Peter Schiff REVEALS Investment Strategy in A Shaky Economy, Gold Boom

Peter Schiff, Chief Economist & Global Strategist at Euro Pacific Asset Management joins us to discuss his investment strategies in the extremely shaky economic environment. What is the role of gold? How is the FED hurting your wealth? A direct, straightforward discussion about your financial future.

Guest: Peter Schiff, Chief Strategist
Company: Euro Pacific Asset Management
𝕏 @PeterSchiff
📺 @peterschiff
🌍 https://www.europac.com

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Recording date: January 15th, 2024
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That’s what the gold market still hasn’t repriced gold is still reflecting the the the the belief that the fed’s going to succeed and that over the long run inflation is going to average 2% it’s not it’s going to average much higher than that probably average closer to 20%

Than 2% and when the um the market has to price in Gold a present value of gold given h a much much higher uh future inflation rate then gold needs to be replaced priced much higher and it will Be welcome back to sore financially where discussed the macro to understand the micro my name is Kai Hoffman I’m thejr mining guy on Twitter and the CEO of the sore financially group thank you so much for joining us we’ve got a fantastic guest joining us today for a

For a really interesting discussion it’s Peter Schiff he’s the founder of shiff gold he’s the head over at Eur specific asset management as well and I’m really looking forward to catching up with him we last spoke in early November right after Halloween it wasn’t as scary as it

Sounds but uh we had we had a really good discussion I caught him met the New Orleans investment conference one of my favorite conferences in the calendar year uh something you definitely should check out big proposer proponent I don’t benefit financially from it check it out my favorite conference whole year um but

We have lots to catch up on the FED came out afterwards gold rallied lots lots going on and we have of course an Outlook to discuss like what is 2024 going to be like and before I switch over to my guest quick reminder there’s a subscribe button here somewhere kindly

Hit it we really appreciate it now with much further Ado Peter it’s great to welcome you back on the program it’s good to see you again thanks for making the time oh sure thanks Kai nice to see you again as well absolutely yeah no Peter uh we’ve only talked about two

Months ago but uh I feel like a whole lifetime you know just happened in the last two months cuz the markets have shifted dramatically and since we’re both gold investors uh sentiment has changed a little bit and maybe Jerome Powell gave us a bit of a Christmas

Present by being extremely doish in his last uh Speech before uh the Christmas break here let let why don’t we start there what what do you make of Pal’s comments before the Christmas break here well we we knew that pal was going to Pivot the only question was when he

Would do it and and and how he would uh you know describe it and you know of course the pivot is not because the FED has won the inflation War I mean the FED has already lost that war uh the reason that the FED is pivoting is to avoid a

Financial crisis and to help reelect Joe Biden uh because the the impact of rising rage was starting to weigh very heavily uh on the real economy certainly the housing market was affected dramatically by the increase in rates but uh businesses were now dealing with Rising rates we we had uh the beginning

Of what would have been a major financial crisis last year uh as Banks uh were uh you know seeing a collapse in the value of their uh collateral of their assets which was something that I predicted for years you know when mortgage interest rates were down at you know

3% and um you know the US government was issuing long-term treasuries for you know 1% or you know 5year treasuries for 25 basis points whatever it was and everybody was talking about how great this was because the government could borrow all this money cheap and homeowners were able to borrow all this

Money and and refinance their mortgages and lock in this rates and everybody was touting how great this was for the borrowers I was the only one who was out there pointing out how bad it was going to be for the lenders that the lenders were going to be trapped owning these

Low yielding assets once interest rates eventually went up and that’s exactly what happened and the banks are now uh in trouble for the very reason that I predicted they would be they loaded up on these long-term mortgages mortgage back Securities us treasuries and they’re now worth 7 cents on the dollar

60 cents on the dollar and they’re going to be worth a lot less when interest rates resume their Ascent which eventually they will but in the meantime in March of last year the Federal Reserve came to the rescue of all these Banks uh and put a Band-Aid on a cancer

That has only gotten worse since they did that and we’re going to find out how much worse uh I guess in a couple more months when that temporary uh you know program expires and the FED of course is going to have to roll it over AB abut that’s I think scheduled to

Happen at the end of March early April I believe that program is coming coming to a close um should be really interesting because liquidity is going to be a big issue um you mentioned bonds and treasuries as well there is a bit of a liquidity crisis in that market as well

Because the FED has to jump in and pick up the slack from U you know t- Bill auctions is that is that correct is that a correct assessment well if you look at the rate with which the national debt is growing I mean even though the official budget deficits are not quite two

Trillion a year if you look at the rate at which the national debt is increasing and all you have to do is go to you know the the national debt clock on on the internet and you’ll see that we’re adding about a trillion dollars of debt every

Quarter uh so the national debt is growing by about four trillion a year and we’re not even technically in a recession yet I mean we probably are in a recession if you measure the numbers correctly uh but the way the government has everything r red we’re not in one

But eventually we will be and historically when we do go into a recession whatever the deficits were prior to the recession uh swell I mean they double or triple and that’s hard to believe that could happen given how large they are right now you know it’s

When the economy is doing well and they keep telling us the economy is great that’s when you’re supposed to have surpluses you know to pay off the deficits now we never have those but at least in the past when the economy was good the deficits were smaller you know

And then they got larger when we went into recession but now we have the largest deficits in our history and we’re told you know we’re not even in a recession that the economy is doing well so there’s all this you know debt on the market meanwhile who’s buying it the the

