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Joe Rogan Experience #1508 - Peter Schiff

Peter Schiff is an American businessman, investment broker, author and financial commentator. Schiff is CEO and chief global strategist of Euro Pacific Capital Inc. He also hosts his own podcast called “The Peter Schiff Podcast” available on iTunes and at SchiffRadio.com @peterschiff

Joe RoganhostPeter Schiffguest
Jul 15, 20203h 4mWatch on YouTube ↗

EVERY SPOKEN WORD

  1. 0:00 – 1:11

    Remote hang, Spotify toast, and why Schiff’s in Connecticut

    1. JR

      Three, two-

    2. PS

      (clears throat)

    3. JR

      ... one. Boom, here we go. Hello, Peter.

    4. PS

      Joe.

    5. JR

      Good to see you, buddy.

    6. PS

      Nice to see you again.

    7. JR

      I like how you-

    8. PS

      Different style at least, but nice to see you.

    9. JR

      I like how you have the Euro Pacific Capital above your left shoulder. Very nice, very wise.

    10. PS

      Well this, this is my studio in my basement-

    11. JR

      Ah.

    12. PS

      ... here in Connecticut where I'm hunkered down. But you know, in honor of doing your show, I poured myself a, a glass of scotch.

    13. JR

      Oh. There you go.

    14. PS

      So I have it.

    15. JR

      Oh, I feel like I should get drunk too.

    16. PS

      And I'm sure you have something to drink, but I wanted to toast your Spotify deal.

    17. JR

      Oh, thank you very much. All right, I got a bottle of, uh, my good friend Josh Barnett's Warbringer Warmaster Edition Mesquite-

    18. PS

      Ah, yeah.

    19. JR

      ... Smoked Whiskey. So I'll have a, I'll have a little bit of this.

    20. PS

      Here's to you and Spotify.

    21. JR

      Thank you.

    22. PS

      And you know, I think they're getting you cheap. You probably could have held out for more money.

    23. JR

      Well, you don't know how much I got.

    24. PS

      Well, I just know what the public says. All right.

    25. JR

      They don't know how much I got either. But thank you very much.

    26. PS

      Well good, if you got more, dr- I'll drink to that too.

    27. JR

      Thank you. I'm very happy. Spotify is awesome, I'm very happy. I'm just, I'm, I'm happy to be-

    28. PS

      Yeah.

    29. JR

      ... with a, a company where they have a, a vested interest in my success. Like we're together, you know, wh- whereas-

    30. PS

      That's the beauty of capitalism.

  2. 1:11 – 2:53

    Puerto Rico living: lifestyle, taxes, and why more people moved there

    1. JR

      So why are you in Connecticut and not Puerto Rico?

    2. PS

      Well, you know, I live in Puerto Rico, and thanks to my appearance on your show, a lot of other people now live there too.

    3. JR

      (laughs)

    4. PS

      I just gotta tell you how many people I run into and they say, "Peter, you know, I moved here because of you."

    5. JR

      Wow.

    6. PS

      And I say, "Really? How'd you hear about it?" "Oh, on Joe Rogan."

    7. JR

      That's amazing.

    8. PS

      So a lot of people have come down here. But I don't know, are y- I don't think you've been to Puerto Rico or have you?

    9. JR

      No, I've, I've never been to Puerto Rico.

    10. PS

      Yeah, I guess, I, you got an open invitation to come visit me. I'll put you up. I got, I got a nice place on the beach for you. Um-

    11. JR

      What's their COVID situation like?

    12. PS

      Hmm?

    13. JR

      What's the COVID situation like-

    14. PS

      Well, you know-

    15. JR

      ... down there?

    16. PS

      Eh, this is, eh, th- it's hot now. It's, you know, it's July, August, and so I would rather be in Connecticut. I love the weather here in the summer, into the fall. And we still maintain a house here. You know-

    17. JR

      Right.

    18. PS

      ... the house that I lived in before we moved to Puerto Rico, so now this is more of a summer home. And so we're here for the summer, although we may be here into the fall. I think we will because, uh, the, the, the ch- the, the schools, you know, are gonna be, uh, remote now. So normally I would come back, the schools start in mid-August in Puerto Rico, so we would normally come back then, but since they're gonna be taking the classes online, we'll probably end up staying in, uh, Connecticut for a little longer, which, which I like. But I, I really enjoy Puerto Rico, it's a great place to live. Uh, you can't beat the tax breaks so, you know, this is gonna be an important thing, uh, especially, uh, if, uh, Biden ends up winning, which it looks highly likely that that's gonna be the case. I think a lot more people are gonna be coming down there to try to escape what will be real confiscatory, uh, levels of taxation. Uh, so, you know, people could look into it. But, um, yeah, I mean, it's a real, uh, real great place to be.

  3. 2:53 – 8:49

    Election outlook: why Schiff thinks Biden is favored and Trump lost his outsider edge

    1. JR

      Well let's, let's get into that. So you, you think that Biden has a very high likelihood of winning. W- here we are, let's just to, if people come upon this in the future, today is the 14th, 14th of July, and, uh, we're a few months away from the election. You feel like it looks like Biden is moving into the direction of, of eventually winning.

    2. PS

      Well, I think he's already moved in that direction, and so the question is can Trump change that direction between now and election day? And I think it's gonna be very challenging. Maybe his best opportunity is gonna be the debates. Uh, we'll see.

    3. JR

      I don't think they're gonna have them though.

    4. PS

      Um, you know, but the big problem for, for Trump, and, you know, I, I voted for Trump, um, the first time, and, you know, I was initially gonna vote Libertarian, which is something I do. And by the way, there's a, there's a candidate, Jo Jorgensen, who you should have on your show. I don't know if you've, if you've thought about it, but there is a woman running for president and she will be on the ballot in every state, Jo Jorgensen from the Libertarian Party. And so everybody who thinks there should be a woman president, I actually agree right now, and that's who we should elect. But obviously we don't-

    5. JR

      Is that who you're voting for?

