Watch Jordan Peterson’s “Vision & Destiny” on DW+
Peterson draws upon his extensive research and relatable real-life experiences to illustrate how to develop attainable goals for intimate relationships, meaningful friendships, and your career. Transform the chaotic potential of the future into actuality — with a vision.
Dr. Jordan B. Peterson and economist Peter Schiff discuss the gold standard, the corruption and impending failure of the fiat system in the wake of inflation, why politicians are pushing inflation to astronomical new levels, and why they’re lying about it.
Peter Schiff is an economist, financial broker, author, frequent guest on national news, and host of the podcast, “the Peter Schiff Show.” Starting in 2005 Schiff took notice of the red flags signaling that economic unrest was looming, and correctly predicted the 2008 housing crisis. His attempts to warn the general public across a multitude of news and radio networks earned him the nickname “Dr. Doom,” and ever since then he has been looked on as a source not only to watch, but heavily consider.
Dr. Peterson’s extensive catalog is available now on DailyWire+:
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(0:00) Coming up
(1:39) Intro
(2:16) What you should know about inflation
(6:13) Decades of bought elections
(9:49) Inflation is another form of tax
(13:55) The gold standard, keeping politicians honest
(21:10) The fraud behind calculating inflation
(23:09) The CPI is rigged to mask the truth
(27:37) How home ownership factors into inflation
(31:39) US Debt and why they are redefining inflation
(32:58) You wouldn’t ask the mafia for crime statistics
(35:21) Why not defer our debt to the future?
(38:16) The dollar will collapse if we stay this course
(41:32) What is the least unreliable currency?
(44:20) The deficit versus the debt
(47:22) The trade deficit, our main export is money
(53:03) Why central banks will go back to gold
(55:47) Why does gold have intrinsic value?
(59:08) Three conditions for money to work
(1:00:10) Crypto, Bitcoin, the store of value
(1:05:29) Why we don’t have a gold-backed digital currency
(1:11:44) The free market combats GOV monopolies
(1:15:04) Look at gold as money
(1:20:53) Should you invest in index funds?
(1:27:20) Buy into international companies
(1:28:57) Advice for investment beginners
(1:32:12) The timeline for the US dollar’s collapse
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Should accept yourself just the way you Are what does that say about who I Should become is that just now off the Table because I'm already good enough in Every way so am I done or something get The hell up get your act together adopt Some responsibility put your life Together develop a vision unfold all Those manifold possibilities that lurk Within be a force for good in the world And that'll be the adventure of your Life [Music] Prices go up all the time because the Government is so involved that's why it Keeps getting more expensive and the Quality goes down the quality of Education I mean a high school degree You know 50 years ago is is way more Valuable than a college degree today Even a master's degree the governments Have destroyed the value of degrees While dramatically increasing the price To to get one so government drives Quality down and price up the free Market does the reverse government let's Say the post office right post office Was a problem and so then FedEx came Along right and okay we can avoid the Post office or more recently uh Governments create monopolies in taxi Cabs well Uber comes along Lyft comes Along and and creates some competition To these government monopolies so the
Same thing is going to happen with money Government money is is so bad And it's going to get worse that the Market is going to offer Alternatives Yes the government is going to try to Put up roadblocks to protect its Monopoly but ultimately it won't work [Music] Hello everyone I am speaking today with Peter Schiff The Economist and stock broker who Successfully predicted the 2008 housing Crisis today we will discuss the current Market hyperinflation Fiat currency and the value of gold in Times of instability Looking forward to the conversation So thank you very much for talking to me Today and to everyone who's watching and Listening thank you for your time and Attention that's much appreciated so the First thing I guess I might ask is what Do you think it is that the typical Person who's watching or listening Should know on the financial front Practically for their own protection and And incremental wisdom that they don't Know I mean people are aren't taught Even the basics of how to think Financially in our education system and So maybe you could walk through what you Regard as the as the basics of fun of Financial literacy on the Practical Front
Uh well there's a lot there but I think The the most pertinent thing That people need to understand Before they make any Investments really Particularly now Is inflation And the impact that inflation is going To have On the decisions that they make on their Savings and their investment because Inflation Is probably a bigger threat now Than it's ever been and therefore it's a Even bigger Factor In determining everything that we do and Ultimately uh what the rewards are going To be or the returns From your Investments and and the reason I think that inflation Is a bigger problem now Then it's it's been in the past is Because of the fiscal predicament that Most of the major governments Have you know put themselves in And the fact that All politicians Unfortunately and this is a a fatal flaw In democracy Is that politicians First and foremost care about themselves And their own political career and their Own re-election that's what they do for A living they are career politicians and So you know like anybody else
You know they're they're they're you Know concerned about Perpetuating their career and most People who are in politics they really Enjoy it I mean they they like all the Perks that come with it uh you know you Get a lot of uh you know respect if You're you know United States or Congressman you're a senator uh you know It it's it's a it's a career that a lot Of people would aspire to and once you Get there you know once you get to Washington and I'm sure this is true and You know every you know country in Europe and all around the world that you Know you like it right you like the Lifestyle you like The Prestige that Comes with being a government official So you want to stay there right well how Do you stay in office well you got to Keep getting elected you know in the United States you know we get elections Every two years right so Politicians are are very concerned about You know the polls and they're Constantly got their finger in the air Seeing where the winds are blowing and They don't want to say anything or do Anything that might jeopardize their Re-election and of course one of the Most important things that you need to Get reelected is you need a lot of money You need to spend money on advertising On television which is expensive and so
You tend to cater to donors Um whether it's a corporation or a a you Know a union anyone that can provide a Lot of money Uh you need to do things that are in Their interest And so what is usually sacrificed by These politicians Is the national interest doing what's Right for the country is secondary to Doing what's right for themselves and Also In order to be as successful as a Politician you have to be a really good Liar and that's probably why a lot of Lawyers go into politics because lawyers You know they're paid to lie I mean you Have to argue your client's case even if You know they're wrong right and you Have to put on a defense or whatever it Is and and so lawyers are generally Pretty good liars and so they they they They be they become politicians because If you're honest and you tell the truth You're not going to have a career in Politics you're you're just not gonna Even if you manage to get elected Telling the truth you're not going to Stay in office telling the truth so you Got to lie so here's the situation so You've had Decades of politicians buying Their re-election by promising voters Something for nothing because Unfortunately that's what a lot of
Voters want they want something from the Government so if you're running for Office like I ran for office in in 2010 I was in Connecticut uh but you know all I promised was more freedom I'm going to Leave you alone I'm going to repeal Government laws regulations I'm gonna I'm Gonna Leave You free to do what you Want and I'm not going to interfere with You some people like that message but a Lot of people that's not what they want They don't want to be free they want to Be taken care of they want to know what Are you going to give me what stuff am I Going to get if I vote for you right What free stuff and so yeah well that's Attractive in the short term especially If you're not paying attention right and Lots people don't pay that much Attention to political discounts and so If you offer something tangible and Immediate that's grip short-term Attention and that can be an effective Strategy yeah and if you and so it's This proclivity to gift in this manner That to the drives inflation do you want To define inflation yeah I will decide I Know exactly what we're talking about Yeah yeah I will I'm getting there but And it's even worse when it comes to Trying to take away something like if You want to cut a program spending That's even worse because once a voter Has something nobody wants to take it
Away in fact even some of the Politicians Let's say Republicans United States that Might have opposed certain government Welfare type programs You know when they started once they're In place even those people won't vote to Take them away that's how how a danger It is so the situation is you've had all These politicians who have promised so Much stuff That the taxpayers can't deliver and of Course when politicians Want to give voters something they don't Want them to pay for it so they want to Spend money but they don't want to raise Taxes because governments don't have any Money they only have the money they take They have to take money from the people In order to give money back to the People and and so if the government's Taking your money that you don't like so With paper money Which unfortunately we have now fiat Currency where the governments don't Need gold real money they could just Create paper money out of thin air right They could just manufacture it digitally And there it is That enables governments to spend Without collecting taxes they run these Large deficits and they're able to print The difference and hand out that money So they can give people money without
Also taking the money away and now they Don't mind taking money away from rich People because you know there's not as Many of those right so they don't lose As many votes although certain rich People can donate a lot to their Campaigns which often you know prevents The taxes from from getting too high but Inflation I asked for the definition Inflation is really just another Tax Because governments create inflation and Inflation is also probably one of the Most misunderstood words in the English Language and deliberately so I think Governments around the world kind of led The campaign to redefine inflation so if You go back to the origin of the word And if you if you have a dictionary even From the 1980s a Webster's dictionary You'll get the real definition of Inflation so inflation is an expansion Of the money supply that's all it is Deflation is a contraction of the money Supply so if you even think about the Word inflate Inflate is to expand Like a balloon if you if you fill a Balloon with air it expands so with Inflation what's being expanded is the Money supply And who expands the money supply Governments you know or they they do it Generally now through a central bank but
