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Well, gold is at record high. Silver is outperforming almost every major asset class, and the US dollar is quietly sliding even as equities hover near their peaks. One of the most vocal critics of fiat currency says this is not a coincidence and not a safe haven trade, but a market warning that investors are misreading.
Peter Schiff has been blunt about what he thinks comes next. And today we're pressing him on trade, the timing, and what investors may be getting wrong. Peter, always a pleasure. Thanks for talking to us. Oh, my pleasure. Thanks for having me on. Well, listen, uh Peter, gold and silver both breaking out at the same time, but this isn't 2008, right?
It isn't a recession yet. What specific signal uh are these markets sending right now that equities and bond markets are ignoring? Well, first of all, gold really broke out uh in early 2025, I'd say, or even 2024, uh when we broke above 2,000, and we really haven't looked back. And so it's been a pretty steady march that has accelerated in speed.
You know, once we got to 4,000, the move to 5,000 happened, you know, almost instantly. Uh but silver didn't really start to break out until this year. Or not this year, last year, 2025, and later in the year, kind of Q4. Um and so now we have silver confirming what happened in gold, and now even leading gold, because first it had to catch up, cuz it was lagging for so long, and now it's taken the lead, which is something that I always forecast was going to happen.
Uh and it really is just a a newer leg of this ongoing uh bull market. It's a stronger leg uh where silver is leading gold. And the next phase is going to be the mining stocks really taking the lead. The silver and gold mining stocks because investors are going to start to accept the reality of not only higher gold and silver prices, but ever rising gold and silver prices.
But to answer your question, what is this signaling? I believe this is a major warning of an imminent crisis in the US dollar and US sovereign debt. I believe the impetus to buy gold and silver is a a desire to be out of the US dollar because of a lack of trust in the US government and in its ability to manage its fiscal house.
And so you're losing confidence in in the government, in the dollar, and you need to go into gold and silver. It started with the central banks and it's now spreading to private investors. Uh Peter, if I'm an investor, where do I actually see that fiat stress, right? In the dollar index, real rates, foreign demand, or capital flows?
What's the cleanest evidence? Well, you see it, you know, in the exchange rate of the dollar weakening to a 4-year low. The dollar just hit an all-time record low against the Swiss franc. You know, record high gold and silver prices. And you could also look at the substantial outperformance going back to the beginning of last year of foreign stocks versus US stocks.
So investors are clearly expressing a preference to invest outside of the United States, and you know, the returns are showing that. And so more and more people are going to be withdrawing money from US markets so that they can redeploy those funds into foreign markets. Gold is rising even with real yields still elevated by historical standards, Peter.
Traditionally, that shouldn't happen, right? Is the market telling us real rates are mispriced, or is that policy credibility itself breaking down? Well, real yields are not, you know, the Fed is cutting rates, uh but inflation is picking up. So I think real yields are falling. Uh and and in fact, I think they're negative because I think inflation is being under reported.
I think there's a much bigger inflation problem than US government data uh acknowledges. Uh so, I I I think that, you know, there are negative rates and I think that that's a big driver into gold. Silver has outperformed gold in this move. I mean, is that a monetary vote against fiat or structural bet on electrification, energy, and supply tightness?
Which one matters more right now? Well, a lot of the move in silver is just to catch up to where it should have been anyway. You know, silver was, you know, suppressed for years and it didn't make any sense to me. Uh but, I think the main driver is monetary. Uh but, yes, I think that there are additional demands, uses for silver being developed, you know, in, you know, electric uh in batteries and and and and the whole move towards uh more electric vehicles and and and all of the uh need for more uh power and energy uh to feed the AI uh build-out.
So, you have, you know, really a perfect storm for silver of increasing industrial demand and increasing investor demand happening at the same time. You You have banks like TD shorting on silver. What's your take on that? Well, look, I mean, obviously, there was a pretty big short book built over the years in silver.
And I you know, I feel badly for anybody who's short silver, but I can't necessarily say they don't deserve what's what's happening. But, um yeah, I think if you're still short silver, you're in a lot of trouble. Uh n- a Many of the shorts have likely covered. Um but, I'm sure there's shorts out there and there's probably some new shorts.
People probably took a stand. Oh, it's a bubble. Let me short silver. Uh I think people who think this is a bubble are in for a a rude awakening, especially if they bet the bubble will pop. Uh cuz it's it's not going to pop cuz it's not a bubble. That doesn't mean that silver can't pull back, but I I I think the pullbacks will be short-lived.
And I I think a lot of buying will step in. So, I I think that, you know, the shorts are more likely to have to cover at higher prices than than be able to do it at lower prices. Yeah. Uh look, let's talk Federal Reserve. We're obviously recording this before the Fed makes a decision. Now, if metals are right and the dollar is is under pressure, is the Fed actually boxed in or can tighter policy still reverse this move without breaking markets?