    6. PS

      Hmm?

    7. JR

      Is that who you're gonna vote for?

    8. PS

      Well, I can't vote for anybody. I live in Puerto Rico and so-

    9. JR

      But I thought Puerto Rico was a part of the United States? Sort of.

    10. PS

      It is. It is part of the United States, but you never, you know, from the revolution, no taxation without representation? So what happens is when you move to Puerto Rico, you no longer have to pay the federal income tax or the Obamacare tax, which is great, but then you can't vote in the, for the president, and you, you don't have any member of Congress, you don't have a senator. So being in Puerto Rico, I have no representation in Congress and I can't vote for president. But the trade-off is, I don't have to pay the taxes.

    11. JR

      Wow.

    12. PS

      So, you know, I, that's a good trade-off that I'm, you know, pretty much everybody's willing to make. So I can't vote, and normally I vote for the lesser of two evils anyway, and most of the time I vote for the loser.

    13. JR

      (laughs)

    14. PS

      So as far as I'm concerned, giving up my right to vote for the loser is, is not much of a sacrifice. But, you know, if I could vote, I would still be living in Connecticut and it would be a total waste of my vote to vote for Trump because he has no chance of winning Connecticut, so I would vote for Jorgensen. Uh, even though I know she can't win, I would rather at least give her a vote of support because I wouldn't be wasting my vote because, you know, it, it doesn't matter. Connecticut is gonna go for Biden in, in, in a big way, and so it's, you know, voting for anybody, it doesn't really matter who you vote for-

    15. JR

      This is one of the-

    16. PS

      ... in, in a state like, like Connecticut. But as I was saying, the problem for Trump... And I was one of the few people who was in the media saying that I thought Trump had a real good shot at winning. I didn't know it was in the bag, but I thought that he was more likely to win than lose, you know, even though everybody thought he was a long shot-And the reason that I thought that Trump could win is because Trump was telling the truth about how bad the economy was. He wasn't regurgitating the lies, uh, that the Obama administration had been, uh, telling or that Wall Street had been telling about how we had a real recovery. I knew that we had a bubble inflated by the Federal Reserve and that beneath that bubble where, you know, you could see the stock market at record highs and these phony unemployment numbers, I knew laid a weak economy, and Trump knew that too. And Trump spoke to the forgotten men and women of this bubble economy, and his message really resonated about how we were a, you know, a shadow of our former self, that our industrial might had decayed, we had all these big trade deficits, that the stock market was a bubble, all the numbers were fake, the real unemployment number rate wasn't 5%, but 20%, 30%, 40%, and that he was a non-politician. He was gonna clean house. He was gonna drain the swamp. He was gonna put politics aside and bi- bring a businessman's perspective to Washington, drain that swamp, eliminate the national debt, right, make America great again. And that message resonated with a lot of people, and a lot of those people were may- maybe afraid to be honest with the pollsters because they didn't want to admit that they were gonna vote for this racist misogynist or however the media was portraying him. So I thought he could win. And, and he did. But here's the problem: now that he's been in office for three years, he didn't drain the swamp. He made the swamp deeper, right? He didn't make, get rid of the deficit. I mean, the deficit is bigger than ever even before COVID. All he did was, uh, you know, nurture the bubble that he inherited from, from Obama and help make it get bigger. He became a cheerleader for the stock market. He didn't care it was a bubble. All of a sudden, all the government numbers that were fake under Obama were all of a sudden real, like they just came down from, from God on a tablet on Mount Sinai, and he began talking about this low unemployment and this booming economy, the greatest economy in the history of the world, the greatest economy ever, and none of that was true. And so you have the same people who voted for Trump thinking that he would shake things up, thinking that he would throw a monkey wrench in the system and make their lives better, and their lives aren't better. They're worse. People have more debt, you know? The bubble got bigger. The trade deficits that Donald Trump criticized are bigger now than they were before he was elected. And obviously the deficits are much bigger even before COVID. Uh, so I just don't see how Trump convinces those swing voters, those blue-collar Reagan Democrats in the Rust Belt who decided they had nothing to lose and so they take a chance on Trump. Why should they vote for him again? I mean, now they may take a chance on Biden even though, I mean, Biden doesn't represent any, any change from the status quo. He's just more of the same. Uh, but you know, once you're the insider and Trump's now the insider, you know, he doesn't have that edge, uh, for reelection.

  4. 8:49 – 16:44

    ‘Government spending is taxation’: deficits, money printing, and the inflation tax

    1. JR

      What do you think went wrong and why do you think Trump just made the swamp deeper? Do- what- do you think that he was deceptive when he was running or do you think the influences once he got into office were greater than he anticipated? What, what do you think happened?

