So the FED is responsible for all the debt that now makes it impossible for
the FED to fight inflation, except that investors haven't figured that out yet.
They still think, well, you know, if to FED just delays the
raid cuts a couple of months, that'll do the Trick's not going to happen.
Inflations are going to run out of control, and when people come to
that conclusion, they are going to be running from dollars. You're listening to
Carrie Letz's Financial Survival Network, where you get valuable information you just can't find
anywhere else to thrive in today's trying times. You need the Financial Survival Network
now more than ever. Go to Financial Survivalnetwork dot com and get your free
newsletter and gift. Financial Survival Network now more than ever, And welcome.
You are listening to the Financial Survival Network. I'm her host, Carrie Lutz,
special guest on today. I've known this person now for fourteen years,
and hey, it looks like his time is here upon us, Peter Schiff
and a euro Pacific Peter. Where's the best place to find you these days?
For those who are looking for you? Well, first of all,
kare I thought I knew you know, a lot longer than fourteen years.
I don't know games that we've been so travel I don't like same circles.
I don't want to get into the age thing. Man. Maybe maybe fifteen
at the most seems like forever we've been on this merry go round though,
right, Yeah, Well, a lot of people are about to get thrown
off. But I know I'm the the same place I've been for probably all
those fourteen years. You know, you can find me on the internet.
You got I got my YouTube channel at Peter ship Show or Shift Report.
I'm on Twitter now with almost a million followers, so yeah, I had
a lot fewer back then. But you know, same website youropack dot com
is my asset management company, although I used to be your capital now it's
just your Pacific asset management. That happened around the time that I moved to
Puerto Rico. I've been living here now full time for about seven years,
part time for over ten. And you know Shift Gold that's still the same
same website where people can buy gold for now under twenty two hundred bucks.
I was talking about the opportunity to try to buy it below two thousand because
I thought pretty soon that those low prices would be gone, and I think
they are. I mean, I doubt we're going back down below two thousand
again, but I think you know where we are now is still very close
to the floor if two thousand is in fact the new floor on the price
in gold. So you can get me at Shift Gold and my podcast Shift
Radio about that. I do my podcasts usually about two a week, sometimes
more, sometimes one. I usually don't skip a week, so usually get
at least one podcast out of me. So you've been living in the tax
havean called Puerto Rico now for yeah, I mean it's it's a tax haven
for some people, you know, not for everybody. Not too. You
have to, you know, you have to arrange your affairs in a certain
way. But yeah, I mean it's certainly worth doing. I also enjoy
it here. I mean I have some problems with the local government, but
I mean I got problems with a lot of governments. But yeah, they
haven't really treated me that well. But the income tax rates are low,
so from that respect, you know, yeah, they don't take take most
of my income like the US government does. So you pay you pay uh
a zero percent on capital gains which you know includes federal because I pay no
federal capital gains living here, so I pay four percent I mean zero percent
capital gains in Puerto Rico, and I pay four percent on the vast majority
of my income four percent tax. Yeah, and that's the that's the so
I don't have to worry about the federal tax for that. I only pay
federal taxes on my non Puerto Rican sourced income, which would be you know,
dividends on a gold mining stock you know there, I would pay US
tax on those dividends. But if I sell the stock in a profit,
I pay no tax on that, right right? Well, who would think
you would be an ex patriot in your own country. I remember years ago
meeting British people who are living in the Monaco because they basically paid into taxes
and the people too. So yeah, but if an American moves to Monaco,
they're still paying US tax. That's the problem be in America exactly.
So when you get to taxes, we get to all these problems. We
got literally runaway spending, runaway deficits. The next election from that standpoint,
and the eventual collapse really isn't going to matter, is it. Well,
I mean, the real collapse that's coming is going to be the collapse of
our currency, collapse with a dollar are our standard of living here in the
United States. I mean, hopefully it won't be a permanent collapse that you
know, there's some you know, light at the end of a very long
tunnel. But we're we're headed for a lot of problems, you know.
