Transcription
Okay. So, the moment you say that, we're going to get a two like a 700 point drop in the Dow.
>> Oh, probably more than that.
>> Probably more than that.
>> Drop a lot more than that.
>> You're you're okay with that as Fed chair? Like hypothetically? I mean, wouldn't that just have a huge ripple effect on the entire economy if the wealth effect holds?
Pleased to welcome back to the show, esteemed economist, chief market strategist Peter Schiff, host of the Peter Schiff show. You can check out his show link down below. He's got a great following and he's been actually uh you know Peter you've been talking on your show about the markets uh valuations getting completely out of control. Why Japan could be the next trigger flash point for a US crisis. We'll talk about that. You have some thoughts on the FOMC. You have some thoughts on the crypto markets perhaps being a leading indicator. And uh gold and silver I want to get your thoughts on that as well. the pullback that we've seen since the end of February. I had you on earlier in the year in January. And so, uh, was this was right before last time you were on the show, it was right before, uh, silver and gold peak. So, we have a great agenda today. Welcome back. Good to see you.
>> Nice to see you, too, David.
>> Yeah. On your show, which I encourage people to check out, Peter Schiff, uh, Peter Schiff show. Uh, you got a radio show as well, but on your show recently, you've been talking about the meltdown. Okay. So, the title of the video was the meltdown is coming. Great title. And in it, you've been talking about um SpaceX IPO being an indicator of how frothy the markets are going to get. I'll let you comment on why you think there's going to be a market meltdown. I mean, so far we've seen the complete opposite of a market meltdown. Uh but something's brewing. What is it, Peter?
Well, it's been melting up. Eventually, it's got to melt down. But yes, I mean the valuations are at extremes that have never existed before. I mean, we've had excess valuations and they've always ended the same way with a major decline. Uh this time the valuations are even more extreme than they've been at prior peaks. And that doesn't mean that we can't go any higher. I mean obviously we can but the question is how much room is really there you left to go uh before the whole thing implodes. I I thought the SpaceX IPO was potentially a bell ringer. Hey, you know this is peak insanity with a company trading at over 100 times a revenue of this size. I mean, yeah, maybe you could have a small biotech company that really doesn't have any revenue, uh, but a major company with a trillion dollar plus market cap trading at over 100 times revenue. And, you know, they only uh sold about 4% of the company in the IPO. Even though it was a record breaking IPO in how much money they raised, they barely sold any stock. So we're determining the price of all the shares based on the 4% that are available to trade. So it really uh allows for an excess valuation. But I think what's a really good harbinger of what's going to happen with these bubbles that have really yet to pop or maybe have but we just can't tell yet is what's happening in crypto. Because that was really the peak of the bubble. That was the the most insane part of the bubble was crypto because, you know, AI stocks, they at least have some underlying value. We can argue over how much they're worth, but they're worth something. I mean, they're viable businesses. The question is, what do you pay for those businesses? What are those what is the present value of their future earnings? But Bitcoin and most of crypto, I mean, they have no earnings. They have nothing. They have no underlying value. It's all just hype. It's all greater fool. And that bubble has already popped. I mean, Bitcoin uh which peaked at 126,000 is down at around 64,000. So, it's down about 50%. But Bitcoin is lower than it was in April of 2021. So, for 5 years, Bitcoin's gone nowhere. Uh meanwhile, Strategy Stock, the the the poster boy, the big buyer of Bitcoin and the creator of so-called digital credit, which is really an oxymoron, but that whole thing is imploding before our eyes. Strategy is now down, I don't know, 70%. It's trading at a 25 to a 30% discount now to the value of the Bitcoin per share. Yet Sailor keeps liquidating shares to buy more Bitcoin >> when he should be selling Bitcoin to buy back stock, but he can't sell Bitcoin because he tried to sell 23 Bitcoin and the market's collapsed. So, he's sitting on um you know 800,000 some odd Bitcoin that he can't sell. And so he's selling what he can, which are his own shares, despite the fact they're at a massive discount. And Stretch, his preferred creation that pays 11% is now paying like 12 a.5% if you buy it because the shares are trading below 90 when par is 100 and he can't issue those anymore without raising the dividend, which he doesn't want to do. So he's stuck. I think this whole thing is imploding. And once this one goes, it's going to be like dominoes. You know, the Bitcoin bubble and the crypto bubble. And now, you know, more are going to go.
