviously the voters

don't like it so they try to point

fingers at Putin or somebody else but

the government benefits from inflation

by wiping out its debt but also

the government benefits from inflation

in that politicians get to

um bribe the voters with government

programs like stimulus yes without

asking the same voters to pick up the

tab right see

when

they raise taxes

people don't like that I mean they like

it if you raise taxes on the rich the

rich is defined as anybody who has more

money than you so as long as they raise

money on people that are are richer than

you you're fine but nobody wants their

own taxes raised

but everybody wants to check from the

government some form right well how does

the government pull off that sleight of

hand how do they give the public

something without taking something away

because the government doesn't have any

money it only has what it takes in in

taxes and then redistribute so what they

do is they run deficits they just hand

out a bunch of money and they don't ask

anybody to pay taxes where do they get

the money the FED creates it so it's

inflation

inflation is a tax

so instead of sending your money to the

government you send your purchasing

power the government takes your purchase

power because they don't need to take

your money they have a pretty press so

they just print money and they give it

to somebody and now that person goes and

buys some stuff but he didn't earn the

money so he didn't produce anything he

just has money and now he spends it and

now prices go up and now you pay higher

prices instead of higher taxes I mean

that's why during covet it was so bad

that think about the how stupid this was

and I and I I pointed it out on my

podcast in real time

in early 2000s

the US government said nobody go to work

everybody stay home right don't go to

work stay at home

but we don't want you to stop spending

keep on spending money oh you don't have

a paycheck anymore we'll send you some

unemployment benefits right it's 600

bucks a week we're going to give you

double or triple what you used to earn

yeah so we told people not to produce

but to buy more buy what they weren't

making anything so that was an

inflationary Time Bomb because we were

expanding the money supply to buy prices

but we were Contracting the supply of

goods to buy so we had more money and

fewer goods and prices go through what

should have happened if the government

really wanted us to stay home they

should have said nobody buy anything

just stay home and stop spending because

they're not working but that would have

made it meant to deeper recession so

they wanted everybody to keep on

spending you know I mean it shows you

how little understanding they have and

even the Federal Reserve uh Powell went

to Congress and said you guys need to

spend more money don't worry I'll print

it we need more stimulus yeah and I got

you covered yeah I mean so he was

encouraging the government to create

more inflation and to be the worst

possible combination of monetary fiscal

policy and we're we've barely begun to

suffer the consequences of that I want

to hear about this but why I mean do you

are you suggesting the reason

potentially we don't use the expansion

of the money supply in the definition of

inflation today or in the measures of

inflation today is because that would be

too obvious then that you know of course

well who expands the money supply yeah

it's only the government right greedy

businesses can't expand the money supply

Putin can't expand our money supply yeah

right so they want to Define it as

prices but of course when you attack

prices you're never going to get rid of

inflation that's why price controls wage

and price controls that we had in the

studies they didn't work wow you know

because it's like you know if you have a

fever if you break the thermometer

that's not gonna bring it down right you

got to get to the cause not you know how

you measure

the symptoms so the way we have to fight

inflation is by shrinking the money

supply

but we really have to cut spending yeah

I mean with austerity like EU yeah when

when Powell is Raising interest rates I

think that's going to fight inflation

see it's not because first of all

interest rates are a cost

and just like labor or raw material so

everybody is dealing with higher

interest rates and that's all passed

into prices consumer prices

what higher interest rates have to do in

order to bring down inflation is to

discourage spending and encourage

savings so if consumers spend less

then there's less demand and if they

save more there's more Supply because

now there's more

money to to loan out for you know

capital investment but that's not what's

happening interest rates have increased

but they're still below the rate of

inflation we still have negative real

interest rates so we're still

incentivizing Consumer Debt and in fact

if you look at the consumer credit card

debt is at a record high savings rates

at a record low has anybody altered

their consumption and savings Behavior

based on the increase in interest rates

No No in fact to the extent that people

can't afford to buy something because

the price went up they don't cut back so

much they just borrow the money and buy

it anyway they keep on paying the higher

prices

and government is continuing to run

these deficits we're not going to bring

down inflation until we bring down the

deficits we have to reduce government

spending consumption has to go down all

government spending is consumption

so we're running what the Cajuns would

call an expansionary fiscal policy right

now we're running huge deficits that is

inflationary even by the Keynesian you

know definition so even if you're saying

we have the FED that is trying to fight

inflation you have the government that

is lighting more fires so you know the

FED is not making any progress so would

you say you're going to make progress

just by raising rates at the rate

they're doing it so at the same time as

the FED is raising rates the federal

government is also handing out

essentially stimulus checks to chip

companies and manufacturers to produce

the factories out here battery

manufacturers I mean we're almost in a

stimulus war between Europe China and

the United States for batteries and EV

would you say then that's stimulative

while the FED is decided Well it's not

stimulative in the sense that it helps

you know it but it stimulates inflation

if you want sure looking at what it

stimulates yeah but also you know a lot

of these politicians

claim that well you know the inflation

isn't Biden's fault or the government's

fault because they have inflation in

Europe it's also you're going to blame

the inflation in the Eurozone on Biden

no I blame it on the European

politicians who made the same mistakes

right and more so the European Central

Bank I mean we have inflation all over

the world because all these central

banks made the same mistake they all

created a bunch of inflation they all

had zero percent interest rates or

negative interest rates they were all

doing quantitative easing it's not an

accident that now they're experiencing

uh the consequences that the only thing

that kind of makes it difficult is that

there was a big lag was that lag so

large it took until covet for us to see

that until after covet right yeah well

but we're I I don't even think we're

seeing all the inflation that we created

in covet I think we're finally catching

up to the stuff from 2009 2010 I think I

think there's a lot of inflation in the

pipeline wow and we're just at the cusp

of it that's why you think it's actually

going to be worse today than this 70s

because what you're saying is the

inflation we're seeing today is from 09

yeah inflation hasn't even hit yet and

and

um we can't do anything about it because

if you look at what it took

so inflation was when volcker came in

1980 81 as she came in

inflation was 11 12 10 11 up there right

and so interest rates went up short-term

rates went up above 20 percent yeah

and inflation didn't even get back down

to two percent for the first time until

1986. that was six years later and the

fed's funds rate in 1986 hit a high of

16 percent six years later you're still

at 16 just to get inflation to two

percent and you know how many years it

took to get another year where inflation

was two percent or lower well 20 total

12 and 12. right so Powell thinks he's

going to get inflation back to two

percent and keep it there he doesn't

have a prayer of doing it if it took 20

interest rates to do it back then we

have worse inflation now but we have so

much more debt what would what would the

interest rate be on the national debt

even at 10 we have a 35 or 32 trillion

dollar national debt if we had to pay 10

on that that's three trillion dollars a

year that's more than National Defense

uh Social Security and Medicare probably

combined I don't know I mean you're

close I mean it would be it would be

like two-thirds of the government's tax

revenue

yeah even even when they refinance the

whole thing at five percent

you know you're you're we're going to be

spending in a couple years it's going to

be two trillion a year in interest maybe

half the tax revenue and we're already