It's the central banks of these Governments that are expanding the money Supply now when you expand the money Supply you have more money Well if you have more money but you Don't have more stuff to buy well the Price of everything goes up that's just Basic economic supply and demand the More money there is the less each Individual monetary unit is worth and Now prices go up now what governments Have done is they've said price is going Up that's inflation no it's not that is The consequence of inflation because Prices don't expand prices go up and Down as a result of inflation now what Happens is sometimes Prices don't go up but you still have Inflation and that's because without That inflation prices would have gone Down And if prices don't go down because Government creates inflation that still Represents a loss to the people because They lost the benefit of lower prices Because in capitalism the tendency of Capitalism is to reduce prices that's Why it's so good because you keep coming Up with better ways of producing more Efficient ways economies of scale if you Look at the CPI for example in the United States in in 1800 and then you Look at the same CPI in 1900 and they Have the data prices were cut in half
You had a hundred year period where you Had deflation or you know the money or Prices falling for 100 years Uh and that was a good thing you know All the politicians now tell us that we Need prices to go up that we must have Inflation you know the way they Define It of two percent a year why why do Prices have to go up every year why Can't they go down every year isn't that Better if stuff gets cheaper you know if The cost of living goes down of course It is but these politicians are trying To sell this lie to the public that Rising prices are somehow necessary for Prosperity that if prices don't go up Okay so let me sum up let me sum up what You've said so the first thing you said That I think is worthy of note for People to remember is that The price of something is a function of The ratio of the money available to the Goods available And so if you make money twice as Available then things cost twice as much And that's and then you Defined Inflation you Defined inflation in that Regard you said inflation isn't prices Going up inflation is the value of money Going down And so it isn't because things are Becoming more expensive it's because There's more money chasing the same Amount or fewer items now you could
Imagine an inflation in a particular Sector that would emerge because that Thing has become more scarce but General Inflation is a reflection of the Inflation of the money supply right then You said well here's here's the let me Just finish the summary you said there's Drivers of that inflation of the money Supply and the basic driver is that Because we have a fiat currency that Isn't paid to something Um permanent let's say like gold And because politicians can create money By printing it they're incentivized to Do so because they can offer people who Aren't paying much attention cheap gifts For nothing And the fastest way to pay for that Because they don't want to raise taxes Is to increase the money supply and then You might say and this is where we could Bring this home to land is well what's So bad about that is that we defer our Expenses into the future people get more Free stuff from the government there's a Bit of a tax that's the inflation tax Let's say but all in all the system Works pretty well but you started this Whole discussion by saying the biggest Threat to the financial Integrity of People individuals over the long run is Inflation and so why does that pose the Cardinal danger to long-term Financial Security and prosperity for people yeah
Well first of all it's not it's not Working well that that is the problem it It worked much better when we had honest Money when we were on a gold standard uh If governments wanted to spend money They needed gold and where did they get It they had to collect taxes because They couldn't create the gold it needed To be mined and and so it was an honest System Um and it it was discipline on Politicians now the politicians don't Want to be disciplined any more than you Know teenagers want to chaperone at the Prom right so you know they want to they Want to do a lot of stuff that The Chaperone won't allow and so gold uh was Keeping politicians in check but to your Point about individual prices you can't Confuse prices individually will go up And down based on the supply and demand But if the price of one thing goes up It's going to necessitate the price of Something else to go down uh and so the General level of prices won't change uh It's only when you have the expansion of The money supply that the price of Everything goes up because the value of Money is going down and so now you need More money to to buy stuff but the Problem now is because these governments Have run such enormous deficits uh and It you know inflated you know the Housing bubble that popped in 2008 the
US and then uh a decade or more of Massive deficit spent ending Quantitative easing programs and by the Way quantitative easing is inflation They basically Get you know taken inflation and put a Nice sounding name to it because Quantitative easing is printing money And buying government bonds that that's Inflation but if the politicians said Our policy is inflation you know the Public doesn't like that so they said no We're doing quantitative easing and Somehow that sounds you know more Palatable than inflation but they've Created so much and and for years and Years these Central Bankers were telling Us that inflation is too low we don't Have enough inflation because it's not Two percent and again we don't need Prices to go up you know and the reason They say that price prices have to go up Is they claim that we won't buy stuff That if we think prices are going to go Down we'll just hold off on buying Indefinitely waiting for a cheaper price And the economy is going to collapse and That's a bunch of BS because you buy Things when you need them and when you Can afford them I mean if if that was True nobody would own a cell phone Nobody would own a laptop computer Nobody would have a television that Because all those things get cheaper
Every year yet we keep buying them so It's nonsense that we won't buy if price Is going down in fact price is going Down create demand if you can't afford Something the way to have to buy it is For the price to go down and then you Can afford it and then you buy it but They've created so much inflation When they said it was too low that now It's exploded right you've got Double-digit inflation or high single Digit inflation pretty much in all the Invest economies in the world And no government anywhere in the world Is willing to actually do what it takes To reduce inflation because a they have To accept responsibility for creating it And then B they have to significantly Reduce government spending and or raise Taxes on on middle class uh voters and Neither of those choices are politically Expedient and so politicians now are Under more pressure than ever to Continue to finance their spending Through inflation so the inflation tax Is going to get bigger and bigger and Bigger uh every year And the reason that that's such a Problem is it's really the worst Possible tax because it impacts the People the most who can afford it the Least it's the middle class the Working Poor uh and the retirees who are living Off of fixed income uh they end up
Paying the inflation tax the most uh They have some savings they have a Pension they have an annuity a cash Value and insurance policies all this Stuff gets uh destroyed wealthier people Who tend to own assets and who have more Good debt right bad debt is Consumer Debt you go out and you borrow money and You spend it you buy a consumer good you Buy a TV with your credit card and That's bad debt or you take a vacation And you pay for it on a credit card but If you buy an asset particularly an Income producing asset a piece of Property uh if you a business a comp Stock if you borrow money and you buy an Asset and that asset is appreciating and Generating income Inflation is your friend inflation helps You out because it wipes out the value Of your debt and you still have the Asset so wealthy people very wealthy People if they invest the right way will Benefit from inflation whereas Ordinary People are going to get hurt Have you ever read the fine print that Appears when you start browsing in Incognito mode it says that your Activity might still be visible to your Employer your school or your internet Service provider to actually stop people From monitoring your online activity you Need expressvpn think about all the Times you've used Wi-Fi at a coffee shop
Hotel or even a friend's house without Expressvpn every site you visit can be Logged by the Admin of that Network That's still true even when you're in Incognito mode it expressvpn is an app That encrypts all of your network data And reroutes it through a network of Secure servers so that your private Online activity stays private expressvpn Works on all your devices and is super Easy to use the app has one button you Tap it to connect and your browsing Activity is secure stop letting Strangers invade your online privacy by Visiting expressvpn.com Jordan that's Expresvpn.com Jordan and get three extra Months free Expressvpn.com Jordan [Music] So inflation is particularly hard on Non-entrepreneurial savers So people who've put put away a certain Store of value maybe that's in a pension Who aren't invested in some active Enterprise that could be generating Revenue it just devastates them and if It's four percent a year they lose what What does that mean they lose half the Value of their investment in like Four percent a year would be something Like 10 years Yeah and so unfortunately it's going to Be a lot higher than than four percent Yeah let's talk about that for a second
So two things two questions about that That are that come along with what You've already laid out the first Question is How is the inflation rate calculated That's mysterious right because yeah That's it Consumer Price Index that's Another big part of the fraud because Certainly in America and I know a lot More about the U.S CPI let's say than I Do about cpis in other countries but my Assumption is that you know the Politicians are being dishonest Everywhere because you know the Inflation rate it's like a report card And if our kids were responsible for Grading their own report cards it Wouldn't be as shocker if they came home With all A's right so that this is the Problem that we've hired the government To grade its own you know is its own Pro Success you know in the economy because High inflation would would be would be Bad Um so the government again when they're Measuring inflation and they're looking At prices they're looking at an effect They're not looking at the thing itself But Over the years Governments have changed the methodology For measuring price increases so the CPI That we use today Is nothing like the one that we use say
In the 1970s yeah that's exactly what I Want to focus on because so the CPI for Everyone listing that's the Consumer Price Index and it's in principle please Correct me if I've got any of this wrong It's the average cost of something like A standard basket of goods that's what a Question then is which Goods yeah okay So let's go into that it used to be There was the basket didn't change they Picked a basket and they just measured The same basket Year after year and so you could see the Changes now the basket changes the Politicians decide what to put in the Basket and when to take out And generally they take out stuff that's Gone up and they put in stuff that Hasn't gone up as much there's all this Substitution there's a lot of other Indexes that they use where they have Hedonics or it is CPI there's hedonics And so what hedonics is is the Statisticians who compute the CPI they Look at a product And they don't use the actual price they Subjectively decide if they think that Product got better And if they think it got better they Adjust the price down Now maybe it did get better and a lot of Times stuff gets worse And they don't They don't adjust for that
