Peter Schiff warns Joe Rogan that Trump’s debt-driven policies—$25T+ deficits, tariffs, and tax cuts without spending cuts—will trigger a recession worse than 2008 within three years, fueled by inflation, stagflation, and Fed mismanagement. He argues socialism’s appeal stems from emotional oversimplification, not solutions, citing Sweden’s 30% VAT and economic decline under high taxes while blaming government interference—not capitalism—for crises like the 1970s inflation. Schiff urges gold investments, shrinking government, and fleeing to stable economies like Switzerland or Singapore before a dollar collapse sparks civil unrest. [Automatically generated summary]
Well, I went down there with a sign that said, I am the 1%, let's talk.
And I went into Zuccotti Park, and the only reason I stopped, the long one, the long version is just under two hours, which is on my YouTube channel now.
But the only reason we stopped is because we ran out of batteries.
Batteries and the camera.
The camera died.
But I could have kept talking, and we were losing the light.
Just watching them get frustrated with you, but not having the words nor the knowledge to compete with what you were saying was very entertaining.
Agree with you or disagree with you, it was just hilarious watching someone so completely outmatched, or a group of people so completely outmatched, trying to debate economics with you and trying to understand the way business works.
Except they didn't even realize they were outmatched.
They thought they were smarter than me.
But the main reason I went there was not so much to try to convince the people there that they were wrong and that capitalism was the solution, not the source of their problems, and that they should be protesting Washington, the Federal Reserve, or Congress.
It was for the people that I knew that would watch it on the internet.
And I still get emails, even now, at least, I don't think a week goes by where somebody from somewhere in the world doesn't send me an email about that.
And I know another website, I forget the name of it, reposted it about a year ago, and they got a couple of million views on it, just posting it again.
So a lot of people have watched it, and I get comments from people saying, this is what changed me.
I was a socialist, Very left-wing.
I watched this, and that was the epiphany.
That was the moment.
And then I did more research, and I learned more.
And now, thanks to you, I'm a total libertarian or a free-market capitalist.
It's good to see people that are so involved in something that they'll go and they'll protest, they'll hang out in the park, but they really can't articulate their feelings or their thoughts in a well-reasoned debate.
They really don't have the facts, but yet they're dedicating their entire life to protesting something.
It's really interesting that people will spend so much energy and effort on something that they're really not even educated in.
Yeah, and it's a lot easier just to talk about something just emotionally instead of actually taking the time to learn about economics and to understand the source of the problems because anybody could just blame it on some rich person who's hoarding money and discriminating against them.
See, if you blame the problems on some rich person, well, the solution is easy.
Just take his money, right?
Have the government come in and redistribute the wealth, which is another word for steal.
Take money from somebody who earned it and give it to somebody who didn't.
But if you actually take a little bit of time and use your head instead of your heart, your feelings, you'll learn that the source of the problems is government interference in the economy.
And that the protests should be directed at government, at their regulations and their subsidies and their taxes and all the things that government does to stifle economic growth and deny opportunities to people.
And we should funnel it into education and community and We're good to go.
They don't hoard money.
I mean, the way you get rich is not by hoarding.
The way you get rich is by trying to figure out what problems people have that you can solve, right?
Whether it's inventing something that makes their lives better or providing a service that makes their lives better because the customers are in charge, individuals.
That's what's going to allocate wealth.
If somebody is better than somebody else at satisfying the desires that people have, right?
If I can come up with something that you like, that you want to buy, that's cheaper and better than what somebody else has come up with, then you're going to buy from me.
And so the person who ends up with the most money is the person who's satisfied the most desires, the most needs, in the most efficient way possible.
And that's what's benefiting society.
I mean, it's great to have charity, and I'm all for private charity, but if you look at the wealthiest men in history, even though they've been incredible philanthropists and they've given away a lot of money, they helped a lot more people amassing their fortunes than gifting away wealth.
What they made.
It was the businesses that they created, the products that they invented, the services that they provided, and the employment, right, that was all a function of their creating their wealth.
That's what did a lot more to help society than simply giving away some of the money that they earned.
They just don't know it, or they don't want to admit it.
And a lot of people don't even understand what socialism is, because, you know, you'll have the left, they'll always consider somebody, like even Donald Trump, they'll say, oh, he's a fascist, right?
They don't even realize that fascism is...
Is part of socialism.
Socialism is a broad concept that includes things like communism and fascism.
So if you're a communist, you are a socialist.
But it doesn't mean that if you're a socialist, you're a communist because you could be a fascist.
You could be for a lot of things.
But fascism is a form of socialism where the government doesn't just steal all the property.
Like the communists want to nationalize everything and take – Legal ownership of the means of production, right?
The government just owns all the capital.
Under fascism, the government is a little bit smarter.
They realize that people will work harder if they think they're working for themselves.
So the fascist doesn't want to nationalize businesses.
They just want to control it through regulation and taxes.
And that's pretty much what the Democrats want to do.
They want to control everything by taxing it heavily and regulating it.
And that's an important aspect of fascism.
I mean, a lot of people associate fascism with racism just because the Nazis were racist.
But you don't have to be racist.
I mean, fascism started in Italy.
And there wasn't any racism there.
And if you go back to...
The Nazi Party.
It's the National Socialist Party of Germany.
That's what the Nazis are.
It's socialists.
So fascism is a form of socialism.
That's why the communists and the fascists, you know, argue so much because they're really, they're fighting over the same turf.
It's which brand of socialism is better, fascism or communism.
But they're not at opposite ends of the political spectrum.
So do you think that people are frustrated with the current system and so they see someone like Bernie Sanders come along that offers this radical change of pace.
He's saying, you know, we need to end income inequality and redistribute wealth and all these different things and it just sparks an emotional reaction in people that they know that the current system, the way it's in place, especially the way it was under Obama, they didn't like how things were, they didn't like how things were under Bush.
They think we need someone who's not a career politician or someone who has got a radical new approach Oh, look at this Bernie Sanders guy.
Look, people, you know, are grasping for straws when they're looking for a solution.
That's why Trump is president.
I mean, a lot of people think that Trump's election maybe shows that the U.S. electorate has moved right, right?
That we're more Republican or more free market.
But that's not what that election was about.
It was about the fact that we had a lousy economy and Trump was honest about that to the voters.
Trump told people that the numbers are phony, don't believe these unemployment numbers, 4% or 5%, it's a lie, it's fraud, it's fiction.
And he was right because the way they calculate it today, they don't calculate the millions and millions of people who have given up looking for work, right?
They don't count the people who just have a part-time job and they're still looking for a full-time job.
So the real unemployment number is much, much higher.
And Trump talked about that.
And he called out, you know, all the politicians from both sides, right?
Not just the Democrats, the Republicans.
And he said, look, I'm going to clean house.
I'm not a politician.
Vote for me, right?
I'm going to make America great again.
I'm going to drain the swamp.
You know, and he appealed to people's, you know, their fears about immigrants.
I'm going to build this wall as if the reason that things are bad is because we have too many immigrants taking away the jobs.
And so people decided, you know what?
What the hell?
Let me give this guy a trance because things are bad.
The media's lying to me.
Wall Street's lying to me.
And so, you know, Trump won.
But unfortunately, now Trump is part of the establishment, and now all of a sudden the fake economic numbers are legit.
Now every time there's an unemployment number out, he tweets about how it's the lowest it's ever been.
So I think that when We get this next recession, which is going to happen while Trump is president during this first term, which I think will be the only term.
I think the government simply injected a bunch of cheap money into the economy and exacerbated the real problems, but reflated the bubbles in the stock market and the housing market.
But, you know, everybody talks about how the economy is doing so great, but it's really not much better than it was under Obama, if it's any better at all.
GDP growth for Trump's first year in office last year was 2.3%.
I mean, nothing great.
First quarter was 2%.
This quarter might be better than three.
Maybe, maybe not.
But, I mean, I think it's going to be the second quarter will probably be the best quarter of the year.
Maybe we're probably going to go downhill.
But last year was, I think, the weakest year of job growth since 2011.
So people want to talk about how great everything is, but it's more a function of people are hoping things are going to turn around.
There's a lot of optimism now that things are going to get better.
But I think that the people who are so optimistic, a lot of them are going to be disappointed because we're going to end up with is a weaker economy.
The only thing that's really strengthening is inflation.
Inflation is going to pick up.
So the cost of living is really going to be rising as the economy is falling into recession.
So we get stagflation, which is probably the worst possible economic scenario.
And, you know, I think that the left and even the Fed is going to be able to blame it on Trump because Trump has come in and, you know, claimed credit for this great economy that he believes we have.
And he's claimed credit for the record in the stock market.
But he's basically put his name on a bubble.
And when it pops, it's going to be hard for him to try to blame the next recession on Obama when he's already said, hey, this is my economy.
I created it.
And so people are going to be disappointed, and they're going to vote, I think, for another person whose promises change.
And unfortunately, that's going to come from the left.
Then you can cut taxes, because now government doesn't need as much money, and you can relieve the taxpayer of the burden of paying for it, and that's great.
But if you just cut taxes, but you don't cut government spending, and of course what the Trump administration did was even worse.
They increased government spending.
We increased welfare spending.
We increased warfare spending.
And so spending is more, but they reduce their tax revenue.
So the deficits are just exploding out of control.
And those deficits are going to do more damage to the economy than the tax cuts were benefit, except you get the benefit first, maybe for the first year, and then you start to deal with the pain after that.
And so I think that's going to set in, you know, long before the end of Trump's term.
Well, remember, again, the unemployment rate is mainly down because so many people that are unemployed are no longer counted as part of the statistics.
So, you know, that's if you look at the labor force participation rate near a record low, I mean, certainly for men, it's the lowest it's been in the history of the republic.
But – and look at the workers to population.
So fewer and fewer people are actually working, and more and more of the people who aren't working are not included in the unemployment statistics.
So if you backed all those people in, right, able-bodied people who don't have jobs but should be working, then the unemployment rate is much, much higher.
So that doesn't really paint a good picture.
And then you look at the fact that so many Americans are unqualified.
There's a lot of jobs out there that go unfilled because American workers aren't qualified to fill those positions because, you know, we take a lot of our kids and we keep them in high school until they're 18, 19 years old.
Many of these kids should drop out of high school and learn a trade.
I mean, a lot of people, you know, they don't have the aptitude for, you know, academics.
There's no point in just being in high school.
lot of times they're glorified daycare centers, but they should be out learning trades.
And of course, we make it harder for employers to train people on the job with occupational licensing laws and minimum wage laws.
So we destroy a lot of the opportunities for younger kids to get skills.
And then the ones that we send to college, they waste their time, you know, majoring in liberal arts.
