3041 Why The US Dollar Will Collapse | Peter Schiff and Stefan Molyneux
Is the United States economy recovering - or are we being lied to by the mainstream establishment? Why has Gold recently hit a five year low despite long term predictions of it's rise in value? Are the government statistics on inflation accurate? What does the future hold for the US Dollar? Why has the Dollar strengthened and how will this play out in the long term? What does Peter Schiff think about Donald Trump and his recent success in the Republican presidential primary? | Also Includes: China economic situation, the Shanghai Stock Exchange Composite Index collapse, Puerto Rico debt default, gold repatriation, physical vs. paper gold holdings, the student debt bubble, the new real estate bubble, more quantitative easing, interest rates and what happens if you raise the minimum wage to $70,000 per year. | Peter Schiff is an economist, financial broker/dealer, author, frequent guest on national news, the host of the Peter Schiff Show Podcast, the CEO of Euro Pacific Capital and the Chairmain of Schiff Gold. | Schiff Gold: http://schiffgold.com | Schiff Radio: http://www.schiffradio.com |Euro Pacific Capital: http://www.europac.com
We have Peter Schiff, always a great pleasure to talk to.
He's the CEO of EuroPacific Capital, Europac, E-U-R-O-P-A-C.com, the chairman of Schiff Gold and, of course, a frequent media commentator who regularly blows the minds of these smarmy leftists who inhabit the mainstream media.
Hey, Peter, good to chat with you again.
How are you doing?
Good, good.
Thanks for having me on.
I'm not on nearly as frequently as I used to be.
They don't like to bring me on as much.
Maybe they want to deny some of the things that I'm saying.
I point out some things that are very unpleasant.
Well, tragically, you're the kind of guy they'll have on afterwards, and they'll say, so you were right!
But they won't say ahead of time.
They probably won't give me credit for being right, but they'll have me on.
They rarely give you credit.
But a lot of people are making fun of me.
A lot of articles are pointing out, you know, because my gold predictions, right?
Oh, gold 2,000, gold 5,000, and, you know, now gold's below 1,100, and they want to say, oh, you know, Peter Schiff doesn't know what he's talking about.
But meanwhile, all those people have been bearish on gold from $300 to $1,900.
Somehow they're geniuses because the gold price has finally gone down.
You know, just because a bunch of fools don't understand what the problems are, they think the Fed has solved the problems, they don't understand that they've made the problems worse, that doesn't, you know, undercut anything that I've been saying just because it's taking a little bit longer for this next leg of the gold bull market.
But, you know, they don't waste any time taking pot shops, I mean.
Okay, so let's, because the libertarians have been talking about gold and the need to buy gold because of the expectation of hyperinflation for many, many years.
And I'm pretty aware that this is not even a dead cat bounce.
Like, this is not even a pseudo-recovery.
There is a lot of smoke and mirrors going on.
But I wonder if you can talk about why it is that people think that Obama, who's presided over, I think, as you've pointed out, a recession during his entire recession, Why do people think that there's this recovery, that everything's back to normal, when of course the debt is still growing, when there's still 0% roughly interest rates, the Fed is afraid to raise the rates, and also of course there's been continuous quantitative easing or what used to be called counterfeiting.
Why are people unable to see any of this stuff?
Is it because they just don't have a clue about the theory?
You know, why couldn't they see the 2008 financial crisis when it was lurking right around the corner?
You know, why did Ben Bernanke in mid-2008 not have a recession anywhere in his forecasts, even though we were already in one?
We had been in the Great Recession for seven months, and he was looking around and saying everything looks great.
I mean, even at the peak of the housing bubble, they said it didn't exist.
So these are the same people.
So it shouldn't be a surprise that they can't see this crisis when they couldn't see the last one.
And then when it happened, they said, well, you know, nobody could have possibly seen this coming.
This was impossible to predict, even though there were people like me who were warning about it for years.
And they were dismissing those warnings.
And in fact, even after we were right, they said, oh, well, they're just a stop clock.
They don't really know anything anyway.
You know, they were talking about this for years.
Yes, because the problems were obvious for years.
They were just in denial.
And I think it's all part of the same problem that they still don't understand.
I think right now the bubble is bigger than ever.
The Fed has spent seven years blowing more air into it than it's ever blown into any bubble in the past.
We've had interest rates at zero.
Not just low interest rates.
Alan Greenspan brought them down to 1% for a while.
We're talking about zero.
We're talking about giving it away for seven years.
We're talking about Three rounds of this quantitative easing, where the Fed's balance sheet is now $4.5 trillion.
I mean, if you imagine, or you don't have to imagine, you think back to all the damage that was done to the economy because of Greenspan's easy money policies, that gave us the financial crisis and the Great Recession.
Well, imagine how much more damage the Fed has done under Bernanke and Yellen with a much more aggressive monetary policy than even anything Greenspan could have dreamt about.
Imagine all of the damage that's been done over this time period and how it's going to come back to bite us.
And, you know, we don't need hyperinflation to benefit as owners of gold.
I mean, we haven't had hyperinflation in this country yet.
Gold was $20 an ounce when Roosevelt confiscated it.
It was $35 an ounce up until about 1970.
We devalued it a couple of times to 42 before we left the gold standard.
But now gold's almost 1,100.
So gold has gone way up, and we haven't had hyperinflation.
So even just accelerated inflation is very, very good for gold.
Of course, if we have hyperinflation, you better own gold.
Because if all you own is dollars, you have nothing.
You have something to line your birdcage with.
Because if there's hyperinflation, the money's not worth anything.
Well, of course, like these Zimbabwe trillion-dollar bills, they can be sold as curiosities of the future.
Now, the 0% interest rates, I mean...
My audience, I think, is pretty good, but not as economically sophisticated as yours.
And my understanding of 0% interest rates combined with inflation is that the Fed is basically paying people to take its money, and they still can't jumpstart any kind of sustainable economic growth.
That is absolutely catastrophic.
It's like paying people...
It's like, I'll pay you $20 to eat at my restaurant, and no one comes to your restaurant.
I mean, how bad does your restaurant have to be?
Well, first of all, you can't jumpstart economic growth by printing money.
If you could...
Anybody could do it, right?
All these banana republics would be leading the global economy if printing money was the key to economic success.
The reality is what the Fed is doing is actually preventing a real recovery from taking place, because what they're doing is they're entrenching all the problems in the economy.
They're misdirecting assets, resources, back to parts of the economy where it doesn't belong, and they're preventing those resources from flowing to where they do belong.
Where we would create real economic growth, increase production, good paying jobs.
Instead, we're trying to, you know, divert resources to sustaining a stock market bubble, a bond market bubble, a real estate bubble, a consumer spending bubble in automobiles.
We're trying to sustain a government bubble and preserve all these programs and employees that we can't afford.
And in doing that, The government is denying or starving the real economy, the productive sector of the economy, from the resources it needs to grow and preventing the restructuring of our economy that is so desperately needed.
We cannot build a legitimate recovery on this phony foundation of bubbles.
We need to get rid of this so we can have a solid foundation to build a lasting recovery.
But none of that is happening because the Federal Reserve is standing in the way.
