Peter Schiff: Gold Is Telling Us the Fed Is Wrong
This week Peter returned from vacation, and he was just in time for a surge in the price of gold. He discusses the factors contributing to gold’s record prices, the similarities between today and the 1970s, and data pointing to future inflation in America.
Peter starts this episode by noting how gold’s recent rise hasn’t received much coverage from the mainstream financial press:
“$30 on a Sunday night— that’s very rare to see that kind of move. But what’s even more rare is that there was no news. It’s not like something happened. Nobody dropped the bomb anywhere, right? It just went up. And that was on top of the near $40 rise that gold had on Friday before the holiday weekend. … Very rare to have that kind of move. But also very rare was the complete lack of attention that the gold rally has been getting.”
The media’s silence on gold serves larger financial interests in America that benefit from a weak economy and dollar:
“Another reason that CNBC and other financial analysts don’t want to talk about gold is because of the message that gold is sending. … Gold is not just some commodity. It is a commodity, but it’s a special commodity. … Gold is special because of the monetary properties and the monetary role that gold plays. If anything can be said to be the canary in the coal mine, it’s gold. … What is gold telling people, if they’re smart enough to listen? What gold is screaming is that what the Fed is contemplating is a mistake, that cutting interest rates whenever these cuts begin is the wrong policy.”
Even widely respected Fed Chairman Alan Greenspan has acknowledged the signaling power of gold’s price, but Jerome Powell and the current Fed are ignoring the signs of a weak economy:
“The Fed says they’re data dependent. Well, why are they ignoring all of this data that says everything they’re saying about inflation is BS? Powell keeps saying, ‘yes, we’re confident we think inflation is going to go back down to 2%.’ Why? Why should it do that? What gives him this confidence? Just because he’s raised interest rates up to 5.25%? Big deal! That’s not a high rate of interest, especially when you have a big inflation problem.”
Any student of history can recognize the political parallels between the inflation of the 1970s and now:
“We had the Vietnam War, which was expensive. We had the war on poverty, which was also expensive. Interestingly, we’ve lost both of those wars. … Poverty won, but we spent a lot of money on both of those wars. Then we also had the space race. … So the government was running these big deficits. … Where did the government get all the money to pay for all this stuff? Well, it borrowed it, right? They ran deficits, and they printed a lot of money. And so naturally, the consequence was inflation, rising prices.”
Peter sees a weakening dollar as the main recent driver behind gold’s price. If the dollar depreciates against other foreign currencies, gold could take off:
“I still believe that soon we’re going to see the dollar crack against other fiat currencies. And when that happens, you’re going to see a much more spectacular rise in the price of gold. If you think about what’s already happened, we’ve seen this big jump in gold prices without a weak dollar relative to other fiat currencies. Imagine how much stronger gold would be if the dollar were also falling in relation to the euro or the Australian dollar, Canadian dollar, emerging market currencies, the yen.”
Apparently foreign central banks can see what Powell can’t, and they’re stockpiling gold because of it:
“Foreign central banks realize that we don’t care [about inflation]. They’re holding all these dollars, and they see that we’re about to create more of them. We’re going to cut rates in the face of mounting evidence that they’re ignoring that inflation is going to be moving in the opposite direction. They claim that they want it down at 2%. All the evidence shows that it’s headed higher and their response is ‘we’re going to cut rates.’ And so foreign central banks want to get out.“
With its price at record highs and foreign central banks clamoring for the yellow metal, gold is strengthening as a hedge against terrible monetary policy. If Peter is right about future price action, now is the perfect time for investors to add to their precious metal holdings.
Learn Why The Globalists Are Killing Their Own Monetary System
Artificially Low Interest Rates Are Creating Economic Chaos
If you asked him, Edward Chancellor wouldn’t say he’s particularly Austrian.