    2. PS

      Well, I have no idea. I mean, I mean, even Ronald Reagan, right? Ronald Reagan when he was elected and he was a very principled conservative, right? Unlike Trump, you know, he was, he, he, he really, uh, talked, uh, walked the walk, not just talked the talk and he was a big supporter of Barry Goldwater who didn't make it, you know, when he ran against Lyndon Johnson but when Reagan came in, he really wanted to shrink government. I mean, he campaigned about cut- getting rid of the Department of Education, uh, the Department of Energy or I forget. He really wanted to shrink government and cut spending, but he was never able to do that, right? He was able to cut taxes, uh, but he wasn't able to cut spending. Trump never really campaigned on cutting spending. He didn't wanna talk about that 'cause he didn't wanna alienate any voters, so he just talked about cutting taxes. And he did, you know, officially cut taxes, but he actually raised taxes. That is the important thing that you have to recognize is that government spending is taxation and what happened to government spending under Trump even before it went through the moon with COVID-19, and we'll get to all the COVID stuff, but even before then, Trump signed on to all kinds of increases in government spending. More spending on the military, more spending welfare, huge increases in government spending. That- those are tax hikes. Now, Trump cut income taxes but the income tax is just one way the government pays for spending because all government spending has to be paid for by the public one way or another. We don't get any government for free. Everything the government does costs us money, so every dime they spend represents taxation in some form. And what they've been doing is they've been printing money, right? The Federal Reserve prints money and in fact right now the Federal Reserve is printing about 55 cents out of every federal dollar that's spent. So more money is being printed and spent than collected in taxation. But all that printing, all that spending that is being paid for by a printing press, we don't get that for free. There is a cost. See, when the government takes our money through an income tax, they take my money that I earned and they give it to somebody else who didn't earn it and now that person spends the money. But because I don't have it, I can't spend it. I can't invest it or save it. I don't have it anymore. The government took it from me in taxes. But if the government doesn't take it from me, they just print money and they hand it to somebody else who didn't earn it and didn't do any work, didn't produce any goods or provide any services, they just, you know, got money from the government, that still costs me because what happens is when that money is spent into circulation, it bids up prices and so prices are now higher than they would have been had that new money not been printed, and so now everything that I want to buy costs more than it otherwise would have cost. Either the prices went up or it prevented prices from going down, and so now my purchasing power has been diminished. And so either the government takes your money...... through an income tax or a sales tax or something, or they take your purchasing power through an inflation tax. And so that's what Trump decided to do, to pay for government through inflation rather than taxation. But what we know from history is that is the most expensive way to pay for government. And in fact, it hits hardest the middle class and the poor, right? Because the rich have a lot of assets, they have a lot of debt where they... not consumer debt like on a credit card, but where they borrow money to accumulate income-producing property, uh, to buy companies, stocks, things like that. And so inflation helps those people, right? If you, if you have debt to buy assets, inflation wipes out your debt. But if you're just saving money and working for a living and getting a paycheck, the inflation tax is very heavy on you. And that inflation tax is going to get much, much higher, uh, under Biden, right? For all the talk about all these big government programs, and we'll talk about that, that he wants to pay for by taxing the rich, the rich aren't gonna pay those taxes. Most of the money is gonna come from the poor and the middle class through the inflation tax. But getting back to, you know, where I think Trump went wrong. So Trump gets into office, and he had promised to make America great again. And the reason that America is not great is because government is too big, right? When America was great, right, we had very, very small government. Government was, you know, an afterthought, right? On all levels, maybe state, federal and local, maybe it was 5% of GDP. We didn't have an income tax, corporate or personal. We didn't have Social Security. We didn't have all, you know, minimum wage or any of these, any of these laws. We had a very, very tiny government. And because ti- government was tiny, the economy got very big. We had all kinds of freedom, uh, and, and because we were free, we were very productive and the living standards were rising and we were eradicating poverty. We were making all kinds of strides. Uh, the greatest, uh, economy in the history of the world was produced from the freest people in the history of the world, which was the United States. Well, Trump wanted to make America great again. The only way to do that would be to, to shrink government, cut government spending, and free up all those resources back into the private sector so that they can be used efficiently again. But the problem is, how do you cut government spending when every single program has its own constituency that benefits from it? And so once you, once you're there, you can't cut anything unless you're willing to stand up to all the politicians and the special interest groups, and apparently Trump wasn't willing to do that. I mean, Trump, when he, when he got into office, became a politician, or maybe he was one when he ran for office, but he was more concerned about getting reelected, which is a shame because he probably won't. He should have used the bully pulpit and used his office right away to level with the American public, to look them square in the eye and tell them that government is too big and, and, and spending needs to be cut, including things like Social Security and Medicare and all these sacred cows that nobody would gore. Trump should have been the guy to do it. He should have said, "The buck stops with me. I don't care if I don't have a second term." And he should have vetoed all of those bills that he signed. He never should have agreed to allow the, allowing the debt ceiling to go up. He should have en- enforced that debt ceiling. We now have 26 and a half trillion of debt, right? When he came into office, it was just under 20 trillion. So we've already added six and a half trillion since he became president. I would not have allowed the debt ceiling to go up at all, not one nickel, and I would have forced the government to cut government spending. And that's what Trump should have done. Uh, you know, but, but he didn't want to do it because he, he was more concerned about the politics of it.

    3. JR

      When you say, "I would," are you running for president? Are you ready to do this?

    4. PS

      No, I'm just saying what I would have done had I been Trump.

    5. JR

      Are you ready to do this, Peter? Are you ready to do this?

    6. PS

      I, I'm not running.

    7. JR

      (laughs) But we need someone who understands-

    8. PS

      But you know, it would be interesting. I could be the first Puerto Rican president.

    9. JR

      (laughs)

    10. PS

      I'd be a... Do, do you ever watch The Sweathogs?

    11. JR

      Yes, sure.

    12. PS

      Yeah, I, I'm Mon Epstein. I'm a Puerto Rican Jew.

    13. JR

      Epstein played my brother in an episode of Newsradio.

    14. PS

      Really?

    15. JR

      Yes. He played my older brother, who was a priest, who beat us up. It was fun.

    16. PS

      Yeah, yeah. Gabriel Kaplan's show. That was... in 1970. But yeah, I'm, I, I could be a Puerto Rican Jew.

    17. JR

      Yeah, there you go.

    18. PS

      Because you know, I can't vote, right? I can't vote for the president, but I can run. In fact, I could be the only person elected president who couldn't vote for himself.

    19. JR

      That's hilarious.