And of course, all of the entrenched interests, particularly the financial sector, that is benefiting from all of this nonsense.
You know, if you can borrow money at 0%, you don't have to be a business genius to make money as a banker.
Just go out and buy some bonds.
What is the old rule in banking, the 363 rule?
You borrow at 3%, you lend at 6%, you go pay golf at 3 o'clock in the afternoon.
I mean, they've just become ridiculously redundant.
And I think it is starving much-needed entrepreneurial areas from new capital.
Yeah, and you know, the average person or even the average entrepreneur, he can't borrow at 3%.
He can't borrow at all.
There's no capital there.
It's only the heavily connected banks that can borrow.
And what are they doing with their money?
Are they growing the economy?
Are they making capital investments?
No.
In fact, if you look at corporate America, there has been such a collapse in capital investment that the average age of our plant and equipment is the oldest it's been in over 60 years.
None of this money is being used productively.
It is going to finance share buybacks, which enrich a few, but don't benefit the many.
It is not growing the economy to do this.
And, you know, the irony of it is this whole big, you know, divide, the 1%, the 99%, this huge disparity between the super rich and everybody else is growing dramatically under President Obama.
I mean, if he wasn't president, he would be the biggest critic of the last, you know, seven years or six years, or how long he's been in the White House, because of this huge widening wealth gap.
And the Democrats like to talk about it, but they don't accept responsibility for creating it.
Their only solution is raise taxes on the rich.
That's not going to help.
If anything, that's going to make the situation worse.
The very wealthy people who are getting all this cheap money, I mean, it doesn't matter what the tax rates are there.
But it's the entrepreneur who's going to be impacted, the guy that might actually start a business and hire somebody that's going to be negatively impacted by higher taxes.
So you're just going to accelerate this gap between the rich and everybody else.
You're not going to solve that problem until you get to the root cause of it.
Well, and of course, what they will do is hold up the free market as the scapegoat for the widening gap between rich and poor as if we have much of that left.
Yeah.
If we had a free market, this would not be happening.
It is not a free market when the Federal Reserve is determining interest rates.
That's a controlled economy.
That's a centrally planned economy.
And, you know, The way our economy is run is not different than the way the Soviet Union used to run parts of its economy.
We have pockets of freedom.
That's why you still see some innovation.
But if you look at the areas where the government is most entrenched, Education, healthcare, housing, these are disasters.
You know, look what the government has done to the housing market.
Home ownership rates now are at the lowest level since like 1967, right?
Meanwhile, if you look at the medium cost of a new home, The new homes that we're building, the medium cost is 10 times the medium wage.
Back in 1950, it was only two times the medium wage.
I mean, so the government set about making housing more affordable and they drove the cost through the roof.
To the point where nobody can afford it now unless the government loans them all the money on a guaranteed loan.
They have no money for a down payment.
We've destroyed the education system.
We've destroyed the healthcare system.
We now have the most expensive college degrees in the world and the most worthless college degrees.
We have kids in their 20s living with their parents in their basement because they have a philosophy degree that has no value.
Meanwhile, they have enormous student loan payments and their grandparents are still working part-time at Walmart Because that's the only way they can survive 0% interest rates and a rise in cost of living in this economy.
So the people who want to retire are too broke to retire, and the young people can't get jobs.
I remember talking years ago with a teacher who was retiring, and that teacher said, oh, the 60s, you know, his eyes went kind of misty, and he, oh, the 60s, you know, he was making $9,000 a year as a teacher, and his house cost him $11,500.
$11,500.
Now, teachers in Toronto are making sort of $60,000, $70,000, which means it should be $80,000, $90,000 for a house.
Instead, it's $800,000 or $900,000 for a house.
And so we've almost lost that memory of what the economy used to be like and how affordable things used to be.
This has become the new normal and like where somehow when people vanish from the workforce, they're considered no longer unemployed.
When things go up but the government says they're not, somehow we just look at the numbers rather than the grocery bill or whatever.
This has kind of become the new normal and I think we've got to try and shake people out.
This doesn't have to be this way.
It doesn't have to be this constant degradation of opportunity.
Yeah, and the media likes to make fun of me because, you know, I deny the government numbers.
I don't want to accept how great the economy is because the government tells me how great it is.
But meanwhile, what the media or Wall Street is overlooking is what ordinary people are saying that are living in this economy.
They don't live in government statistics.
They live in reality.
And their reality It's totally different than what the government is pretending or what the media is pretending.
And so I would say to the people who are trotting out these government numbers and trying to claim everything is great, why are you drowning out the cries of the people in the real economy?
Because that tells a totally different story.
You know, they can't buy the CPI. They have to buy actual products.
And so if the prices of the products they're buying are going up, it doesn't matter what the government pretends.
If the government wants to pretend that everybody has jobs, but the people who are out there and don't have jobs know they're unemployed and the government wants to pretend they don't exist, or you have people who are working part-time and the government says, okay, well, you're employed.
Well, they're only working part-time because they can't find a full-time job that they actually want.
I mean, that person is still unemployed.
You know, if somebody used to be, you know, work in a factory, and maybe he was an engineer, and now he's a part-time fry cook at McDonald's, that guy's unemployed.
But the government wants to pretend that he's not.
Or even the people who, like I remember in the early 90s when I graduated with my undergrad, it was a terrible recession and I'm like, well, I might as well get my master's, you know?
And so a lot of the people are heading back to school because there are no jobs out there for them and they're also counted as employed or working.
The problem is people with master's degrees are waiting tables and driving cabs right now.
So if that's the case, why are you going to go to school to get a degree that there's no demand for anyway?
I mean, people are wasting their time and taxpayer money, and it's going to be taxpayer money because nobody's going to pay back these loans.
And the taxpayers are going to be on the hook for the unpaid balances.
Well, you see, but because my degree was in history with some aspects in philosophy, Peter, I could see down the tunnel of time.
See, that's the thing, right?
I could see podcasting in, you know, 10 to 12 years, so I'll take a little bit of time in the business world.
But no, actually, I mean, I was just very lucky that way.
And of course, a lot of these people are graduating without those skills.
And across the world, you know, a lot of people are focusing on Greece because it's very dramatic and there's Molotov cocktails and all this kind of stuff.
But I've been trying to draw people's attention recently to Puerto Rico and to China.
I know you've written and spoken some about that because I sort of have the feeling it's going to be a little bit more important to Americans that China seems to be facing a bubble crash and Puerto Rico is about to default.
I wonder if you could just step people through how this might actually affect their portfolios and their jobs and their lives.
Well, first of all, portfolio—I mean, Puerto Rico, I think, is a very interesting example of what happens when governments borrow too much money and are forced to admit they can't repay it, because that's the point that Puerto Rico is in.
But the irony of it is Puerto Rico has less debt than America.
Relative to the size of his economy or on a per capita basis, even if you adjust it for the fact that per capita income in Puerto Rico is roughly half of what it is in Mississippi, which I think is the poorest of the U.S. states.
But even if you make the relative adjustments, Puerto Rico is fiscally more sound than the United States.
The only difference is Puerto Rico's creditors have figured this out.
And America's creditors have not.
