저자: Bullion Times · 외국인
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$4 trillion a year on interest. That would mean the entire budget deficits would be about six or seven trillion because we'd have to borrow all that money. We don't have it. The negative yield is going to get bigger, which creates an even bigger incentive to avoid the loss by buying gold. It's going to go and it's not the strong economy because I don't even know what they're looking at because GDP growth has been slower so far than After 2 years, debt chickens are coming along to root all around the world that it's not.
It's not just individuals, homeowners, companies. The US government is not going to be able to service the massive debt that it ran up when rates were at zero. Now that rates are declined. So sometime between here and then we're going to have and and it could happen in a few weeks. it could happen in a few months.
Oh, the Fed is just going to have to be more aggressive, but they can't. They they put themselves in a box. I want to talk about the Fed for a moment because the traditional belief of course is that rising yields are on both treasuries and of course a raise in the Fed funds rate is bearish for precious metals.
However, at this point, even if you're getting north of 5% on a Treasury bill, you're not outpacing the real rate of inflation. Considering how cooked the CPI and other government inflation statistics actually are, do you think rising yields, if we do see more rate hikes, if we see a higher yield on the US Treasury bills, are those currently one of the headwinds holding gold back?
And if so, could we see further downside ahead if we do see the long-term treasuries, the 20 and 30 year get to that 6% or above on the yield? Yeah. Well, I think it's the misperception of what those rising bond yields imply that is a headwind for gold for now. But that misperception is going to clear up at some point.
You know, if you look at the CPI and as you mentioned, it's it's a flawed measure because it under underestimates what's actually happening. But so far in 2026 during the first 9 months of this year, the CPI is up 4%. It was up 2.9% for all of 2024, which was the the last year under Biden. Uh it was 3.4 in 2023, Biden's, you know, second to last year.
So we're already above both of those years and we got three more months left. I think by the time we get the next 3 months of data, we're going to see a five handle on 2026 CPI. And so by that measure, the Fed funds rate will still end the year negative. That is not a uh you know a restrictive monetary policy.
That is highly accommodative. And in fact, the highest inflation got in any calendar year under Biden was 7% in 2021. I think there's a very good chance that 2027 will be higher than seven, but I doubt the Fed funds rate will be much higher than five. So the the negative yield is going to get bigger.
Uh which creates an even bigger incentive to avoid the loss by buying gold. So, you know, rather than a headwind for gold, I think the rising bond yields are going to be a tailwind because they're not going to rise enough to offset the loss to inflation. And in fact, as rates rise and more US government debt matures and needs to be rolled over and you get this upward pressure on the cost of carrying debt, the most recent government numbers showed 1.4 trillion now is the annual tab for interest on the national debt.
But that number gets bigger every month and you know sometime next year it's going to hit two trillion which means it will be bigger than social security. Social security is 1.7 trillion right now. Of course that number is going to get bigger next year as well. But interest on the national debt is now the second biggest government expense but the fastest rising government expense.
So, at some point, the Fed is going to have to not only stop hiking, but actually ramp up the QE program because there aren't going to be enough private buyers uh for negative yielding treasuries. Do you think we are seeing a potential crisis emerge in the sovereign debt markets? Because Treasury yields, many of them at rates not seen since preGFC days.
Of course, we're seeing yields rise around the world, Japan perhaps being the main poster child, many of those bond yields rising to historic rates. What are your thoughts there? Because, of course, when it comes to US Treasury bills, you have some pundits out there who say yields are rising because of the strength of the American economy.
I believe Judy Shelton came on Fox News and said this recently. Some other people have said that as well. And of course, some others are pointing out that the these yields are getting out of control considering the level of national debt we have. this isn't the 80s where the the the debt levels are much more severe.
How bad could this get? And and is there a level on the yields that you're watching for when things could really spiral out of control? Uh it's going to get a lot worse. And it's not the strong economy cuz I don't even know what they're looking at because GDP growth has been slower so far during the past two years.
Uh you know, Trump's first two years. GDP is growing slower than it was during Biden's second two years. So by pretty much every objective measure, the economy is weaker now than it was a couple years ago. So it can't be the strong economy that is the reason that rates are rising if the economy is weaker than it was before the weight rates went up.
So that's not the reason. The problem is we have 40 trillion in debt. Actually 40.3 trillion, right? Because it keeps going up. But we have all this debt and uh there it's impossible really to find uh private money to finance it. And it's not just that the US government is borrowing a lot of money. The rest of the world governments are borrowing a lot of money.
I mean you mentioned Japan. Look what's happening in France over the past week and the French tenure is now up around 5% almost to the level that ours are. Uh but the increase has been even bigger because the yields in France were actually lower than they were here. Um but all of these sovereigns that made too many promises to pay with borrowed money are are are running into problems.
The debt chickens are coming home to roost all around the world. That is the difference. And you know people are very complacent too if they look back 20 years ago and say well you know we could handle 5% uh treasuries we we could handle a 7 12% mortgage 20 years ago so why can't we handle it today?