Federal Reserve which was the largest buyer of treasuries the Federal Reserve is selling in competition with the treasury also the social securities so-called trust funds which used to be buyers of us treasuries not that many years ago because Social Security had a surplus they would collect taxes payroll taxes

And then pay out benefits and there was some money left over and what the Social Security trust funds did with that money is they bought treasuries well now given you know how weak the economy is how many people have left the labor force uh there’s a deficit Social

Security despite all these jobs that are out there people have two or three jobs now they’re not paying enough payroll tax to cover the baby boom in retirement so the Social Security trust funds are already selling us Treasures so they’ve gone from buyers to sellers just like

The Federal Reserve the other big buyers of treasuries were the Bank of China Bank of Japan they’re not buying anymore uh so who’s buying all these treasuries I mean I don’t know I I don’t know anybody who wants to buy them really um so there’s a huge problem and that’s why

I believe that the FED is going to go back to quantitative easing before the end of this year I I just don’t see how we going to make it through the entire year If the Fed continues to sell at treasuries especially if the dollar starts to fall which I believe it will I

Think that the the main reason that the FED succeeded in bringing down the official inflation measures the CPI headline number was the strength of the dollar the dollar had a huge run uh in anticipation of all of the rate hikes uh that would be you know implemented to

Try to bring down the inflation rate and I think it was the strength of the dollar and the dollar Index went up from about 90ish to 115 and I think it was that dollar strength that brought down oil prices commodity prices and help bring that pressure on the headline numbers well

The dollar has already backed off from 115 now to it’s around 102 102 and a half uh but I think that we’re going to fall substantially uh probably throughout uh you know 2024 and that is going to reverse that progress and I think right now where we are on the CPI where we’re

In the low threes that’s really the trough and I think you know sometime during this year we’re going to start to see the year-over-year inflation numbers headed back up and so we never quite made it down to 2% and now we’re we’re headed back up but I don’t believe that that’s going to

Derail uh the return to quantitative easing because I think the FED is going to have to decide that higher inflation is better than the alternative because if the FED does you know pull the rug out from under the markets and you know cancel the rate hikes that

Everybody has factored in uh and and continues to raise rates and continues with quantitative tightening the whole Market’s going to implode the stock market would crash uh real estate uh the the the whole fiscal situation the banking sector we could have a worst financial crisis in 2008 and all this

During an election year and I don’t think that Jerome pal is going to let his boss have to run for re-election uh in that type of environment and I think for all the talk you know the Biden Administration wants to pretend that the FED is independent it’s not independent

At all I mean they’re they’re talking to Pal and Pal’s got his his script as marching orders and I think he’s going to follow it absolutely no interesting comments and I wrote three key topics that I want to follow up with you on Peter um let’s start with bond yields

Because you mentioned they right around 4% for the 10-year and I had Simon hunt on the other day as well right I think right around Christmas time as well and he said he’s going to we’re going to see 10% bond yields again which brings me to the question is is there an inflection

Point where bond yields actually become attractive enough again to attract enough liquidity and attract enough Capital to sort of find that equilibrium again right does that make sense what I’m asking yeah but you know I don’t think there’s any bond yield high enough to make bonds fundamentally attractive I

Mean first of all we had this big bull market in bonds that went from about 1980 to about 2020 so 40-year bull market and in fact I remember on my podcast when bond yields really uh collapsed during covid in early 2020 and we got to less than 1% yields right on

30-year and and 10e treasuries I said on my podcast at that time this is it this is the climatic blowoff top in the bond market it’s over the big you know multi you know de deade bull market is over and this is the climactic end of that

And and in fact looking back I I was right there that was the end of it and we did move back up to 5 perish uh yields on the 10year out to the 30-year and now we’re back around 4% but if you look at a chart of bonds I mean we’ve

Clearly broken down so we’re in a new bare Market which I think is going to be uh you know a ferocious bare Market it could be worse than the bareket Market that we had in the 1970s that laid the foundation for that big bull market I think yields are going higher I think

They topped out in the last bare Market yields got to about 15 16% uh on longer term debt short-term debt it topped out at about 20 21% but remember the official inflation members measures got no higher than 133% and so you had 133% inflation you had you know 16% yields you had 20%

Short rates you the rates were well above the inflation rate and the CPI was far more honest back then than it is now um but the reason I said that there’s no yield that would be attractive is even let’s say yields got to 10% the the government can’t afford that

Th this is not 1980 we’ve got a uh $34 trillion um national debt right now um but let’s say in a couple of years two or three years it’s it’s it’s 40 trillion and if interest rates are 10% that’s $4 trillion a year in in interest costs the government can’t pay that I

Mean that’s basically 100% of what what it collects in taxes there’s there’s no way the government could pay a 4% I mean 10% Plus imagine the economy if treasury yields were 10% where would the housing market be where would mortgage rates be think about the enormity Americans have

Record amount of a debt in fact last week we reported more than5 trillion dollar of of of personal debt it’s the first time ever had spend that above five trillion but credit card debt record highs uh uh student loans record highs I mean everybody is drowning in

Debt how are they going to stay afloat you know with with 10 % rate so if rates actually got that high the government would have to print so much money to monetize such a large portion of the debt that the inflation that would be created would render a 10% nominal yield

Negative in real terms so there there there there is no positive rate of interest that the US government could legitimately afford to pay so I I just don’t think that bonds would really be attractive at any yield uh because it would only be a nominal gain because there there the inflation

Is going to be higher I can’t see a situation where you have positive real yields because the economy would implode uh if we the banks would all fail you know and now what is the government going to not bail them out the the the treasury couldn’t pay the interest on