Um like let's say they're looking at Airline prices and they just look at the Ticket price and they say wait a minute But you're charged extra for luggage You're charged extra for a blanket You're charged extra for food oh you Know they just look at the price you Know a lot of quality has gone down and A lot of things that hasn't been Captured and you know I did this Exercise I did this a long time ago in 2013 and I made a YouTube video about it But I just did this for kicks I looked at the CPI in 2013. and According to the CPI over the prior 10 Years Um the the price of newspapers and Magazines had gone up about 30 percent According to the CPI in 2013 magazines And newspapers were 30 percent more Expensive than they were in 2003. well I Decided to check because it's easy to do You know you could just go on the Internet and you could see a picture of Those magazines because they put the Price right on the cover so I took about 20 I took like 20 of the most circulated Newspapers and magazines in the country And I just looked at what the price was In 2003 and then I took the exact same Magazines and I looked at the price on The cover and I just compared it over The the 10 years and what I found was
That the actual increase in price wasn't 30 it was a hundred and thirty percent So the question is where did that extra 100 go because you know that those are The prices so obviously the CPI is Rigged in such a way as to have a a Number it's not that people lie when They calculate like they get a certain Number and they say oh no that's too High the methodology that is used has Been engineered To mask the real degree to which prices Are rising you also pointed to something Else that's a fundamental flaw if your Reasoning is correct which is that if Inflation is best construed as ratio of Money to Goods merely calculating Inflation as a consequence of price Increase doesn't capture the essential Element of the inflation because that's A huge problem too because let's say Prices should have gone down by three Percent and instead they go up by two Percent That's five percent inflation in that my Cost of living is five percent higher Than it would have been Um had you not had the inflation and Again if you think about inflation as a Tax when the government taxes you Legitimately let's say through a sales Tax or an income tax whatever the Government takes your money money that You had goes to the government and then
The government takes that money and Gives it to somebody else right you lose Your money but when they tax you through Inflation they don't take any of your Money you get to keep your money but They print new money and they give that Money to somebody else now when that's Somebody else spends that money that he Didn't earn it drives up your prices so Now you pay more so the government Didn't take your money they took your Purchasing power So it's the same thing and you know Another thing about our CPI that they How they changed Is Once Upon a Time back in the 70s Housing prices were in the CPI and and So were rents And and that's about a third of the CPI Which is shelter but somewhere along the Way they decided to use something called Owner's equivalent rent instead of Actual rent or actual home prices now What is owner's equivalent rent well It's a fiction that they made up that Nobody actually pays apparently uh the Government calls people at random And asks them if they own their home how Much do they think they could rent it For if they were to rent it and they Keep track of those numbers Now I don't know like you know who They're asking I mean I've owned homes For a long time I've never gotten a call
From a government guy wanting to know What I think I could rent my house for But if you're not a landlord and you're Not in the rental market how the hell do You know what you could rent in your House for it's such a ridiculous way to Try to measure the cost of Shelter by Using a number okay so let me okay so Let me ask you a question about that Because I've really been curious about That because It's obvious the K the case in Canada in Particular like housing and rent prices Have skyrocketed in the last eight years And that's not reflected in the Inflation statistics and that seems to Be a major oversight at least according To one line of argumentation because That's one-third of what people spend Their money on now you could argue this Is where it gets complicated as far as I Can tell that If what you've bought is an asset that Generates income and its value goes up That's actually not a cost to you it's An advantage you already made reference Well only if you if you own the asset Yes if you own it if you want to buy it And the price has gone up it's a Disadvantage right because now the Assets that you want to buy are more More costly Right so does that imply that a proper CPI that would include the cost of
Shelter would be calculated on the basis Of those who want to buy rather than Those who already own yeah because I'm Trying to figure out how to measure Inflation properly here right you're Very complicated problem if you already Own a home Then the cost of buying another one is Not as important to you of course a lot Of people that own homes they may want To buy bigger homes as their families Grow and and so it would be but for Those people what's important are uh Your maintenance costs Your insurance costs your property taxes Uh there are a lot of other factors that Would be significant to you if you don't Own if you're a renter then obviously Rent is of primary importance to you You're you're paying rent there's all Sorts of valid ways that the government Could measure shelter as a component of The cost of living but in the United States they don't choose any of those Valid ways they choose another way and They're doing that because they want the Number to be lower they don't want to Report High inflation and they even do This as part of the GNP because when They deport report GDP they don't even Do GNP anymore it's GDP now that they Report gross domestic product In order to get the number they have to Deflate it every there's a deflator
Which adjusts the GDP for prices and the Government always underestimates that Deflator so the GDP looks bigger than it Really is because in many cases Economies are actually Contracting in Real terms but because the government is Dishonest in the way it reports it it Reports economic growth even though There is no real growth it's inflation Which creates the illusion of growth That's another reason that politicians Like inflation and of course when Inflation drives up the stock market and The real estate market people think They're richer right because oh my house Has gone way up my stock but it hasn't Gone up your money has gone down Right but people don't necessarily Connect those dots uh you know they they Think they're they think they're Wealthier but also if you think about as I said earlier inflation benefits Debtors it's a transfer of wealth from Creditors to debtors who are the biggest Debtors in the world governments and the Biggest Most highly indebted government is the United States government we have 32 Trillion dollars of funded debt almost And our unfunded liabilities commitments That have been made where they didn't Borrow the money but they're on the hook Like guaranteed student loans or a Guaranteed pensions Social Security
Medicare all that stuff that's like a Hundred trillion so when the government Creates inflation they repudiate Enormous amounts of their debt and so The governments have massive incentives To create inflation but then they have Massive incentives to lie about it and Pretend it's not as bad as it is and Blame other people which is the main Reason that they redefine inflation from The expansion of the money supply to Rising prices because when you know Inflation is an expansion of the money Supply then you know who causes it it's The government you can't blame greedy Corporations for it you can't blame Putin for it Putin doesn't print our Money We do the Federal Reserve does and so When politicians can redefine inflation They can they can blame everybody but Themselves Okay so so let me ask you a kind of a Modified Ponzi scheme question because This is something that's bedeviled me so I understand that so I have two Questions I understand that getting the Measurements of something as fundamental As inflation correct is absolutely Necessary so one of the things I've Wondered is like why aren't there Independent teams of economists who Generate various true estimates of Inflation make them public so that the
Public itself could gather a basket of Independent estimates and know for Themselves what the inflation rate is Very curious about that well they have One other well I mean there's a website Who's reliable who's reliable Yeah you know well I think the least Reliable would be the government Right yeah yeah you don't want their Statistics because they're completely Biased right you know it's like you know The mafia is not going to give you Accurate statistics on crime right so Um you got to look to Independent Sources but Um I think it's kind of obvious though If you understand what inflation is and You see the enormity I mean the United States is running two trillion dollar a Year plus deficits now uh and Technically we're not even in a Recession the deficits are going to get Even bigger uh when this next recession Starts but how are we financing those Deficits it's it's inflation there's Just no other way they'll look at the The Federal Reserves balance sheet so we Know that inflation is going to be a Significant threat it's going to reduce The value of money and so that has to be The single most important factor in Driving your decisions on savings on Investing Um you know and and even for in this day
And age if you don't have a lot of money To invest you know I I've been saying This for years to people I started Talking about it several years ago People have to stock up on things you Know you know buy things that you're Going to use in a year or two buy it now Because it's going to be a lot more Expensive if you wait why hold on to the Cash if the cash is going to lose value Uh just buy the things that you're Actually going to need because those Things will retain their value if you're Planning on using them So here's the Ponzi scheme question So Because of the efficiencies of the Capitalist system Free market system let's say We are generally able to produce more For less and in some instances we seem To be doing that faster and faster so Consumer electronics are a good example And price of computation and so forth And so what that means is that Independent of inflation because of Technological progress things will get Cheaper in the future the future will be Richer than the present so then you Might say if you're a politician you say Well if that's the case and if that's Invariably the the case then why not Defer our debt to the Future like Essentially why not borrow from the
Future because the future is going to be Wealthier than the present and then I Wonder like if we had a three percent Increment in actual productivity per Year Then maybe we could tolerate a two Percent inflation rate because Fundamentally The tendency for things to get cheaper Because of enhanced productivity would Be balanced by that inflationary Proclivity so are the politicians could You make a case that the politicians are Making a good bet because they're Throwing the debt into the future when We're going to be richer no well they They are making a politically Opportunistic decision yeah fair enough Because they're they're telling the Voters hey don't worry about it your Grandkids will pay for it right or Whatever uh and and right of course not All voters have kids right some voters You know don't have kids and so what do They care if somebody else's Grandchildren uh pay for their for their Program but the only time you could Justify Borrowing from the future Is if you are creating something that Future uh people will benefit from let's Say a capital investment let's say the Government is going to build a bridge And that bridge is going to be there for