Well there's a big difference. We have a lot more debt today than we did 20 years ago. The reason we have so much debt now is because we were encouraged to take it on based on how cheap it was. Because the rates were so low, it made it appear affordable to borrow. But now that the the rates are normalizing, but we have an abnormally high amount of debt, we can't service it.
A $40.3 trillion debt burden changes what investors should consider safe. What Peter Schiff is highlighting is the collision between elevated borrowing costs and an economy he argues is weaker than the official optimism suggests. Governments worldwide must compete for financing, potentially pushing yields higher even without stronger growth.
For ordinary investors, the danger is that yesterday's affordable debt becomes tomorrow's fiscal constraint. Next, Peter Schiff exposes why today's borrowing costs could hurt far more than similar rates did decades ago. And it's not we, it's not just individuals, homeowners, companies, the US government is not going to be able to service the massive debt that it ran up when rates were at zero.
Now that rates are at five. But the other important factor is that 20 years ago, Treasury yields were five, mortgage yields, mortgage rates were 7 and a half on the way down. Now they're there on the way up. That is a big difference because even if you if you took out a 7 and a half% mortgage 20 years ago, you had the opportunity to refinance it at 6 and 1/2, 5 and 1/2, 4 and 1/2, three, you know, 2 and 1/2.
Um rates are headed back up now. No one's refinancing that it's going to they're going to go to eight and a half, nine and a half, 10, 11. Mortgage rates were at 18% in 1981. So, they fell for 40 years. Now, they're going to rise, maybe for as many years, I don't know, or at least half as many. And we're only six years into the the rate rise.
Uh, treasuries were at 14% and they went down to a half a percent. So, now we're at 5%. But 5% is still pretty cheap money. It's just not so cheap when you owe so much. But yields will hit 6%, then 7%, then 8%. So, the problem's going to get bigger and bigger and bigger. And so is the debt bill. We're going to be paying $2 trillion a year in interest on the national debt by the end of next year.
But if rates rise to 8% and the national debt is 50 trillion in two or three years, which it will be, we could be spending 4 trillion a year on interest on the national debt. I mean, that's 80% of tax revenue. And if we were spending $4 trillion a year on interest, that would mean the entire budget deficits would be about six or seven trillion because we'd have to borrow all that money.
We don't have it. So, can we survive with budget deficits, annual budget deficits that enormous? No. The real danger isn't simply higher interest rates. It's the enormous debt accumulated when money was cheap. Peter Schiff's argument suggests that refinancing once offered relief, whereas rising rates now threaten to lock borrowers into escalating costs.
He projects that $50 trillion in federal debt combined with 8% rates could mean $4 trillion in annual interest, although that outcome is not guaranteed. Investors should watch the fiscal arithmetic closely. Next, Peter Schiff reveals why the bond market's next breaking point could arrive sooner than expected.
So sometime between here and then right now and we're going to have a bond crisis and and it could happen in a few weeks. It could happen in a few months. I doubt we're going to be able to hold it off for a few years. I hope you've been enjoying this interview with Peter Schiff. If you're looking for great prices on gold and silver bullion products, our sponsor Arc Silver Gold Opium has you covered.
You can see some of their prices on your screen right now. These are subject to change and while supplies last. So, reach out to owner Ian Everard today at 307-264-9441 or by email at ianarchsggo.com. We get nothing but positive comments about working with Ian. When you do give him a call, make sure to tell him that Commodity Culture sent you.
The next question comes from a member of the Commodity Academy. It's an online class we run, guys. You can check it out in the description below and get your chance to ask guest question. This is Sabrina. She asks, "What specific indicators would you say will reveal that we've crossed from a normal precious metals bull market into an actual dollar devaluation or confidence crisis?" Now, a lot of what you've laid out seems to point in that direction.
Um, is there any other parameters that you're watching that would point to dollar devaluation or confidence crisis? I think one thing is you need to see the dollar actually losing value against its fiat counterparts. So if you see the dollar weakening against the euro, against the pound, against the yen, uh that would be one indication.
Another one would be when you start to see the gold market responding to hotter than expected inflation numbers by going up, not down. When you see the bond market rising when interest rates rise, not bond yields not falling. because that will be a strong indication that the markets are figuring it out, that traders are recognizing that, you know, higher inflation numbers are not just a sign that the Fed is going to have to fight harder to beat inflation.
They're confirming that the Fed has already lost the inflation fight, that inflation is won, that the Fed can't fight hard enough to beat it. The shift from a normal gold rally to a currency confidence crisis requires more than rising bullion prices. Peter Schiff identifies a weaker dollar and gold rising on unexpectedly hot inflation as potential warning signs that markets are losing faith in monetary policy.