And the day of reckoning has been a long time in coming. And we've
kicked the can down the road, and we continue to kick it down the
road. But I've been expecting that our ability to do that is going to
come to an abrupt end one day and it's probably one day soon at this
point. How much longer can they kick the can down the road? Oh
though, I mean, you got a thirty four and a half trillion dollar
deficit. You know, we're rising three to four trillion per year in the
national debt, and that's going to accelerate as you know, we move into
recession or as the current recession gets worse. I mean, I actually think
that we're in a recession. I think all the talk about this strong resilient
economy is just a bunch of talk. I think people should listen to the
voters who are giving Biden the lowest marks on the economy probably in the history
of these popularity surveys. And that's not because we have a strong economy.
It's because the public is living in the economy and they know how weak it
is. But a lot of the jobs we got jobs numbers out on Friday.
It was a horrible jobs report. Even though the headline number was a
beat, The headline number is always a beat. Meanwhile, they went back
to the prior month and they knocked out about one hundred and twenty five thousand
jobs, including almost all the manufacturing jobs that they claimed were created. And
then last month we lost manufacturing jobs. Manufacturing is in a recession. It's
spent in a recession for years. Even the government statistics acknowledge that the manufacturing
is in a recession. The trade death sits keep getting worse because we're not
producing. Meanwhile, I look at the debt levels, household debt, credit
card debt soaring to all time record highs. So that's all. Inflation is
an expansion of the money supply and the supply of credit. And the whole
time the Fed has been claiming to be fighting inflation, credit has been expanding
the entire time, and that credit is used to bid up prices, and
that's what we're seeing. That's why the inflation numbers that came out this morning
again were hotter than expected. As I expected, they'd been that way for
a while. Now inflation is bottomed. Disinflation is over. It's now reflation
or just plain old inflation. But we're not going back down to two percent.
We're more likely going back up to nine percent. In fact, we're
probably going to go higher than that. The question is when are the market's
going to figure it out? And what if anything is to fed a reserve
going to do about it. That's a good question. And but what I
said before is Trump was no deficit hawk, right we go, Well,
he's pretending to be now. You know, when he's not president, he
talks a good game about, you know, cutting spending. In fact,
I just saw an interview with him the other day in which he was talking
about, you know, how he was paying the debt and now he was
cutting spending him. It's like it's a fantasy world. But you know,
everybody lies. Biden lies about how great the economy is now, and Trump
lies about how great it was when he was president. The truth of the
matter is it was a bubble under Trump. It's just a bigger bubble under
Biden. And the difference between the Trump and Biden is that Trump actually remembers
his lies and Biden doesn't. Right, I don't know what Biden remembers or
what he even believes. But yeah, I mean cognitively, you know,
at least Trump, you know, is in control of his faculties, and
you know, and and and it is you know, is capable of making
a form decision. I mean, he may make the wrong decision, but
he also may you know, may listen to reason. I think that when
we do have this you know, economic crisis, which will you know,
take the form of a sovereign debt and the currency crisis, and when we
really have to make the tough decisions about eliminating government agencies and departments and cutting
spending, you know, kind of like what Malay is doing, doubt in
Argentina, when we actually do that stuff, I mean, Trump is far
more likely to agree to it than buy it. So let's talk about what
Malay is doing there in Argentina, because that could become the template for the
rest of the world. Because once this fake stuff blows up, where is
that going to leave us? Do we follow? Remember, Argentina's been living
in misery for a long time, you know they. I mean, things
have been pretty tough down there, and so I hope it doesn't take America
that long to come to the same realization that the Argentines have, and that
is that government doesn't work. Socialism is a lie, and government is the
source of all the problems that it claims to be trying to solve. And
so the problems that government causes have been so bad for so long that the
Argentinians were finally willing to say, you know, no, Moss, you
know you, and let's try something different. And Malay had the something different,
which is economic freedom, liberty and limited government. And people you know,
don't really know history. I guess Americans in particular because they were educated
or indoctrinated in government schools. But a undred years ago, Argentina was one
of the wealthiest countries in the world. And in fact, they're an expression
in America was he's as wealthy as an Argentine or as rich as an Argentine.
I mean, they there was a lot of money down there, and
you know, but the government destroyed all that with the same types of programs
that our government has been destroying our country with. And you know, we're
we're going to experience the same consequences. But every government that's ever been created
has done the same thing, hasn't it. When they have it, it's
been for short periods of time. Yeah, I mean looks to come.
The founding fathers in the United States were very familiar with the track record of
government, and they recognize that the success of a nation is defined by its
ability to constrain its government. And that's what the whole Constitution was about.