100 years right uh and and people who Aren't even born yet are going to Benefit from that bridge okay maybe they Can sell bonds to finance the Construction of that bridge that future People will end up paying because They're going to have the benefit of That bridge so you can make an argument For debt to support that but if we're Going to borrow money just to pay for Welfare benefits or Social Security Benefits where we're leaving our Children and grandchildren with nothing But a bill right they don't have a Bridge or a capital asset uh the money's Been spent I see so your argument Basically is is that if you're borrowing From the future isn't designed Specifically to drive productivity let's Say then it's a degenerating bet yeah I Don't think it's borrowing from the Future I think it's stealing from the Future you're trying yeah okay fair Enough and and yeah but you know a lot Of this stuff is going to backfire Because I think the current generation Is going to pay for a lot of this stuff Because The dollar is going to collapse you know We could have hyperinflation and and Because the future Generations are not Going to pay this they're you know They're they're they're going to leave That you know they'll leave the
Countries that because they're not going To want to be subjected to the Confiscatory tax rates when they can't Get commensurate benefits from Government they're going to leave uh the The currency is going to collapse in Value and we're already there I mean We're already at that point because You're talking about this Intergenerational Ponzi scheme that's Really what Social Security is I mean it Wasn't created that way in the 1930s When Roosevelt uh first uh concocted This social security and it was totally Unconstitutional and unfortunate that That we haven't but the idea was that it Was like Insurance the government was Going to take the money and invest it And then when everybody was older you Would get paid your benefits and they Even called the taxes premiums but the Whole thing was a con because it never Was Insurance because the government Never invested the money they spent the Money and now they gave themselves an IOU they created these things called Trust funds and so what would happen is The government would collect the money From Social Security then they would Take the Social Security money and spend It on whatever military or whatever They're doing but then they would put an IOU in the government trust fund in the Form of a bond and then they would say
Oh we have an asset in this trust fund We have a bond that's not an asset it's It's your own debt it's like if I write Myself a check for a million dollars I Can't take that uncashed check and claim I've got a million dollar asset no I Mean it's also a million dollar Liability so there never was any money In Social Security they spent it all Their the system is broke and now they Have to keep raising taxes on the Workers but now they won't even raise Taxes on the workers so they just keep They create inflation to pay for Social Security We'll be right back first we wanted to Give you a sneak peek at Jordan's new Documentary logos and literacy I was very much struck by how the Translation of the biblical writings Jump started the development of literacy Across the entire world illiteracy was The norm the pastor's home was the first School and every morning into a begin With singing the Christian faith is a Singing religion probably 80 percent of Scripture memorization today exists only Because of what is sung this is amazing Here we have a Gutenberg Bible printed On the Press of Johan goodberg science And religion are opposing forces in the World but historically that has not been The case now the book is available to Everyone from Shakespeare to modern
Education and medicine and science to to Civilization itself it is the most Influential book in all history and Hopefully people can walk away with at Least a sense of that Okay so let me let me offer another Rosy Scenario sort of like the boring from The future scenario so I've been Thinking about this issue of fiat Currency and the fact that the currency Is on moored But we have a situation in the world now Where every currency is unmoored right And so you might say no matter what form Of money you use you're making a bad bet You're relying on something unreliable But if you're going to rely on something Unreliable You should rely on the least unreliable Currency Right and so then you might say well the Least unreliable currency becomes by Default the standard and the US has Managed that for 50 years 60 years and So why isn't it the case because you Said for example well people who are Subject to unfair tax because of future Deferral of debt will leave but I could Say yeah but there won't be anywhere Better to go I know there will be and so The the whole world doesn't doesn't you Know there have those tax rates of a Certain country you know Um Saddles it's
Yeah future generations with too big a Debt burden Um those you know that they could leave And go to a country that doesn't have That demographic problem that big Um of a dead burden and and and and of Course so you think there'll still be Enough call even if everyone's on fiat Currency and if all the currencies are Corrupt you still think there'll be Enough variability oh yeah corruption so That people will vote with their feet Like they are in the U.S moving from Correct Democrats correct Republic and States and the idea that you know it's The you have to settle for the least bad Uh currency and again currency isn't Even really money money is a commodity Gold was money silver you know it would Be money Uh legitimate currency which is backed By real money is currency what we have Now is fiat currency and and both fiat Currency and and legitimate currency are Substitutes for money they're not actual Money but they substitute and they can Function as money but they're not really Money in the real sense of how you Define money as the most marketable Commodity which is would be money but People have been saying well you know The dollar is the cleanest shirt in the Hamper And but I I think the dollar only
Appears clean Because of its status as the reserve Currency And I think that status is in Jeopardy And when it's lost then the dollar is Going to be the the by far the dirtiest Shirt in in in in that hamper so so and Okay so two questions from that so first Of all maybe you could walk everybody Through why the government is the Biggest debtor because people aren't Really clear even for example about the Difference between the deficit and the Debt and they don't know what the debt Means to them in real terms because it's Always expressed in these huge numbers Like 132 trillion it's like no one knows What that means but they could figure That out if they knew how much of that Debt they were responsible for or their Family so you've got you've got two First of all why is the government the Big debtor well you've got the national Debt which is the accumulation of every Year's budget deficit and then you've Got the the annual budget deficit which Adds to the total debt Um but what I'm talking about creditors Versus debtors Nations can either be a Creditor Nation or a debtor Nation a Creditor nation is a nation in which the World owes it money more money that it Owes the world a debtor Nation owes the World more than it's owed so prior to
The US going off the gold standard in 1971 and in fact all the way up to Probably the early 1980s The United States was the world's Biggest creditor Nation right we we Generated tremendous amounts of wealth Um under a Freer economy than the one we Have today and one that was governed by The disciplines of a gold standard so we Became the world's wealthiest creditor Nation today after 50 years of Fiat Money America is not only the world's Biggest debtor Nation America owes more money than all the Other debtor nations of the world Combined right that's how uh much our Financial position has eroded now when The dollar became the reserve currency It became the reserve currency because Of America's Financial and Industrial Might we were the world's biggest Creditor Nation we also had huge trade Surpluses now we have massive trade Deficits I mean over a trillion dollars A year but when the dollar became the Reserve currency we made everything You know all the Consumer Electronics That are now made in Japan or Korea or China all that stuff was made in America I mean if you wanted anything we made it In this country in America and so since Everybody wanted American Products Everybody needed American dollars to buy Them and the American dollar was as good
As gold because if you had dollars you Had gold if you had 35 dollars you could Get an ounce of gold from the government It was convertible and so under those Conditions the US dollar became the Reserve currency but today The the dollar would never be the Reserve currency today if it wasn't Already there right nobody would pick The dollar given our financial position Our trade-in balances but you know it's Been the reserve currency because you Know for the tradition of the fact that It's been But In order for the world To to maintain this status it's very Expensive for the world it's a huge Benefit for America I said we have a Trillion dollar a year trade deficit That means the world has to supply America with a million dollars worth of Merchandise for which it doesn't get Paid right it doesn't it doesn't get Products you know most countries in Order to export have to I mean in order To import have to export you have to Export something in order to pay for Your Imports well we don't have to Export anything we just print money and Export that well that costs nothing but The rest of the world has to produce Real stuff and and use resources land Labor and capital to produce products so
Americans get to live beyond their means Because of the dollar status but the Rest of the world collectively lives Beneath its means and of course it's not Um uh consistent because some countries Uh have to live even further below their Means depending on how big a trade Surplus they have with the United States That's how much they're subsidizing the US economy so a lot of the Emerging Markets uh bearing even uh bigger uh uh Uh burden of preserving the dollar Status And and so I think the world is starting To move away from the dollar not only Because of the economic cost Of maintaining it but now we have raised The political risks if you look at what The Biden Administration did with Russia The unprecedented sanctions On Russia This has really highlighted the Tremendous risk that every Sovereign Nation assumes by being beholden to the Dollar Because it puts tremendous power in the Hands of the United States it's like Putting a noose around your neck and Then throwing throwing it over a tree to America who's holding the other end then You're hoping that they don't pull I Mean nobody wants to really be in that Position especially if you're a country Like China where you know we've kind of
Made China our enemy but in reality China provides America with the largest Annual subsidy they're our biggest uh uh Uh trade deficit is with China so they Supply us with more merchandise than Anybody else and they're our largest Creditor now some people say it's Japan Uh but no it's actually China because You have to take Hong Kong because Hong Kong is part of China so if you take all The treasuries that Hong Kong owns and The treasuries that China owns that's More than Japan so they're our biggest Banker they Supply us with credit they Supply us with merchandise right that's All going to end right China is going to Wean itself of that okay so well so Let's let's go after that so you said And let me see if I got the reasons Right you said well the American dollar Could stand as the Um fundamental currency because it had Come off the gold standard but had still Benefited from that it was Extraordinarily productive it ran huge Trade surpluses it was a dynamic Expanding rich country with a very Stable currency so it could run on that For a long time and and you said however Now if people looked at the American Economic situation the American dollar Without that historical context there's No way the US dollar would be the Reserve currency but then we're back to