So they spend four, five, six years in college learning nothing of any real value in the They accumulate a massive amount of debt in the process.
And so we have a labor force that's highly educated in that they've got a bunch of degrees.
Maybe they didn't learn anything, but they got a piece of paper.
But then what they have is a lot of debt.
And so we don't have a lot of people qualified to do a lot of things that need to be done.
See, the problem that Trump already made was when he first got elected, he should not have changed His perspective.
He shouldn't have said, hey, everything is great.
Now, he's planning on running his next campaign as Keep America Great.
When Trump ran for office, he said America was an economic wasteland, that it was a disaster.
He's been president for a little over a year.
All of a sudden, it's the greatest economy in the history of the country.
Which is not even close to being true.
But if he's going to try to run for reelection on, I've already made America great and now we just want to keep it great, that's not going to resonate.
So what he should have done from day one is leveled with the American public.
Again, this is how bad the problem is and this is what it's going to take to solve it.
Because there's a lot of, you know, pain, short-term pain that we're going to need to go through in order to come to the other side, in order to get rid of all these problems.
Like right now, look at the trade, right?
Trump is making a big deal about the trade deficits and he's launching tariffs.
He's going to have this trade war that he's convinced that we could win.
And this is very misguided.
The trade deficits are We're good to go.
We don't save enough.
We don't make the right capital investment.
That's because interest rates have been kept too low.
Our tax code favors debt.
And we have a lot of regulations that make American businesses less competitive.
And so the result is that we import a lot of products rather than making them ourselves.
And it's not because the other countries aren't fair or because they have tariffs.
Are very low around the world.
I mean, tariffs are not the problem.
And so if Trump is simply going to erect tariffs, all that's going to do is tax the American public, because the American public has to pay the tariffs whenever they buy imported products.
So this is not going to turn the economy around.
And Trump is right.
He points out that, well, at one point in time, America ran on tariffs, which is true.
During the 19th century, the government raised money primarily by tariffs, but we didn't have an income tax.
And so this is the irony of it.
The reason we have an income tax today is because the populist politicians of the day told the American voter, if we can tax the rich with an income tax, Then we can get rid of tariffs that the average person is paying.
So the average person understood that tariffs cost them money.
And the politicians said, let's get rid of these tariffs and let's just tax the rich.
And the income tax that was originally proposed really was a tax on the very rich.
I mean, even doctors and lawyers didn't pay it.
I mean, you had to be super rich before you pay the tax.
And then it was like, you know, 1% to 4%.
So it was a small tax.
And it wasn't taken from your paycheck.
I mean, first of all, if you got a paycheck, you didn't pay the tax.
But we didn't have withholding until 1943. That was part of the victory tax to pay for the Second World War.
But Americans were told, let's tax the rich and you won't have to pay tariffs anymore.
Well, the minute the government got the nose under the tent, all of a sudden now the income tax affects everybody.
People pay a lot more in income taxes today than they used to pay in tariffs.
But now, now the president wants to bring the tariffs back on top of the income tax.
I mean, if Trump wants to repeal the income tax and get rid of it entirely, and then have some tariffs, I'd be okay with that.
But you can't do that unless you dramatically shrink the size of government, which is the most important thing that Trump needs to do, but what he's not doing.
He has to make the military smaller, not bigger.
I mean, he's talking about a Space Force.
I mean, we can't even afford the Air Force, Navy, Marines that we got now.
We don't have enough money for a Space Force, but we have to cut everything.
Well, basically, look, the problem – the basic problems with the US economy, and this is because of monetary policy, fiscal policy, is we don't save anything, right?
And because we don't save enough, we don't invest enough, we don't produce enough, we don't make enough real things, right?
I mean when Trump wants to say that foreigners are taking advantage of us by running these huge trade surpluses, he's got it backwards.
We're taking advantage of them.
Like the Chinese are sending us all these products that they worked hard to produce.
And they had to use real resources, land, labor, capital to make these products.
And they send them here.
And what do we give them?
We give them IOUs.
We give them a piece of paper and they buy our treasury bonds.
So in the short run...
Americans are just putting everything on a credit card, right?
We're living a higher standard of living because we can consume what we didn't make.
But when you do that, you become poorer.
See, America used to be the richest creditor nation in the world, right?
The world owed us a lot of money.
Today, we're the world's biggest debtor nation.
How did we go from being the biggest creditor to the biggest debtor?
It was trade deficits.
Every year, we keep borrowing money to consume.
And what this has done is this has turned a rich nation into a poor nation.
But we just don't live like a poor nation yet because we're still borrowing.
Yeah, and you could be a rich individual yet maintain a rich lifestyle on debt.
But eventually, you know, that's going to catch up with you and then your lifestyle is going to come crashing down.
And this is what's going to happen.
But what we should do instead of having a crisis imposed on us Globally, with a crisis in the dollar and a crisis in our bond market, we should do it ourselves.
We should set these forces in motion ourselves.
So what we have to do is shrink government, right?
We have to cut a lot of government spending, get rid of a lot of government agencies and departments to get government out of the way so we can lower taxes legitimately.
And then we have to allow the Federal Reserve to let the market set interest rates.
Interest rates have to be much higher than they are now, right?
Because that's going to encourage people to save.
If interest rates are high, you'll put your money in the bank to earn that high rate of interest.
When money goes into a bank, it can get loaned out to businesses.
Right now, all that money is going to government or it's in the corporate bond market where it's not growing the economy or the money is being used to finance stock buybacks.
We need money on Main Street financing, capital formation, entrepreneurship, new businesses, new jobs.
So we get higher interest rates.
We'll get that.
And we need people to stop buying things they can't afford.
You buy something if you have the money to pay for it.
You don't just put it on a credit card.
And if credit card interest rates went up and if credit was contracted so that credit card companies were not giving out as much credit, they're giving out a lot of credit now because the government is misdirecting it.
But if we slow down our consumption, we increase our savings and investment, then the economy can actually grow.
But if interest rates go up, Asset prices have to come down.
But, you know, whenever they talk, look, they're talking about the auto tariffs, and they say it's national security, as if somehow my buying a foreign car is somehow jeopardizing national security.
Most politicians ignore the trade deficits, right?
At least Donald Trump is putting them on the spotlight and saying, look, this is a problem.
It is a problem, but not for the reason that Trump believes.
In the short run, in the here and now, the trade deficits benefit America because Because the world is subsidizing our standard of living.
We're getting to buy things that we otherwise wouldn't be able to have.
I mean, without these trade deficits, we wouldn't have all these consumer goods on all these shelves.
I mean, people would not be able to buy stuff.
Prices would be much higher if we had to make stuff ourselves.
By having the Chinese make it, you know, it's a lot cheaper.
Plus, you know, it's great for our environment because, you know, we don't have to pollute our own air because the factories are over there.
So he's right that it's a problem, but in that...
It's a reflection of the fact that the economy is inefficient, and that's what needs to be addressed.
It's like, you know, we have cancer, but you just can't put Band-Aids on the blemishes or something to cover it up.
You got to actually get to the source of those blemishes, which is the Federal Reserve and their bad monetary policy and our government policy, our fiscal policy, our regulatory policy.
We need to have that type of change, and then the trade deficits will go away.
But if we simply try to Put tariffs on.
It's just going to make our own problems worse.
All that's going to do is make prices higher.
It's just going to mean that Americans are going to have to spend more money buying stuff.
And it also actually undermines a lot of American businesses that export into countries that are retaliating.
And also, a lot of U.S. businesses import components, and then they assemble the components here, but now those imported parts are going to be more expensive, and so their net exports are more expensive, and so they become less efficient.
The people that are supporting Trump, the people that are happy with the way things are going, have said that him lowering taxes for corporations encourages growth, and it gets more jobs, and there's more economic activity.
I mean, the lower taxes are, the better it's going to be, but not if you borrow the money to pay for the tax cuts.
So the idea is if the government now has to go into the market and borrow money that it no longer collects in taxes, that's going to have an impact on the economy.
That's going to further deplete our savings pool.
That's going to put real upward pressure on interest rates, and obviously the Fed is trying to counteract that.
But, you know, what They did with the tax code, though.
They dramatically complicated it.
I mean, there's a lot more complexity in the code now than there was before, not like it wasn't complex before.
So initially, they talked about simplifying the code.
They didn't do that.
They made the code a lot more complex.
And they certainly, you know, they raised lower taxes for some people, but they raised taxes for other people.
I mean, depending on what state you're in, there are a lot of people now that are going to pay higher taxes.
You know, you wouldn't think it would be, but all of a sudden, all these big guys down there in Puerto Rico, they'll probably say something again because obviously they watch your podcast, but a couple of really big guys were calling me out saying that I'm insulting Puerto Rican women, like, you know, I'm calling them whores or something because I said that they want to date guys with jobs.
But I mean, but all this, I mean, it was almost part of the whole political correctness thing of it, like, or the Me Too, like, you can't say something.
Anything that you say is going to be spun, like, this is against women, because I'm stating something that's very obvious.
But you can, because I think these outrage peddlers that make these articles and write these blogs, who the fuck is agreeing with them?
I just don't buy it.
I think what they're doing is they're striking a chord and a few malcontents go along with it, but you read those things and you think, like, wow, there's some validity to this because it's in, you know, X publication.
Yeah, and everybody wants to act like you can't say something that's offensive to anybody.
Like, if somebody gets offended, then, you know, like, you know, this, what was this, you know, this, one of these contestants, I read this story, but one of the contestants on The Bachelorette, Apparently, on his Instagram page, he liked some jokes that, you know, maybe off-color, a little bit offensive jokes, that right-wing, somebody on the right had posted on their Instagram page.
And it was like a big deal.
He had to take down his whole Instagram page.
I mean, it's obviously jokes.
They're jokes.
Jokes are offensive.
That's part of what makes them funny.
I mean, almost all the jokes offend somebody.
But now you can't even have a sense of humor.
Everything has to be, you know, you can't offend anybody, which you don't have a right not to be offended.
That's the whole part of freedom of speech.
People are going to say things and do things that you might be offended by, and you just got to deal with it.
You can't be looking like, you know, I got to have a law against that, or But these offense merchants, these people that get offended, that's their currency.
They trade in being offended.
And then once they find something that's in any way offensive, they just start writing blogs about it and making videos about it.
And that's their in.
Their in is finding something Peter Schiff said about Puerto Rican women.
But it's all – look, it's this whole mentality that people have now about not being offended is about feeling that they have a right to something or not being entitled.
And so men and women have rights because they're individuals.
They don't get a separate right because they fit into a group.
All that is about privilege.