The national debt is the Federal Reserve going to let the US Treasury default I I just don’t think you know politically that would happen so we’ve guaranteed inflation that we’re going to repudiate debt uh by wiping it out through inflation and so that means the big

Losers are the bond holders you know or even people with cash or money stuffed under a mattress everybody with dollars is going to lose so uh there’s always going to be a better alternative to us treasuries no matter how high the yield is we’ll talk about investment strategies later during our

Conversations where where you should put your money or based on you know personal experience as well here um because there really really good points there on the bond yield and you you took away a question I want to ask you Peter is about U potential of a US

Default right because if if you’re looking at 16% bond yields or even 10% Like how how much of a default is priced in there and can and you mentioned can the US actually afford that and they can’t yeah well I don’t think there’s any uh default risk priced into

Treasuries and again people just assume that the treasury won’t default because they’ve got a printing press but that doesn’t mean that owning treasuries is safe because if the government has to create inflation to pay off the debt the debts not really paid off it’s repudiated you don’t get your purchasing

Power back and we we’ve already crossed that point where the debt is payable it’s it’s not payable through legitimate means the US government cannot tax the American public to a degree that would allow it to honestly repay its debt and and it can’t cut spending in other

Areas the US government is not going to cut Social Security so it can pay interest on the national debt it’s just never going to happen in fact whenever we get to the debt ceiling and they talk about you know you know what’s going to happen if we don’t raise the ceiling the

First thing they say is well we’re going to have to default on our debt they never say well we’re going to have to raise taxes to collect more income so we can pay our debts or we’re going to have to cut Social Security so we can pay our debts the government

Tells us right up front if we can’t borrow more money we’re def faulting on the the money we’ve already borrowed I mean they they admit it’s a Ponzi scheme uh so the only way to avoid default is to inflate uh but there is no viable way to honestly repay what’s been borrowed

Because we’ve borrowed way too much you the government can’t do it in fact if you look at the the nature of the debt in the next year just the next year about a third of the national debt matures which is over10 trillion uh and when you figure the new

Money we have to borrow over the next year the US government has to finance about $15 trillion of debt well who who wants to loan us15 trillion you know now a lot of that debt is the debt that’s maturing but the people who own that

Debt may not want to roll it over they may want their money back so that they could do something else with it you know that’s what happened with a lot of the banks that’s why one of the reasons the banks were in so much trouble and needed these bailouts is their depositors

Wanted their money back because they had better places to put it like they could just put it in a money market and earn 5% loaning it to the US government the banks were paying nothing and so the customers wanted their money back but the banks didn’t have it because they

Loaned it to the government themselves uh you know for 10 years at at you know at 1% or they loaned out a 30-year mortgage at 3% and they didn’t have the cash uh so you know the the US Treasury is in in the same position uh so in order to prevent all

Of this you know they’re just going to print money and again that’s not a get out of jail free card you know I hear people say well you don’t have to worry about uh the governments that borrow in their own currency because they’ll never going to default well you know yeah but

Argentina borrowed in pesos although maybe I shouldn’t use Argentina as an example now they’re they’re back on maybe they’re on the right track but in the past they they made all these mistakes or zimb or there are a lot of countries that had hyperinflation I have

A two I have A2 billion dollar rore two billion RAR bills somewhere lying around here as well so history kind of repeating itself yeah you Yar Republic they borrowed in their own currency and look look what happened to their creditors exactly so history seems to be repeating itself there Peter you talked

About QE and I want to follow up with that real quick as well because they’re never going to call it QE again just they they can’t because they would be admitting defeat here um how do you see QE sort of uh be reflected in in in the

Future like what kind of what do you call them weapons or tools do they have to sort of re-inject liquidity Capital into the market it’s not just going to be money first of all I mean quantitative easing was just a euphemism you know I mean they they the FED wasn’t

Doing anything new right they weren’t doing anything that you know the rice bank or the Zimbabwe hadn’t done or Argentina it was just inflation all they did was print money and buy government bonds it’s not like they invented some new thing right it it’s been done ever

Since they had uh paper money and and that’s why you know you know the F fathers put us on a gold standard to to avoid this and in fact when the Federal Reserve was first started uh they did not allow the Federal Reserve to own treasuries uh for the very reason that

They didn’t want them monetizing debt and you know when the FED first launched quantitative easing and uh Ben uh bangi went to Congress congressmen asked him they said hey you know you’re monetizing the debt this is this is not a good thing and Baki said no no no we’re not monetizing

The debt because this is just a temporary program we’re going to sell all these bonds we’re only we’re only buying it temporarily it’s only debt monetization when the Central Bank buys the bonds and keeps them well that’s exactly what they’ve done because when pal was asked about it the

Balance sheet was you know a fraction of what it is today I mean it’s you know even though they’ve shrunk it by a trillion it’s still about what an eight trillion dollar balance sheet H so the FED never put those bonds back into the economy pal lied to Congress

And I called him out at the time I said he was lying uh I said that you know no there’s no way the FED is going to be able to reverse what it’s done because it’ll create a bigger crisis than the one that it tried to prevent by doing it

In the first place so I I said at the beginning it’s a monetary roach motel you you fed could check us in but never check us out and here we are you know uh over a decade later and all those bonds plus a lot more are still there and yeah

They’re going to go back to quantitative easy who cares what they call it uh but the balance sheet is going to start to explode because the FED is going to have no choice I mean it does have a choice if it wants to do the right thing but