>> I did ask Michael Sailor about your views on this subject. He says, "Well, Peter," and I I quote his words, "Peter is not a lover of anything when it comes to Bitcoin." And so, you know, he he's trying to explain he's he's got a larger strategy here, no pun intended, uh for strategy, and that involves financing. But, uh you know, this is not the first time he's sold Bitcoin. Um, and it's probably not going to be the last based on history. Maybe this is just indicative of the cycle of where the market is right now and it's it's it's always recovered in the past. What do you think?
Well, first of all, it makes no sense for him. Three weeks in a row, Strategy has sold common stock to buy Bitcoin. Why would you do that? I understand the logic when your common stock is trading at a premium. So you can sell stock for, you know, a$120 and then and then go buy a$120 worth of Bitcoin and increase your your Bitcoin per share. But if you're going to sell your stock for 80 cents and then go out and only have 80 cents to buy Bitcoin and you're going to lose Bitcoin per share, what is the point? You know, he was always stressing the Bitcoin yield. How did he generate Bitcoin yield? by selling stock at a premium and then taking the excess and buying more Bitcoin. But now he's selling stock at a discount and he's destroying Bitcoin per share. He's got a negative yield. Now, why do that? What is the What is the purpose of doing that? The only purpose is so he can keep buying Bitcoin to prop up the price of Bitcoin, but he has to sacrifice his own shareholders in order to do it. So, that's the game over. Meanwhile, he's got this huge obligation now to pay all this income, the dividends to the to the preferred shareholders. And he keeps having to raise cash by selling stock at a discount again to raise cash to make these payments that he can't afford because he doesn't have any revenue. He doesn't have any income to service all these obligations. So, all he can do is liquidate assets in order to pay creditors. I mean this this eventually the whole company collapses. I mean well regardless of what you think about Bitcoin strategy is a disaster.
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>> Okay. I'll I'll I'll let maybe one day you and um Michael to sit down face to face. Maybe one day.
>> You won't get him to agree to that. A lot of people have tried to get us into a debate. He refuses everybody.
>> Okay. Uh
>> he won't he won't engage me.
>> Um well, that's too bad. For now, let's go back to the uh to the markets. I've noticed, by the way, the DXY has been strengthening while dollar alternative assets, if you want to call them that, gold and Bitcoin alike, have both been falling. So maybe this isn't just a crypto story. It's a rotation into the dollar story. What do you think?
>> Yeah, look, there certainly was a bit of a bid in the dollar uh regarding the Iran war, which I think we lost.
>> Um why did we lose, by the way, I'll go back to the dollar, but just because you said that, why did the US lose the Iran war?
Well, we I think we lost the war for the same reasons that I said we would lose it the day that we declared it. I we we didn't achieve our objectives. Uh we did not change the Iranian regime. They're still in power. Yes, we killed some of them, but the people that replaced them are the same, you know, cut from the same cloth. They they may even be more radical and more extreme. Uh who knows? Um, but we didn't really, you know, denuclearize Iran. We're we're we're basically acknowledging that they're going to continue to enrich uranium and have nuclear so long as they don't use it for weapons. But that was exactly the position that we were in before the war that the Iranians never said that their goal is to have a nuclear bomb. They just said they needed a nuclear to have power. And we just didn't take their word for it. and now all of a sudden we trust them. So we haven't really achieved anything. We we wasted a lot of money. Uh, you know, we blew up a lot of our missiles and bombs that now I guess we have to replace. Um, but in order to get this deal, we had to make a lot of concessions to Iran. Uh, we had to agree now that we'd wave the sanctions and they could sell their oil. we have to agree to return to them even as part of theou billions of uh assets that we had frozen and we're working to arrange assuming that we get a final deal a $300 billion investment fund uh to invest in Iran and ultimately Iran is going to be able to decide what kind of fees it wants to charge ships that end up passing through uh the straight of her where before the war it was getting nothing. So I think Iran wins simply because it survived. We threatened to get rid of the regime and the regime is still standing and they signed a deal that economically empowers them that enriches them. Yes, we did diminish their military capabilities as far as conventional weapons are concerned. But that military was never a threat to America. their their their ships, their planes, their missiles, they were never going to target the US mainland. So to the extent that maybe he's less of a menace in the Middle East, that may be a benefit to some Middle Eastern countries, but I don't see the direct benefit to the United States. But meanwhile, Iran is going to have a lot of money now uh from investment