저자: PeterSchiff · 외국인
요약 보기
금 가격은 1999~2000년 300달러 미만에서 현재 4000달러 이상으로 올랐지만, 다우는 같은 기간 약 5배(1만→5만)에 그쳐 실질가치(금 기준)로는 주식시장이 25년 전보다 절반 수준이라고 주장. 과잉 통화팽창과 인위적 저금리가 원인이며, 2008년 주택 버블을 예측했던 경험을 근거로 현재 주식·AI·가상화폐·채권 등에 버블이 있다고 경고. 향후 트럼프 2기에 연준의 양적완화 재개로 달러 가치 큰 하락 예상.
다듬은 글
And, you know, when gold, if we look at the price of gold in 1999-2000, was gold below $300 an ounce? Yes. It's now above 4000. And the reason for that is that we've devalued the currency. We have created so much inflation that it takes more dollars to buy an ounce of gold. Now, the stock market, the Dow, is at about 50,000, and in 2000 it was at 10,000.
So the Dow has gone up 5 times, but gold has gone up more than 10 times during the same period of time. So what that shows is that yes, we have created a lot of inflation to make asset prices rise in nominal terms , in dollar terms, but in real terms, valued in real money, valued in gold, the market is much lower than it was 25 years ago .
Lower? Yes. Not even much lower. It's half of what it was. Oh. And that's why gold has risen from about $300 to over $4,000 an ounce, more than just an extraordinary surge. It reveals how much the purchasing power of the US dollar has decreased over the past 25 years . The main stock market indices have reached all-time highs, but Peter Schiff argues that the picture is radically different when those gains are compared to real money, such as gold.
Veteran economist, investor, and monetary policy critic Peter Schiff warns that years of excessive money creation, government debt, and artificially low interest rates have made the financial system more vulnerable. He believes that by adding more liquidity to the economy, central banks have repeatedly postponed essential corrections, allowing debt and asset values to reach risky level.
And so, quantitative easing was inflation. And you know, the current chairman of the Federal Reserve, Kevin Warsh, is right when he says that inflation is a choice. And it is the choice that central banks always make because it is the lesser evil from their perspective. I believe it is actually the greater evil, but from a politically convenient perspective, it is better for politicians to create inflation.
So, the policy after the 2008 financial crisis was to create inflation. That's what they did. Yeah . And you know, when gold, if we look at the price of gold in 1999-2000, was below $300 an ounce. Yes. It's now above 4000. And the reason for that is that we've devalued the currency. We have created a lot of inflation.
More dollars are needed to buy an ounce of gold. Now, the stock market and the Dow are hovering around 50,000, compared to 10,000 in 2000. So the Dow has risen 5 times. Yes. But gold has risen more than 10 times during the same period of time. So what that shows is that yes, we created a lot of inflation to make asset prices rise in nominal terms, in dollar terms.
But in real terms, valued in real money, valued in gold, the market is much lower than it was 25 years ago. Lower. Yes. Not even much lower. It's half of what it was. Oh. And that's why, you know, affordability...Everyone's talking about affordability. We have an affordability crisis because the government has destroyed much of the purchasing power of our money.
And they did it , you know, to bail out the banks and the stock market in 2008. They did it again during COVID, didn't they ? They printed an insane amount of money in 2000. The Federal Reserve's balance sheet doubled in 2020. We flooded the economy with inflation. That's why prices skyrocketed in 2000 and in 2021 , uh, 2022.
You know, Trump and the Republicans want to say, "Oh, that was Biden's fault." I mean, it wasn't Biden's fault. The policies that created those price increases occurred under Trump. It was, you know, Trump's last year, 2020, when we had COVID. And that's when the deficits skyrocketed with all those ridiculous government programs.
Like what? You know, the PPP purchasing power protection program, whatever it was, or the stimulus programs. But, you know, the Federal Reserve cut interest rates to zero in 2020. So we really primed the pump with a lot of inflation. There is a lag between the creation of inflation, which is the expansion of the money supply and credit, and the impact it has on prices.
Yes. Well, we created inflation with Trump. This manifested itself in a rise in prices, mainly under Biden. But if we look at a CPI chart and see when it really started to rise , it was in the last three or four months of Trump's presidency. And then it continued like that. And it was accelerating even before Biden's first bill was passed.
And even if Trump had served two consecutive terms, had he been elected president, the same thing would have happened. Inflation would have been just as bad if Trump had been re-elected back then as Biden had been. And now I think the situation will be much worse during this second Trump term than it was under Biden.