The FED has never done the right thing so you know why would it start now I mean we know what they want to do they want to do whatever they can to Kick the Can down the road and to delay the inevitable crisis and the only way to do

That is to print money that’s that’s the only tool they have right is to is to print money lower interest rates print money a a and and hope that they can you know postpone it uh for a few more years absolutely I just realized I got some

Money from Venezuela here on my desk as well so and you know that that used to be a very rich country too yeah you know I bought bought all this for like four bucks so um one one other thing you mentioned as well earlier is inflation

And uh admittedly I was almost in the in the camp and you brought up well Jerome Paul’s never said anything or done anything the right way well when they talked about transitory inflation for for a month or two I was like H maybe he was on to something but now we’re seeing

Backup like we’re seeing inflation ticking back up again we just in the US 3.4% Europe is ticking up higher a little bit um let’s talk about inflation fears again is it uh just based on geopolitical fears or where do you see inflation ticking up again and is it

Going to be a longer term Trend here now well first of all it was never transitory I mean that was just something that they made up because they they didn’t want to raise rates at all and so they were making up this transitory nonsense in order to avoid

Raising rates in fact if you remember remember uh back in 2021 when inflation the way they measure it right first moved above 2% instead of raising rates they decided to reinvent their mandate and they said you know we’re targeting average inflation now we don’t just want inflation at 2% we want a historically

Average rate of 2% so pal said we need to make up for the fact that we had a few years below 2% now we need to let it run above 2% for a little while just to kind of average it all up which was a bunch of nonsense in the first place but

Pal was just looking for an excuse not to do anything about the inflation problem because he was afraid of what it might do to the real economy so they made up this you know this BS about inflation averaging yeah nobody asked pal about inflation averaging now because look how much higher than 2%

Inflation has been and even the FED will admit that it’s not going back down to 2 % until maybe 2025 or 2026 so how much lower than 2% is inflation going to have to run to bring the average back down to 2% when right now the average is so much higher than

2% so that that inflation averaging went out the window right no nobody talks about it it’s like you know you’re not allowed to mention it but that that is the last official policy they never they never officially abandoned that and said you know what for foret about inflation

Averaging all we want to do is get back down to 2% we don’t care if it averages five or six or 7% you know along the way we just want to get back to 2% you know because if that’s the case if you only have to average down low inflation but

You never have to average down high inflation right in the long run inflation is going to be much much higher than 2% you know and that’s what the gold market still hasn’t repriced gold is still reflecting the the the the belief that the fed’s going to succeed

And that over the long run inflation is going to average 2% it’s not it’s going to average much higher than that probably average closer to 20% than 2% and when the um the market has to price in Gold a present value of gold given uh a much much higher uh future inflation

Rate then gold needs to be replaced priced much higher and it will be absolutely yeah no we’re we’re seeing that right now and you mentioned in our conversation early November that gold is going to jump over the $2,000 hurdle it’s going to stay up there as well and

It looks like it is staying up there it seems like 2000 is the new floor question is though is it just geopolitical or is there more at play here as well because we’re seeing tensions rise again in the Middle East that has been driving gold prices also

Over the weekend as we’re recording this here um how sustainable is it Peter and based on your commentary I’m assuming it’s quite sustainable yeah you know I think that gold has built a very big base around this level you know it initially Rose to around 2000 in

2011 uh and then pulled back to a th000 and then you know gradually made its way back up again uh to 2000 and it’s kind of been hanging out around this area and now it’s been building uh a bit of a base just above 2000 and I think we’ve

Been you know compressing the support higher and the resistance is there uh but I don’t think it’s very formidable at around 2100 or 2150 or just above a lot of people are still a little reluctant to buy gold above 2,000 because they’ve been burned in the past

At this price point you know to see gold pullback but the pullbacks have been you know narrower and narrower and I I don’t think there’s a lot of downside risk in in Gold I mean obviously you know there’s a little bit of an opportunity cost in that you’re giving up your

Interest uh but you know there’s not that much interest and I I think the upside potential uh is enormous uh relative to you know the downside risk in gold from here you know I think historically if you look at you know where gold is relative to let’s say

US Stocks relative to the Dow Jones where the Dow Jones you know close to 40,000 you know and gold at 2,000 you know gold is historically very very cheap uh you know gold could be 10,000 or 20,000 with the Dow at this level um if we’re going to get to to a cheap

Stock market which is what I think I mean right now we have a very expensive stock market uh you know based on valuations and a lot of other metrics I don’t think the market should be expensive the market should should be cheap and eventually it will be cheap

But it won’t be cheap in dollars it’ll be cheap in real money it’ll be cheap in Gold uh but the other reason I think gold prices go much higher is you know money supply and inflation and and not only how much inflation we’ve already created but how much inflation is going

To be created in the near future and you know you asked me earlier about you know inflation you know the inflation is all about money um we we had a huge increase in the money supply and and that’s the source of the inflation that is the

Inflation uh the impact that that has on prices is is a result and and we’re focusing on prices and we’re not looking at inflation and that kind of lets the government off the hook for creating it and you know it always annoys me when I watch some of the you know Financial

Channels and they talk about uh food inflation or rent inflation there’s no such thing is rent inflation or food inflation as if landlords C cause inflation or the farmers are causing inflation they’re not food prices are going up because the government has caused inflation rents are going up because the government has

Caused inflation the inflation is the expansion of the money supply and even though money supply has contracted a bit uh recently compared to how much it went up it’s barely gone down and so the prices still haven’t adjusted to the money supply growth of the past and