capital, from oil sales, from fees on the street to rebuild whatever it wants of its military. We have no restrictions on what they can spend their money on. they can do whatever they want with it. Um, and we don't have, you know, now they're talking about maybe having some inspections. Uh, but they haven't even agreed to that yet. Uh, so far it's just we have to just trust the Iranians, which is the exact position that we were in before. Um, so I I think Trump made a mistake in declaring the war. And then once he realized that he couldn't win, he tried to figure out how to get out of it, how to surrender and pretend to win, which is really, you know, what Trump does anyway. He everything is pretend. Everything is make believe. We have a lousy economy. Just claim we have the greatest economy in the history of the world, right? Just pretend everything you do is the best and the greatest, no matter what the reality happens to be. And you know, that's part of, you know, we talk about why the dollar is going up because you have Kevin Walsh, you know, pretending that he's going to fight inflation, that he's determined uh to restore price stability, that he's, you know, going to succeed where his predecessors failed. And that's all a bunch of talk. You know, he admitted that inflation is a choice. And it is. We choose inflation. Powell chose inflation. Yellen chose inflation. Bernaki, Alan Greenspan, who just died, he wrote the playbook. Yeah.
>> Choosing inflation. And Walsh is going to make the same choice for the same reasons. Because if you choose not to have inflation, then you choose a massive recession, a huge drop in stocks, in real estate, in bonds, maybe you choose a financial crisis. You choose to force fiscal responsibility on the government. But he's not going to choose that for the same reason nobody has chosen that. You know, the government is about 50% bigger now than it was before CO. It's spending 50% more money. We're spending like 7.5 trillion a year,
>> but we're barely collecting 5 trillion a year in taxes.
>> Where's that extra money coming from? It's debt and it's being monetized. And if the Fed doesn't create that debt that there's there's there's no way that the government can service it. Uh so we're going to have inflation because that's how we pay for government. And the Fed is going to enable it under Walsh just the way it's enabled it under his predecessors. Uh the gold market, the silver market don't get that yet. They will. Yeah.
>> Uh I want to come back to all of those points. Very important points. But just in the fact that the Iran war has been lost strategically, take a look at this. The US exports about 30% of the energy it produced. Um, and this has grown in recent years. This is from the E uh EIA as of 2024. My point is, Peter, do you think the US energy industry is the hidden winner from all this given that the straight up moose is closed and then now the US is benefiting because uh they're not a net net exporter, but they still export a lot of the crude.
>> Yeah, look, I I think oil companies are in a good position. I mean, I own stock in some US oil companies. Um, I think higher oil prices are good for oil companies and I think one of the results of the war is going to be higher oil prices and and so that's going to b um oil companies. I think oil prices were going to go up anyway. They're just going to go up even more and the premium that's going to exist in crude for quite some time now because there's so much uncertainty. We have no idea, you know, that straight can close back down at any moment. Meanwhile, you know, look at our strategic petroleum reserves. They're at the lowest they've ever been. And other countries have also sold down their reserves. So, I think you have a lot of demand now to replenish depleted reserves. That will just add to energy demand. And there's a lot of energy demand. Look at all the, you know, this hyperscalers and this big buildout in the data centers. There's tremendous demand for energy right now. uh and that's going to push up oil prices. So sure, oil companies are going to benefit. Uh I don't think overall American economy is going to benefit even if we are a net exporter of oil because the benefits of higher oil are concentrated,
>> you know, in the oil companies and the people who own stock in the oil companies.
>> But the majority of Americans don't produce oil. They don't have oil rigs in their backyard. They buy oil, you know, and they don't work for oil companies. I mean, how many people do oil companies employ in America? It's not that big. Um, so most Americans are going to suffer higher oil prices. They're not going to be among the few who who benefit from it.
Well, you've been calling for higher inflation for quite some time on my show in the last year, you've been right. I mean, high inflation is higher now. So, the question is what's going to happen to the economy once interest rates go up? Now, you've argued that the interest cost is going to explode, which is going to put a lot of pressure on the deficit, which is going to put a lot of stress on the US dollar. And I wonder why, my question is for now, I wonder why the US dollar is still behaving the way it is, which is going up despite the fact that we have the threat of higher rates potentially making investors lose confidence in the dollar.