And you don't have special privileges granted to you by the Constitution.
We all have rights.
When people try to pretend that a privilege or a group privilege and try to give that the status of a right, I know you talked about it on your podcast.
We had the Supreme Court ruling recently regarding the gay couple that wanted a wedding cake.
And they sued because the baker wouldn't make a wedding cake with a couple of guys on the top and decorate it in a way that it was obviously for a gay wedding.
Well, the bigger problem is, first of all, They – it's not like you have this gay couple that just went into a bakery and then they were denied the ability to buy a cake.
They probably went to 100 bakeries to find the one that wouldn't bake them a cake.
And of course, you know, if you're a baker, right, I don't know what the margins are on wedding cakes, but wedding cakes are probably like the holy grail of cakes, right?
I mean, if you're sitting there in the small bakery shop, you're waiting for somebody to call for a wedding cake, because those are the biggest cakes you could make, very expensive cakes.
So everybody wants to do a wedding cake.
Nobody cares whether there's two guys or a guy and a girl on the top of it.
You just want to make the money that you're going to get from baking a wedding cake.
Now, you come across a guy...
Who just has a strong religious conviction.
He just, you know, doesn't want to bake a cake for a gay wedding.
Okay.
I mean, he's the one that's losing.
He's losing out on the commission to bake the cake.
I mean, the gay couple isn't hurt by that.
There's so many bakeries that would bake him that cake.
Actively seeking out a black boss, which is the difference between that and being approached by a bunch of white people and saying, no, I hate white people.
Yeah, and the left always tries to make it out like if you have this perspective, right?
Oh, you must be a racist if you believe that people have a right to discriminate.
Look, I believe that people have a right to say a lot of things that I disagree with.
I'm not going to stop them from saying things.
I believe in free speech even if what you're saying is idiotic or offensive.
And I believe people have a right to discriminate because the bigger problem is when the government becomes the thought police because the minute you make it illegal to discriminate, now you have to get into people's minds, right?
If somebody doesn't promote somebody or fire somebody and they happen to be black or a woman or too old or handicapped.
So you tell your boss, hey, can I work an extra 10 hours a week?
I want to make some more money.
Well, your boss says, well, I'm sorry, I'd like to let you work an extra 10 hours, but I have to pay you time and a half, right?
And the guy says, well, I don't need time and a half.
I'll just work 10 hours for the same pay.
That's illegal.
Sorry, I'd like to do it, but I can't.
And if that boss needs extra workers, he has to go bring on a part-time worker.
So now, let's say if I want to get an extra 10 hours work, I got to find another job someplace else where I can work part-time where the time and a half...
Law doesn't apply.
But now I've got to get from my full-time job to my part-time job.
That's the whole – I mean obviously people – you're going to have people that work for two employers – And then other people working, and they're going back and forth between the same companies.
Well, different states could have different rules, and federally they have different rules over what constitutes – how much pay do you have to earn before the overtime rules apply?
Well, look, everything the government does is arbitrary.
That's what laws are.
They have to come up with a number.
But all of this should be – Free for discussion.
It's interesting because you have the liberals believe that, hey, two people should be able to have a relationship without the government interfering.
They can have a sexual relationship.
It's none of the government's business who you're sleeping with.
Well, why don't they have the same – believe in the same freedom when it comes to economic relationships?
If an employee and an employer are having a relationship, why doesn't the government just butt out and let the employer and the employee negotiate the relationship and the terms of the relationship that they think is best for them?
Because there are a lot of workers that, oh, I don't need the overtime, but maybe there's another benefit that I would prefer to have that I could get, but I can't because some government laws are requiring things that I don't want.
I mean, the minimum wage is probably the dumbest law.
I think we talked about that on the last podcast, but it's probably the dumbest law that you can come up with because All it does is hurt the very people that you are intending to help.
You're hurting the least skilled people.
You're preventing people from getting jobs in the first place.
And you're creating extra incentives for employers to eliminate jobs, to try to use capital instead of labor, to try to outsource.
I mean, nobody is going to hire somebody If they're losing money, right?
People have a certain amount of productivity that they can bring to the table.
And when an employer makes a decision on who to hire, they have to hire somebody that brings them at least enough productivity to cover the wages.
And so what happens is when you have a minimum wage, let's say the minimum wage is $8 an hour.
And I'm an unskilled worker.
And I have to convince an employer to pay me $8 an hour.
I have to also convince him that I can deliver more than $8 an hour of productivity to his organization.
And if I can't do that, I can't get a job.
Now, what if I can only bring $5 of productivity?
Well, that means you can't get hired.
Well, I mean, if I only have $5 an hour worth of skills and I can't get a job to improve my skills, I'm stuck in unemployment forever.
I mean, the worst thing you can do to a guy with minimal skills is prevent them from getting a job because it's the job that's going to enable them to increase their skills so they can earn more money in the future.
I know what you're saying, but the idea is that if you have a minimum amount that you allow people to pay, then at least the people that are working for that company will have a real income where they can pay their bills and feed themselves.
And that this company, because they have all the power, they have all the money, and a poor worker who's stepping into the market for the first time or just hasn't been able to acquire job skills that would allow them to make much more money per hour, that they would be taken advantage of by this larger corporation.
But you can look at examples where the United States has imposed a minimum wage on other countries.
I mean, the minimum wage did a lot of damage in Puerto Rico.
But, you know, look at another American territory, American Samoa.
American Samoa, we basically destroyed American Samoa with our minimum wage.
I mean the Samoans are furious about it.
This happened years ago actually.
And the reason I even found out about it, I was watching 60 Minutes and they were doing a report about I think football players in Samoa.
And during their report, they mentioned that there was like a depression going on in Samoa.
And it was like there was 30% unemployment and really high inflation.
I was like, what the hell is going on in Samoa?
So I wanted to research that on my own.
And I found out that we imposed the minimum wage on Samoa and we destroyed all their jobs.
Their two biggest employers were Chicken of the Sea and Starkist.
They were canning tuna and then they were shipping the tuna back to the mainland.
But the minute they raised the minimum wage, they made the production...
costs to get the tuna back to the mainland.
So all the canneries shut down and then they created massive unemployment.
And then prices went way up on the island because they no longer had boats coming back and forth to pick up the tuna.
So now all of a sudden the shipping cost of imports went way up.
So they had massive inflation, sky-high unemployment, all because of minimum wage.
So you could look at examples of how minimum wage destroys jobs right there.
You Yet they continue to advocate for these higher wages because it sounds good.
Oh, everybody should earn a decent living.
Well, not if you don't have any skills.
You can't.
A lot of kids, you know, they're 16, 17, 18, 19, 20. I mean, people live with their parents still.
The most important thing is getting a job so you can acquire the skills to get a better job, to move up the ladder in an organization, to enhance your value to employers in general.
I mean there's a lot of people that don't think it out.
They think with their mind or their heart rather.
And they don't even get – the origin of the minimum wage was racism.
I mean the first minimum wage is here.
It was designed to keep employers from hiring the Chinese or from hiring blacks because they – that's where the minimum wage came from, to try to prevent employers from hiring certain people.
So they said, well, let's have a minimum wage and that will reduce hiring of people who have less skills.
And so – and the labor unions, the biggest supporters of the minimum wage are the labor unions.
And none of the labor unions' workers earn the minimum wage.
So you might think why are they – do they so care about the minimum wage if they don't – if they get paid a lot higher than the minimum wage?
And it's because you always have a competition between skilled laborers.
And unskilled labor, right?
So let's say a businessman has the option of hiring a skilled person to do something, and let's say the skilled person is going to charge $20 an hour, or an unskilled person.
And let's say I can hire three unskilled people for $5 an hour, and that equals 15. Well, hey, I'd rather hire the unskilled worker.
I can pay $3, $5 an hour to do the same job of one skilled worker.
But now if the skilled worker could lobby for a $7 minimum wage, now if I have to hire three unskilled people, it costs $21.
Aha!
Now all of a sudden I hire the guy with skills.
So the labor unions benefit by keeping unskilled people unemployed because they have more skills and therefore they can get more work.
No, actually, you know, I found this out as I'm traveling now.
You know, I still have an American passport.
But when I mention what country I'm from and I look where you live, I always have to select Puerto Rico as a country.
Even though it's part of America, it's still considered its own country, even though you still are American citizens when you live there and you travel on a U.S. passport.
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It's listed as a separate country from the United States.
And where's the money going to come from to pay for it?
They're going to have to take the money from the private sector that would have created efficient jobs, and they're going to give it to the government to create inefficient jobs.
It's a disaster.
But the problem that I mentioned earlier is the economy is in bad shape because of all the government.
That's what went back to the Occupy Wall Street is that the people are protesting because there's serious problems in the country.
They don't realize that it's not capitalism that is creating those problems.
Capitalism would solve those problems.
It's government interference that is causing the problems that they're protesting.
And so the same thing with these socialists.
They understand that their standard of living is falling.
One of the things they want to do is they want to give free education.
I guess the liberals are all complaining about the fact that college is so expensive and that students have so much debt.
That's because of government.
Before the government got involved, college was cheap.
I mean government drove up the cost of college by guaranteeing student loans.
I mean that's how the government got the votes of students.
They promised the students something for nothing.
They said, hey, vote for me and I'll guarantee – I'll make it easier for you to get a loan to go to college, right?
Well, the minute colleges knew that people could get these loans, they started jacking up the tuition.
So they could benefit from all this government money.
So the colleges benefited.
The banking system benefited by making riskless loans that the taxpayer was on the hook for.
But the byproduct of all this cheap money being funneled at the colleges was that the colleges kept raising their tuition higher and higher and higher.
And then the politicians kept increasing the amount of loans they would subsidize.
And so all of this is the fault of government.
The government created the problem that they're now complaining about.
But the students don't understand that that's why college is so expensive.
But this next crisis – Even if you don't lose your job, you're going to be affected by inflation.
Prices are going to go way up because I think this is going to be a dollar crisis.
This is going to be a sovereign debt crisis.
And investors were bailed out.
The government was able to bail out investors last time with quantitative easing and TARP and all that.
But the next time, investors are not going to get bailed out.
They're going to go down for the count.
Because if they try, and I believe they will try, to reflate the bubbles again by printing even more money, doing another round of quantitative easing, It's going to destroy the dollar.
So they're not going to reflate the bubble in stocks.
They're going to prick the bubble in the dollar.
And so when the dollar loses value and prices go up and you have stagflation, you have a combination of a recession and inflation at the same time.
And then, of course, what is the Fed going to do in that circumstance?
Because their playbook is if you have recession, you ease.
If you have inflation, you tighten.
Well, what if you have them both together?
You know, they just did these stress tests.