at a one trillion we're not quite a

trillion years by the end of this year

early next year it'll be a trillion

dollars a year just in interest on the

national debt that means over 10 years

that's 10 trillion in interest payments

but of course it will be more than that

because rates are going to keep going up

and the debt keeps going up so it's it

compounds so what do you say to people

who say that uh one of the reasons you

had more inflation in the 70s and you

ended up getting a Paul volcker was

because of unanchored inflation

expectations whereas today they're

relatively anchored yeah well I mean I

think that's a bunch of BS when you know

and pal said that again today that he

thinks that inflation is a function of

expectations like you know people expect

inflation and that's why there is

inflation but that's part of the

government's efforts to blame other

people for inflation we don't have

inflation because people expect it

people expect inflation because we have

it right so they got the cart before the

horse interesting and it's not that my

beliefs about inflation

is what creates it is well if you think

there's going to be rising prices you're

going to demand higher wages and you

know but this is all a bunch of BS you

know but yes of course if you have

inflation long enough

people will anticipate that it will

continue and they will try to deal with

it as best they can but that is not

what's creating it and it's possible

that if people anticipate inflation but

you pursue the correct policies they'll

end up being wrong there won't be the

inflation that they anticipate and in

fact I think Americans by and large are

wrong today there's going to be far more

inflation than just about anybody

anticipates wow I mean think about the

huge inflation that we had

I mean it measured by CPI last year

eight nine percent how many people

anticipated that yeah no it wasn't you

know people thought oh everybody thought

that inflation would be low

uh and people still expect it to be low

I mean if you look at what they expect

not two percent but maybe three percent

sure but they're they're completely

wrong so five years out the University

of Michigan say says 4.2 percent for

inflation uh sorry that might be one

year out one year out four point two

percent let's say and five years out 2.4

what say you do that completely off well

I don't even know like how they ask the

question I mean I've never been

questioned but I mean a lot of Americans

can't even do basic math I mean you ever

see some of these videos I mean I mean

the Americans have been so dumbed down

on just about any subject how are you

going to ask like oh what's the

inflation rate going to be in four years

like how the hell does anybody know so I

mean do they give them like a multiple

choice I mean I don't even know like

how they they they conduct the polls

yeah you know I've never received a

phone call from somebody from the

government asking me what I thought the

inflation rate was going to be you know

three or four years from now I mean so

the whole thing is ridiculous to even

put any stock into what a bunch of

idiots think inflation is going to be

right I mean you know they don't know I

mean they actually they may be they may

be closer than a central Banker yeah you

know they actually may be more accurate

than the people on the fomc but they

don't know they're just guessing how the

hell how does anybody know what it's

going to be now what's uh what would you

say though to this great moderation that

we've had over the last 40 Years of yes

expanding the debt uh so expanding the

money supply but uh also inflation

falling from the Paul volcker era down

to really 20 right before well again

part of that is due to the changes we

made to the CPI so that we're not being

honest so inflation has been so we've

been misled we've misled okay but I

think

you have other factors that have come

like one of them in the U.S was women

entering the labor force I think that

was a big thing because prior to the

1970s married women by and large did not

work sure I mean maybe if their husband

got laid off they might get a job just

to pick up the slack till he got another

job

but I mean women didn't work

but as a result of the inflation of the

70s

and the reduction in the real income of

the men the women came to the rescue the

women

went to work and so we got the benefit

of all that extra labor we didn't have

it before right instead of productivity

so yes now we have more people working

uh and producing and so instead of the

husband having to support the wife he

didn't have they supported each other

and so you had you had another worker so

that was part of it now of course we

can't do that anymore because they're

both working and now that some of them

are they're working two or three jobs a

piece they're kind of maxed out I mean I

suppose the kids can start dropping out

of school and they could pitch in oh

okay but you know yes they got those

child labor laws yeah yeah it's hard but

um so the other thing I think was the

growth of China I think China really

saved us because you had all these

people that could do all the work for us

at a lower cost deflationary

and and so we were able to uh Outsource

a lot of our production

and that kept the lid on prices because

all this stuff was coming in from China

uh at prices that we could never produce

it ourselves I mean obviously if all the

money we printed had to stay in America

and we can only buy what we made I mean

prices would have just gone through the

roof but we were able to send the money

to China and and they sent us their

stuff now what did China do with the

money they bought treasuries they bought

stocks they bought real estate so what

happens during the 90s and the 2000s

2010s is a lot of that inflation

ended up in financial assets that's why

stock prices went up so much that's why

real estate prices that's why bond

prices right so inflation was showing up

in those financial assets because that's

how the money was making its way through

the economy but where we are now we're

at the early stages of the money flowing

out of financial assets into consumer

goods and because that's ultimately

where it all goes

because nobody buys stocks because they

want stocks I mean there's probably some

Geeks out there that just love stocks

they're just trading for the thrill of

it you know but most people want to buy

stocks because they want to sell the

stock and buy something with the money

that they earn and appreciation

guys like me

I buy stocks for the dividends right

right I expect I want to earn dividends

and I want to spend the dividends on on

things whatever you want right but no

one just wants the stock just to brag

about owning it or admire the

certificate assuming they actually know

what really has a certificate

so ultimately everybody's goal is to

move the money out of the stock market

into the real economy and buy cars take

vacations buy a house travel go out to

dinner buy clothes that's what everybody

wants right so as all the people start

to turn their financial assets into

consumption prices for financial assets

are going down because people have to

sell

and now the price of everything else is

going up because people are starting to

spend so we're just early in that cycle

yikes now what's your take on

potentially deglobalization also then

increasing those prices or do you think

the world will more re-globalize

no you're right I mean I think we've

reached the end of that trade with China

where China's like screw this yeah you

know we want our stuff we're going to

keep the stuff that we make you keep the

money you print we'll keep all this

stuff

and and so we're not going to be able to

import deflation from China we're going

to be importing our inflation back right

because all that money comes back

because you know what the Chinese are

going to do they're going to take their

money and buy our used stuff

right not you buy our used cars or you

know whatever so a lot of prices are

going to be bid up when they don't want

our stocks anymore they don't want our

bonds anymore they want actual stuff uh

so you know we have this big Day of

Reckoning coming with inflation and a

dollar devaluation I mean there's just

no way around it what's that going to

look like

going to look pretty bad right because

you know it's prices are just going to

go way up and prices of goods and then

assets down yeah no asset prices might

actually go up in nominal terms but

don't go down in real terms right

compared to so you expect hyperinflation

well that be the worst case scenario I

hope we avoid that but even if it's not

hyperinflation you know why my Republic

style or Zimbabwe style something like

that we can still have you know an

Argentina type situation you know Turkey

yeah we could have something now it

doesn't mean that we're that Weimar

Republic is impossible of course because

you know Germany was very wealthy I mean

you know

uh and look what happened right I mean

so it's possible that we could we could

end up in a worst case scenario but to

avoid the worst case scenario it's you

know we're gonna have to bite the bullet

at some point otherwise that's what's

going to happen and what time frame do

