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Peter Schiff Potpourri: Oil, Bonds, Bitcoin, Tariffs and Guns

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In his most recent podcast, Peter Schiff hit a number of subjects including oil prices, bond prices, Bitcoin, the dollar and tariffs. Peter said he thinks we’re seeing a lot of movement in a number of markets that are counter to the long-term trends. For instance, oil dropped late last week, but he expects it’s long-term trend to continue upward. The dollar has picked up strength, but the broader trend is toward a weaker dollar. And bond yields fell, but the overall trajectory for interest rates is up.

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Highlights from the Podcast

“I think this is more technical noise. I don’t think the uptrend in the price of oil has changed based on this pullback from 73 now to 67-and-a-half. Maybe we have a little bit more downside but if you look at the chart, you can barely see the decline … I’m still bullish on oil.”

“It’s not a coincidence that both [bond] yields and oil prices are falling at the same time because they rose at the same time, which also makes sense. If inflation is driving up oil prices, then inflation should also be driving up interest rates. And that’s exactly what we’ve been experiencing in these markets. And just as I think the upward trend in oil is intact, I think the upward trend in interest rates is intact.”

“I think the dollar is going to run into some resistance. I thought it might have already happened. Maybe it’s going to go a little higher, but to me, the primary trend is down. We are in a bear market. The bear market started in January of last year, but there’s always corrections in every market whether it’s bull or bear. In this case, if I’m right, this is early in a dollar bear this is one of the first corrections – the correction being the up-move and it’s sowing the seeds of its own destruction.”

“I think the renewed optimism about the Fed hiking rates I think will soon give way to the new reality that they’re almost finished raising rates, and they’re not going to be able to raise rates nearly as much as the markets once believed.”

“Bitcoin has probably lost more value this week than any of the emerging market currencies.”

“The cryptos currencies did not do what they are marketed to do. This is when they’re supposed to shine, right? If you’re in an emerging market and your currency is going down, you’re supposed to buy the cryptos as a hedge. But that’s not happening. I mean, maybe somebody did buy Bitcoin as a hedge, but the hedge didn’t work out. If somebody sold their fiat currency on Monday and bought into Bitcoin, they jumped out of the frying pan and into the fire, because chances are Bitcoin went down by more than the currency they were worried about.”

“What’s interesting about this decline that we’ve had (in Bitcoin) is that there hasn’t been any big panic. It’s just been a slow meltdown. And there have been plenty of rallies along the way, but they sell into every rally and it’s just a slow erosion of the price of Bitcoin.”

“Overall, the immediate effect of tariffs would be to raise the cost of cars, and that is not going to bode well politically, so I don’t think the tariffs are going to happen.”

“The question is what does more damage to the economy? The deficits or the tariffs? Because they both do damage. I mean personally, I would think that the deficits would actually do more damage, but that damage is more long-term. The more immediate damage is probably the taxes, right? Because we have some immediate benefit to the economy of the tax cuts, long-term we’re going to have problems. The tax cuts are going to be a net negative because they led to bigger deficits, which in the long-run are a bigger problem for the economy than the tax cuts are a solution. But the same thing would apply if we had tariffs.”

“Every time there is a government program, it’s here forever.”

“I want taxes as in-your-face as possible so when a politician raises taxes, the taxpayers immediately see it and they know that they’re the ones paying it because then politicians will be less like to pass a tax that’s going to hit in a very obvious way their constituents.”

“My dad always described government aid as being a blood transfusion from your right arm to your left arm and you spill half the blood on the floor.”

“And the point is, had 10 or 20 people died in this restaurant, it would have been a huge story. It would have been all over the news. And what would the consequence had been? ‘We need to ban guns.’ And at the very least we need more gun control. But you would have had a lot of people coming out saying, ‘We need to ban guns! Guns kill! We need to outlaw guns!’ Well, in this case, guns didn’t kill, unless you count the shooter. Guns saved lives. These guns saved the lives of all the people in that restaurant who might otherwise have been shot had these other people not had guns to intervene.”

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