Transcription
Welcome, everybody. I'm Lena Petrova, with a new episode of World Affairs in Context. Today, I'm very pleased to welcome Peter Schiff. Peter is a well-known economist and market analyst, as well as an outspoken critic of central banking policy. He's the chief economist and global strategist at Euro Pacific Asset Management. Peter gained widespread attention for predicting the 2008 financial crisis and has since become a leading voice on sound money and the long-term outlook for the US economy. Peter, welcome to the program. Thank you so much for joining.
>> Uh, thanks, Lena. That was an excellent introduction.
>> Well, thank you for joining, and I'm very excited for this conversation. I would love to get your perspective on the macro view first and the state of the US economy today. President Trump has repeatedly described the US economy as experiencing a golden age, citing record stock market highs, high oil and gas production, and successful tariff policies. However, this narrative contrasts with reports of job losses, rising inflation, and slowing wage growth. Where are we today? And is the US economy as strong as the Trump administration claims it is?
>> Well, you know, the golden age may be limited to gold itself. Uh, because gold is gold has done very well uh since Trump's been been president. But it's nothing like, you know, the Gilded Age, which is what that, you know, would evoke, you know, which is the the late 19th century. That's when we had a real economic boom. Uh, what we have now is a boom that exists only in the imagination of Donald Trump. But if you look at any objective measures that we typically use, and I don't even necessarily believe these are the best measures, but they're the measures that pretty much the mainstream relies on. GDP grew by 2.1% last year. That was slower than any year under Biden. Um, 2024 was 2.8. 8, 2023 was 2.9. So that's a substantial slowdown. How is that a boom? Uh, job creation was minimal. It wasn't great under Biden, but it was even worse. We barely created any jobs. I think in 2024 maybe there was a million jobs for the whole year, but 2025 it was like a 100,000 something. I mean, just a tenth. So it wasn't a boom in job creation. Uh, the stock market is up, but if you measure the stock market, you know, from when Trump took office to now and go back and see how it did under Biden, it's it's gone up less. So he, you know, Trump wants to talk about this booming stock market. Well, big deal. I mean, it boomed even more when Biden was president. He was supposedly the worst president ever, and Trump's the best. And Trump had Biden had the worst economy ever, and he's got the best. Even though we have a weaker labor market, a weaker GDP growth, and un inflation rather is rising, and 2026 I think the CPI will rise more in this year than in every year that Biden was president except maybe one. But it may even beat the top year under Biden. So inflation isn't conquered either. Inflation is here. It's here to stay. And I think that by the end of Trump's full term, the total increase in consumer prices will likely exceed the increase under Biden. So inflation is going to get worse, not not better. And the deficit spending u Trump was critical, and so were a lot of Republicans correctly, you know, of the deficit spending under Biden. They blamed that deficit spending for the inflation, and it was certainly partially responsible, but so was the deficit spending of Trump that that Biden inherited. Uh, and a lot of it was the Fed, and the Fed pursued the same inflationary policies under both Trump and Biden. Um, but um, if we end up with even worse inflation and a weaker economy. Oh. Oh, now I remember what I was talking was the debt. The debt, the the national debt is almost 40 trillion. We're over 39 trillion. We're going to hit 40 trillion, you know, within a month. But the deficits, the annual deficits now exceed the deficits under Biden. And I think by the end of Trump's term, the national debt could hit 50 trillion. Um, that is huge. And in fact, when Donald Trump was president the first time, he set the record for the biggest increase in the national debt in in in one term. Biden broke the record, I believe. But now Trump's going to break that record. And Trump's, you know, and you know, he's obviously going to have the record for the most debt ever because he's going to serve two terms. So he's going to beat. Right now, the record is um Obama had the most debt ever because he was there for eight years. >> Trump almost did in four what Biden did in eight. And so did Biden. I mean, it was close. But I think Trump is going to obviously he's going to have two terms now. He's going to blow away a Biden. So from all objective measures, I mean, it's a failed presidency. It's a failed economy. I, you know, I mean, yeah, there are some positives, but I don't think they outweigh all of the negatives.
