저자: PeterSchiff · 외국인
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Peter Schiff은 은행 시스템이 지급불능 상태이며 인플레이션이 걷잡을 수 없이 치솟을 것이라고 주장합니다. 또한 FINRA와 SEC, 그리고 정부 규제를 비판하고 있습니다. 그는 비트코인 현물 ETF를 과열된 이벤트, 즉 '소문에 사서 뉴스에 판다'식 행사였다고 평가하며, 수요는 이미 소진되었고 Grayscale에서 순매도와 자금 유출이 나타날 것이라고 예측합니다. 아울러 건전한 화폐를 옹호하고, 민주주의보다 군주제가 낫다는 견해를 밝히며, 자신이 운영하는 Puerto Rico 은행의 어려움도 언급합니다. ETF에 대한 낙관론과 대비되는 시각으로 소개되며, 내용은 대부분 거시경제 및 규제에 관한 의견입니다.
다듬은 글
the whole banking system is completely insolvent and the FED hasn't even raised rates anywhere near high enough to get rid of inflation we actually need much higher rates than than where the FED stopped the media keeps saying there's a disconnect between the voters and the economy no the disconnect is between the data and the economy see people think governments give them things government doesn't have anything it has to take it first it has to take it from somebody who produced it to give it to somebody who didn't but in the world of all powerful AI everybody can have everything and you just put your goggles on and get your stimulus check and you don't need a stimulus check your goggles give you whatever you want right the AI is so super intelligent that it's almost like a God because of finra the little guy can't even get professional help they end up having to do it themselves and they're more likely to get scammed mean I wish we had no finra wish we had no SEC eventually there's a collapse eventually inflation Runs Out of Control I've been trying to help people protect themselves from this crisis for a long time I'm investing to win the game I don't have to get out of my stocks I own the right stocks I have the winning hand ivilege to once again be at Peter schiff's home Peter the last time we were here it's about 10 months ago Bitcoin has since doubled and we had a big debate with your son about Bitcoin what's going on well I guess I should have bought some huh what's the future I mean FS now is well you know my son was trying to get me to invest in uh AI stocks back then I didn't even know what they were you know he should have told me Nvidia you know now he's been pushing me to Nvidia for some time uh because he's really into AI now not so much crypto anymore he doesn't really talk about that oh really what happened well AI you know he's just you know that's his new thing so what and so what do you think what what's your position been I mean the ETFs are these the next big thing for Bitcoin much like uh when gold had its ETF back in the early 2000s yeah you know that's what the Bitcoin Community is is hoping for or is you know that's the story they're telling but I don't think that's going to happen I I I don't think there's this huge penup demand for Bitcoin bitcoin's been around for a while now and it's certainly been in the spotlight since 2017 when it had the initial big run but then really 2020 2021 you know with all the uh Super Bowl commercials and you know just all the hype uh and you know we they had the Futures ETFs that came out a couple of years ago uh and a lot of stocks you know like Michael strategy came out coinbase you had you know uh um what's El Salvador lots of stuff in the news about crypto all the the uh celebrities and influencers that that jumped on the bandwagon so I think that most of the people that wanted to buy bought I don't think they were just nah I can't buy we don't have a spot Bitcoin ETF like I'm just waiting for that I don't think there's all this demand I mean they they think it's kind of like the Field of Dreams well if we build an ETF then all these investors are going to come and they're going to buy it and I think the buying already happened I think it was you know buy the rumors sell the fact for years um the rumor of these ETFs was a a major Catalyst to get people to buy because they wanted to buy before the ETFs so that they would already own it and then when everybody else came to the party and bought the ETFs you would make a lot of money if you front ran it well I think that that trade was was already done you know the the gold ETFs the the value there was a lot of people didn't want to buy the physical gold didn't want to store it they were worried about losing it and when you buy gold you you can't really buy it at the spot price you have to buy it in some form you got to buy a coin you got to buy a bar so that adds to the cost and so the ETFs took away some of that cost because now you're buying into 100 ounce bars which is a lot cheaper than you know coins but you know you didn't have to worry about storing it you can buy it very simply in your brokerage account so it did make it easier for a certain segment of the market to buy gold but with Bitcoin anybody who wants Bitcoin can just go buy it just set up a wallet I mean that's what everybody has done in fact the whole point of Bitcoin is not to have a third party uh it's your own Keys you don't have to trust somebody else you don't have to pay storage fees the only I think reason it might make sense for somebody to do an ETF is if it's in an IRA and of course they have Bitcoin IAS already uh but it is easier to buy the ETF than to set up one of these IAS but how much Ira money is really you know wanting to go into Bitcoin that's not already there I think people already bought Bitcoin in their taxable accounts it's completely inappropriate for an IRA I mean most of the big firms probably won't allow it certainly they wouldn't allow it to be solicited in an IRA because the broker could get sued uh for putting something very speculative like that they're making the allocation decision so to speak or even if they made a recommendation you know for cuz an IRA I mean it's supposed to be a retirement money supposed to be more conservative I mean not gambling with it uh so I don't I don't think there's a big uh case to be made for the ETF it was part of the hype and as you can see you know the day the ETF started Bitcoin almost hit 50,000 and it just got below 40,000 briefly a couple days ago so it sold off and almost all the ETFs in fact all the ETFs dropped 20% or more from their Peak price on the day they started trading which technically fits the Wall Street definition of bare markets so we already got kind of an immediate sell the sell the F sell the news but I think there's a lot more selling to come even more so you you don't think that I mean the idea is this institutional allocation might leave Bitcoin becoming this next1 trillion gold-like asset so in other words there should be at least a 10 plus X in it and with the finite Supply Kathy Wood says we're going to 500,000 inner bease scenario what's your bare case scenario well I mean first of all I mean the idea that the institutions are going to come and be the bag holders here like the the little guy got in years ago and now that we built this ETF you're going to see Pension funds and endowments and you know all the big sophisticated money is now going to buy in to this Mania right late in the game I I I I just I don't see that happening I you know I mean could there be some money dumb enough to bite at it you know like oh I'm going to just buy this because it's going up right the fomo um it's possible and I'm sure some money has flowed in but remember there's a lot of money coming out especially grayscale I mean people were buying grayscale when it was at a 40 50% discount to nav to play the eventual move to ETF which is now happened so and a lot of money is already coming out of a grayscale and a lot more money is going to come out of grayscale I mean even if you want to stay in an ETF why would you stay in grayscale at 150 basis points when other people are you know a fraction of that but you know grayscale used to be a big buyer of Bitcoin and now they're a seller and it was a one-way street right Bitcoin checked in but they never checked out because it was a closed end fund that's why it was trading at a discount well it's not going to trade at a discount anymore because when people sell they got to sell Bitcoin into the market so I I think the Dynamics have have flipped I think you're going to have a lot more Sellers and then eventually I think the money that went into these ETFs I don't believe these are the you know the the the Die Hard hoders even though one of them has the symbol hodal right one but but I think this is more trading money I think to the extent that people are going to be in the ETFs it may maybe people who were trading on coinbase which is why I've been saying it's negative for coinbase because I think some of the day trading is going to happen now um in the ETFs versus uh directly in you know crypto exchanges but I think a lot of the people that are buying now are you know buying as a trade buying to make money and if we start to break down Bitcoin um you know maybe cracks 30,000 or whatever the key is going to be 20,000 I think you could see a lot of people just getting out in fact people could put stops in on these ETFs you know just Market orders like if it dumps get me out at the market I don't know how Bitcoin is going to handle that I don't know what's going to happen when you get a bunch of sell orders that hit the market and one of the things that's happened in the past when you had a lot of sell orders with Bitcoin is all of a sudden there'd be more tether tether would just come out of thin air and buy up all that Bitcoin right well if they're just counterfeiting tethers and they can expand a supply of tethers and kind of use it as a like a plunge protection and and and buy Bitcoin but if people start dumping um the ETFs you can't there's no tether the ETFs need dollars when people redeem the sellers need to get dollars they can't take tether so all of a sudden you could have a lot of Bitcoin dumping on the market and only actual dollars would be able to buy so you think the ETF is a net negative for for Bitcoin I think it's going to be I think the potential of the ETFs was the positive that was the Catalyst hey you got to buy it because the ETFs are coming you got to get in before the ETFs because once the ETFs are here you're going to have all this new buying that's just like been sitting on the sidelines for years and it never made sense to me because first of all there were Futures ETFs which pretty much the same thing I mean same exposure there were lots of stocks that were Bitcoin proxies like micro strategy like coinbase like some of these other stock Michael sailor's company right I mean it was essentially at one point I think he even called his company an ETF I mean obviously it's not no one even knows what software they do I mean who cares you know you're not buy you're not buying micro strategy because you like their software business right all those guys have sold it anybody who is in micro strategy because they they like the company they're gone it's all you know crypto people that are in it now right um plus there are and have been spot Bitcoin ETFs in Europe in Canada the institutions are not limited if you're managing money for a big institution there's nothing that stops you from trading in Europe nothing that stops you from trading in Canada so if you wanted to buy a Bitcoin spot ETF they were there it's not like yeah you know so I think that now that you've got these there and there's 11 12 of them whatever all right that's it so now what now what are you going to do what's the next big thing that is going to happen that's going to sucker in more buers to keep the the Ponzi going um that's it I think this this is the end of it there's nothing left up your sleeve in crypto now that you've got the ETFs and what I do think is going to happen and people are missing the point you know Gary gansler did not want these ETFs but he kind of got backed into a legal corner but you know before they came out he was warning hey this is risky you know don't buy I think they're getting ready to come out with some more regulation on crypto and Bitcoin not just from the SEC but the B Administration uh you know AML kyc kind of stuff that's going to significantly increase the cost of trading in crypto but I also think they're going to issue some warnings to the broker dealer Community the invest advisor Community like hey we don't want you recommending this stuff and if you do recommend it and your customer loses and they take you to arbitration you are going to lose wow so it's going to be like and I know how the arbitration and you're I got out of Fina I I've never liked this about this heads eye win tails you lose mentality but it encourages uh customers to gamble knowing that they can get their money back if they lose and in fact one of the reasons that Wall Street a lot of the big firms won't take small investors right you try to open up an account for $10,000 $225,000 at maril Lynch right you know uh Morgan Stanley they they won't let you take open the account they won't take you and the reason is they say those small accounts come with a free put and what that means is if the investor loses money you have to give it back because they'll file an arbitration there's all these lawyers that'll take it on contingency and it costs you 50 100 grand every time someone sues you even if you win so if a guy opens up a $10,000 account and loses it and sues you for the 10 grand what are you going to do fight them no you write them a check so they just they won't take the accounts because they know it's like a casino where you're betting with the House's money but that you know one of my big critic criticisms of of finra you know cu the whole idea Finn was like oh we want to we want to help the little guy who's not sophisticated he's going to get ripped off by these you know brokerage firms well thra has made it so expensive to be a broker dealer and to service the small customer that nobody will even work with them so because of finra the little guy can't even get professional help they end up having to do it themselves you know self-directed and they're more likely to get scammed they're more likely to fall victim to fraudsters because the legitimate firms refuse to work with them because yeah because of the because of the government more people get ripped off I mean I wish we had no finra wish we had no SEC you know the SEC and Fina bless Bernie maid off in fact you know they said hey you can trust me look the government says I'm I'm okay I got the government's uh Good Housekeeping seal of approval you know I I'd rather have the free market if if broker dealers want to join a club you know if finer was voluntary I would have been all in favor of it but it was like you want to be a stock broker you you have to be a member so a lot of folks say that regulation would help be a catalyst towards Bitcoin crypto you actually think it's completely the opposite yeah you know and and it's ironic to see the crypto Community we need more regulation we want more government no the whole point of it was like we don't want government we want to get away from that but isn't that like an FTX where you have no supervision at all and then you get a collapse uh like like uh you know yeah well look again FTX collapsed the government didn't do that the the government didn't do anything about FTX until after it collapsed you know the Ponzi was the original creator of the Ponzi scheme right it wasn't it wasn't called Ponzi scheme until after Ponzi pulled it off but there was no SEC there was no finra when Ponzi was around his collapsed in less than a year the free market figured him out and and collapsed it Bernie Midol pulled off his Ponzi scheme for a lot longer right under the the nose of the SEC and and finra so the free market does a much better job of fiing out frauders than the government the government actually comes in and then cozies up with the criminals you know and ends up helping perpetuate their their crimes because the industry captures The Regulators and then ends up using The Regulators to stifle competition which is what happened I mean the reason I initially sold my broker dealer that I started in the mid 90s was it was too expensive to continue it I was spending millions and millions of dollars a year on compliance and when I first started compliance was a fraction of the cost so I started my own broker dealer but could a young Peter Schiff start a broker dealer today no way impossible so there are a lot fewer broker dealers they've gone out of business they've merged because they can't handle the regulation I mean my bank before the government you know conspired with the media to shut it down you know and ironically I a media falsely accused me of using my bank to help people launder money and vade taxes I spent millions of dollars a year making sure that nobody used my bank that was the biggest cost I had 65 employees of my bank 30 of them worked in compliance wow 30 I had one person in marketing one so one person to get business 30 people to to shut it down right to prevent business from happening we turn down um like 75% of the account applications and and we screened them most people wouldn't even apply because we had such a a rigorous process we said if you're doing this you're doing this don't even bother applying you know so we we we screened out who could apply and then