Well, yeah, the the Fed is is boxed in in the sense that the the right thing to do is raise interest rates, but if they do that, they'll cause a financial crisis. So, they can't do the right thing. Uh and they end up doing the wrong thing, but the wrong thing is going to create an even bigger problem in the long run.
But, they're more focused on the short run. And so, that's why they've been cutting rates, and that's why they've gone back to quantitative easing. Now, they haven't admitted that what they're doing is QE, but it basically is, and I think they're going to be expanding the program. Uh you know, so that at some point it will be impossible to deny that it's QE.
A beautiful and active investor today, not not a gold bug. I mean, what's the biggest mistake right now? Being under exposed to precious metals or over estimating how quickly fiat stress translates into broader market pain? What's your take? Yeah, well, the biggest mistake is probably having no exposure at all, which would probably uh you know, most people would fall in that camp.
Um and then it would be not having enough. And another thing that people could do wrong would be getting out, thinking that, oh, this is it. I just tripled my money. Let me get out. Um you know, I I think it'd be leaving much too much on the table uh because this trade is not about tripling your money.
It's about preserving your wealth. Uh and ultimately, if you triple the number of dollars you have and the dollar ends up being worthless, it doesn't matter how many you have, right? So, I'd rather accumulate ounces of gold and silver uh than than than than dollars. So, I don't think that you you need to be getting out of uh of of of real money into fake money.
Uh but I think, you know, you need to diversify. I mean, I I I have a lot of my own portfolio in good dividend-paying foreign stocks and I think people, you know, people should look into alternatives to US financial assets uh that it's not just, you know, holding a a a metal. You have Bitcoin supporters arguing it's absorbing the same monetary anxiety gold once did.
I mean, what's your take on that? Well, I mean, obviously, the the argument for Bitcoin that was being made by Bitcoin promoters was pretty much the same argument that I was making as to why you should buy gold and silver. Uh and I always said that the the Bitcoiners had the the argument correct. They just had the wrong solution.
That Bitcoin was not going to behave like gold and silver. And last year proved that. All right, last year was the best year for gold since 1979, up about 65% or so, uh and Bitcoin went down. And once again this year, gold's having its best January ever and Bitcoin is flat. Um so, Bitcoin has now proven that it is not digital gold.
Not that it ever looked like digital gold to me, but that was the story. That Bitcoin was an alternative to gold that you would buy for the same reason you might buy gold, but that you could expect an even better return. So if gold went up, Bitcoin would just go up more. Well, gold went way up and Bitcoin not only didn't go up more, it went down.
So I think the whole Bitcoin is digital gold uh story has has unraveled. And so if Bitcoin isn't digital gold, what the hell is it? And why buy it? I mean, it doesn't There is no reason to buy it because it doesn't really do anything. And and so I think that the bottom's going to drop out of Bitcoin soon.
I think you're going to see a big uh uh collapse in in the price and it's going to cause all the speculators who bought the Bitcoin ETFs to to get out. And that's going to fuel the decline. And then you're going to run into leverage and you're going to have a lot of Bitcoin that was margin that's going to be liquidated.
Uh so I think there's a lot of selling pressure coming uh in in in Bitcoin. And then finally, Peter, as I wrap up, I mean, I would just want to go back to what you said earlier on in the interview. You know, the uh physical gold or the physical metal versus the actual mining stock. We spoke last year and and even when we spoke last year, you could see that the mining stock was still trying to catch up.
Where where does this race end? When does it eventually catch up? And and what what should your move be right now? Well, I any day the gold mining stocks could just take off. You know, because right now, you know, they're subject to the swings in the precious metals markets, which are kind of volatile right now because we've had such a big move.
And every time you see a sharp sell-off, uh these stocks tank because investors are like, "Oh, this is it. It's going to crash. It was a bubble." And and so it's been hard for the gold and silver mining stocks to really move up because they lose so much every time gold goes down a little bit. So even though gold's in a new all-time record high today, uh the gold and silver stocks are not because they went down so much more than gold when gold corrected.
Even though these corrections are meaningless because even though gold falls, it's not falling anywhere near enough to make these stocks expensive. They're still cheap despite the fall. Uh you know, if gold was down $500 today, gold mining stocks should still be up because they're still cheap even if gold is 4,500 instead of 5,000.
In fact, it's wait a minute, it's 5,300. So, if it went down $500, it'd be 4,800. 4,800 is a very high price for gold. Gold mining stocks are cheap if gold's at 4,800. Now, they're cheaper at 5,300, which is where we are, but at some point investors are going to notice this. The sellers are going to be gone uh from the mining stocks uh and and and they're going to take off.
But, in the meantime, people should just be buying into any dip that you get in these stocks. Peter Schiff, always a pleasure. Thanks very much indeed for that insight. All right.
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