>> I would agree with that. I think his focus on the foreign policy has been a major concern, and of course, his foreign policy is just a topic of its own that we will not touch um in this video. But the US economy and the global economy are experiencing extreme volatility and uncertainty, partially because of his foreign policy decisions, with the war in Iran having become a major destabilizing wild card. The economic consequences of a long protracted war are impossible to predict, of course, but how would you characterize the overall economic impact of the war against Iran so far? Are we looking at a temporary economic shock, or is this something much more structural?
>> Well, I mean, first of all, wars are never good for an economy. They're they're expensive to fight. Uh, you know, you run up deficits creating inflation to finance it. Wars destroy things. They disrupt things. Now, it's possible that the outcome of a war, to the sense that it was a just war and the war ultimately leads to a more peaceful, a more productive society, global economy. The long run, there could be some benefits for a a war. But regardless of the potential long-term benefits of a war, while the war is being waged, it's it's a cost. It's not it's not a positive. Now, it's a positive for some people, right? If you if you're a military defense contractor and you're getting a bunch of new orders, yeah, you're loving the war, right? So, there are winners and losers, but but overall, uh, it's a burden that the the economy has to bear. And obviously, if the economy is already struggling, it's already having problems, then the burden is even heavier than if everything is good. But one of the most important things about this war is it flies in the face of everything Trump stood for, everything he campaigned on. Um, Trump promised to keep us out of wars, to end the wars. He was very critical of US involvement in Iraq, in Afghanistan, and he said if he was president, we wouldn't have been in any of those wars. And in fact, in the past, he had criticized Obama because he accused him of potentially launching a war on Iran as a political distraction. He was like, "Oh, he's going to declare war." And they often talked about the prospect of war with Iran as one of the negative consequences of electing a Democrat. Oh, don't vote for Kamala Harris because we might end up going to war with Iran. So, the fact that we're now at war with Iran, uh, you know, is a real betrayal. And Donald Trump tries to claim, "Well, I didn't start this war. It's been going on for 50 years. You know, they had it coming." All right, then. Why didn't you campaign on that? Why didn't you say, "When I'm elected, I'm going to start a war with Iran 'cause they got it coming." You know, all the stuff that they supposedly did to justify the war. Trump knew that long before he started it. He knew it long before he was reelected. So why why why didn't he embrace that? Why didn't he say vote for me and I'm going to kick some Iranian ass? You know, he didn't do that. Uh, so I, you know, I was always a critic of Trump's economic policies, but I supported his foreign policy until now, you know, until he started a war. So he took away one of the only one of the few things that I liked about his presidency was his first presidency. He pretty much kept his word on that. I mean, you know,
>> What are the key economic indicators that you're watching to assess how this evolves and how it impacts the US economy? Because the inflation is obviously resurging, um, the labor market is weakening, but what other things are you looking at to see how this impacts the US economy and whether it does have long-term impact?