we turned down 75% I mean what business wants to turn down 75% of its customers it's like but we did it um but yeah so I don't even have have that bank anymore you know I I sued the media in Australia for defamation in one uh but you know it doesn't come close to uh recouping my losses I'm I'm filing more lawsuits over there I didn't sue the New York Times but the guy that wrote the article I don't know if it was defamation but they he definitely lied he miss represented the facts in the article and and in because the the media wanted to create the false impression that my bank had lack a customer vetting or compliance when we actually had a stronger customer vetting than just about any Bank in fact one of the guys that the uh the only guy that the the New York Times Reporter Matthew Goldstein cited as evidence that my bank had lacks compliance I just dug up a YouTube video from 2018 where he's actually talking about the very account that he opened at my bank that he never used he only put in £425 and never even used the account so it's not like you know he has any experience really but it took over three weeks to get his account open but the guy was talking and I tweeted this out or not I posted it on X but I he he says you know I opened up the account and my God they asked me so many questions I wasn't expecting it it was very rigorous they needed all this information they needed all these forms they asked so many questions about the account about the the company he said it's a lot harder to open a bank account there than it was in the UK where it takes one day and you just give them like 12 pounds I mean he even admitted in fact everybody that the reporters in Australia and New York interviewed about my bank all the former customers former employees referral agents everybody said oh my God their their compliance was like over the top I've never seen anything like it I mean the main reason we lost accounts was because they couldn't handle the compliance because every time you wanted to send money out we we put you through the ringer so as an entrepreneur why why go into banking in the first place a broker dealer you know you shouldn't I learned that I mean I'll never do it again but you know I I saw a niche that I wanted to fill I me I was a 100% Reserve Bank didn't make any loans my bank was you know no customers were at risk all these Banks now are in solvant in the US because they they loaned out money for 30 years they bought mortgages and government bonds I didn't do any of that I probably had the most solvent Bank in the country and of course when they shut it down The Regulators claimed they were doing so because it was insolvent even though I had no debt and millions more in cash than than my deposits and you know when the the false allegations came out in the media in the New York Times and in Australia my bank at the time had about 270 million in deposits by the time they shut it down in June of 2022 there was only about 70 million left so 7 34 of my deposits got withdrawn because of all the problems that the media created we sent them the money how what bank could handle a 75% run right apparently none of them in March of 2023 when we had a banking crisis well none of them can handle it now I mean they only they don't even keep they only keep a couple of percent it's fractional Reserve so I was able to send back all the money but then the government took over the bank they've been in control for 19 18 months and since they took over not a single dime has been returned that's F receivership no not FDIC we didn't have any FDIC Insurance the local Puerto Rican government took it over oh wow but the IRS I think is the reason that they closed it they came down here because they wanted to send a message to the world that Puerto Rico wasn't going to tolerate money laundering or tax evasion because my bank got investigated by the US government for two years they they they they took hundreds of thousands of documents for thousands of accounts and they found nothing they found not only did they find that the bank did nothing wrong they've investigated thousands of customers and they haven't found a single customer that did anything wrong anywhere in the world yet they made my bank was the target of the largest money laundering tax evasion investigation in the history of the world five governments investigated my tiny little bank they probably spent more money investigating my bank than anybody else I mean one of part of the irony of it is you know we mentioned FTX Sam bankman freed was running his giant fraud out of the Bahamas that's not too far from Puerto Rico right they didn't do anything to him they were spending all their time investigating me well he was donating to everyone yeah well he was yeah I didn't give any money to any Democrats and he was out there virtue signaling he was talking about how he didn't want any money for himself he was just like I just have this one pair of tennis shoes and a T-shirt and I live with 14 roommates and here's my beat up old car right like meanwhile behind the scenes is like lifestyles of the Richard famous right but you know I'm honest about you know what I'm doing so are we going to have another banking crisis I mean you've got a unique Insight here you were in banking and I'm sure I mean the banking crisis happened within a month of the last time we were here we had the bank term funding program that's coming to an end here on March 11 so they right right we'll see I think that needs to be followed up by a rate cut right away to hopefully uh prop up uh some of those bonds again otherwise we'll walk into another banking what do you think they're probably going to go back to QE you think so look in March of last year we would have had a worse financial crisis than 2008 had the FED not stepped up now that doesn't mean they did the right thing they did the wrong thing they they should have allowed the crisis because a worse crisis is going to result from the delay and and what another worse crisis is ahead of us 2008 Yes and worse than what March would have been last year had we had it in March of last year right they they always kicked a can down the road because they'd rather have a problem tomorrow even if it's a bigger problem tomorrow than a smaller problem today because then it's somebody else's problem right uh but I think the banking system is completely insolvent in the United States I think it is much in much worse shape than it was in 2008 when it collapsed and usually people will say well yeah there's problems but it's not not like 2008 but they think it's not like 2008 because it's not as bad it's actually not like 2008 because it's much worse you know so there there there there's two big real estate problems or problems the bank has in 2008 the problem was mortgage loans that went into default people stopped paying their mortgage and the reason this was a problem for the banks is because when somebody doesn't pay their mortgage well you got to sell the house that's the collateral for the loan but if you remember back then people were making zero down loans um and so they didn't have much and real estate prices went down so I loan somebody 500 Grand to buy a house um now the house is worth 300 Grand the fact that that's happened in and of itself is an incentive for the borrower not to pay of course walk away yeah and especially if they had a teaser rate on their mortgage so their mortgage started out and the guy was paying maybe 2,000 a month but now he's paying 3,000 a month but he only makes you know 2,000 a whatever he was he was paying a lot of money for his mortgage because he thought he was going to get rich owning a house when it turns out that he went broke he's not going to make that payment why why why why make payments when you're so underwater that sounds worse than it is today where you've got people locked in at 2 and a half% mortgages 30-year no it's not worse it's it's worse for the borrower although the borrower just walked away if they put it down payment they lost it in 2008 they just walked but you know you could go and rent a place or do something else so the problem was when the loan defaulted the bank lost and you know when I was a CR critical of the um you know adjustable rate mortgages and nothing down and things like that I never criticized it from the point of the borrower I always said the borrow was smart to put nothing down because then you got nothing to lose I mean if somebody is dumb enough to let you freeroll right Putting a down payment was the mistake that the problem with a zero down or low down no dock arms was the lender the lender was giving somebody you know a free BET on real estate hey I'm buy this real estate if heads I win tails the bank loses well it was tails the banks lost and and so they lost money and you know a lot of banks should have failed and unfortunately they got bailed out by by the government but most mortgages did not default it was still a small percentage but that was enough to wipe out the bank Capital because they didn't have a lot of capital it was big pyramid well today it's the opposite problem the problem isn't the mortgages that default it's the ones that are current that keep paying because this time real estate prices haven't crashed the mortgage prices have crashed H so the bond market essentially has crashed so the the the homeowner doesn't own the mortgage he owes the mortgage he owns the asset the bank owns the mortgage the mortgage has crashed so if I loan somebody $500,000 at 3% and they don't have to pay me back for 30 years what's the present value of that mortgage oh maybe you know 30 40% half so the banks are underwater not on the real estate but on the mortgages now the borrowers they're going to pay they're not going to stop paying on these sweetheart Deals they got 3% right they're going to they're going to they're going to take that mortgage to the grave and um it's the only thing that's not going up right everything the price is if everything is going up except your mortgage right so it's the the mortgage is the homeowner's biggest asset it's the bank's biggest liability so the banks are losing money on every mortgage and the homeowners aren't going anywhere um and they they even if they wanted to they can't they can't sell because they can't buy anything else because they can't get that mortgage the mortgage is ortable they can't take the mortgage from one house and move it to another house and the buyer of their house can't even assume that mortgage so they're stuck there right so the real estate Market's not moving houses aren't for sale so home prices are still high no one could afford to buy because the price is structured for 3% mortgages and they're 7% so the housing market is dead but so the banks have lost a ton of money but it's not just mortgages they bought they bought treasuries and things like that so they're way underwater that's why the banks can't afford to pay interest go to your bank and say hey how much interest can I get well I can't get anything oh then I want my money I'm taking my money out of your bank I'm going to put it in a money market where I can get 5% right that's the crowding out everybody's loaning money to the government the banks don't have any money that's why the banks had to go to the FED why did the banks need money because the Depo depositors wanted their money and the banks didn't have it well they still don't have it because they gave it to the customers how are they going to repay these loans in March all any that's why I think they're going to extend this program so you think uh this uh this the only way essentially the Ponzi keeps going is If the Fed extends the bank term funding program and if they don't and they call these $160 billion of loans due will have banking crisis 2.0 what does that do for the consumer exactly exactly and but also depositors if the if the FED doesn't extend this that's going to create a bigger run on the banks because you're going to have to take your money out of a bank if you're worried it's going to fail because the FDIC only goes to what 100 250,000 now what is it you know so if you've got a lot of money to bank you're not going to leave it there you're going to take it out and put it in one of the two big to fail Banks so any bank that's not too big to fail is going to fail that's another example of where the government comes in and and distorts the market because they give a comparative advantage to the bigger Banks uh but the other thing I wanted to point out about why the banks are insolvent particularly a lot of the regional Banks it's not just a Residential Mortgage book it's commercial and Commercial is a different problem commercial is more like 2008 where it's the default problem and the collapse of commercial real estate values because when people bought a lot of this commercial real estate interest rates are at zero and Commercial Real Estate is like a bond it trades at a cap rate and the lower interest rates are the more commercial real estate is worth because what investors just do is they look at the income right and they compare it well I can buy this piece of property and collect rent or I can buy this Bond and and clip coupons so it's you know it's the interest rate determines the value of the commercial real estate so when interest rates were at zero um and and you had rental streams from property commercial property prices went way up and that was also helpful because in 2008 when the banks were losing money on on their uh residential loans they weren't losing any money on their commercial loans because commercial real estate went up and everybody paid but now what's happened well you had covid and that started the work from home craze so a lot of office space is empty you also had the bankruptcy of um what's that company um the the banks sorry no no no the the company that that rented out all this office space Oh we work again for the second time we work yeah so now you have all this we work space right we work didn't that was my joke always always about it but uh but now you have all that space on the market right they were some of the biggest tenants in the major major markets in the country uh that space is up for up for sale interest rates have risen a lot so that's also brought down real estate but the rents have collapsed because the properties are offices are vacant then you also have uh shopping centers malls that are half empty why well not only are people working from home they're shopping from home uh and they're shopping less because they're spending all their money on food on on rent on utilities on a healthcare they don't have as much money left over for you know things that you know restaurants or or you know or or or stores you know that they would just go and and buy buy things that they don't really need just stuff that they you know they like liked so you have all these vacancies that have collapsed the income so commercial real estate prices you look at most markets they're down 30% 40% 50% and in some cities you know where the crime has exploded ever since uh you know we had the black lives matter protest with um um uh uh chovin and George Floyd and all that stuff when you know all the police just stopped enforcing the laws and they stopped lock lock up the shoplifters um insurance rates have gone through the roof losses due to theft so stores are shutting down and a lot of uh uh employers don't even want their workers coming to work they're afraid so what do you think how does this manifest like well this so this this these are huge losses for the banks because the owners of this commercial real estate when you borrowed let's say you borrowed $200 million from a bank to buy a piece of property and and that property is now worth $100 million and your loan was 7 years and now it comes due and when you borrowed the money you were paying you know 4% and now they want 10 I mean what's the odds that you're going to you know even want to stay in no you're going to mail in the keys you're going to give the bank back the building better give them a $100 million building than a $200 million cash so the banks are looking at massive losses on their commercial real estate at the same time they have massive losses on all their Residential Mortgages and and government bonds so the whole banking system is completely insolvent and the FED hasn't even raised rates anywhere near high enough to get rid of inflation we we actually need much higher rates than than where the FED stopped and not only do we need the FED to tighten more oh I forgot I had my phone it's all right turn that off so how let me finish this but not only not only do we need the FED not only do we need the FED to tighten more we need the government to tighten because you need contractionary fiscal policy as well as monetary policy right you can't have one without the other because the engine of inflation is the government spending more than it collects in taxes because you're you're you're putting artificial into the economy now it's worse when it's monetized by the FED when the FED is printing the money to buy the bonds that facilitates this extra spending but budget deficits