Inflation is not just about um growth of money supply it’s about credit because consumers use credit to buy stuff just like they use real money and so if credit is expanding and now consumers take that credit and they buy stuff that bids up prices I mentioned earlier that

Credit uh card debt is soaring to a record high I mean look at the last month it was like four times estimates when credit blew up consumers are are taking advantage of credit that is still plentiful and easy and they’re buying stuff they’re buying stuff that they

Can’t afford that their their their two or three paychecks still don’t allow them to pay for it they they find a way to borrow the money and so as long as credit is continuing to expand uh that’s going to bid up prices and prices are going higher and higher and higher but

When you look forward to this fiscal cliff and what’s going to happen to money supply as you know the interest rates really start to move up because nobody wants to buy Treasures I mentioned earlier somebody’s buying treasuries but eventually nobody’s going to want to buy treasuries and everybody

Who owns treasuries is going to want to sell treasuries and that means the only buyer is going to be the FED but it it’s not just going to be treasuries no one’s going to want to buy any US dollar denominated debt because none of the borrowers are going to be able to pay

Rates high enough to cover the loss of value of the dollar so then the FED might have to start buying municipal bonds corporate bonds uh everything you know and and and it’s just you know just a spiral and so it’s not just that we’ve had so much inflation in the past but

That we’ve got so much inflation that’s already baked in the cake for the future that’s why the price of gold really needs to start to rise uh to reflect that right now you know people just don’t get it I mean people are still optimistic they’re still confident in

The FED they still don’t understand uh you know what’s about to happen because they don’t understand what already happened they still don’t you know know uh you know how the FED created all these problems how it inflated all these bubbles they still think we have you know genuine Prosperity as opposed to a

Gigantic bubble absolutely no it’s uh that’s why we’re doing these interviews Peter so we can educate a little bit as well and uh hopefully convert uh some of the investors out there and uh help them understand what is actually happening here in the world and uh in the

Financial markets um I want last topic I want to talk about Peter is mining stocks as well um they have been sort of been disconnected from the gold prize move uh in particular gold mining stocks of course um let’s talk about that as well like how do you factor them in how

Do they fit into your investment strategies here as well yeah well first of all you know we have uh strategies uh that are 100% gold stocks that we manage I mean I have a gold fund uh the year Pacific gold fund that’s managed by Adrien day and so that’s a fund that you

Know people can buy at any discount brokerage firm if you have a you know an account or you can buy it with us at your pafic asset management and we do manage separately managed accounts that are exclusively in the mining sector but even our non-mining strategies I have a

A value strategy Global value strategy and that still incorporates an allocation to to mining because I think those stocks represent extraordinary value uh you know relative to historically where these stocks have been priced uh given the current goal price or you know given their book

Values or uh uh things like that but I think the reason that gold stop stocks have been as weak as they’ve been is really a function of you know the the Outlook investors expect the price of gold to fall because they expect the FED to be successful in its inflation fight

Uh and and as they you know expect the price of gold to fall they they think that’s going to reflect poorly on uh the future profits of these companies and stocks you know try to Discount future earnings into the present and if you have a barar view on the price of gold

You’re going to have a negative outlook on the value of mining companies that are going to be mining that cheap gold in the future uh but also it’s you know these gold stocks have been the ironic victims of inflation because you would think oh a lot of inflation that’s going

To be good for gold stocks because you know they have gold and it’s an inflation hedge but the inflation has pushed up the cost of mining gold a lot more than it’s pushed up the price of gold and so gold companies have seen their earnings suffer due to inflation

And and that’s because investors still don’t appreciate uh the permanence of this inflation or how much worse it’s going to get and and so they haven’t you know factored that in so that’s been difficult but I think the gold price is going to ultimately catch up uh to where

It needs to be I mean it’s it’s it’s very very underpriced right now so I do think you’re going to see a period of time where the price of gold will you know rise a lot faster than the cost to mine it and and that will be great for these

Gold mining companies not only for their for their earnings you know their their current earnings but a lot of these gold companies have reserves that are assigned little to no value in the market because cost it costs more to mine them than the gold is

Worth you so let’s say you have a a a part of your reserves where your mining costs is $2,300 you know you may have a lot of gold there but it’s 2,300 an ounce to get out of the ground well it doesn’t matter how much you have it’s not worth

Anything because you can only sell it for $2,000 right so you can’t make it up on volume right you you you got a worthless asset but if all of a sudden the price of gold is $55,000 and maybe the cost of minding that gold only goes to

$33,000 now you’ve got $22,000 an ounce profit you know multiplied by a lot of ounces all of a sudden there’s a huge asset there that was not there uh so there’s tremendous leverage I think in in the gold mining stocks if we get the type of move that I expect in the price

Of gold and I think if you w to get an idea of the magnitude I think the last time we saw a move that I think is going to be similar to what’s coming is in the 70s because in the 70s the price of gold had been suppressed for a long time uh

You know and it went from $35 an ounce in you know the late 1960s to over 800 in the early 1980s I mean think about the magnitude of that rise uh the percentage gain and and and so think about where gold prices would be now or later if

They if they did something similar and you know what happened in the um in the 70s of course is we we left the gold standard and the result was a big devaluation of the dollar as a result of us leaving the gold standard well I

Think the next major move is going to be when the world leaves the dollar standard and when that happens when the dollar loses its role as the reserve currency I think the next mark marown in the value of the dollar relative gold could be just as big if not bigger than