>> Well, it's gone up, but it's not gone up a lot. I mean, it's only it's barely above 100.
>> It's not even 101. So, it's not like it's exploded. dollar index is not
>> 120
>> and and one of the reasons it's gone up is because the yen is so weak. I mean look at the yen is breaking down about 162 and that is a yen weakness story. It's not a dollar strength story but I think as some pe money is moving out of the yen, right? It's moving into the dollar. Um, and a but overall I think that the dollar is going to weaken because traders are are focused more on nominal rates. The Fed is going to hike rates. They've gone from forecasting rate cuts to now two or three more hikes between now and the end of the year. But these are quarter point rate hikes. 75 basis point hike is not going to do anything to slow the inflation train. It It's way too far ahead. It's going too fast. That's too little too late. I pay attention to real interest rates and real interest rates have already collapsed as inflation has accelerated and the Fed has just stayed still. Uh, and so I think the markets are going to start to focus on that, not to be fooled by a nominal payment when it's a fraction of what you're losing in purchasing power to inflation. And so rather than buying dollars to get that nominal yield that is actually a negative yield, investors will be buying gold to avoid that loss.
The Japan story, let's talk about that. That's important.
>> Yeah, the yen is at 160 uh 1612. Yeah. 162. Wow. Okay. I'm I'm behind.
>> Okay.
>> Yeah, it was like 161 and a half to 16. Yeah,
>> that's a that's a key trigger point you mentioned. And uh yeah, how does this impact the US investor and economy ultimately?
>> Well, first of all, you know, Japan is sitting on a over a trillion dollars of treasuries.
>> That's right.
>> And if they're in a financial, you know, position, a difficulty where they need to pay down debt and raise cash, an obvious source is the US Treasury market. they have this big pile of US treasuries that they can liquidate. So that immediately impacts us. But also as the is that puts upward pressure on interest rates in Japan. I mean year-over-year import prices in Japan are already up 25%. And um, you know I mean that that's a big deal. And now it's going to go up even more as the yen weakens. By definition, everything costs them more. And and and so as the end weakens and inflation accelerates, that puts more pressure on yields in Japan, which now, you know, if you look at uh the the the 30-year yield, it's almost 4%. Like 3.8 a couple years ago, it was less than one. And the 10-year bond, which is yielding, what is it like 26, 27, that was 10 basis points a couple years ago, and it was 10 basis points, I think, from like 2017 to 2022. I mean, almost zero. The Japanese government was borrowing at close to zero on 10-year paper. Uh, but now, you know, with 2.7%. But as that yield rises, it becomes a competition for Treasury yields. And you know not just you know all these sovereigns compete the Japanese government's borrowing you know European governments are borrowing the US government's borrowing right so all these all this compete so as yields go up there it's going to put upward pressure on our yields and Japan is running debt to GDP right now they're running a deficit of about 4 and a.5% of their GDP that's a lot of debt especially when they're already at 250% debt to GDP and they're adding debt as interest rates are soaring. So Japan could find itself in a sovereign debt crisis even sooner than we fight ourselves in one. But obviously if Japan gets into a crisis that is a problem for us too.
People have actually looked at Japan as a model for higher uh debt deficits 250% debt to GDP. So the US is nowhere near 250%. But people look at Japan and say well look the economy hasn't you know hasn't completely collapsed. It hasn't recovered since the late late night late ' 80s and early 90s. But, you know, we can go up to Japan's level and everything will be fine. How do what do you what do you say to that?
>> Well, first of all, I don't think everything is fine in Japan. I think there's going to be a big problem.
>> Okay.
>> But just because Japan could get to 250%. Doesn't mean that we can because there are some other key differences.