The dirty shirt in hamper problem and I Know the Russians and the and the Chinese and the Brazilians Etc are Wrestling with that they're trying to Move people away to some degree from the Dollar as a reserve currency but like Nobody in the right mind is going to Trust the Chinese currency so where so Where do people go if it's not the American dollar that's going to be the Standard for all the reasons you laid Out well you know the Euro doesn't look Better really and certainly you have to Be insane to use Chinese currency I Think see that that is the false choice That everybody thinks we have to make One of the reasons that people are so Arrogant particularly in America that The dollar status is not in jeopardy and So that we can keep on running these Huge deficits we can create keep on Creating inflation and the world's got No choice right but the state with a Dollar because are they going to go to The euro are they going to go to the Yen You know the pound I mean they're Winning B I agree all of those Currencies also have problems And so do you really want to switch from One flawed fiat currency to another even If those other Fiat currencies may be Less flawed than the dollar right Do you really want to make that shift I Don't think that that's what's going to
Happen what everybody is missing is that There is an alternative To the dollar that doesn't involve Another fiat currency and that's gold That is real money everybody forgets That for thousands of years gold was Money it was money because it worked now Over the course of time we had paper Currencies that would arise and fall I Mean hundreds of years ago they were Paper currencies that are now worthless And you don't even know their names you Know they come and go but gold has has Stayed you know gold works as money and So I think what these central banks are Going to do is as they get out of Dollars they will just increase their Holdings of gold gold will be the Monetary anchor gold will be the reserve Monetary asset just the way it was Before the dollar it wasn't the British Pound I mean the British pound was a Dominant currency but gold was what Everybody owned the British back the Pound do you see any do you see any Evidence that some of these alternate Currencies are starting to back their Currency claims with gold oh yeah you Can what's happening on the central Banks are now buying more gold than They've bought in in in decades Especially a lot of the uh you know the Emerging Market countries not even maybe So much the United States isn't buying
Any gold and maybe you know some of the More mature uh countries but a lot of Other countries that had predominantly Held dollars and then to a lower degree Euros or Yen or pounds these countries Are increasingly buying gold that's why Gold is at a record high it goes around Two thousand dollars an ounce but in Terms of just about every other currency On the planet gold has been hitting All-time record highs uh and again That's not really gold going up that's All these Fiat currencies going down but What are the reasons that countries Would want gold as opposed to the dollar Is the US government doesn't have any Control over it you know gold is an Asset that's not also somebody else's Liability and nobody could create it you Have to mine it no one country you know Has the advantage so you know why would You want to take away Uh that that privilege that the United States has and just bestow it on Somebody else who is going to abuse it The same way I mean the United States Abused that privilege that we had and we We we exported all this inflation to the World we took advantage of the this the Position that we were in uh so why would You want to put another nation in in a Position to similarly take advantage of The world it's much better to go back to To honest money and again even when we
Were on Bretton Woods before you know 1971 and we were on the dollar standard It was because the dollar was backed by Gold again if you held dollars you held Gold that's where the saying came from The dollar is as good as gold in fact The legal definition of a dollar is a is A weight of gold that's what a dollar is Dollars are gold the the the paper Currency that circulated Federal Reserve Notes are not dollars they are notes of The Federal Reserve initially the those Federal Reserve notes were payable in Dollars the dollars were the gold that The Federal Reserve notes paid because If you think about what a note is a note Is a promise to pay something a Federal Reserve Note is supposed to pay Something well what did it pay it paid Gold it paid dollars today Federal Reserve notes pay nothing their ious Nothing the Federal Reserve is not Obligated to give you anything I mean if You have a ten dollar bill okay so People people might object and they and They have That well gold is just another arbitrary Standard of value it has some intrinsic Worth it's useful for jewelry it's Useful for certain industrial Applications but it's just another Psychologically valuable currency Without any intrinsic value and so it Shouldn't be a repository of value in
Principle that's any more stable than Let's say a well-managed or even a badly Managed fiat currency and so what do you What do you why is it that gold has Proved itself let's say over centuries Or Millennia as a storehouse of value What is it about gold Intrinsically let's say that seems to Have given it that edge the idea that Gold doesn't have any intrinsic value is Just pure nonsense it's obviously Politicians have a vested interest in in Trying to diminish gold as a monetary Alternative to the Fiat system and even Now you have a lot out of cryptocurrency Enthusiasts who say the same thing well You know gold has no value because they Want to justify something like Bitcoin Which also has no value and say well Gold worked as money and it has no value So so Bitcoin could work well it's not True that gold has no value gold is the Most valuable the most useful metal on The periodic table gold became money Because it was such a valuable commodity But gold has a lot of properties that Make it uniquely qualified to be money More so than than other Commodities That's why gold was so successful over The centuries as money because people Preferred to use it as money it wasn't Governments that decided gold is going To be money The people decided that gold was going
To be money and once the people decided That gold was going to be money if you Were a king you know well you would tax People in Gold because if you wanted to Pay your soldiers to protect you your Soldiers wanted gold right so it was the Money created in the free market and it Beat out all other forms of money Because gold you know a gold coin uh all They're all all the same you could melt Gold down and you can make it into coins Uh it's fungible it's portable it's Divisible but the other aspect of goal That is the key you can save gold Because if I have an ounce of gold in 100 years in a thousand years it's Exactly the same it doesn't lose any of Its properties and in fact even if I Take my gold and I make you know I make A ring out of it or I I use it to make a Watch right You can melt this ring down and you get Your gold back and it's exactly the way It was you could do something else with It there's really no other metal you can Keep using it over and over and over Again I mean they fill teeth with gold If you find somebody buried in the Ground you know you could take their Fillings and you know the Gold's still There you know there treasure ships from The 1400s 1500s they sink if they Recover the wreckage the only thing That's still there is the goal it's an
It looks exactly the way it looked when The sink when the ship sank 500 years Ago so from a point of savings because Money has to satisfy three primary Conditions two of them are a unit of Account an immediate exchange but the Third one is the store of value And that's important Because it's also makes it possible to Do loans that I can borrow money you can Lend money and you can be repaid and you Know that the money that you're going to Get repaid is going to retain its value And so that's something that gold that Gold does better than than other metals But The the value of gold even if I'm not Using my gold today as a metal let's say I have gold stored in a safe and you say Well you know you're not using it for Anything that's true but I'm preserving The future use of that gold somebody in The future is going to need that gold And so I'm storing it right now Because you know there are more uses for Gold that are discovered all the time Because of its very unique properties I'm sure in a hundred years or a Thousand years There will be more uses for gold than There are now And and so okay so let me where are they Push you on the crypto front for a Second so
So you know I've been contemplating Permanent storage storehouses of value Concerned about such phenomenon that We've been discussing as inflation and Potentially hyperinflation Which is far From rare even among developed countries I think you have a one percent chance if You live in a developed country of uh Hyperinflation incident at some point in Your life it's something like that but Anyways the cryptocurrency people and I Think the Bitcoin people have made this Case the best is that they've managed to Duplicate gold in its important elements In that they've produced a storehouse of Value that can't be corrupted because It's blockchained and distributed and That's a nice argument that also gets More scarce with time which was quite The brilliant Um technological innovation that Requires work to Obtain and so that's the Bitcoin mining But that is also easily distributable Digitally and so it's out of the hands Of governments it's an uncorruptable Store of value it's widely distributed And it's easily moved and so you know That's not that that accounts for a fair Number of the properties that you Described a money a moment a monetary Unit had to possess so What do you think of crypto in general But more specifically about Bitcoin
Because I think it's king of the cryptos And Do you think there's a case to be made That gold has an advantage that crypto Cannot duplicate and then we might ask Well what if you had a gold-backed Crypto Because maybe then you could have the Best of both worlds so so what are your Thoughts about the I mean bitcoin's done Pretty well for a currency that doesn't Exist you know that's not government Mandated Etc it's it's stored its value There's a lot of well variability oh First of all but Bitcoin isn't a store Value because you can't store something That you don't have right first you have To have the value so as I said Gold's Value is its use as a metal right that's What you're storing is the future use of Gold and metal whether you're going to Use it in jewelry or as a conductor in Electronics or in medicine whatever it Is you're you're storing that uh Bitcoin Only has a price doesn't have value Price is something that you pay right Value is something that you get when you Buy Bitcoin you pay a price but you get No real value Um and now I agree the price of Bitcoin Has gone way up from when it was first Started where you know you could get Multiple Bitcoins for a fraction of a Penny or a dollar whatever they started
Next to nothing and at one point people Were paying almost seventy thousand Dollars for for a Bitcoin Um currently it's around 27 000 as we're Recording this Um so depending on when you bought you You potentially made a lot of money if You sold if you bought during the Mania Hysteria of 2021 you know you you've Lost a lot of your money if you if you Get out Um but looking at Bitcoin look Bitcoin Did an excellent job of replicating the Qualities that gold has That made it better money than you know Cattle you know or salt or you know Other Commodities that have been money Right gold did has certain properties And Bitcoin you know Captured those properties but the most Important property at all Of all is Gold's metallic properties Gold as a commodity Bitcoin has none of That And and so Bitcoin just like a fiat currency what What gives a fiat currency its value Just confidence people just believe that It has value they believe that people Will accept it now part of that belief Is driven by governments which declare It legal tender and which require it for Payment of taxes and so there is some Real demand for dollars if you live in