You hear these bank stress tests?
And the Federal Reserve came out and they said that all the banks passed.
You know, well, what a shocker, right?
The Fed came up with a test that everybody passed.
But if you look at the assumptions that they made about the economy, under the worst case scenario that they assumed...
Interest rates, 10-year rates, go no higher than 3%.
They don't go down, they just don't go up.
And they assume that inflation stays below 2% under the worst-case scenario, and they assume that the Fed is able to lower interest rates to zero again to stimulate the economy.
Now, I mean, what happens if inflation doesn't go down?
What if it goes up?
What if it goes up to 5%, 8%?
You know, what if interest rates go up to 5% or 8%, 10%?
What happens then, right?
All the banks collapse.
Because what happens if we have a recession?
Where the Fed can't stimulate because they have to fight inflation?
Or what happens if we have a recession and the government has to raise taxes during the recession because the budget deficit is exploding and they don't have the money to pay the interest on the debt?
Well, I think that the politics are going to come into play and that the Fed is going to err on allowing inflation to run out of control.
They're going to do what they can to try to prop up the economy and they're going to sacrifice the dollar.
They're going to say, well, inflation is the lesser of the two evils.
But it's actually going to end up being the greater evil.
And remember, when Nixon imposed wage and price controls, which was a very misguided effort, it's kind of like what Trump is doing with tariffs, trying to cure the trade deficit.
Rising prices are the result of inflation.
It's not the cause.
And so price controls don't work.
They simply try to mask the problem while it gets worse.
But I think they're going to let inflation get a lot worse.
And what that's going to mean is that people need to prepare for that.
I mean, people need to do something.
We talked about that when I was on your show before about buying gold.
We talked about cryptocurrencies.
I talked about gold money.
And by the way, this is...
We talked about Gold Money on your show before, and so many people – this just shows you how many people listen to this podcast.
So many people tried to open up accounts at Gold Money because of our conversation that the regulators actually shut them down.
They actually stopped them from onboarding new customers because there was too many people coming onto the platform.
And the reason, look, this is the system that we're in now because when you have a gold money account, right, it's not like just buying gold.
You have gold that you can actually transact in.
I can take my gold and I can send it to anybody I want anywhere in the world who has an account for free.
There's gold stored in a Brinks vault, and they have vaults all around the world, but I can transfer my ownership of that gold to you or anybody else.
But because I can do that, now all of a sudden the regulations are there because they're worried about terrorists, they're worried about money laundering, and so everybody who has an account, there has to be a lot of scrutiny.
About those accounts and those transactions, just like it was a bank.
And a lot of people got frustrated.
I got a lot of emails from people who were frustrated.
They tried to open up accounts, and they didn't realize that it was the regulators.
They get mad at gold money because they're not opening up their account or approving their account, but it's the regulations that are the cog in the machine.
But the good news is I think they've satisfied the regulators recently.
They've come up with some new systems.
So the process is a lot more efficient now for people to go online and buy gold.
And, again, you can buy $25, $50 worth, $100 worth of gold.
And you actually have another store of value, another means of transacting with other people where you can have some protection against inflation.
And I showed you I have my – by the way, they're sending you one of those gold cards.
And this is a great way for average people to own gold, but also kill two birds with one stone.
Because when you go out and buy jewelry, right, and you buy typical jewelry, maybe it's, you know, 14 karat gold, 18 karat gold.
The Mene jewelry is 24 karat gold, and they sell it by the weight of gold.
So let's say you went to a department store and you spent $1,000 on a gold necklace, right?
Maybe you'd have $100 worth of gold.
Maybe, right?
If you spent $1,000 at Minet, you're going to get $800 worth of gold.
And Minet will buy that...
That necklace back from you at any point in time in the future, two years from now, five years from now, ten years from now, at whatever the gold value of the necklace is.
So let's say gold goes up by 30% from the time you buy the necklace.
You can actually sell it back to Monet for more than you paid for it.
Whereas if, you know, if you have used jewelry that you buy at a department store, what's it worth on the secondhand market?
You know, 10 cents on the dollar, right?
20, maybe?
So this allows people to have nice jewelry but also own real gold at the same time.
I mean, you're going to pay a higher premium to buy a gold necklace.
I have a pair of gold cufflinks that I wear.
My wife wears this Binet jewelry all the time.
She wears it every day.
And so, you know, you can buy it instead of buying other jewelry.
But you're not throwing your money away.
You're actually getting gold.
But the point is that people need to protect themselves from the inflation that's coming because that is where we're headed.
The government is going to continue to print money to try to prop everything up, to try to delay the day of reckoning for as long as they can.
And we've had a rally in the dollar recently because people think, oh, the trade war is good for the dollar.
They're wrong.
It's a disaster for the dollar.
America can't win the trade war.
I mean, we benefit from the trade deficit right now.
All we can do is lose in the short run if we lose access to all those goods that we're not having to pay for with exports.
You know, they're actually trying to say that the budget deficit's going up.
Is good for the dollar when it's not.
I mean, big budget deficits are always bad for the dollar because it means the government is creating more debt.
They're selling more bonds around the world.
The supply of dollars also includes the supply of treasuries.
And so if you're flooding the world with treasuries, you've got a surplus of dollars.
The dollar is going to lose value.
And so people have to find a way to protect themselves.
And the average guy, I mean, gold is the easiest way to do that.
And with the gold money account, you could do it very inexpensively.
Of course, if you want to buy bigger amounts of gold, if someone wants to put $50,000, $100,000 worth of gold, I wouldn't spend it on jewelry.
You could just buy regular gold.
I've got a company, Shift Gold, where I sell maple leaves, cougarands, U.S. coins.
When I sell gold bullion to people, coins, we mark it up, you know, 1-2%.
It's a small markup.
The markup on jewelry is higher because we had to pay to make the jewelry.
It's more expensive to make a gold necklace or a gold bracelet or a gold ring than to make a gold coin.
So you wouldn't want to have all your gold in jewelry.
But to the extent that you're going to buy jewelry anyway, you might as well buy real gold because now you actually have some savings that has value in addition to having something you can wear.
I mean, I don't get a lot of value day-to-day by having gold in a safe.
But if you're wearing it, right?
I mean, so then now you're getting an extra benefit from the fact that you have gold because now you get to enjoy it on a daily basis if you're wearing it.
And obviously, too, if you don't have that much money, if someone's not going to buy any gold, if someone has a couple thousand dollars, they were going to spend it on jewelry?
All right, we'll spend it on gold jewelry, because at least you still have the money.
Well, I mean, there are other metals that have been used as money.
I mean, silver has been used as money.
But, I mean, gold has been the choice.
I mean, look, central banks own a lot of gold.
I mean, not as much as they used to, not as much as they should.
But central banks own it.
Gold's a monetary metal.
Gold is used in a lot of things.
I mean, it's in cell phones, in computers.
It's used in medicine, in dentistry.
I mean, so there are a lot of uses for it because gold has properties that other metals don't have that gives it value, not just its physical beauty, but also the things that you can do with it.
You can do things with gold that you can't do with other metals.
And gold is not going to tarnish.
It's not rust.
So you can make something out of it and it's not going anywhere.
Yeah, the properties that it has, you know, no other metal can replicate.
And that's one of the reasons that it's been so desirable for so many years.
But it also makes it, you know, ideally suited to be money.
And that's, you know, one of the things that, you know, Bitcoin...
Bitcoin is trying to digitally replicate the properties of gold.
I mean, that's the whole selling point of Bitcoin.
They say it's digital gold.
And it does have a lot of gold's properties that helped it succeed as money, but it doesn't have any of gold's physical properties that gave it so much value in the first place.
And so you can't separate the intrinsic value of money from money.
Money has to be a commodity.
It has to have value.
And that's where Bitcoin fails.
You know, I just had a debate in New York, in Soho, I think last week on Bitcoin.
You know, whether it was going to succeed and replace fiat currencies.
And basically, you know, technically I lost the debate, but I think it was rigged.
Well, because the way they decide the winner is before the debate, they have a poll, and they ask everybody where they stand.
And then after the debate, they ask them where they stand now to see if people change their opinion.
And since everybody in there was a whole Bitcoin audience, and I had it confirmed to me from several sources that basically everybody was saying, hey, make sure you vote...
This way before the debate so you can change your mind after the debate so that the pro-Bitcoin guy is going to win.
But they wanted to propose it initially before the debate, get your thoughts, but they rigged it by having these people have contrary thoughts before the debate.
So as if Bitcoin was evangelized to them, like, oh, now I get it.
The idea is like a bunch of people were in this debate that didn't believe Bitcoin was the future.
But now, after this hour debate, they were convinced by my opponent that it was the future.
Because then, you know, when I read all the stories, and if you go online, you read the stories about the debate, it's always like Peter Schiff lost, Peter gets bested, Schiff loses.
So it's almost like I got caught up in the Bitcoin propaganda.
Look, you know, I feel badly in that—well, first of all, some of them got very rich, so I don't feel bad for these guys that got rich, that put a few thousand dollars in and now have millions of dollars.
I mean, obviously, I missed out on that myself, right?
I mean, that—I mean— There's a lot of bubbles that I missed out on.
I didn't make anything on the dot-com bubble.
I made money when it came down.
I didn't make any money on the housing bubble until it went down.
And I missed out on the Bitcoin bubble.
But this bubble was tailor-made for me.
If there was ever a bubble that I should have been part of, it was this one.
It was all for the libertarians, right?
Free market guys, anti-fiat currency.
So, you know, I knew about it early on.
I mean, not at the very beginning when it was like pennies, but I knew about it before it was $10.
Yeah, but, you know, so, I mean, I don't feel badly that, you know, some of these guys lucked into having a lot of money or, you know, it's luck or they took a shot and it paid off, right?
They got in and, you know, and the market exploded and they have an opportunity to cash out on a profit.
But a lot of them are not cashing out.
They're going to – I think they're going to go down with the ship.
And the last time I did your show, I mean, a lot of people are, you know, what Peter Schiff got wrong on Joe Rogan about Bitcoin.
I mean, everybody thinks I don't understand it, and that's why I don't believe in it.
It's because I do understand it that I don't believe it.
The people who think it's going to work, they may understand the technology, but they don't understand money.
And so – but when I talk to these people, to me, it's very much like a cult.
I mean they believe so strongly in this.
They're so caught up in the hype and the hysteria and maybe they're blinded by the money they think they're going to make when these things are a million dollars apiece or wherever they believe they're going.
Because they think, oh, there's 21 million Bitcoin.
And they think that that means they're scarce.
Well, they're not scarce.
There's so many other currencies out there.