are still 2 trillion plus per year that's stimulative policy and also look at the credit markets Consumer Debt is at an all-time record high credit card debt is at an all-time record high household debt the savings rate continues to plunge every everybody keeps spending well that's the fuel for the inflation what the FED needs to do to put this inflation Genie that it let out of the bottle on purpose right it's not like this happened out of left field not only do they have to contract a money supply which is growing again rather rapidly but they have to contract credit and they have to change uh people's behavior they have to increase savings and reduce consumption and spending that's how you fight inflation but we haven't done that at all and if you go back to the very definition of inflation which is an expansion of the supply of money it also includes credit inflation is an expansion of the supply of money and the supply of credit so credit expansion is inflationary and we've had credit expanding the entire time that the Fed was fighting inflation which means the fight has been inadequate now why is inflation come down the way they measure it it was 9% now it's 3% well again nothing goes in a straight line right so maybe it goes nine then it goes three and the next move is 12 right it's just in a wave up the trend is is higher right you'd want to buy the dip in inflation right if you're looking at that but the main reason inflation came down was the market anticipated all the rate hikes and that strengthened the dollar the dollar Index Rose about 30% and uh in that environment brought down oil prices commodity prices and the strong dollar put a l on import prices so that helped we also had a small contraction in the money supply after a major expansion but through QT then eh quantitative tightening yeah which is now pretty much ending the fed's rate hikes are over so now the markets are starting to look at the Great Cuts which is going to weaken the dollar so ironically the FED says Hey we've won our inflation fight we can cut rates by indicating that inflation is going to come roaring back because that brings down the the dollar right it's actually loosening the financial conditions but I think the dollar is turning I think it's top it's getting ready to fall Commodities have bottomed oil is bottomed uh we're going to start to see a a big move up and the FED is in a box now because it's promised the market rate cuts it can't you know pull the rug out from under it but when inflation really surprises the thing that's going to be a big problem is we're going to be in a recession fact we're probably in a recession right now now you know that I know the economic data doesn't say that you know we just got this you know big GDP number right 3.3% unemployment is really low but they were saying the same thing in the summer of 2008 they were saying we're not going to have a recession even though they were in one it's just that the government data didn't recognize the Great Recession that started in December of 2007 they didn't recognize it until December of 2008 so the government in December of 2008 came out and said you know what all the economic data we released for the last year was wrong all the good data was actually bad data we've been in a recession the whole time and they went and revised down everything so they could just as easily do the same thing now they could come back and say you know what you know all those good numbers that we gave you all those jobs that we said were created they actually weren't created we actually lost millions of jobs and you know all that economic growth that we said was there actually we we were in recession the whole time they could easily come back and do that and I think it's it's likely that they will and I think that the reason that Joe Biden is so unpopular I mean it's unprecedented how unpopular but nobody has ever been less popular and the same thing with KLA Harris she's the most unpopular vice president ever why what does she do I mean I I don't know I could you name anything she stands for anything she's done that would would justify this degree of unpopularity I think it's just the voters taking out their frustration on how bad the economy is the economy stinks and the American electorate tends to either blame or credit so if the economy is bad the White House gets credit I mean if the economy is good the White House gets credit if the economy is bad they get to blame whether it's their fault or not the voters are just going to vote their pocketbooks remember Henry uh Carville it's the economy stupid well if you want to know why Biden is so unpopular it's the economy stupid right so the econom is bad so the media keeps saying there's a disconnect between the the voters and the economy no the disconnect is between the data and the economy the voters have got it right the economy is awful wow so why not keep uh or potentially as the fed the the Ponzi going so to speak If the Fed starts lowering rates or at least signaling that rates come down now losses at Banks start evaporating start reducing the cost of borrowing maybe start reducing some of those credit defaults which you mentioned debt and and delinquencies are higher now than where they were before covid so it does seem like there's some unsustainability with the spending even just this morning we saw once again Lower inflation and pce numbers yet uh higher spending so it seems like the FED should be in this position of cutting is it just your position that that will create substantial inflation again or uh can we uh can we bail out the banks that way and remember that spending was financed in large part by a depletion of savings which are already low so it's more debt it's more credit but there's a reason that Ponzi schemes are illegal and and and that's because they can't continue indefinitely they always fall apart so there's always people holding the bag that end up losing money uh and so no they can't keep the Ponzi going indefinitely because it's a Ponzi by definition now governments can generally get away with it a lot longer than you and I could uh because they they protect themselves they kind of write the rules but they can't you know suspend the rules indefinitely uh and and the reason I think they can't really get away with it anymore is the way they've gotten away with it in the past is by creating inflation that's how they they do it right quantitative easing is inflation by definition it's just a better name it's a euphan ISM because if the government said our policy is to create inflation people would well I don't like that I don't like inflation that makes prices go up so if they just call it quantitative easing they don't get a lot of enemies although in Europe they were even more abrupt they kept saying you know or even here we need more inflation you know that was they actually told us that they said the problem is we don't have enough inflation like we have a lot of problems that was not one of them lack of inflation is not your problem but the government said it was and they had to solve it by creating more inflation so that's what they did every time we had a problem they created inflation to solve it but they've created so much inflation at this point that inflation is now the biggest problem and how do you solve the inflation problem with more inflation you don't so when we get the next economic downturn when it's going to happen in an environment where you still have high inflation right it's not going to be 2% or any you know close to it now let's you know inflation is let's say four 5% whatever it is and unemployment really spikes the banks start to fail and they print a bunch more money and now you take that inflation rate and send it right into the double digits that's it I mean you're the dollar crashes I mean the bonds crash you know cuz the bond market remember you look at that chart of the bond market all the time the FED has been doing these policies we've been in this secular bull market for bonds which started in 1980 81 and ended in 2020 so you had a 40-year bull market in bonds which is now the beginning of a bare Market which who knows how long it's going to last it's going to be brutal it's going to be around for a long time so now if the FED is going to try QE in a bond bear I don't think it's going to work I think the next time the FED prints money to buy bonds bonds are going to go down and not and of course what are really going to go down are not just treasuries but the bonds that the FED is not buying because treasury buying of you know the FED buying of treasuries will will offset some of the decline it should pump up prices right but but they're not going to buy all the treasury so other people would be selling but what about the mun bonds who's going to buy them what about corporate bonds you know as you know rates are going to Surge across the Spectrum but nobody could afford to pay I mean just look at the national debt this is where it's it screams at you the national debt is 34 trillion it's growing by a trillion a quarter in calendar 2024 something like 12 trillion of that shes has to be rolled over in addition to the 4 trillion of new bar that's 16 trillion who's going to buy that right now the FED is selling fed's adding to the problem you know who else is selling Social Security they were one of the biggest buyers of treasuries during that bull market they're now one of the biggest sellers because Social Security because so many people have dropped out of the labor force or retired Social Security doesn't collect enough money in payroll tax taxes to cover the cost of the benefits of the people who are already retired not to mention the ones who are going to retire next week or next month so they're selling treasuries the other big buyer of treasuries were foreigners Japan China you know they're not buying I mean that they're selling too uh so this is a huge problem there a it's a huge bond market B you think there'll be a lack of buyers and as they return to QE and increase the supply substantially of bonds there won't be enough Bond buyers there already isn't enough Bond buyers that's why Skyrocket again that's why they're going to go back to QE and again the other point interest on the national debt is about now the same as National Defense a year ago it was nothing it was two or 300 billion a year now it's almost a trillion in another year or two interest on the national debt if interest rates just stay where they are right don't go higher which they could do they just stay where they are interest will be more than Social Security or Medicare it'll be the single biggest expense in a couple of years about 50% of every dollar the US government collects in taxes income taxes Social Security taxes 50 cents of every dollar will be needed just to pay the interest on the debt not pay back any of the debt just the interest on the debt and before the end of this decade assuming that we can get there without a crisis which I I don't think is possible do you think it's imminent oh yeah well it's it's been imminent for a while but before the end of the decade which is not that far away 100% of government tax revenues will be for interest on the dead now obviously that circumstances can't exist you can't have a government that simply transfers money to bond holders and has nothing left over for anything else I'm not talking about I mean not even to pay the salaries of the the people that that that clean the toilets in the capital I mean nothing no money for anything except interest on the debt so this is how much this thing is ballooned out of proportion you know even Janet Yellen you know a year ago or a year and a half ago when she was asked if she was worried about the $30 trillion debt she said no the debt didn't matter as long as the interest payments were low that's what she said I remember at the time saying well doesn't she realize that those interest payments aren't fixed the FED is going to be raising rates you know I'm only worried about it when interest rates go up well then you should worry about it now because interest rates are going to go up but this is why the FED is going to stop cutting rates it's not because it's one it's battle against inflation it's lost it's going to surrender it's cutting rates because nobody can afford to pay it's going to cut rates to prevent default insolvency right but that's going to lead to Runaway inflation could your Sun be right where artificial intelligence expands GDP so much that that our debt just doesn't matter anymore and everything's great and there's no recession what what are the odds of us being able to escape massive pain and you mentioned it yourself layoffs and unemployment which is obviously a lagging indicator yeah I mean obviously I mean my son thinks the odds are High um I don't know why he's he's that confident but I think the odds are very low I mean look obviously if if AI you know leads to such an enormous uh increase in productivity I mean in theory right if I everybody can have their own a AI that was so super intelligent that it can conjure up anything you need almost like you remember Barbara Eden from I dream e genie right whatever Tony Nelson wanted she just blinked and he could have it right well if AI could do that oh I'd like a brand new car and the AI just creates it from the molecules in the air you know it creates your food it it gives you everything you need and you don't nobody have well sure no one no one needs anything I mean we don't need money right the problem isn't money it's stuff we need things right we need food we need shelter we need clothing we need entertainment um um you know there are a lot of things that we need and we can't have them unless we produce them right we don't have to produce them ourselves somebody has to produce them and we have to do something of value to exchange with the productive people so that we can have things but if nobody needed to work if we could if we could just have all the things without having to do the work well then the problems are over right we we don't need anything uh and then it doesn't matter about you know any of this right you just put your goggles on and get your stimulus check and you don't need a stimulus check you you know your goggles give you whatever you want right you the AI is so super intelligent that it's almost like a god it has harnessed the the powers of the universe the force right I mean this is like the ultimate where it can just give you what you want you don't have to work to earn something and of course government see people think governments give them things government doesn't have anything it has to take it first it has to take it from somebody who produced it to give it to somebody who didn't but in the world of you know all powerful AI everybody can have everything you know because you're every AI so obviously you know we're not going to be there but to the extent that look if if if a if a factory can you know get rid of a 100 workers and replace it with you know an AI chip or whatever it's a computer chip an Elon robot um then you know we you know production productivity goes up you know if if if we could have a much more efficient Health Care system because all the doctors are robots and they diagnose you immediately or they they figure out a cure so you don't even need an operation they're so super smart that they just here take this pill it'll cure everything that you have right all our health care costs go down you know I mean so yes I mean you could say that we could get a get out of jail free card from this productivity Miracle um but look you know I think that there is a lot of potential in Ai and it may take many more years or decades for it to fully uh develop and in the meantime you know to the extent that AI does uh eliminate uh the need for workers the way governments are set up today those workers just might immediately start getting government money it's not like they're going to do something else that's valuable they're just going to start collecting government money uh and that's more inflation and also you know the these programs like Social Security and Medicare they depend on people working for a paycheck if I replace my workers with a robot there's no more FICA right because you know and so the government loses a lot of that tax revenue and if they start spending money because they're they're giving everybody like a stimulus check because they no longer have a job so in the short run there could be a a a negative to the AI not because of capitalism but because of government because of because of socialism um but you know the other thing is that AI is not just in the America it's all over the world and you know to the extent that the world is a lot better off then you know that could be a negative for the us because we kind of depend on everybody else being in trouble because they buy the dollar like as as a safe haven people are worried about Europe they're worried about Japan and when they they buy the dollar so we're the best of the worst so to speak so people buy the doar perception of that right so if things get better hey they don't need they don't need