It was about chaining the government, binding the government, and the change and
the Constitution is what they said. And they warned us that we can maintain
our limit in our prosperity so long as we maintain those chains. But to
the extent that the government was able to break free and start doing things that
the Constitution prohibited, you know, our days were numbered. And that's what's
happened. I mean, the Constitution now is basically a piece of paper for
all practical purposes. The government does all sorts of things that are not authorized
by the Constitution, yet it does it anyway, and so you know,
that's why we're thirty four and a half trillion in debt. That's why we
have you know, a couple of hundred trillion of unfunded liabilities. You know,
that's why, you know, record numbers of married women have to work.
That's why record numbers of workers have two or three jobs just to pay
the bills. That's why Americans are drowning in debt and have no savings and
are dependent on a government run POSI scheme for their retirement. You know,
once upon a time, this is not the way it was in America.
We were a very strong economy and we had you know, wealthy individuals and
a small government. And I'm talking about just the middle class. I mean,
we built the middle class. You know, the middle class didn't build
the country. Capitalism and freedom built the middle class, you know, and
government, government, regulation and taxation is destroyed. It so true. So
going back to inflation, when you if you actually had a real inflation number
figured into these elusive GDP numbers. We've been in a recession for years already,
haven't we. Yeah. Well, you know a lot of people don't
recall, or maybe they don't even know, but the Great Session two thousand
and seven, two thousand and eight. That recession started in December of seven,
but up until December of eight, a year later, everybody was talking
about how great the economy was because all the numbers were still good. And
I remember, you know, the summer of two thousand and eight being on
you know, CNBC and Fox and CNN table shows arguing about the weakness in
the economy, and people were saying, you know, no, the economy
is great. It's the greatest story never told. It's goldilocks. There's no
inflation, no recession anywhere in sight, and we were in a recession.
They couldn't see one that they thought was in the future, but we were
already in one in the present. The government all of a sudden in December
of eight went back and they revised a year's worth of economic data, and
then after the fact said, you know, we've actually been in a recession
for a whole year. All the time we were giving you all this positive
data, it was actually wrong. We were in a recession. So there
already is a precedent for the government putting out bake data for an entire year
before having to go back and admit the truth. They even admitted what the
truth was. So I think that you know, given this as an election
year two, that there's a good chance that the data that we've been receiving
that is leading people to believe we have a strong economy is in fact inaccurate,
and it will be revised and we'll find out that we're in a recession
right now. In fact, every month, I think maybe there's been one
month in the last year year and a half where they haven't revised down the
job's number a month after. I mean, that's not random coincidence. I
mean, if you toss a coin, you're not going to get, you
know, fifteen heads in one tail. I mean, if that happens is
because the coin is not fair. There's something itch ring right, and so
the government is rigging these numbers. It's always overestimating how many jobs were created,
and then it comes back the next month and eliminates them and comes up
with another overestimation. But the media always seeses on what they report for that
month. They ignore the revisions for the prior months, and they don't look
beneath the surface, and they don't look at the household survey which shows every
month that we lose jobs, and in fact, there are fewer people with
full time jobs now than there were a couple of years ago. True,
and pretty much all the jobs that we're creating are part time jobs, and
they're all going to people who already have jobs. So it's not like people
are moving from the unemployment line to some production line. It's people that have
jobs that are moonlighting. And they're not moonlighting because they want to, it's
because they have to. It's because their salaries haven't kept pace with the true
increase in the cost of living, and so the only way to pay the
bills other than putting it on a credit card is to get another job.