Yet The Price of Time: The Real Story of Interest, the dense book he most timely published during the height of the inflation summer of 2022, is as obsessed with centrally planned interest rates as your average Misesian. Like many before him, and many in the Austrian camp, Chancellor identifies the many ills that trouble the world and locates their cause in a dysfunctional interest-rate regime.
In Chancellor’s own words, “The most important question addressed in this book is whether a capitalist economy can function properly without market-determined interest.” Most readers of these pages will automatically respond, no—free-market capitalism rests on an uninhibited market for capital and debt, and thus interest rates act as a rationing mechanism and guiding principle. The rest is just implementation, as Michael Malice might say.
A skilled journalist and trained historian, Chancellor’s writing is calm and balanced, nuanced and well thought through. It’s littered with citations and quotes from economists and commentators both past and present.
That’s also part of why making it through the three-hundred-plus carefully written pages of The Price of Time is such a hardship. It’s fascinating and engaging but dense and ultimately a bit confusing. The author gives no clues for where we’re going, over and above the early hint that low interest rates have all sorts of bad downstream effects on an economy and its financials. The signposts are missing. Another piece of annoyance is the frequent antimarket talking points he returns to—monopoly power, corporations centralizing through acquisition and control, debt-issuing and share buybacks to boost financial returns, inequality, and wealth concentration.
The saving grace is they all fit into a low-rates story. Much like James Grant, of Grant’s Interest Rate Observer, remarks, “A little-known fact about unicorns . . . is that they feed on interest rates. They like low, little rates—the tinier, the better.” The same goes for the conglomerate empire-building, leveraged buyouts, takeovers paid for with shares, or even the explosion of ultra-high-net-worth individuals. It wasn’t a flaw in the capitalist system that generated these perverse outcomes, but the Fed-manipulated, centrally planned rates and its money printing.
He traces the long history of interest back to Mesopotamia, but it’s in his treatment of the last few centuries that the book really shines. He identifies John Locke as “the first writer to consider at length the potential damage produced by taking interest rates below their natural level.” He continues,
In the wake of the global financial crisis of 2008, central bankers slashed interest rates, hoping to revive economies by easing the burden of debt and boosting asset values. Their aims were remarkably similar to those espoused by the seventeenth-century advocates of easy money.
Locke had already spelled out the consequences for them: “Paper wealth has multiplied while genuine wealth has stagnated.” At the bottom of all bubbles, continues Chancellor, lies “a disconnect between finance and the real world.” Low interest rates turn otherwise careful and diligent investors into financial engineers and imbue venture capitalists with a “spray-and-pray” mentality, like macro analyst Andreas Steno says in a piece I keep coming back to over and over, “Three Reasons Why Everyone, Zuckerberg, Me, and Their Dogs Turn into Idiots When Rates Are 0 Percent.”
“Easy money,” concludes Chancellor, “was dumb money.” Cue WeWork and fake meat companies, GameStop and zombie companies, the mania around environmental, social, and governance, and the FTX collapse.
He quotes Murray Rothbard and Ludwig von Mises with as much ease and approval as he does Jeremy Bentham or Daniel Defoe, and he digs up some remarkably Austrian commentary from the past. A nineteenth-century British banker, after one of England’s infamous midcentury panics, remarks, “As a rule, panics do not destroy capital; they merely reveal the extent to which it has previously been destroyed by its betrayal into hopelessly unproductive works.”
“The book inclines quite strongly toward the Austrian interpretations,” Chancellor confessed in an interview with Jeff Deist last year. Maybe that’s why so many establishment outlets didn’t touch it. Sane economic reasoning is apparently right-wing extremism. (And The New York Timesbestseller list is editorial content anyway, so go figure.)
Case in point: Jamie Martin’s piece for the London Review of Books—which more favorably could have been titled “Don’t Slash My Precious Government Spending!”—completely missed the point of Chancellor’s well-assembled armada, instead rallying against austerity: “As a consequence, [countries cutting government spending] face the prospect of years of lost growth, deteriorating public services and infrastructure, and political instability. . . . There are no zombie countries whose destruction will make us better off.” Ugh.
