'Pomp' & Schiff On Bitcoin & Bullion

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by Tyler Durden
Monday, Jul 27, 2020 - 01:10 PM


Peter Schiff did a live show with Anthony Pompliano on Sunday to talk about goldsilver, bitcoin and crypto.

Known as “Pomp,” Pompliano is co-founder and partner at Morgan Creek Digital, “a multi-strategy investment firm focused on providing access to blockchain technology and digital assets.”

At the time of the recording, gold had just broken its all-time record.

“I’ve been waiting since 2011 for gold to take out that high,” Peter said.

Meanwhile, bitcoin had climbed above $10,000. Peter pointed out the last three times this has happened, bitcoin got killed.

“So, the question is, is the fourth time the charm for bitcoin? It’s put up or shut up for bitcoin. It’s got to hold $10,000 now, don’t you think?” Peter asked.

Pomp brought up one thing both he and Peter can agree on — the macroeconomy is screwed up and something other than what’s going on has to be the solution, whether its gold or bitcoin.

“Oh yeah, look,” Peter said, “The dollar index is tanking tonight. … This is a big deal — the weak dollar. People are trying to get out of the dollar. I think the dollar is going to crash.”

Peter asked a poignant question: how is the Fed going to stop the dollar from falling?

Here are some of Peter’s other highlights from the discussion

“Once the dollar starts to fall, it takes on a life of its own. … If the dollar is going to fall, and people believe it is going to fall, they’re going to dump those bonds. And then they’re going to dump the dollars. So, as the dollar goes down and more people want to get rid of it, the only way the Fed could try to stop the dollar from falling would be to let interest rates rise sufficiently to offset the risk of holding dollars. So, maybe we would have to start offering 5 or 10% interest on Treasuries. But who the hell can afford that?”

“We’re printing forever. It’s zero percent forever. So now the bottom’s going to drop out of the dollar; I think gold’s going to go through the roof.”

“Gold can go to infinity because the dollar can go to zero.”

“I can take my gold and use it. I can make a ring out of it.”

“The reason I knew that gold had not peaked was gold has been rising against the US dollar ever since the Federal Reserve came into existence. … The US dollar has now lost 99% of its original value. So I knew that that long trend that had been going on for so many years was going to continue. You don’t have that kind of history with bitcoin.”

“[Bitcoin] is not a store of value. It’s been a speculative asset, digital asset, that has gone up in market price. But there is no underlying value in bitcoin, so there’s nothing to store.”

“The bitcoin is not stable enough to price goods and services directly in bitcoin.”

The world’s central banks, all these countries all around the world, that have their own fiat currency, they’re not going to abandon that fiat currency. But they have to find something else to back it with so that it maintains stability and so that their citizens have confidence in it. Right now, it’s backed by dollars. But if the dollar is in freefall and people lose confidence in the dollar, these other fiat currencies need to be backed by something. And what I think they’re going to get backed by is gold. Governments are going to turn to gold.”

There’s not an unlimited supply of gold. There is a limited supply. … The supply of gold, ever since we’ve been mining gold, the supply increases by about 1% per year. That’s it. That’s all the gold you can get.”

“People can trust gold as real. It’s been here for a long time. It has all sorts of uses and all sorts of industries. Bitcoin is just brand new. It has no substance. You have to just trust the miners and all these people … and you have to trust people are going to want it.”

“I am working in the banking world. Bitcoin is poison when it comes to banking.”

Gold measures the value of fiat currencies. It measures the value of the dollar. We have a lot more dollars in circulation today than we have in 2011. And more importantly, the supply of dollars is set to increase much faster  than that supply was set to increase back then (in 2011).”