The crucial distinction is whether investors expect tighter policy to restore purchasing power or believe policy makers cannot contain inflation. The difference could reshape portfolio protection strategies. Next, Peter Schiff exposes the market reaction that could reveal when inflation fears begin overpowering rate hike expectations.
That is the problem. That that is the actual reality. But the markets still don't get that. They see, oh, inflation is higher than we thought. Oh, the Fed is just going to have to be more aggressive. But they can't be. They they put themselves in a box. Look, uh, Worsh has been Fed chair for 5 months, and during those 5 months, the inflation numbers have gotten progressively worse.
Yet, we've only got 125 basis point rate hike. That's it. Meantime, the balance sheet is bigger now than it was five months ago when he took office. and money supply M2 is growing at a 6% annualized rate. This is a highly accommodated Fed that this is not an inflation fighting Fed. So despite what Worsh has said that has spooked the gold market about his resolve and how the Fed is going to do whatever it takes to bring inflation down, so far what it's doing is is pushing inflation up.
So forget about what they say. Look at what they do. Now, if gold bugs are lamenting right now due to a drop in the gold price, silver stackers are even more upset as we see the metal plunge to around $57 after soaring to triple digits earlier in the year. I've personally been a buyer at these levels.
I'm wondering if you're seeing this as an opportunity to accumulate and how low do you think silver could go in a worst case scenario? Well, I mean, I think that $50 is the support because I think that was the resistance that basically uh was holding the market back since 1980 81, uh it acted as very substantial resistance in 2011.
And even as gold initially rose from 2,000 to 4,000, silver still couldn't get above that. It wasn't until gold really finally had that, you know, $4 to $5,000 rally that all of a sudden silver went from 30 to$125. It was just an explosion uh with a breakout. It makes sense that that type of parabolic rise wasn't sustainable and we had a pullback.
Now, the pullback was actually bigger than I had expected when we were trading at those levels, but I didn't think that it would be out of the question. A central bank can sound aggressive on inflation while its balance sheet tells a more complicated story. This is where Peter Schiff's thesis shifts.
He argues that rising money supply and worsening inflation undermine confidence in the Fed's tough rhetoric. Yet, silver's plunge from tripledigit prices toward $57 also demonstrates how violently markets can correct. Even within a bullish long-term narrative, investors must separate conviction from timing.
Next, Peter Schiff reveals why the $50 silver level could matter more than the latest panic. And I think that you anything below $60, frankly, I think represents the bottom. Now, I think that, you know, 50 is probably the new 20, you know, for silver. And, you know, we're going a lot higher. So, it's been a bigger correction than what we had in gold, but um silver still looks cheap to me relative to gold even though it's not as cheap as it was.
You know, it was 100 to one at one point. It was over 100 to1 when when when you know gold was uh at the highs and silver was still you know below 30. It was at 20 and barely above 20. You know, there are different uh types of investments. I look at gold, physical gold and silver as money, as just being a store of value.
They're not investments per se. They're just a way to preserve your purchasing power. I think that gold and silver mining companies as a an investor, as a stock market investor, I think these businesses are undervalued because I think investors just don't understand how much higher the price of gold and silver will be in the future and how much money these companies are going to make, not only on their mining operations, but how much more valuable their reserves are going to become with much higher metal prices.
So, I have a lot more mining stocks uh than I just have physical metal because I I think I'm getting a much better deal on the gold that's still in the ground than buying what's already been mined. Given that my outlook doesn't really march match uh the the conventional wisdom of of of future gold prices, I I see a real dollar crisis, a sovereign debt crisis, much higher prices.
Meanwhile, you know, gold stocks are earning a lot more money now than they were a few years ago. Even though the price of gold has pulled back, look at where it is. And even though oil prices are high in dollar terms at, you know, over $90 a barrel, when gold is over $4,000 an ounce, historically, that's a very cheap relationship between uh gold and oil.
and and and oil is physical metals and mining stocks offer different kinds of exposure and confusing them can create unexpected portfolio risks. According to Peter Schiff, miners could benefit disproportionately if gold and silver prices rise because higher selling prices can improve margins and increase the value of underground reserves.
But mining shares still carry operational market and management risks that boolean does not. Investors should evaluate both sides before choosing their allocation. Next, Peter Schiff exposes the overlooked relationship between gold, oil, and mining profitability. You know, a major cost component of mining, but since the price of gold, this has risen more than the price of oil.
Uh it's a great environment for these gold mining companies. And I think gold prices are headed a lot higher. I think the price of gold is going to outpace the price of oil. I think both are headed higher actually. So I think oil prices are going to go up and in the short run rising oil prices have again acted as a headwind for gold uh because the markets perceive that as meaning a a tighter Fed.
But ultimately higher oil prices are going to be mean a looser Fed because the Fed is going to accommodate those higher oil prices with bigger budget deficits and more quantitative easing. And that's going to be bullish for gold. We're going to have more inflation as a result not of the pri rise in the price of oil, but as a result of the the monetary policy that the Fed will pursue.
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