So Puerto Rican creditors are demanding much higher interest rates, and so Puerto Rico can't continue to play the game.
They can't borrow money at a rate that they can afford.
Well, in America, if our creditors all of a sudden decided that we were broke and they refused to roll over their treasuries, We're good to go.
The US government can rely on the Federal Reserve and Janet Yellen to buy whatever bonds nobody wants.
See, quantitative easing goes to treasuries.
There's no quantitative easing program for Puerto Rican government bonds.
If there were, then Puerto Rico wouldn't be having a problem right now.
They can pretend everything was great, just like America is pretending everything is great.
But this is a warning sign.
People are ignoring it, just like they ignored the subprime problem.
They said, hey, don't worry about the mortgage market.
It's just subprime.
It's contained.
Oh, it's just contained to Puerto Rico.
It's contained to Greece.
No, it's not.
This is a debt problem, and we have the problem bigger than anybody.
It's just that people are oblivious to it, and they think that we're immune to it because we can print money.
But printing money is going to be our downfall, and it's why we're going to have so much inflation and why people You know, need to be doing to protect themselves.
As far as China is concerned, look, China is slowing down, too.
But the U.S. economy is slowing down even faster.
You know, look at U.S. GDP in the second quarter.
We just got that reported.
It was 2.3%.
That's about half of what it was in the second quarter of last year.
So our economy is rapidly decelerating.
The whole first half of 2015 is 1.45%, and the second half could be even lower than that.
So yes, China is slowing down from 100 miles an hour to 70 miles an hour, and we're slowing down from 30 miles an hour to 15.
And we're getting ready to go into reverse.
So I'm much more worried about the economic slowdown in the US than I'm worried about what's going on in China.
But yeah, China does have problems.
And I think a lot of those problems are made in America.
We buy all these products made in China.
Well, they get all their problems made over here.
A lot of it is a byproduct of them keeping their currency too low and all the malinvestments and bubbles that flow from having interest rates too low.
Well, of course, we've done a bigger problem here.
But when China finally allows their currency to rise, and I think they're doing that.
I think they're preparing for that.
They just announced their gold holdings much lower than I would estimate.
But again, I think they did this after lying about it for seven years.
They pretended they weren't buying any gold.
Now they fessed up.
But I think they're still lying.
I think they wanted to at least admit that they bought some gold, but they didn't want to tell everybody how much.
And now people think, oh, see, they're not buying as much gold as we thought.
And that made the price go down.
And this is great for the Chinese because now they can buy even more.
And this repatriation thing, too, I find quite fascinating because it's the kind of stuff that you think would be like a four-alarm fire for the mainstream media that a lot of governments, particularly in Europe, are demanding their gold back.
That seems quite important to me.
I don't know if it's too complicated to explain from the mainstream media.
I don't know because maybe if the gold changed its gender and had a reality show or something, maybe we'd hear more about it.
What are the indications that people should be taking from this clawback of gold from the European governments and other governments as well?
Well, again, it's a lack of trust, not a lack of trust in gold, but a lack of trust in the institutions that are claiming to be holding onto it for you.
Because what if your gold depository doesn't actually have the gold that it's holding for you?
What if it's actually been loaned out to short sellers who have sold it onto the market and they don't have it?
And so that's the risk.
And what if the gold isn't actually there?
People think they own gold, but they don't own it.
And of course, if you thought you own it, and then you find out you don't, and then you have to go back and buy it again, because the gold you thought you had, you no longer own, where's the price going to go?
Right?
And people who have to go back and buy the gold.
And if the gold's not there, because maybe the people who do own it don't want to sell it.
See, that's going to be the thing that happens.
Right now, there's all these speculators that want to sell gold, right?
And they're shorting all this gold that they don't own.
And in many cases, they're selling it to other speculators who have no intention of actually buying it.
So you have all this paper gold trading around, but there's no actually gold there.
Meanwhile, There's a lot of demand for real physical gold and silver.
That demand is increasing as the price is going down.
But at some point, there is going to be a rush to buy real gold, and it's not there.
Yeah, if you want to buy gold from somebody who doesn't have it and can't deliver it, there's a huge supply of people willing to short it to you.
If you actually want gold that you can have in your hands, there's not that much of it around.
And I believe that the people who have it aren't going to sell it.
My clients and other people who have been buying gold, if gold goes to $1,500 tomorrow, they're not selling any.
I'm not selling.
I'm holding on to it.
I hope to be buried with this gold.
I hold on to it like grim death.
There's almost nothing that could make me part with it.
Whenever you have that urge to sell, it's because you think things are getting worse.
And if we're right and things get a lot worse, you want to hold on to your goal to the last possible minute.
Use it to buy your life in the desert of the future.
I don't know.
But yeah, hang on to it is sort of my suggestion for people.
Yeah, and as I said, it is, you know, eventually we're going to use our gold, eventually.
You know, when we do have a monetary crisis, a dollar crisis, I mean, it might be the only thing that people will accept in payment for goods and services.
But certainly under normal circumstances, just a market appreciation is not going to tempt any selling, especially when the people who have been buying physical gold want more.
They want more than they have.
Which is why I wanted to announce we got a special going on in these silver, half-ounce silver rounds at Shift Gold.
We were able to get a number of these things.
And we're going to run out by the end of the week.
But we're selling them at an introductory rate.
You can't find silver rounds.
These are half-ounce rounds.
It's cheaper anywhere online.
The only problem is I don't know how much longer we're going to have them.
We are limiting the number that will allow each individual.
It's kind of like a goodwill kind of gesture.
But we're going to run out of them by the end of the week.
There's like a shortage now in a lot of the products that we sell in the physical world.
To shift gold, the clients, they don't want paper.
They want the actual gold or silver delivered Into their doorstep so they can have it in their hands.
And it's getting harder and harder to come by that.
Even junk silver, which are, you know, dimes, quarters, half dollars, minted before 1965.
You know, we're having a hard time getting those.
And, you know, all of a sudden you're having to wait a long time to get delivery because the supply is just not there.
Right, right.
Now, as far as all this quantitative easing and why it's not translating into even more inflation than people are seeing, the image that I have, and I work in analogies, so forgive me for the flourish, but the analogy that I have is I sort of think of a giant sponge and a pitcher of water being poured into the giant sponge.
It doesn't immediately flood, like you just pour it on the ground, you know, you're up to your ankles in water.
You pour it into this giant sponge and it doesn't immediately, but the effect is still going to be there.
And it seems to me like the phrase you've used is we're exporting our inflation.
And we're of course deferring our inflation by having a bunch of treasuries bought, which is just future liabilities.
Is that a reasonable way for people to sort of understand why we've not had the same proportion of inflation as we have had of money printing?
Yeah.
Well, first of all, you have to look at where the money is going and kind of follow the flows.
A lot of this new money is being introduced through the banking system and through Wall Street.
And if you want to look at stock prices, if you want to look at bond prices, If you want to look at high-end real estate prices, I mean, the average house that the average guy is going to look in, you know, that house is not going up.
But, you know, these multimillion-dollar homes or very expensive condos in major cities, right, they're going way up, right?
And you look at anything that wealthy people buy.
Look at, you know, fine art, you know, collectible type art, the great masters.