>> Uh Japan is still a creditor nation. That means that the Japanese own more foreign assets and foreign debt than foreigners own in Japan. And almost all the Japanese government debt is held by the Japanese. They don't owe it to the Europeans. They don't owe it to us. Whereas in America, we're the world's largest detonation. We owe more money than all the other donations combined. So we have an external drain. So when we pay interest, we don't pay it to ourselves. We pay some of it to ourselves but a lot of it we pay abroad. Japan almost pays almost everything to itself. Japan also has balanced trade. They have a surplus some year deficit. We have over a trillion dollar year trade deficit. So we don't just have to finance budget deficits. We have to finance trade deficits. And our GDP is much more heavily concentrated in the service sector. M
>> the biggest employers in Japan are still manufacturers. The biggest employers in America are FedEx, UPS, Amazon, and Walmart. They don't produce anything. All they do is sell and transport it around. But the stuff they're selling and transporting were made in foreign countries. So our GDP is a lot fluff. So I don't think we have anywhere near the run room that Japan had. I think they had a lot more rope to hang themselves with than we do. Uh but they're still going to end up dangling on that rope. We're going to dangle on a shorter rope because we can't get to 250%. It there's just no way that it's going to get that big here. But the other thing that we have that they don't we have the reserve currency. So that's bought us some time. That's the only reason I think it's gone on as long as it has.
But at what point would Japan be forced to sell US treasuries? I don't know. I mean, I guess they're never forced to. They they can keep printing money and to destroy the yen, but to me, they need to sell their their US treasuries and pay down debt. But even if they sold all of their foreign exchange reserves, they could only pay down about 15% of their debt. So, they'd still have a big problem. But at least they can make a dent in it. you know, it makes no sense to just hold on to that and keep selling, you know, printing more yen and issuing more Japanese government bonds when you have this pile of treasuries you can get rid of.
>> So, so going back to bring it back to home, the Fed has to raise interest rates to combat inflation, but they can't raise it too much or else the bond market's going to break and the economy is going to crack. So what what
>> well, it's not just raise interest rates. They got to keep
>> if they don't keep printing money. The balance sheet is still expanding. Look at what's going on. They have to keep buying bonds. They have to keep doing quantitative easing because if they don't buy these bonds, who will?
>> I think that might be the key difference between Worsh and Powell. This is just my take. I don't know if I'm wrong, but remember how Worsh back in 2011 protested against QE and he left. Maybe he doesn't like that.
>> Yes,
>> it wasn't it wasn't brought up at the last FOMC that they're going to shrink the balance sheet. But do you think that's his next move?
>> No, he can't shrink the balance sheet. He's going to expand the balance sheet. In fact, it expanded last week. If he wants to shrink it, why isn't he shrinking it right now? In fact, what he's doing is he's setting up a task force to study the problem, right? He doesn't actually want to uh solve it because the the government is running deficits now of like 3 to four trillion a year. If you look at what we're spending versus what we're collecting, where's the government going to get that money? The only sed is going to have to buy a lot more government debt. Uh and it's going to create money out of thin air. It's going to create inflation in order to do it. Otherwise, long-term interest rates are going to sore because if we have to find private buyers because who's going to buy? Remember the big who were the big buyers of treasuries? It was foreign central banks. They're not big buyers. It was US government trust funds. Social Security trust fund man. They're sellers now. The Social Security trust fund sells US treasuries every year. It's not a buyer, it's a seller. Uh so foreign central banks aren't buying. Government trust funds are selling. Who's going to buy? Is the public a big buyer? No. The public's not buying treasuries in a big way. They they don't have any money anyway. The average American is broke. Don't have any money for treasuries. But when the average American decides to invest, he doesn't want to invest for 4% yield. They're they're buying SpaceX, you know, they they they they they want to go to the moon, right? They they don't they don't want to clip a 4% 5% coupon. Even if treasuries were six or 7%.
>> They don't want that.
>> Yeah.
>> So I there's just no demand there. The Fed is going to supply it. No, it it shouldn't. The Fed should allow the collapse. The Fed should force the government to cut spending. The government should be cutting social security, Medicare, national defense, government pensions, all farm subsidies, all this stuff should be cut. And if the Fed refused to buy all this debt, it would be cut. But, you know, the Fed's not going to do that. That the Fed is going to cooperate and enable the profleacy just like it's done, you know, since Greenspan.
Well, what's a more important tool for fighting inflation? Uh monetary the money supply, which is the balance sheet size, or interest rates?
Well, both actually. I think the money supply and and and they kind of go together. Um, but remember, inflation is about an expansion of money and credit. So, the reason that prices go up when you have inflation is because there's more money chasing a supply of goods. Well, you can buy goods with credit. You don't need money. I can go I can have no money. I can go into a store and I can buy all kinds of stuff even though I have no money. I can use credit. And so, credit acts like money in an economy. And so, inflation is an expansion of money and credit. you get more credit, you get more money, you get higher prices. The Fed is basically controlling that. Controls the money supply, controls price of credit, and and so we've had artificially low interest rates and an expanding balance sheet. That's been the source of our inflation. In order to deflate, we need to shrink the balance sheet and let interest rates go up. But if we do that, the whole house of cards that was erected on top of all that cheap money is going to come crashing down.
