Peter Schiff on Gold’s Dominance Over the S&P and the Plot to Stop You From Noticing

26:54So they made drastic changes to the methodology for calculating the CPI. And they've done the same thing for unemployment too. The government constantly changes how they measure. Oh, I've noticed. Right. So today - Unemployment doesn't measure how many people are unemployed. No, not even close. I know. So in order to see what prices are doing, you pretty much have to double whatever the government says. I mean, I did a - But tell us what the changes are that they made. Well, they introduced all kinds of substitution, hedonics. Just, you know, they make changes to the basket. I don't even know.

27:30In 2013, I did a YouTube video. It's a long time ago. Because I remember looking at the CPI and according to the government, over a 10-year period, newspaper and magazine prices were up by 30%. And I remember thinking, I don't know, I think they're up more than that. So I went on the internet and I took the 20 most popular newspapers and magazines in 2013. And I looked at what the prices were because it's just written right there on the cover. It's not hard to see. And then I went and I got photographs on the internet of the exact same newspapers and magazines from 10 years earlier. And I looked at the prices and I just compared them.

28:11And the actual increase was 130%. So who knows how you put 130 % in and and only 30 % comes out. That is the magic of the CPI. So, you know. Well, that's just, that's lying. Well, yeah, that's what they do. I mean, unemployment, the way they measure unemployment now, they used to, when they measured unemployment, the official rate. So when they go back and they say, hey, unemployment's not as bad as it was in the 70s, of course, it's actually worse if we measured it the way we measured it then. Because back then, if you were part-time, had a part-time job, but you were looking for a full-time job, you were still unemployed.

28:54And now you don't count, right? If you're, if you're, if you're, you could be, you can be working one, one hour a week and you're not unemployed anymore. Even if you spend the rest of the week looking for work, you're still not unemployed. You used to be unemployed. If you've stopped looking for work because you can't find a job and you're just tired of looking, you really want one, but you're just not looking because you're, you're convinced there is no job for you. You used to be counted as unemployed. Today they say, well, you're discouraged. We're not going to count you. So if you give up looking for work, but you don't have a job, you're no longer unemployed.

29:26But back in the 70s and 80s, you were still unemployed. So we've basically taken so many unemployed people and we've decided that we're not going to count them as being unemployed. That's the reason that unemployment is so low, because we're not counting all these people. If we still measured unemployment now, the way we did in the 70s and 80s, the official unemployment rate would be well over 10%. And the inflation rate would be at least double what they claim. And Donald Trump, ironically enough, when Donald Trump ran for office the first time, he said this. If you remember, he kept saying, don't believe these government numbers.

30:02They're fake. Unemployment is a lot higher. But once he became president, then he told everybody the numbers were real because he wanted people to believe he was doing a great job. And so he pointed to the same government numbers that he said were fake when he was trying to get elected. All of a sudden, they were real when he wanted to use those same fake numbers to pretend that the economy was doing well when it wasn't doing well. So the big, beautiful bill was the worst thing that we've done under Trump because the big, beautiful bill not only preserved all the deficit spending under Biden, but it expanded it.

30:42It made it worse, right? We made the deficits even worse by increasing government spending and through tax cuts. And so now we're going to have even bigger deficits and the Fed is going to be monetizing those deficits. Money supply, you know, after - What does it mean to monetize a deficit? It just buys, prints money and buys the bonds. And in fact, just last week, the Fed basically said, we're going back to quantitative easing without saying it because they don't want to admit it. But they announced, you know, they were doing quantitative tightening, right? They were shrinking their balance sheet because the balance sheet blew up, you know, after the financial crisis and then after COVID.

31:22And so the Fed was reducing, shrinking the balance sheet and they stopped in December, just this month. But now they restarted expanding it again. They're now printing money to buy up treasuries in order to suppress interest rates. But the underlying problem with the US economy has been for decades now, interest rates are too low, right? Everybody says, oh, we need lower interest rates. We need lower interest rates. We actually need higher interest rates. The reason our economy is so screwed up is because interest rates have been too low. That's why nobody saves because you don't have a return on savings and everybody is going into debt.

32:00We have record debt in the government, record debt in the corporate sector, record debt in households, all because the Fed has kept interest rates too low. And they've done that to keep this bubble economy going. In fact, that's the real reason when the Fed started hiking rates, the reason it stopped hiking rates wasn't because they finished the job and they beat inflation. It was because the banks started to fail. You had several banks that went under because of higher rates, which was another thing that I predicted, just like I predicted the 2008 financial crisis. I predicted that the Fed was set at sowing the stage of another crisis by keeping interest rates so low because the banks were loading up on low-yielding long-term mortgages and government debt.

32:46And everybody thought this was great. People can go out and buy a house and they can borrow money at three and 4%. But I was pointing out, well, what happens to the lenders who own all that paper when interest rates eventually go up and they're stuck with this long-term debt where they're collecting three or 4%, but now their cost of funds are 5 % and they're getting killed. And I said exactly what's happening with the housing market now. You have a situation where the Fed has inflated a housing bubble bigger than the one that popped in 2007 because they kept interest rates so low and people were able to borrow money to bid up home prices.

33:25But now that mortgage rates are not rock bottom anymore. They're still not high. They're still low by historic standards. They're just not as low as they were, right? 7 % mortgage is still pretty cheap. But you can't afford to buy a home at a 7 % mortgage that was priced for a 3 % mortgage. And so now you have a situation where real estate prices have to fall. Things around the world are moving so fast right now, it's impossible to keep up with all of the changes. But we do know that when those changes happen, markets change too. And nothing changes faster than the price of precious metals, gold and silver.