>> Well, I think I like to look at the money supply and the Fed's balance sheet, both of which are now growing at a pretty healthy pace. Or not healthy, unhealthy because it's an inflationary pace. I look at the price of gold, which has gone to record highs. It's had a bit of a pullback, but the the trend is very clear. The breakout is very clear. Uh, that signals a loss of confidence in the US dollar and US sovereign debt. I look at long-term interest rates, which have remained stubbornly high despite the Fed's efforts to reduce rates. Long-term rates have not gone down. In fact, they've gone up. So that's more indication of a loss of confidence in the dollar. You know, I'm paying attention to the surging debt numbers. Looking at some of the popularity polls where the president is the most unpopular president in history when it comes to the economy, that says a lot. Uh, because, you know, the economy is all about a pocketbook. You know, you when somebody pulls you and says, "Are you satisfied? And do you approve of how the uh president is handling the economy?" They're not looking at it from the perspective of everybody. They're looking at it from their own perspective. You know, their family's economy. How how are you doing? You know, are things getting better for you or are they getting worse for you? And when you have a record number of people saying, "I don't approve. I'm not I don't have confidence." It's because things are getting worse for them. And and and and and things are going to continue to get worse. I mean, I no matter how much Trump wants to shove this false narrative down our throats that this is an economic boom that he has presided over the greatest economic turnaround in the history of the of the world. Um, you know, those lies don't erase the truth that people actually live in on a day-to-day basis. And so I I think that this is going to be very problematic in November with these midterm elections that are going to heavily swing Democrat, which is problematic for the country because their policies are even worse than the Republicans usually. I mean, this time around, the Republicans have had some pretty bad policies, too. But it it could get even worse with Democrats.
>> You mentioned US dollar, so let's turn to the dollar for a minute. The US dollar has been of course widely regarded as a safe haven. It is a global reserve currency. But in recent years, central banks have been diversifying assets away from the dollar. And interestingly enough, the dollar rallied after the Iran war began, despite the fact that it's been on a downward trajectory before the war for probably more than 12 months or so. Will the dollar regain its status as a safe haven? Or is this just sort of a short-term rally that effectively is doomed?
>> Yeah. Well, you're you're correct that a lot of people have regarded the dollar as, you know, safe haven. I was not among them. I I I've always looked at the dollar as a risk that you want to avoid. You need safety from the dollar. You shouldn't be seeking safety in the dollar. But the dollar had a very weak 2025. It was one of the worst years it's had. And so the fact that it bounced a bit in 2026 with the war as a catalyst is not surprising. Just like gold, you know, gold when the war started, gold was at 5,500 and now it's 4,800. It went down as low as 4,100. So the fact that people took profits on gold after a big run, you know, I don't think that destroys the idea that gold's the safe haven. It's just that it had gone up so much in advance of the war uh that it gave some of it back when the war started. You know, you buy the rumor and and sell the fact. Same thing with the dollar. You had some short covering of the dollar. You had a little bounce in the dollar, but it's not a significant bounce. And in fact, the dollar has lost most of that gain. The dollar index is, you know, 98 and a half, and it was about 98 when the war started, and it and it rallied above 100, you know, two two and a half% rise, and that was that was it. That was all the dollar, you know, could could get. And so to me, that's a very muted uh safe haven move. I think had we started this war 10 years ago, 20 years ago, you would have seen a much bigger rise in the dollar. Uh, and so that's not happening now because the dollar is losing its appeal and it's going to lose a lot more of that appeal in in in the years ahead.
>> Many are arguing that the petrodollar is dying or is already dead. Of course, with the Strait of Hormuz being sort of in this questionable state, open, closed, open, closed, blockaded, uh, we are also seeing reports that indicate that Iran could charge a toll, effectively set up a toll booth and charge a toll for non-Chinese, non-Russian, non-US, and Israeli ships to cross. Um, but that would of course be transacted in the yuan. So what are your thoughts on the petrodollar effectively losing its its ground and the broader implications on the US dollar as a reserve, reserve currency in the world?