you see that in I think once once the

inflation really kicks in it'll be quick

you know the dollar will start spiraling

down and prices will go up and the real

you know problem is going to be you know

the the politics of it all the civil

unrest that may uh ensue

and other really

misguided policies we may go back to

wage of price controls again import

restrictions exchange rate restrictions

so that just makes it worse yeah of

course

because it will create shortages right

and then black markets underground

economy

um a lot of crime violence I mean it's

yeah I mean it it it's not going to be

pretty that's that's and you think that

could be with as soon as potentially the

next few years when the real inflation

comes through yeah I mean it can happen

anytime I mean again we can kick the can

down the road for another five years I

don't know so you know we can still go

to the moon for another five years

oh you know prices yeah I doubt if you

look at the charts

I doubt that we're gonna you know see

another huge run

you know in a lot of these Tech names

and things like that I mean I wouldn't

be surprised if the Dow made a new high

man that could happen because you have

some legitimate companies that are in

those 30 thousand stocks yeah like AMC

yeah well they would have been too bad

they kicked out Exxon Mobil you know

they replaced it with Salesforce yeah

but um but yeah I don't think you're

gonna see you know you know the fangs or

the low even lower quality names I don't

think they're made I think the highs are

in for those stocks wow even nominally

you know I wouldn't be surprised if they

they made new Highs but if they do it's

only with massive inflation and in which

case they made a new high but you're

better off with owning almost almost

anything else oh my gosh anything other

than stocks those stocks well you can

own the right stocks

um but just you know you know the the

stuff in your kitchen can outperform

those stocks right what's prevented you

from launching your own ETF like a Kathy

would uh but maybe more dividend focused

well I have my own mutual funds I've

already done that I have a whole family

of funds

and finally after several years of

lagging the competition I'm now at the

top of the Heap

um it's dividend payer fund yeah uh was

number one last year according to uh

lipber uh Morningstar uh U.S news and

World we've got a couple of awards for

the fund in fact congrats in

international value there's like 350

funds in a category I only have two

funds in the category and my funds are

ranked one in three wow over the last

one year three years and five years okay

so uh and that's a value strategy uh you

know good stock picking good sector

collection now the absolute returns are

not great in dollars because we've had a

very strong dollar so the returns are

only good relative to my peers and

that's of course the Benchmark right how

I've done but I think the returns over

the next five years are going to be much

better

not only in relative terms but in

absolute terms because I expect the

dollar would be very weak over the next

five years now I expected it to be weak

over the past five years so I got that

wrong right I expected my funds to

deliver better returns for my American

uh investors sure

um but I think we're going to make up

for that because I think the next five

years will give us enough extra return

to make up for the first five because I

think now the dollars demise is going to

be bigger it's a bigger bubble more air

is going to come out so I think we're

going to get paid the Payday for being

patient is going to be bigger because we

had to wait longer to to receive it now

if we have more inflation wouldn't that

lead treasury yields then to increase

and potentially demand for those

treasuries to increase leading the

dollar to rise at least in the short

terms well that's already happened right

yields have picked up and the Dollar's

gone up right

but that's only because the markets

still believe the FED is going to

succeed in reducing inflation over the

long run right it'll take a failure in

other words I see

the markets have to lose confidence in

the FED for some reason they still do if

you look at a 30-year treasury right the

yield is less than four percent in fact

the yield on the 10-year treasure is

higher than the yield on the 30-year

treasury they yield out a five-year

treasury is higher than on a 10 year the

yield about a two years higher than five

years everybody expects the FED to

succeed

yeah they're not going to succeed

they're going to fail so you think the

Bond Market is wrong completely wrong

right

and and part of the reason they're wrong

is it's so distorted by the central

banks but at some point

the Bond vigilantes are going to wake up

and realize that the central banks have

put themselves in a box and there's no

escape and that inflation is not going

away it's here to stay

and even though they're raising interest

rates the rate that you're getting is

still going to be negative in terms of

inflation I don't believe the central

banks are able to offer an interest rate

that is above the inflation rate wow and

so as long as bonds are yielding

negative why would anybody want one you

can't win in a bond you you know you

could make money in stocks when interest

rates are negative I mean you know you

could have a lot of growth the stock

price go up but if inflation is eight

percent and you've got a bond with a

five percent coupon you can't make money

you're guaranteed to lose unless the

inflation rate comes way down right but

it's not going to happen you know so now

do you think it's possible if they've

rigged the inflation data for let's say

the past decade that they could adjust

the inflation data down going forward

they probably will but you know I mean

you know you can't fool everybody you

know it's like you know

some of the ways that companies avoid

raising prices as they just you know

translation not yeah so I mean

eventually you buy a box of cereal and

there's just like one flake in there I

mean you can't you know I remember when

I used to buy cereal when I was a kid

right into box it was filled up to the

top right and I know that because when I

used to go to the supermarket with my my

mom

we would pick the cereal based on the

toy inside and so as soon as I got home

I would have my mother open up the box

and pour out the cereal so I could get

the toy and that cereal was all the way

to the top of the box now you buy a box

of cereal and it doesn't even start

until two thirds down like two-thirds of

the box is actually empty sure by the

time you get to the little bit of cereal

it's in that box so I mean just but

there's only so much they could do and

they you know and then they're reluctant

to shrink the size of it because you

know then you'll see so they just they

just give you lessons the same box but

at some point you reach you know you

can't shrink it anymore I mean they keep

taking sheets out of a roll of toilet

paper yeah you know at some point they

you know they can't make them that small

and they have to just you know start

raising prices but it's still the same

to the consumer because I just have to

go and buy more rolls doesn't matter if

they just you know make the rolls

smaller and I pay less per roll I have

to go every time I go to the supermarket

you know you got to buy you know a 12

pack yeah you know to get enough toilet

paper last of the week especially you

know if you you know if you've got women

in the house you know they they run

through that toilet paper what about uh

Kathy Wood uh and her idea that

inflation today is actually lower than

what's being reported yeah the opposite

of what's actually true that's how the

lyric delusional Kathy Wood is yeah I

mean look she's just saying that because

she's trying to talk her own book and

you know you can make the same

accusation you know of me right Peter's

just bearish because he's you know long

gold stocks or he's short to Dollar you

know so yes I recognize that you you

could say that but

in this you know I

I think I'm right of course obviously

maybe she thinks she's right too but

uh why do you think she's wrong

well she's pretty much been wrong about

everything but

what she's talking about right

higher productivity and I don't

dispute the facts

that in certain areas

productivity is going on AI yeah and and

now it remains to be seen right

what that AI is going to ultimately do

for productivity it has the potential

to make people a lot more productive

because I can start a business and

instead of hiring a bunch of people

I can just have a computer program do it

for me and I don't have to use those

labor resources they're freed up to do

something else

and you know to the extent that I can

run a business on a lower budget well

then I can charge lower prices for

whatever my goods or services are

because I don't have to pay all these

workers

um and so it's very possible that

productivity goes up which is good we

want productivity to go up and under the

normal course

that would mean lower prices but if we

print enough money that we will lose

that benefit prices May remain the same

or they may go up a little bit so we

