Schiff with Burack: Even 2008 is Preferable to 2024
Last Tuesday, Jason Burack, host of “Wall St for Main St,” interviewed Peter. They cover the state of gold and silver markets, the similarities between 2024 and 2008, and the flaws with government data. Peter also predicts a return to QE-style Fed policy in the near future.
The interview starts with a discussion of the dollar index (DXY). Peter sees the dollar falling and silver picking up steam:
“I think the dollar is in for a lot of trouble. … The dollar index is getting ready to break through the 100 handle. I think when the dollar really starts to fall, you’re going to see increased upward pressure on gold. Silver was up 5% today. It’s now back above $32 an ounce, but it’s still ridiculously cheap. Remember, we had a $50 high going back to 1980, and then it retested it in 2011.”
While talking about central bank policy, Peter notes that inflation is not only higher that official numbers can measure, but it’s also liable to start rising again with recent rate cuts:
“First of all, inflation, the way the government has measured it, has been around 3% now for over a year. And so the progress has clearly stopped, well short of 2%. But now that the Fed is cutting rates again, it’s going to reverse and head higher, especially if the dollar responds to the rate cuts by dropping, which I believe it will. That will put a lot of upward pressure on commodity prices, oil, copper, other prices.”
Anyone who thinks the government can solve inflation is misleading their audience. Government is the reason inflation exists in the first place, and COVID era spending is a prime example:
“The Inflation Reduction Act, like all government acts, the name is the opposite of what it actually achieves. And so the Inflation Reduction Act was actually an act to increase inflation, which is what it’s done because the Inflation Reduction Act was about government increasing spending and that’s the source of the inflation. The government is spending money it doesn’t have and it’s increasing aggregate demand and ultimately causing the Fed to have to print more money.”
Peter compares today’s economy with the pre-2008 economy, but notes that the problem of toxic mortgages has only intensified since then:
“I think the banking system is in worse shape today than it was just before the ‘08 financial crisis. And because back then the problem with the banks was the real estate loans that were in default because they extended credit too recklessly. … But right now it’s much worse. I think the banking system is completely insolvent because it’s a bigger mortgage problem now than it was before.”
The two pivot to the peculiar lack of media coverage on gold’s price action. Peter suspects big financial institutions would rather cover and publicize Bitcoin, since they can make money off of retail investors in Bitcoin:
“I think the big banks got involved because they saw they could get demand and generate fees. And now the big banks are making a lot of money on these worthless Bitcoin ETFs that they have. And so now all of a sudden they love Bitcoin because they can make a buck off it. That’s all that’s changed. They’ve basically sold out. They don’t give a damn how much money their customers lose just so long as they can collect fees.”
Foreign central banks can see the writing on the wall. The dollar is increasingly a political and economic burden, and the global transition away from the dollar will only accelerate as Uncle Sam and the Fed continue to devalue it:
“The other central banks are voting– voting with their fiat currencies and their U.S. dollars. And they’re not buying U.S. Treasuries. They’re buying physical gold tonnage instead. And I think that seems to be one of the major themes of the last two years. That’s going to continue. And they probably accelerated with the sanctions on Russia, which created a powerful political incentive to divest of dollars so as not to be vulnerable to U.S. sanctions. But there’s always been an economic argument to get rid of dollars. That just accelerated the trend.”
