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are the stock market retreating from record highs let's get some reaction now from Peter Schiff CEO of euro pacific capital and Peter it's been an incredible record run here and the levels were seeing now even with this slight pullback were record highs not too long ago so what do you say well the bubble keeps getting bigger you know Donald Trump called it himself as a candidate he said it was a big fat ugly bubble he was right then you know he's wrong now because now he denies it it's a bubble because he's now the president and so it's his bubble and so he rather it be a bull market but the the valuations here really are extreme the complacency is also extreme I mean investors are willing to pay very high prices and have very little worry that the stock market is going to go down you know and people have you know very short memories I mean we've had two major 50% declines in the stock market you know this century you know since 2000 so we've had the market cut in half twice and it could easily happen again yet nobody seems concerned and I think one of the the reasons is because the last two times the market went down the Fed was able to bail out investors who bet on one bubble by inflating a bigger one so a lot of investors you know may have been conditioned to believe that even if the market implodes if they hold on they'll get their money back but you know the third time may not be the charm it's possible if the Fed can't blow a bubble big enough to bail out investors this time but still Peter you must acknowledge how well some of these companies are doing I mean do you report on valuations look at how well apples doing they have a pretty modest valuation other stocks like Amazon Microsoft are doing so great Roku I mean companies are benefiting from these technology trends right well I think they're really benefiting from all the cheap money that's been coming out of the Federal Reserve so yes it's very easy for companies to do well when you have interest rates at historic lows let's see how well these companies perform when interest rates normalized I mean that is the key it's like yes I they're doing well on life support but let's unplug all those gadgets and let's see how they do I think if rate were allowed to normalize you know what was that Warren Buffett used to say when when the tide goes out we see who's swimming naked well I think there's a lot of people swimming naked and you just don't know that because of all the the water that the Fed has been you know sprinkling into the markets but eventually the tides gonna go out you know and it's not gonna be pretty so do you think that tide kind of turns in the next year hey you know I don't know there's no way to know I mean I think Donald Trump is you know nominated somebody who will try to do his best to keep the air in the bubble Jake 8qe for exactly but you know at some point you know it's the market forces will overwhelm the Fed the market will go down and if it doesn't go down the dollar will collapse instead but either way you're gonna see the real value of US stocks come way down whether it happens nominally or not and I have a feeling if the Fed prints enough money to prevent the market from going down dramatically then the real losses will be even bigger because of the implosion of the US dollar okay so any advice then for investors in terms of where to put their money right now if you're worried about US stocks yeah look I've been putting my money outside the US market for years you know it was a great trade up until 2008 from 2001 2008 it was you know the returns were spectacular internationally in commodities and emerging markets you know then we had good years from oh nine through 12 2013 14 and 15 were bad years for global investors we had a big rise in the dollar a drop in gold of dropping commodities but the the tide has turned since January of last year and I think we're riding a big wave here I mean people who are in the US market are overlooking much better returns from much better of valuation levels that are happening overseas so I think people should take advantage of the overpriced US stock market the overpriced US dollar and sell and move money abroad get into the international markets I've developed and emerging get into the commodity space look at oil hitting a new two-year high again today this is going on in commodities across the board we are coming off of major bear markets where the infancy of new bull markets and I think the dollar is about to get killed this is the first year in many years now that the dollar is down but I think it's the first of many I think the dollar could fall for the next five to ten years in a major major bear market taking the dollar to all-time record lows and this will enable enormous profits for people who are invested outside the US in the right currencies the right assets the right companies and that's what I think we're doing with our clients that you know you're a Pacific Capital and that's certainly what I'm doing with my own money all right Peter I want to ask you about a specific market situation there are reports that the Justice Department is asking for CNN to be spun off in order for 18 tees acquisition of Time Warner to close of course Time Warner own CNN what's your reaction to something like this well you know I don't think it really matters much but I really wish the government would stay out I really don't like all of this antitrust legislation it all started you know with a populist movement early in the last century and I think over the years it has done far more harm than good I think the consumers are best served not by government regulators but by the free market so I think you know let companies compete let companies merge I think at the end of the day the consumer is going to win I am not worried about monopolies unless they're they exist by way of a government grant or government a regulation that stifles competition I think the free market and competition is the best thing that the consumer has and we don't need the government to make the market free I think the market does a very good job on its own and when the regulars try to substitute their own judgment and try to determine that things are anti-competitive I think they make more errors in judgment and I think they end up stifling innovation and growth that I think at the end of the day because of all the antitrust rat-like regulation I think