34:03It just shifts in an instant because it is a reaction to and against what's happening in the world. So timing is essential. If you're thinking about adding precious metals, and you definitely should, we do, you need to know when prices are going to move and why they're moving. And Battalion Metals makes that all really simple. You can buy the dip when it happens. Try calling your broker in the public equities market. No, this is a new world and Battalion makes it a transparent and honest world. There's no fraud here at all. We were founded to fight fraud. So if you want real-time alerts sent directly to your inbox when gold and silver prices move, go to battalionmetals.com slash alerts.

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35:24From craveable sauces to satisfying textures, they're designed to keep you going without slowing you down. So put that fork down. Try the new wraps today in app or at order.sweetgreen.com. Available at participating locations only. Why haven't those prices adjusted more quickly than they have? Well, I mean, it takes some time. I think that's a mystery. It's a mystery. All of a sudden, no one can buy a house, but house prices are still high. Yeah. Well, you know, what's happening is a lot of the people who own their homes and have these low mortgages, they don't feel any pressure to put them on the market.

36:01I mean, if they can get a high price, they'll sell. If not, they're just staying on their homes. Yeah, it would be crazy. Meanwhile, we're not building a lot of new homes because it's very expensive to build them. And in fact, Trump has made them even more expensive with tariffs. So we have tariffs on lumber. We have tariffs on copper and steel and all the things that need to build houses. Plus, we're chasing out all the workers. I think something like 20 % of the people who work in construction are illegal, right? So if they're not here, so you're driving up. Well, that's just bullshit right there.

36:33What you said is bullshit. Well, they are. We've got 50 million illegals in the United States and they're all being paid. not all, but a lot of them are on the government subsidies. So maybe if you took those away, they would go into the construction trades. You've got a lot of unemployed people who could build houses. Yes, but they're not going to take those jobs unless you pay them higher wages. I mean, that's the problem. So you're driving up the cost of building homes. So fewer homes are being built, right? Regardless of what you think of the immigration policy. No, but I'm just saying it's not a potential.

37:00We have all kinds of labor problems. No one can find labor, but it's not because there aren't enough people without work. There are a lot of people. No, there are a lot of people that should be working, but the government has given them an alternative. Right. And so they, and that, that is a huge problem. That is a whole different topic. But the point is that there aren't a lot of homes being constructed and there's not a lot of homes for sale because the people that own the homes, you know, they, they, they, they have such a good deal on their mortgage that they don't, and rather than even sell it, you'll rent it out because now you can rent it out and pay the mortgage and collect the rent.

37:35and you have a good spread there. Of course, you put on an Airbnb. But eventually, people have to sell their houses for whatever reason. People die, people get divorced, people move. Houses are gonna come on the market. And of course, eventually, people are gonna lose their jobs. I mean, we're headed for a very severe recession. I think we've been in recession for years. It's just gonna get a lot worse. And a lot of the houses are gonna come on the market and real estate prices are gonna go down substantially nationwide. And that creates a whole new problem because now if people lose their home equity, now they may just default on their mortgage.

38:13And now in addition to sitting on all these underwater mortgages, banks are going to start to lose money on defaulted mortgages. So the question is who eats the shit sandwich? Is it the real estate? Is it the people who have real estate assets or the people seeking to buy real estate assets? Yeah. I mean, you can't. Someone's going to get screwed here, right? Exactly. The buyer or the seller. Well, houses are unaffordable. People cannot afford to buy them. So the solution is lower prices. But obviously, if you already own a house and that's your main asset, the last thing you want is lower home prices.

38:51Exactly. And so that is the problem. But the Fed created that problem by blowing up this bubble in the first place. If we'd never had the artificially low interest rates, and of course, the other problem was the government guaranteeing the mortgages. which enabled people to pay more for homes than they otherwise could have paid. So all of these - Can I just ask you a foundational question? Why did, you've referred a couple of times to quantitative easing, the post-financial crisis, interest rates at zero, but that went on for like, what, 15 years or something. Why did that go on for so long? Because they were afraid to let rates go up because of all the debt that we had.

39:27They knew that if they let rates go up, it was going to be a problem. So they kicked a can down the road and they kept them low. But the point is that all of the money in housing, it doesn't make housing more affordable. It actually makes housing more expensive, right? Of course. Whenever the government comes in to try to help you pay for something, they actually make it more expensive. If you look at all the areas where the government is involved in a big way, which would be housing, healthcare, education, that's where prices have gone up the most, right? It's because the government gets involved and subsidizes it.

40:05Before the government got involved in education, college was not expensive. If you were upper middle class in the 1940s, 1950s, you could afford to send your kids to Ivy League schools. It wasn't that big a deal. If you were poor, like my father grew up poor. right? He wasn't dirt poor, but he thought he was like upper, lower, lower, middle. But my father, father, he had eight kids and his mother didn't have a job, right? So even though my grandfather worked as a carpenter, he had a wife who didn't have a job and he was able to support eight kids. And they had a house, they had like a beach house, they had a car.

40:48I mean, they lived okay for what he would consider upper, lower class. Well, if they had a house and a beach house, by modern standards, they'd be rich. But they weren't back then. Right, I'm saying even having eight kids, either you're Amish or you're rich. Yeah, nobody could afford eight. I mean, you gotta be rich to afford eight kids today. And of course you could because your wife would have a job. My grandmother didn't work. And my grandfather came to this country without a penny. He didn't even speak English. He came here at about 12 or 13. No welfare, no food stamps, no government housing, just nothing.

41:19Just show up and get a job. Where did they live? In New Haven, in Connecticut. He worked on building the Yale Bowl. It's like the first thing he did. But anyway, so my father didn't have any money for college. So he got a job in the summer and that paid for all his college. He didn't graduate with any debt. He worked his way through college like a lot of his friends. That was common to do back then. There was no government loans. There was, nobody could get a loan to go to college. But because nobody can get a loan to go to college, the universities had to keep the cost down or they wouldn't have any customers.