>> Yeah. Well, um, it's obviously very important that the petrodollar be there. I mean, if you go back to the origin of how it all came about, it was shortly after the US went off the gold standard when the dollar was, you know, backed by gold and redeemable in gold. And when we went away from that, you know, the dollar had lost any, you know, real value other than you could spend it, but it didn't have anything backing it up. And when we got the OPEC nations to price oil in dollars and tell the world, if you want to buy our oil, you need US dollars. We created another reason for the world to need dollars, and we also created a situation where a lot of the OPEC countries that received dollars in exchange for their oil kept those dollars and invested them in US treasuries, lo, you know, loaned them right back to the US government. So, it's been a very powerful enabler of, you know, our deficit spending and our trade deficits. And I do believe that that's going away, and that's going to be a huge problem for the United States that depends on this. But it's going to be a huge benefit, I think, for the rest of the world that has had to bear the burden of of of this because the relationship ends up enabling Americans to live beyond our means. We could spend more than we produce. We can borrow more than we save. But that's only because the rest of the world takes the other side of that bargain. They produce more than they consume, and they save more than they borrow. So we get to live beyond our means. They have to live beneath their means. That's what makes it possible. And so when the relationship ends, things will balance out. Our standard of living will go down. The rest of the world will go up. You know, if you measure it by consumption, how much stuff you can buy and and how much you can invest in your own economy. So I think the world comes out ahead, and and America loses this exorbitant privilege that we have relied on for so long.
>> You mentioned the bond market, Peter, and I would love to get your thoughts on on the bond market today. It has been flashing red signs lately. Treasuries auctions have seen a decline in demand. What is your reading um of these moves in the bond market and what how do you interpret them?
>> If you go back to when the Fed first started cutting rates, you know, from its peak, the the peak in the Fed funds was around five and a quarter up there. And and the reason the Fed started cutting rates, it wasn't because we had won the war against inflation. We basically surrendered. Inflation won. It was because banks started to fail. And so the Fed was trying to take the pressure off uh the bank's balance sheets by by by cutting rates. But before the first rate cut, I predicted that when the Fed's started cutting short rates, long rates would rise. And very few people had that forecast. And that's exactly what happened. The first 75 basis points of cuts related resulted in 75 basis points higher on the long end. And so that also is an indication the Fed is losing control of the bond market. And today, uh, central banks, foreign central banks are thumbing their nose at, you know, at a 4% yield on Treasuries and they'd rather own gold and get no yield. And and that says a lot. And I think that it's an important market indicator of of of what's going to happen. I mean, in fact, former Treasury Secretary Hank Paulson just last week came out and said the US should have a contingency, you know, emergency break the glass plan for how to deal with, you know, the severe consequences of a loss of demand for Treasuries, which, yeah, of course, what he should be telling the administration is do something now before we have a crisis like that. Cut back on spending. Do something to instill confidence so that we don't have a a collapse in demand for Treasuries. Instead, his advice was, we're going to have a collapse eventually, so let's just brace for it, right? Let's just figure out what we're going to do, which, you know, to me is bad advice. I mean, what are you going to do? I mean, I I my joke I said on my podcast was the only plan I could think of at that point would be to have a a revolver behind that glass. And when you break the revolver, you just shoot shoot yourself in the head. That's the only solution uh at that point. So, um, but but when you have a former Treasury Secretary saying what I've been saying, maybe some people should pay attention.
>> Exactly. And and what's interesting is that the Trump administration has been in this battle with the Fed for for a while now. Um, the new incoming, if confirmed, Fed Chair Kevin Borsch is is of course Trump's pick, and it may be very challenging for him to support lower rates given the current economic environment without looking like he's carrying water for the Trump administration. So the Fed's independence, or the appearance of independence, is at stake. Um, what do you expect the Fed's policies under Worsh, if he's confirmed, to look like in terms of a response to surging inflation and weakening labor market?
>> Well, look, you know, this is not Walsh's first rodeo. He's he's been on the Fed before, and I don't expect any difference from prior uh, you know, Fed chairs. He will respond the way Yellen and Bernanke and uh Greenspan and Paul responded. He will cut rates and print money, right? When when times get bad, if stocks are weak enough, if the economy is weak, if unemployment is rising, they will prime the pump. They will cut rates. Uh, they will print money. Um, you know, they're going to ignore the impact that those things have on consumer prices. Uh, because as far as they're concerned, the other things are more important.
>> How do you think >> They're very concerned. They're very concerned about long-term interest rates and the Fed's ability or the US government's ability to finance its debt, and so they will be the buyer of last resort, even if that means creating a lot of inflation in the process.