the consumer ends up paying higher prices and then would otherwise be the case if the government just minded its own business even though if 18 tea bowls up on content they have more pricing power so within the consumer lose but potentially now there is so much competition for content I mean it's crazy to say that there's not going to be a competitive market look I remember when the government broke up the merger between Blockbuster and Hollywood video because they said they would dominate the VCR rental market I mean the market doesn't even exist anymore I mean it was not in a few years anyway and they were desperately trying to survive yet the government you know blocked a merger because they wanted to make sure there was still competition to rent movies I mean look at all the competition that exists even without any rental companies so you know this is nonsense there is plenty of content there's plenty of alternatives consumers have more options now than ever before this is ridiculous I mean these companies need to actually merge together to remain competitive you know in the in an environment that is that is hyper competitive right now so this well you know the thinking is you know Trump has criticized CNN's coverage of him so is that the ultimate reason that he wants or the administration won CNN sold look I have no idea if it's that kind of petty Vendetta or if the president has anything to do with going on I mean this is the type of stuff that's been happening you know if Trump was gonna drain the swamp I'd like to see some swamp draining over there you know stop you know nitpicking if if private businesses want to get together if the shareholders of these companies decide that it's in their economic interest to merge let the merge so Peter what do you make of the latest surge of Bitcoin in recent days it hits seventy eight hundred dollars at one point how high can this go well I mean I don't know I mean I guess there's no limit right because III there's no real value I believe in in in in in Bitcoin so if we can go to 8,000 it can go to 80,000 I mean I suppose the odds are lower the higher you get because you get two prices that are so absolutely ridiculous and of course you have the temptation you know people hold are holding out of these things at some point they're gonna want to sell they're gonna want to buy stuff right so at some point you know the markets gonna go down but you know I think what I've seen recently is more people looking at Bitcoin not as a fiat currency not as an alternative for a medium of exchange I think a lot of people are acknowledging that it's not going to be an alternative for you know typical people around the world to go out and buy a cup of coffee they're not going to be paying for it with Bitcoin now the story is that it's an alternative to gold that it's not really digital currency it's digital gold and that people could use it the way most people use gold now most people are not using gold as money even though we've used gold as money in the past today investors use gold as an inflation hedge it's a store of value as a safe haven and I think now they're trying to market Bitcoin as an alternative to gold they're even calling a digital bolt and they're trying to get investors and hedge funds and and and and larger buyers to come in and to some extent I think this marketing campaign is working and of course you know the returns have been so spectacular on Bitcoin I mean the people that bought in 3 4 5 6 years ago have made returns that we've never seen even in the dot-com bubble or any other bubbles I mean the amount of money on paper and maybe and for some people they've actually cashed out but the returns have been enormous and obviously those spectacular gains the and agreed that that you know that it creates there's a you know people are want to get it on it I mean people want people are hoping that the same thing can happen again that then it can go up another 50 times or a hundred times but it probably isn't going to do that at some point it's gonna implode but I have no idea when do you think bitcoin is a sort of legitimate alternative to gold no I don't think it is I mean I don't you know I III don't it you know it is an asset it's a digital asset you know what it's actual value is remains to be seen but it has nothing in common with gold I mean there are certain things that you could say it has in common with gold but you can't do anything with it I mean none of the of the real world uses of gold I mean gold is used in jewelry you can't make jewelry out of a Bitcoin Gold is used in consumer electronics it's used in medicine it's used in aerospace when you there's no use for Bitcoin other than storing it as a as an asset but that depends on other people valuing that asset other people it's all based on trust it's all based on confidence see that's what are the flaws that people who were initially violent buying Bitcoin saw in the dollar or in the Euro or in the end right all these fiat currency is created by government have no real backing have no real value so their value comes from confidence comes from trust comes from faith but that's the exact same way that Bitcoin arrives its value you know yes you know Bitcoin is is limited in supply unlike dollars or Euros that are unlimited but there is an unlimited supply of other crypto currencies that can be created that are as good or as a dent achill to Bitcoin or maybe will even be better and so there you have you know unlimited supply as well so I you know I think I don't think that the currencies are gonna work but they have made people a lot of money certainly the people who have cashed out a lot of other people have big paper profits whether they actually realize those paper profits well we'll see you know I think most of the paper profits are gonna vanish but you know some of them will be realized but at the end of the day I think it becomes a zero-sum game and the people who make money on Bitcoin those gains will come at the expense of the people who lose money right just like any kind of pyramid or Ponzi scheme somebody gets caught holding the bag and it's the bag holders that end up you know providing all the profits for the people who got in early and who cashed out right could be the hot potato situation all right I don't want to get caught with it when the music stops Peter Schiff always a pleasure chatting with you thanks so much
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