America there's a demand for euros if You're in Europe because you have to pay Taxes and if you don't pay taxes they Could put you in jail and so in order to Avoid jail you need the currency that The the government demands uh but Bitcoin Is similar to Fiat in that all of its Value comes from faith and confidence People just believe that people in the Future will want it and they'll pay a Higher price for it except there is no Legal currency status there is no Government really maybe other than El Salvador I don't know what's going on Over there but there's no government That is accepting tax payments in Bitcoin Um so there's no natural demand other Than the speculative demand From people who think they're going to Get rich I mean people who buy Bitcoin Are buying it because they expect the Price to go up and the people who buy it From them thinks their the price is Going to go up so it's just greater full Theory that the price is going to go up And that's what's driving people to buy It uh it's very cumbersome if you want To use it as a medium exchange or a unit Of account it's too volatile to be a Unit of account it's too expensive to be A medium of exchange and it can't be a Store of value uh so it's it's it's not
Gold it's you know digital Fool's Gold But you you hit the nail on the head When you talked about a crypto that's Actually backed by gold that works that Solves all the problems that bitcoiners Claim Gold has it well you know I can't send My gold around the world I can't use my Gold to buy a cup of coffee well yes you Can it's a lot better than Bitcoin if I Have gold stored with any third party it Could be a government it could be a Private company it could be anybody You could tokenize that goal and have a Bitcoin similar cryptocurrency That is a digital representation of that Actual goal it's like a warehouse Receipt an IOU for gold and then if I Wanted to give you some of my gold I Wouldn't have to ship you my bar I could Just send you my tokens you know over The internet and and now the ownership Goes from me to you Um you know it's it's an improvement on Paper money because again initially Paper money came as a substitute for Gold I had my gold stored with a Blacksmith and instead of lugging my Gold around my blacksmith gave me an IOU And then I could circulate that IOU Because everybody knows the gold is There and instead of having to get it They just circulate uh the IOU in in the Paper terms well it's much more
Efficient to do it uh crypto digitally And you can take an ounce of gold or a Gram of gold and divide it you know to Tiny little pieces so that I could buy a Cup of coffee and pay the Barista with My gold uh using the token uh and it Would be faster and cheaper than Bitcoin And the difference is when I'm paying With gold I'm paying with something real I'm getting one commodity for another I'm getting coffee and the guy that sold Me coffee is getting gold Um and you can actually denominate the Price in Gold because gold is stable I Mean it could function much better as a Monetary instrument the only thing that You have you have to trust you have to Trust the third party But I mean capitalism is all about Trusting third parties I mean private Third parties we we buy an insurance Policy people buy life insurance fire Insurance health insurance it's all a Third party that's selling you that Policy the policy is only as good as the Third party's ability to to pay you know How do you you know we have rating Agencies we have capitalism we have Competition for reputation There is no reason that you can't have Third parties to store your gold and Then you could use it you don't have to Store all of your gold that way you can Keep a lot of your gold yourself but the
Goal that you want to use as a media of Exchange uh you can use that uh Digitally and that works much better uh Than Bitcoin you have real value you Have real well I've talked I've talked To people who have Attempted to produce gold-backed Cryptocurrencies and they've run into From my understanding a variety of legal Impediments on that front do you know of Anybody who's doing that successfully And if so Why aren't they uh Prime competitors Let's say in the international market For Bitcoin I mean the argument you laid Out seems to make sense and so you'd Think well you'd think two things you'd Think given that governments are rushing To digital currencies and that some Governments would like to displace the U.S dollar as the reserve currency that The logical thing to do for some Enterprising country would be to produce A digital currency that was gold backed And so what's happening on that front Okay so there's two things first of all The demand that is mainly coming in Cryptocurrencies including Bitcoin Is to get rich right people want to buy Bitcoin because they think it's going to Go to the Moon And so that's really the demand for Cryptocurrencies it's not to have an Alternative as a medium of exchange and
As a unit of account most people that Are buying Bitcoin they still use Dollars or Euros or Pounds in their Transactions they just hoard their Bitcoin because they think they're going To get rich And and so there's no real Demand yet For a cryptocurrency that's backed by Gold to be used as a medium exchange People are still content to use their Fiat currencies for that role Um But I think that once this crypto bubble Really pops and The losses you know stack up and and People get burned and they're no longer Interested in these get rich quick Schemes and they really start to focus On an alternative Not to get rich but to preserve what They have right because that's what gold Is Right physical gold is not about Getting rich it's about avoiding Becoming poor it's about avoiding the Inflation tax and and so I think as the Inflation rates get worse throughout you Know the world There will be more of a demand for an Alternative medium of exchange to these Fiat currencies that can also store Value you said you said some of that is Happening already you said that many Countries around the world the central Banks are buying gold the central banks
Right seems to be a right right so and And many of those central banks are also Starting to experiment with the idea of An imposed digital currency well there There's there's flirting on the market What they're talking about is a digital Fiat currency that just gives them more Yes I know they just want they and if They want to eliminate cash it's just Inherently a very oppressive monetary System that concentrates even more power In government and diminishes uh Individual liberty and makes it easier For governments to become more Tyrannical so that's a whole different a Topic but staying on a gold back crypto So one reason is that there's not a lot Of demand for it yet The other problem though is that to the Extent that there is some demand There is such a huge regulatory Impediment and I think it's deliberate On the part of governments governments Don't want to have to compete with gold And and so the barrier that a lot of Companies face because it's very easy to Tokenize Gold this is not a hard process It's the regulatory environment It's the money laundering laws uh you Know that are there uh that make it very Expensive to get into this Um business Uh because you have to comply with all These rules and regulations and also you
Have the potential for governments to Declare these tokens Securities which They're not but some government can say Oh it's a it's a security and now it's Got to be registered and you've got to Comply with all these other rules and Regulations so government makes it very Expensive to compete with their Fiat Currencies so what has to happen is the Advantage of a goal back crypto has to Be so large that it could absorb those Costs and that's going to happen because The inflation is going to be so high but Also you're going to have Sovereign Nations potentially coming out with Goldback cryptos in the United States You may have state governments coming Out with their own official Uh gold back uh cryptos uh there it's I Mean all of this is going to happen the Market is going to find solutions to This problem you know whenever the Government you know has some type of Service that it provides and of course All government services are going to be Flawed you know we talked about how Capitalism lowers prices governments Raise prices whenever whenever you look At an industry that that's heavily Regulated education right prices go up All the time because the government is So involved that's why it keeps getting More expensive and the quality goes down The quality of Education I mean a high
School degree you know 50 years ago is Is way more valuable than a college Degree today even a master's degree so Governments have destroyed especially a Master's degree yeah the governments Have destroyed the value of degrees While dramatically increasing the price To to get one so government drives Quality down and price up the free Market does the reverse it drives quite Quality up and and and and and and price Down Government let's say the post office Right post office was a problem and so Then FedEx came along right and okay we Can avoid the post office or more Recently uh governments create Monopolies in taxi cabs well Uber comes Along Lyft comes along and and creates Some competition to these government Monopolies so the same thing is going to Happen with money government money is is So bad And it's going to get worse that the Market is going to offer Alternatives And Yes the government is going to try to Put up roadblocks to protect its Monopoly But ultimately it won't work And you know the people will find ways Around it okay okay so well let's turn On the recommendation front now so and We can talk a little bit about your Particular business as well so
I would say that one of the threads Running through our conversation is well First of all you're cautioning people Against the immense danger not only of Inflation but of potential Hyperinflation and you're making the Case that Fiat currencies including the American dollar are intrinsically weak And getting weaker for a variety of Reasons and that's true systemically not Only in the US and that that's going to Inevitably increase inflationary Pressure now we've seen a fair bit of That in the last two years let's say and It's certainly I think evident to anyone Who's thinking that the actual inflation Rate is much higher than the pronounced Inflation rate okay so now Hypothetically people are going to want To know how to protect themselves Against inflation if they're trying to Store wealth in the long run Um trying to maintain their savings at Minimum let's say and you make a strong Case that gold is the proper medium in Which to invest savings that you wish to Maintain now you broker gold purchasing Services we can walk through that a Little bit and so someone could say well You know you have an iron in the fire You have a stake and the outcome here It's not surprising that you're putting Forward the pro gold Vision but I Presume the reason you're doing that is
Because you actually believe it and are Invested that way yourself so what would You recommend to people who are Listening and these would be people of a Moderate income let's say or perhaps on The Lower Side what would you recommend To them to be doing in order to protect Themselves against the threat of Inflation as the future rules forward Yeah well first of all absolutely right I don't I don't promote gold because I Have a bunch of gold I'm looking to Unload I mean I I went into that Business because I believe that people Need to own it I mean in fact I started Shift gold uh I had I was I owned a Broker dealer and a lot of my customers Wanted gold because I promoted gold I Talked about it but I didn't I didn't Sell it at the time I was was just you Know I was stock broker and I was Helping people with their stock Portfolios but I also recommended that They go and buy some gold and they would Go and buy it from other companies but What was happening is people were Getting ripped off a lot of these gold Merchants were uh overpricing their Products they were you know pushing them Into numismatics or these Collectibles And I didn't like what was going on and So in order to make sure that my Customers didn't get ripped off I Started my own business to so that they