Look at collectible cars, you know, antique, rare cars.
I mean, prices have been going through the roof.
So the people who have been getting all this money, they're spending it.
And the prices of things they're buying are going up.
So that is happening.
And if you see, again, asset prices going up as a result of money printing, see, stock prices aren't going up because companies are more profitable.
They're not earning more money, right?
Their stocks are just more expensive because more money is being printed and it's being used to buy them.
Or the companies themselves are using that cheap money to buy back their own stocks.
So they're bidding up the price.
So you have the inflation.
Manifesting itself in financial assets.
But meanwhile, it is in the real economy.
Rents are rising at their fastest pace in years.
Utilities are going up.
Your cable bill, grocery bills are going up.
I mean, look at the price of a hamburger.
You know, things are getting more expensive.
The government doesn't want to acknowledge that.
Look at health care costs, insurance premiums, whether it's health insurance or, you know, your auto insurance going up or, you know, prices are rising.
The government just doesn't accurately report that.
But the fact that the dollar has been so strong over the last few years, that's brought down oil prices, other commodity prices, that's helping to keep inflation in check.
But, you know, inflation is being exported because the rest of the world isn't seeing those big price declines that Americans are seeing.
Meanwhile, goods are still flowing in.
Our trade deficit is still enormous.
And so the dynamic there is we print money and we ship it abroad.
And so now the world has our money and then they produce products and they send them here.
So we get their stuff and they get our paper.
And so The more stuff pushes down the price, right?
There's more supply of stuff, so it keeps the price down.
And the rest of the world has less stuff because they sent it to us, but they have more paper floating around.
And so they end up with higher prices.
We get lower prices, so we're able to export a lot of that inflation.
But one of these days, when the world gets tired of holding on to all that paper, and they actually want to spend it, Then, all of a sudden, it comes back, and what are they going to buy?
Well, whatever they buy is going to get more expensive.
And I'm not sure what they're going to buy, because we're not producing the consumer goods that we buy from them.
So one of these days, this inflation is going to come back like a tsunami and wash up on our shores, and we're going to drown in it.
But meanwhile, you've got to protect yourself from it now.
And all these governments, they're all telling us here, Oh, we got nothing to worry about.
There's no inflation.
They're printing all this money.
And somehow there's no inflation when that is the definition of inflation.
And then they make fun of people like me for saying, oh, Peter Schiff was warning that there was inflation.
And look, there's none.
He was totally wrong.
You've got nothing to worry about.
In fact, the politicians are trying to tell us that not only don't we have inflation, that we don't have enough inflation, that inflation is so low that we should try to get more of it.
That prices aren't rising fast enough, that we need prices to go up even faster, which would shock the average American who's already struggling with a rising cost of living to find out that our leaders are losing sleep worrying how to make the cost of living go up even faster because they don't think things are expensive enough.
Now, don't you wish or long for the good old days of the mid-2000s when there was only one crash in general to worry about, which was the housing crash, perhaps to some degree the financial crash?
It seems like, and I'm trying not to be sort of paranoid about this stuff, Peter, but it seems like everywhere I look, I see a bubble.
Like, we just did China, we did Puerto Rico, we did something on the student debt, a trillion-dollar liability in the student debt crisis and so on.
It's 1.4 trillion now.
It's already 1.4.
That's how fast it's growing.
Yeah.
Man.
So it seems like, and here in Canada, I mean, it seems to me that we've got kind of a housing bubble.
I mean, just look at the prices are mad.
And of course, if the Chinese economy tanks, particularly out in the West Coast, it means the prices, the cash-driven prices for high-end homes is going to collapse because the Chinese are buying a lot of homes, getting their money out of China, probably because they know what's coming.
If you sort of had to rank order where you think the bubbles are going to be hitting us from, what would your panic list be?
Well, I think the biggest bubble is in the dollar itself.
The dollar, I think, is probably at the foundation of the bubbles.
But ultimately, that's going to be the one, I think, that pops first.
Because in order for the central bank to maintain the bubbles in the stock market, in the real estate market, they're going to have to sacrifice the dollar.
Because ultimately, they have to print dollars to buy up bonds to prevent interest rates from rising.
They have to print more dollars to fund another round of quantitative easing.
If the government's going to keep on spending and it doesn't want to raise taxes to pay for the spending because it really can't get blood from a stone at this point, you know, where is the money going to come from in order to pay off all the government obligations, whether it's to people on Social Security, people on Medicare, you know, people who are retired, you know, collecting a government paycheck.
Bondholders, you know, defaulted student loans, defaulted home mortgages, all that money is going to have to be created out of thin air by the Fed.
And so ultimately, the air is going to have to come out of the dollar bubble.
And I think ultimately, when the dollar really goes into freefall and the Federal Reserve is forced To do something about it.
Like Russia, you know, they had to raise interest rates to 17%, I think, earlier this year to stop the ruble from collapsing.
When we're backed into a wall, into a corner like that, and we have to do something, just like Paul Volcker had to jack interest rates up to 20% in 1980 to stop a dollar crisis from, you know, snowballing.
That's when all the other bubbles are going to prick, when the Fed is finally forced to raise rates, because then a whole economy that's built on cheap credit, when you yank that cheap credit away, when you pull it out from under a rug, it's going to fall over, because all of a sudden, rates are going to skyrocket, and that's it.
Everything is going to implode.
And it seems like they're out of arrows in their quiver.
I mean, it seems like there's always been this, oh, you can play with the interest rates with this, you can make that, but it seems to me like they can't lower their interest rates below zero.
You can't pay people to take it.
I mean, that's just too obvious.
I don't see how they can print a whole lot more money.
I don't see how the trade deficit, like it seems like they're kind of out of these Keynesian stimulus options for whenever the next thing hits.
I don't know that there's going to be a lot of smoke and mirrors.
Well, the next thing is gonna be an overdose on Keynesian stimulus, and it's gonna kill us.
But when the stock market bubble burst in 2001, whatever, Greenspan lowered interest rates to 1%.
They kept them there for about a year and a half.
And then the economy was recovering, so they slowly raised them back up.
And by the time the financial crisis hit, rates were back over 5%, right?
The Fed reloaded the gun and had all those bullets back in there.
And then, of course, the minute the market collapsed, they used it like a machine gun, right?
Because they got down to zero so quickly, the clip was empty.
This has been a recovery, supposedly.
They tell us we've had this really great recovery, yet during the entirety of this seven-year recovery, they haven't even raised rates once.
You know, and if the next recession starts, let's say, next year, or maybe at the end of this year, and it starts and they're still at zero, what is their option?
What is their policy prescription?
Well, we know what it is, QE4, because that's all they've got, right?
They're going to do another round of QE. But the message it should send is that we've now reached a point Where we can never raise interest rates.
Because if we couldn't raise interest rates during the recovery, obviously we can't raise them during the next recession.
And since the next recession will be worse than the last recession, how are they going to ever be able to raise rates again?
See, the thing that's keeping the dollar up Is the anticipation of higher rates, the belief that this monetary policy was temporary, that we're going to normalize rates, that the Fed is going to shrink its balance sheet?
Well, from the very beginning, I said this is impossible.