it but also you know America is uniquely vulnerable because of the Dollar's status I mean we it's like you know you live by the sword you die by the sword I mean the dollar status is the source of our standard of living right so right now we we benefit from the doar being the reserve currency because we don't have to work as hard as everybody else we don't have to produce because we could print money instead and we can exchange that money with for the stuff everybody else produces because everybody wants our dollars because they're the reserve currency not because you could do anything with them um you know we have huge trade deficits you know trillion dollars a year so the source of our strength is actually going to be our undoing uh because once we lose that privilege the whole economy collapses because we've built it on the foundation of that privilege being there we have this service sector economy right where everybody is in the service sector well that's only possible because we don't have to manufacture as much because we can rely on China or other countries to manufacture for us because they need our paper money but if they don't need it anymore because the dollar has been demonetized as a reserve currency because we've created too many of them we've created too much inflation because we have too much debt now we can't import anymore without exporting and so now the economy doesn't work I mean imagine a Walmart with no with no nothing on the shelves I mean so all those workers at the store are going to lose their jobs if there's nothing to buy right those jobs are predicated on their being stuff on the shelves and and a lot of the service sector economy is is predicated on you already having stuff you know that you bought but if you don't have the manufacturing if you don't have the actual Goods then you can't afford the services and the whole thing is going to just implode so the economies on the verg collapse the dollar crashes I guess two things to ask is what can I as an individual do to protect myself and then beyond that Beyond just me covering my ass like what can we as a society do to kind of remove ourselves from this centralized government and this impending doom yeah well I've been trying to help people protect themselves from this crisis for a long time and because we haven't had the crisis people think well shift's wrong right he's preparing for you know this crisis that's never going to happen no I'm preparing for a crisis that is going to happen it's just happening later um but all of the the things that make the crisis inevitable all those problems not only still exist but they're they're bigger so the crisis looms even larger than it did a decade ago you know um we've just blown a bigger bubble but while we've you know kicked a can down the road all these problems have gotten so much worse and so what this means is that we have the crisis it's going to be much deeper because we've dug ourselves into a bigger hole now again maybe AI could soften the blow you know anything that that that the free market could do uh to counteract the damage that government does I mean that's basically the dance that we do capitalism is a positive Force for good uh the free market which is constantly finding ways to increase abundance uh make things better make things cheaper increase living standards and then you have governments that are working at the exact opposite purp purpose they're trying to undermine productivity they're trying to add unnecessary burdens and regulations and red type they're trying to counteract the benevolent forces of the free market that want to allocate resources and labor to their highest and best use politicians want to allocate them to their friends sure whoever's going to give them the the most donations so FTX yeah so government government is acting and then you have the free market that is trying to lower prices and the government that creates inflation to push them up uh you know so whatever the government the the free market can do to undo the damage of government but you can only imagine the world that we would live in today if Government had stayed at the same size it was in 1900 you know had we never had an income tax have we never had a social security have we never had a Federal Reserve had the government stayed the same size it was in 1900 which was less than 5% of our GDP had we had no government borrowing right imagine imagine the world that we would live in would even recogn I mean would we have less control of domestic policies uh International policies uh you know the idea of government is they're here to protect us Peter who would protect us if the government wasn't as massively large as it is like I said with my bank you know every customer could have taken out all their money and then the government came in to protect them and now no one gets any money for almost two years no one's gotten their money now that they have government protection when when I was protecting them in the free market everybody had access to all their money at all the time but no what the world would look like look I I think that had the government not get involv gotten involved I think that you know the typical family today um would have one bread winner most likely the man but it could be the woman but you wouldn't have a husband and wife both having jobs uh people wouldn't be Moonlighting you wouldn't have people with two or three jobs my guess is by now we'd probably be down to maybe three or four days a week working so the weekends would probably be maybe four four days long five days long uh we'd be so much more productive we'd have a much higher standard of living God knows what inventions we would have come up with uh what drugs we would have come up with you know without the FDA you know uh you know screwing all that up I mean we maybe we would have cancer by now who knows right where we maybe we would have developed AI a decade two ago I don't know but I know I used to watch The Jetsons when I was a kid did you ever see that show so yeah they The Jetsons came out in the 60s and they just assumed that you know we would just keep expanding the way we were back then you know um but I think George Jetson worked two days a week he was complaining about these two-day work weeks are killing me and he was say look at my button pushing I had to push the button four times yesterday like that's all he did right it was his job um he worked at this place spacely sprockets right they made sprocket so who the hell knows what a sprocket is right it's was like a widget a sprocket uh but I think it would be something like that I mean maybe we wouldn't be flying around in you know the flying cars but we would all be working a lot less we would have a much higher standard of living uh than we do now you know and if you look at you know America relative to the rest of the world Americans had a standard of living in 1940 1950 that was unrivaled there was nothing like America we I mean American capitalism created the middle class which didn't exist in Europe I mean Americans used to go to Europe and there was an expression the Ugly American and the reason that we were ugly is because Americans would go there and all of a sudden they'd be rich because everything was so cheap there and so we would act kind of arrogant when we were there just you know not on purpose um but you know I mean everybody was rich when they went to Europe because it was they were poor in comparison to America's middle class uh but today Americans don't live that much better than the rest of the world in fact there are a lot of countries that have higher standard of livings than America uh and and the only reason our standard living isn't much lower is because of all this debt but that just means that in the future it's you know our standard of living is is going to come way down when this bubble bursts and we can't uh live beyond our means anymore do you think the wealth Gap is just going to widen or will there be some great reset that gives everybody that opportunity to you know help reduce the size of government and get back to a normal playing field yeah I mean the wealth Gap I think is going to continue to widen as a result of the fed and government policy remember the biggest wealth Gap is in Socialism or communism right you have a few people who work for the government that have all the wealth and everybody else else is in abject poverty right and yeah there are a few people that are connected to the government that that manage to get some get something capitalism is the great equalizer you know that's what uh Narrows the Gap and it creates a lot of wealth now you're going to have some very rich people in capitalism but they earn it because in capitalism you're rewarded in proportion to your contribution the more you benefit Society the more money you earn because that's what profit is profit is the gain that's derived from doing good right if if you're able to uh combine the the resources in the economy that are scarce right everybody the resources are scarce so if you're going to use these resources you need to use them efficiently and if you can take these resources and create products and and services that people value more than the resources it took to create them you get rich because people buy what you have to sell but a capitalist can't force somebody to buy anything they have to voluntarily do it people make a choice I want to own that I want to buy that because it's going to make my life better and I'm going to give money to the company that made my life better so the more money you collect the more people's lives that you've improved that's the Invisible Hand of capitalism and that's that's the beauty of the system but yes I mean there are going to be people that work harder that are smarter and do more good and they're going to achieve more wealth but you always have people who become envious of other people and the politicians play on that Envy right and they say these people are rich that's not fair you should have more money vote for me and I'll steal their money and give it to you right because you're more deserving you're more caring because they have their money because they're greedy right you know they're you know they're just they're just ripping people off and exploiting their workers right that that that's what they tell you to get get they get they get the votes and people yes the reason I'm not rich is because I'm a good guy I don't exploit people I'm not Cutthroat in evil right like those rich people are right because that's a way to kind of L you know justify the fact that you're not rich instead of saying I'm not rich because I don't work as hard I'm not ambitious I'm not as smart right that's why you're not rich on that note uh Brett Whitten over from Arin vest I know you love Arin vest and Kathy over there slightly different opinions uh but uh they argue that there's a chance the Federal Reserve might be biased in cutting interest rates substantially maybe even before the election to preserve the stability of the Dollar by preventing potentially a trump election and keeping their jobs what's your take on that well I agree with the idea that the FED wants to reelect Biden and that they don't want Trump and that they know know that the economy is going to be key and so one of the reasons they'll try to pump it up between now and November is to help Biden and how do they do that well they need to cut rates they need to go back to quantitative easing uh they need to you know create some more phony wealth they're try to artificially boost up the economy so that people feel better and and and vote Biden so yes I would agree uh that that is you know part of the reason that the FED is going to cut it's not the only reason or part of the reason they're going to go back to QE um but what they're hoping is the the negative effects of that meaning the the the spike in inflation won't happen until after the election so basically you know the voters won't realize what they're getting when they when they buy Biden right they because they they're they're in for a shock um in 2025 when the negative consequences of you know the fed's actions show up of course though the government will never accept responsibility right when like during covid they print all this money and create massive inflation and then we see the consequences of it with you know soaring prices and they never accept responsibility for their actions it's like yes well we we printed all this money just to to send out these stimulus checks and everybody spent them and that's why prices went up right they they don't want to accept responsibility they act like this just happened coincidentally oh it's all the supply bottlenecks that's the problem look if if we gave everybody a million dollars right and then everybody ran to uh uh you know uh the the Ferrari dealers to buy a Ferrari you and then well obviously Ferrari prices would go way up and you would say well it's supply problem there's not enough Ferraris of course no no there there's never enough Ferraris there's too much money right you could always claim it's a supply problem right if you just print a bunch of money and give it to people yeah they want to buy stuff but Supply is always the problem because stuff is scarce and limited you know it's the demand that's the problem when you give people a bunch of money to spend the only way to get an equilibrium is for the price to go up so if the government just doubles the supply of money right away and the supply of stuff is the same everything has to double in price so that the economy works right it's like if we have an auction and in one room everybody has $100 and that's all they have to bid and you have the same merchandise and you have another auction everybody has $1,000 to spend where are the prices going to be higher yeah it's a great analogy yeah yeah I mean it's where it the the because the limiting factor is the stuff the money is just how we allocate the stuff right and and we set a price based on the quantity of money and the quantity of stuff you know now different things will have different values depending on how much people want something versus something else right so prices some prices can go up but then other prices have to go down they all have to adjust but all of a sudden everybody has more money like they did during covid and especially worse because in covid we gave people money to do less work so cuz it's the work that produces the stuff so if you stop working you you don't have the stuff right worse to both case scenarios you're supposed to if you're so what we should have done is told people okay you can't go to work because of covid so you're not going to get any money either because you're not working so you can't spend we told people don't go to work but here's money go out and spend it spend more money while you're staying at home than you used to spend when you actually had a job so it was the worst possible combination of monetary and fiscal policy I called it out at the time I said this is a inflationary cocktail this is terrible and you know of course I was right so to distill uh all of these issues that we have it sounds like you've got uh mortgage back Securities that are in the toilet office real estate multif family commercial real estate potentially in the toilet maybe not so much multif family's office obviously but you've got these these massive issues that are creating revaluations and losses at Banks your thesis is that the FED May prop up Biden here which would continue fiscal expansionary policies uh and basically worsen a 2025 reignition of inflation and then when the FED finally realizes that they've reignited inflation and you still have the bond issues a lack of bond buyers you've got the commercial real estate issues and now inflation uh combined with the debt and the debt instability now you actually have the real unemployment skyrocketing because companies have to lay off just to have any earnings left over and you have a real crash yeah I mean you have to understand that the FED causes the problem by keeping interest rates artificially low that's the source of the problem because in capitalism the interest rate is very important and the price has to be right and the price has to be determined in a free market you never want the government to set a price and we understand that for most things like we don't have a a bureau that decides how much milk is going to cost or how much gas is going to cost or how much anything is going to cost we let the market determine that right because if the government picked a price it would guess wrong and either we'd have a shortage we'd have a surplus right but for some reason we've decided that interest rates there we need a pilot Bureau we don't want capitalism we just want a bunch of men in a room to get together and decide what they think the price should be now once we've done that it's not a surprise that they always think the price should be lower than it it really is because low interest rates benefit who debtors borrowers right artificially you know we got this consumer economy so there there is a bias to wanting rates