>> How do you think that policy will reflect in the global demand for the US treasuries? Because to me, the world is already saying the US has no fiscal sense of responsibility. It is, you know, racking up debt. Its national debt is out of control. Um, the interest cost to service that debt is surpassing $1 trillion per year. And uh, wouldn't that mean effectively fewer and fewer countries saying, we do want to purchase US securities because we believe that the US economy, you know, is resilient? I I feel like that would sort of backfire if they start printing money again. Of course, it would probably be a good thing in the short term, but in the long run, that seems to be a self-defeating strategy.
>> Yeah. Well, it's never really a good thing. I mean, it could make you feel good. Uh, you know, just like, you know, drugs, you know, you could take some very harmful drug that makes you feel good for a while, but you know, you're doing damage and you're creating problems, and that's, you know, that's what monetary heroin has done. I mean, the economy is in a lot of trouble today because of how many times we relied on that drug to make us feel better rather than dealing with the underlying problems that were the reason that we needed to feel better.
>> Right. Um, so, um, yeah, you know, I I I I I think that the policies aren't going to work and they they will backfire, and the money printing is going to directly undermine the dollar, and the weakness in the dollar is going to push up long-term interest rates just when they're trying to lower them. And higher inflation is going to act as a sedative on the economy just as they're trying to stimulate it. So, I think it's, you know, I think we're headed for a real crisis here, much worse than 2008. I think it's going to be, you know, a um a sovereign debt crisis, not a subprime crisis, and a US dollar crisis. You know, that dollar is going to be at the epicenter of this. And so, people need to be prepared. They need to own gold. They need to own silver, you know, not dollars. You know, that that's why, you know, I got Shift Gold. That's my gold company. I get people to buy as much gold and silver as they can. And they need to invest abroad. Get out of the US markets. I mean, US markets are way overpriced. Money is now pulling out. Uh, so people should look for these international strategies, and those are the strategies that we specialize in at Euro Pacific Asset Management. So we can help people build portfolios, emerging markets, develop foreign markets, precious metals, other, you know, natural resource companies that that benefit from the stagflationary environment that we're not only in now, but we're going to be stuck in for many, many years. Let's turn to energy markets because I know that uh, you know, when when you look at the news, energy prices are in every single headline, it seems. And so oil prices are now trading at around $100 per barrel. JP Morgan forecast predicts oil hitting 120 or even 150 per barrel. If there's a new escalation and let's say Yemen closes Bab al-Mandab, we may be looking at $200 per barrel, uh, which would be absolutely catastrophic. At what point does the rising energy price become extremely economically destabilizing here in the United States? And and if that happens, what do you think the Trump administration would do to to mitigate the risks?
>> Well, you know, it it's it's going to have an effect even at today's prices of, you know, close to $100 a barrel. But obviously, the higher the price of oil goes and the longer the war continues and, you know, the longer the strait is is is closed, uh, the higher the prices are going to go. Now, I think prices are going to go higher anyway, even if the war ends and the strait is reopened. They they were going to go up anyway. This just makes them go up sooner and and and more. I don't know exactly at what point the oil price is high enough that it could actually tip the economy into recession all by itself, but it certainly has an impact right now on the margin, and the impact will be greater. And, you know, a lot of people talk about demand destruction. You know, when oil goes up, you know, we use less oil. And to an extent that that happens, people will economize if the price gets high enough. But a lot of the demand destruction is not actually in energy. It's in other things because if, you know, I have to spend a lot more money on energy, and that's not just gas for my car, you know, heating my house, you know, a lot of the the fertilizer for my food, so my food is more expensive. So if all the the things that are directly impacted by the strait being closed get more expensive, where am I going to get the money? Well, I got to cut back on other things. So the demand destruction occurs in discretionary spending, and then you see weakness there, you see layoffs there. And, you know, what would the Trump administration likely do? The closer we get to an election too, the more pressure there is to do something. But they'll do some kind of tax cuts, some kind of gimmick, maybe lower the gas tax or give everybody a gas stimulus check or what. But all this stuff is counterproductive. It all fuels demand, which makes the problem worse. Doesn't give us more supply, just gives us more demand. Uh, and the Fed, of course, could try to cut rates and print money to try to offset the higher oil price. Uh, but that's going to create even higher prices, not just for oil, but for everything else. You see, oil prices going up, that doesn't create inflation. That can create recession. What creates inflation is when the Fed prints a lot of money because high oil prices cause a recession. Then the Fed prints a lot of money, and that makes all prices go up, not just oil.