And it's only scarce because it's coded to be scarce.
Gold is scarce because it really is scarce.
Bitcoin is scarce because they decided to make it scarce, but it's not scarce in that there's nothing that any other cryptocurrency can't do that Bitcoin is doing.
Well, they look at it as an alternative to both, I think, a lot of them.
Although some people think it's maybe a complement of gold, but it doesn't have any actual value.
And that's where I get into a lot of arguments with these crypto guys, because they say, well, gold doesn't have any actual value either, which is laughable, because of course gold has actual value.
There are lots of things that I can do with gold, and that shows that it has value.
There's nothing that I can do with Bitcoin other than give it to somebody else.
I mean, that's the whole purpose of it, is to give it to somebody else and Right, but our whole economy is kind of screwy.
Governments could certainly issue crypto fiat currency the same way they issue paper fiat currency.
In fact, most of our paper currency transactions are digital anyway.
I mean, how much cash do you use on a daily basis?
You use your credit card and And so banks are transferring – they're not shipping bills back and forth mostly.
It's just numbers on a computer.
So the government can certainly do that, and that would probably give them even more control over the economy, which is a negative thing.
Because at least if you have cash, I can give you $100, and the government doesn't see that transaction.
They're not spying on us.
But if they eliminated all cash and all transactions were digital, then they would know everything I did.
Right.
The dollar I spent would be recorded on some government computer.
And that's something that I don't want.
And I think libertarians certainly don't want that, which is one way cryptocurrencies could backfire is if the governments end up monopolizing cryptocurrency and issue cryptocurrency alongside or instead of the paper currencies that they issue now.
Part of the biggest damage that's ultimately going to come from it is when the cryptocurrencies collapse and people lose a lot of money, which is going to happen.
The government's going to be able to say, you see, we told you the free enterprise capitalism is no good.
I mean, look what happens when you trust...
You know, Bitcoin, it's going to help make the dollar and the euro and the yen look good by comparison.
Even though these are fatally fraud currencies, they're still going to look better than the cryptocurrencies, the people who have lost a lot of money.
See, right now, people, there are a lot of people that like Bitcoin because they bought it real cheap.
And even though it's gone down, you know, 70% from its high, it got up to 20,000, and now it's about 6,400.
There's a lot of people that bought it and still have big profits.
But what about the people that bought it at $20,000, $18,000, $15,000, $10,000?
They're losing money.
And if it keeps falling and it goes down to $1,000 or lower where I think it's going, you have a lot of people that have lost a lot of money.
And so that's going to create a lot of problems.
And I think the government's going to come in with all sorts of new rules and new regulations on transactions to try to protect us from ourselves.
And again, it's just going to, you know, try to make government look good and the free market look bad.
People get caught up in frenzies all the time.
It doesn't mean that the free market needs to be shut down just because every once in a while people get greedy and get nuts.
And it's not a reason to expand the power of government because government will do much more damage to an economy than small bubbles will do when you have a boom and a bust because you have a mania.
No, because to me, you just can't have a digital token that you just create.
That's going to have – going to be a store of value.
I mean money has to be a store of value.
It has to be a medium of deferred payment.
So what that means is I have to be able to take my money and save it for a year, five years, ten years.
I have to be able to make a loan.
Like I can loan you money.
I can't loan you a Bitcoin and you say I'll pay the Bitcoin back in ten years because none of us know what the Bitcoin is going to be worth.
So how do you know what kind of interest rate to charge?
You need to have stable money.
And I don't think any of these cryptocurrencies can ever be stable because there's no real value to stabilize.
People say it's a store of value, but there's no value to store.
So the only cryptocurrencies that would work would be cryptocurrencies that were backed by a real commodity like gold, and that can work.
But, you know, what gold money does is actually something better because you don't have to have a cryptocurrency.
You just have actual gold.
See, the reason that Currency existed in the first place because currency was always backed by real money.
So let's say I had gold that I was storing at a blacksmith.
I had a bar of gold, and I had a piece of paper that said, you know, pay to the bear on demand, you know, this bar of gold, right?
And it was written from a reputable blacksmith.
I could negotiate that piece of paper.
I can give you that piece of paper and say, hey, I own some gold at this blacksmith.
Take this piece of paper, and now you own the gold, right?
And so that piece of paper is functioning as a money substitute, as currency, but the real money is in a vault.
It's gold.
It's hard for me to – I can't break up that bar.
I can't just give you a small portion of it.
But what gold money is doing is taking that old blacksmith concept and bringing it into the modern era because I can store my gold in a vault at Brinks through gold money.
And now I can transfer any portion.
I can give you a gram of my gold, a tiny amount of gold.
I can just send it to you for free.
And now you own that gold because now the ownership register is going to be changed.
And instead of being in Peter Schiff's name, it's going to be in Joe Rogan's name.
And so once you can do that, once I can take a bar of gold...
And turn it into liquid money that can be used to buy a cup of coffee.
Yeah, well, somebody has to have physical control.
And that's what a lot of the Bitcoin advocates don't like about something like a gold money.
They say, well, you have to trust a third party to store your gold.
Yes.
You do.
I mean, but people have been trusting third parties with gold for thousands of years.
And, you know, you have reliable third parties that can hold on to something of real value because you have to have stability.
I mean, that's the big problem that we have in the world today is we have no real money.
We just have these fiat currencies that governments create out of thin air.
And there's no real stability in the monetary system.
If we had real money, if we were on a gold standard, which I believe we will be on again eventually, because that is the norm throughout history, is to be on a gold standard.
All these experiments with fiat currency, they don't work.
I mean, what we have now works for government, but it doesn't work for the people.
It doesn't work for prosperity.
You know, when Trump is out there trying to say we have the greatest economy in history— I mean, it isn't even close.
I mean, forget about the fact that it's not even better than it was when Obama was president, and he said that was an economic wasteland.
But you go back to the period of time, let's say 1870 through 1910 or in there.
I mean, that was the golden age.
I mean, that is what created the middle class.
The middle class was a byproduct of the economic growth that took place in America.
I mean, we basically had tremendous economic growth.
We absorbed tens of millions of immigrants that were coming from all over the world, and they weren't coming here for welfare and food stamps because they didn't exist.
There was no minimum wage.
You know, there was just freedom here.
And people came here from all around the world because they could be freer in America than they could be anyplace else.
And it was those free Americans working with a gold standard, with sound money that created the greatest amount of economic growth that the world has ever seen in the shortest amount of time.
I mean people talk about how great the Chinese economy is, but look back at the American economy during that period – And that was tremendous growth.
And I think, you know, we could have great growth again, you know, to the extent that we, you know, substantially diminish the size of government.
But part of that would be to return to sound money.
Oh, you know, before I forget, too, I forgot to bring this up because you mentioned it on the other podcast, and you're like, I wish somebody would come in and talk to me about it.
I was like, yeah, I got to talk about it, which is the Act 2022 in Puerto Rico and whether or not Puerto Rico is in trouble because you have a bunch of rich people who are there who are not paying taxes.
The reason why it was so difficult to rebuild the infrastructure post-Maria was that all you rich guys had come there and you soaked off the economy and that's why you're there because you weren't paying any taxes.
Yeah, and so first of all, the tax breaks didn't start until 2012. So before that, what was going on and what changed?
Well, if you were rich in Puerto Rico, you paid the same 30% tax as everybody else.
Now, nobody in Puerto Rico has to pay federal income taxes.
That is one of the big benefits that Puerto Rico has.
You don't have to pay the federal income tax if you live there and you're working there on the money you earn.
So if I had moved to Puerto Rico in 2010 or 2011, which I did not do, but had I moved there then, I would have had to pay the same high Puerto Rican income tax that everybody else in Puerto Rico is paying.
But what enticed a lot of people to move to Puerto Rico was the fact that they reduced the taxes.
Now, the taxes aren't zero, right?
If you come there, you're still going to pay taxes on some of the money that you earn.
My business pays a 4% corporate tax, so it's not zero.
I pay 4%.
I can give myself a dividend that's tax-free, but the corporations are required to pay out a certain amount of taxable salary to the owners.
So some of my salary is taxed as high as 30 percent.
The majority of it is taxed basically at the 4 percent.
But 4 percent of something is better than 30 percent of nothing.
Plus, they're getting 30 percent of something.
So a lot of the people who have moved to Puerto Rico over the last five, six, seven years that didn't live there before are paying a lot of taxes now to the Puerto Rican government.
Even though the rate is very low, the dollar amount is very high.
And each individual person who has moved there is paying a lot more taxes than the average Puerto Rican who's already living there paying the higher rate.
So the people who moved there brought significant tax revenue that Puerto Rico never was going to get.
Because remember, if they were taxing people at 30%, people from California wouldn't have moved there.
People from New York, people from New Jersey wouldn't have moved there.
It was the low taxes that brought all these people to Puerto Rico who never would have been there.
And they're now paying taxes.
But more importantly, they're hiring people who are also paying taxes.
They're spending a lot of money locally in the economy, generating revenue and jobs.
So they've been a big plus.
And I can tell you, the people who have moved there, myself included, we donated a lot of money to the relief efforts.
I mean, as soon as that hurricane was over, a lot of the Act 2022 people, which is what they'd be called because they went there to participate, they were raising money, they were helping out.
I mean, so there's a lot of charity that came to Puerto Rico that a lot of these people, they wouldn't have thought of it if they didn't already live there.
But by bringing a lot of wealthy people down there to Puerto Rico and they're there living it, They're more inclined to help out their neighbors than when they were still living in the U.S. So Puerto Rico has derived significant benefit from an influx of wealthy entrepreneurs.
So this idea that you're taking advantage of them and that you moving in there and just exploiting that place by getting paid in low taxes and that it's a bad thing for the people that live there.
No, it's a great thing for the people that live there because people are coming to the island bringing capital, bringing businesses, bringing employment opportunities, paying taxes that they never would have paid.
Now, would there be a way that all these people coming in, they could somehow or another fix the whole electrical system that they have there, their power grid?
But now you've got a minimum wage that's the same as Kentucky.
So it's basically keeping a lot more people unemployed.
But then you still have welfare.
You still have food stamps.
So you have all these people now that are not working because they're getting paid by the government.
But then you have the Puerto Rican government, which is a major employer of people who work for the government.
And a lot of them...
I mean, there's so many people that are working for the government.
They're not productive, but they're draining resources from the Puerto Rican economy.
I mean, part of it was a power company.
I mean, it's a disaster, but the government is running everything there, and so everything is inefficient.
And meanwhile, a lot of the productive people, people who want jobs, have left the island.
