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Peter Schiff on the Collective Delusion Among Investors Around the World

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Peter Schiff appeared on RT America recently to talk gold.

The host noted the decline in the price of the yellow metal over the last few months and asked Peter if he thought it was because of the Fed’s interest rate hikes. Peter said, “No.” He said he thinks it has more to do with the “collective delusion among investors around the world.”

I think it’s because of the collective delusion among investors around the world that the US economy is actually booming when it’s not, and the US is going to win the trade war when it can’t. So, I think that when reality rears its ugly head, I think gold prices are headed much higher.”

The host followed up, asking Peter what metrics might push gold forward. Peter said it’s all about the economic data that the mainstream seems to be ignoring or misrepresenting.

Well, I think the economy was a bubble when Trump was elected and he’s managed to blow a little air back into it. It probably would have already been deflating.”

Peter noted the unemployment numbers, saying they are just as fake now as they were when Trump called out Pres. Obama for touting these same statistics. He cited the low labor force participation rate, saying the reason a lot of people aren’t officially unemployed is simply because they aren’t being counted.

Then there’s the rising stock market. Peter expressed skepticism about that too.

The stock market is a bigger bubble now than when Trump pointed it out as a candidate.”

As far as the tax cuts go, they’ve served as an artificial stimulus, but the larger deficit and piling up of debt will end up being a bigger drag on the economy than the boost we got from the cuts.

It’s disingenuous to take credit for cutting taxes when you simultaneously make government more expensive, which is what Donald Trump did by signing bills to increase military spending and to increase welfare spending. We have a bigger, more expensive government now that taxpayers need to pay for. And if they’re not going to pay for it with income taxes, they’re going to do it with additional debt, higher inflation, higher consumer prices – and that’s what we’re seeing. Consumer prices are rising, rates are rising, and those trends are going to continue.”

The trade war with China doesn’t seem to be anywhere close to a resolution. The US will begin collecting 25% tariffs on another $16 billion of Chinese goods on Aug. 23. The US Trade Representative Office finalized a list of 279 product lines that will be hit by the import taxes. According to Reuters, “Trump has also threatened 25% tariffs on another $200 billion worth of Chinese goods, and possibly another $300 billion worth, in his administration’s quest for changes to China’s intellectual property, market access and industrial subsidy policies.”

Meanwhile, a Chinese newspaper mocked Trump’s assertion that the US is winning the trade war as “wishful thinking.”

Peter agrees. He said it’s obvious that the US is going to lose the trade war.

We are right now benefitting from the subsidies that foreign economies are extending to us by allowing us to buy what they produce on credit. And when they stop doing that, it’s Americans that are going to suffer. I think the dollar is going to collapse, and of course, once the dollar starts going down, people will be rushing into gold.”

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