still have inflation even if the free

market is increasing productivity The

Government Can Be undermining the

benefits of that by creating inflation

so thanks to running a deficit because

by default you're suggesting we're

running a deficit which is inflationary

and so even if we get uh Innovation

we're we're still fighting the situation

what's probably going to happen in the

world that we live in today versus the

free market world that we should be

living in is a lot of the workers that

end up losing their jobs to AI we'll

just go on some government welfare

program so it's not like they're going

to go do something else Ubi yeah they're

just going to get money from the

government so it's like that's going to

offset that's interesting so that's

potentially arguing that even if if we

get more productivity we might just take

one person completely out of the

workforce and then reset that

productivity back to right where it was

well if if if the government simply pays

the person so let's say let's say

somebody was employed right making you

know fifty thousand dollars a year yeah

and then I lay that guy off I don't need

them anymore I can I a computer can do

his job for me so I I don't have to

expense that 50 000. and now I fire that

guy if that guy goes and gets another

job it's a win yeah right because now

he's doing something else so now we have

the benefit of whatever else he's doing

sure plus what I'm doing with the

computer but if instead he goes to the

government the government just gives

them fifty thousand dollars a year and

some kind of welfare and he doesn't work

then Society hasn't benefited at all

from there's no extra product too the

guys just get money from the government

and so you know whatever whatever uh

benefits are being stolen by the

government so we'll see how this is

going to happen I mean obviously some of

the first people to lose their jobs

from a lot of this are going to be the

unskilled like the minimum wage type

workers who are being you know automated

out of existence by the minimum wage and

other payroll taxes and a lot of these

guys obviously are just showing up

um on the welfare rules I mean look at

the the labor force participation rate I

mean why is it so low where are all

those people how these people surviving

could it have been retirements because

of covid

well some people but

um

you know a lot of it are just young

people that never even enter the

workforce but I think a lot of people

are actually coming out of retirement

somehow because they can't even afford

to stay retired because they're the

inflation they're taking these odd jobs

and things like that but I think a lot

more people over the course of this

decade who are now retired are going to

go back to work what's your take on

housing then housing is obviously a real

asset uh potentially an inflationary

hedge uh however with rates going from

2.7 to now 6.7 maybe in some cases seven

percent it seems like there could be an

impetus of a housing crash uh much like

you potentially I believe you predicted

in 2005 uh or 2006 you mentioned you saw

the top of the housing market at the end

of o5 and that there would be some form

of housing crash how does that relate to

what you're seeing today well I started

a warning about the housing bubble when

the FED began inflating it in 2002. oh

wow I just didn't know when it would

reach its peak but by

2005-2006 it was pretty clear that we

had peaked and I was you know warning

about it and that's when we I helped get

the hedge fund the shorts subprime and

do all that stuff uh and that was in 06

and that was you know pretty much just

before it all imploded in 07 right but I

I had been warning about it you know and

writing about it extensively online in

2003 2000 2004 2005. so this thing

didn't come out of left field and I

explained exactly why we had a bubble I

talked about how the Federal Reserve how

Fannie Mae and Freddie Mac and the banks

the appraisal industry and I explained

how all that was happening and and how

was the story in the economy and the

financial crisis that was going to

result when the whole thing burst so I

mean

people have said if they you know listen

to some of my talks you would think that

I was I came back from the future

and well you know in the time these

talks but it's basic economics it's just

that so many people don't understand it

sure you know they think that I'm some

kind of prophet because I can see what

should have been obvious to everyone

else when the schools aren't teaching

that it wasn't that I was so smart is

that everybody else was so dumb and so

you know I was the the tallest uh well

short short person little person in the

room I don't want to don't want to be

politically incorrect but um so how does

that compare to today well it look it is

a different situation today

we don't have time is different we well

I mean we don't have the same type of

subprime

uh Market that we had back then right we

don't have as many teaser rates and

adjustable rate mortgages now as we have

back then but it's still a big bubble

right uh real estate is still priced

really for three percent mortgages three

three percent mortgages and we're at

seven and going higher going higher

where's the terminal they're both fed

and what would you guess two years from

now I don't know it's gonna go higher I

don't know I can't I don't know I just

think it's you know in the 1980s

mortgage rates were 14 15 you know I

mean they can't get up there again you

could force you could reasonably foresee

14 mortgages sure it could happen now

the FED might cry Uncle before then but

we'll see

but um

mortgage mortgage rates

are double what they were right at the

lows oh yeah and and so homes for most

people are completely unaffordable

unless the price comes down and so

that's the only thing that can give us

the price so the price will eventually

come down for houses

um and then that sets off a whole other

bunch of problems when people have

negative equity right and you know do

they make their mortgage payments you

know uh you know so you get the defaults

one thing that might keep people in

their homes today longer than in 2008 is

people had a decade to refinance their

mortgages at three three and a half

percent

and so even if your house loses value

there's still an incentive to stay there

because your mortgage could be lower

than what you could rent right what you

can get a rental for

and even if you sell your home you can't

buy another one because you can't get

that cheap money anymore right so people

do have an incentive to stay in a home

even if it's worth less than they paid

because the mortgage is worth way more

right that that's your that's most

homeowners most valuable asset right now

it's the mortgage they've borrowed all

this money for 30 years and they've got

a really low rate right inflation is

going to average you know let's say

seven or eight percent or more ten

percent for the next 30 Years and you've

got a three and a half percent mortgage

you know that's huge that's worth the

bank should pay you lots of money to

sell to give up to walk away you know to

pay to pay the mortgage off sell your

house and pay so that's going to keep

more people in their homes if you didn't

have that situation

um back then yeah

yeah

um

but you know the problem for homeowners

though is the maintenance costs are

going to go up the insurance costs and I

I some at my home in Connecticut

the uh property insurance doubles wow

because they said well it costs twice as

much to your house isn't worth more but

if it burns down it's twice as expensive

to rebuild it the materials the labor

right so uh those costs property tax is

going up because all these governments

that have a lot of debt now the interest

rates are going up where are they going

to get the money they got to raise taxes

so homeowners are going to be under a

lot of pressure even if their mortgage

is fixed you know a lot of their other

expenses are not but I real estate

prices are going to come down in in real

terms they're going to come way down

nominal terms it all depends on how much

more inflation

is Unleashed how quickly the FED folds

and pivots and you think they will they

will eventually because they've done it

every time in the past you know the last

time was coveted right they were they

were trying to normalize interest rates

before coven

and remember when they initially cut

interest rates the first time in like

2020 when it was

or 29 yeah 2020 or no it was 2018. they

started cutting rates

they had to abort it the minute like the

market started to fall apart they like

you know they stopped they said oh it's

a mid-course correction and of course it

ended up being you know it went to zero

then it wasn't a correction there was a

beginning of going back to zero sure

um so they will reach that point again

but there just has to be more pain

before they they do that wouldn't that

though if if the FED does that uh and

rates came down wouldn't that

potentially signal an opportunity for

all right back to borrowing stocks back

up I don't well the reason I don't think

it's gonna be like the third time's the

charm for the FED I mean they got away

with it in 2008 they got away with it in

2020.