And that's why a lot of people do it. And then Biden wants to
claim credit for all these jobs that are being created when the people who are
working these jobs would prefer not to have them. So they want to blame
Biden for these jobs. They don't want to give him credit. Yeah,
they're going to give it. Eight. So, going back in history,
you mentioned the Great Financial Collapse, the GFC, as they call it,
the Great Recession. You give a talk, you're a keynote speaker at the
National Association of Realtors. If I remember correctly explaining to them that housing was
going to have a bust, and yeah, well you're talking about That was
mortgage Banker's conference in Las Vegas, right. I spoke there twice in two
thousand and six, in two thousand and seven, And the only reason I
came back in two thousand and seven was because I was trying to get investors
into my hedge funds short the subprime market. No, two thousand and six,
excuse me. I spoke in two thousand and five, in two thousand
and six, so two thousand and six was the second talk. And I
always spoke because they gave me a workshop where I could, you know,
promote and look for investors in the hedge fund. And you know, there
were three thousand mortgage bankers there, and I thought, some of these guys
are going to want to put a little money, you know, on the
don't pass line just as a hedge because they all make their living in mortgage
finance. And I was going to tell them that the whole market was going
to implode, and I thought maybe some of them would like to just bet
a little bit on shorty subprime so that they lost their jobs. You know,
they could at least make money in the fund. But out of the
three thousand people that were there, maybe fifty sixty decided to hear me out
for my hedge fund. And out of those guys, only one guy invested
and he sent in five hundred thousand dollars and about a year later I sent
him back five million. So that was that was his return short for shorty
Subprime Abey, after he paid the twenty percent profit share. But yeah,
I mean, people just didn't want to believe it. I was trying to
tell them, you know, what was really going on in the mortgage market
and the alsie market, but you know, nobody could accept that reality.
And you know, the same thing is happening today. I mean, it's
cognitive dissident. People are trapped in a gigantic bubble and they think everything is
great and they think it's imperious, and you know, I've been warning about
it for years and years, the way I warned about the housing bubble for
years and years. But as the bubble got bigger, everybody just assumed that
I was wrong. And the bubble we have now, which is much bigger
than a mere housing bubble, has been inflating for you know, many many
more years, and people have just made the same mistake. They think,
well, I've been warning about it for so long, I must be wrong,
because you know, nothing's crashed, you know, the stock markets and
a record e right, so Peter Schiff must be wrong. I'm not wrong.
All the problems that I've been warning about have gotten worse as i've been
warning about them. And it doesn't mean that there's no consequences. It just
means that the consequences are going to be even worse because we allowed it to
continue for so long. Because in a now, allowing it to continue,
we actually make it worse, right, we make them bigger bubble, and
so it's even you know, greater consequences and more people are going to get
decimated when when it pops and pop it will. Do you think there was
anything you could have said to those people back in two thousand and five,
two thousand and six, anything you could have done. I don't know.
I tried. I tried my best because I was going to get a percentage
of their profits if they got into the fund. No, I mean I
was talking until I was blue in the face, you know, I mean,
I haven't seen anything like that you know, it was even worse,
I thought than the dot coms, because I tried to talk to a lot
of people about why I thought the dot coms were going to come down.
But the people who own these stocks, I mean, we're really like religious
fanatics and like nothing I said, you know, penetrated their own self defense
wall that they built up. Housing, to me was almost worse or was
in that, you know, people own homes and they couldn't even contemplate that
the price can go down, right, that's impossible, right, but real
estate doesn't go down. Yeah, But what I've seen now in bitcoin tops,
it all takes the cake. I've never seen more irrational exuberance, more
arrogance, I've never I've never seen more smart people say so many dumb things
other than through in bitcoin into crypto. So this is this is the worst
of them as far as I'm concerned with psychology and occultish nature of what's going
on. But all these bubbles are sourced, you know, basically from the
FED and cheap money and and and you know, the crypto bubble is just
you know, the epitomey of it. But I mean, there are a
lot of other examples of what's going on. And that's another thing where people
say, well, I've you been warning about bitcoin being a bubble for a
long time. Yeah, I have, and the bubble just gets bigger and
bigger and bigger. That doesn't mean that I was wrong about my underlying assessment
of what of what bitcoin is. You know, Michael Sailor is out the
other day, you know, just borrowed another six hundred and eight hundred million
to buy more bitcoin, right with borrowed money. But he acknowledges that it's
not a currency. He says, it's it's not a good media of exchange
or a unit of account. He just thinks it's the ultimate store of value.
But what value is it storing if it doesn't do anything? It does
it does it generate income, It doesn't have any real use case. And
he says that bitcoin is the greatest property, that digital property. He thinks
bitcoin is better than gold, better than stocks, better than real estate.
It's nothing, it's but you know this, this is the reality of where
of what we're living in. But look, it's going to come crashing down.