We are in a monetary roach motel.
You cannot check out from 0% rates without collapsing the bubble that 0% rates inflated.
In fact, this economy is so addicted to cheap money, you can't even take away the QE. That's why I know they're going to do QE4. It's the same reason they did QE3. They stopped QE2. Everybody thought they were done.
I knew that wasn't the case.
I knew that they would do QE3 eventually because I knew QE2 didn't work.
And not only didn't it work, it made the problems they were trying to solve worse, which is why they did QE3. And now the problems are even worse after QE3 than before they started it, which means the solution is QE4. And that probably will be the last round.
Now, let's switch gears for a sec, because you had a good run.
Okay, you're a very successful businessman, and you took a good run at politics.
Hmm, I'm just wondering if there's someone else in the media we can think of who might be along those lines.
I don't know if you've been following the Donald, but what are your thoughts on his candidacy?
I have been quite surprised at the degree of traction he's got.
You know, you always forget about the silent majority when all you read is the media.
You think everyone's lefty.
And then someone like Donald Trump comes along and you remember that there's this whale under the water that sometimes surfaces in American politics.
And he seems to be really tapping into that.
What are your thoughts on his candidacy?
Yeah, you know, it doesn't surprise me that he is as popular as he is.
And again, it just shows you that things are a lot worse than people think.
Because, you know, he's really like the none of the above.
I mean, he's like voting because, you know, for none of the candidates, right?
And none of the above would probably do pretty well.
I always thought if I was going to run for office, that should be my name, none of the above.
And, you know, maybe I could win.
But, you know, it's basically people are fed up.
They know the economy is getting worse.
And they don't think that the Democrats or the Republicans are going to do anything about it because they're both to blame for the mess that we're in.
And a guy like Donald Trump, you know, articulates a lot of our problems.
I mean, a lot of the things that Donald Trump says are true.
They're not all true, but some of them are true.
And enough of it is true that people can identify with it.
And at least they look at the guy, and he's unapologetic about his wealth, and they're tired of these phony hypocrites like Hillary Clinton trying to talk about how the rich people are trying to do this.
Meanwhile, she's as rich as anybody, and she's living a pretty high lifestyle, yet she's trying to identify with average guys.
At least Donald Trump is telling it like it is.
Look, I'm rich.
I don't apologize for it.
And I don't want to pay taxes.
I pay as little as possible.
And he's proud of that.
And he speaks his mind.
And people are like, yeah, you know, this is a difference.
This is not like voting for one of these other Republicans.
Now, I wish people would vote more Rand Paul.
I wish Rand could get some of the disgruntled voters that are going to Trump.
By actually showing that he's a lot different than a mainstream Republican, and he really is a move in a different direction.
But he hasn't been able to capture that kind of excitement the way Donald Trump has.
And he's going to get a lot of votes in the Republican primary.
He'd probably get votes even if he ran in the Democratic primary.
Because people are fed up.
The economy is not as strong as people think.
So they're looking for anything.
They're grasping for straws.
And they see Donald Trump, at least he's different.
At least he's saying things that other candidates aren't saying.
And people think he's honest.
People know that he's not doing an opinion poll.
You know, he's just saying what he thinks.
And, you know, people like that.
And I think, you know, he's got some bad scapegoats, you know, to blame things on immigrants.
But I know a lot of people in the Republican Party want to blame a lot of these problems on immigration.
And I think that's wrong.
That's not the problem.
Clamping down on illegal immigration isn't going to solve our problems.
They're more of a scapegoat for problems that are being caused by government.
Now, Donald Trump talks a lot about the trade deficit and how bad it is.
And he's right.
It's a disaster.
But he can't solve it by hiring better negotiators.
That's not the problem.
A better negotiator with Mexico or China isn't going to solve our problem.
Our trade deficit is big because our businesses have collapsed.
Our factories are gone.
We're having to deal with regulations and taxes that our Chinese competitors or even our Mexican competitors aren't having to deal with.
So we have too much government.
And so that's what he needs to do.
He doesn't need to change our negotiators.
We need to eliminate all these regulations and taxes so we don't have to worry about what mistakes our negotiators want.
Let's just have free trade.
There's nothing to negotiate there.
Yeah, I would be curious as well if he's ever going to start talking about monetary policy.
I mean, I certainly think he's got the IQ points to grasp it and maybe he could find a way to communicate it to people, I don't know, using juggling balls or fire hoses that people try and drink from.
He's a showman and he's got, you know, what he has, I think, that Rand Paul doesn't have as much of is a sort of larger than life, half clown, half compelling, half...
Always fascinating kind of persona.
He's a larger-than-life persona, and I think Rand Paul is a bit more cautious that way.
Everybody knows who he is, right?
I mean, he has a high name recognition.
And look, he's not necessarily self-made in that he did get off to a good start because he inherited money from his father.
But he certainly did a lot on his own.
There are a lot of people—look at Paris Hilton, right?
There are a lot of people who inherit money, and they just blow it.
They don't contribute anything to society.
They don't grow a business.
They don't hire anybody.
They just spend daddy's money.
And he didn't do that.
I mean, he inherited a fortune and turned it into a much larger fortune.
But he's not a politician.
That's what people want.
I mean, people say, oh, you don't have the experience to be president.
What kind of experience do the other candidates have?
So they were in Congress?
I mean, what kind of experience is that?
What do they actually do?
I mean, he actually, you know, has a resume where he actually did real things.
He didn't just win elections.
I mean, you know, what does that mean?
You know, yes, I'm qualified to be president because I've won other elections to lower offices.
I mean, you know, big deal.
I mean, you know, we've elected career politicians, you know, for generations, and look at the mess the country is in.
You know, so maybe, hey, let's try somebody.
You know, Ross Perot tried to tap into that, and he almost, you know, he didn't do that bad in a three-way race.
And if he hadn't dropped out and got back in again, but, you know, he was kind of a weird guy, Ross Perot.
I mean, Donald Trump is a much stronger personality.
Then Ross Perot and his charts and his let's get grandma out and get under the hood and fix the engine, whatever.
I mean, a lot of the stuff that Donald Trump says, I mean, it's really strong stuff.
And people might say, you know what?
Let's take a shot.
It can't be any worse, you know?
Yeah.
I think there's this desperation, too, because he can run without donations.
I mean, everybody kind of gets that, you know, the old joke being if you put the stickers on congressmen the way you put on NASCARs, you wouldn't even be able to see them.
They're so buried in logos.
And everyone who donates gets their special favors, and the average taxpayer just gets the bill.
I think people are kind of really hungry for a candidate who doesn't need to take people's money, just to see if that is going to affect the political process at all.
Yeah, although I do think if he actually got the Republican nomination, I mean, he would need money because I don't know that he's willing to spend a billion dollars.
I don't know how much he's actually liquid for.
You know, a lot of his net worth is businesses and properties.
And, you know, you don't know, you know, because to run in a primary, it's not as expensive.
But a general election against a well-funded Democratic machine, he's going to need contributions.
I don't think that I don't think he can do this whole thing.
I don't think he's I don't think he's that rich.
He's going to need support.
But he certainly isn't for sale.