    20. PS

      (laughs)

    21. JR

      Now, I'm so glad you're on here today because you have a unique ability to illuminate all these areas of finance and taxing and Wall Street, that most people just simply don't have the understanding or the knowledge to, to lay out for the layperson like myself. When you look-

  5. 16:44 – 20:33

    The pre-COVID economy as a Fed-inflated bubble (and why it was already deflating)

    1. PS

      Yeah, well, I pre- I appreciate that. And, you know, you've got a great audience and I'm hoping to clear up a lot of misconception out there, 'cause I've been saying, you know, the only thing that spreads faster than the coronavirus is ignorance. You know, about economics, uh, about, about finance. And so I want to clear that up. And, you know, a good place to get started is to really talk about the current state of the US economy and, and where we were, right, leading up to COVID-19. Because, you know, Donald Trump is out there claiming that we have this great economy, right, that just got screwed up by COVID-19. We had to shut it down. But we didn't. We had an enormous bubble. There was nothing great about it other than the size of the bubble. And the reason that it collapsed so quickly was because what happened was COVID-19 was a pin that pricked that bubble. In fact, the bubble was already deflating before COVID. It started to deflate in the fourth quarter of 2019. That's when the Federal Reserve stopped hiking interest rates and then started cutting them again and started doing quantitative easing again. And then COVID-19 came and it was like a giant spear that put a gaping hole into a bubble that was already deflating.

    2. JR

      Can I pause-

    3. PS

      And it just accelerated the process.

    4. JR

      Can I pause you there, Peter? Can I pause you there? Why did that happen? Why did that process take place before COVID-19?

    5. PS

      Well, because again-Um, Trump was very critical of Janet Yellen during the Obama years, rightly so, because Yellen kept interest rates artificially low to make Obama look good by propping up the stock market and the real estate market with cheap money. But doing that is what prevented a real recovery that would've benefited Main Street. And so those are the people that Trump was tapping into, the guys on Main Street that were getting screwed as the guys on Wall Street were being enriched by, by bad monetary policy. So Fed was r- uh, Trump was right to criticize Yellen and then he didn't want to reappoint her because supposedly he was gonna reappoint somebody that would, would do the right thing. But as Powell was doing the right thing, albeit too slowly, Powell started to correct the problem by raising interest rates and shrinking the balance sheet. But when that began to impact the markets, Trump was like, oh. He started criticizing him. You know, "We're gonna fire you. You're, you're a terrible Fed chairman." He was doing the right thing. We need higher interest rates, and unfortunately higher interest rates means the stock market's gonna go down. I mean, that's just the reality. The real estate market's gonna go down. You know, we're addicted to cheap money like a drug addict is addicted to heroin. But if you've got a guy addicted to heroin, the solution isn't more heroin so he stays high. The solution is, okay, no more heroin, and now you're gonna go through withdrawal. So the economy started to go through withdrawal as the Fed was withdrawing that cheap money, and Trump was like, "No. I don't want, I don't want withdrawal. Who's gonna vote for me if they're, you know, ev- everybody's hung lo- I wanna party again. I want the stock market at record highs." A- a- a- and so, you know, but so because we, we, we, we did this, we never actually had a real recovery. We just, you know, put more air into the bubble. But, you know, when, when COVID started, this is important to understand. So COVID-19 hits, and all of a sudden, you know, and I don't even know... I've, I've seen some of your discussions on, on the podcast about COVID itself and, and, and whether or not the threat is being exaggerated. Is it really as big a health threat as a lot of people say? And, you know, I'm not an expert there. You know, I, I tend to, I, I tend to always be suspicious of government and I, and I kind of think it's being exaggerated like most stuff, but I'm not a doctor, I'm not an immunologist, and so I, I, you know, let's just take them at their word that it, that, that it's as bad as they say. L- I just wanna focus

  6. 20:33 – 31:18

    COVID response debate: shutdowns, bailouts, and the WWII comparison

    1. PS

      on the economics of it. But, so when COVID hits and people, you know, people start, you know, staying home and they're not going out and, you know, and the e- co- people start losing their jobs and the economy starts tanking, right? The government comes in as if it's the government's job to rescue the economy. And the politicians say, in fact Trump himself said, "Oh, we're at war. I'm a wartime president. This is like World War II." Remember that? Remember when he said that?

    2. JR

      Yes.

    3. PS

      Yeah. It's World War II and we have to sacrifice. Americans have to sacrifice to beat, um, COVID-19 the way, you know, a p- a prior generation sacrificed to beat, you know, Nazi Germany, uh, uh, uh, Imperial Japan. We have to sacrifice. Except what we're doing now is the complete opposite of the actual sacrifice that Americans were asked to make during World War II, right? Apart from the fact that 16 million young men went off to war and risked their lives, apart from that sacrifice, the people that didn't go off to war, they actually sacrificed. Right? So 'cause 1941 when the war started, not even 10% of Americans paid any income tax at all. Fewer than 10%.

    4. JR

      Really.

    5. PS

      1942 there was a victory tax, and after the victory tax more than a third of Americans began paying income taxes. They weren't paying any income taxes before the war. All of a sudden they're paying income taxes. And in 1942 they, they, they created the withholding tax which Americans, you know, we pay it today, you think it was always there. Up until 1942 nobody had any income taxes withheld from their pay. What happened was if you were among the few people who actually paid income taxes, you didn't write a check until April 15th of the following year. You made no payments. You made no quarterly payments, you had no payroll withholding. That started as part of the victory tax. So massive tax increases on Americans. In addition to that, the US government told Americans, "We need more money than this. You need to loan us money." And so the f- the Treasury started selling these war bonds to the public and middle class Americans bought the equivalent of trillions of dollars of war bonds. So the government taxed the middle class and borrowed from the middle class to pay for the war, and this is in 1940. We just went through the Great Depression, so these are Americans that just lived through a 10-year depression, the worst period in American history, yet they had enough money to loan trillions to the US government and to pay much higher taxes than they were paying before. And in addition, nobody got a bailout. No businesses... If you ran a restaurant and nobody was coming to your restaurant because your customers are off fighting a war and the ones that weren't fighting a war were now working harder to pay higher taxes, you know, and they... people weren't taking vacations, they weren't going to theaters, they weren't staying in hotels, but none of these small business owners got one nickel from the US government. The government didn't loan money to anybody, it didn't bail anybody out. What are we doing now? The opposite. The government is cutting people's taxes-

    6. JR

      But hold, but hold on a second. Hold on a second. Hold on, hold on, hold on, hold on.