And that's what. Look, I've got my own money invested. I'm
prepared, you know, I own real assets. I have the portfolio of
global equities, a good dividend paying value stocks. The businesses that I own,
I invest in for myself and clients are selling uh uh services or providing
services, producing manufacturing products, harvesting resources that the world needs, that their
customers need, that they're going to keep paying for if they raise their prices,
they're going to keep buying, and the companies are going to keep paying
me dividends. I've got a lot of resource type stocks. I've been loaded
up, you know on the gold mining stocks. Uh. They've been giving
them away. In fact, a lot of people recently I've been selling their
gold stocks and their goal to buy bitcoin ETFs, which has been a godsend
for people like me and my clients. This gives us more opportunity to buy.
It's unfortunate that that people are trading in their goal for trinkings of you
know nothing. But the other big winners have been the foreign central banks.
They're the major buyers of gold. You know, they keep buying up all
the gold. And you know, as much as a lot of people don't
like central bankers, and you know, you know, I don't like them
very much either. Uh. You got to, you know, respect what
they're doing and take note, because you know it's not that they're just reading
the writing on the wall. They put the writing on the wall. They
wrote it. They are de dollarizing and they are getting out of dollars,
and what are they getting into. They're getting into gold. Right, you
have to get into something when you get out of the dollar. You got
to buy something with the dollars. They are buying gold and they have a
lot more goal to buy. And the only reason the price isn't already much
higher is because you know, other people were dumb enough to sell theirs and
so these the ETFs have been providing goal to foreign central banks. But at
some point the selling is going to exhaust and Americans are going to stop selling
their goal. And then the question is where are the foreign central banks going
to get it? Because the gold mining companies aren't producing that much, so
the prices are going to have to go a lot higher to get production up
to where it needs to be to satisfy all the demand that's coming not just
from continued demand from central banks, but a return of retail demand. And
I think a big movie by institutions in the goal because right now what's holding
gold back as everybody thinks that the inflation genie is back in the bottle,
right the rate irons work and we're back at two percent. They didn't work.
Rates are too low. They need to be higher, but the FED
can't raise them higher because we're too broke, especially in the US government,
which is already spending at trillion dollars a year on interest. We're now spending
more on interest and on national defense, and we spend too much on national
defense. But we can cut national defense. We can't cut the interest unless
we want a default on our debt. But that one trillion dollar number price
tag is headed to two trillion and then higher, and so the FED is
in a box. It can't fight inflation. So instead of uh, you
know, fighting in barks, it just talks about fighting inflation and how it's
willing to be tough, but it can't really do anything because it's hamstrung by
the amount of debt. But the reason there's so much debt is because the
FED kept interest rates so low for so long and enabled it all to happen.
So the FED is responsible for all the debt that now makes it impossible
for the FED to fight inflation, except that investors haven't figured that out yet.
They still think, well, you know, if the FED just delays
the raid cuts a couple of months, that'll do the trick. It's not
going to happen. Inflations are going to run out of control, and when
people come to that conclusion, they are going to be running from dollars and
and moving into gold. But you don't want to wait for that to happen.
That's why you know, I'm I'm fully invested, you know. I
think there are a lot of people that think they're you know, they're super
smart and they can time this, that they can figure out exactly when to
get into the gold stocks or get out of the dollar. I know that
I'm not smart enough to do that, and I don't know anybody who really
is. They could be accurate, you know, So I just want to
I know what the end game is, and the only way to make sure
that you win is to be properly positioned. Now, don't don't hope that
you're going to end up in the right position because you're gonna you're gonna time
it perfectly. You don't have to time it perfectly, you just have to
be early. Yeah, all right, Well, hey, so real estate,
what's what's going to happen there? Well, I mean depends on what
you're looking at. I mean, commercial real estate is a disaster, which
was not even a problem. In two thousand and eight. Commercial real estate
went up, and now it's obliterated. I mean you've got properties that are
down fifty to sixty seventy percent. You know, people are walking away from
office buildings and strip malls and and the banks are stuck with them, and
there's foreclosures. So there's huge losses you know for the regional banks that are
holding out of this paper. The residential real estate market is very different.
Banks are losing a ton of money on their residential mortgages too, not because
of default, because people are paying. The problem is and they're paying three
percent four percent and their cost of money is five percent. So the mortgages
that they used to make money on when the Fed ad rates said zero,
they're losing money on those mortgages now, and that they have to sell the
mortgages because the depositors want their money. They're looking at, you know,
losses. I mean, basically all these banks are insolvent. Uh. If
the depositors want their money, or if they had to do honest accounting.