You don't have the idea that he's doing this for the money.
Now, he could be doing it for his ego, because we know he has a big ego.
And he pretty much has everything he wants.
So the White House is generally something That, you know, there's a lot of power and prestige and perks that go with being the president.
And so, you know, it's hard to put a price tag on that.
But that's certainly something that, you know, a billionaire just can't buy.
You know, all the money you have, you're not going to be treated.
President Obama, with his entourage, you know, the way he travels, the way he's treated, You know, no billionaire really could probably match that experience, you know?
Because I don't know how much money you would have to have.
I don't know if any king of any country has such a huge court at their disposal.
You know, all the people that are there that are working for them that you have.
So it's probably a very unique experience.
There's only a handful of people that are alive today that have experienced that.
So, you know, it could be something that, you know, a lot of people would want, you know.
Now, I don't know if you followed this story.
Dan Price, he was CEO of a Seattle-based Gravity Payments.
He's the guy.
He made national news a couple of months ago.
You probably have followed this.
In the, of course this was going to happen next.
I mean, this is like reading Atlas Shrugged for the fourth time, watching this guy's business plan unfold.
But he's the guy who said, everybody gets $70,000.
That's the minimum wage.
And I think it was a fixed wage for all his employees or something like that.
And everyone was like, wow, great!
Somebody with long hair and a hippy-doo, scruffy beard can somehow repeal the laws of economics.
Have you seen this play out on where he's at now?
You know, it's interesting.
I just put in an article.
I posted an article on my Facebook page, and I've got 250,000 views already.
I mean, that's a lot of views just for an article, so people are interested in this topic.
But I talked about this guy on my podcast.
You know, I used to do the radio show, and now I just do this podcast.
And I did one on this guy, because I predicted that this whole company would fail eventually, and all those employees were going to lose their jobs.
So instead of making, they used to make $40,000, and then they got a bump to $70,000.
I said, look, they're going to go down to zero.
And I hope they don't, you know, go out and buy a new car or run up their credit card debts, because they're expecting to earn $70,000.
Because this business model was unsustainable.
You know, it's really like a socialist from each according to his ability to each according to his needs.
Because he says, all my people need $70,000 a year.
So I'm going to pay them what they need regardless of their ability, regardless of their productivity.
And it destroyed the whole thing.
And I knew that, you know, look, how is he going to succeed?
I mean, he's not going to be able to do this.
And, you know, some of the higher paid people now left.
And, of course, you get inundated by job applicants.
All the people that can only do $25,000, $30,000, $40,000 worth of work, all of a sudden they all want to work for you because you're overpaying.
But if you're overpaying relative to your competitors, then how are you going to stay in business if you're overpaying?
You just think you're not going to be price competitive.
And meanwhile, he gave up his entire income.
He was making a million dollars a year.
Now he's not even making nothing.
He had to rent out his house because he didn't even afford to live there.
I mean, where is the return for him?
He's the entrepreneur.
He took all the risk.
I mean, you can't work for nothing.
Meanwhile, his brother, who was his partner, I guess sued him because he gave away all his brother's money.
I mean, his brother invested in this business not so he can give out all the money to the employees.
They didn't invest in the business.
He just decided to splurge because he had some idea of some utopian world where everybody earns $70,000 an hour.
Meanwhile, this whole business is going to fail.
And so you have a viable business going under.
Customers who used to benefit from the services are now going to have to buy their services someplace else, presumably at a higher price or not as good a value as they got before.
And all the jobs that were there are going to be destroyed.
The people that were making $100,000 a year have lost their jobs.
And the people who were making $40,000 a year, not only did they lose their jobs, but they lost their chance to one day progress.
To earn $70,000 a year.
Hey, they thought they had it for nothing.
Hey, why do I have to increase my skills?
Why do I have to work harder?
I'm just getting $70,000 a year for doing the same work when I was doing 40.
The whole thing didn't work.
But the liberal media was fawning all over this guy.
They were putting him up.
Hey, this is what everybody should be.
This is the perfect ideal CEO. Why doesn't every CEO do what he did?
Well, if every CEO did what he did, then all the companies would be broke, just like his.
So what good would that be?
Well, it's so sad because it makes people feel so passive if they feel that their salary has kind of nothing to do with them and it's the whim of whoever got power.
You know, it's just, well, if this guy likes me, he'll just give me more money.
But I keep telling my listeners as an entrepreneur myself, if you want to make more money, provide more value.
You have to up your skills.
I mean, I can go onto a movie set and demand $20 million to star in the movie, but nobody's going to pay me because I ain't Brad Pitt.
You know, Brad Pitt can open a movie.
He can make movies make money.
So just provide more value and the marketplace will inevitably reflect that.
Yeah, you know, Hollywood is a perfect example.
I mean, you get what you're worth.
I mean, yeah.
And look at all the pay disparity.
I mean, should we force motion picture producers to pay all the actors the same?
Should they not take these factors into consideration?
Should it just be equal pay for equal work?
I mean, you know, because acting is acting.
I mean, so if Brad Pitt has a co-star who has the same number of lines, why shouldn't he get the same pay?
It's the same work.
No, because the employer is looking at the value added.
How much am I going to earn if I hire this guy?
And if I have Brad Pitt starring in my movie, I'm going to have a lot more than if I have Stefan Molyneux.
And so even if Stefan is just as good an actor, maybe, and can read the lines just as well, I can't have a $50 million action movie starring Stefan because I'm going to lose a bunch of money.
I've got to put Tom Cruise, I've got to put Brad Pitt in there, even if I've got to pay him $25 million.
That's what I gotta do.
You know, plus, sometimes I wake up with a bit of a kink in my neck.
So those action scenes, you know, they can be a little stiff.
So, you know, those guys...
I mean, Tom Cruise just did another Mission Impossible.
To me, being over 50 and starring in an action movie is Mission Impossible.
Good on you, man.
He's doing another Top Gun.
He's gonna be back in a fight.
But, you know, there's no 50-year-old women doing these movies.
I mean, all the actresses that were popular when I was in my 20s, none of them are working.
Kelly McGillis was in the first one.
I don't even know what she's done for the last 20 years.
Right, but the same guys that were acting in movies when I was in my 20s, they're acting.
There's age discrimination in Hollywood.
There's sex discrimination.
I mean, they pay the women a lot less than they pay the men.
But no one cares because the free market works there and no one criticizes it.
But somehow these same people want to criticize the free market when it happens in any other industry.
The people producing movies aren't sexist.
They're not discriminating against...
You know, women, they're just looking at the bottom line.
And for some reason, the people buying tickets to movies, they want these big action stars, and they want their women younger and prettier.
That's what they want.
They don't want 50-year-old women, right?
They want 20-year-old women.
But they don't mind 50-year-old guys.
And the thing is, these 50-year-old guys, they don't even look 50.
You know, I talked to my son.
You know, we're watching, like, I said, you don't realize that he's my age, like Tom Cruise and Brad Pitt.
They're the same age as me.
They look like they're half my age.
But I can only assume that they sleep in vats of formaldehyde or something like that.
Or, you know, I have to occasionally get some work done that doesn't involve doing sit-ups hanging like a bat from a monkey bar or something.
