Peter Schiff: We're Living On Borrowed Time!

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by Tyler Durden
Tuesday, Sep 12, 2023 - 03:10 PM


Peter Schiff recently appeared on Nino’s Corner with David Nino Rodriguez to talk about the trajectory of the economy. Peter explained why the dollar is doomed to crash and what we can do to prepare. He also emphasized that the powers that be have managed to kick the can down the road for a lot longer than he expected.

But you can’t kick the can down the road forever. Eventually, you will run out of road.

Rodriguez is a heavyweight boxer who was ranked as high as number 13 in the world by the WBC and 12th by the WBA.

Highlights from the Interview

“There really is no ‘Bidenomics.’ All they’re doing is spending money. Any fool can do that.”

“I just think they’re trying to get votes. That’s the bottom line. They’re trying to hand out something for nothing. The problem is the voters don’t understand how expensive it is when you get something free from the government. Politicians exploit that ignorance and that greed to perpetuate their own careers. Unfortunately, it undermines the living standards of all the people who are voting to reelect them.”

“Don’t think just because you didn’t get a tax hike that you’re not paying for Bidenomics. You’re paying for it all every time you go to the supermarket.”

“The problem with immigrants isn’t the immigrants. It’s the welfare state that attracts many immigrants. We need to turn that off.”

“I think what is going to be the catalyst for the next major leg down is going to be when inflation kicks into a new gear and it rears its head in an even bigger way than it did back in 2021, 2022.”

It’s going to be a deluge before too long where it’s a rush to get out of the dollar. We have these deficits — $2 trillion-plus annual budget deficits — not only as far as the eye can see, but the eye can see them getting much bigger than 2 trillion, 3 trillion, 4 trillion. It’s completely unsustainable. During the next official recession, when unemployment really spikes back up, the deficits are going to be $4 trillion per year, $5 trillion per year.”

“Americans get to live a standard of living that is much higher than what we would otherwise be entitled to based on our own productivity. But to make that possible, the rest of the world — and it’s not proportionate, some parts of the world feel the burden more than others —  but the world outside the United States lives collectively beneath its means to enable 300 million Americans to live above their means. So, we get to consume without producing, but the rest of the world has to produce without consuming. We get to borrow without saving, and the rest of the world has to save without borrowing. So, we get all the fun stuff to make our lives better, and they do all the hard work that makes that possible.”

“We created an additional incentive for the world to move off the dollar based on the sanctions that the Biden administration imposed on Russia following the invasion of Ukraine. That was a huge wakeup call to every nation in the world.”

“It sent a message. ‘Get out of the dollar! Otherwise, you’re in a very vulnerable position because the US could punish you for using the dollar.'”

“When I think there will be a rush to get out of the dollar is once you start to see a significant erosion in the dollar’s exchange rate relative to a lot of other currencies.”

“Interest rates have helped prop up the dollar, and so our creditors are not in a rush to get rid of their dollars. But once they really see the dollar falling, and I think maybe it needs to fall maybe 20% or more from here, but once that happens, and then it keeps falling, then it can go into freefall. Because then people are going to get nervous about their dollars and they are going to want to get rid of them. But then, as more people want to get rid of them, the price starts to drop even faster, and ultimately it produces a crash when everybody’s like, ‘Oh, that’s it! We’ve got to get out no matter what. Sell at any price.’ Then you get a complete implosion of the dollar, which sends consumer prices absolutely ballistic here in the United States.”

“We’re literally living on borrowed time. We’ve been able to kick the can down the road for many, many years longer than I thought we could a decade or two ago. But the problem is all these years of can-kicking have simply allowed the problems to get much bigger. And so the consequences we didn’t want to deal with a decade ago are much more severe now because we didn’t deal with them a decade ago. We let the problems get bigger.”

“When this crisis hits, because we’ve succeeded in delaying the inevitable, the inevitable is going to be that much worse.”

“That’s certainly one thing you can do. Buy goldBuy silver. I have a company, SchiffGold, that you can go and buy gold and silver from. We’ve got great prices. We don’t push people into numismatics or other so-called collectibles where the commissions are huge and the salesmen make a lot of money. We get you into the right coins and bars that you need at the lowest markups. And that will hedge you from inflation. Don’t be fooled into thinking, ‘I can get 5% in a money market.’ Five percent isn’t even going to come close to breaking you even with how much inflation is going to be.”

“Gold and silver are better than holding cash or bonds. But I would not put everything into gold and silver. Now, if you don’t have a lot of money, if you only have a few thousand dollars, that’s fine. But if you’ve got a real portfolio … you do want to get rid of your US stocks and bonds, and you want to get into international stocks. That’s what we do at EuroPacific Asset Management.”