So everything is being propped up, you know, by cooking the books,
and by government backstops and guarantees, and by the Fed. So I think
the banks are in a lot of trouble. But what's the dynamics in the
housing market now are very different than what they were in eight Even though the
market is overpriced just the way it was back then. The difference is now
you've got so many people who own those overpriced homes that have very valuable mortgages
that they don't want to lose. Right if I've got some bank that was
Domino to loan me money for thirty years at three percent, and maybe I
got twenty five years left on that mortgage, I ain't moving, no,
I mean, because I'm going to make those payments because rents of skyrocketed,
but my mortgage payment hasn't and it's locked in. And so but the only
way you can keep that mortgage is if you know is if you keep the
house, you know you, So these houses are not on the market.
People aren't selling the houses because they want it. They want the mortgage.
I mean, the banks could pay people to sell their houses, so they
can get out out of jail on these mortgages that they're they're losing all this
money out, so you're not getting houses on the market. Normally, when
rates go up, you know, housing prices come down to offset it.
But they're not coming down because there's no supply. Also, what's constraining supply
is inflation has driven up the cost of construction and the cost of labor,
so you can't really build the houses right, and so there's not enough houses
on the market. And that's another reason that that that rents can keep going
up because the landlords know that their tenants are stuck as renters because they can't
afford to buy. But you know, the people who have these fixed rate
mortgages, they're not just you know, it's not all sunshine at lollipops because
they're maintenance built, their insurance costs, their taxes, I mean, all
the other costs of home ownership are going up. The only thing that's not
going up is their fixed rate mortgage payment. So, you know, but
I do think that at some point, you know, houses are going to
come on the market. People are going to die, people are going to
lose their jobs, people are going to get divorced. I mean, things
are going to happen, and so the supply will eventually build. And in
some really really open priced markets, I mean there's a lot of room for
prices to come down. You know California for example, you know, and
a lot of these markets too. You have other dynamics of soaring crime.
You know, we're being pulled, you know, I mean just you know,
we're going to want to get out, and you know who's going to
want to buy, so the prices are going to have to come tow So
it's very much you know, a local market, right. All real estate
is local, So it's not like a big model it where I can say
home prices are going down, some own prices will go down, and other
own prices could go up. I remember, all of this is in an
inflationary environment, so nothing's really going up, right. It's the dollar that's
going down, that's what's happening. Right, So your house isn't becoming more
valuable. It's just the dollars that people would pay you to buy your house
are becoming less valuable, so you need a lot more dollars for the house.
That's all that's happening, all right, Well, I think you've summed
it up quite well. And as my ex love partner used to say,
the situation is hopeless but never serious, but it's looking more serious by the
day. Here so best place to find you europac dot com and we'll have
links to your podcast and to Shift Gold of course in the show that this
interview on Financial Survival Network dot com orways a pleasure having you on Peter,
even if the words aren't that encouraging, Hey better you should know the truth
and you can hopefully do something that's ignorant. That's what I told the people
at that mortgage banker's conference. You know, forewarned is forearmed. Don't shoot
the messenger, be glad that you got the message, and take action to
protect yourself. And you know, that's what I would encourage all of your
listeners to do, is to you know, not ignore the warnings, just
to do something so you don't regret it later. All the things you could
have done and should have done it would have done, just do them now.
And yeah, I get a hold of my guys at you'repack dot com
or if you're doing yourself or you don't have five mutual funds, your Pacific
funds. You can buy no load on any of the major discount prokerage firms.
You know, we've been getting net redemptions for months out of our goalfund
as the price of goal keeps going up. Ever said anything like it.
Normally the public wants to buy when the market is going up, but recently
they've been selling, and you know, the public is generally wrong, and
so you want to buy what they're selling. And what they're selling is gold
stocks, so you can you can get into the Europacific goalflud all right,
excellent. Hey, if you've got a question for Peter or myself, shoot
me an email k l at Terry LUTs dot com. Peter, stay well,
stay safe and we will talk to you again soon. You to carry
nicely. Be with you. Thanks for listening to Carrie Letz's Financial Survival Network,
your solution to today's trying times. For the latest, go to Financial
Survivalnetwork dot com. Financial Survival Network now more than ever