Toward the end of The Price of Time, Chancellor finds an eerie echo of our times in Lewis Carroll’s last novel Sylvie and Bruno, published in 1889. In it, emperor-mandated money printing generates wealth, two eggs cost less than one, and a loan is repaid before it is even issued. The absurdity is amusing—until central bankers a century later thought to make it a reality. “Carroll would have understood that when the price of time is set at nothing or turns negative, and central banks print money without limit, finance becomes absurd.” Accordingly, capitalism without bankruptcy is like Christianity without hell.
The best way to destroy capitalism truly is to mess with its most important set of prices: the price for “hired money,” incorporating as it does the spread between present and future goods, and the time value of money between the various stages of production.
In the concluding chapter, Chancellor picks up the pace, throws caution to the wind, and turns downright radical:
Each time the monetary authorities stepped forward to deal with some real and pressing problem—whether the collapsing banking system, the unravelling of international credit and rising unemployment in 2008, or Europe’s sovereign debt crisis a couple of years later—there followed secondary consequences that were never properly considered or resolved.
Learn Why The Globalists Are Killing Their Own Monetary System
Watch Democrats Disrespect and Talk Down To America
Speaking in general terms, politicians are sociopaths who are compelled to control crowds of people.
Also:
Black-Owned Chicken Restaurant Cries ‘Racism’ After Community Complaints
After apparently receiving some bad reviews online from customers, the manager of Huntington, West Virginia, chicken restaurant Crisppi’s posted a video online accusing his community of racism.
WATCH: Manager of WV chicken restaurant claims his sales aren’t good because he’s black
“We’re not the other color, which is unfortunate.”pic.twitter.com/duZbFLtdKq— Breaking911 (@Breaking911) April 3, 2024
The manager, only known as Kurt, went to Facebook to complain the business isn’t being supported or respected enough because “we’re not the other color.”
“If we were the other color, I’m sure there’d be a lot more respect and a lot more support,” he claimed.
“The entire community is filled with negativity. Being an African American company, this is what we deal with on a regular basis,” the manager said.
Kurt accused naysayers complaining about legitimate frustrations, such as the company being cashless and having a high employee turnover rate, of being “negative” and racist.
The manager tried to walk back his comments following backlash, issuing another video where he claimed he didn’t mean white people when he said, “there’d be a lot more respect and a lot more support,” for the restaurant if the owners “were the other color.”
In trying to clarify his stance, Kurt explained he thinks the company would be doing better if they were ANY ethnicity other than black, saying they’d be accepted if they were “Chinese, Pakistanian, Indian, White, etc., etc.”
Next, Kurt was invited to join the Talk Huntington podcast hosted by David “Alligator Jackson” Williams to elaborate on the drama.
Alligator Jackson also allowed the manager to address some of the complaints made by customers such as the restaurant not serving ketchup.
During the interview, Kurt went on to attack his black peers in addition to the “other color” people of Huntington, saying, “The African American community, we are known to tear each other down. The Chinese is not known for it, the Europeans. Nobody else is known for it… Now, I can take my peace that we’ve been disrespected since we’ve been here within our own community, our own race.”
Now, after playing the victim card, the restaurant is gaining even more negative attention after appearing to attack everyone in its community who has ever been critical of the eatery.
‘Vaccine Lettuce’ On Track to be Classified as ‘Drug’ in Tennessee
Legislators in the State of Tennessee have passed a bill aiming to designate foods containing vaccine ingredients as a drug.
HB 1894 was passed last Thursday in a 23-6 Senate vote. The bill:
Defines vaccine or vaccine material as a substance intended for use in humans to stimulate the production of antibodies and provide immunity against disease, prepared from the causative agent of a disease, its products, or a synthetic substitute, treated to act as an antigen without inducing the disease, that is authorized or approved by the United States Food and Drug Administration.