I don't think they're gonna get away

with it again

because

during the you know 2009 time period

2010 2011 and even as late as 2020. the

official CPI numbers were still sub two

percent so they had that cover like okay

we can do this because we have low

inflation right but

if the wheels fall off the bus again we

have a blow up in the financial sector

or whether it's a bank failure or

something's going on with the money

markets or hedge funder some some

something cracks somewhere because

there's all this debt out there right

and it's all it's unserviceable let

alone unpayable so Something's Gonna

Break something's going to implode

the longer the FED keeps rates where

they are and of course as they keep

ratcheting it up it just puts more

pressure

so but when something happens some

crisis happens and now the Fed

does what it's done in the pants right

oh we're going to slash interest rates

we're going to launch QE if they do that

let's say inflation is six percent it's

tripled or two percent Target

how can they justify

their response

and if inflation is six percent and they

pursue inflation as a solution to this

financial problem and now it goes to 15

right does the bond market really rally

in that circumstance because the bond

market has rallied every time the FED

has launched QE right because Traders

anticipate the FED buying bonds and so

they want to own those bonds and sell

them to the FED but if they realize that

inflation is running out of control

bonds are just IOU dollars and if the

dollar is going to lose a lot of value

why would you want to buy a promise to

be paid dollars in the future when

they're going to be worth so much less

in the future they are right now so

that's going to be the real breaking

point where the FED goes back to QE and

instead of going up bond prices go down

because the trust has been lost and and

they no longer believe that inflation is

contained wow and also the dollar goes

down see right now the FED raises rates

the dollar goes up bonds go up what's

ultimately going to happen is the fed's

going to raise rates and the dollar and

the bonds are going to go down wow

because people are going to realize that

they're raising rates but it doesn't

matter they're still behind the

inflation curve and it doesn't matter if

nominal rates go up what matters is real

rates and if inflation is is is

accelerating faster than the rate hikes

the FED is is falling further behind the

curve so at some point right they're

going to wake up and then gold will

respond I mean right now what happens

with gold whenever there's more in

isolation than the markets expect gold

goes down right oh inflation is hotter

and gold you know gold was down 30 bucks

the other day

I know there's inflation News why is

why is higher inflation bad for gold

Gold's an inflation hedge right it

should be good for both it's only bad

for gold because the markets think the

FED will be motivated to fight harder oh

inflation is higher than a Fed thought

well they're just going to have to raise

rates higher and leave them there even

longer to bring it back down and so that

pushes gold down what investors

eventually have to come to terms with is

higher inflation doesn't mean the FED

has to fight harder to win it just means

the FED is losing it is losing the war

against inflation and higher inflation

is evidence of that

and you need to buy gold on higher

inflation So eventually that's what's

going to happen when we have higher

inflation when we have more stimulus we

have more QE it's going to be gold

up the dollar down bonds down

and stocks you know it'll be mixed

depending on the stock based on the

earnings or whatever yeah I mean some

companies but initially I mean you know

a lot of things are going to can include

I mean to me the Market's you know

really look like

2001 around then I mean wow so your

favorite stocks then if we're in 01

would be uh All Tech today no yes well

those are the ones that are going to go

down the most remember the NASDAQ

dropped about 80 percent and a lot of

stocks dropped 100 and the NASDAQ would

have gone down more than 80 percent in

fact I think it would have gone down 90

in fact back in 2000 when the bubble was

near its peak the NASA was now five

thousand I was predicting a 90 Decline

and the only reason it was only 80 was

because the FED cut rates to one percent

I didn't see that happening Darth Peter

you were lost yeah so but by 2002 I said

okay we're not going down 90 I could see

the writing I could read the writing on

the wall with one percent interest rates

and so I knew that you know the market

had bought them but I still didn't buy

the tech stocks I was just buying you

know value stocks and foreign stocks now

I should have I should have you know

loaded up should have just bought a

bunch of Amazon back then uh you know

that that one survived Amazon Apple you

know eBay Apple was a great buy back

then yeah sure because you know that

Apple was Apple was the stock that

didn't even participate in the bubble

everybody everybody was selling their

Apple to buy all the apple apple was

nothing you know in 2000 it was you know

so what you're saying is today all in on

Tesla then

Yeah well yeah Tesla is one of those uh

you know Meme stocks and maybe it's the

original meme stock wow

but I still think Tesla has a way to go

down and on all these stocks and that's

again that's Kathy Woods like her core

holding is a Tesla and that's what kind

of helped Propel her to into the

Limelight she got lucky with Tesla she

bought a bunch of Tesla

do you think she can get lucky again

with the autonomy of full self-driving

or no no I mean I think I mean I think

her her

stay in the Limelight you know her five

minutes served forever made how much

Fame she had although you know she still

gets brought out they still look at her

as some kind of Messiah they don't

realize that

she was just in the right place at the

right time

and there's an old saying about not

confusing brains with a bull market and

that's particularly important in a

bubble you definitely don't want to

confuse brains with a bubble because she

was in a bubble and she's still in a

bubble she just doesn't recognize it's

very hard to see a bubble when you're

inside it right it's much easier when

you're looking from outside the bubble

so with her arguments on uh robotics

battery storage autonomy genomic

sequencing those none of those are

interesting or just too expensive all

that stuff is good I'm not saying that

she's wrong that there's going to be

Innovation now

is she smart enough to pick the names

that are going to make it probably not I

mean most of the stock she's buying

probably you know are gonna go bankrupt

I mean she doesn't it's very difficult

to do like if you go back to the

beginning of the automobile I mean

there's like 100 automobile companies in

America so if you would have bought a

bunch of these companies in 1900 because

yeah people are going to use cars

they're not going to be riding on on

horses anymore you might have been right

but most of the stocks you bought would

have gone to zero wow right because you

know you don't know so

Kathy Wood is probably right that we're

gonna have a lot of increased

productivity that's going to result from

you know Tech and artificial

intelligence and all the stuff that

we're doing

but are the companies that she owns now

going to really benefit from it or are

they going to be put out of business by

another company that she doesn't own you

know that that just comes out of left

field with something better

uh maybe the the the companies that