    7. PS

      The government is loaning. You mean-

    8. JR

      Hold on. Wasn't that a t- but that's a different time, right? This is a time of a united country that it's facing a global threat from a tyrannical German Nazi regime. This, uh, it's a different situation than dealing with a, a virus. I mean we're in great-

    9. PS

      Well, no. Well, first of all-... it's Trump and other people that made the comparison to World War II.

    10. JR

      I understand that.

    11. PS

      But Hip- this was a global threat, this was a real war. This was actually worse, believe me.

    12. JR

      Right.

    13. PS

      COVID-19 is not as bad as having a world war.

    14. JR

      Not even close.

    15. PS

      Right, I would much rather fight a disease than to fight, uh, Hitler and, and, and Japan. I mean-

    16. JR

      We-

    17. PS

      ... this is not as bad as what people had to deal with in the '40s. Would you agree with that?

    18. JR

      Of course. Yeah, of course.

    19. PS

      Okay. But the, but the concept is the same. Government had to spend a lot of money fighting this war, and where did it get the money? It had to get it from the people, right?

    20. JR

      Yes.

    21. PS

      And its people were, you know, disrupted. A lot of people lost money because of World War II. It wasn't their fault. If you ran a restaurant and now your customers weren't coming because they went to fight the war, it wasn't your fault-

    22. JR

      Right.

    23. PS

      ... that your business dried up.

    24. JR

      Let me pa-

    25. PS

      But-

    26. JR

      Can I pause you for a second?

    27. PS

      Yeah.

    28. JR

      Do y- do you think that... First of all, we, we had to do something to stop the spread of COVID-19. Do you think-

    29. PS

      I agree.

    30. JR

      Yes. But-

  7. 31:18 – 34:59

    Commercial real estate collapse and the ‘rip off the Band-Aid’ recession logic

    1. JR

      Last time you were on, you were predicting the bubble of commercial real estate y- and, and a, a lot of other issues. What, what do you think is different about that situation now, and how m- how much does that compound what we're dealing with currently?

    2. PS

      Well, obviously, the coronavirus has made, you know, th- the problem worse for commercial real estate.

    3. JR

      Yes.

    4. PS

      I mean, commercial real estate is gonna get killed for so many reasons.

    5. JR

      It's de- it's devastating.

    6. PS

      But it was in trouble, I think, before COVID. But COVID, again, just accelerated the process, but obviously, uh, if you are a retailer, you know, no one's coming into your store, your restaurant, if your, if you got a gym, if you got a movie theater. So you're not collecting any rent, so you wanna default. And so now your landlord's not getting paid, and he might have a mortgage, and now he can't pay because he's not getting rent. You've got all these office buildings where a lot of offices now, like my company, almost all my people are working from home now. I mean, I got some people that come into the office, but I got a lot of people working from home. And so a lot of companies are thinking, "Hey, I don't need all this, uh, commercial space. I don't need as big an office anymore because more of my people are working from home." So now you have pressure on the rent. So that was already happening, you know, you had WeWork that blew up and they had, you know, they had, uh, you know, rented all this space that was now, you know, on the market for sublease. But all this was inflated by the Fed. Keeping interest rates artificially low to prop up these bubbles made that real estate bubble very, very big. And so now it's gonna be far more disruptive when it pops. But it's gotta pop. You know, trying to prevent bubbles from deflating by trying to blow more air into them just makes it worse. Maybe you delay the day of reckoning a little bit, but you make the day of reckoning much worse 'cause now you have additional mistakes that you need to reckon with.

    7. JR

      I understand. So w- it's, it's essentially like a pull off the Band-Aid situation, and we, we, we have to have a, a healing moment. You have to let things collapse that need to collapse that sh- should have been done a long time ago because of mismanagement.

    8. PS

      Yeah, and you have to understand that we're ripping the Band-Aid off a wound that the government inflicted us with in the first place.

    9. JR

      Yes.

    10. PS

      Right? The, the free market never would've screwed us, screwed us up this much. It was government interference in the free market. That's why, you know, capitalism gets a bad name. You know, that's why, you know, we talked about on a, on, on one of these, uh, earlier podcasts about when I went to occupy Wall Street years ago, and I went down to Zuccotti Park because you had all these young protesters who were blaming Wall Street for the bailouts and for the financial crisis, and I was saying, "No, it's not Wall Street that took the bailouts. Blame the government for providing the bailouts, for making them available. Blame the Federal Reserve for funding all this and inflating the bubble." You know?

    11. JR

      Yes.

    12. PS

      But, you know, the interesting thing, if I tried to do that today, if I tried to go to one of these protests, one of these Black Lives Matter protests or any of these, I mean, do you think they'd be civil? You think I could do that? You think I could walk into a crowd of hundreds of people and take the opposite position-

    13. JR

      They would-

    14. PS

      ... and walk out of there, you know? (laughs)

    15. JR

      They would beat you to death.

    16. PS

      Unscathed?

    17. JR

      They would beat you to death, 100%. (laughs)

    18. PS

      Yeah, so I mean, it really shows you-

    19. JR

      That's unfortunately-

    20. PS

      ... the loss of civility in just, you know, 10 years.