During discussion of the bill last week, one Democrat senator said she wouldn’t be voting for the bill since she was unaware of instances where this type of food is sold to consumers.
“So does the sponsor know of any instances of there being food offered in the state of Tennessee that contains vaccines and some kind of a retail or public forum?” Campbell asked.
‘Vaccine lettuce’ bill, aiming to classify food containing a vaccine as a drug, passes in Tennessee
— Camus (@newstart_2024) March 31, 2024
“I’ve been reading about it talking about putting it in and lettuce and mass medicate everybody, like they do with fluoride in the water.”
“Actually I’ve been reading about data… pic.twitter.com/yqOtPMnTGq
“No, I do not know any specific examples. But certainly they are developing this process. And actually, Congress has actually dealt with this as well and passed an amendment that said no fund could be used for transgenic edible vaccines. This is a process that is being developed. But this bill merely would say that if that happens in the future, that food would have to be classified as a drug if it had a vaccine in it,” Sen. Joey Hensley, a sponsor of the bill, replied.
Campbell responded: “So while I feel like this legislation’s basically anodyne, I mean, I guess it’s addressing something that I can’t imagine whatever exists, which is the idea that we would somehow be putting vaccines into foods that you would buy in a grocery store. I mean, I can’t think of any logical reason why anyone would ever do that. And I do know that, you know, certainly, there have been experiments with putting vaccines in vegetables for the purposes of, of studying possible transmission methods. But the idea that this would somehow correlate to some kind of a retail offering of vegetables, especially when that vegetable would cost, you know, many thousands of dollars, just seems to me, I guess, messy, to be passing legislation for that reason. So I will be voting no.”
Sen. Frank Niceley (R), who voted in favor of the bill, also spoke up during the discussion, stating,
“Actually I’ve been reading about data for a couple of years now and evidently with this new technology, they can raise this lettuce is what they’re talking about first. They can raise this stuff so cheap, and I’ve been reading about it talking about putting it in and lettuce and mass medicate everybody, like they do with fluoride in the water. I mean, who could control the dose? If you’re if you eat a lot of lettuce, you’re gonna get a lot of mRNA if you don’t eat any won’t get any. And they’re actually talking about other vegetables that they’re trying to put this in. And my question is, would this have to be sold at a drugstore? Would you still buy it in a grocery store? Why don’t we just outlaw this stuff completely? We don’t have any idea what its gonna do to our children? I mean, to us and old people anything? I mean, is this stuff locked out of a science fiction movie? I mean, it’s, it’s ridiculous. It’s changes your DNA, mRNA changes your DNA when if you have your DNA tested now, and you eat a bunch of this, lettuce take a bunch of these MRNA vaccines, and you go back and get your DNA tested again, it’s gonna be a little different. It’s not going to be the same as it was that you were born with that you got from your parents. This is dangerous stuff. We need to study it probably need to outlaw it. I mean, I can’t imagine. When I first read about this, I thought this can not be true. But you keep reading about it. And it is true.”
The original sponsor of the bill, State Rep. Scott Cepicky (R), says he introduced the legislation after scientists in California “perfected putting vaccines into certain foods,” and said the law would require companies to warn consumers if foods would be used to “medicate” them.
“If you go to buy tomatoes, and there’s a polio vaccine in there, that you’re aware of what you’re buying as a polio vaccine,” Rep. Cepicky stated. “The problem we have is if it’s not treated as a pharmaceutical… How many tomatoes do I have to eat to get the proper dosage versus how many tomatoes do you have to eat? And if you eat too many, do you get an overdose?”
The bill next heads to Governor Bill Lee’s desk for his signature.
Bill Gates Says Math Is ‘White Supremacy’
During the Wednesday edition of The Alex Jones Show, guest host Owen Shroyer covered the leftist narrative that math is somehow racist.