>> So,
>> and that's what nobody wants. Like Donald Trump, when you talk to Donald Trump about housing.
>> Mhm.
>> He says he wants housing prices to keep rising even though they're already unaffordable and firsttime home buyers are now 40 years old because that's how old they have to be before they can afford to overpay for a house. Donald Trump wants houses to get more expensive because he wants the older people to stay rich or to feel rich. He wants people who bought their homes 20, 30 years ago at a much lower price to stay rich on paper. And he doesn't want uh the prices to come down. Well, if mortgage rates go up to 8 10%, 12%, I mean, they have to come crashing down.
>> And that's where they would go. They would probably go higher than that if the Fed did the right thing. This is actually what he said. So this is you're right. I just I I I just pulled this up as you were mentioning this.
>> God said though is uh again existing housing people that own their homes. We're going to keep them wealthy. We're going to keep those prices up. We're not going to destroy the value of their homes so that somebody that didn't work very hard can buy a home. We're going to get we're going to make it easier to buy. We're going to get interest rates down. But I want to protect the people that for the first time in their lives feel good about themselves. They feel like they've
>> How's he going to do that? He's going to He's going to make it more affordable for people to buy homes, but also stop people from owning homes to have the wealth collapse.
>> Well, he wants to make it easier to overpay for homes by getting mortgage rates down so you can borrow more money to overpay for a house instead of letting the house price come back down. See, he wants people who are benefiting from a bubble. There's a housing bubble. And he's like, I don't want the housing bubble to pop because then the people who are benefiting from the bubble won't be as rich.
>> That's right.
>> Well, they never should have been this rich and it's all on paper. What is a house worth that you can't sell? Because ultimately, the house is worth what the buyer can afford to pay. And if you want to pretend your house is worth a million dollar, but the highest offer you've ever got was $700,000, your house ain't worth a million.
>> I don't care what you think it's worth. If you can't sell it for a million, it's not worth a million.
>> Is he right, though? It's not just houses. The wealthy people own stocks. If the market collapses, if the housing market collapses, we go into a recession. So, maybe he's got a point there.
>> Well, he's got a point. The solution involves bursting a lot of bubbles. And so, asset prices have to come down. But since he doesn't want asset prices to come down, goods prices are going to go up instead. And so real asset prices are going to fall no matter what the president does. But if he can keep asset prices propped up if he has to the help of the Fed, but then consumer prices go up. So instead of your house losing half its value, everything you want to buy doubles and so it seems like your house has lost half its value because you know everything is twice as expensive and your house stayed the same, right? So, um, but they they they can't create real wealth out of thin air. Yeah. They could they could play around with the numbers by creating inflation and they can make people feel that they're richer. Oh, look look, I have a million-doll house. Okay, you have a million- dollar house, but you have a $10,000 box of cereal in the in in in in the pantry. You know what is that million dollar house worth?
>> What would you do? Let's say Trump invites you to be the next fetch here. He says, "Peter Schiff, you're you're you're you've got Kevin Worsh's job. I mean, you're you're in a quandry here, right? You you can't raise interest rates too high or you're going to crash markets.
>> He already called me a loser and and an idiot. So, I don't I don't think he is going to appoint me." Um, but look, if I was chairman of the Federal Reserve, yeah, that the the buck would stop with me. I mean, I would basically, you know, let everybody know the Fed is no longer in the business of monetizing government debt. There is no Fed put in the market. If the market drops, the market drops.
>> Okay. So, the moment you say that, we're going to get a two like a 700 point drop in the Dow.
>> Oh, probably more than that.
>> Probably drop a lot more than that.
>> You're you're okay with that as Fed chair? Like hypothetically? I mean, wouldn't that just have a huge ripple effect on the entire economy if the wealth effect holds?
>> Well, yeah. Well, it's like, do I want to rip the band-aid off or do I want to peel it off slowly? Yeah. Look, I want to get it over with. I look, I know it's going to be bad. It's just going to be worse if we don't do it. And had we done it my way, had they made me Fed chair 20 years ago and I would have done the right thing, we would be in great shape right now. And it wouldn't have been as painful to do it 20 years ago as it's going to be to do it now. But that doesn't mean you don't do it.