Like if you think a high minimum wage is great, all the people who are leaving Puerto Rico to go to Florida are effectively, even though it's the same minimum wage, they're actually going to a state that has a much lower minimum wage relative to the medium wage because they can get jobs in Florida.
They can't get them in Puerto Rico.
So you have that situation where very few people are actually employed, so you don't have a real tax base.
And then what America did, what really screwed them over, was we made all their bonds triple tax-free.
We said if you live in New York and you buy Puerto Rican government bonds, you're not going to pay any local income taxes.
You're not going to pay any federal income taxes.
It's all tax-free.
If you loan money to a Puerto Rican company, right, if you loan money to a private business in Puerto Rico, you've got to pay taxes on whatever they pay you in interest.
But if you loan money to the Puerto Rican government, the interest is tax-free.
So America subsidized loaning money to the government in Puerto Rico, but not to the private sector.
And so they made it very easy for Puerto Rican politicians to go into debt because all these muni bond funds all over the country needed Puerto Rican paper to increase the yield on their fund.
So you have everybody wants Puerto Rican government bonds.
So the Puerto Rican government is creating these bonds and they can now buy votes.
They can promise all sorts of goodies to people who vote for them.
They can overpay government workers, give them all sorts of holidays, lots of time off, and they can keep borrowing money.
So they got deeper and deeper into debt because we created an incentive for them to do that.
And now they have a debt crisis because all of a sudden Puerto Ricans bondholders realize that Puerto Rico is never going to pay back their money.
And then the other thing that we did to them, and I talked about I think on the show, is the Jones Act, which, if you remember, Trump suspended it for like a week or two after Maria.
But the Jones Act should be completely repealed, and especially if Donald Trump's going to be talking about Paris.
Well, there's a number of aspects of it, but the most significant to Puerto Rico is that the Jones Act says that if you want to transport goods from one U.S. port to another U.S. port, it has to be an American ship.
So Trump is out there talking about free trade.
We need free trade.
The Jones Act is the opposite of free trade.
It's complete protectionism.
It's saying that if you want to take something from Florida...
If you want to take something between the US and Puerto Rico, you've got to use a US ship.
You can't use a foreign ship, right?
So there's no competition.
But what this has done is this has dramatically increased the cost of living.
So even though the average person in Puerto Rico earns half of what the average person in Kentucky earns, groceries in Puerto Rico are more expensive than groceries in Kentucky.
So you have lower income but a higher cost of living.
That's thanks to the Jones Act.
And if they repealed the Jones Act, the cost of living in Puerto Rico would plunge.
And that's one of the reasons, too, that the tourism industry...
Puerto Rico is a beautiful island.
I mean, if you haven't been there, you should come.
It's a magnificent island.
And what's also great about it is it has a real culture.
It has a real vibe to it.
It's a city.
It's like it's a Latin American city on an island.
It's not just like a remote little island.
So it's a really nice place to be, and it's one of the only places that I think you can really live in the Caribbean and not feel like you're just on Gilligan's Island or not – but just like on vacation all the time.
It's a real city with real stuff going on, and I've been there now long enough that – You know, I would go there, you know, even without the tax breaks, I like being there, right?
Yeah, I mean, look, there's crime there in the big city in San Juan and certain areas, just like there are in New York, and just like all major U.S. cities, you've got crime problems, and again, there's a lot of reasons for that.
Again, it has to do with government, it has to do with the drug laws and all the other things, although they've got miracle marijuana.
So the Jones Act makes Puerto Rican hotels unable to compete on the low end with hotels in other Caribbean islands because – Everything is so expensive because of the Jones Act and because they have the U.S. minimum wage.
And all the food that you eat, all the drinks, all the stuff is shipped in, and to bring it to Puerto Rico is a lot more expensive than to bring it to the Bahamas or bring it to Barbados or someplace else.
So all these other Caribbean islands can get a lot of American tourists to go there for bargain vacations, but Puerto Rico can't compete on the low end.
On the real high end, they can compete because people are not as concerned about the cost.
But on the lower end, the budget traveler, a lot more people would be going to Puerto Rico if it wasn't for the Jones Act because the hotels would be able to cater to a lower price point because they could hire the chamber mage for less money.
They could have lower prices at the restaurant.
So this is really destroying the tourism industry.
In Puerto Rico, which could be thriving but for the Jones Act, but also it is diminishing the standard of living of Puerto Ricans who are forced to pay higher prices.
I mean, what happens is, let's say there's a big ship coming in from China with all sorts of goods, and it's headed for a U.S. port.
If it could stop off at Puerto Rico, drop a few things off, and then continue on its destination, that would be great.
It would be inexpensive.
But they can't.
What it has to do is it has to bring all the stuff that's going to Puerto Rico to the U.S., unload it, and then load it back on a U.S. flagship, and then send it back to Puerto Rico, which costs a fortune.
And then the same thing with Puerto Rican exports.
So the whole Puerto Rican international commerce is being limited.
By the Jones Act.
Now, this also affects Hawaii.
Hawaii suffers from the Jones Act, too.
But Hawaii is much richer than Puerto Rico.
They have a much higher average income.
And so even though it affects them, it's not as big a deal.
They'll cite Norway, a lot of the Scandinavian countries, Denmark.
But you have to look at how successful they were before they became socialist.
And then you also have to look at what the government is doing there because the taxes on business are not – You know, extreme.
The taxes are on the average guy.
They have, I think in Sweden, I think the VAT is about 30% sales tax that you have to pay.
I mean, this is a high sales tax.
I mean, and then the income taxes impact average people.
So because they know, the Swedes know if they really jack up taxes on businesses, the businesses will just leave and they'll destroy their economy.
So at least they're trying to redistribute the wealth from the middle class to the middle class.
But this stuff doesn't work.
And you create generations of people who now don't want to work, who just want to live off of other people.
You destroy the initiatives.
You destroy the incentives.
And so the success that Sweden enjoyed is a byproduct of freedom and capitalism that's And since they moved in that direction, they have slowed down that progress.
But the Swedish people have recognized that.
And that's why the reforms that have been made over the last decade or two have been to turn back the clock, to move away from those socialist policies and to try to dismantle.
Now, they haven't gone completely the other way, just like New Zealand.
I mean, New Zealand went so far.
They went from like...
A totally socialist-type economy, one that was like – this was the example.
If you believed in socialism, you would point to New Zealand as, see, this shows you, right?
And then they went bankrupt.
They went through a huge economic crisis in the 80s.
So let me ask you this, though, because we're going to keep going around in circles with this.
You're going to study this for a long period of time.
What is it about socialism that's so appealing to people if there's no examples of it being effective?
Why does it keep coming up?
Is it a lack of education or a lack of understanding of economics?
Like what is it about it that keeps, like when this woman who just won and she seems like a very nice person, when she talks about being a democratic socialist and everybody gets fired up, is it ignorance?
Well, even people believing in big government because usually what happens is when you're a kid and when you're in high school, you've never had a job and all this stuff sounds great until you're out in the real world paying taxes.
That's why it was a mistake to lower the voting age down to 18. I mean I don't even think 21. It should be higher.
If you think about the original voting age when it was 21, 100 years ago, 150 years ago, think about a guy who was 21 back in, you know, 1850. Different person.
I mean, think about...
I mean, the guy probably got out of school when he was 10. Probably already had kids.
He's been working.
He's got a family.
He's in the real world.
And I know people are going to say, look, women weren't voting.
No, they lowered it, right, because you could get drafted when you were 18. And they were saying, look, if you're going to draft, look, I don't believe in the draft.
Well, I wouldn't want to do that, but if you're in – it's 183 days is the cutoff for where your residence is going to be.
But the important thing about voting is not that you get to vote.
The important thing is to have good government.
And what is good government?
Good government is government that respects private property, that respects that, you know, if you go back and look, and I mentioned this on my own podcast recently, I talked about the meaning of America and what government is for in America.
And if you go back to the Declaration of Independence, we just had the – we celebrated our Independence Day, you know, just a couple of weeks ago.
But government is here to protect life, liberty, and the pursuit of happiness.
Government is here to protect our rights.
It's not here to give us free stuff.
It's not here to take stuff from other people and give it to us.
It's there to protect us, right?
It's there protecting life, liberty, property.
And so the goal of government or the goal of an election is to have good government.
Now, as far as I'm concerned, I would rather have good government where I don't vote.
Than bad government where I do vote, right?
Because, you know, one of the things people said, oh, you're going to move to Puerto Rico, you can't vote.
Who cares?
I vote for the loser in every election.
What difference does it make when some idiots are going to outvote me?
And that's basically who's voting in America.
I mean, if you think about it, the elections are decided by the TV commercials, right?
Because most people, you know, they know who they're going to vote for.
Can you imagine the person who decides who's going to vote for based on a TV commercial?
Well, when you were talking about this before it happened, and I remember you going on these different talk shows saying, this is going to crash, and people weren't listening to you.
And they were like, oh, Peter Schiff doesn't know what he's talking about.
And then it did crash, and then they listened to you.
You're the only one that's saying it's going to crash again.
Well, here's the irony of it all, because leading up to the 2008 financial crisis, and if you go to my YouTube channel, you can see my introductory video is a little montage that I actually shot as part of my Senate campaign when I ran for Senate in 2010. But it's a bunch of people mocking me, and then a lot of the shows that I went on where they said, hey, you were right.
You were the one guy that called it.
So I used to be on...
I was on television a lot on Fox, CNBC, CNN, Bloomberg, probably once a week for three or four years I was on something.
And then I used to get – the Washington Post used to call me, the New York Times.
People – magazine articles were written about me.
When I was this lone kind of crazy guy talking about a housing bubble, talking about a financial crisis that was coming – They at least, you know, gave me a platform to air my views, even though they mocked them and laughed at them.
I was still there.
I was like the gloom and doom guy, Dr. Doom.
I think Time Magazine did an article with me.
I had a sickle in my hand.
I was the grim reaper.
But anyway, so then we get to financial crisis.
And all of a sudden, I get a little bit of notoriety.
But over the last few years, nobody will talk to me.
I'm not on any television shows.
Why?
Well, I think that at this point, people just think, look, you know, I've been saying, talking about this problem for so long.
They look, he doesn't know what he's talking about.
They forget that I was warning about the problems in the housing market for four or five years.
You know, as the prices kept going up, you know, it's not like the things that I see happen immediately.
But I think, you know, at this point, maybe in the past they thought maybe there was a chance I could be right, even though it was a slim chance.
Now they probably think it's impossible that I could be right, so why even give me any airtime?
So, I mean, I come on shows like yours and people actually get to hear the truth.
But if you go back to what I was actually predicting...
2008, that financial crisis was the beginning of the end, not the end.