choose invested are just laying the

foundation for other companies to

rebuild on the rubble that they leave

behind who knows now maybe some of the

stocks that she owns will end up

succeeding but the question is

what will they be worth maybe she

already overpaid for them maybe they

will succeed but they're not going to be

as valuable as she thinks because

they're going to have a lot more

competition

see that's what happens like with Tesla

people are like oh look at this electric

car market and look at Tesla has half

the market so and and when and when

everybody has an electric car they're

going to have half of that market no

they won't because as they start making

money they're going to invite

competition and so you may be right that

everybody is in electric cars but the

market share of Tesla is going to be a

fraction

of what it is

in the future when it's a much bigger

market and they're competing with all

these other companies I mean you pointed

out you came into my garage I got two

electric vehicles and neither one is

Tesla one is a Jaguar one is a Porsche I

mean you know

so I mean there's other companies that

make electric vehicles you don't have to

buy Tesla but do you have full

self-driving no but you know I don't I

don't have self-driving but I wouldn't

how valuable do you think there's too

many potholes in Puerto Rico I don't do

they self-driving cars know to avoid the

potholes they're you know in their last

investor Day presentation they they were

talking about working on uh code that

could identify potholes what I need here

is a self-driving golf cart because I'm

in my golf carts a lot more as you know

model two my actual car yeah but there

are a lot of Teslas here and I've been

in Tesla's I'm not saying they're

they're not you know they're they're

decent cars by the way uh Maine musk has

been at this Resort I had a good

conversation with her wife oh wow I've

never seen Elon here but I've seen it do

you like Elon yes I think I I wish he

was a friend of mine I mean I think he's

I think he's an interesting guy very you

know eccentric I guess as a word for him

but you know what about Twitter him

buying Twitter yeah well you know

I was critical of it

as an investment okay when I when in

fact when he first talked about it I

thought he was just joking with

everybody just like yanking their chain

like you know

um and then he actually did it yeah uh

and I knew that you know if you if you

followed my investment advice when he

was doing I said sell Tesla I said if he

buys it it's bad for Tesla stock and of

course that was around the time but one

of the interesting things is he was able

to use buying Twitter as an excuse to

sell a bunch of Tesla yes much higher

yes you know if he was selling it

without that it would have raised some

eyebrows but look I don't really want to

sell it I need the money to buy it to

buy Twitter so people like oh you

overpaid for Twitter yes he did but he

got a lot more money for his Tesla

shares and they were so it's you know

six or one half dozen of the other but

as a Twitter user right I use Twitter

quite a bit no no yeah I don't know if

you followed me of course but I'm

getting close to a million followers

maybe you can help me get up there Mike

920 000 Twitter followers you know I

tweeted a picture of them they're all

organic I don't have any you know like

Bots following I've never I've never

paid to promote a tweet or to buy a

subscrib fiber so there is a lot of

engagement on my site because it's all

organic it's all real people that are

interested not only in responding to my

tweets but responding to the responses

on my tweets right now with the

criticism

oh you know I deal with it you read it

yes I had to read them all because it's

too many but I I like too much criticism

I liked it no to me too many too many

replies you know there's so much time

today but as a a Twitter user I'm very

happy that Elon owns Twitter I think

he's done a great service public service

by overpaying for Twitter and making all

this information known about how Twitter

Twitter is colluded with the government

to kind of help you know influence the

outcome of the 2020 election so what's

your reaction to that oh I didn't I

wasn't surprised

you know it's good to have the proof

right

um did you see the Twitter or the um

Tucker Carlson Jan six videos yeah yeah

and you know look I I've always believed

that the last

uh blew that out of proportion you know

I mean that it wasn't like an attempt to

coo it wasn't a violent Insurrection I

mean people didn't show up with guns

they had cameras they were they were

taking selfies they weren't shooting

anybody and

um yeah I mean it got out of hand uh but

I mean I mean they completely blew out

of proportion and now you see like this

main guy you've got like a four-year

prison sentence is being escorted

through the Capitol building by like

half a dozen or so uh policemen who are

like here you go go here oh let me try

that door for you oh that one's locked

let's try another one I mean if you're

walking through the Capitol and you're

being escorted by the police and not

only are they not trying to stop you

they're like helping you why would you

think that you're doing something wrong

right and now if he if the footage had

shown this guy you know like like Rambo

going through they're like beating all

these cops up like they're all trying to

stop him and he was like you know doing

some kind of karate moves or knocking

him down he fought his way through okay

even some head shakes so no don't go

here right yeah just push the guy out of

the way you know but no it was like you

know and where was all that footage

before I mean why did that guy have

access to that footage like in his trial

like to defend himself

um but you know they they they

all they did this to discredit obviously

Trump they didn't want Trump to run

again they're trying to get him you know

arrested or tried or whatever it was so

but the the left lies about everything I

mean it's not just this I mean it's and

it's not just a left I mean Republicans

lie too I mean but the Democrats are

probably you know better at it but

I mean if they're gonna lie about

something like you know January 6 and

make up all that stuff right well what

does that tell you about when they're

giving you economic data they're talking

about inflation or unemployment I mean

none of that is true the government lies

about everything I mean that's at least

the one thing you can say about

government is it's consistent right lies

about everything so on on the note of

government just last couple questions

here uh Biden or Newsom I'm sorry

um DeSantis or Newsome well obviously it

would be DeSantis I mean you know but

the question is is it the stantis or or

who else Republican party yeah you know

I'm not a big

Trump

fan I voted for him the first time I

can't vote for anybody anymore because I

live in Puerto Rico so I've given up my

vote and the trade-off is I've given up

the income tax so it works for me you

know my vote was never that valuable and

normally I vote for the loser Trump was

one of the few times I voted for the

winner but I voted in Connecticut and

Trump lost Connecticut so it was a

complete waste of time right going to

the polls and voting Republican in in

Connecticut you didn't get a mail-in

ballot no that's when I still live there

okay I can't vote anymore I don't live

in Connecticut anymore I live in Puerto

Rico we can't vote over here right so

but we also don't have to pay the income

tax so again it's a trade-off that's