lower than than than they need to be but by doing that by setting a rate that's lower than where the free market would have set it you are causing problems structural problems that get worse the longer interest rates stay low now every time the FED tries to raise rates back or normalize them that's what exposes the problems that the FED has created and now the market tries to fix the problem by reorganizing resources repricing assets and that causes a recession or crisis the government's response is always oh my God we can't allow this cure we need to make the disease worse so now let's print more money let's shut it lower interest rates even lower keep them there even longer so because of qe1 QE2 qe3 uh covid stimulus all that the problems in the US have never been greater than they are right now right all we and everybody who credits the FED for solving the problem doesn't understand the problem or that the FED has made it worse and so right now you know all the warnings that I was giving a decade ago or more the problems that I warned about haven't gone away they've gotten worse but the people who didn't understand them still don't get that and they're still looking to the FED to solve the problems that the FED creates if only there was some sort of digital currency that the FED couldn't manipulate so yes if that's yes yes Bitcoin fixes this that's what everybody if only there was this but you know what but Bitcoin doesn't do that you know bit Bitcoin you know again Bitcoin is just one of tens of thousands of digital currencies except Bitcoin isn't even a digital currency because it's not used as a currency it's a digital asset but it's a digital asset with no value because it doesn't do anything you know and people claim well that's the same thing as gold gold doesn't do anything yes it does gold look I mean this watch is made of gold right so there gold is used for this watch um you have a cell phone there's a little gold in there uh you know so there gold is used but yes there's a lot of gold that isn't used it just sits there in a vault but what it's doing is it's storing the value of its future use that's what that gold is is doing every ounce of gold that's stored could be used in industry and maybe will be used in industry at some future date right um but when you're storing your Bitcoin you're not storing anything that anybody can ever use because you can't do anything with your Bitcoin all you can do is hold it um and there's 20,000 other currencies that you can also hold that don't have any value but actually if you wanted to use a cryptocurrency as a med of exchange or as a unit of account there are hundreds of them that do it much better than Bitcoin and who knows what new one is going to be created I mentioned you know my son lost interest Shin yeah well my son my son lost interest in Bitcoin I mean look AI is coming right tell us about that why why did he lose interest in Bitcoin I don't know it's just a fat I mean people lost interest in the hula hoop you know you know the pet rock what happen you know once upon a time people used to stuff phone booths now we don't even have phone booths but even what you know but people stopped stuffing them long before we lost the phone boots look you know it's a fad but look I think people made money like just like people made money trading beanie babies um you know people jumped on the bandwagon I mean why did people buy tulips in Holland you know I mean so it's happened I mean people it's it's it's been a giant bubble Again part of the FED a lot of bubbles were inflated due to the fed's cheap money and people looking for Alternatives um but Bitcoin doesn't fix it you know it look if everybody with Bitcoin the problem is so you take something that inherently has no value and we all just pretend that it has value we agree it has value and because we agree it has value we we want it and because we we've limited its Supply right um the price goes up if more people want to buy it and there's no increase in Supply or the supply is it increases slowly um the price is going to go up but the problem is what happens if people stop believing what happens if new people don't want to buy it uh it implodes if it's all about buying and holding it and the only use cases to hold it and you only hold it because you think somebody else is going to want to pay you more for it in the future because if you want something if you have Bitcoin but you want a car you want food you want to buy a house you want to take a vacation you got to sell some Bitcoin you know the the the grocery store doesn't want your Bitcoin and even if they took it they'd have to sell it because they have to pay their workers their salary they got to pay rent they got to pay tax ta um So eventually the Bitcoin has to be sold and if there's not new people to buy it then the price is going to implode I mean that's what they're doing now with these ETFs they're hoping to draw in new buyers because they need new buyers to keep it going and the higher the price is the more money has to suck in to sustain it um but the whole thing could collapse I mean if people stop buying you know one Satoshi could crash the market I mean if I want to sell one Satoshi and is not a buyer you know where you know wherever that Satoshi trade sets the market for all the others right last trade so is it because the dollar let's say is the the reserve currency it always has that imputed demand whereas Bitcoin doesn't necessarily always need to have that imputed demand because it's not a reserve currency then should you make it a reserve currency well it's not a currency it's not a reserve anything um but the dollar has that uh Demand right now because everyone in America will sell you whatever you need and accept dollars that is the unit of account that is that we use that is the medium exchange because everyone believes in it everybody believes in it um now at some point they may stop believing they will stop believing but one of the things that keeps the belief going is the legal framework because remember there's a US government that collects taxes and a big military right but the military isn't the thing it's paying for the military so the US government um takes all those taxes and taxes have to be paid in dollars and so every American who doesn't want to go to jail needs dollars because the government said you know you give us these dollars you know I an example that my dad told me a long time ago of how this works which you know uh is a good example think about a bunch of kids in a schoolyard and there's one bully that beats the crap out of everybody and the bully says you know what I'm going to uh come up with a little uh note and if you pay me $5 I'm going to give you this note and this note says you paid the $5 you won't get beat up and so you give me the you know and so every time I come around you got to show me this note if you don't have it I'm I'm going to kick the crap out of you right so all of a sudden people want to buy these notes because if you own these notes you're not going to get beat up well now you know the people in the schoolyard will value those notes if they you don't have a note you might you know hey I'll give you my my lunch for your note right because you know but what gives the note value is the fact that the bully is going to beat you up if you don't have it right that that's the US government the US government is like look you know you got to have my paper you got to have these dollars cuz if you don't have them come April 15th we're taking your ass to jail right you need these so everybody has to get these dollars because that's what the government takes that's really so what you're saying is because Bitcoin doesn't have a bully who is forcing you to choose that exactly there's no one there's no one that can kick the crap out of you if you don't have Bitcoin right the government the government in fact the government won't take your Bitcoin for taxes you have to sell your Bitcoin to get dollars that's the only thing that they will accept um is is is US currency uh and so that gives it value and that's the same thing with uh every other currency you have a Sovereign Nation that says this is how you have to pay your taxes right and so everybody needs to earn these so that you can pay your taxes because that is the law so that helps keep it going but that doesn't mean that you can't have hyperinflation me they have taxes in zagu they have they you know they have taxes in you know other countries if they print too much money it's not going to matter weaker bully I guess huh but what about the other strong bully in the world China can we should we invest and buy the dip in China and the Chinese consumer and Alibaba yeah look you know the Chinese stocks have gone down a lot um you know I own some I mean I I really would like to own more than I do um but you know part of the risk the political risk is that the US government comes up with sanctions and basically says you can't own these stocks you it forces you to sell them is that a trump reference well Trump did it but Biden didn't do it I mean you know who would be worse for for investing in China oh I I I I assume Biden is worth worse for most things um but you know it's it's unconstitutional that the US government can tell you that you know you can't own an investment but if the government forces Americans to divest themselves of Chinese assets it just benefits the person who gets to buy the assets it might actually benefit China if they get to buy their assets back right they sell them to Americans and then they buy them back cheap um but look China is the rising economic power and yes they are experiencing growth pains they have problems some of them relate to uh they're hitching their cart to our wagon I mean they're you know they're accumulating trillions of dollars and they're financing exports they're basically vendor Finance they vendor Finance trillions of dollars of exports to the United States that was a mistake um but these are growing pains uh China is on the ascent America is on the decline you know from where we were as a world power uh so we're we're on a different slope unfortunately you know they they they went from total government complete communism and they are introducing elements of capitalism into a communist structure we went from almost pure free enterprise and we've been gradually introducing socialism so we're kind of you know moving in opposite directions we started at different points the key is have we passed you know when do we get to the point where we're more socialist than they are right you think that'll happen well in in a lot of things it's already happened I mean it hasn't completely happened um but if you're like a small entrepreneur you're a young kid want to start a business General business it's join finra well forget about finra but if you're young if you're you know 20 years old and you want to go out and start a business it's probably easier to do it in China than wow I I I'm shocked by that why yeah I mean you fewer forms and regulations and permits and licenses and it's not just the federal government that licenses you you know you have states and cities there's all kinds of things you know that you know let's say you just wanted to you know open up a barber shop and and cut hair you just can't do that you need to get licens as a hairdresser hair styler you you need to go to school why can't I just cut people's hair what the hell you know it's like I mean like what's the worst thing that happens you get a bad haircut you don't come back you know I mean a lot of people found out you know my my wife started cutting her hair during Co she did a pretty good job she never you know she never took any lessons she just has a little aesthetic you know looks at the hair and you know um so but yeah I mean it's it's the government makes it a lot harder and then you have to keep all kinds of Records yeah you know when my grandfather came to this country uh my father's father he became a carpenter he came here he was 13 14 years old didn't speak any English didn't have any money no welfare no food stamps no government assistant he survived and he started a small business hired some people I mean he never became rich but he was self-employed but I don't know that he could have survived if he had a deal with workman's comp and payroll and and ta Social Security I mean he just probably collected some money and paid his workers with cash he earned cash and he probably didn't even keep records he didn't pay any income taxes I mean that stuff started in the 30s but when he came here 1900 they didn't have any of that 1890s whenever he got here you know it was like wow you know you didn't have I mean you wanted to start a business you just started a business and you didn't have to keep all these books and records of course it's easier to keep books and Records now because we got computers thankfully you know they didn't have any of that stuff back then do you think that there's a a chance we can continue to see spending the way it is now uh the stock market continues to run into the election rates come down and despite the fact that we're spending more because we've expanded Supply so much through greater manufacturing that we actually end up with deflation or well first of all manufacturing has been in a recession for about two years yeah so we're actually producing less not more um we're importing more so is capacity going up though maybe utilization no it's not it's not now now some companies are starting to introduce AI in a way that is helping productivity but we're not seeing it in the the end results yet I mean maybe things would be worse if we didn't have this these gains uh and there's a major investment going on right now in capacity you know in in in in in computing power that's why nid is stocking everybody is buying all these gpus and and so they're making a major investment that may pay off in the future uh and may not I mean who knows maybe people are overestimating how this thing is going to be I you know I don't know you know um but no there's it it's not going to happen in the next year now does that mean that the stock market can't keep rallying of course not I mean the stock market could keep rallying um and uh but that you know the dollar is going to have to break because the only way to keep the stock market going up is not to fight inflation to surrender to inflation which undermines the dollar which ultimately undermines the whole us system because it's all predicated on the dollar um the deficits are going to keep Rising um unless you know and the government's going to have to step up QE to fund them especially as I mentioned Social Security deficits are going to get bigger I mean nobody is talking about cutting soci Security benefits very politically unpopular nobody wants to raise the payroll tax in in fact all we've done is cut the payroll tax that was one of the things we did in Co every time there's a recession oh let's lower the payroll tax you know well you know and now we're forgiving student loans where's that money coming from again that was an asset that the government owned but remember every time we forgive a student loan it's inflationary because when people are paying student loans they're they're not spending that money on goods and services they're sending that money to the government which is reducing the deficit or making it smaller but when you tell somebody as a student loan you don't have to pay that loan anymore well that now they have more money to buy stuff and you've expanded the money supply uh and it's inflation and who's paying for it people think that student debt relief is free no it costs everybody money because the price of everything that you need to buy will go up the more student loans are forgiven there's almost $2 trillion of student loans outstanding and because the government is forgiving them the the the they're growing even faster because there there was always a moral hazard that's the problem where I mentioned how government always does harm student loans is one of the best examples because in the 1960s is when all this started right student nobody borrowed money to go to college my father and mother went to college none of them took out loans now my father was the youngest of eight kids said his my grandfather was a carpenter he said they could couldn't figure out if they were upper lower class or lower middle class but they were not even you know middle middle class yet my dad didn't need any student loans Wow and his parents didn't pay for college he had a summer job he weighed tables and that's what his friends did there was an old expression I'm working my way through school that's what people did now they borrow their way through school but the reason we got these student loans is during the Vietnam more days the voting age was was initially 21 they lowered it to 18 they said well if you're old enough to fight you're old enough to vote so they which was BS but they lowered the voting age so now you have all these people who are 18 who are voting well what are 18-y olds doing they're all going to college how do you get their