41:50So there was a lot of free market pressure to keep tuition down. But what happened during the 1960s is the 18-year-olds got the vote, right? And once 18-year-olds could vote, politicians figured, well, how can we get these kids to vote for us? Oh, let's promise that they don't have to work their way through college anymore. You could just bum around Europe all summer. Go to Woodstock. And we'll arrange loans for you. You can loan money, you can borrow money, and just pay it back later when you get your job. And so they started all these government guaranteed loans. And then what happened? The colleges reacted to that by raising prices.

42:28Hey, the kids have all this money, right? Let's raise prices. And so, and then they kept increasing how much the kids could borrow and the colleges kept raising prices. And then they said, oh, well, let's have fancy gymnasiums. Let's have nicer dorms. Nobody cared how much anything costs because all the loans were coming in. And so the government got involved and now college costs a fortune. Everybody has a degree, so it doesn't even mean anything anymore. and you graduate with a mortgage, right? The government caused tuition prices to skyrocket. The same thing with healthcare. May I ask a question about college loans?

43:02How did the lenders do in that arrangement? Well, the lenders did great because the government guaranteed all the loans. So the lenders didn't care if the kids could pay back the loans. It didn't matter what your major was, right? You could major in basket weaving. You could go to a college, you know, where you take, you know, you don't get no reading or math. I mean, they didn't care because the government guaranteed every loan. And so, you know, in a free market, you couldn't borrow all this money because the banks would be worried about getting the money back. Why am I going to loan all this money to somebody who has no assets?

43:38You know, but once the government comes in, then nobody cares. That's what happened. So the lenders got pretty rich on this. Of course. They always get out. The lenders made a fortune and the universities made a fortune because they got to charge more for their product. Exactly. Right. It's the kids that get stuck with the bill. You get all these liberal or I like to say liberal, but Democrat, radical left politicians that are now complaining about all the student loan debt. They're the reason it exists. Without the government, there would be no student loan debt. Colleges would be a lot less expensive.

44:09Yeah, and people would work their way through like my dad did if they didn't come from an affluent family. But they did the same thing with health care. I mean, health insurance and health care is expensive because the government is so involved in it. And even if you look at where the government is not involved, like LASIK surgery, prices have come down for those procedures because the government doesn't pay for it. And the reason that we all have insurance, people have insurance for everything now. And in fact, what really made it bad, and the Republicans want no role in repealing it, is under Obamacare, they said that insurance companies cannot discriminate against people who are already sick.

45:04Right? If you have a pre-existing condition, the insurance companies have to charge you the same as if you were completely healthy, which destroys the whole concept of insurance and makes it extremely expensive. Well, it's not insurance at that point. It's not. It's free healthcare. It's like you can't buy fire insurance after your house burns down. Right. And if you could, nobody would buy fire insurance before it burns down. Well, no one would have a fire extinguisher either. Why? Yeah. Well, it's like, what if you could buy car insurance that covered all your gas? Right? Right. I mean, would you, I mean, nobody expects their auto insurance to cover their gas or their oil changes or their tires.

45:42Right? You buy auto insurance in case you get a wreck and now you have your car is totaled. Right. You don't have the money. Health insurance is supposed to be, I got cancer. I got a brain tumor. You're not supposed to have health insurance because you sprained your ankle, because you had a baby. Or your annual checkup. Because you got the flu. Yeah. All of that stuff is supposed to be paid for out of pocket. But the reason it's not is because the government created a perverse incentive for people to get their insurance from their employer. Because if your employer gives you health insurance, there's no tax.

46:13If they give you money to buy health insurance, then you have to pay taxes. So now everybody gets their health insurance from their employer. And now they have health insurance that pays for everything. And so, you know, you go to a doctor sometimes and if they tell you you need to do something, ask what it costs. They're like, who the hell knows? Nobody knows what anything costs because nobody cares because nobody's paying for it. The person that's paying for it isn't even in the room. You have the patient and the doctor and neither one of them knows what anything costs because you got some third party that's paying the bill.

46:49So the entire system doesn't work, but it's all because government got involved. Right. When government tries to make things more affordable, it makes them more expensive. The only way to make things cheaper is to let the free market do it. The free market is great at lowering costs and increasing quality. But the free market is blamed. I mean, of course, we don't have anything approaching a free market. Nothing resembles a free market. It's a monopoly economy. It's cartel. But all of this is described as a free market, thereby totally discrediting the concept of free market economics and ensuring that we're going to get a socialist system.

47:24No, we don't have it anymore. And it's very unfortunate because a lot of people look at Trump and they say, well, he is a pro-business president. And he is pro-business, but he's not pro-capitalism, pro-free markets. Donald Trump wants to micromanage the economy from the White House. He's the CEO. He wants to decide where he thinks capital should go and direct it into industries that he likes or companies that he likes. And that's wrong. I mean, one of the big industries that he's promoting is crypto. And for me, I think this is a complete waste of capital. Now, yeah, I mean, if Americans want to throw their money away in a lot of these crypto companies, all right, I mean, it's unfortunate.

48:07But if the government is now promoting it and pushing money into this industry that might have gone someplace else if it was a free market, this is doing a lot of harm. Why is it throwing? I mean, you know, you meet all these people who've made hundreds of millions. You meet kids who've made real money from crypto. Why is it throwing it away? Well, because where did they make it? They didn't make money in crypto because they produced products that we consume or provide services that improve our lives. The people who have made money in crypto, and I know a lot of them, they've made money in crypto because the crypto that they bought a long time ago went way up.

48:48How is that different from buying gold? Well, I don't know a lot of people who got rich buying gold, right? I've done really well, just being honest, and so have you. No, okay, we've tripled our money. I'm talking about people who bought Bitcoin for a dollar and now it's$90 ,000, right? You're talking about people who put - Okay, so it's a big run-up, but it's the same. But when you buy gold, which I own a gold company, I'm totally for buying gold, but it's not a creative act. You're not making anything. You're not making anyone's life better. You're not really adding to the sum total of the economy.