What we had during the 1970s so that is a huge potential increase as the world remonetized gold as central banks now move away from dollars as their primary monetary reserve and they go back to gold as their primary monetary Reserve uh and and that means they have to buy a

Lot of gold and that also means everybody else is going to be buying a lot of gold and there’s not that much gold to go around so the only way to to make it work is with a much higher price and I think that’s what’s Comon you just

Open a whole new can of worms here with dollarization topic there Peter and Bricks potentially goldback currency there as well wondering if we should go down that rabbit hole for for a minute let’s let’s go down that dollarization topic I don’t think we talked about it

In or and so because it was a big topic this summer right before the brick Summit in August in Johannesburg and then that topic dollarization sort of disappeared heed a little bit you touched on Argentina earlier going back on the US dollar so there’s a couple Trends pulling right now and uh I’m

Curious like how do you see that playing out you’re seeing really a dollarization trend and a second or a potential new world Reserve currency emerge yeah well I mean the the Dynamics do not favor the dollar as the reserve currency remember when the dollar became the reserve currency initially number one it was

Backed by gold and it wasn’t just backed by gold it was redeemable in gold but also the US was the world’s largest uh creditor nation and we were the world’s largest net exporter we had huge trade surpluses and we were this you know gigantic creditor so it made sense uh

Everybody needed dollars because everybody wanted to buy our stuff we made all the cars we made all the radios we we made all the appliances I mean all the manufactured goods were made in America and so people needed dollars to buy all our stuff uh but you know Flash Forward to today

We’re the world’s biggest debtor uh we have the world’s biggest trade deficits what do you anybody need dollars for you know we no one needs to buy our stuff we don’t make the stuff right you know so people have been recycling these surpluses into our debt into you know into our

Bonds um but we owe so much money that it’s obvious that anyone holding our bonds is holding the bag they’re going to take losses so it doesn’t work uh and we have these global imbalances huge economic imbalances because Americans live beyond their means uh we we we we

Spend but we don’t save you know or borrow we don’t save we we consume but we don’t produce and this is a gigantic burden that we have imposed on the rest of the world that has to subsidize this and the cost is getting higher and

Higher and higher and and so it’s got to come to an end and I think we accelerated the process early in the Biden Administration with these sanctions on Russia where we weaponized the the exorbitant privilege that the world has given us against Russia and we made an example or and and

We basically a warning hey you know if you own dollars you better do what we tell you or you know we have the ability to punish you and I don’t think China is happy to be in that position I don’t think anybody wants to be in a position where the US

Has that kind of power so I think we’ve created another political incentive on top of the economic incentive to dollarize to move away from the dollar you know one of the things that happened early on in the 70s when we went off the gold standard that’s when we got uh

Saudi Arabia to price oil and dollars so okay well you couldn’t get gold for your dollars anymore but at least you can get oil you know we created the Petro dollar but you know the world is moving away from that I mean more and more trade in oil now is occurring in other

Currencies and and so this process I think is going to accelerate uh in the years ahead uh you know as this you know debt bubble explodes and we have to go back to QE whatever we call it uh in the face of escalating inflation and then people realize that 2% inflation is a

Thing of the past if we actually had it and it’s going to be high inflation or double digit inflation as far as the IE can see and that means negative real rates on on on treasuries in US debt and and nobody’s going to want to hold it

And and so then you’re going to get this unraveling uh of uh of the dollar and then you know there’s no way the dollar can be the reserve currency uh if it’s losing uh that kind of purchasing power so you know there has to be a replacement for it and the most likely

Alternative is is gold you know a lot of people and is very conceited but people think that well you know the dollar will be the reserve uh currency forever because there’s no alternative because the euro is not a good alternative the yen is not a good alternative the R&B is

Not a good alternative so there there there’s just no choice the dollar wins by default well we don’t need another Reserve currency we we could just have gold as a reserve you know because gold was the reserve before the dollar you know it wasn’t the British pound I mean

The pound was the biggest currency in use but you know the the pound sterling was was real real metal uh the world was always on a monetary uh a metallic monetary system gold silver were money the fact that we now have Fiat we have paper as money this is new I mean it

Started in 1971 uh so it doesn’t have that long of a history and I I think its history is is uh you know replete with failures I mean look at all the problems we’ve had uh on this Fiat standard but I think that you know experiment is coming to an

End and the world will just go back to to what worked and that is real money I mean you can have paper you know s you know circulate as a money substitute but it has to be backed by something of real value it just can’t be something that

Governments create out of thin air doesn’t work we’ve seen it hyperinflation you mentioned W Republic it just does not work Peter um I have two more questions for you and those were both sent in from the audience um and one is sort of borderlining on the

Last question I wanted to ask you as well um is it’s about the US elections and we had two guests on the channel before that sort of touched on that topic so curious what your opinion is um but the question is what will be results if the president ad present

Administration pulls a fast one and cancels the upcoming elections in the US by emergency executive order invoking the power the War Powers Act do you see that is there any chance that that could happen happen and uh maybe to expand on that question what is the impact of the

Elections next this year well I mean I I I I don’t believe that that’s going to happen I guess I’m not going to say that it’s impossible for something like that to happen but I’ve been saying for a while now that I thought that Trump would win

That Trump would would uh you know be the the first president since Grover Cleveland to be elected to two non-consecutive terms in office uh you know I I thought that Trump was going to win in 2016 and I believe that because he was telling the truth about

The economy and I knew the economy was a lot weaker uh than uh you know everybody claimed and that the voters uh you know Trump’s message would resonate and he won and and then I thought that he would lose in in 2020 because I didn’t think