votes let's give them loans let's happens to it so this is what they told people don't work over the summer have fun right have a vacation go to Europe we'll give you the money for college we'll loan it to you pay it back later when you've got a great job right so this is what started it what started these student loans now the minute the government started giving kids money to go to college the colleges were like Whoa We Could raise our prices and they started increasing prices because of the access to money and they started throwing things in to college you know nicer dorms nicer gymnasiums different things because the kids had the money well then tuition went up and then the government kept saying oh college is now more expensive we need bigger loans we need more money you know I went over like I looked I did an article about this years ago I looked at the tuition in Harvard because you can go back to like you know 17 you know 100 or 1800 and Harvard's tuition would stay the same for 30 or 40 years in a row exactly the same then it would go up a little bit then it would stay the same for 30 or 40 years right it's not like now where they raise it every single year right so before the government got involved College was affordable right nobody had to borrow money to go to college it was you know it wasn't cheap you had maybe you had to get a job now if you were Rich you didn't have to work your parents could afford to pay you and it wasn't anywhere near as expensive as today but the government came in with student loans to make College affordable and they made it astronomically expensive and in fact not only did government artificially increase the cost of a college degree right they made a college degree much more expensive they also destroyed the value of it because now because the government loans all this money to kids to go to college everybody goes when my father went most people didn't go to college you just you know you just you know you just got a different type of job because most jobs didn't require a college degree so if you actually got a college degree it had some value but now everybody gets a college degree right so they used to say like hey you got to go to college right otherwise you're going to be working at McDonald's right well now you got to go to college to get a job at McDonald's right because they all have college I don't know if you ever saw this I did a video this is about 12 years ago you go on YouTube and type put in Peter shiff college right and I walked around Bourbon Street in New Orleans one one day I'm down there for this conference and I went to all the bars and the strip clubs and you know whatever was there and I I I talked to the people that were you know the bouncers driving the petty cars uh cleaning the the trash cans I asked everybody did you go to college uh when did you graduate what was your major and everybody I talked to had a college degree everybody and everybody had debt but nobody had a good job interesting some of them had multiple I mean you'll laugh you watch this thing but the government did this to people and now you have the government saying oh look at all these students they have all this debt this is terrible why do they have all this debt they never could have gotten that debt in a free market the only reason that Banks loan them the money was because the government guaranteed it and now the government makes the loans and think about this you can borrow money it doesn't even matter what your degree is doesn't even matter what your GPA is right you can go to college and major in you know uh you know women's studies you know or gender equality or some whatever kind of nonsense and you could even get a master's degree in it and you could borrow all this money the same the same as if you're you know Ma you know doing mathematics or computer science or engineering they don't care and they don't care what your grades are you can be flunking out as long as you pass you can keep borrowing the money and you can go to school four years five years six years you can keep change I mean it's ridiculous the free market would never screw something up this badly and who benefited from student loans because it wasn't the students they they suffered it was the colleges un ities that got to overcharge the students you know they're living high right they you know they're making all the money that that that everybody is Bor the country is poor because all of this money that could have been used to finance the building of factories right productive investment was loaned to students to blow in college you know and waste four five six years of their lives when they could have been out working doing something productive said they were just getting drunk how does do gen Z get ahead today your or your children for example8 and 10 I believe how do they how would they make it in kids white kids made it because they won the lottery of this the sperm Lottery right so how does a normal child that age make it yeah no it's it's going to be difficult some of them might leave the country to make it really I mean if there's more opportunities like look look at what's going on now in down in Argentina uh I you know I with jaier M yeah I mean look if this is the beginning look you go to 1900 Argentina was one of the richest countries in the world per capita I mean there was an expression you know riches in Argentine right I mean they were making a ton of money they were very wealthy down there uh and socialism destroyed the country they bankrupted themselves they finally elected a true free market libertarian you know he walked right out of the pages of an Iran novel you know you we've got you know as a president of a country now why did Argentina elect somebody like this well because there it's a basket case down there they've had so much socialism for so long that they're just they have a belly full of it right and they're just barfing it all up right um we're not there yet we're not willing to elect a guy that's promising Freedom we still want to elect people that are promising free stuff the argentinians don't want any more free stuff because they know how expensive it is right they can't afford any more free stuff they want to be left alone they want the government to get out of the way and so to the extent that these reforms stick and Argentina stays on that path a lot of Americans may be moving down there maybe me well because they had to go through massive uh economic pain 40 plus% poverty to I guess come to the recogn recognition that either their currency wasn't strong enough or they had too much inflation or just mismanaged government policies or a combination of all of those so now you have basically that great reset happening in Argentina do you think that same sort of reset will come to America well I mean we're definitely going to get the pain right we're definitely going to experience the consequences of this whether we make the right decision like Argentina has potentially made I don't know you know we could make the wrong decision and make it worse we yes I mean we could we could completely go all in on communism socialis we could you know if our politicians succeed in blaming this massive crisis that's coming if they say you see this is what happens when you have some capitalism we need no capitalism we need government to control everything we need the government to take over the means of production you know all decisions must be made by the benevolent leaders in government because these greedy capitalists have already proven how much damage they could do right I mean who knows uh you know what the voters are going to uh you know buy into but yeah there's a lot of risks uh but eventually there's going to be some kind of uproar there's going to be some kind of a revolution you know that's one of the main reasons that I object to all of this um intrusions on our privacy on the part of government because at some point you know we may want to have a revolution and you know the more power the government has to monitor and control us the less likely it is that that Revolution is going to succeed it's like a free market Revolution you're saying people or no like people just like civil disab are just people just trying to fight back wow you know that's one of the reasons that a central bank digital currency would be so harmful why because the government would know everything that you do the minute you bought something they knew exactly what you bought you know oh he bought some uh some uh article on freedom or something on how government look get them or ammo yeah whatever you got a gun or yeah I mean they would force everybody underground if they you know they can control you to that degree they know every you know every little dime that you spend is that true of credit cards though already well they they already have access to that but it's not even direct because it's still a private company that has the records they'd have to get the records but if it's the government currency they have the records then they they have it automatically they are the record yeah they they have they have everything they don't have control yeah they they have all that information on you wow and yeah so I mean I mean it should be resisted that's at least one of the things Trump is saying is no dig no Central Bank digital currency I'm not going to allow that uh because you know he does see the threat there what do you think Mikey uh one more cryptocurrency question you mentioned before that the free market is really good at finding the Ponzi schemes even better so than government would be yes how come Bitcoin hasn't been discovered as a Ponzi I know now we have the ETFs and all that but go back a few years how come nobody's found Bitcoin as a Ponzi scheme and sold out why isn't it crashed yet maybe it's not a Ponzi well yeah well yeah it's obviously it's gone on for a long time and so to the extent that I'm right that it's a Ponzi and it's not like a classic Ponzi it's more of a a a of a hybrid you know it's kind of got elements of a Ponzi got elements of a pyramid elements of a chain letter um but it's new right it hasn't been used in this form before and due to the the internet and the commun the way we can communicate the potential audience participants has been greatly expanded I mean when Ponzi was operating his scheme or even Bernie maid off I mean how many people really could could get in you know uh but it was so easy for people to to get into it so I think that it's not that it's not going to collapse it's just that this has enabled it to have a longer life and I do think that ultimately the governments are going to react in the future and probably Outlaw a lot of this stuff I mean China has already done it but once everybody loses you know their money the government's going to come in and do something um which they always do right after all the horses have left the barn they they try to come to the Rescue by by closing the doors on on an empty Barn um but yeah I mean it has gone on for a long time but the interest interesting thing about it is the peak was almost three years ago so it really stopped growing now some people say well that's just temporary well we'll see but if you go back to 2021 which was really the peak that was when we had uh all the big money coming in the ads were going nonstop I mean the ads have kind of recirculated again resurfaced with the ETFs but we had all the ads we had all the all coins we had the nfts uh we had um uh you know uh El Salvador we had sailor uh all this stuff was going on you know we had three or four Super Bowl ads I don't think there's any cryptocurrencies crypto companies advertising in the Super Bowl this year um you know we had stadiums that were named for crypto crypto.com so um I think that was like the blowoff top and so I think now you know the air is coming out of the bubble it's it's taking longer they've been able to breathe some life into it again with the ETFs but now that they're here um I think that that good news is in the past now and it's set up for a disappointment if we don't get all this new buying and then all of a sudden the people that got in want to get out and the people that bought in anticipation of the ETF demand you know once they think it's topped out uh but does that mean it can't can't possibly make another new high and take out 655,000 remember all those people that had you know laser beams in their eyes that was for Bitcoin 100,000 right so it was supposed to be there a long time ago your neighbor is betting that he will buy home in this neighborhood with Bitcoin going to the Moon is is he going to be disappointed well a lot of people have already bought homes in this neighborhood with their Bitcoin that's why the prices went up so much so the the early money cashed out the smart money um that got in I mean I guess I mean I could have got in I was I I was too smart for my own good I outsmarted myself because I looked at Bitcoin you know when it was you know below $10 I don't remember if it was below a dollar or not but regardless it was it was low and I just outsmarted myself and I just thought well you know and I overestimated everybody else's intelligence to make the same conclusion wow but it was I mean if there was ever a bub with my name on it this was it right I should have got in on it on the ground floor but I also have a problem like I can't like buy something and and publicly talk about it if I don't believe in it so I would have had to buy it and kept my mouth shut which I guess I could have done so top five Investments now what are your top five investment recommendations now maybe not recommendations but what where what do you think for yourself your top five we don't want Fina get upset well fin has nothing to say about it now because I I'm not a member anymore after 30 years I I'm fin refree I didn't renew any of my licenses and I pulled my affiliation which ones did you have by the way which oh I had pretty much most of them I mean I had your standard you know Series 7 that people have but I I was a registered principal which is4 series 24 I was an option principal which is series 4 I was a municipal Bond principal I was a financial principle which was like a 27 the finop oh yeah was I was every because I owned my own firm I had all these light licenses I had to get a whole bunch of them you I had like a dozen of these things um and those are hard tests I I just passed well when I took the test though they were on paper oh what's that you know yeah I I I I had have a number two pencil two pencil but you know now they've upped all this continuing education crap which all the continuing education isn't about how to be a good adviser it's about how to comply with their rules and regulations that's what the tests are for that you all the AML and all the other compliance and you know stuff like that but so I'm not doing it anymore but look what I think people should be doing I mean first of all the do-it-yourselfers that have you know their own brokerage accounts discount brokerage firms they should be loading up on my mutual funds right uh because those funds have been created and are managed with this perspective of of understanding how these events are going to play out okay and what companies are best positioned to not only weather it but actually benefit from it what companies and they're almost all overseas companies and their primary consumer is not in the United States because Americans are buying on credit they're buying with currency that's going to collapse in value I think if your business relies on American consumers you're going to be in trouble why uh mutual funds versus say ETF well you could I mean I convert my funds into an ETF okay that the thing isn't just that it's my it's the fund it's what I own it's it's it's the businesses that I've invested in you're not going to find that in any other mutual fund or ETF they people aren't investing the way I am and I and I am I I have a a long-term Focus how is that like give us a structure is it all in on Argentina well most most um funds are managed to kind of mimic some type of index or Benchmark and so they're really like a closet indexer they they may beer a little bit from the index to try to outperform it by a bit but they don't want to underperform it by too much either my funds look nothing like their benchmarks and that's why you'll see some years my funds are number one out of like 350 funds and some years they're at the bottom right it's because I'm I've got I'm I'm not afraid to be very different than the indexes because I know the index are indexes are dominated by the most overvalued assets stocks that have the most to fall but in the short run magnificent five six those are all overvalued yeah I mean and the sectors that they're in I mean I I'm investing to win the game okay to to to have to have you know and that's not apple or Facebook or Google or well no you if you want to outperform in the short run people can own those stocks but they're so overpriced you're not going to make any real money in the long run you could make money in the short run before the Music Stops if you get out in time but