Because I think we're going to see a big drop in the dollar, since the Federal Reserve has to increase quantitative easing again. You know , War said that inflation is a choice. And he's going to make the same decision. He will make that decision for the same reason Greenspan chose inflation; the same reason Bernanke, Yellen, and Powell chose her.
Because the alternative was a stock market crash, a bond market crash, which is what we need, a housing market crash, a severe recession, high unemployment, a financial crisis. Well, unfortunately, we need a lot of those things. Because the entire economy is screwed up due to years of artificially low interest rates, inflated asset prices, the economy is disorganized by what the government has done .
And the forces of the free market have not been allowed to operate. And so, we have all sorts of imbalances in the economy, bubbles, you know, bad allocations of resources. So many mistakes have been made as a result of this bad monetary policy that correcting them, you know, will involve a severe recession, bankruptcies, and a huge increase in unemployment.
It's going to be very difficult to fix what the government broke. We had a big problem back then . Now we have an even bigger problem. Yes, we have it. And the same factors are behind this. But the mistakes that were made before the 2008 financial crisis, the mistakes that inflated the housing bubble, were quite obvious to me when they were made.
And they really started after the dot-com bubble burst. And we also had these terrorist attacks in 2001 and we had a shallow recession. And then the Federal Reserve under Alan Greenspan, who passed away a couple of weeks ago at 100. 100 years old, yes. Well, he reduced interest rates to 1%, which at that time was truly the lowest level in our lifetime.
We 've never seen guys that short. And that cheap money was what fueled the housing bubble. Because it allowed mortgage rates to fall, but it also developed these tempting interest rates, because as rates were so low and the Federal Reserve had committed to keeping them low for a while, it would then raise them very slowly in quarter-point increments.
So the lenders were confident that they could lend money for two or three years at a very low rate. So they offered these tempting rates with which people could buy a house, but during the first few years, the mortgage payment was really low. And that allowed people to stretch their budgets to buy more expensive homes or pay more for homes than they could normally afford.
And because interest rates were so low, everyone was looking for returns. Everyone on Wall Street wanted profitability. And what they were doing was packaging these mortgages, securitizing them and selling them, and there was demand for them. And because there was all this demand for mortgages on Wall Street, you know, mortgages were readily available.
This is how people were able to buy mortgages. And now people could make no down payment, zero paperwork, and get loans . There were all kinds of frauds involved . The government was guaranteeing many of the mortgages directly through the FHA and indirectly through Fannie and Freddie. And Fannie and Freddie became the biggest buyers in the high-risk market.
And I knew that all of this was a gigantic bubble. According to Peter Schiff, central bank policies that increased the money supply and kept interest rates artificially low are largely to blame for current inflation. People and businesses have more money to spend when loans become incredibly cheap and significant amounts of fresh money enter the economy, but the supply of products and services may not grow at the same rate.
Although politicians often blame each other for the rising cost of living, they believe the problem is much more complex. According to him, inflation can take years to fully manifest itself after a significant monetary expansion. Therefore, central banks usually react to financial problems by creating additional money rather than letting excessive debt and bad investments correct themselves.
The economy becomes more dependent on easy money as a result of the continued expansion of credit, which also promotes greater indebtedness and keeps financial institutions in crisis. Like, subscribe, and hit the bell to receive notifications every time we upload new content. We greatly appreciate your support.
I knew it was a bubble, you know, for years. And I even rented a space. I had a stockbroker at the time and had just moved to Orange County from the Los Angeles area and rented a lot more space than I needed. So I was subletting space. And my tenants were always mortgage brokers. I could hear their conversations and he was a complete and utter fraud.
I mean , they were just getting people to fake their income and copy and paste it, because they would cold call people and say, "Hey, we can get money out of your house. We could get you a refinance." And they inflated the value and... There was a lot of fraud in the mortgage market. And I saw that people were being qualified for mortgages based on their ability to pay the initial interest rate.
And they forgot what would happen in the hypothetical case that the rates eventually reached their normal level. So I saw this happening and I saw people, you know, buying multiple houses, leveraging their homes. I knew that, well, sooner or later rates would go up, initial rates would expire, you know, people and nobody used fixed rates.
People used adjustable rates, you know, variable rates. So I knew this was going to end badly. I knew that the entities that were securitizing or guaranteeing the loans, Fannie and Freddie, were going to go bankrupt. I knew the subprime mortgages were going to explode. That's how I got involved with that hedge fund to short the subprime mortgage market , which you can see if you search on YouTube and look up Peter Schiff Mortgage Bankers, you'll see a talk I gave in 2006.