    21. JR

      Well, it's, it's not just a loss of civility. It's a loss of opportunity and a, a, the loss of a faith in the system and the future if we stay on the same path. That's part of the problem. It's that people don't believe that if we keep going the way we are going that things will work out in, i- i- i- in, in an equitable, fair, and balanced way, and that's where-

    22. PS

      Yeah, but the, the-

    23. JR

      ... young people today-

  8. 34:59 – 40:23

    Dollar reserve-currency privilege: why Schiff fears a dollar and import shock

    1. PS

      ... important point I wanted to make though, too, when I went back to America in 1940 was to show that the American middle class, you know, was real strong. They could afford to pay for World War II and for, a- a- and to provide for their own families, you know, because now they keep comparing World War II now because we're running up as much debt now as we ran up during World War II. But we had the capacity to pay it back back then. That was the point. The debt went way down. Debt to GDP went way down in the decades after World War II because Americans had the capacity to pay back what they borrowed to fight the war. We don't have that capacity now. I mean, the debt's never gonna go down. The debt's gonna keep on rising and rising and rising until the dollar implodes. See, that is the real crisis that we're headed for. It's gonna be a collapse in the value of the dollar because right now we're printing money, right? And, and, and the government is sending it out, and people are able to buy stuff with it, right? But that's gonna come to an end because the world is no longer going to accept US dollars as the reserve currency. See, that's the unique privilege that we've enjoyed for several generations now and that we've abused to the point where we're going to lose it.See, right now we're able to print money, and we use that money we print to buy all sorts of stuff that the rest of the world produces, that we didn't have to produce ourselves. But producing goods requires capital, it requires labor, it requires land. It requires real resources. But we get all this stuff for free. We just create money and say, "Here you go," and they send us stuff. And then to make it even better for us, they take the money that we send them, the paper, and they loan it right back to us at very low rates of interest. They buy our bonds, they buy our mortgage-backed securities. So Americans get to spend all this borrowed money that they didn't save. We get to consume all this stuff that we didn't produce, and so we have an artificially elevated standard of living. We live beyond our means. That's gonna come to an end because foreigners are gonna realize that we're never gonna stop printing money, that the deficits are never gonna be brought under control, that we're gonna have QE infinity, 0% interest rates in perpetuity, and then they're not gonna want the dollar anymore. And then the dollar's gonna crash, and we're not gonna be able to import anything anymore. And the only things we're gonna be able to buy is the stuff we make ourselves, except we don't make much stuff anymore. So prices are gonna go through the roof. That is the real economic consequences. And so it's not gonna matter that the government sends you a stimulus check if you can't buy anything with it, because the government can't create purchasing power. They can print all the money they want, but none of that printed money adds any purchasing power. They don't grow any food, they don't produce any products, nothing. They just print money.

    2. JR

      Right. But there is... If, if the government gives money to people, they will be able to buy things, and people still are making things.

    3. PS

      But now. But when the dollar's value collapses... See, you can't keep printing trillions and trillions of dollars and expect the dollars not to lose purchasing power.

    4. JR

      Right.

    5. PS

      Right? Because paper money, all that does is that, um, allows us to divvy up what we produce. Right? You have all these Americans now who used to be working, doing something, right? They were p- helping to produce a product, they were providing a service, and now they're just at home collecting a check.

    6. JR

      Right.

    7. PS

      So they're getting money for nothing. They didn't put anything into the pot-

    8. JR

      Can I pause you?

    9. PS

      ... but now they wanna take out of the pot with their money. Well, there's nothing in the pot.

    10. JR

      Right.

    11. PS

      So now the prices of everything in that pot have to go up, because there's no, there's no extra stuff. There's just more buying.

    12. JR

      Peter, as a-

    13. PS

      So what's been-

    14. JR

      I'm sorry.

    15. PS

      Mm?

    16. JR

      As, as an economic expert, what would you have done differently? If you could have advised this government and we were... Let's, let's go back to March when everything was shutting down. What would you have, have advised differently?

    17. PS

      Again, first of all, I would all- I would allow the states to be responsible for their own policy. So you, you decide what you wanna do in your own state as far as, you know, what you, what businesses you wanna close, you know, what, what you wanna do, and, and you pay for it. And if you think that certain businesses or individuals need to get money, then s- the state will provide it based on local taxpayers. But what I would have done on the federal level is I would have dramatically cut government spending, e- you know, even after COVID-19, because government spending is a drain on the private sector. It's a drag on the economy. It's the government taking resources away from the private sector where they would be used efficiently and squander them i- i- in the public sector.

    18. JR

      I under-

    19. PS

      And so it's-

    20. JR

      Can I pause you for a second there?

    21. PS

      ... it's a burden.

    22. JR

      Uh, can I pause you?

    23. PS

      I would lighten the burden.

    24. JR

      What would you have... What you have... Uh, when you say lighten the burden, what would you have cut and how would you do that? When you think about all the-

    25. PS

      Well, I would-

    26. JR

      ... different aspects of the government that are essential, things that need to be in place.

    27. PS

      Yeah.

    28. JR

      What would you have cut?

    29. PS

      Well, most of, most of the government money is, is transfer payments, where the government takes money from one person and gives it to somebody else. I mean, the, the government shouldn't be doing that. That's not why we have a government in America. Government is here to secure our rights-

    30. JR

      Can you explain that?

  9. 40:23 – 1:01:01

    PPP/CARES controversy: ‘free money,’ fraud incentives, and unemployment disincentives

    1. PS

      Look at all the damage that the Cares Act did to, to the economy. So first of all, let's look at the Payroll Protection Plan that everybody wants to brag about, right? What a complete fraud this was. I said from day one this would be a, a, a cesspool of fraud. You know, we found out last week that there were 600, approximately, hedge funds, private equity funds, asset management companies that got PPP loans. And they're not even loans because you don't have to pay them back. So it's free money, right? And I could have gotten one of those loans if I wanted to. I just didn't wanna lie to qualify.

    2. JR

      Can you stop right there?