I don't want to I don't want to base my investment strategy on hoping I get out in time I don't have to get out of my stocks I own the right stocks right I I I have the winning hand I just have to keep my cards until you know the we can show them a lot of people are are are going to lose but as long as they don't have to show me what they got right they could they could you know Bluff they could put chips under the pot um so my funds are are are position right own value assets good dividends I got to get some that's all right uh hold on maybe real estate in included in there or would you add real estate at this to or is that dangerous to allocate to right now anyway getting back to my funds first yeah yeah so I own businesses that you know are low pees you know four times earnings five six seven eight you know some some of them are higher PS depending alibaba's down there would that be part of it well we have we don't have Alibaba we do own like we own tensent you know which is you know something similar um uh and we own it you know in in Hong Kong this year or no in in in in um Singapore no no that's Hong Kong it's in Hong Kong um but um they pay good dividends and most of the businesses that we have are selling products or providing services that that that people need and that people are going to continue to buy okay um not the companies that are selling people things that they they buy if they can afford it because they they have money left over when they finish buying the things that they need uh I want to buy you know companies that have pricing power because there's a lot of inflation so they can raise their prices and I want companies that have consumers in the emerging markets in places where people are going to get richer not poor where people are spending from income not credit cards you know where they have adequate savings for their retirement where they're not dependent on a government-run Ponzi scheme uh and you know you want to have a lot of exposure to non-dollars you want to have resources I mean Commodities I mean the the gold stocks in particular I mean are just so super cheap because gold is going to be r valued uh much higher than it is once uh people figure out you know where we're headed and and where we are and so there is an opportunity there so I have a gold fund uh I have a emerging market fund miners or gold itself like no the miners okay yeah you I mean you gold itself people should own as a store value as a safe haven you know 5 10% of your portfolio should be uh in metals and you should have some metals you know on your person like in your home just silver because you may need them you may you may go to a situation where that's how you buy things right if there's you know really black markets uh if there's shortages and price controls and a lot of bad things could happen drone power won't save the day H drone no you're not going to be able to buy anything with that money if nobody wants it you know and especially if it's illegal to charge a market price if you want to buy something you're going to have to do it on the black market and you may have to do it in something that the government can't track right the guy you know cuz there it's controlled by the seller so the seller may say hey I've got some of these products you know that you need but I I want silver I want something that the government doesn't track because it's illegal I'm doing something illegal I shouldn't even be selling you this right I'm breaking the law I don't want to get caught so you got to pay me in something that I you know that they're not going to know that I that I that I that I did this transaction um but my funds I think are unique um you know we have some property trusts in the funds you know that own property but real real estate you know is is is a hard asset a real asset it's not quite as portable and as liquid as let's say gold but you know you can generate income from Real Estate either you can rent it out or you can you know you can Farm it what property funds would it be like uh multif family developers home builders yeah I mean we have some um Asia no I don't own any in the US forign cuz I'm trying to get out of the US get out the dollar even at wait even out of us real estate you want to get out of well I don't want to be in the publicly traded Vehicles okay okay now us real estate to me is you know it's going to be it's not going to be homogenius you know and you know I was telling people for a long time yeah you can go out and buy a house as long as you get a 30-year fixed rate mortgage because that's your big asset the fact that you were able to borrow all this money cheap the only way to lock it up was to buy a piece of property but I still said look it makes a difference where the property is you know uh it's not all the same uh but now you can't get a 30-year loan you know at 3% you're going to pay maybe six and a half seven which is still probably a decent rate um but it's not like it was um but yeah I mean people could still buy property if it if it pencils out right you know the values that are there but I think the market is overpriced um and in real terms right if you want to think about how much gold do you need to buy a house sure you're going to be able to buy a lot more house with your gold in the future you won't need as much gold to buy to buy the house because in in those real terms it's going to come down oh that's because you think gold prices will go up not because you think real estate prices will come down well it's because I think the value of the dollar is going to go down and as the value of the dollar goes down the price of everything else goes up okay so the value of homes denominated in dollars would actually go up right but not up not not up as much as in Gold okay okay okay and so that really shows you that the real price of real estate is going down even as the nominal price is going up but I don't think that it's just gold that will go up more than real estate you know corn you know cotton Commodities Coco right I mean and what it costs you know your your your your insurance you know your health care you know everything else you know you know your grocery bill I mean everything is going to go up more than your house now the thing about your house is the leverage component to it right because you're you're you're borrowing money to buy the asset and it's it's the it's the The Leverage that can end up making you some money because inflation wipes out the debt inflation transfers wealth from um creditor s to borrowers so the the lender loses at the borrower gain that's why you know the US government one of the reasons they create inflation on purpose is because the US government is the world's biggest debtor and so if inflation they have to keep it going they have to keep inflation of yes because that's how they can inflate the debt away because so the pon keeps going I go long stocks the debt is unpayable right you can't pay the debt off so they try to reduce the value through inflation but again it doesn't continue in some benevolent cycle eventually there's a collapse eventually inflation Runs Out of Control right they they they can't you know uh they they can't keep it in control it always gets out of control right uh it's like they think they can control the fire but but they can't right because it it's got to get bigger and bigger bigger like like like a drug addiction I I I'm gonna but people think they're going to control their addiction I can you know I no no because you keep needing the more you do a drug then now you don't get the same effect you always have to increase your dosage and eventually you know now you're taking too much so we keep needing more and more inflation to paper over the mistakes created by the last inflation again look at all the debt we have now look at how much inflation we have to create to prevent rates from rising because it would the whole thing would implode I mean what if interest rates went to 10% right I mean they went to 20% in 1980 George gamon believes that this is what's likely that the yield curve is indicating we're about to go to potentially much higher rates in the future well we should go to a higher rate I mean fundamentally we have a lot less savings now and a lot more debt than we did in 1980 uh so the market should price PR credit higher now especially the US government you know in 1980 we had 1 trillion in debt now we're 34 trillion in debt in 1980 we were the world's biggest creditor Nation now the we're the world's biggest debtor we had trade surpluses in 1980 now we have trade deficit so just looking at the us we're a much worse credit risk right than we were back then and so you know the the worse of a credit risk you are right the lower your FICO score the more expensive it is for to borrow yeah so our cost of borrowing should be higher now than it was was back then and you know just supply and demand we have more debt less savings that means a higher price to clear the market but let's say let's say rates went to 10% um between let's say between now and the next few years okay and the national debt goes to let's say you know 40 trillion well it'll be there in a year so let's say 50 trillion let's say in four or five years we have $50 trillion debt and we have 10% interest rate well what's 10% of of of 50 trillion five trillion a that's that's more than the government collects in taxes sure it's a fifth of our economy that's just interest but also when you have all this short-term debt which is what we have right and we and as it matures we keep rolling it over short term people can take their money back we're all focusing on the interest what if we have to repay the principle because people are under the impression that we never have to repay the principal right well that's not true because we're borrowing the money we're not stealing the money right so like when people tell me we never have to pay back the national debt I always say well have you discussed this with the lenders that they realize that's the deal right they never get their money back but if people don't want to buy Treasures anymore and the treasury matures right they go to the US government they bought a one-year treasury okay let me have my money back and the government says well don't you want to buy a brand new one no thank you I just want my money back I don't want to buy another one how do we convince them to buy another one well how about if we pay you more interest how about 6% n I'm still not interested I want my money back 7% 8% right it takes but we can't pay so if we're not able to raise interest rates because we can't afford it it's not just the interest it's the principle MH and and so where's the principle going to come from it's going to come from the FED now remember the which exacerbates the problem right when when Ben beragi first did quantitative easing before they called it qe1 because it was the only one he went to Congress in 2009 and there was you know some Republicans who were said hey wait a minute you're monetizing the debt this is bad this is Banana Republic style you can't monetize debt that's inflation beraki said oh no no we're not doing that we would never monetize the debt no no we realize that's bad we're not doing that he said this is temporary we're going to sell these bonds right back into the market we're just doing this it's an emergency we're just temporarily buying these bonds and mortgages we're going to sell them so this the balance sheet is going to go right back down as soon as this crisis is over so yeah no we're with you we would never monetize this debt right so back then I said he was lying cuz I said there's no way that you could do this and then reverse it I said it's a monetary roach Rotel you could check in but you can't check out that's why I said that when this is over they're going to do it again you know that we'd have more qes than Rocky movies I say this at the beginning well now here we are 12 years later the balance sheet is almost 8 trillion so clearly we did monetize the debt we did exactly what bangi said that was really bad and he would never do well that's what we're going to do with the debt we're going to monetize even more of it the balance Sheet's going to go to 10 trillion 15 trillion 20 trillion wow because they're going to have to buy the bonds cuz nobody else is going to buy them and now it's it's going up you know exponentially um but then too it's not just the treasuries they got to buy Muni bonds they got to buy corporate bonds they got to buy the mortgage back scares because everything they don't buy is going to you know collapse and the yields are going to go up so that that's where you know the slippery slope uh to hyperinflation and the only way to get off that slope is to crash the economy on purpose to have a financial crisis that's worse than 2008 and I'm talking about a financial crisis where you lose your money where you have an account at Bank of America or Wells Fargo and you lose the money not just that the government doesn't ensure the deposits that are over 250 it's all gone it doesn't ensure anything because the FDIC doesn't have the money unless the FED creates it well the FED CR create it if it's fighting it inflation if it's restricting the supply of money which it needs to do to stop hyperinflation so that's why I tell people if you have your money in the bank there's only two ways it's going to end you're going to lose your money in the bank or your your money is going to lose its value so you're going to lose your purchasing power or you're going to lose your money but either way you're going to lose you're going to go broke if you have money in the bank because you're all the banks are going to fail unless the government bails them out but if the government bails them out then the money fails because they have to create massive inflation wow it it would be better if you lost your money but if your money loses its value it's worse you know because now you got a bunch of worthless money but that that has bigger problems for the for the economy and you think that's close look it's been close for a long time but now we've just had a banking crisis I mean now going into 2024 here is it happening this look we we're obviously we're closer now than we've ever been right um and I don't think people should be pressing their luck people should be preparing as if it was going to happen tomorrow and if it doesn't happen tomorrow then at least you're prepared right you got these people Preppers that are like you know building Doomsday Bunkers right I mean this is a little you know not as Extreme as that and I'm not going to necessarily laugh at the Doomsday bunker I might end up with my own but I mean but this is a lot less extreme but again you can't build the doomsday bunker after the the crisis after the Doom it it it has to be in place and fully provisioned in advance so you got to get your financial house in order because again it's not a question of will this Crisis happen it's 100% certainty that it will the only variable is when now maybe you'll get lucky and die you know before it happens right and then it's your kids's problem um but I don't want to bet on dying to avoid problem I I I you know I want to be here you saw all the equipment I've got to keep me to keep keep me young multiple hundreds of thousands of dollars of you were in it how was it very chilly negative 124 degrees it's going to be real chilly in the financial world too if you don't you know you don't have yourself protected so as I said you got my mutual funds but people you know people can work with me directly they can come to my asset management company which I'm still there so that's SEC registered not finra anymore see because you're that's an investment advisor right we're fee based so I don't I don't work on commission anymore I just manage money for fee okay um but I think we do a job that you're not going to find anywhere else in in the investment community no one's got the balls to to manage the money the way I do and they don't actually have the foresight to understand that what they that they need to do this um but I think we're we're we're constructing and managing portfolio uh that are ideally positioned I mean if you would have had my portfolio in 1970 and you would have stuck with it through 1980 you would have just crushed it I mean with you guys remember what happened in 19 from 1970 the dollar lost about two-thirds of its value against other currencies the deutschmark went from four you got four do schach to the dollar to one and a half you went from buying 360 yen to about 150 oil went from $3 a barrel to $30 a barrel gold went from $35 an ounce to$ 800 uh we went through this massive stagflation uh it was a terrible economy right all these married women were forced into the workforce because their husband's salaries were eviscerated by inflation and taxes uh and so they had no choice they had to go get a job um but the Investments certain Investments if you invested in in Japan if you invested in Emerging Markets if you invested in Commodities you invested in oil you invested in Gold you made a killing where did you get killed if