Schiff on Trump’s Speech: There are no Free Marketers in a Recession

Peter went live on X Spaces on Tuesday to comment on President Trump’s address to congress and take questions from his followers. Peter offers his thoughts on ongoing economic instability, gold’s long-awaited rise, and mounting inflationary pressures. He also comments on the recent Trump-Zelenskyy debacle and Trump’s renewed tariff pressure.

Peter opens the conversation reflecting on the Russia-Ukraine conflict, framing it as a senseless geopolitical quagmire reminiscent of Vietnam:

But I remember when the war first started, I predicted when everybody thought it was going to be over quick, I said, no, this is going to be another Vietnam, this will be like a quagmire. It’s never going to end based on what we’re doing. And now that Trump is here, we finally have a chance, a real chance for peace, which is one of the reasons that I recommended voting for him. The Democrats, unfortunately, are the warmongers and the Republicans don’t like people dying needlessly on both sides.

He then shifts to the domestic economic landscape, predicting significant challenges ahead for stocks and highlighting the unfortunate position of the dollar:

Not only could we easily be in a recession during the first half of Trump’s first year, but we could be in a bear market in stocks, you know, the Russell 2000 at the low this morning was already down 17% from its peak. So it’s close to a bear market, but you know, the NASDAQ was down about 10%, maybe halfway there, but we could easily be in a bear market in stocks.

Peter forecasts movement in the mining sector, emphasizing that the upcoming surge in mining stocks and silver will catch many investors unprepared:

When these stocks start to move, when the mining stocks in particular, and also silver, when they start to move, it’s going to be a very rapid move, and I think the people who, you know, are not in the market are going to have all the money that they get are going to have a hard time getting in because it’s going to be scary to buy.

He expresses frustration at economic policymakers’ reluctance to face economic downturns without government interference, pointing out the incentives that even pro-freedom politicians face in a crisis:

There’s an expression– there are no atheists in foxholes, right? Because once you’re in a foxhole, you’re praying to God that you don’t die, right? There’s no free market economists in a recession. They’re all Keynesians. Nobody is willing to say, do nothing and let the recession run its course. Everybody now wants the government to do something.

Turning to inflation, Peter illustrates the dollar’s decline by tracing gold’s price trajectory over the last 6 decades:

Gold was $35 an ounce in the late 1960s and it’s now a hundred times that almost, and that just means the dollar has lost almost 99% of its value. And the sad thing is it’s going to lose another 99% of its value from here. And it could do it in a much shorter period of time. And that’s why gold is going to be a lot more expensive. It’s not that gold’s going up. It says the value of the dollar’s going down.

He also warns of a looming crisis in the gold market caused by futures traders over-leveraging:

Eventually it’s going to be a problem. I mean, it’s not a problem if you’re long gold, there’s going to be a problem if you’re short, but there could be a lot of paper gold trading. So long as nobody who’s long wants the gold, right? At some point, the people who actually want gold are going to start buying the contracts because the physical supply is just not there.

Finally, Schiff criticizes the unpredictability surrounding Trump’s tariff policies, arguing that economic uncertainty is inherently harmful to investment:

Trump could put a tariff in now and he could, you know, change his mind in six months, in six days, you know, who knows? I mean, Trump is, you know, he puts them on one day and takes them off the next. I mean, I have no idea what’s going on. It’s just anybody’s guess, but a lot of economic decisions are going to be impacted by the tariffs.

For more of Peter’s economic analysis, check out this summary of his last full podcast.