Alan Greenspan passed away. Alan Greenspan passed away today. What what was his legacy?
Well, he wrote the playbook that everybody is following. I mean, he was the the architect of the House of Cards that collapsed in 2008. I blamed him for the 2008 financial crisis years before the crisis happened because I knew that his policy mistakes were setting us up for that crisis and it blew up on Bernaki but Greenspan created the problem and I knew it and I described it for years before it blew up. Um, but then uh Pal I mean, not Pal um Bernaki then Yellen then Pal all followed the Greenspan playbook to kick the can down the road and keep interest rates artificially low and you know they expanded the balance sheet
>> and put us in this situation that we're in today. I mean a a real crash which was the topic of one of my books you could see on my desk there. But the real crash is coming and it's because of Greenspan and the playbook that he wrote that every predecessor and I believe it will include Worsh uh are going to follow.
Going back to markets, we'll finish off in the last segment here. The uh you once told the media you'd be a lot richer if you invested all your money in the Mac 7 a decade ago. Uh well, that was a decade ago. We can't turn back time. Uh, how what are you doing for the next decade if the Max 7 did this well in the last decade? I mean, it's not too late, Peter. Wouldn't you rotate now?
Yeah, that's like, you know, yeah, I would I would be a lot richer if 15 years ago I put all my money in Bitcoin. I didn't do that either.
>> Sure.
>> But that that doesn't mean I'm going to do it now or even a few years ago because Bitcoin is, you know, lower now than it was four or five years ago. So, I was wrong from a, you know, trader position. And I don't think I've ever been wrong on Bitcoin in my fundamental understanding of it. But as a trader, yeah, I could have made a great trade. I could have bought some of this crap 15 years ago and sold it five years ago and I, you know, made made a fortune. I didn't do that. Um, and I didn't do, you know, the same thing with, you know, obviously a lot of these AI stocks. Now, I own a couple of them. I own some. I I I have a stock I'm up almost 100x in. I mean, I think it may be 100x. I I've I've got some money,
>> but when I bought this stock, I didn't even know it was an AI stock. I mean, it wasn't when I bought it. It kind of became one
>> and and so I I I got a I got a little taste of it. But yeah, I mean, obviously I could have made a lot more had I put a more substantial percentage of the portfolio into um these names. But I, you know, I'm more of a value investor. I I I'm I'm not buying into hype and and and I'm trying to, you know, win it, you know, like like the tortoise, not not the hair, right? I I want I want to win and cross the finish line. I don't want to, you know, run out of breath and drop dead, you know, having to lead, you know, you know, most of the way and then I don't make it. Um, so I'm still buying what I've been buying, which is, you know, precious metals, mining stocks, commodity stocks in general, energy, uh, agriculture, emerging markets, uh, value, dividend paying companies, foreign stocks.
>> Um, and you know, I had a great year last year. Uh, best year I've had in I don't know, maybe my career on the long side. And I think that was a breakout year
>> and um you know bit of a pullback still. I think we're still beating the US market year to date with international stocks. Gold stocks though now are now negative. Um, but not much. But I think they're going to end up beating the S&P on the year. I think they'll end up beating the NASDAQ on the year, too. So, we'll see how how the rest of the year plays out. Uh, but it's not quite half over yet.
We have to bring up gold and silver then since you brought up the GDX is still up uh from one year ago. Even though it is down talking about calendar year. Yeah. Yeah.
>> Yeah. Yeah. Exactly. From 12 months ago, calendar year, it is down. Why? Why is the sentiment in gold and miners so low right now? I've talked to a lot of people and if you look at, you know, if you just zoom out over the last 7 to 8 to 12 months, it's done quite well. It's just a bit of a pullback from this really euphoric period here. What what's what's been going on?