    3. PS

      But apparently-

    4. JR

      Can you stop right there?

    5. PS

      ... 600 firms did.

    6. JR

      Can you stop right there? Most people don't know that these hedge funds got this money. Most people think this money went out to American businesses to keep these businesses from collapsing 'cause we need restaurants, we need, you know, movie theaters, and all these, all these various American businesses that we assume this money went to prevent from collapsing. Explain that, please.

    7. PS

      Yeah. Well, you didn't have to... All you had to do was apply. And according to the, the s- the Small Business Administration, as long as the, the, the money you asked for was less than 2 million, they didn't ask any questions. Because in theory, you are supposed to need the money, right? You are supposed to have some disruption. Like, if you ran a restaurant and your restaurant is shut down, you don't have any revenue. There's nobody eating in your restaurant, so you have no money coming in. So how do you pay your, your waiters? How do you pay your, your, your, your busboys? You have no money. So the government was like, "Oh, we'll give you some money. As long as you don't fire your workers, we'll give you some money to pay your workers." But a company like mine, right? My, my co-... I have s- two or three companies that I could have taken money from and I didn't. But you look at my, like, my asset management company, EurAsia Asset Management. I'm making more money now than I was before COVID, and I assume-

    8. JR

      How is that possible?

    9. PS

      ... that that's the case with most firms-

    10. JR

      Huh.

    11. PS

      ... that are in my i- industry-

    12. JR

      H- h- can you explain how that's possible?

    13. PS

      ... because our revenue was never shut down.Hmm?

    14. JR

      How is that possible? How are you making more money?

    15. PS

      Because all I do is charge fees to manage people's money. I didn't stop managing their money because of COVID. I mean, we just keep on managing it and we keep on billing for our fees. We bill every quarter. We weren't even shut down. Uh, e- even in Puerto Rico, where they were shutting down everything, I mean, I was considered an essential business, financial services. So, I, I, you know, I ... people could come to my office, even though I let a lot of them work from home, and remember, all of our customers, they talk to us on the phone. So when I want to talk to a customer, the customer doesn't drive down to my office, you know, they just call me on the phone. And so, there's no physical contact, so there isn't any disruption. All of the revenues that the hedge funds were getting, that the asset management companies, all that revenue continued unabated. Not a single job was in jeopardy, right? All these companies that got government money ... See, the, the, the government wants to pretend that these loans saved jobs. They didn't save these jobs. These jobs were never in jeopardy of being lost. So all that happened is that it's a windfall. The asset management companies, the hedge funds, they got extra money from the government to make their profits even bigger, on top of the fact that the Federal Reserve printed all this money which inflated asset prices. We charged fees on those assets, and so as the Fed inflates assets, Wall Street has inflated fees. We make more money. It was a double bailout for a lot of these Wall Street firms. So that was one of the frauds. But even in the case where the government is actually giving companies, giving money to companies that need it, right, that otherwise would have fired their workers. Look, we don't know, you know, what the future demand for restaurants and bars and theaters is gonna be. I personally believe that demand is going to be diminished for a long time. It's not just a temporary thing. I don't think it's gonna come back to the way it was, especially since the way it was, was a bubble. See, that's what people don't get. They say, "We wanna go back to the way it was before COVID." We can't reflate that bubble. We have to start spending less. We have to save more, and that means we can't go out as often. We need to build up our savings again, because we've depleted it. So there's gonna be less demand for restaurants. There's gonna be less demand for a lot of things. We have to let these companies downsize. Look at the airlines. Americans are gonna be flying less. There's no question in my mind that domestic air travel is gonna be down for many, many years, even after COVID is, is, is cured. So the airlines have to shrink. They have to lay people off. They have to be profitable. They have to, you know, effectively utilize resources. So to the extent that the government prevents businesses from laying off workers that really should be laid off, they ultimately compromise the viability of those businesses, and in the long run, they may end up putting people out of business that would have stayed in business. Maybe they, you know, maybe if somebody had 100 employees, and maybe they could have downsized to 30 employees, and at least those 30 employees would have a job, but instead, they, they keep those employees on the payroll for long enough to the point where the whole company has to go out of business, and now everybody loses their job.

    16. JR

      Now, when you, when you say hedge funds were able to receive PPE, and you're saying that they did so while they were still earning profits, and there wasn't any diminishment of their income, why were they able to receive PP- PPP?

    17. PS

      Well, that's the problem with government programs. There's always fraud. Look, whenever the government is giving out free money, people try to qualify for it. Now, you know, you can read the fine print, and I know a lot of other people could say, "Hey, you know, Peter had said as long as your business was affected by COVID," and look, yes, my business was affected. I mean, people worked at home that used to work in the office. But it, you had to s- you had to basically testify or certify that the money was necessary to support the ongoing operations of your business, which, for most of these firms, it wasn't. And you also had to say that you had no other source of capital, which again, people were lying. But the government basically said, "If you ask for less than $2,000,000.00, we're gonna look the w- other way. We're not gonna vet these loans."

    18. JR

      But hold on. Hold on. Did they actually say that?

    19. PS

      And, you know, the other problem with these loans-

    20. JR

      Did they actually say that?

    21. PS

      ... is that they're non-recourse, there's no collateral, so a lot of businesses that were gonna fail anyway, and that were gonna lay off all their workers, took the money. They're still gonna lay off all their workers, but now they're not gonna have to pay the money back, because they're gonna bankrupt their business. And once your business is bankrupt, even though you fire all your workers, you're under no obligation to repay the loan.

    22. JR

      Okay, did they actually say that if you asked for less than $2,000,000.00, we're gonna look the other way? Like, wh- where are you taking this from?