you stayed in US bonds and US Stocks us bonds I mean complete disaster uh stocks you know in in the 1960s they had something called the nifty50 right uh these were stocks they called them one decision stocks the only decision is when to buy you never have to sell because they never stopped going up right in 1966 the Dow was at a th000 in 1980 it was still at 1,000 despite all that inflation despite the fact that gold went from $35 ounce to 800 the Dow didn't go anywhere that's why the real price of the Dow in 1982 I think was at an all-time record low or 19881 it was almost 1:1 that was lower than the Dow was at its low point in 19 32 it was actually the record low for the US Stock Market was in the early 80s in terms of gold like oh in terms of girl 82 was also just in terms of Dollar Bottom and then it was up like 40 years from there well in early 80s you wanted to sell all your gold and buy buy stocks right now you'd want to do the opposite if if the only choice were US Stocks because you know you're looking it's not quite 20 to1 right the Dow is almost 40,000 and Gold's about 2,000 it's so was close to 20 to1 that was where the peak that was the peak in 1929 20 to1 now the alltime record Peak was 2000 it was like 40 to1 the.com bubble was the peak for the day you know because gold was under 300 so we we got we got about a 40 to1 ratio so we're we're well off the highs but we're still in expensive territory you know I think the Dow is going to come you know below 2 to one I don't know if it'll get all the way to 1 to one and that again could be dollar or gold up yeah well the same thing so where where would it be so if the Dow is 40,000 and gold is 20,000 that's 2 to1 but the Dow can go to 10,000 and gold can go to 5,000 why's gold been so stuck with all this inflation well you remember gold went from under 300 in 2000 to almost 2,000 in 2011 had a huge gain it's now moved sideways for a while Consolidated those gains yeah it's getting ready for another big leg up this all going to smooth out you know in you know in 30 or 40 years when you look back you will barely notice this period of stady when you look at gold at 10,000 20,000 wherever it's going uh because it it has to go there I mean the dollar has already lost 99% of its value against gold when we started on the gold standard when the Federal Reserve was introduced gold was $20 an ounce it's now $2,000 an ounce that's a good point that gold hasn't changed gold is the same the dollar has lost 99% % of its value you you need a 100 times as many dollars to buy an ounce of gold as you needed when we created the Federal Reserve but the thing is before we created the Federal Reserve gold in 1800 was the same price it was in 1900 because the dollar didn't lose value for those 100 years because we didn't have a Federal Reserve W during those 100 years we had capitalism you know prices were going were going down so people should you know they can come to my ra EUR Pacific Capital and we could create a portfolio because if you stayed with the the stocks that worked in the 60s in the 70s you lost your ass if you were smart enough to make the shift out of the nifty50 out of the Polaroids right that was one of the stocks right how many people are using Polaroids down right you know maybe as a gag item at a party once well somebody will take a Polaroid right shift shift shift shift but you know everything that's new is old eventually right all the new technology is you know is old I mean I I you know I remember oh cassettes came and they replaced records and for a brief period of time I thought I was cool with an eight track and that didn't last very long and then they and then oh my God look at these D these DVDs who has those they don't exist anymore either I mean it's it's there it's new it's great and then it's gone right so you know but if you stay with you know the stocks you know that dominate the NASDAQ these few stocks that everybody make money in if you overstay that party you're going to have massive losses just like people did in the 1970s probably worse you've got to recognize you know that you know the time to leave was yesterday I mean you can't you can't try to get every last drop you know there was a famous I think saying you know if was who who who it was Bernard baroo you know but whatever you know what was your secret to investment success I always sold too soon right you you can't try to get every last bit of a bubble right you you got to get out and and you got to be willing to let somebody else you know make we've got a couple final questions let finish finish the point so you got to make this shift and that's what are my portfolios that I have now and I've been building are the ones that are going to do well in the next cycle right not the ones that did well in the last cycle right they're going get crushed right it's invest for the future anticipate how the winds are going to change and where the pendam is going to swing and and or you know skate to the puck right where it's going to be right and and and shoot ahead of the Running Deer yes all these there's all kinds of ways to explain this but you know people don't get it in the investment world so I I I'm there these portfolios and you know they're still producing returns positive returns paying dividends um uh but in the in in the long run if I'm right in the long run maybe just around the corner uh these are the strategies that you need to adopt and you know Mikey you have a question we've got we've got H who has a couple questions if he could jump in really hop on in h you want you want to just hop in so you can listen to the mic you want to switch really quick a couple last final questions here Peter thank you so much for your time this been wonderful but H you've written down a few questions here what what do you got yeah so you mentioned China is the rising economic power um pretty much I think we agree that Bernan and Friends in' 08 they agree they debt monetization uh they chose and inflationary route and now we're having to pay for it we're going to have to pay for it for the next couple decades we don't know the exact timeline but uh it's either you it's like an inflationary bubble it's giant Central Ponzi uh and the only way we could get out of it is a deflationary bubble which nobody wants to do because all the inflation was an assets and all the rich people who are in charge it was just it's Nob I know it's probably not going to happen um my question is to you is that do you think China chose the opposite do you think China is currently in its kind of 08 um where it's earlier uh in its EC economic rise still relatively higher GDP numbers and they've chosen to do the more fiscally and monetarily responsible Thing by choosing less stimulus we see that you know the hansang index is way lower it's like it's been paining for around two three years we saw that they even during covid with all that pressure they chose to actually limit the economy to not be giving out as many stimulus checks um so yeah my I guess my question to you is I I am my hypothesis my thesis is potentially that China is even like is doing the fiscally is doing the responsible thing even though they are Socialist Communist background historically would you agree disagree and why yeah I mean first of all they always choose inflation over deflation because they can always blame the inflation on somebody else and the pain generally happens later rather than sooner you know that's what happened I mentioned when we went off the gold standard in 1971 Nixon had a choice then deflation or inflation because we could have stayed on the gold standard and allowed a deflation we could have allowed prices to come down asset prices good prices to meet gold instead we went off the gold standard and instead of the prices of everything coming down the price of gold went up right that's what we did we ended up devaluing the dollar instead of deflating the economy which had been inflated based on all the stimulus spending of the 19 1960s you know predominantly the war on poverty Great Society Johnson right yeah yeah all all that stuff that that that had that happened in the 60 so we have a much bigger bubble now we had much more inflationary policies deflation is the solution to our problem but the disease is so big that The Cure kills us too right I mean it's like that's the problem and so they're going to choose inflation now the reason that China may not is one of China's strengths when it comes may not what may not choose inflation may make the right choice whereas America won't is China doesn't elect its leaders democratically party control so the problem with democracy and it's an underlying flaw that every democracy struggles with and it's why we're not supposed to be a democracy the founding fathers understood the evils of democracy they called it mobocracy um and and they they they established a a republic we had some democratic aspects within the Republic but you know the whole idea was to safeguard the country from the evils of democracy because they knew that democracies are as violent in their deaths as they are in their births and what do you mean by that like so the problem so the problem with democracy is decisions are being made that are politically expedient for the people who are making them and and so doing the right thing always requires some pain and always requires some honesty on the part of the politicians to prepare the people for those bad things like hey this is what's going to happen it's going to be hard you're going to lose some money you're going to have to work harder you're not going to get this you're not going to get that but years down the road you you're you know you're going to benefit right that's not what the voters want if somebody else says oh that guy's full of you don't have to do that I've got a program for you I'm going to fix this I'm going to give you money uh and so in America we're going to do what's right for the politicians we're not going to do what's right for the country but in China they can do what's right for the country because they don't have to worry about the election what they have to worry about is the people because what would cause a revolution in China would be poverty and misery and so when you're like you know a ruler which is one of the reasons why I you know I like you know a constitutional monarchy I think I I I would prefer that than to a democracy for sure you know where you have a a king who rules but you you limit their power uh you know legally but a king is trying to protect the country for his kids and his grandkids right politicians don't give a damn about what happens to the country after they're dead they they're just living for the here and now and they can't they don't leave if you're the president your son doesn't inherit your presidency what do you care right but if I'm the king of America I want my son or my daughter to inherit a healthy viable America I don't want a revolution right I don't want to end up you know or my you know with my head on a spear but so you have a reason to try to do the right thing for your country politicians have kids too right yeah but they're not going to inher politicians don't care about their kids they don't think about that you know well see you you know but what's Wild is I never thought I would come to Peter schiff's house and hear him ADV advocate for monarchy but then makesense I see AR also make a good argument on it well let let's let's put it this way if I was a king of America how much money do you think I'd need King in the castle King in the castle if I was the king of America if you were the king of America how much would you need to live pretty good I mean would could you live well on a billion dollars a year oh much less yes you don't need that much right I wouldn't need this whole huge bureaucracy I would not need an income tax to maintain my kingdom I would my my subjects would be free and I would just take a small little tax maybe I'd have a national sales tax of a half a percent I that's all I need I could I could cover everything with that I cover all my lifestyle all my parties and I could still have Army protecting everybody it wouldn't cost that much and we wouldn't even need that big an army because we no we wouldn't be making enemies cuz we wouldn't be attacking any so in in this shift Kingdom uh would the currency just be gold of course I would of course real money oh no you don't want the Monarch again limitations the Monarch can't print money interesting you know so if I if I wanted money I'd have to collect taxes I'd have to take some of your gold or go mine well well I don't if I owned a mine yeah so going a little a little more back so going back to your thing so China China can do the right thing okay right and again not that I'm saying we should be communist right but I'm just saying that elections are not all they're cracked up to be what what's the the most important thing is economic freedom so if I had a choice between political freedom and economic freedom I take economic freedom right so if someone say here you can live in a country where you can't vote but you have no income tax you have private property you have sound money right and you have good government you just have no say in it or you can live in a awful socialist country where you know you you half your money is taken in taxes you got all these rules and regulations and every four years you can vote for which socialist you want to run the country it's whoever offers the biggest check yeah I mean and and the thing is like when I moved to Puerto Rico one of the things people said well you're going to give up your right to vote I said well who cares I mean I lived in Connecticut I never vote for the winner of any election what good is voting for The Loser right I mean I mean maybe I could have moved to Florida and I I could have voted for the winner but to me all right I can't vote for the president but no matter who W who wins they can't tax me so what do I mean so personally it doesn't matter cuz none of them are going to tax me now the thing is now the big tax that everybody has to worry about now is inflation right so I avoid that um with my investments but where they get you a second time is with the capital gains tax because inflation makes phony gains but I have zero capital gains in Puerto Rico so I don't have to worry about that wow so if I buy something for a million dollars and then the dollar loses 90% of its value and I sell it for 10 million but it's really the same million that I that I invested I don't have to worry about paying a tax on that gain that isn't really a gain right the government creates inflation which benefits it and then it taxes you on the gains that don't even exist so the government wins twice to inflation and you lose twice Peter how can people follow you all right well I mean I'm on the internet right I've got almost I've had a I've been having a hard time getting to a million exf followers I've been at 990 plus thousand for a while now every time I gain some I lose some I don't know what's going on it's like tug of war but um you can follow me on X because that's where I I I I uh I put out the most personal stuff you know but I'm also on Facebook Instagram you know Tik Tok I mean I'm on all the social media so you like Elon more than Zuck it sounds like well be well because there's not as much going on Facebook face people don't go to fa how often do you go to your Facebook page what's that yeah see but remember at one time everybody loved Facebook yeah right just like Bitcoin right then you know Facebook got rid of my space do you have an Instagram I do have instag yeah well that'sit photos no but that's what's saving that's what on the beach sexy gold bars that's what saved Facebook is he bought Instagram of course and WhatsApp yeah he spies of the people yeah yeah why not nobody would no and they bought it with their their stock right they cost their sholders paid for it yeah yeah um but all of a sudden who who would have seen uh Tik Tok coming right out of the blue right Tik Tok comes in um but so I'm on all those but YouTube of course I I put a lot of content there my YouTube channel that's where my podcasts go I do the podcast I'm doing one later today so I got to take a break I got to save my voice thank you do my do my own podcast later today at shiff Radio you can listen to it at shiff radio or on my YouTube channel so subscribe to that and again visit my my website europa.eu physical precious metals shift gold shift gold.com exactly shift gold.com and you know they tried to get me to buy gold.com recently and I just didn't feel like how much do they want like 7even million oh my gosh I don't they kept saying oh it's a bargain it's I don't know I mean I got shift gold right now but um that's amazing uh yeah so shift gold.com and I want to make it clear this video is not sponsored thank you for inviting us into your house uh and thank you this was very insightful we well thanks for thanks for coming by right you didn't make me come all the way out to California you guys came came out to Puerto Rico
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