That he uh accomplished what he set out to accomplish I didn’t think he made America great again I think he he talked about it but I don’t think he actually did it I thought the problems got worse and and he lost but the economy is so much worse

Now than it was in in uh in 2020 uh that I think uh people are going to vote to go back to Trump because it certainly was better then and they’ll remember that their circumstances were better when Trump was President whether it was Trump’s false or not I mean it’s

Generally the economy stupid investors uh or voters wrot their pocketbook and if uh they’re not doing good they they blame the bums that are there and they want to throw them out and they want to they want to get new ones and I I think that uh Trump’s uh campaign speeches and

His message are going to resonate you know and and I think uh you know Biden is the most unpopular president in history I think I mean why I mean you know it’s it’s because the economy is terrible and they’re in Den of that fact and so asking for four more

Years is not a winning recipe at least Trump will promise to do something different Biden can’t promise to do something different all Biden can promise is more of the same well the same stinks nobody wants what we have now to continue now that doesn’t mean that that Trump’s going to actually be

Able to deliver on any kind of prosperity but the voters don’t know that they just know that times are really bad and and and they they’re hoping that Trump will will change it and they remember you know it wasn’t that long ago when Trump was president

And they only had one job and they they like that now they have three jobs they have no time off right they they have no leisure time you know and everything is more expensive uh and they’re they’re poor and and so I think I think uh Trump

Is g to win uh but it’s not going to be a Panacea uh for for the economy because the problems are there I mean the problems have been there long before Trump first term right we just keep making them bigger and bigger uh it really started in Earnest with with

Allen Greenspan and so all the presidents uh you know Bush and Clinton and and Obama they’ve all been uh presiding over a bubble and it gets bigger and bigger and you know we have these temporary setbacks but then we inflate it bigger and bigger uh and at

Some point it’s going to burst for good you know and and there’s just going to be no way to contain uh you know the the the the aftermath or the Carnage so that that’s all going to happen uh and it it may happen on Trump’s watch but you know I I

I’d rather Trump be be president when it happens than Biden I mean maybe uh Trump could do the right thing and if things got bad enough I mean it’s it’s less likely that Biden would ever do the right thing uh but Trump at least May surround himself by the type of people

That may give him good advice we’ll see it seems like they’re playing a bit of presidential economic Hot Potato here so just just passing on the torch with the with the problems um one very last question Peter I think that was quite interesting there on the on the US

Elections because we’re also having the Iowa caucus uh happening today as as we speak as well so curious what the results will be from that um one one last thing somebody watched a YouTube video of yours Peter and he’s asking what will Peter shiff uh was right

Compilation look like two years from now uh big a background you put a compilation on your YouTube channel where you sort of compiled five or six years of some of your highlights on on CNBC and other platforms and media channels and uh where you just forecast

That you were right what what do you think uh the next Edition is going to look like well I mean first of all somebody else the the actual initial Peter shiff was right video which got a couple million views which was a lot of views on YouTube back

In 2009 because it was a new platform so having that many views on a video was very rare I mean now of course you got a lot of big videos have a lot more views than that but back in 2009 it was like you know one of the most popular YouTube

Videos ever actually um but it was done by a a third party I had nothing to do with it that person eventually took it down from the internet I don’t know why they did that but they eventually you know took took it down but there were

Some copies made I mean I made a copy so you can still see it uh on on the internet you just don’t see the original um but a big difference today would be you know you wouldn’t see any clips of me on CNBC because they stopped inviting many years

Ago U also I used to a lot of it was from the Fox News business shows most of them on the peters ship was right was from the Saturday morning shows you know Neil Cavuto and they had cashing in and I forget the names of the shows there

Were like four shows they’re still on but they also stopped inviting me on like a decade ago so most of my appearances I still do Fox Business occasionally I don’t really do although I was doing Fox News talking Carlson would have me on now he’s not there

Anymore Lauren ingan has me on once in a while there are a few hosts that will have me on uh but I’m not on nearly as frequently as I was back in 2005 and six and seven and eight so you don’t have all this footage you know of me arguing

With people and and them saying ridiculous things that you know you so we don’t have all the material for the Peter shiff was right videos like like we had back then I mean I do go on a lot of you know uh let’s say conservative you know news max one

American news but I’m not usually doing the type of debating it’s usually just the host and me and the hosts are pretty sympathetic to what I have to say right because I’m going on uh you know these these conservative stations so I I don’t have as much material you know that

Would be entertaining where you could you know laugh at the people who were laughing at me because you know I was saying all this stuff you know predicting a financial crisis a housing CR crisis and people were just laughing at me like oh my God what is this guy

Smoking this is impossible and of course all the stuff that I said was going to happened all all that stuff happened but um everything that the government did in the aftermath of the 2008 crisis is why the next one is going to be so much worse because we never

Solved any of the problems we just made them all worse but most people on Wall Street never understood the problems in the first place that’s why they didn’t see the crisis coming and they still believe that the FED did the right thing uh and they don’t understand that

What they did simply made a much greater crisis inevitable and that’s the one that we’re on the cusp of you know and that’s why I think it’s very important for you know your uh listeners to be prepared for this crisis and you know that’s what I’m doing doing with my own

Money I’ve been preparing for a long time obviously I prepared way in advance because I know what’s going to happen I but I don’t know when I mean I’m that smart I’m not I can’t figure out exactly when things are going to happen because it’s pretty much impossible to know when