So, you know, they must work really hard to stay looking that good.
So, more power to them.
I mean, they should get paid that.
Yeah, but I guess maybe it just doesn't work as well for women.
But the bottom line is that it's a free market.
And yeah, you can't just demand.
The minimum wage, people think, oh, I want $15 minimum wage, as if your boss is going to be required to pay you $15 an hour, even though your productivity is nine.
And no, the minimum wage doesn't force your boss to pay you anything.
All it does is force him to choose between paying you $15 or firing you.
And unfortunately, for a lot of people, he's going to choose the latter.
You know, that's what's going to happen.
Now, for the people who don't get fired, okay, maybe you're going to benefit.
But it's going to be at the expense of everybody else who is.
And meanwhile, your business, the business that's employing you, is going to be less efficient Oh, man, if there's one...
Myth.
I mean, it changes every day.
But today, Peter, the one myth that I would really like for people to disabuse themselves of is this myth or this fantasy that people in power are just sitting on piles of gold.
Like they just have masses and masses of gold.
Because people say, well, the government can pay for this.
First of all, the government has no money at all.
They just flow through for taxes, debt, and counterfeiting.
But your boss is not sitting on massive piles of gold, and if he pays you more, he just takes a little bit out of his basement full of smorg-like treasure.
Right?
The customers are paying your salary.
And so the boss is just organizing the customers to pay your salary.
That's basically all he's doing.
And so if you want a higher salary, you have to accept.
It's not going to come out of your boss's profits.
It's not going to come out of his money.
It's going to come out of the customers.
And so how is your job going to do if you have to double the price of whatever it is you're paying for?
And even if your job does survive, as you point out, you're going to end up paying a lot more.
If you're going to get $15 more, it's the purchasing power that counts, not the number.
And if inflation is going up because of higher minimum wages, you don't end up with more to buy.
What most people don't understand is the companies that pay minimum wage, because most U.S. employers don't have any employees at minimum wage, right?
They don't hire those type of workers.
They don't provide the entry-level jobs.
If you look at the average...
A businessman who is employing young people, teenagers, young adults in entry-level jobs, they themselves are not making that much money.
I mean, you own a restaurant, right?
How much do you think a restaurant owner is making?
$75,000, $100,000 a year?
These guys aren't rich, right?
And they might employ 20 or 30 people.
You force this restaurateur to give all those people a raise $50 an hour.
He has no profit.
It's gone.
All of his profits is gone.
So now he's got to figure out how to stay in business.
Either he has to jack up his prices and hope that he doesn't lose too much business, or he's got to I've got to figure out how to, you know, not pay as many people, not have as many people.
Can I automate?
Can I have self-serve?
Can I have machines?
Because, you know, these guys aren't employing the people that are making, you know, the $100,000, $200,000 a year.
They're employing the low-skill guys.
And I see a lot of businesses that want to say, oh, yeah, we need a higher minimum wage, but they don't have anybody.
I don't have a single worker.
Not that I'm a really big company.
I don't have one worker that makes minimum wage.
I don't even think I have anybody that makes $15 an hour.
Why?
Because I can't find anybody to do the work that I need who will do it that cheaply.
Believe me, if I could, I would hire that person.
That's what capitalism is about.
It's about, you know, you're trying to get the best deal you can.
I mean, everybody does that.
If you wanted to hire a plumber to fix your sink, you would call two or three plumbers, and you'd take the lowest price.
I mean, you're going to hire the guy who's going to do the work for the least amount of money.
That's what everybody wants to do.
But, I mean, if the guy's not competent, you can't hire him, right?
I have to find people competent enough to do what I want, and those people demand more than the minimum wage.
But there are people, if you're just looking for somebody to take an order, you know, behind a window, anybody can do that.
You can take a kid out of high school, a 16-year-old, talk to him for 15 minutes, and they'll be able to do it.
So, obviously, you don't have to pay a lot of money to hire somebody like that.
But, you know, those are very important jobs in a person's life because that's what gets them on the path.
That's where they learn responsibility.
They learn about business.
They learn about customer service.
They learn all sorts of things that are valuable.
In fact, most young people, you know, they should pay to have those jobs.
The fact that they're even getting paid is the icing on the cake because what they're getting is experience that has much more value than their minimum wage paychecks.
And also, I mean, from my experience starting off, you have the worst bosses in your early jobs.
Because all the competent bosses aren't managing minimum wage people.
So it's all the really cheese-eating, neck-beard, mouth-breathing dunderbosses who are down there at the lower levels.
And if you can deal with them, every boss...
I say this to my listeners sometimes who are complaining about bosses when they're starting out...
Every boss you have after your first boss will be a dream come true.
It gets way easier.
And if you can run that gauntlet at the beginning, there's nowhere you can't go in life.
And I can tell you this, too.
I know that a lot of people that do start off working, let's say, in a fast food franchise that start at the bottom, a lot of these guys go on to owning their own franchises because they learn the business from the ground up.
They stay with it.
They get promoted.
They do become the manager of the restaurant.
And eventually, you know, they break out on their own and they pick up their own franchise.
This is what happens.
I mean, a lot of these guys don't have college degrees.
They don't even have high school degrees.
But they are running businesses.
But the only reason they have the skills to run those businesses is because they've worked in those businesses their whole lives.
They've learned the business from the ground up.
And a lot of times, you can't learn those skills in school.
You have to be in the business world to learn how to run one of those restaurants, to learn all the nuances of business.
But you take away those entry-level jobs, and you take away those future entrepreneurs.
Yeah, I mean, to me, there's only two major ways to increase salaries as a whole.
And we, of course, we used to see this up until the 90s when this all began to crater.
Number one, of course, people have to have more schools.
I think that one of the reasons why governments want to pump up minimum wage is they basically want to hide how unbelievably unskilled people are when they come out of 12 years of government education.
I mean, they're worthless in the marketplace as a whole.
So they don't want – if the wages fell to what governments were producing and the value they had, I doubt people could, you know, get bus fare to their jobs.
So they want to cover that up.
And the second thing, of course, to raise wages, as you pointed out, I mean, just increase competition for workers.
You know, get more businesses started, lower barriers to entry.
Like a third of Americans need government permission to do their job.
That's insane.
Maybe you're working in a nuclear factory, but hairdressing?
Really?
Come on.
I mean, you're not going to cut someone's ear off if you don't have a license.
So lower barriers to entry.
Yeah.
If you want to sell your labor to somebody – Yeah, you want as many people bidding for it as possible.
So the government has to pursue business-friendly policies, make it as easy as possible for people to hire people, to start businesses.
But we're doing the opposite.
We're basically targeting employers for mass discrimination as far as fines and lawsuits and taxes.
We create all sorts of reasons for people not to want to hire people.
We're making it very risky to hire.
So it's no wonder that these jobs aren't here.
But one of the funniest things I remember hearing about college and minimum wage is I remember an argument that said that we need to raise the minimum wage.
Because if we don't raise the minimum wage, how do we expect our college grads to repay their loans?
Right?
We're sending kids to college to graduate and work at a minimum wage job.
