Peter Schiff: Powell Spins Another False Narrative

On Wednesday’s episode of the Peter Schiff Show, Peter tackles another round of economic data, critiques a recent interview with Jerome Powell, and circles back to criticism of his last podcast. He also calls out the unconstitutionality of the so-called “exit tax” and its abuse against political dissident Roger Ver.

Peter starts by addressing comments from his last podcast. He clarifies his point, pointing out that even though we export a lot of goods, a large share of consumer goods Americans buy are imported:

The goods that consumers go and buy on a day-to-day basis. When they go to Walmart, when they go on Amazon, when they buy presents to put under the Christmas tree or stuff to stick in the stockings, that kind of stuff. That’s all imported. And that doesn’t mean that we don’t make anything. … And so if it wasn’t for the dollar’s role as a reserve currency and our ability to trade the money we print for the goods the rest of the world produces, we would have to have some serious changes in our economy. 

Living off debt and printing money are actions of a bad customer, not one who will keep calling the shots in international trade:

When Trump is threatening these tariffs and everybody thinks we’re in the driver’s seat because we’re everybody’s best customer, we’re actually not the best customer. The best customer is the customer who pays. The customer who you have to finance, the customer who you have to loan money to buy your stuff, especially if the customer is never going to pay you back but just keeps demanding that you loan more and more money… That’s actually your worst customer, and the sooner you can cut that customer off, the better.

Fed Chair Jerome Powell was interviewed on Wednesday, and he refuses to see the writing on the wall. The economy is not strong, and new data proves it:

This ISM service index begs to differ. We had a big contraction in that number. But also, we got factory orders that weren’t terrible. They were supposed to come in at .4, a .4. They came in at up .2, so half of what was expected. … We got the PMI composite, the final number. And both were below estimates. They were looking for .55 for the composite index. And we got .54. And the service index was supposed to be .57. We got .56. So both were below estimates. … We just got the ADP number. And remember, last month we got a number that was bigger than expected. We got 233,000. Well, this month they told us to forget about that number—that it’s actually 184,000. That’s 49,000 revised down.

Powell denied that the Fed considers interest payments on government debt when choosing not to hike interest rates. Peter argues this is patently absurd:

They kept rates so low for so long. They encouraged everybody to load up on debt that they can’t afford. The Fed knows if it raises interest rates where they need to be, the whole debt bubble is going to collapse…. This is all BS. Just like ‘subprime was contained’, ‘inflation is transitory.’ This is another BS story that the Fed is giving to try to justify their policy. The policy isn’t justified by their actions. They’re trying to use their actions and justify this ridiculous policy.

Finally, Peter addresses the disturbing case of Roger Ver, an early adopter of Bitcoin who has since been the target of lawfare by the IRS for supposedly failing to pay an “exit tax” when he forfeited his citizenship. While Ver may be wrong on crypto, he’s absolutely correct about the tyranny of the exit tax:

He’s 100% right. It is unconstitutional. It’s amazing that nobody has challenged it. And I’m happy that he’s doing that. In fact, this will be a great accomplishment of Bitcoin. Maybe one of the only real accomplishments is if we can end up getting rid of the exit tax—because of a Bitcoin. … On a fundamental level, if we’re a free country, if Americans are free, everybody should be free to leave. You want to leave the country? Get out, right? I mean, this is not a prison.

If you missed it, be sure to check out SchiffGold’s Cyber Monday Sale on gold Krugerrands, which is still available!