>> What are your thoughts on the energy market in general? I've seen some reports that effectively point to uh price manipulation and and uh the fact that uh the price of Brent crude and probably WTI as well doesn't really reflect the um, you know, the true supply chain risks. What are your thoughts on the overall kind of pricing situation? Is this does it reflect true market conditions or are there other things going on that perhaps other people are not aware of?
>> Well, you know, I think energy prices are low, and I think one of the reasons is the dollar is still pretty high. Um, you know, barely below 100. I think once we start to see a more meaningful decline in the dollar, dollar index starts to trade 80 instead of 100, you're going to see a lot more demand for oil. And so the price is going to be a lot higher. And as we continue to print money and create inflation and, you know, reduce the demand for dollar, we're going to increase the demand for oil uh priced in dollar. So I I I think it's going to go up. That's why after mining stocks, the second biggest part of my portfolio are energy stocks. So, you know, I'm bullish.
>> Um, let's turn to the labor market. Unfortunately, rising energy costs are not the only issue. And uh, despite the most recent headline labor market data, household survey showed that year to date, the US has lost approximately 1.4 million jobs. So the US economy is very clearly weakening, and right now with rising energy costs, it may be safe to say that we're on the path toward a stagflation, a full-blown stagflation. So the Federal Reserve is now sort of stuck between fighting inflation and uh supporting economic growth. How does this situation complicate decisions for central banks um globally, including the Federal Reserve?
>> Yeah. And, you know, that dichotomy uh and the tension between the mandates, as they like to describe it all, actually stems from a lack of understanding of of of the the efficacy of Fed policy because the idea that the Fed can stimulate the economy by creating inflation is just wrong. Cutting interest rates, doing quantitative easing doesn't really help the economy. Now, it can help prop up asset prices, but higher stock prices doesn't necessarily help the economy. In fact, if stock prices are too high, having them come down is what's good for the economy. If the Fed prevents that from happening, it's doing harm. And in fact, when interest rates are high and there's a recession, if the Fed artificially suppresses those rates, the Fed could actually be damaging the economy. The high interest rates were there for a reason. They're trying to address a problem. Generally, the problem is insufficient savings. And so, the high interest rates are the market's way of encouraging more savings and discouraging more borrowing. So, if we have too much borrowing and not enough savings, we could have high interest rates. Now, those high interest rates could result in a recession in the short run. But if the Fed now intervenes and says, "Oh, we got to lower interest rates to fight this recession." They've undermined what the market is trying to accomplish by moving rates higher. And now you have artificially low rates which are doing damage to the economy. Now, in the short run, again, you know, it could feel good if you're coming off a high to get more drugs, but what's better is to get the drugs out of your system and go through withdrawal. And and that's, you know, the market tries to do that from time to time. And when a central bank interferes with that process, it's doing harm. It's not doing good.
>> You've mentioned the stock market, and one of the most, I would say, um frequent comments that I get on my finance-related videos is, well, you're saying the economy is so bad, but then I see the stock market is doing really well, so what you're saying must not be true. What would be your response to those comments? Why is the stock market hitting new highs, but we're talking about the US economy collapsing effectively?