Because I would joke when I was a kid, what they always used to say was, you know, you better go to college because if you don't go to college, you're going to end up, you know, as a fry cook at McDonald's, right?
Now, it's a totally different refrain.
Now we're saying, hey, if you want to land a plum job at McDonald's, you better borrow a lot of money and go to college.
You know, because you need a college degree now to get those jobs.
I mean, this is ridiculous and people can't even, you know, put two and two together to see the absurdity of this situation.
Now, I wonder if we could end up with, I've been curious about If you could, you know, crawl into the ear of whoever's going to end up being the president next, right?
I mean, and you could give them sort of a top two or three things that you'd really like to see happen in the economy.
I mean, you're a dad, I'm a dad, of course, we really care what kind of world our kids can grow up in.
And if there's a couple of things, because, you know, prioritization is pretty key when you're a manager, what are the couple of things that you'd really wake up singing and dancing out of bed if these things were achieved by whoever's the next commander-in-chief?
Well, look, I mean, there's a lot that needs to be done, but it's all basically the same, you know, part of the same prescription, and that is to reduce government at all possible levels as much as possible through,
you know, getting rid of or dismantling agencies, departments, programs, slashing government spending, you know, Getting people off the government payroll, I mean, we need to make the government as small as possible, recognizing that the government is a gigantic burden on the economy, and the economy cannot grow when it's weighed down by that burden.
And we have to recognize that a lot of promises have been made that can never be kept, and we need to level with that.
Rather than pretending that we can keep them and printing the money, we have to admit that we're broke, kind of like Puerto Rico did, and we need to allow the country to solve the problems that the government created.
You know, we certainly need an independent Federal Reserve.
We've got to stop the 0% interest rates.
We've got to let interest rates go up.
We need more savings so we can have real capital investment.
But we're going to have to live through a real gut-wrenching downturn at this point because we're going to have to allow a restructuring.
As painful as that restructuring is going to be, just like anybody that's a drug addict, you know, my recommendation is not, you know, do even more drugs.
It's you've got to stop drugs, check yourself into a rehab, you know, go cold You need old turkey.
You need rehabilitation.
You need to get your life back on track.
Well, it's the same advice for the economy.
We have to come off this monetary high.
You know, we have to stop all this speculating and consumption and borrowing.
And we have to go back to what our grandparents or great grandparents did, what the founders of this country established for us, a free market of, you know, sound money, limited government, a rugged individual.
You know, savings, production.
We can't, you know, be looking to create special privileges for people and try to protect everybody from discrimination or, you know, everybody doesn't have a right to be treated, you know, equally or fairly.
I mean, you've got to make it on your own in this world.
You've got to, you know, you've got to go out and stake your own claim.
And it doesn't matter who's discriminating against you.
You just got to overcome it.
You know, you can't expect to be handed something on a silver platter and look for some government to make things fair for you or level some kind of playing field.
You play on the field that's there and you do your best.
And if you're born, if you're not as smart as the next guy, you know, you're not as ambitious or, you know, you have to figure out how to overcome.
You've got to play the hand that you're dealt, right?
That's how Roosevelt said, look, I'm going to give everybody a new deal.
There is no new deal.
You play the cards that you're dealt and you play them as best you can.
And that's the way you're going to have, you know, the most prosperity.
You know, my grandparents came here, right?
All four of my grandparents came to America from Europe.
If they wanted big government, they could have stayed in Europe.
But they came here.
We had no welfare.
We had no Social Security.
We had no minimum wage.
We had no Medicare.
We had no income tax either.
We didn't have anything.
And there was no anti-discrimination laws.
Your boss can fire you for whatever reason you wanted.
He didn't like the way you look.
He didn't like what sex you were.
He didn't like how old.
It was whatever reason he wanted to fire you.
It was it.
You couldn't do anything.
You couldn't sue him.
All you could do is get another job.
But you know what?
They came here by the millions.
And then when they got here, it was so great, they got the rest of their relatives to come over too.
Because what we had was freedom.
And when we have freedom, we have prosperity.
We don't have that anymore.
The government has taken away our freedom.
We've sold our soul to the government devil because he's promised us protection.
Oh, yeah, we're not going to let your boss discriminate against you.
We're not going to let him fire you.
So we've done all these things, and so now there's no more jobs.
There's no more bosses.
There's no more opportunity because the freedom is gone.
Yeah.
And we got a terrible bad price for it too because we didn't even get stuff.
We got a few trinkets and a massive debt.
Now for my listeners who are interested in services, you mentioned earlier that you've got some silver for sale.
I know you work with gold as well.
What are the services if my listeners want to If you poke more into what you can provide for them, what would you suggest that you can provide for them?
Well, first of all, sure.
At my metals company, Shift Gold, I've got the logo up there over my shoulder.
We sell physical gold and silver delivered to your house.
You can have it in your possession.
There are a lot of firms that sell gold and silver.
The problem is a lot of them have huge markups.
These are the guys that advertise on cable television all the time.
Avoid those companies because, you know, the price that you have to pay is outrageous relative to what you're actually buying.
We have very, very good prices.
We have very, very low markups over the actual value of the gold and silver that you're buying.
So that's a chip gold.
If you've got a more substantial portfolio, I don't recommend that people only own gold, owning gold to the exclusion of everything else.
I think you want to have an investment portfolio.
We invest in stocks and bonds around the world, mainly stocks.
But I screen the countries.
I'm looking for countries that rank very high on the index of economic freedom because I believe freedom results in prosperity and profits for investors.
I want to invest where there's freedom, not where there's government.
So I'm looking for the countries that have the least amount of government.
Which again, you know, it's all about, you know, relative basis because a lot of the countries have a lot of government.
It's a question of degree these days.
But the countries that have relatively less government, so they have fewer regulations, they have lower taxes.
Generally, they have better balances of trade.
They have surpluses instead of the deficits.
Their people have high savings rates instead of like Americans who are running up big debts.
So I look for more favorable macroeconomic fundamentals and I look to own currencies.
That I think are going to rise substantially against the dollar.
It happens to be a great time to be investing with me right now because the US dollar has had this huge suckers rally as everybody is convinced that the Fed has saved us.
They don't realize they just set us up for the worst crash yet.
And this will be, I think, a currency crisis.
So before that bubble bursts, you can use those dollars to buy assets on sale in Switzerland and Singapore and New Zealand and places like that where we invest.
And buy some real good quality companies for 20%, 30% off from where they were a year or two ago simply because the dollar's gone up so much.
But I don't think the dollar is going to retain these gains.
I think it's going to surrender all the gains and then some when the people who've been buying the dollar, the speculators, wake up to reality.
And that reality is not a vibrant recovery with a tighter monetary policy.
It's a renewed recession and an even looser monetary policy than we had before with QE4. Yeah.
So, it's a good time.
You go europac.com, shiftgold.com, and shiftradio.com.
As always, Peter, a real pleasure.
And, of course, thanks for sounding the free market trumpets across the human landscape, because there's not too many people out there, particularly in the mainstream media, doing it.
So, I thank you for that.
And thank you for doing the same thing, because you're out there, too.
And I do listen to your podcasts, and I often enjoy them.
I just don't have enough time to listen to as many as I'd like to, but I listen to some.