49:24You're not doing anything other than buying something low and holding until it gets high. Right, but there is a big difference, and I'll get to that in a minute. But the people who have made money in crypto, they bought it at a very low price, and now other people are buying it at a much higher price, believing that they're going to be able to do the same thing. There are people who are buying Bitcoin now at$90 ,000, whatever it's at. They're buying it because they think it's going to a million. They think they'll be able to sell it at a million. And of course, the only reason someone's going to buy it at a million is because they think it's going to 10 million, right?

49:59So it's all this greater fool theory. And so - But why is it different from NVIDIA or any stock? So NVIDIA, right? And I think NVIDIA is overpriced. But NVIDIA is a business that is generating income, right? Selling its GPUs and has earnings. So it's an actual viable business. The question is, what is that business worth? I think it's worth less than the market currently believes. But it's worth something. There's no doubt that NVIDIA is a valuable company that is producing things that people need. But the rationale for the trade, like for the average person buying any stock, is that I will buy it lower than I will sell it.

50:36Well— And the people at the very end of that chain, as it starts to decline, get screwed. Well, if that's the reason. Look, if we buy stocks, right, for our customers at Europe Pacific Asset Management, which is my company, the most important criteria is the current earnings and the dividends, right? So I'm buying companies because they generate income to me as the owner. Just like if I were to buy real estate, I would look at the rental income, right? For sure. What am I getting in rent? Of course, yes. If you just buy real estate because you think the price is going to go up, well, you're a real estate speculator.

51:10Maybe you'll speculate right. Maybe you'll be wrong. But it's different from an investor who is looking at the cash flow. For sure. So when I buy a stock, if I'm getting a 7%, 8%, 9 % dividend, right, because I own that company, it's paying me a dividend. I don't need the stock to go up. I just get my share of the income. I'm buying into a business that is generating income. Now, if the business grows and generates more income, in addition to my dividend yield, when I go to sell the stock in the future, if it's a more valuable company that's generating more income and paying more dividends, then I can sell it at a higher price than what I paid, right?

51:45Because the business itself is more valuable. But if you're simply buying a company that doesn't even make any money, then maybe it's losing money. and you just want to bet that in the future it might make money, you're speculating on a stock. You could speculate, but it's very different from being an investor. You're a stock speculator. But when you buy Bitcoin, you're not even speculating in the sense that Bitcoin is going to earn money in the future. It's never going to earn money in the future. It is a non-income producing digital asset. It's marketed as if it were digital gold, but it's not digital gold at all.

52:21It's got nothing in common. with gold. Gold is a valuable commodity. Now, when you own gold, when you decide to buy some gold, right, what you're doing is you're storing that gold so that somebody in the future can use it, right? Gold is unique among commodities in that it doesn't decay, it doesn't spoil, right? For thousands of years, you know, gold will stay the same, right? And if, you know, if a ship sunk 500 years ago in the ocean, and you can salvage that ship today. If there was gold in it, it looks exactly the way it looked when the ship sank. Everything else is gone. So the physical properties of it are enduring.

53:01But they're not just enduring. They are important and valuable because they're needed in all sorts of industries, right? And so when you are storing gold, the gold that you're storing can be used in the future, not just by a jeweler who would want it to make jewelry, but to use in aerospace. in consumer electronics, in medicine. There are all sorts of things where you actually need gold. There are industrial applications for gold. Right. And there are more uses for gold now than there's ever been. And in fact, we're developing new uses all the time. So as we advance as a civilization, we come up with more ways that we can utilize gold.

53:41And so when you're storing that gold and you are holding it for somebody to use in the future, that's why it's a store of value. But can I also add to that? I mean, that's obviously true what you're saying. It's even more true for platinum, which is not as prized as gold. And I think the difference is that gold does have a mystical quality to it. It's been a medium of exchange for all recorded human history, all recorded, I mean, from the earliest rings we have refer to gold. So there's something about gold that people associate with value. Well, it has value. It's not that they associate it. Well, it has industrial value.

54:14Okay, it has value. But even just look, just even here, I have a gold bracelet that I'm wearing. I mean, just having a jeweler have a gold watch, right? Like, I wear gold when I know I'm going to talk about gold. But the reason people - So people can see that people like it for a reason as to where it is gold. But the reason is not so easily explained. It's not just that it's useful in medical devices or in consumer electronics. Is there something about it that resonates that hums at a certain frequency within people? Right, and you're talking - God knows what that is. Societies that never had any interaction with each other were using gold.

54:48That's kind of what I'm saying. Right. But we don't know why. Let's be honest. We don't actually know what that is. No, but when you look at gold and you look at the things you can do with it and the properties that it has, we as humans value the properties that gold has. But it's just inherent. It's like we always have. Well, I would imagine that if there's life on other planets, they value gold there too. I think it's kind of a universal thing as far as the properties that gold has. Now, what Bitcoin did, right? Gold wasn't the first money. It was the best money, right? Because before we had money, there was barter, right?

55:22We invented money. But when there was no money, and if two people wanted to trade with each other, they would barter. So if I was a butcher and you were a baker and you wanted some meat, you would offer me some of your bread, right? And then I would give you some meat and we could trade. But what if you're a vegetarian, right? What if you don't want meat? How am I gonna buy your bread if all I have is meat, right? So it was difficult because you needed a confluence of needs. But man invented money, which was a commodity that everybody would accept as payment. And so if I had money, then I could buy your bread and give you the money.

56:04And then you could take that money and buy something else. But the money also had to be something of value, but not bread, which would go stale, or meat that would go bad. The money had to be a commodity that would hold onto its value. And so that's where gold came in. So instead of giving you meat that you'd have to eat right away or freeze it or something, I'd just give you gold. And you knew that that was valuable. And somebody else, the candlestick maker, would take gold for his candlesticks. You don't need to give him meat. You don't need to give him bread. And a lot of things were used as money throughout societies.