Could buy gold from me and I could make Sure that they they weren't pushed into These other products and that they Bought bullion and they they paid a low Price for it so that's how I got into The business Um because I believed in it now I don't Look at gold though as an investment I Look at gold as money So to the extent that you want to keep Liquidity you don't want to make an Investment right you don't want to buy Real estate you don't want to buy stocks You don't want to buy bonds you just Want to keep some cash That's where I see gold As a place in the portfolio right and Not the cash that you might need I mean At least now I mean when we're starting To use gold back crypto then you could Keep everything in Gold but for now you Want to pay your rent your landlord Isn't taking gold yet I mean he probably Will in the future but right now he Wants you know dollars or Euros so you Got to keep some cash to pay your bills But if you're talking about cash that You're going to hold on to that you Might use in a few years maybe to make An investment maybe you think real Estate's going to go down maybe you Think stocks are going to go down and so You want to you want to have some dry Powder to buy that's where you want to
Keep gold instead of currency because Currency could lose so much value that You know stocks can go down in value but Still go up in price you know so let's Say uh stocks could go down 10 or 20 Percent in terms of gold but they can go Up in terms of dollars or or or Euros so It's better to hold your dry powder in In honest money and especially now Because if you look around the world Interest rates in almost every country Are still below the official inflation Rates which means rates are negative and Of course the the real inflation rates Are much higher than the official rates So you're losing a lot in cash maybe 10 20 years ago that wasn't the case you Could get an interest rate that exceeded The rate of inflation and so you were Paid for the loss of uh purchasing power And people would say hey you don't want To own gold because you're giving up That interest well now there is no Interest there's negative interest gold Actually lets you avoid that negative Interest because negative interest is a Loss that's imposed On You by holding a Currency so you avoid that loss by Owning gold so gold uh is a substitute For money But You want to make investments you don't Want to just leave all your money in Gold gold is a metal it's not doing
Anything it's not producing anything uh You're gonna do better over time Investing in productive assets and That's what I do if you can identify Them yes and if you don't overpay for Them I mean that's a mistake that a lot Of people make they look at a company That has a good product And they think oh it let me buy that Stock well the stock could be way Overpriced so it's not just buying a Good company it's paying the right price And because that's what's going to Determine your long-term return if you Overpay for an asset you're probably Going to lose money eventually now you Can so how would you how do you view how Do you view let's say the relative Importance of something like a good so There are these funds which I'll just Outline this for people who are Listening that allow you to purchase a Basket of stocks essentially And often those stocks are weighted to The index is used to assess stock market Performance and so you can buy uh shares In a mutual fund in a fund let's say That owns a basket of stocks a large Basket of stocks and so then you average Your risk across many companies and you Benefit in principle from the average Increase in productivity across that Basket of Stellar companies and so those Those index portfolios have proved to be
A pretty good alternative to actively Managed money and how do you see Investing in gold in relationship to Something like investing in an index Fund well I mean they're very different So first of all the the idea of just Indexing and just say look I'm just Going to buy the market I'm going to buy All these stocks You know in certain periods of time that Could work out Right because if a lot of money is Flowing into those indexes it's going to Push up the price of the stocks that are Included in those indexes but right now Because so many people have indexed The stocks in those indexes by and large Are overpriced and if you you buy if you Overpay for an asset as I said you're Going to lose eventually now you can Overpay for an asset and you can make Money if you can sell it to somebody who Overpays by an even greater amount and So you could trade overpriced assets if You're Nimble and make money but if You're a long-term investor The way to make money is to buy Something cheap buy it when it's Undervalued especially if it pays a good Dividend because now you can collect Your dividends while you're waiting for The asset that you bought cheap to Become expensive and I don't like Passive investing you know what I do for
My clients and what I do personally is I Actively invest Um and over the long run That is much better than indexing over Certain periods of time Indexing can do better and then it Becomes a self-fulfilling prophecy Because the money gets sucked in chasing And performance how how do you know that You're how do you know that your active Investing is allowing you to I Accurately identify stocks that are Properly or under underpriced I mean That's the million dollar question well There are some basic You know truths to assessing Value of a business right you could look At a a business because that's what a Stock is when you're buying a stock You're buying a piece of a business so You look at the business and you can Look at the the revenues the profits the Debt you know you could look at all These metrics and you can tell You know is it cheap am I buying the Income potential of this business am I Getting a good price you can look at Ratios historically that show you that Something is cheap or expensive now the Problem that a lot of people have is Their time Horizons are so short because Yes an asset can stay cheap for a while Before the price goes up and usually When you get something cheap
It's because there's a problem Something's got to be going wrong that's Causing people to sell so what you have To be able to do is do your homework and Decide Is this problem that is hurting the Price of this stock is it fixable is it Long term can we see beyond this problem To the solution and is the market Getting something wrong and I'm getting A good price conversely When stocks are expensive it's because They're doing great and everybody loves Them and then what you have to decide is Well are people being too optimistic About this company that's doing really Well are there problems that the market Is not paying attention to that are Likely to come up in several years so There are ways to do this and if you're Smart and you st you have basic Principles over the long run I think You're going to outperform just a static Basket of stocks where you're just going To pay whatever price the market is Demanding I mean people say well you're Saying that's partly because these index Stocks they also tend to be somewhat Inflated in value because so many people Have dumped money into them exactly That's artificially inflating the price Of the entire basket right right because Then that counter purposes to the idea Of random sampling it's no longer random
If you're buying a preferentially priced Basket and then it's going to work in Reverse when a lot of people want to get Out of the indexes all these stocks are Going to get sold because a lot of these Stocks don't even pay dividends I mean The problem is let's say you're buying a Bunch of stocks they don't pay dividends If you retire and you have all these Stocks and now you need money to pay Your bills because you don't have a job You got to start selling your stocks and That puts downward pressure so by by Placing those stocks in an index they're No longer independent either right you Bundle them together and so the Presumption of Independence that was There to begin with is violated by the Bundling of the stocks in the index but The other point I'm trying to make is if I'm building a portfolio for my clients Of companies that I'm buying cheap and Because I'm buying them cheap I'm Getting a high dividend I'm getting a Lot of income on my stock because see if You're just buying a stock because you Think the price is going to go up that's Just speculating you could be wrong the Price could go down I'm buying stocks That even if the price never goes up I still make a good return because I'm Getting a dividend right now regardless Of what happens to the stock price so if You build a big portfolio of good
Dividend-paying stocks while you're Still working and you don't need the Income you can take those dividends and Buy more stocks and build up your Portfolio but then when you retire you Don't have to sell your stocks you just Take your checks your dividends and you Start spending those you stop Reinvesting and so that's not a Ponzi Mentality that's legitimate investing in The market uh by buying companies that Throw the most important thing though That I think people can do now is Recognize though if I'm right about What's going to happen to the dollar and The US economy the companies I'm buying Are international and their customers Are outside the United States and these Are the customers that are going to Benefit when the dollar declines and the U.S loses that Reserve status and Americans can no longer live above above Their means that means a lot of other People who are living beneath their Means they're going to get a reward from The dollars a loss of status and those Consumers in those other countries are Now going to be in better shape I want To own businesses that have those Customers I want businesses whose Customers are going to get richer not Whose customers are going to get poor And I want customers who have a lot of Savings not a lot of debt so I own
Businesses that are going to be able to Thrive in an econ you know where the US Economy is in a lot of trouble where It's in stagflation and I also own Companies That sell products and provide services That people need and they're going to Continue to buy those goods and services Even if they have to cut back on other Things to afford it you don't want to Have a portfolio where consumers can Easily do without what you're selling or If you're not even selling anything a Lot of these tech companies you know all Their income is from advertising they Give away the products and they and they Have advertisers but if the consumers Can't afford to buy products that the Advertisers are advertising then all That ad Revenue goes away and a lot of These uh tech companies that have these Really high multiples you know they're Going to come crashing down okay so if You were we're starting to come to near The end of the time for our discussion If you were Giving people advice who are beginning To invest let's say these are people who Might say have a hundred to five Thousand dollars a month to invest What would you recommend When do you think people should start Doing that when should at what level of Income should you start to consider
Putting away some of your money how much Should you put away and then what Concrete steps could you take to start Doing this it's broken down in a very Simple manner because lots of people Have no idea how to start doing this When it comes to investing I mean the Earlier you start the better because you Get the compounding effects of that uh Now if you allow inflation to destroy The value of what you've invested then You know that's no good but If somebody only has you know 500 a Thousand dollars a month to invest I Mean what I would recommend is that they Use my mutual funds I mean you could go To uh my my uh website europac.com now I Think the minimum is twenty five hundred Dollars to get your account going right So you have to have at least that amount That's not a lot but you can go on my Website and just buy my funds now my Funds are also available at all the Discount brokers so if you have an Account at Schwab or Fidelity or Ameritrade or yeah all these you know my Funds are on their platforms But Um but then the I think the the Incremental investment you can invest a Hundred dollars or 500 at a time you Know you can you can have small Investments once you've established uh The portfolio but then you do get the
