Stefan Molyneux interviewed Peter Schiff on Freedomain Radio. In this hour-long conversation, Stefan and Peter cover the gamut of essential economic issues: the gold market, hidden inflation, the so-called US economic “recovery,” and the ultimate death of the US dollar. This is a great video to catch up on nearly every hot-button issue in the media, from China's economy to Donald Trump's campaign to Puerto Rico's default to American's misunderstanding of high minimum wage.
Video Length: 01:04:06
Highlights from the interview:
“A lot of people are making fun of me… Because of my gold predictions. Gold $2000, gold $5000. Now gold is below $1100 and they want to say, ‘Oh, Peter Schiff doesn't know what he's talking about.' Meanwhile, all those people have been bearish on gold from $300 to $1900, somehow they're geniuses because the gold price has finally gone down. Just because a bunch of fools don't understand what the problems are – they think the Fed has solved the problems. They don't understand that they've made the problems worse. That doesn't undercut anything I've been saying, that it's taking a little bit longer for this next leg of the gold bull market. But they don't waste any time taking pot shots at me…
“We don't need hyperinflation to benefit as owners of gold. We haven't had hyperinflation in this country yet. Gold was $20 an ounce when Roosevelt confiscated it. It was $35 an ounce up until 1970… Now gold is almost $1100, so gold has gone way up and we haven't had hyperinflation. So even just accelerated inflation is very, very good for gold. Of course, if we have hyperinflation, you better own gold. Because if all you own is dollars, you own nothing…
“I deny the government numbers… Meanwhile, what the media and Wall Street is overlooking is what ordinary people are saying that are living in this economy. They don't live in government statistics. They live in reality. Their reality is totally different than what the government is pretending and what the media is pretending. So I would say to the people who are trotting out these government numbers and trying to claim everything is great – why are you drowning out the cries of the people in the real economy? Because that tells a totally different story. They can't buy the CPI. They have to buy actual products…
“Puerto Rico is a very interesting example of when governments borrow too much money and are forced to admit they can't repay it. That's the point Puerto Rico is in. But the irony of it is, Puerto Rico has less debt than America relative to the size of its economy or on a per capita basis, even if you adjust it for the fact that per capita income in Puerto Rico is roughly half of what it is in Mississippi, which I think is the poorest of the US states. Even you make the relative adjustments, Puerto Rico is fiscally more sound than the United States. The only difference is that Puerto Rico's creditors have figured this out, and America's creditors have not…
“[China] just announced their gold holdings – much lower than I would estimate. But I think they did this after lying about it for seven years. They pretended they weren't buying any gold, now they've fessed up. I think they're still lying. I think they wanted to at least admit that they bought some gold, but they didn't want to tell everybody how much. Now people think, ‘Oh, they're not buying as much gold as we thought.' That made the price gold down, and this is great for the Chinese, because now they can buy even more…
“[The gold repatriation movement] is a lack of trust, not a lack of trust in gold, but a lack of trust in the institutions that have been claiming to be holding onto it for you. What if your gold depository doesn't actually have the gold that it's holding for you? What if it's actually been loaned out to short sellers who have sold it onto the market and they don't have it? That's the risk. What if the gold isn't actually there? People think they own gold, but they don't own it. Of course, if you thought you own it and then you find out you don't and you have to go back and buy it again, because the gold you thought you had, you no longer own – where's the price going to go? …
“That's going to be the thing that happens. Right now there are all these speculators that want to sell gold. They're shorting all this gold that they don't own. In many cases, they're selling it to other speculators who have no intention of actually buying it. So you have all this paper gold trading around, but there's no actual gold there. Meanwhile, there's a lot of demand for real, physical gold and silver. That demand is increasing as the price is going down. But at some point there is going to be a rush to buy real gold and it's not there. Yeah, if you want to buy gold from somebody who doesn't have it and can't deliver it, there's a huge supply of people willing to short it to you. But if you actually want gold that you can have in your hands, there's not that much of it around. And I believe that the people who have it are not going to sell it. My clients and other people who have been buying gold, if gold goes to $1500 tomorrow – they're not selling any!”