And in Las Vegas there was one, it was the Western Region Mortgage Bankers Association . In 2006. And there were like 3000 people there, maybe . And he had spoken the previous year, in 2005, which was really the peak of the real estate market. And I was the only one there who was pessimistic about housing.
And all the other bigwigs in the industry were, of course, very optimistic. And then they made me come back a year later because some of those pessimistic predictions were starting to come true in 2006. So I went, and the main reason I went was because I said, "Look, I'm trying to raise money for this hedge fund to short-sell subprime mortgages.
I'll go there, but I want them to give me a room so I can do a workshop and promote it because I'm looking for clients who want to participate in this operation." And they said, "Okay." And that's why I went. But when I saw the talk, I explained exactly what was going to happen, and it all happened in 2007, about a year after my lecture or that talk, when everything exploded.
But I explained quite well how everything was going to collapse, how subprime mortgages were going to explode, how the housing market was going to sink. I said, you know, all these mortgage bankers are going to be out of a job. And I also hoped that more of these mortgage bankers would want to protect their careers by joining this fund.
And, you know, out of the 3,000 people who were there, only one person invested. A guy. A guy sent me about half a million dollars. And about a year later, I think he recovered 5 million. But that was all. But that shows that very few people are trapped inside the bubble. And even though they were part of it, they couldn't see it.
Well, the bubble we have now is much, much bigger. And it's much broader because it's not just the house. Because housing prices are actually more overvalued today than they were in 2007. They are even less affordable than they were then. Well, but it's a bigger bubble because we have a stock market bubble bigger than the one that burst in 2000.
And the names related to AI, the hyperscalers, the companies that are driving the demand for AI, are a big part of it. But the market as a whole is more expensive than it has ever been in history. Yes. Well, we have a stock market bubble bigger than the dot-com bubble. And me, you know, you could include cryptocurrencies, which didn't even exist back then.
That the whole industry is a bubble. So put it in there. But cryptocurrencies, stocks and bonds—the bond bubble has already burst. But can you explain it to people who don't understand it at all? It's as if he doesn't understand the bond market or how it works. Yes, and what I call a bubble is when prices don't really reflect the fundamentals, the reality, right?
Prices are becoming completely decoupled from economic fundamentals. In the case of stocks, when prices...if we look at company earnings, company dividends, and other metrics, the price to pay is very excessive. That's how it is. And it reflects optimism; the crowd is very enthusiastic and they all firmly believe that profits will experience real growth.
And, generally, they are wrong when they have that mindset. And the same applies to the real estate sector. I mean , one of the reasons I also knew the real estate sector was a bubble was because I compared the price of real estate with the cost of renting. And renting was much cheaper back then . In 2006 or 2005?
Yes, I remember that I was still living in Connecticut. I had recently gotten divorced . And he rented an apartment in Stamford. And my rent was about $3,000 a month. It had a very nice place. I was on the top floor. It was like a duplex. My boat was right below me. I could see the pier. I had the sailboat there.
And it was a new building. It had janitors. It had a gym. I had a lot of things. And right next door were some old terraced houses. And they weren't nearly as nice as the ones she rented. But I went there because they were having an open house . So just for fun, I was right next door. So I went in. And I think they were selling these things for five or six hundred thousand dollars a unit.
And they were smaller than the one she rented. Not nearly as pretty. They didn't have such great views. A little dark. None of the amenities. Peter Schiff's experience before the 2008 financial crisis demonstrates the dangerous nature of excessive debt and artificially cheap money. The Federal Reserve lowered interest rates to extremely low levels during the dot-com meltdown, reducing the cost of mortgages and encouraging borrowers to take out more loans.
According to Schiff, he saw the warning signs early on. He observed that clients were taking on excessive debt, buying multiple residences, and relying on low short-term mortgage payments. Today, he warns that the same fundamental problems still exist and may even have worsened. According to Schiff, there is currently excessive speculation in stocks, real estate, cryptocurrencies, AI-related businesses, and other assets.
Investors may begin to believe that prices will persist indefinitely when they rise significantly above what the underlying fundamentals can sustain. The most important lesson is that bubbles can seem strong just before they burst. The rise in asset values can mask underlying concerns, and cheap money makes the economy appear better than it is.
According to Schiff, investors should be aware of debt, valuations, interest rates and purchasing power, in addition to rising prices. If you enjoyed this video, don't forget to hit stay up to date. Thanks for watching.
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