>> Well, because A, the stock market is not the economy. The stock market's the stock market, and the stock market can go up for reasons having nothing to do. In fact, a weak economy could be seen as good for the stock market because if a weak economy keeps interest rates low, low interest rates are good for the stock market. If you've got a lot of liquidity, that liquidity goes into stocks. Uh, if there's a lot of inflation, stock prices go up just like the price of anything else. Stocks are prices. But if you want to look at stocks in terms of real money, if you want to look at stocks in terms of gold, that gives you a a better picture because 20 years ago, 20 26 years ago, actually, the Dow was worth more than 40 ounces of gold. It was maybe 43, 44 at the peak. Now it's only worth about 10. Um, that's a huge decline. That's a 75% decline in the Dow in terms of real money. So once you, you know, look at it from that prism, things aren't so good. If if I made more money just putting a bar of gold in my sock drawer than owning the S&P 500 and collecting all those dividends, if the bar of gold still beat the S&P, what does that tell you about the real performance of US stocks? And, you know, if the if the real performance of US stocks is that bad, then maybe so is the economy. And and and that's probably one of the reasons that the stock market has so underperformed gold. It's because we've had a bad economy the entire time they've been pointing at the nominal increase in the stock market to try to convince us that we have a good economy.
>> Another economic wild card, I would say, that is worth covering is the private credit market. Its size is $1.3 trillion, and uh in recent weeks, its biggest players such as Blue Owl Capital and Blackstone have capped investor withdrawals. These loans are not liquid assets, of course, and uh if funds begin selling those port uh portfolios to cover withdrawal requests, they will likely have to sell at a loss. So, it's only going to make things worse. And uh I was really surprised by a recent um comment by JP Morgan uh CEO Jamie Diamond. He warned that private credit losses will be quote larger than expected. So what is your interpretation of the private credit situation and its possible impact on this very fragile state of the US economy today?
>> Yeah. Well, you know, if we have an economic downturn, um, you know, there's going to be defaults. And a lot of these private loans, I don't know how good the the vetting process was. A lot of times during good times, the underwriters tend to look the other way. Uh, they take on more risk in a low interest rate environment. Um, so, you know, just like during the the financial crisis of 2008, I mean, people people were very reckless when the party was raging, and that's why the hangover was so bad when the music stopped. And so I'm sure it's even worse now. I'm sure there's a lot of problem loans uh, you know, in commercial, in in in in individual, a lot of them related to real estate, but also, you know, other forms of consumer finance. A lot of these loans are going to go bad. A lot of the loans, there's a lot of people that have borrowed money against crypto. Um, all these these loans are going bad. They're, you know, there's going to be a lot of defaults. Collateral is going to have to be sold at at fire sale prices, and that's obviously not good for the sellers. You know, maybe the buyers will get a good deal. Uh, but this, there's going to be big losses throughout the financial system, and that's going to have repercussions.
>> Several years ago, I remember seeing you uh being very skeptical of of of the crypto industry, and that was I think pre-Trump 2.0.
>> That's putting it mildly.
>> Yeah. No, I'm trying to be diplomatic here. So you, we're very skeptical, and um, then of course, Trump came into the Oval Office, and he and his sons are very much focused on uh, you know, driving the crypto their crypto businesses, um, and and uh, you know, making that sort of a priority. Have your views changed on the cryptocurrencies, and what's your take on the on the overall kind of Trump crypto craziness that we see uh every single day in the news?
