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this is matthew crowder from trader university and today i want to talk about peter schiff gold and bitcoin i've been getting a lot of questions about peter schiff so i thought i would address uh what i think of him and his views on gold if you're interested in learning how to make money in both bull and bear markets or you just want to see what i'm trading or investing in be sure to hit that subscribe button so for those of you who don't know peter schiff is a fairly famous libertarian talking ahead and gold bug he started euro pacific capital and now he runs i don't know if he changed the name to shift gold but he also runs a company uh maybe it's the same company called shift gold where he actually uh is a gold broker dealer who sells uh gold i think mostly to retail investors so uh peter schiff and i would agree i'm very bullish on physical gold as we see the dollar devaluing so someone like peter schiff and i have a lot in common in terms of our view of fiat money the central bank etc but i want to sort of watch walk you through the evolution of peter schiff's take on bitcoin and i think it's a it's a cautionary tale for everyone because this really could happen to anyone where we make a bad decision and then we have to double down and then we reach the point of complete absurdity so i'm going to show you how this works back in in 2013 um peter schiff was going on shows talking about how bitcoin was a bubble it was tula mania it was not a store value like gold 2.0 i think he criticized bitcoin as well in 2012.
i couldn't find the the link to that but this was back just to put into perspective today go today bitcoin is around uh 12 000 per bitcoin this is back when bitcoin was 375 dollars per bitcoin he said that bitcoin was in a bubble fast forward um a few more years i guess this is also 2013 where he says thinking of buying this is a tweet from november 22 2013.
thinking of buying bitcoin instead of precious metals think again at this point bitcoin was 684 uh since then at least up going up to march bitcoin uh bitcoin's obviously gone up a lot more it's doubled again from here roughly but bitcoin was up 872 percent and gold was up 35 and this is a pretty cruel meme all my tweets age well so fast forward to 2017 uh when bitcoin hit 4 000 for this first time and again this is going from what did we say 375 so it's basically up more than 10x he doubles down and says bitcoin is still in a bubble now when something keeps going up and it goes up for maybe 10 years it reaches the point where it can become fairly absurd to say something is in a bubble but this is the problem that peter schiff has is that he took a stance and he hasn't let new data alter his view and so now he's making just crazy predictions so here's an article from um i think this was originally published in may because it was talking about the may 2020 having last updated in in june this is why bitcoin will plunge after the 2020 having according to peter schiff obviously the exact opposite has happened it's been uh going straight up uh since there so the problem with having this sort of confirmation bias is that you begin to make bad predictions that that don't even make any sense because if if supply goes down for a commodity and let's say bitcoin's sort of a commodity it's scarce uh if the supply goes down why wouldn't you think that if demand stays equal that the price would go up i mean peter schiff's a smart economist he should understand these things but now he's reached the point where he is so committed to gold and so against bitcoin that he's begun to say completely absurd things and he's really uh at least in my opinion making a complete fool of himself so here's an article i'll link to about how gold is harder to confiscate than bitcoin now obviously bitcoin you can memorize your your 12 or 24 word keyword uh seed phrase your recovery phrase and you can walk across a border and you could take 100 million dollars with you or you could take a hundred thousand dollars or you could take a hundred dollars uh peter schiff is saying that gold is more difficult gold is easier to transport and and more difficult to confiscate than bitcoin which is just a common sense view i'll link to this article so you can read it but uh a common sense view of this just that says that this is absurd obviously gold is much more difficult to transport especially as you start talking about significant sums of money bitcoin is much easier to hide it's much easier to transport it's much easier to beam around the gold i could send some gold i could send some bitcoin right now to anywhere anywhere in the world and it would take 10 minutes 30 minutes maybe an hour at most how am i going to send gold how am i going to send gold anywhere in the world especially to some hostile uh regime and now i would say that we've reached the the height of peter schiff's absurdity this is a tweet from august 15 2020 and this is where i think he's he's completely lost all credibility uh in this tweet he says gold is not valuable because it's scarce gold's value comes from all the unique properties that it has as a medal utility makes gold valuable uh scarcity just makes it expensive bitcoin has no unique properties scarcity without utility is meaningless meaningless now the the reason schiff has been forced to adopt this point of view is that everyone has figured out that bitcoin is much more scarce than gold and so what peter schiff is being forced to do is to deny how important scarcity is now obviously copper is a lot less scarce than gold but it has a lot more unique properties in fact it's much more used as an industrial metal uh and uh but