56:40But what ended up being the best money was gold. And they made coins out of it and you could easily tell how much gold was in each coin and what kind of weight of gold you were getting in exchange for whatever it was you were selling. And the reason gold became better money than seashells or cattle or salt, different things that were used. The Romans used salt as money. That's where the word salary comes from, right? Because it was salt.

57:11But gold had a lot of properties. It was very divisible. It was very portable. It was very durable. It was fungible. It had a lot of these properties that really made it ideal to use this money. And so what the creator of Bitcoin did is he came up with a digital token that mimicked those properties, right? Bitcoin, it's portable. It's divisible. It's fungible, right? It can do all that stuff, which is fine. But what it doesn't have is the most important characteristic that you need to be money, and that's you have to be a valuable commodity. You have to have value, intrinsic value on your own.

57:54There has to be a use beyond just a medium of exchange because money needs to be a store of value. It can't just be a medium of exchange or a unit account. It has to be a store of value. And so in order to store value, you got to have value, right? You can't store something that you don't have. So when you have gold, you're storing the value of a metal that can be used in jewelry and consumer electronics and aerospace and all this stuff. But when you're holding on to Bitcoin, you have nothing. I can't do anything with Bitcoin. It can't be used for anything because it's just a string of numbers.

58:26So it has no actual use. Sure, I can give you my Bitcoin. I can sell you my Bitcoin. But what can you do with it? Well, you could give it to somebody else or sell it to somebody else. But the only reason anybody wants to buy it is because they think the price is going to go up. That is the sole source of demand is I'm going to get rich. If I buy this Bitcoin and hodl it and never sell it and ride out the volatility, I'm going to get rich. Well, there was another use that was intended or at least advertised at the very beginning. I remember it vividly, which was as a medium of exchange that couldn't be controlled by governments.

59:01and that was going to usher in true human freedom where they couldn't control commerce. Yeah, part of the promise of Bitcoin when I first learned about it was it was anonymous and private and it allowed you to circumvent the AML laws and the KYC laws and you can transact without the government knowing what you were doing. And that was a positive aspect of it. Well, yeah, that was the whole appeal to me. Which is completely lost now that it's all in ETFs and Bitcoin treasury companies and all that. But even though that was appealing, because it didn't have any real underlying value, you couldn't really keep a lot of money in it.

59:42It was only really useful, I think, for people who were doing something illegal. Because there, if you have to launder money because you're doing something illegal, even if I end up losing 20 or 30 % of my money in Bitcoin because I accept Bitcoin and by the time I use it, It's, you know, it's lost 30 % of its value. That's fine because criminals are used to paying to launder money. Of course. They don't mind it. But if you're a lawless, honest person and, you know, I'm buying stuff, I really don't, you know, care if the government knows I bought it. You're not going to take that kind of a risk to be anonymous, to be, you know, to transact in private.

1:00:22And, you know, I think it's unfortunate that we've lost all of this privacy that we once had. I mean, it was, you know, constitutional right. You had a right to privacy. The whole constitution is written. Yeah, but not anymore. There's no privacy whatsoever anymore.

1:00:40But ultimately, the fact that it didn't have any real value is what lessened that appeal to most people. But in order to make Bitcoin palatable to Wall Street, they actually got all this government regulation. I mean, can you imagine an industry that is just asking to be regulated, wants regulation? I mean, normally a business industry would want as little regulation as possible. They don't want the government getting involved. Well, they call it clarity. Well, what they're looking for in crypto is validation. They want the regulation to validate product in the industry so they can get people to buy it by saying the government has blessed it.

1:01:19So the government now endorses it. The government is supporting it. And the reason that so many politicians, including Trump, the reason that they support Bitcoin is because Bitcoin supported them, right? People that got into Bitcoin early made so much money because so many other people got in late that they were able to pay off a bunch of politicians and get them to support Bitcoin. They supported this whole idea of a Bitcoin strategic reserve, which is really just a Bitcoin bailout fund trying to use taxpayer money to buy out Bitcoin. but the Bitcoin industry was able to pay off a lot of politicians.

1:01:56And because - Can I just ask though, I mean, a lot of what you're saying is obviously true, but I also think you've described the decline of the US dollar. It's diminishing purchasing power. So clearly there needs to be a new global reserve currency. You don't want it to be one owned by a geopolitical rival. So why wouldn't tether, why wouldn't Bitcoin be the new global reserve currency? Well, first of all, gold is money. It's not currency. And so there's a difference between money and currency. So currency is backed by money. So when we were on a gold standard and we had paper that was redeemable in gold, the paper was currency.

1:02:38The gold was money. So currency is like a money substitute. But you can have two kinds of currency. You can have legitimate currency, which is backed by real money, or you can have fiat currency, which is backed by nothing. And so what we have now is fiat currency. And the question is, well, could we replace that with Bitcoin? And I don't think that that's possible because I don't think that Bitcoin has any value beyond its appeal that a greater fool is going to come and buy it. But central banks can't hold Bitcoin as a reserve against their own currency. If they had to sell it, I mean, the price would drop sharply.

1:03:17You have to have real money. That's why all these central banks— But under our current system, you don't have real money. You have the U.S. dollar, which is real because people have decided it's real. It's an act of faith. And their faith in that is declining because it's been used as a political weapon, as you, I thought, so crisply explained. And so you need to replace it with something. Why would Bitcoin be any different from the US dollar except you like start anew? Well, the main difference there is, you know, they're both in a way fiat. Right. In that both Bitcoin and the dollar derive their value from faith and confidence.