>> Well, I mean, you sum it up pretty well by just calling it craziness because I think the whole thing is crazy. Uh, I think the reason that Trump embraced Bitcoin was not because he found Bitcoin religion after years of criticizing it. He recognized that embracing Bitcoin was good politics. He was able to get a lot of money from the crypto community to help finance his 20 uh 24 campaign, and he was able to convince a lot of people who own Bitcoin to vote for him simply because of his pro-Bitcoin stance. So, it was a great political issue because he didn't really lose any support by being pro-crypto, right? Like if you come out pro-choice, yes, you get the pro-choicers, but you lose the pro-lifers, and vice versa. But if you come out pro-crypto, I mean, there are there isn't a big anti-crypto vote. Ah, Trump likes Bitcoin. I'm voting for Kamala. You know, people weren't doing that. So, it was it was a very good political decision that Trump made. But then, not only did he embrace crypto to get the money and the votes, he also saw an opportunity for himself and his family to make a lot of money. And so they basically focused their whole Trump business empire on crypto. Real estate took a backseat, and they're making more money in crypto than they are in anything else. And that is a function of his popularity within the crypto community and the influence that he has over the industry because people want to invest alongside him and they figure that Trump's got their back. Now that Trump is pro-crypto, we have a cryptozar. He's a crypto president. He's obviously going to steer capital and steer investment into crypto and try to uh orchestrate pro-crypto uh legislation that's going to benefit. So, he's creating, you know, that perception to help fuel the mania. What's interesting is that Bitcoin is lower now than it was. It's lost all of the gains that it had early in the Trump administration despite all this hype, despite all this promotion. And what that shows you is that the smart money, the real money was waiting to sell into it. So the people that helped elect Trump from the crypto community, they cashed in. When Bitcoin rallied, they were the ones doing all the selling. They did the buying before he got elected, and then they sold afterwards. But now you got a bunch of bagholders that have bought a lot of $100,000 plus Bitcoin uh that are going to lose their shirts.
>> And uh maybe the last question for today. So the US economy is in this very uh questionable state. Let's just say the ceasefire is very fragile with Iran, and and there seems to be maybe a new round of negotiations happening this weekend. Um, I think reports are unconfirmed at this point in time. So, my point is, we're just not sure where we stand and whether things are going to escalate or if they will be sort of just sort of uh put on pause, so to speak. The midterms are coming up, and he clearly has to focus on domestic politics as well, not just foreign relations, but the economic impact of his of his policies has been very unpopular. So what is Trump's economic endgame here? What is sort of what's the plan to uh combat resurging inflation to to address the
>> He he doesn't have a plan. I mean, his plan, his drill, baby drill plan, right? Let's just have more oil. Oil prices don't cause inflation, but, you know, we're not drilling much more oil now than we were when Biden was president. So, it's not going to make a big impact. Uh, and of course, now, you know, we've got what's going on with the war, which undermines the whole drill baby drill, you know, scenario anyway. But other than that, Trump does not have a a plan. His other plan is to try to beat companies up, you know, like the drug companies and Trump RX and trying to force companies to sell their products at lower prices. But that's not going to work. That's like a government price control. You're trying to attack the symptoms of inflation, ignoring the underlying cause of the inflation, just like when we had price controls uh uh, you know, when Nixon was president or Ford. I mean, they didn't work. Yeah. Because they can't work. It's like, you know, if I got a a skin cancer and I just put a band-aid on it so I don't have to look at it, it's not going to stop it from spreading. I I got to get to the cancer to to cure it. And and and and all they're trying to do with inflation is cover up the symptoms while the disease gets worse. So, he has no plan. The only plan he could have would be cutting government spending and having higher interest rates. And these are two things that he opposes. Doesn't want to cut any government spending. He wants the government to spend more. And he wants the Fed to cut rates. He wants rates at 1% maybe less. He wants the Fed to go back to QE. That's all inflation. So he doesn't want less inflation. He wants more inflation. He just doesn't want the public to realize that.
Peter, thank you so much for joining us today. This was an absolutely fascinating conversation, and uh I know that our viewers would absolutely love to have you back on the program, and uh I hope you come back for a new episode.
>> Oh, sure. I'm surprised it's taken so long to have this first one.
>> I know. I hear that we we kept canceling for a while. My schedule was uh was busy. So, but I'm glad we finally uh managed to get it done.
>> I am too. And uh I look forward to a new one with you.
>> All right. Take care. Have a good weekend.