Schiff on TWIM: Governments Gouge, Not Companies

Last week, Peter appeared on This Week in Mining with Jay Martin. They spend a good chunk of time discussing the logic (or illogic) or price controls, de-dollarization, and the possibility of a commodities boom in the post-COVID economy. This is Peter’s second appearance on Jay’s show this year. You can view his first interview on VRIC Media.

Peter starts the interview with a reminder that gold’s boom this year is driven by central banks. They, not the public, are the ones who recognize the importance of gold in an economy where the dollar is increasingly uncertain:

“The public is really not there. In fact, the public has been net sellers. Look at the GLD, the big ETF, they’ve had net liquidations all this year. So the public is getting out of their gold, even though the price is going up. We know the economy is weak. I’m sure jewelry sales are down. So people are buying less gold jewelry. So why is the price of gold going up? Because central banks are buying it and they’re not the dumb money.”

Pivoting to price controls, Peter blows up Kamala Harris’s explanation of rising retail prices:

“What Kamala Harris talked about initially was groceries, right? She’s complaining that the price of food has gone way up. And she’s had a big role in that as part of the Biden administration. But food prices didn’t go up because greedy grocers gouged their customers. They were gouged by the government. They were gouged by the Fed. The government raised the cost of all their items. The grocery stores just add like a one or two percent markup.”

The government can print money endlessly because it is the only institution that can use violence to back up its edicts:

“The only one with a gun is the government. So the government is the only one that can gouge you because they can tax you, and you can’t say, ‘You know what, I don’t want your government services. They’re too expensive.’ Nope. You’re stuck with them. No matter how lousy they are or how much they cost.”

If inflation continues, history may repeat itself, and the government may try to scapegoat private companies even more than it already has:

“The reason that I’ve been forecasting for years and years that we were going to have price controls is we had them in the 70s. Now they didn’t work, but that doesn’t mean the government’s not going to do it again, right? The government never learns from its mistakes. It just repeats them on a bigger scale. But I also know that the government never accepts responsibility for inflation. It always blames inflation on the people who are raising the prices. But they’re only raising the prices in response to the inflation the government created.”

In the long run, de-dollarization will hurt Americans. But it will also lift the burden of Uncle Sam’s oppressive debt from the rest of the world:

 “But I think, you know, if the dollar really gets clobbered, the way that I believe it will, that’s a major game changer for the world. You know, it’s a huge negative for the US, but it’s a huge positive for a lot of other countries. Because it’s a giant burden that’s basically lifted from their backs. They don’t have to prop up the US anymore.”

Peter and Jay discuss the possibility of a commodities boom in the near future, with economic trends, such as the adoption of electric vehicles, driving prices higher for metals like copper and nickel:

“If we’re not going to use fossil fuels, we’re going to make batteries. We don’t get the batteries out of thin air. There’s metals that got to go into those batteries.  So all these commodities are going to be in short supply. And there’s going to be a lot more demand, especially when the dollar really starts to go down. Because when the dollar goes down, everybody outside America gets richer. If the dollar is going down against, let’s say, the Indian rupee or the Chinese RMB, there’s billions of people that now can buy more stuff.”