it's but it's it doesn't have the same value that gold does as if you look the market cap of all copper versus the market cap of all gold gold is much more valuable and i would argue it is because it is scarce there are lots of very interesting metals like palladium and platinum and some of the rare metals that are not as not as valuable as gold simply because when you look at their stock to flow and this is how we measure scarcity the stock to flow would just be the existing inventories of a metal divided by annual production so that these it's sort of an inflation measurement or it's the inverse of inflation measurement and i'll link to a paper that explains this but i would argue that this is why gold is so valuable it has a very high stock to flow silver has the next highest stock to flow and then you go on down the chain right now bitcoin has a stock to flow that's only slightly below gold and after the next having it's gonna have a stock to flow in other words it's gonna be much more scarce than gold and so peter schiff by refusing to admit his mistake is now at the point where he's forced to argue very absurd things that gold is is harder to confiscate than bitcoin and also that gold is not valuable because it's scarce it's clearly valuable because it's scarce and because the existing supplies increase so slowly because it's very expensive to mine and very very dangerous to mine there are a lot of environmental problems with gold mining etc and so i think he's a peter schiff's really a cautionary tale on what happens when you double down on bad uh when you double down on bad bets you begin to have to say really absurd things such as that the scarcity of gold doesn't matter gold is actually valuable because of its scarcity that's why it trades at a monetary premium to its utility or two it's your use value i've talked about this a little bit in previous videos but uh only ten percent of gold is used for industrial purposes the rest of the ninety percent of it is is basically used as a store value as a form it's a very ancient form of money i think plan b does a really great job in this paper talking about stock to flow relative scarcity and the market cap values a lot of people are confused by the fact that they just look at the price of uh they just look at the price of silver or the price of gold and try to decide which is cheaper than but the way you have to do it is you have to look at the uh the total market value of all the known above ground supplies so for example silver has a stock to flow these numbers are slightly dated now but silver has a stock to flow of approximately 33 which means it would take 33 years to replace all existing inventories above ground market value or market cap of 561 billion gold has a higher stock to flow as a result uh we're not necessarily interested in in the fact that the price per ounce is higher but the total market value the market cap is higher this is probably closer to 11 or 12 trillion at this point and uh to put this in perspective bitcoin only has a market cap so far of about 210 220 billion and i think plan b does a very good job of of of uh correlating market value total market cap to scarcity or stock to flow and so we can see for example right here gold has the highest stock to flow it also has the highest market cap and then there is a silver right here uh plan b is in the process of adding diamonds and real estate and some other things to this and then these other dots we see are bitcoin in various uh previous incarnations when it had a lower stock to flow but right now bitcoin stock to flow is closer to right here and as a result this is one reason i think it's going to go up so much now peter schiff is as i said is a cautionary tale about confirmation bias where we only look for evidence that confirms what we already believe and you know he's also a great example of cognitive dissonance where he's gone so far down the path of hitting bitcoin that he has to start saying absurdities such as that gold is harder to confiscate and the fact that gold is not valuable because it's scarce and all of this are sort of mental gymnastics that he has to go through in order to avoid uh admitting that he was wrong about bitcoin saying it was a bubble at 375 and a bubble at uh 4 000 in a bubble at 10 000 in a bubble at 12 000 etc so it's a cautionary tale uh i know how difficult it is to change your opinion i was a tesla bear for uh a long time and unfortunately i flipped around in may of 2020.
this was extremely painful to admit that i was wrong uh but i thought it was uh i much rather make money uh than be right and so i flipped around tesla and got long around uh 800 and that's been a very good ride so i definitely i understand how difficult it is to change your mind especially publicly when you've made public pronouncements and i made a lot of bearish public pronouncements about tesla that turned out to be wrong it's very difficult to change your mind publicly and it's much easier just to settle into confirmation bias but the problem with this is you end up missing out on a lot of money and so for this reason i would say people ask me if they should follow peter schiff i think he's basically made himself a laughingstock at this point especially with this latest tweet just totally misunderstanding why gold has uh has value as a monetary good let me know your questions comments in the comment section below and if you found this video helpful be sure to hit that subscribe and like button hit the notification bell as well so you'll be notified when i post my next video thanks a lot for watching and i'll see you in the next video
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