A bubble’s going to finally collapse because the whole thing is irrational in the first place uh so you you you don’t know you know when are all the people who are acting irrationally going to suddenly wake up and be rational right there you it’s going to happen there’s

Going to be some kind of Emperor has no closed moment uh but you can’t wait for that moment because then it’ll be too late I mean if it’s obvious to you then it’s obvious to a lot more people and the only way to get out of an overpriced

Asset is before the crowd and if everybody is trying to get out at the same time there’s nobody to take the other side so you got to be willing to be early now in in in in hindsight I didn’t realize I was as early as I’ve been I’ve been I’ve been been warning

About these problems for a long time as they’ve gotten worse that’s one thing is all the problems that I was worried about are much worse it’s not like they and none of them have been solved so there’s even more to worry about but you know that’s why you got to be careful

And understand that the the the the worst thing that you can own is cash or actually bonds would be even worse than owning cash because bonds are simply a promise to pay you cash in the future when it will have even less value than it has now uh so even if you’re worried

About an overvalued stock market or an overvalued bond market or anything you can’t just hide out in cash you can’t you know be in treasury bills or something like that and think that you’re safe because you’re not because inflation is going to decimate the value of those assets those are the big losers

Uh it’s the the bond holders the creditors the government is the world’s biggest debtor and inflation is its only way out of jail and so inflation transfers wealth from the creditors to the debtors so you don’t want to be a creditor you don’t want to sit in in

Cash or treasure bills you got to buy something so you can have some money in Gold uh and silver and you know you can contact shift gold and talk to my guys there to get some physical gold and silver which is the way you want to own

Your gold and silver is you know take custody of it yourself but you know there are a lot of stocks around the world that I own uh that pay dividends that are much higher than the treasury yields so if you think oh I’m getting four or five% you can get six 78% or

More if you buy the right stocks and even though the US Stock Market is clearly overvalued or in a bubble that’s not the case for most of the world I mean most of the world’s stock markets the stock prices are no higher than they were 10 20 years ago right the only

Return you’ve had have been your dividends the US is kind of unique now the Japanese Market has had a nice run up recently um uh but that may you know come into some uh uh headwinds when the bank of Japan has to tighten but then you know a stronger Yen should kind of

Cushion uh the blow from a US investor even if Japanese stocks pull back the Yen could rise and so your your Forex gains could offset some of the the decline in in in the stock prices but most the world particularly the merging markets the stocks are actually cheap and so you have viable

Alternatives to take your depreciating dollars or soon to be rapidly depreciating dollars and invest in real companies around the world uh that have real products that they produce or services that they provide that consumers need and value and will buy and these companies have pricing power I mean and

You’re already seeing this now a shift away from momentum into value the US market is dominated by momentum by growth stocks uh but that was when we had low inflation and falling rates High inflation and Rising rates you don’t want to own those stocks you want to own

Value you want to own dividend paying companies that have pricing power that can raise their prices and raise their dividends and so we’re investing in those kind of stocks but one of the things and one of the themes that’s very important and I I touched on this

Earlier I said America has been living beyond its means uh because we consume more than we produce uh we borrow more than we save the rest of the world has to do the opposite to make that possible the rest of the world produces and doesn’t consume saves and doesn’t borrow

And and so we get to live uh beyond our means but that means the rest of the world collectively is living beneath its means well when the dollar uh no longer is the reserve currency and we no longer receive that subsidy the world doesn’t have to provide that so now uh foreign

Consumers can start to spend more and buy more and and and and keep more of what they produce and reap more of the gains of their productivity so a lot of the businesses that we own are deriving their income from those soon to be wealthier foreign consumers who are now

Going to have more buying power their wages are going to have more value because the currencies that they’re earning are going to gain in relation to the dollar and so more of the stuff that’s produced in Asia will stay in Asia and be consumed in Asia and therefore the companies that are selling

Those products to these Asian consumers are going to have higher earnings and they’re going to pay greater dividends and so most people are still locked in the past the way things were when the dollar was the reserve currency because it’s still effectively is but it won’t

Retain that status much longer and so I think we have a portfolio especially in the Emerging Markets uh where we have tremendous growth opportunities in these stocks uh so even though US stocks are expensive uh there again there are lots of stocks all around the world that are

Not expensive that are that are cheap uh and they’re in countries that are in much better fiscal shape than than the United States so that’s where we’re keeping most of our our money in dividend paying value stocks that also have the potential to grow their earnings and their dividends and can act

As real inflation Hedges as the US dollar loses value and the cost of living goes up these companies will be able to return appreciated income to my clients that will translate into enhanced domestic purchasing power no and if anybody is interested in doing that you know you see your Pacific

Asset management is the uh is the company uh our you go to the website but our phone number is 866 87828 eight1 and you can talk to any of our advisors there and they’ll you know talk about our strategies and see how those strategies can can work into uh into

Your portfolio fantastic Peter I tremendously enjoyed our conversation really really appreciate your time we’ve been going exactly 1 hour now tremendously appreciate thank you so much very very insightful can’t wait to have you back recap maybe after the end of q1 we should definitely recap and see

What’s going on in the markets thanks so much for your time uh we’ll definitely link to your europa.eu conversation if you have please hit that like And subscribe button as well if you want to turn on that Bell notification as well so you can see new interviews popping up on

Your screen or via push a push message as well leave a comment below as well what do you think is going to happen how are you positioned how are you hedging what do you think about emerging market stocks I think that’s a very interesting topic Peter touched on let let us know

Below we do want to hear from you thank you so much for tuning in we’ll be back with lots more see everybody in Vancouver next week