JRE #445 – Peter Schiff

by

1/22/2014







#445 – Peter Schiff

Peter Schiff is an American businessman, investment broker, author, and financial commentator. Schiff is the CEO and chief global strategist of Euro Pacific Capital Inc. He is known for his outspoken views on the economy, particularly his prediction of the 2008 financial crisis. This episode dives deep into Schiff’s analysis of the U.S. economy, highlighting his concerns about government intervention, the dangers of fiat currency, and the impending economic collapse. The podcast is both insightful and provocative, offering a compelling perspective on the current state of the financial world.

Topics Covered:

  • The Illusion of Economic Growth: Schiff argues that the U.S. economy is experiencing a false sense of prosperity due to government manipulation of asset prices. He contends that real economic growth occurs when a country produces more goods and services, not simply when asset prices rise.
  • The 2008 Financial Crisis and the Bailouts: Schiff accurately predicted the 2008 financial crisis, attributing it to a housing bubble created by government policies. He criticizes the bank bailouts, arguing that they exacerbated the problem by creating a moral hazard and delaying a necessary economic correction.
  • The Dangers of Central Banking: Schiff is a vocal critic of the Federal Reserve, which he believes is responsible for the current economic instability. He argues that the Fed’s monetary policies, including quantitative easing, have inflated asset bubbles and led to excessive debt levels.
  • The Impending Economic Disaster: Schiff believes that the U.S. economy is on the verge of a major collapse, triggered by the collapse of the dollar. He predicts that this collapse will result in hyperinflation and widespread economic hardship.
  • The Importance of Sound Money: Schiff advocates for a return to a gold standard, arguing that it is essential for a stable and healthy economy. He believes that fiat currency, like the U.S. dollar, lacks intrinsic value and is susceptible to manipulation by governments.
  • Government Intervention and Regulation: Schiff argues that excessive government intervention and regulation stifle economic growth and innovation. He believes that the free market, with minimal government involvement, is the most efficient way to allocate resources and create wealth.
  • The Moral Hazard of Government Insurance: Schiff criticizes government-insured bank deposits, arguing that it creates a moral hazard where banks take on excessive risk because they know the government will bail them out.
  • The Importance of Individual Responsibility: Schiff emphasizes the importance of individual responsibility in a free market. He believes that individuals should be free to make their own choices, even if those choices lead to negative consequences.
  • The War on Drugs: Schiff argues that the war on drugs is a failed policy that has done more harm than good. He believes that legalizing drugs would reduce crime and improve public safety.
  • The Minimum Wage: Schiff is a staunch opponent of the minimum wage, arguing that it destroys jobs and prevents unskilled workers from entering the labor market. He believes that the free market should determine wages based on the value of an individual’s skills and productivity.
  • Environmental Protection: Schiff believes that environmental protection is best left to the free market, with individuals and businesses being held accountable for their actions through lawsuits and market forces. He contends that government regulation is often ineffective and counterproductive.
  • The Role of Government: Schiff advocates for a limited government, focusing on protecting individual rights and liberties while minimizing intervention in the economy. He argues that the government should focus on national defense and leave other areas to the free market.
  • The Military Industrial Complex: Schiff expresses concern about the growth of the military industrial complex, which he believes profits from war and perpetuates conflict.
  • The Social Security Ponzi Scheme: Schiff argues that Social Security is an unsustainable Ponzi scheme that will eventually collapse. He believes that it is a form of welfare that transfers wealth from young to old.
  • The Importance of Education: Schiff criticizes the current education system, which he believes is too expensive and ineffective. He argues that individuals should be free to pursue education that is relevant to their interests and career goals, without being forced to go to college.
  • The Future of the U.S. Economy: Schiff paints a bleak outlook for the U.S. economy, predicting that the impending economic collapse will be far worse than 2008. He believes that the only way to prevent this collapse is to return to sound money and limited government.
  • Bitcoin: Schiff is skeptical of Bitcoin and other cryptocurrencies, arguing that they lack intrinsic value and are likely to collapse. He believes that true digital currency should be backed by gold.

Memorable Quotes:

  • “What’s economic growth is when your economy produces more stuff. When you have more output of the goods and services that make people’s lives better, right? You wanna grow your standard of living, You know, if people are poor, they’re poor because they don’t have enough stuff.” – Schiff defines real economic growth, emphasizing the importance of production.
  • “The best economy is a free economy. It doesn’t need micromanagement. Don’t you think that if you if you wanna be a socialist, then wanna try to micromanage and centrally plan the economy, then you need advisors. But if you believe in capitalism, there is no advice. Just let the market function.” – Schiff argues for a laissez-faire approach to the economy.
  • “They’re getting rich off the government. They’re getting rich by they get the money first. They get the money cheapest. They get to borrow money at practically nothing and speculate with it. They create no real wealth for society, but they’re getting rich on their own. But all of this is phony. All of this is gonna end in complete disaster.” – Schiff criticizes the current system of wealth accumulation, which he believes is fueled by government intervention.
  • “The greatest threat to America is not corporations. It’s the government. Right? I mean and and, you know, the interesting thing, when you have a lot of people that are afraid of corporations, and it’s, oh, big corporations are bad. It’s like, you know, well but what could a corporation in general do to you if they they they can make a product and they can hope that you buy it? But it’s your decision. You choose.” – Schiff distinguishes between the power of corporations and the government.
  • “We gotta end this thing. We gotta we gotta stop the Social Security tax. Right? Let the young people off the hook. And now we have to deal with the consequences of a failed system.” – Schiff calls for an end to Social Security, arguing that it is unsustainable and unfair to younger generations.


 

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