beneficial pretty much I I think

everybody I know if I basically ask them

that question would you give up your

right to vote if you did not pay any

income taxes

I mean it's like sure why would I need

to vote about paying taxes who cares who

cares who wins I can't really wow but

but anyway but it was like a waste when

I was Voting anyway you know and I lived

in California for a long time I mean I

mean I couldn't vote for the winner in

California

so I'd vote libertarian no way they had

no chance right it was just like this is

only Democrats win just a ceremonial

like you know vote just to you know

let's you know give the guy some

encouragement that that ran keep going

but the problem I had with Trump

I mean he's a genuine guy and he did

some things that were good right which

at least is better than Biden who's done

no things that are good right so he's

done did something is he gonna make it

to 24. I mean is he going to survive

live long enough yeah will he be capable

to run again I don't know look what was

it what was the other guy that ran with

a disability that won fetterman yeah

look at him and I was that was like in

the hospital right he's not even he

can't even get into the Senate because

he so I mean you know he could be like

you know what was that um not Weekend at

Bernie's was it but he never Woody Allen

where they had the leader and he was

like he ended up he was just like a

thumb or something or I forget but they

could find a way to prop him up and just

like you know let him run right so Trump

wants to say Trump

you know Trump was more of a populist he

didn't end up he didn't go to Washington

and do what I would have done if I was

there which is you know drain and swamp

oh so he didn't no no no he didn't I I

would have I wanted I would have cut

spending dramatically I mean across the

board I wouldn't have created the space

force I would have gotten rid of like a

lot of the government agencies I would

have had big cuts to entitlement Social

Security Medicare you know you know

that's very unpopular well that has to

be done and it takes a real Statesman to

do it I was hopeful that maybe Trump not

a career politician would try to do

what's right and not what's politically

expedient because no politician is going

to do what's unpopular that's the

problem with democracy all the things

that need to be done are very unpopular

and it would have been great if Trump

didn't I mean I would do I wouldn't care

if I was you know I was President I

would just do everything that I needed

to do I wouldn't care if I ever got

reelected I wouldn't care if people

didn't like me this is what needs to be

done is that ever going to happen no I

mean you know I mean you can't get

elected telling the truth you have to

lie to get elected and then you have to

tell the truth after you get elected but

that never happens you know the lot you

lie your way into the White House and

then you keep lying the whole time

you're there but Trump was a big spender

he was a big taxer except he just wanted

to tax people with tariffs and pretend

that the Chinese paid him but you know

and like I'm out of tariffs could be a

better way of raising taxes than income

taxes so if you lower income taxes and

and then put tariffs that's that's a

positive as far as I'm concerned but he

didn't do that I mean there were some

little tax cuts but

um then you know but

you know I was like you know in that in

that race the initial 2020 race my

candidate was Rand Paul so that's who I

supported but he kind of fell away Trump

sucked all the oxygen out of the room in

fact a lot of uh Iran Paul supporters

ended up going to Trump yeah Trump was

more charismatic than ranch right but

the one reason I would like to see Trump

president is because of how many people

would be so pissed off that he got

elected I mean and the people who I

again you mean in 24. yes the people

that I really don't like are the ones

that will be pissed off I mean they were

already pissed off when he won the first

time I see you know

um so that you know and DeSantis

wouldn't cut it for you well I mean the

status is fine I mean but again I don't

expect he's not a game changer I don't

think the santis is going to go to

Washington and do what needs to be done

but he punished Disney

you know now he has his board Patrol you

know but I mean look he's a decent

Governor I mean I would definitely if I

had the ability to vote you know my mom

still lives in Florida she can vote for

him

God but um yeah I mean but you know

I think he'd probably be a better

candidate than Trump in that I think

it'll be easier for him to win against

Biden but I think if 2024 were is biting

Trump I think Trump will win again

because

I think the economy will be so bad by

2024 it'll be very hard for Biden to run

on a campaign of four more years right

right and even though Trump want what we

just had four more years and even though

Trump's highly exaggerated how strong

the economy was when he was president

just like Biden is exaggerating it now

people don't even remember what it was

actually like they just know how lousy

it is now and he can still say look

everything was great and then I I handed

it off to Biden and it's a complete mess

so I made America great once I'll do it

again I just got you know so

that's why they may have to get rid of

Biden just to have somebody else run

because you know but I don't know how

you have another Democrat distance

themselves from right from Biden right

right it'd have to be like a Newsome or

something but it's almost like the

Democrats want

Trump to run so because they think they

can beat them right but that's right but

that's the mistake they made the first

time yeah he was like our Dream

candidate because they thought well he

can't win and then their their dream

turned into a nightmare

last question uh your son is still into

Bitcoin and you were not yeah I know

well he's only he's still only 20. so

but it's not at zero yet no but no I'm

saying his age no I know but

conveniently so he's still here over 20.

I know right the old saying was if

you're not a uh socialist by the time

you're you know 18 you don't have a

heart if you're not a conservative by

the time you're 28 you don't have a head

so

he Stars a few more years to mentally

grow up and recognize the error of his

Bitcoin ways but there are a lot of

adults in my neighborhood here that are

into Bitcoin or other crypto this is a

nice neighborhood yeah well they got in

early you know and they were able to

cash out that's why they can afford to

live here but the people who bought

their Bitcoin they're not going to look

forward to live here because they're

going to lose all their money when uh

the bubble pops but yeah I haven't been

able to convince my son

he is

as committed in his belief now he's kind

of a Bitcoin Maximo so he doesn't like

all the other cryptos okay he's just

Bitcoin right so now I mean we just went

from 69 000 to 15 000 uh you had the

collapse of FTX you have the potentially

near collapse of binance they're

obviously still around uh what's a good

way to take I mean if if Bitcoins are

able to survive that uh and falling to

15K and rebounding why would it go away

maybe it is an inflation hedge well you

know

nothing goes down in a straight line

okay

there are a lot of people

with a vested interest in maintaining

the price of Bitcoin

so there are people that are we're there

to buy

um but I I don't expect Bitcoin to make

a new high

okay

um I think after this consolidation is

over you know as we're doing this

interview it's around 22 000.