Yeah. poor sentiment has defined the entirety of the bull market, right? I mean, investors were never excited about the mining stocks because they never believed the rally in gold and silver. And I think what's really caused this sentiment to get negative, not just the new idea that we have a hawkish Fed that's going to, you know, come out swinging with these rate hikes, but the fact that gold went down during the war is leading a lot of people to question whether or not gold is even a safe haven anymore. Like, hey, why did it go down? Why didn't it go up? And they overlooked the fact that it went up so much before the war. It already priced the war in before the war happened. And by the time the war happened, it was to buy the rumor, sell the fact. Plus, gold was so overbought going into the war. I believe had we started the war and gold was still around 3,000 and silver was still around 30, both would have gone way up during the war. The only reason they didn't, the only reason they came down was because they went up so much right before the war started. But that's created a lot of false uh negative sentiment on the metals that hey, they don't work anymore. And a lot of the gold enthusiasm over the past decade was stolen by crypto and Bitcoin. And that's where all the action was. That's where all the hype was, all the Wall Street money, all the political clout was being concentrated on Bitcoin. And that stole a lot of gold thunder. But I think as the air really comes out of this Bitcoin bubble and it's coming out, it's just going to come out faster and more people are going to recognize it. Right now, your typical Bitcoin guy is like a deer in a headlight. He doesn't even realize what's coming. He's just frozen. Uh but they're all going to get hit by a Mac truck. And and and and that's going to take the spotlight off of Bitcoin and put it right back on gold where it belongs. And I think to the extent that crypto is going to be a part of it, it's going to be about tokenized gold.
>> You know, gold is the future of blockchain, not Bitcoin. Instead of making gold obsolete, blockchain makes gold better. It makes it more fungeable, more divisible, more portable. It makes gold better money. Bitcoin was never money. Even though it was on a blockchain, it wasn't money. Gold's been money. But now when you tokenize it, it becomes even better money. It does everything that Bitcoin promises to do but can't.
>> Yeah. But even the World Gold Council is participating in exactly this. By the way, I I spoke to David Tate at the Consensus Miami conference.
Okay. So, final question. Interest rates go up this year. Suppose the Fed raises rates. What is the biggest thing to rerate? In other words, if markets move, what moves the most?
Well, I think when the Fed starts to raise rates, I would expect gold to go up. You know, just buy the rumors, sell the fact. Everybody knows they're going to raise rates, so get it over with. Uh because once they start raising rates, the focus will be that it's not enough and that it's going to weaken the economy and that's going to create bigger budget deficits and that's going to be good for gold. Uh so I think by the time we do get a rate cut, gold is going to go up, but we may not get a rate cut because between now and the first rate cut, we could have a big drop in the stock market. We could get some really negative economic data. We can get some very weak jobs reports. And then that takes the rate hikes off the table and that's really going to send gold uh through the roof.
>> Interesting. Thank you so much. Uh appreciate your time. Where can we learn from you? Follow you.
>> Well, don't forget to watch my my podcast, listen to my podcast. I do one or two a week on sheriffradio.com, but the best place to watch them is on my YouTube channel because they're all done live with video. So, if you want to, you know, get the whole experience, you can see me, uh, then go to, uh, my YouTube channel and subscribe. Got over 625,000 subscribers now. And so, when you subscribe, you'll get a notification every time I I I premiere a new podcast. And follow me on social media. I mean, I'm on all the platforms. I'm on Tik Tok. I'm on Instagram. I'm on Facebook. I am the most prolific on X. I'm constantly there. Not a day goes by really that I don't post something and I'm constantly
>> you post yourself or you have an AI agent working for you now.
>> No, no, no. I'm I'm still I'm still posting myself.
>> Okay.
>> Um I mean sometimes people post some stuff they they retweet stuff. I don't do that or some people but pretty much all the you could tell it's me when you you know I come in there. But I talk about politics. I talk about economics. I talk about the markets. I've got over one and a half million followers now. So that's that's the way to go. And uh I'm you know I'm gaining about you know four or 5 thousand followers a week now. So it's it's gaining some momentum and um and so I you know follow me there and tell your friends to follow me because you know there's so much bad information out there and misinformation. Uh I got I got to counter it. I got to get the truth out there because, you know, the lies are all over the place and but at least, you know, I don't know if the playing field is level, but I'm on the field, right? I'm I'm I'm there. I I get an opportunity. I don't need uh a network television or cable television. I I I can go directly to the people with my information. And the more people who get information from me, the more people will see the information. So I I get a bigger soap box the more people who who follow me.
>> Okay. All right. Well, thank you. We'll put the links down below. Follow Peter shift there.
>> Take care for now, Peter.
>> All right. Thank you for watching. Don't forget to like, subscribe.