Benefit of professional management and Diversification you get a a big Portfolio of stocks that are actively Managed by by me and my team where we Are you know looking for good Opportunities buying stocks when they're Cheap selling them if they get too Expensive Um you know constantly you know you know Evaluating our Holdings making sure that The stocks that we thought were cheap Um because they had a problem that those Problems are being solved and that we're Right on our research and if something Comes up and we think we've made a Mistake we can sell a stock and and Redeploy the money or if we find an Opportunity that we like better than one That we have we can you know we can make The changes that's something that you Can't do when you're just in a in a in a Static model you know and and that's why My my funds the performance has been so Fantastic recently uh in the last you Know one three and five years relative Our to our peers is because we've done Such a good job of Um stock picking and sector allocation I Mean not only are we way ahead of our Benchmarks which would be an index but We're way ahead of everybody else who's Trying to beat the indexes uh but I Think the the time period where my funds Are going to do the best and I have a
Value fund a dividend payer fund an Emerging market fund a gold fund and an International bond fund it's going to be In the future years when the dollar is Really weakening I mean the dollar Hasn't weakened dramatically yet I mean In terms of purchasing power it has I Mean that's clear I mean you need more Dollars to buy everything but in terms Of Euros or Yen or pounds that's not the Case but that's coming I think we're Going to see a substantial decline in The dollar relative these other Currencies and that is the environment Where my funds are going to do the best And as inflation rates pick up and we See a bigger increases in commodity Prices Uh that's going to really benefit my Investment strategy So okay so let's let's close with this Perhaps so the devil to some degree is Always in time frame you know and you've Made a case for the inevitable weakening Of the American dollar as a reserve Currency and of its value as a fiat Currency and that's in keeping the Latter part in particular in keeping With its gradual dissent into Comparative lack of value against gold Since 1971. but so The devil is always timing and so Over what period of time do you think This unfolding into a more inflationary
Period is going to occur and and what Makes you reasonably convinced let's say Of your timing Well timing is is always difficult I um I mean I know what's going to happen I've known what's going to happen for a Long time right that that might be the Problem but Where we are right now is exactly where I've been forecasting we would be even Going back to you know my predictions of The 2008 financial crisis you know I Knew that crisis was coming because I Understood the mistakes that the Federal Reserve made to create that housing Bubble and I knew the consequences for The financial set system when it popped But even before the bubble popped I knew The mistakes the government was going to Make I I predicted QE before I even knew The word I knew they would do this and I Knew they would inflate an even bigger Bubble uh that has finally popped Because I knew that eventually the FED Would be in a position at other central Banks where the they would have created So much inflation that they would now be Under pressure to do something about the Inflation problem but they couldn't do That without creating a worse financial Crisis than the one that they used Inflation to mitigate in 2008 and that Financial crisis has already started we Saw that with the failure of Silicon
Valley Bank and Signature Bank and a lot More Banks would have already failed had They not been bailed out the government Pat you know came in and propped them up And printed more money and and came to The rescue which is another mistake But We're at a point now where inflation is Going to start to run out of control Because the FED has started to return to Inflationary monetary policies When inflation is already you know Triple it's two percent Target uh we're Starting another recession uh from the Weakest you know financial position that We've ever been in and all the stuff That's been happening is stuff that I Predicted in fact even when covet first Started and everybody was saying oh this Is very deflationary I said no it's not It's massively inflationary because We're people are not working they're not Producing and we're printing even more Money than ever we're we're we're Actually paying people more to stay home Than they earned when they actually were Productive I said this is you know Creating even more inflation and so We're at this taking point you know and In fact when the central banks had to Keep interest rates at zero for so long They did that for a reason that was Because they didn't want the whole thing Imploding so they kept it on life
Support until they couldn't do it Anymore because of the the outbreaks of Consumer prices but I I think we've Passed that point and and so this is Happening this is the time frame where The air is coming out of this bubble It's still early if you remember in 2007 When the subprime market blew up and I Was very you know active there we had Shorted a subprime market I mean you Know they they you know they made wrote A book they made a movie about that Trade well I lived that trade we did That trade so I I was predicting you Know subprime I mean you can go one of My videos on YouTube is mortgage Banker Speech I gave in 2006 in front of 3 000 Mortgage Bankers I went there to promote This hedge fund that was shorting Subprime but you could still watch my my Talk with what you don't have on the Internet is the smaller talk that I gave Later specifically on that fund right This was the larger talk I had about Maybe 50 people that came to the smaller Presentation about about the fun Um But I knew at at that time That The the bursting of that bubble but you Know we we would create this crisis but When the subprime problem initially Reared its head everybody said don't
Worry about it the Federal Reserve said It was contained Ben Bernanke said don't Worry about subprime it's contained well I was on television at that time all the Time I used to be on cable news every Week back then I said no it's not Contained this is the tip of an iceberg This is a huge problem in the entire Mortgage Market we're headed for a Financial crisis you know it's anything But contained well the government got That wrong then when inflation really Burst out as far as high prices in 2021 What did they say oh don't worry about It it's transitory Right well I said no it's not transitory It's permanent it's here to stay they Were wrong again well they're ignoring The warning signs again just like they Ignored uh the subprime problem just Like they ignored the outbreak of the CPI they're ignoring all the early Warning signs of the of the financial Crisis that we're in now and the Great Recession that's beginning that is much Worse than the last one and so That the significant thing is going to Be the difference because I think this Time we're headed for a currency crisis That's going to be the end result of This next collapse is going to be the End of the dollar status in a currency Crisis and so you have to have a very Different Investment Portfolio than the
One you had in the prior decade just Hiding out in tech stocks isn't going to Work those stocks are going to go down You have to have the international value The dividend paying the commodity Exposure old-fashioned type investing Gold and and that's what I'm doing and Again for for wealthier people you don't Necessarily have to buy my funds you can Buy my funds but we have separately Managed accounts so if you contact your Pacific Asset Management we manage Portfolios individual portfolios of Stocks uh that I think will perform Extremely well during the economic Environment that we're in and that we're Going to continue to be in most people Unfortunately are going to get wiped out People are going to lose lot in this Environment but there's going to be a Small percentage of people there always Are who will make money during this time Period And I I just prefer to be among Those people right just like you know Not everybody made money off the Subprime collapse there were a a number Of people who understood the problem and Bet against the conventional wisdom and And and they made money and the Conventional wisdom is generally wrong And it's wrong right now they expect Things to happen and aren't going to Happen they have a lot of confidence and Faith in central banks and the fed and
And they're wrong this is not going to End the way they believe there is a huge Mispricing of Assets Now just like there Was for mortgages back then a lot of People don't understand this and they're Going to suffer but the people who Understand it are going to are going to Profit and and I'm hoping that as many People as possible I can help them Profit by by getting them properly Positioned with their portfolios All right well that's an excellent place To stop I would say we're pretty much Right on time there and so for everybody Who's watching and listening thank you Very much for your time and attention And Peter Schiff thank you very much for Talking to me today and walking me Through a lot of this somewhat Elementary material but it's very good For people to hear exactly how these Things work right because we're not well Taught on the financial front and many Of the terms that are bandied about Inflation debt deficit investment for That matter gold standard Fiat people Don't understand these things and to be To provide people with that information Is extremely helpful we will link to all Of the Um opportunities that Peter described in The description of the video so you can Check that out if you want and I'm going To switch over to the Daily wire plus
Side now and talk to Peter for another Half an hour I do that with all my Guests to get a little bit more Biographical information to find out how We got where he is and uh maybe to delve A bit more deeply into his ability to Have prognosticated accurately regarding The 2008 financial crisis which was quite The interesting catastrophe in which he Seemed to get right when very few people Did so for all of you who are watching And listening Um maybe you can direct your interest to The Daily wire plus side and offer them Some support in doing so they make these Podcasts for example possible and at Least at the Quality that they're now Being broadcast and Peter thank you very Much for agreeing to talk to me today And for sharing what you know with Everybody who's listening and uh will Well we'll talk again right away and Hopefully we'll have a chance to meet at Some point in the future Jordan has been My pleasure to be here I really Appreciate the opportunity to speak with Your audience and hopefully I can come Back and we can expand on these Principles and uh yeah if you're ever Out here in Puerto Rico Or Connecticut I'm there once in a while But happy to happy to meet you Yeah well hopefully that'll happen in
The not too distant future and once Again oh and to everybody here I'm in uh I'm in Monastery at the moment heligan Croy is just outside of Vienna taping This podcast and to the crew here thank You very much for your help to the Daily Wire plus people for setting this up That's always much appreciated and Peter Thanks again everyone watching ciao you Thanks for participating and we'll see You on the next podcast Hello everyone I would encourage you to Continue listening to my conversation With my guest on dailywireplus.com