but I do expect during this year for

Bitcoin to break down and and take out

the lows from last year or whatever it

was 15 16 000. I think we'll probably

trade under 10 000 before the end of the

year I guess

will we close below I don't know I mean

they're probably by the dip again

um but

you know then maybe the following year

we'll take out five thousand or one

thousand but I I do expect the rest of

the air to come out of this bubble

um as inflation remains sticky and yeah

and it's not a it proves that it's not a

hedge uh it's not digital gold it

doesn't have any properties in common

with gold it's just a a collectible

token digital token

uh but it doesn't have any actual value

I mean it's not good as a medium

exchange or a unit of account can't be a

store of value because there's no value

at the store

but yeah it has a price because people

think it it's going to go up so people

are willing to buy it and hold it you

don't think the international trade or

being able to send money overseas

through blockchain well you're not

sending money you're sending Bitcoin

right it's the difference you know but

you in now in theory you can sell that

Bitcoin and get money sure but what if

you can't what if the price collapses

and then when you go to sell it you

can't get much money for your Bitcoin

um but you know you can do the same

thing

with

uh cryptocurrencies that are actually

backed by something you know I've been

talking about this uh and this is what I

believe is the future of blockchain or

cryptocurrency stable style coins right

but not stable to a fiat currency like

the dollar but stable to real money like

gold so if you're really looking for an

alternative to a Fiat system but one

that is easily incorporated into online

transactions sure where you can send

your uh tokens around the world quickly

and for a low cost

this solution is at tokenized Gold it's

to have a central depository or private

company wherever governments anybody can

do it you take gold you tokenize that

gold and now the tokens are freely

tradable they're redeemable in Gold if

somebody wants the gold they can take

the tokens and take delivery to Gold but

more likely they can exchange the tokens

use them as a media exchange uh

businesses could use them as a unit of

account animated exchange everybody can

use it as a store of value and then you

have a real currency backed by real

money except it's a crypto digital

currency as opposed to uh paper currency

but you know before we had Fiat money

then it's real digital gold right well

yeah it's not yeah it's a digital

representation of actual gold right

Bitcoin is a digital representation of

nothing they depict Bitcoin like the

coin they make this gold coin they put a

b in there but there is no actual coin

anywhere there's no substance and that's

why there's no difference between a

Bitcoin and a Satoshi I mean the only

difference in a Bitcoin and a Satoshi is

that one Satoshi is 100 million Bitcoin

or one Bitcoin is 100 million Satoshi

but I can't do anything more with a

Bitcoin than I can with a Satoshi

because I can't do anything with a

Satoshi it doesn't matter how many I

have relative to let's say I think you

posted a silver article where you

mentioned look silver is used in solar

there's actual uh conductive property to

Silver yes and the more silver you have

the more you can use it in Industry I

mean there's a difference between having

a gram of silver and an ounce of silver

I can do a lot more with an ounce but I

can't do anything more with 100 million

satoshi's than I can with one other than

I can give them away I can trade them

but there's nothing you could do with

with any of them even if I had all 21

million Bitcoin what could I do with

them nothing I couldn't do a thing one

question from Twitter that seems to be a

question a lot of people have is why

have gold prices been flat for years

with inflation soaring

yeah you know well you got to go back

over the last 20 years or so 20 years

ago gold was under 300.

and it had a big run up to 1900 and 10

years so that was a big move and so it

spent the last decade or so kind of

consolidating that move

and so gold is an inflation head but

doesn't mean it's going to be perfectly

correlated you know every year

it's over longer periods of time that

it's going to hold its value I think

that gold got ahead of itself when it

ran up to 1900 I think it's behind where

it should be now

but a lot of that again has to do with

the false expectations that people have

about the future trajectory of interest

rates and inflation

when more people recognize reality and

eventually they will right Abraham

Lincoln said you could fool some of the

people all the time and all the people

some of the time but you can't fool all

the people all the time right So

eventually

uh the people the bond market the gold

market is going to wake up to reality

and then there's a lot of catching up to

do in Gold I mean all of a sudden the

sellers are going to disappear and the

buyers are going to you know you know

increase in number and the price can

shoot up very quickly so let's say the

price of gold which is now around 1800.

it could have one year where it moves up

to five thousand right from eighteen

hundred

and all of a sudden hey wait a minute

now go back over the last year and it's

kept pace right because all of a sudden

it has a big move in one year and now

you you know you've caught up so some

people just

lose patience well that's what Kathy

Wood says just wait five more years

uh oh for her stocks yeah yeah well you

know we're waiting for Godot waiting for

those stocks to come back but there's a

difference between

a valuable commodity and a money losing

company I mean because that's five more

years of losses it's assuming the

company could survive uh those losses

but yeah I mean like I said I think that

bubble's already popped and so it's

difficult to reflate another one

um a lot of people think oh look at

Bitcoin right the bubble has popped so

many times

you know it really hasn't I mean it's

it's just been one big bubble ever since

it started in 2009 2010.

um but I I do think it's you know it's

as I said I think it's likely likely

Peak and I think you know

the p coincided with the meme stocks and

the nfts and uh El Salvador and you know

the Super Bowl commercials Miami hype

right I mean 2021 I mean was massive

blowout top because you have to ask you

know ask yourself it was like all this

money that was spent advertising

promoting pumping and Bitcoin went down

how come because all the people spending

all that money to advertise were the

ones selling oh right so it was just

like it was a distribution top where a

lot of the Insiders like distributed all

their crap to the Mom and Pops who you

know

saw somebody on Instagram you know who

was touting a coin or you know Tick Tock

you know all these influencers jumped on

the bandwagon and were paid all kinds of

money oh yeah right I mean was it

Kardashian they got fined by the SEC yep

um but all these pop stars and athletes

you know they all got sucked in with

look what happened to Poor Tom Brady you

know he got sucked into FTX

um but that was the peak that was the

end of it all that was like you know you

know they rang a bell and hey it's over

you know everybody is in you know this

is it and so but people just don't

recognize that that that that's over but

a lot of money is going to be made

uh

has the bubble deflates right I mean a

lot of people are going to lose money

well the people who get out have already

made money but

there's a lot of money to be made I mean

I I did really well

as an investor between 2002 and 2008

because all the stocks I was buying

during the NASDAQ bubble that didn't go

anywhere just went way up in between

2008 to 2002 and 2008 I mean great

returns so I was able to harvest the

returns that I that I planted during

that bubble so I think a lot of the

positions that I have now that I've been

building over the years I think the

profits are really going to start to

come in as the rest of the air comes out

of that bubble the way it did following

the the bursting of the the bubble in

2000. wow well this has been incredible

uh Peter how do people get in touch with

you you've got shiftradio.com at Peter

Schiff it looks like pretty much on

everything and uh Twitter YouTube

Facebook Instagram what am I missing

here

well you know you got my podcast the

Peter shift show which is shift radio

you can listen to it also on my YouTube

channel

um I don't got I don't have your kind of

numbers yet on YouTube actually I think

you just came out of the blue and just

like passed me you know because I I have

about like a little over half a million

oh yeah and you what are you a couple

million now or right around there yeah

yeah so I mean but so but I'm on YouTube

so you can find me there you get my

podcast

um but the most important thing is if

you're listening to me to tell your

friends to listen because we need to

grow the army of people who know the

truth and understand economics and you

know and you know people are getting

brainwashed at universities so I need to

get more young people you know uh to to

to listen and I have a good young

audience I mean they can't afford to be

clients of mine but that's fine you know

maybe they'll be clients in the future

how can people reach out to you to be a

client of yours yeah well there you can