    23. PS

      That's what it, well, what, what it says is, "We'll assume that you're filing an honest claim," right? 'Cause they're saying that, "If you, if you ask for more than $2,000,000.00, we're gonna vet the claim and we're gonna take a look at your situation," but it said on the small business administration that, "We'll just assume you're being honest," right? "So if you ask for less than $2,000,000.00, we'll assume you're being honest." Well, the minute they say that, "Ah, shit, I'm gonna lie." That's the problem. So many people lie. Whenever the government has a program, it gets abused. That, that's part of the problem with government spending, right? Everybody tries to qualify. Like, just like the unemployment benefits. This crazy, uh, deal with the, um, uh, enhanced unemployment benefits. You have a lot of people now who are being paid twice as much not to work as they were earning when they were working. Now, you create that kind of incentive, you have a lot of people now, the last thing they want is to go back to work, because they're making so much more money not working than they were when they were working. And most of these people, if you have a job where you're making, you know, $10, $15 an hour, $20 an hour, chances are, you don't love your job. I mean, you're not working because you enjoy what you're doing. You're working because you need the money. You need to pay the bills. Well, if you can make the same amount of money or more without working, I mean, who's not gonna go for that? I mean, I don't blame anybody for not wanting to work if the government is paying you more not to work than what your boss was paying you to work-And of course, you know, there's more than just working. You have to get up early in the morning, you gotta fight traffic, you know, you, you, you know, you, you got other expenses. Maybe you gotta, you know, put your kids i- in daycare, you know, you gotta, you know, launder, you know, dry clean your clothes. Women, women can spend an hour in the morning doing their hair, doing makeup. They don't get paid for that, but they gotta do all that, you know, and add all that to commute time. I mean, so there's a big cost of working, and then of course you give up all your leisure. When you're at work, you can't have fun. The government now has created a situation where people are getting paid to have fun. So, I mean, how do you end that? What politician is now gonna take this away?

    24. JR

      I understand what you're saying about that, and I do agree with that, and that was very shocking to me that, uh, people that I know who have friends that are on unemployment don't want the economy to reopen 'cause they would lose money. And I was like, "My God-"

    25. PS

      Oh yeah, look I know people-

    26. JR

      ... "what a conundrum."

    27. PS

      ... who can't hire people.

    28. JR

      But ho- ho- hold on please.

    29. PS

      You can't get people to work.

    30. JR

      Hold on please. Hold- hold on-

  10. 1:01:01 – 1:16:55

    Why socialism feels compassionate—and Schiff’s case for voluntary charity over redistribution

    1. JR

      That's a very important way to look at it. The way you- you look at it there, where half of the income is going to someone else. And let me- let, I wanted to stop you for a second, but I wanted to hear that rant. There's a connection that people make to, from, i- it's, they connect socialism to empathy, socialism to kindness, socialism to people that are less greedy, socialism to people that are- are more interested in- in a community. This is th- th- and this is coming from a person like myself who has no economic i- 86% of what I know about the economic world is from you. (laughs)

    2. PS

      (laughs)

    3. JR

      So I'm- I'm an idiot, all right? I- I listen to people who are experts. But when I think of the idea of community and of helping people out, I think of the idea, like, what- what's wrong with some socialist policies? We have the fire department, that's a socialist policy. Nobody wants a fire department to be only for people who have money. We want the fire department to be for the community, who, it doesn't matter if you have $0, if your house is on fire, we're all gonna pay for the fire department to come put it out. We all have a vested interest in keeping your house from burning down and you dying and the whole community from burning, right? We have these sort of agreements.

    4. PS

      Yeah, well there's a big difference between that type of, uh-

    5. JR

      I understand. But hold on a second.

    6. PS

      ... program.

    7. JR

      Just, you're right, you're 100% right. But it's the idea behind it that comes from idealistic people, and I'm putting myself in this category. I am often naïve and idealistic, but also ruthless in my assessment of human character. It's a big contradiction 'cause I think there's a lot of people that really could do more than they're doing, and they know they could, and they wanna make excuses. And it's (laughs) part of the reason why throughout history they've left people behind. There's certain people that if you had a tribe and you had to make it over this mountain, and Bob is fucking lazy and he's like, "You gotta carry me, bro," I'm like, "Bob, we're both walking. Come on, man."

    8. PS

      (laughs)

    9. JR

      Bob's not supposed to make it. He's not supposed to make it. We want him to make it, but we don't want our kids to die, we don't want our mom to starve, we gotta keep going. Bob, you lazy fuck. Come on, bro.

    10. PS

      (laughs)

    11. JR

      There's always been people like Bob, and it's part of the problem with humans.

    12. PS

      Yeah. You know-

    13. JR

      So I'm a contradiction.

    14. PS

      But the best way-

    15. JR

      But hold on a second. I'm- I-

    16. PS

      The best way to take care of th-

    17. JR

      I understand, but I'm gonna give you, but I, that's what attracts people to socialist ideas. It's just that they're nice, that they want everybody to do better.

    18. PS

      Yeah, look, socialist- socialist ideas are very appealing.

    19. JR

      Yes.

    20. PS

      I mean, 'cause I- I get that, and that's why they're very popular with young people who don't know any better.

    21. JR

      But-

    22. PS

      They don't have enough life experience to understand-

    23. JR

      But this is the bridge. Peter Schiff, this is the bridge, because a g- a guy like you who really understands economics can talk to a guy like me and we can explain it to everybody, because otherwise we just ha- and I- I- I'm definitely not arguing with you, but your argument versus people who disagree with you's argument. You have this. But there's a- there's an opportunity to make this bridge, and for us to understand each other.

    24. PS

      Yeah, that's what I'm hoping.

    25. JR

      I think so.

    26. PS

      That's why I'm here.

    27. JR

      I- I listen and that's-

    28. PS

      To- to make that bridge.

    29. JR

      And I appre- I appreciate that.

    30. PS

      You know, because, uh, I want to help people evolve from being socialist-

Episode duration: 3:04:17

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