1:03:54Right. But Bitcoin, people are buying, most people who are buying Bitcoin are buying Bitcoin to get more dollars. They're thinking the price is going to go way up and they'll be able to sell out and have more dollars than they started with. Most people are not getting into Bitcoin because they just want a safe store of value. If that was the case, they would buy gold. They're speculating in it. But the central banks, these big central banks, are not going to be able to put large quantities of their dollar reserves into Bitcoin. There's just, it's not a reliable long-term store of value for them.

1:04:31That's what they're looking for. They're looking for something to replace the dollar to back up their currency. Are they buying Bitcoin? No, they're not buying. I mean, El Salvador bought some Bitcoin. I mean, you have some foreign governments that have sovereign wealth funds. Yes. Where those sovereign wealth funds have kind of bought some Bitcoin ETFs, or maybe they bought strategy, which was a big mistake. But because these investment managers are under a lot of pressure, just like any other manager, to perform. And so a lot of these crypto-related assets went up. And so there was some pressure, hey, I need to put these in the portfolio.

1:05:09And so you have allocations. And then the crypto community tries to pretend, oh, these governments are buying up Bitcoin. They're not really buying Bitcoin. The managers of these sovereign wealth funds have taken a small allocation. I think that's all going to stop because this is going to blow up. The people who are putting money into crypto now into Bitcoin are going to lose a lot of money. They're the exit strategy. I mean, that's why Bitcoin hasn't gone up. Bitcoin's real high watermark was four years ago. It's down about 40 % priced in gold over the last four years. So we've been distributing Bitcoin from the strong hands that bought it early, the OGs, the whales, to the retail public has been buying it at these inflated prices for years.

1:05:54And eventually, you know, the bottom is going to drop out of this thing. So that, I mean, you're making a very, I would say, I'm biased, of course, but you're making a pretty compelling case for gold on a bunch of levels. But one, most obviously, is a hedge against whatever the hell is going to happen next. So if you were giving advice to someone you love, like I've got$100, what do I do with it? I think the loving advice would be put some of it in gold. Well, everybody should have some money in gold. But so why isn't that advice ever uttered on any of the financial advice channels? I think that's weird.

1:06:29Yeah, because Wall Street has never been a big promoter of gold. I don't mean why doesn't JP Morgan tell you to buy gold? why doesn't CNBC tell you to buy gold? Well, I don't think they have enough gold companies that advertise on CNBC. I think most of their advertisers are from the crypto industry. And I think that really corrupts the whole process. Yeah, I think the advertisers advertise because they know they're going to have a lot of pro-crypto content. I mean, they spend the entire day on CNBC. I haven't been on that show in over a decade. They're the ones that initially started calling me Dr.

1:07:06Doom when I was predicting the 2008 financial crisis. So they kind of used to have me on. And it's not just me. They don't really have any Bitcoin critics on their air. They have one Bitcoin promoter after another. And all of the on-air talent, all the anchors are pretty much pro-Bitcoin. Where are they on gold? They don't even really talk about it. But you'd started this conversation by describing the rise in the S &P relative to gold You mean the fall in the S &P relative to gold? Well, the S &P has risen, but once you root it in gold, because all measures are comparative, you see that it's actually fallen compared to gold.

1:07:46So gold is the better buy. Yeah, but again - So that's just indisputable, right? Yes, but that is not what they're selling on these financial channels. But they're lying then. Well, yeah. I mean, or they don't understand it. I mean, there's a lot of ignorance. But that's even I understand. I mean, I don't know anything. Again, because you didn't get a degree in economics from a major university. But that's really simple. I buy two things 25 years ago, which is worth more now? That's just simple, right? And it's going to accelerate because we're going to be printing a lot of money. Now that the Fed has really gone back to QE, they haven't admitted it, but it's only a matter of time.

1:08:22Why do you say they've gone back to quantitative easing? Because they're printing money and buying treasuries. So, but what are interest, like over the past six months, what have, for those who are not paying attention, tell us where interest rates have been. Well, short-term interest rates have come down, right? The Fed has cut rates three times. And so now they have the Fed funds at three and a half to three and three quarters. But the 10-year treasury has stayed around 4%. It's around 4.15%. The 30-year treasury is around 4.8%, right? So they haven't been able to move long-term rates down. And I think long-term rates are going to soar in this country.

1:08:56And I think in order to prevent long-term rates from really rising, the Fed is going to be monetizing more debt, printing more money, creating more inflation. Remember, we're spending now over a trillion dollars a year just on interest on the national debt, like 1.2, 1.3 trillion. That's going to hit 2 trillion probably sometime next year because almost all of the national debt is financed with treasury bills. Back when interest rates got to 20 % in 1980, most of the national debt was long term. So it was unaffected by the big move. It only affected the new borrowing. But now, if a third of the national debt comes due in the next year, the government has to refinance that at whatever the current rate of interest is.

1:09:41So I think we're headed for this fiscal time bomb where the cost of servicing the debt is skyrocketing. I mean, in not too many years, it could cost us more than we collect in taxes just to pay the interest on what we've borrowed. Because the debt service costs are exploding. And the only reason they're not much higher now is because rates are still low. You know, 4 % is low, right? Donald Trump wants them lower. You know, he wants, you know, zero or 1%. But the reason he wants that, he wants just more inflation. He wants to try to blow air into the bubble to hide the fact that the economy is actually getting weaker.

1:10:20So he just wants to make the bubbles bigger by creating more inflation. While at the same time claiming that he's vanquished inflation, all because energy prices have come down. And energy prices have come down. In fact, energy prices are as cheap as they've ever been. If you look at how many barrels of oil you can buy with an ounce of gold, oil is dirt cheap. The question is, how long is it going to stay this cheap? I don't think it's going to stay cheap. I've been buying a lot of oil stocks now. We've been increasing our allocation of energy because I think we're going to see a big move up in oil prices.