What I was predicting, and I wrote a book about it, Crash Proof, had a profit from the coming economic collapse that came out in February of 2007. I said we have this huge bubble.
We have this housing bubble that the Federal Reserve created, right?
Not the private enterprise.
It was created by government.
And in fact, after the financial crisis happened, Congress had a...
A hearing to try to determine why we had a financial crisis.
And I tried my best to get invited to testify and they refused to let me be there because they didn't have anybody there that predicted it because they wanted to basically come to a conclusion that they had already arrived at was that it was caused by a lack of regulation and we need more government, right?
So they didn't want me there to say it was caused by government and we needed less government.
Although, by the way, I have testified at Congress twice since then.
And both of my testimonies are on YouTube.
And you've got to watch them.
It's incredible stuff.
And in fact, after I was on the first time, I was convinced they would never invite me back.
Because I don't treat these guys with the type of respect that they normally get.
I have a lot more people who listen to my podcast than I did back then.
But the point that I wanted to make about the crisis is I wrote back then that we had this bubble and we were going to have this crash.
But the economic crisis was not going to be that.
It was that the collapse that I saw coming in 08 was the beginning.
I said that we have this disease that the Fed has created and it's manifested itself in this housing bubble and it's going to pop and we're going to have the worst recession since the Great Depression.
We're going to have double digit unemployment.
We're going to have trillion dollar deficits.
But I said, that's not what's going to kill us.
I said, we're not going to die of that disease.
That disease is survivable.
I said, what's going to kill us is the government's cure.
They're going to print so much money, they're going to try to reflate these bubbles, and that's going to cause a dollar crisis and a bond crisis, and that was what was going to destroy the economy.
And that's not happened yet.
Now, what I did not know at the time, and I didn't put a date on it, I didn't know it would take so long.
I mean, here we are 10 years later almost, and that hasn't happened yet.
The bubbles now are bigger than the ones that popped in 08. And what's the difference between bubbles and an actual functioning economy that's sustainable?
If it's doing well right now, you agree it's doing well right now?
Yes, and then the wealth came down, and I talked about that for years.
Well, we have even faker prosperity now, but it's even less prosperous.
Even fewer people are feeling the benefits than before.
So the real economy is getting sicker and sicker as it takes more and more air to inflate the bubble, because in order to keep the bubbles from popping, the government and the central bank has to keep misdirecting resources out of the real economy to sustain the bubbles.
They still don't realize that the Fed lit the fire, and they didn't really put it out.
It's just kind of—it's simmering, and people don't notice it.
But what's going to happen is— The Fed never was able to normalize interest rates.
Rates are still 2%.
That's still really, really low.
And for all the talk about shrinking their balance sheet, it really hasn't shrunk.
It's still enormous.
And I think that the economy is going to slip into recession.
And when it does, the Fed never got interest rates back to 5% or 6% where they normally bring them.
They never shrank the balance sheet.
So now all of a sudden, we go into this recession, but it's going to be a stagflation because inflation is now really starting to pick up.
Prices rise with a lag.
The inflation is the expansion of the money supply.
That's what the word inflate means.
It's to expand, right?
You can't expand prices.
Prices can go up and they go down.
They don't expand.
What expands is the supply of money.
And so the supply of money expanded, and a lot of that Went into financial assets.
So inflation caused stock prices to go up.
It caused real estate prices to go up.
It caused bond prices to go up.
It caused the price of rare art to go up.
And all sorts of things went up because of inflation.
Ultimately, a lot of that inflation, though, is going to end up in the supermarket, right, you know, at the gas station.
And so you're going to have that at the same time that we have the recession.
Now the Fed is going to have to go back to the only thing it knows how to do.
We're going to do QE4 and we're going to cut rates back to zero.
But now the markets are going to see this and they're going to, wait a minute.
You never normalized interest rates.
You never shrunk your balance sheet.
And now you're going to expand it again?
Now you're going back to zero?
Wait a minute, wait a minute.
If you couldn't normalize interest rates following, you know, this last recession, how are you going to do it in the future?
I mean, if you couldn't shrink a $4.5 trillion balance sheet, how are you going to shrink a $6 or a $7 trillion balance sheet?
If you couldn't raise interest rates back to normal with the national debt, you know, our national debt's now $21 trillion.
What if it goes up to 25 trillion, 30 trillion?
I mean, one of the reasons the Fed can't raise rates is because we have too much debt.
Nobody can afford to pay the higher rates.
You know, when inflation was running out of control in the 1970s, and it's going to be a lot worse now, right?
The inflation that we had in the 1970s.
It was created in the 1960s by Lyndon Johnson, by the Great Society, the War on Poverty, the Vietnam War, going to the moon.
We borrowed all sorts of money.
We ran big deficits.
And the consequence was the dollar crashed in the 70s.
Gold went through the roof.
Oil went through the roof.
And finally, you know, we had to do something about it at the end of the 70s because when Nixon came in and Ford came in, they just continued the same policies.
They were, you know, very liberal Republicans, Rockefeller Republicans.
And we didn't do anything about inflation until Reagan came in and Volcker was there.
And so how did they stop the inflation from running out of control?
Volcker jacked interest rates up to 20 percent.
Twenty percent!
And we had a recession where the Fed was raising interest rates.
But that saved the dollar, and it broke the inflationary cycle that was in the economy.
And of course, Reagan did some other tax reform and things like that.
But the Fed really finally got out in front of the inflation curve, and they brought it down.
But if you think about the difference between the United States in 1980 and the United States today, we were still the world's biggest creditor nation in 1980, not the world's biggest debtor nation.
The national debt was a fraction of what it is now.
I don't know.
Maybe it was like a half a billion – 500 billion or I don't know the exact amount, but well under a trillion.
The national debt was financed with long-term bonds, like 10-year, 30-year bonds.
So when interest rates went up to 20%, that didn't affect the majority of the debt that was out there.
That only increased the cost to the government of the new debt that came out, right, the new borrowing.
But today, the $21 trillion national debt is predominantly Treasury bills, stuff that matures in a year or less.
And so if interest rates had to go up to, let's say, 10%, the government would have to pay 10% within a few years on the entire national debt.
So where would the government get all that money?
And it's not this.
The government, corporations have never been this levered up.
Individuals have never been this levered up.
They didn't have adjustable rate mortgages back then.
Now you still have a lot of people that have arms, where their mortgage debt would go up.
At this point, the Fed can't really fight inflation because it doesn't have the tools because we have so much debt.
If they raised interest rates to fight that inflation, the collapse would be so much worse than 2008. All the banks that they bailed out would fail again, but they couldn't bail them out a second time because they can't bail them out and fight inflation at the same time because you can't ease and tighten simultaneously.
It's one or the other.
So I think when the markets see That we're going back to QE. That we're going back to zero.
They're going to realize that this is not temporary.
That this is permanent.
That the Fed can never normalize interest rates.
That the balance sheet is never going to shrink.
That we're a banana republic.
That we are monetizing our debt.
That the Fed has no ability to drain that liquidity.
And no ability to fight inflation.
That means the dollar is a bottomless pit.
That means the dollar is going to keep falling.
That means nobody is going to want to own it.
And everybody is going to want to get out of dollars.
Everybody's going to want to get out of any bond that is denominated in dollars.
And then the Federal Reserve, in order to keep interest rates from rising, they might have to start buying muni bonds.
They might have to start buying corporate bonds.
Otherwise, interest rates are going to skyrocket, and that just fuels the inflationary fire.
And then we get a currency crisis.
Right?
Where the dollar is plunging.
Prices are skyrocketing.
That is real pain.
And who knows what they're going to do?
Maybe they're going to have price controls, which are just going to backfire.
Then we're going to have shortages.
We're going to have rationing.
We're going to have civil unrest.
I mean, this is going to be ugly when it hits the fan.
And, you know, it's dangerous to do this in a backdrop where so many people are inclined To vote for socialists, because that's going to be the type of economic environment where socialism can thrive, because socialists always want to look for a scapegoat.
Who can we blame this on?
And it's very easy to blame it on the rich or the businesses or the corporations or the Republicans.
And I think that's what's going to happen if this happens, you know, sometime over the next few years.
But if it doesn't happen in Trump's first term, there's no way he finishes the second term without this happening.
I think he has people that were listening to me on the campaign trail.
I would say things on my podcast or tweet something, and the next day he'd say something pretty similar.
I'm sure.
Because my rhetoric, he had to appeal to certain voters.
And so he was throwing them this type of red meat.
But look, I know some of the guys that are close to him, like Larry Kudlow, like Steve Moore.
I mean, I know Steve Moore pretty well because we speak at a lot of the same things.
I used to be on Larry's show a lot back in the day when he used to have his show on CNBC. So I know some of these guys.
I don't know Art Laffer as well.
But, you know, Art Laffer, right?
Go look at the debate I did with Art Laffer in 2006 when he said everything was great and, you know, there's no recession coming.
And then he bet me a penny and welched on it.
I mean, if you can't even – Yeah, he bet me a penny that everything was great and there was nothing to worry about and we weren't going to have a major decline.
I mean, so what he's got to do is basically he's got to come clean now and tell the truth about how screwed up this country is after years of big government and after years of a central bank that has inflated bubble after bubble and say, look, this is what we need to do.
What?
We're going to have to shrink government.
I know I said I wasn't going to cut entitlements, but we got to do that.
We can't afford to make these commitments.
We can't pay all the Social Security benefits that have been promised, because if we try, we're going to destroy the dollar, right?
Because if the government tries to give everybody a Social Security check, They can't do it without destroying the dollar.
So we've got to shrink the program.
We've got to means test the program.
We've got to make it a lot smaller.
We've got to end it for the future.
We can't have this intergenerational Ponzi scheme that it was a mistake to create it.
Nobody wants to admit that Social Security was a mistake, that Medicare was a mistake.
It's not a legitimately funded retirement program.
It's not like your Social Security money is putting a real trust fund somewhere and invested, and when you retire, you're going to get payments out of this trust fund.
And so when it first started, Social Security started a long time ago, the first woman that got a check was Ima Fuller or something was her name.
And she lived to be 100 years old.
And for her, Social Security was a windfall because she paid into it for a couple of years.
She collected for like 40 years.
And when Social Security started, it was a 1% tax on payroll.
And it was only a small amount.
And then the employer paid 1%, which of course comes from the employee.
That's part of the fraud, right?
I mean the employee pays the whole thing.
It doesn't matter if it's considered the employer.
But it didn't – self-employed people weren't even included.
I think we didn't include the self-employed until like the 50s.
Because the government figured if you're smart enough to run your own business, well, then you're smart enough to save for your own retirement.
