Peter Schiff: Kamala’s Policies Get Worse

On Friday’s episode, Peter focuses on the Harris campaign’s recently announced and economically illiterate policy proposals, including what are effectively price controls and additional subsidies to drive housing costs up. He also discusses what proved to be a great week for gold, with the metal finishing the week above $2500.

Peter begins by reminding us that price controls would actually do nothing to fix price inflation:

“You can’t stop something by treating the symptoms. If someone has skin cancer, and it starts to show up, you got some moles or something on your skin—if you just put a band-aid on the mole so you can’t see it anymore, that doesn’t treat the cancer. The cancer is still there, getting worse. You’re never going to treat a disease by trying to cover up the symptoms. You’ve got to actually get to the root cause of the disease. And the root cause of the inflation disease is deficit spending, which ends up being monetized by the central bank.”

He explains how the Federal Reserve’s actions are only making the situation worse, instead of addressing the core issues:

“We need to suck out the money—all the new money that was put into circulation. We need to withdraw it. We need deflation… But everybody is fighting deflation. Nobody wants deflation. That’s the cure, right? But instead, they want more of the disease. They just want to try to cover up the symptoms so we don’t notice it, but of course, we’re going to feel it because prices are going up one way or another if you create inflation.”

If price controls were actually implemented, it would lead to shortages and black markets:

“Everything that she is proposing is highly inflationary… When criminals start selling oranges, those are going to be some real expensive oranges. Why? Because the criminal is taking a risk… But let’s say there is a black market. How are you going to pay? Well, it’s all going to be cash, right? You want to buy oranges and all you got is a central bank digital currency? You ain’t getting any oranges.”

Expanding housing subsidies is bad enough on its own, but the policy would also add to the debt and could drive more inflation:

“Another thing she said she wants to do is she wants the government to give every first-time homebuyer $25,000 towards the down payment for a house. Now, first of all, where’s the government going to get the $25,000? Because it doesn’t have it, right? We have a $35.2 trillion national debt. So where’s the government going to get the money to give people the down payment? Well, they’re going to borrow it. And who are they going to borrow it from? Well, they’re probably going to borrow it from the Fed. And the Fed’s going to print it. So in order to give people $25,000 to make a down payment, they’re going to have to create a lot of inflation, right?”

He further elaborates on the disastrous impact that these policies could have on the U.S. dollar:

“We’ve been able to convince our creditors to keep loaning us money. We’ve been able to convince the world to keep warehousing U.S. dollars and U.S. treasuries as a reserve asset. But all they have to do is listen to Kamala Harris talk, and they’re going to run from the U.S. dollar.”

The silver (or gold) lining to the week is that gold is looking better than ever. Peter thinks even $2,500 is a bargain:

“The trend is going to accelerate… What is material is if you don’t buy at $2,500 because you’re waiting for $2,400 or $2,300 and you never get it, and the next thing you know, we’re at $5,000. … Just buy it now. … It’s a lot cheaper than buying it a lot higher.”