1:10:53The one factor you haven't mentioned is technological change. So, and with gold too. I mean, if gold prices, I don't know what the threshold for gold is, but if it gets to, you know, six grand an ounce or something crazy, somebody's going to figure out a better extraction technique and there's going to be a lot more gold and prices will fall. Well, there won't be a lot more gold because, you know, the supply of gold grows pretty slowly, one or two percent a year. It has, right? But that's a technology question. Yeah, but, you know, we haven't come up with better ways or, you know, because the gold gets harder to get out of the ground.

1:11:27The real easy gold has already been extracted, right? Because they've been mining gold for hundreds of years. So the gold that's still there is more difficult to get out of the ground. But there hasn't been a major gold discovery in decades. There hasn't been a lot of investment in exploration and development. So by the time the industry is able to attract enough capital into the sector, because nobody's been interested in gold mining, right? It's been dead. And in fact, crypto, I think, really harmed the industry. It created a big distraction. Of course. Where people are like, well, why should I buy gold?

1:12:01I got Bitcoin. It's better than gold. It's gold 2.0. So the industry was really starved for capital. But I'm just saying because markets do respond to reality over time. Over time. If the price gets high enough, it's in seawater. Yes, over time. And people will start melting down their jewelry because they need money and the prices are higher. And yes, all this will happen, but it's not going to stop the price of gold. Look, the price of gold was$20 an ounce from 1789 to 1933, right? For like 150 years, it was$20 an ounce. And then Roosevelt devalued and got 35. But if gold can go from$20 an ounce to 4 ,000, right?

1:12:43Where can it go from 4 ,000? I mean, it can go to 100 ,000. Obviously, we can keep debasing the value of currency. You know, ironically, you know, one of the ways that you're going to actually bring gold into the modern economy is through the blockchain, through the internet. Everybody wants to talk about, you know, stable coins, right, which are basically tokenized dollars, right? Just taking the dollar and turning it into a token, right? Well, there's no real stability in tokenizing dollars because you've got the same inherent problem. If you own a dollar token, inflation is going to destroy its value.

1:13:25You're going to lose value the same way as— You're not in control of the Congress and the Fed. And you don't even really earn interest on it. At least if I have dollars, I can put them in a money market and get some interest to offset some of what I'm losing to inflation. But the ideal thing to tokenize is gold. Because when you turn gold into a token, now you actually have digital gold. So instead of having paper money that's backed by gold, I can have a digital token that's backed by gold. As long as the tokens continue to match one for one the physical supply of gold, that's a real system. But the second you've got more paper than you've got assets, then it's not real.

1:14:02But you know what? But it's so easily auditable on a blockchain. I mean, I'm doing that, and you should look into this too. I have a, on Shift Gold, I have a T-Gold, which is ultimately going to be tokenized gold. I haven't launched the token yet. But right now, I'm helping people buy gold and silver that we're going to tokenize. So once you have the gold, you'll have the ability to withdraw it either in a physical form or in the form of a token. But the idea of a gold-backed token, the idea of T-Gold, is so that you can use your gold easily as a medium of exchange. and you can transact instantly over the internet.

1:14:40You know, somebody in the United States can make a purchase from somebody in Australia and pay them instantly with gold. You don't have to send the actual gold to Australia. You just send the token, which represents ownership of that gold. If you have the token, then the gold belongs to you. And so if I want to give you my gold, I don't have to drive down to the vault, grab some of it and bring it to you. I just send you the token and now you own the gold. Just like paper money, when paper used to circulate, whoever had the paper had ownership of the gold. The paper currency was titled to gold.

1:15:15And so now you can do that with a token through a blockchain. As long as you can redeem it. Yeah. And it's enforceable. And it's auditable. Look, when you have - But is it enforceable? Of course, it's a legal contract. It's a lot. So if I sell you a gold token and that's like an IOU, it's an IOU for gold. And I legally, contractually, I'm obligated to pay you or whoever is the bearer of that token. So while you own the token, the gold belongs to you. But if you spend that token and now somebody else earns it because, you know, they provided goods or services or you just gave them a gift, now they own the gold.

1:15:51Now they don't have to come and get it. They, you know, they can just leave it there and just transact the token. I mean, that's what people did. If you go back to the days of a blacksmith with your gold, you would have gold and you left it with a blacksmith and he gave you an IOU. And if the people in the town knew the local blacksmith and they recognized his IOU, you could spend it. People would take it because they didn't have to go get the gold. They knew the gold was there. The problem would be, of course, if the blacksmith absconded with the gold. But in capitalism, and I have this argument all the time with these Bitcoiners because they think that what I'm doing with tokenized gold, they think, well, you have to trust the third party.

1:16:34So I want to own Bitcoin because I don't have to trust the third party. Well, of course, if you put your Bitcoin on an exchange, if you own it through an ETF, of course you're trusting a third party. But I have no problem with trusting third parties in capitalism because a business that has a reputation and has a brand wants to maintain the value of that brand. I mean, the insurance industry is a perfect example of trust. When you buy an insurance policy, you're relying on a third party, the insurance company, to pay your claim, right? You know, if you have fire insurance, you're trusting that if your house burns down, the insurance company is going to pay you.

1:17:16Every transaction requires, I mean, I trust there's no poison in my ice cream. You know, every transaction. Now, people in Bitcoin say, well, when I have Bitcoin, I don't have to trust anybody. Well, no, you have to trust everybody. You have to trust that people still want your Bitcoin, despite the fact that it has no value. We also have to trust the electrical grid because it doesn't exist without it. Right, that too. But the bigger thing is you're just trusting that the people who believe in Bitcoin, who believe that nothing is something, continue to believe that and continue to want to buy it.