But the government tried to say, look, some Americans are not smart enough to save, which I think was a mistake because the government didn't save anything.
Because what the government did is the minute they got the money, they spent it.
But before they spend it, they write themselves an IOU and they call it a trust fund.
See, what happens is the government collects the Social Security money.
And then they spend the money on the current employees.
But what they don't spend, they put into the so-called trust fund.
But then they borrow it right out and they write themselves an IOU called the government bond.
But if the government owns its own bond, that's not an asset.
Because they keep saying, oh, the trust funds are going to be solvent until the year 2040 or something like that.
But they're not – they're insolvent right now because there's nothing in them.
Because if the government has to tap the trust fund, it has to sell a bond to the public, which is what it would do if there was no trust fund.
It's like if you wrote me a check for $10,000, right, and I had that check, that would be an asset to me if I had your check for $10,000.
If you wrote yourself a check for $10,000, that's not an asset to you.
Yes, but initially, it's like if you're going to train somebody to come into your gym and they come in and they're real fat and they're out of weight, they're overweight, they have a lousy diet, right?
And you say, OK, I've got a plan for you that's going to get you into shape.
In the short run, they're not going to like that plan.
They can't eat their favorite foods.
They're going to be getting up early and training.
And so their lifestyle, it's not going to be as enjoyable to them.
There's going to be all this pain, right?
So in order to do the right thing, I'm not saying there's a panacea, right?
In order to fix the economy, we are going to have to go through a recession, a very bad one, in order to reallocate resources to where they need to be, to let the free market reallocate them.
So when the government gets out of the way and starts shrinking, a lot of people who are getting government checks are not going to get those checks.
A lot of people who had government jobs are not going to have jobs.
They're going to have to get productive jobs in the private sector.
So there's going to be some transition there.
We're going to also have to get rid of a lot of regulations that make it so difficult and expensive to hire people and train people.
So we have to downsize government.
And again, as I said, we have to let interest rates go up so that people will save, so that entrepreneurs can get the capital they need to make the investments, to make the tools that their workers need to be more productive.
But then we have to let asset prices fall.
We have to stop trying to create this phony wealth effect.
See, the central bank thinks what we need is to make the stock market go up, and then people will think they're rich and go out and spend money.
Stock price appreciation is not supposed to be the source of wealth.
It's companies becoming more valuable because they're earning more and producing more.
That's supposed to make the price go up.
They're trying to put the cart before the horse.
They think that just making the stock market go up is going to make us richer.
Okay, so in your opinion, deregulation, smaller business, all these things are going to help letting people know that we are fucked and that this whole the economy is doing great thing is a ruse.
Automation makes us wealthier as a society because it eliminates work.
Work is not an ends in and of itself.
Work is a means to an ends.
Nobody wants to work.
They want the fruits of the labor.
And so to the extent that we can have a machine do the work for us, That frees us up to do other things.
So, you know, if we have autonomous cars and I don't have to drive anymore, you know, A, Trump won't have that problem being sued for overtime by his ex-driver because he won't need somebody to drive.
But imagine if everybody had a self-driving car.
Think of all the free time now that you have.
You could work while you're in your car or you can watch a movie while you're in the car.
I mean, you won't be dreading a long trip because you'll be able to be productive while you're in that car.
And so there's a lot of things that will happen.
Yes, we'll eliminate truck driver jobs, but we'll have safer streets and it'll be less expensive to transport goods.
But that frees up that worker to do something else with their time now that they don't have to drive that truck.
So the idea that universal basic income is the only solution to that isn't appealing to you because you think that they really – the real solution is not to give them free money.
The real solution is for them to find something else to do.
The appeal of universal basic income is almost like two wrongs make a right.
I mean the problem is the welfare state discourages people from working.
See, the highest marginal tax rate that anybody pays is going from welfare to work because not only do you pay the taxes on what you earn but you lose all the benefits because you now have a job.
So welfare and the welfare state creates a huge incentive for people not to work.
So at least the argument with universal income is, look, we're not going to take away your welfare if you get a job.
So if you improve your lot in life, if you go out there and you become productive, we're not going to punish you by taking away your welfare.
Well, the better answer is let's not punish you for working.
And, you know, what happens now is everybody sends all this money to the federal government and then they beg to get some of it back, right?
They have state aid where you send money out and you try to get some of it back.
Just don't send it to Washington in the first place.
I mean, look at the five richest counties in America.
They all surround Washington, D.C. It's all the lobby.
It's where all the power is.
I mean, we've got to get rid of that.
I mean, the federal government is like a cancer.
Now we're talking about we've got a new nominee for the Supreme Court.
But nobody really talks about the role of the Constitution.
Everybody's like, oh, are we going to repeal Roe v.
Wade, as if the most important thing is whether or not there's this federal abortion.
The important part of the Constitution is that it is the law that applies to the government.
It limits the power of government.
Thomas Jefferson said that we will bind up the government in the chains of the Constitution.
But at this point, the government does whatever it wants.
The government is not abiding by the law.
I mean, they try to pretend that we're interpreting the Constitution.
It's not up for interpretation.
The Constitution is not written in Chinese.
You don't have to interpret it, but the government likes to talk about interpreting the Constitution because they want to ignore it.
They want to do all sorts of things that are not authorized by the Constitution.
The Constitution only authorizes a few powers to the federal government.
They're enumerated there in the Constitution.
And if the Constitution doesn't say the government can do it, it can't do it.
And almost everything the government does today is unconstitutional, is doing stuff that it has no constant authority to do.
And that's what we need a Supreme Court for.
I mean, a lot of people don't like Congress, very low opinion of Congress.
A lot of people don't necessarily like the president, but everybody loves the judiciary, right?
We have three branches of government, the executive, the legislative, and the judiciary.
And everybody likes the judiciary, but I think it's the judiciary that has sold us out the most because they have let the government get away with murder.
They are not enforcing the law on the government and making the government abide by the law.
I mean, the laws that apply to me and you aren't up for interpretation.
You know, they mean what they say.
But somehow, the laws that apply to the government, well, they can be interpreted, which means they can be ignored.
They want to say, oh, the Constitution is a living, breathing document so that it can change with the times, is a way of saying it means nothing.
So we need to reclaim the republic by actually enforcing the government to live by the Constitution.
That's one of the things Trump can do, is say, look, we are going to restore constitutional government to this republic.
We are going to make sure the government only does what it's authorized to do in the Constitution.
And the smaller you make government, the freer you make people, right?
That's what it's all about.
I said earlier in the podcast about this whole idea about group privilege.
The more privileges that you give groups, the fewer rights that you have for individuals.
And the more government you have, the less free we are.
So that's actually the real definition of freedom, is freedom from government.
And so the smaller your government, the less they regulate your activity, and the less money they take from you, the more freedom you have.
And the more free we are, the more freely we can interact with one another, the more prosperous we're going to be.
What I am hoping is people like you and people like me, after it collapses, That if we can at least come out there with an alternative version of what happened.
Like after the financial crisis happened and I was one of the few people saying it's not – it wasn't the banks.
It wasn't greed.
It was government.
It was the Federal Reserve.
It was Fannie Mae and Freddie Mac.
They were the problem, right?
But the government got away with blaming capitalism and making government bigger.
What we need to do and what you can do with your audience, which is much bigger than mine, Is when it hits the fan again to put the blame where it belongs on government and say government did this to us.
It's not an accident that we have all this government and we have all these problems.
And, you know, it's government interference in capitalism that's the problem, not capitalism itself.
If the government stayed out, it would be working beautifully.
So we don't want to throw the baby out with the bathwater.
We want to preserve the baby.
The government's the bathwater.
So what you can do with your, you know, soapbox is get people to understand the real source.
Now, what you can do now, what your audience can do now to protect themselves so they don't go broke, and I think that to the extent that you don't go broke, you're in a better position to help the economy and help the country if you have resources.
I said if a ship is going to sink and I can get you off the ship onto a lifeboat, then when the ship goes down, you might be able to help some of the people out of the water if you're not drowning yourself.
So what you can do is protect your finances.
If you've got a large portfolio, right, what I do with my own money and what I, you know, I advise people I manage money at Europe Pacific Asset Management, I'm a broker-dealer at Europe Pacific Capital, is I invest in countries that, you know, I think are in relatively better shape, whether it's Switzerland or Singapore, you know, or, you know, New Zealand.
You know, their economy is strong enough that I think they can withstand it.
They've made enough progress.
You know, so there are countries out there that are not nearly as screwed up.
Nobody is perfect, right?
Nobody is as good as America used to be.
But there are a lot of countries that are much better than we are now.
And they have assets that you can own that are not in bubbles.
You can get good dividends.
You can protect yourself from this coming stock market crash, dollar crash, bond market crash.
So you can preserve your wealth.
And as the dollar goes down – so if you went through the 1970s and you had your portfolio – because in the 1970s, the stock market went way down.
But the dollar went down even more.
The dollar lost two-thirds of its value.
The reason oil prices went up tenfold in the 70s, the reason gold went from $35 an ounce to $850 was because the dollar collapsed.
Well, the dollar is going to have a bigger collapse this time than it did last time, right?
This time, I think the dollar is going to lose its status as the reserve currency.
Last time, it didn't lose the status.
It just got marked down because we went off the gold standard, but it didn't get knocked out.
I think the next one is going to be a knockout.
So you got to invest your money outside the U.S. to preserve your wealth when everybody else is going broke.
And you got to own real money.
You got to own gold.
You own physical gold.
Right?
Which you can buy, you know, larger quantities of gold through Shift Gold.
You know, I got, you know, very low prices.
You got to be careful out there.
There are a lot of companies that will try to, you know, bait and switch you into collectible coins, rare coins with these huge markups, 20%, 30%, 40% markups, sometimes 100% markups.
Stay away from that.
You know, you just want to buy bullion and you want to buy it as cheap as you can over spot.
The only time you'd want to pay a little bit more is to get some jewelry because you want to wear it.
Then it's probably worth it to pay a little extra if you want to Buy something that you can wear.
So you can do that.
I think the stocks that are going to go up the most, if you really want to potentially make a lot of money on this crisis, it'll be gold stocks.
Gold bullion is not about getting rich.
It's about staying rich.
It's about not getting poor.
Buying physical gold is about preserving the wealth that you have.
But I think that these gold mining companies, when the price of gold goes up, I think some of these stocks can go up 10, 20 times or more.
So if you can tolerate the risk, because if I'm wrong, these stocks can go way down.
But if I'm right, they're going to go way up.
So a way that you can really profit from what's going to happen is by having some money investing in these gold mining companies.
And then when we have a dollar crisis and the price of gold goes way up, these stocks can go ballistic.