1:17:43But if you have gold coins in your backyard, you have to trust fewer people. All you have to trust is human nature, which is attracted to gold, period. Well, but when you own gold, you're not trusting anything because the gold itself has value. Well, that's what I'm saying. Right. Right. So, but if you have possession of physical gold, you're not relying on fragile systems. Right. I mean, the only risk there is somebody could steal it from you if they find it, right? You could lose it, right? You know, if you have gold. But the thing about tokenized gold, and I recommend that people have both.

1:18:15They have physical gold and they have some tokenized gold because the tokenized gold is the gold that you can use in commerce, you know, that you could easily spend. It's much more difficult if I have bars of gold or even gold coins. Even a one-ounce gold coin is$4 ,000. A tenth of an ounce coin is$400. So if you want to buy something for$5, you can't really do it. But if you have the tokenized gold, then you can easily transact. You can buy a cup of coffee and the barista can accept payment in gold. You know, the big problem though, and I want to congratulate you too on Battalion Gold, right?

1:18:55That you set up. Because, you know, when I started, as I mentioned, when I started in this industry, in the gold industry in 2010, for over 10 years before that, I was just telling all my customers, buy gold, just go out and buy gold, right? Even though I didn't sell it, I thought everybody should own it. And I just said, you know, go out and get it. And little did I know that people were just getting ripped off because I found out years later, people would call me up and they would say, you know, I just sold some gold. You know, I bought it, you know, it was$400 and now I sold it at 700 and I lost money.

1:19:31How'd you lose money? And then, and I started looking into it and I found out that when they bought gold, when it was 400, they didn't pay 400. They paid like, because they didn't get$400 worth of gold. They just paid$400 to get like$200 worth of gold. Because they bought it in the form of a commemorative coin that was supposed to have value. Yeah, they got. And so I set up shift gold simply because I didn't want people to get ripped off anymore because it was so it was so pervasive. And it was almost because so few people were buying gold that the only way that the gold industry could make money was to overcharge.

1:20:07And what really made me furious, and I don't even want to name names, but I had, you know, is that they would go to some of the most popular conservative talk show hosts and they would pay these guys to recommend their gold company. Oh, I know. And the reason they would do that is because the loyal listeners trusted the talk show host. Well, they came to me with an offer. Yeah. That's how I know this. I didn't understand how it worked. I've always been pro-gold, but I didn't realize people were paying twice the value, twice the spot price. The only reason it worked, Tucker, the reason it worked is because the people who listen to their favorite talk show host and the guy would say, here's the firm I trust.

1:20:50This is where I buy my gold. Yeah, because they don't rip you off. But here's where I get my gold. Go buy your gold there. and the listener who is very loyal to the talk show hosts and trusts them goes to that gold broker and just assumes they're getting a great deal. Hey, so-and-so wouldn't recommend this company unless they were going to treat me right. And so they didn't shop around. And in fact, they make it impossible to shop around because they sell coins that nobody else has because they're so obscure. And they try to pretend that they're not going to be confiscated or they have some kind of collectible value.

1:21:23And it's all BS. They have no value. All the money goes into the pocket of the salesman because these gold salesmen work on commission. And if they sell you maple leaves at a 1 % markup and maybe they make$200 in gross commission and they make$30 for themselves. Or they can get you to put the$10 ,000 into these DS coins and they make$2 ,000,$3 ,000. That's what they sell. I didn't know any of this. And the problem with selling gold in an honest way is that it's a very low margin. Yes. You know, it's a very low margin. You're not getting rich selling gold, and we're not getting rich from it. And our prices are transparent.

1:22:02You know exactly. It's whatever, two points above spot or something. We're not in this to get rich. Well, where you're going to make money eventually is on volume. Eventually, a lot more people are going to start buying gold. I mean, people just don't know enough to buy it. But everything can't be a scam because then people lose confidence in their fellow human beings and their country, and it's just bad. The problem is the only companies that can afford to advertise on television are the ones that are ripping you off. That's how I figured out it was a scam. I was like, how can they afford? It's a commodity.

1:22:31How can they afford to pay me just as a pitchman? I'm sure they have other people. They do have other people pitching as well. Where does this money come from? And that's how I figured it out. And I talked to a lot of people that I knew in the industry. And I was pointing out, your audience is getting ripped off. You are helping these guys steal money by promoting these companies. And they're the nicest people. And they're directionally correct in their concerns. They love America. They're worried about the softening of the dollar. They know that their politicians basically are looting the country through devaluing the dollar.

1:23:03That's all true. So they're the best people. They're the most honest people. And to screw them over just enraged me. Yes, they're screwing them over. They're trying to do the right thing. Yeah, I know. They're trying to buy gold. Oh, I know. And then they're getting ripped off. Now, the thing is, gold has gone up so much that a lot of those people don't even realize because now they could actually still sell their gold at a gain. But they would have a much bigger gain if they hadn't been ripped off. In fact, I have a special report. I remember I wrote this report. People can get it. It's on my website on shiftgold.com.

1:23:35But it's classic gold scams. and I go over all of the tricks, all the things that gold salesmen tell you to steal your money, to convince you why you shouldn't buy, you know, a maple leaf or a cougar and, why you should buy this certain, and they have all these tricks. And a lot of times too, they'll even advertise for these, you know, they'll have a low price on a maple leaf, right? That might even be lower than what I would charge, right? But then when someone calls up to buy it, they don't sell you that. No. They sell you. They upsell you. They talk you into something else. And they also try to con you into it.

1:24:11A lot of these companies have something called like a price protection. Like they say, hey, we'll guarantee you if the price goes down over the next 30 days, we'll market to the lower price. We'll give you some more. Or sometimes they even offer to give you free gold or free silver if you buy a certain amount. And the only reason they can do that is because they're overcharging you by so much money. It's totally right. They have enough left over. or if they're charging you 50 % more than the price of gold and the price of gold goes down and they have to give you back 10 % of what they overcharge you, they still made a fortune.

1:24:43Exactly.