Peter Schiff: How Smart Entrepreneurs and Investors Preserve Wealth During Financial Crises | Finance | E346

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0:00:59 Invest in productive assets, and the most lucrative asset you can invest in
0:00:59 is your own business.
0:01:03 It’s very difficult to be a successful entrepreneur, but it’s very important.
0:01:07 And if you succeed, you deserve all the money that you make.
0:01:10 And the more money you make, the more people you’ve helped.
0:01:13 In order to really make America great again, there’s going to be a…
0:01:32 Yeah, fam, welcome back to the show.
0:01:34 My guest today is Peter Schiff.
0:01:39 He’s a businessman, investment broker, author, and financial commentator.
0:01:43 He’s the CEO and chief global strategist of Euro-Pacific Capital.
0:01:47 And he is also the host of the very popular Peter Schiff podcast.
0:01:53 In this episode, we’re going to talk about the 1%, why they aren’t so bad,
0:01:56 and why capitalism really fuels the economy.
0:02:00 We’re going to be talking about real assets, what that means,
0:02:04 and the difference between Bitcoin, the dollar, gold,
0:02:08 how we should think about and be investing in each of those.
0:02:11 And we’re also going to talk about the potential recession that’s about to hit
0:02:13 in the upcoming year with this new presidency.
0:02:16 So I can’t wait for you guys to hear this.
0:02:19 I was really blown away by all of Peter’s knowledge.
0:02:22 This is one of my favorite episodes about the economy and finance
0:02:24 that we’ve had in a really long time.
0:02:30 So without further delay, this is my super insightful conversation with Peter Schiff.
0:02:32 Peter, welcome to Young and Profiting podcast.
0:02:34 Mahalo, thanks for inviting me on.
0:02:35 I’m happy to be here.
0:02:40 Yeah, I’m excited to talk about the economy, to talk about investing.
0:02:46 And to kick it off, I really wanted to get your POV related to some general topics,
0:02:47 the things that you talk a lot about.
0:02:51 And the first place I wanted to start was income inequality.
0:02:56 And income inequality has been a super hot topic in America for over a decade now.
0:03:02 So in 2011, if you guys don’t know, Occupy Wall Street movement was happening, right?
0:03:05 And their big slogan was, we are the 99%.
0:03:09 And I learned that you actually went down to the protests with a camera and a sign that
0:03:12 said, I am the 1%, let’s talk.
0:03:17 And wealth inequality has actually gotten a lot worse since 2011.
0:03:23 And I came across a recent stat that said the top 1% of American households held about 30%
0:03:25 of the nation’s total net worth.
0:03:28 So, first of all, do you think this is a problem?
0:03:34 Well, first of all, just about the Occupy Wall Street thing that I did, I went down there, it was,
0:03:35 I was working with Reason TV.
0:03:38 And so they initially sponsored it.
0:03:44 And the video ended up getting tens of millions of views on multiple channels.
0:03:47 And this is a while ago when that was a lot of views.
0:03:50 I mean, YouTube wasn’t as big back then as it is now.
0:03:52 So it did really well.
0:03:56 I mean, if you want to see it, I eventually, a few years ago, I just put a copy of it on my
0:03:57 YouTube channel.
0:04:00 And even there, I’ve got over 5 million views.
0:04:01 I put it up a few years ago.
0:04:03 But it’s a great video.
0:04:06 I think it’s about two hours if you have the time.
0:04:10 And it did make a big impact because I still get emails now.
0:04:15 I mean, every week, at least I get one from somebody, usually young people, who let me know
0:04:17 how influential this was.
0:04:21 It opened their eyes to a lot of things that they didn’t understand.
0:04:24 Now, getting to your income inequality question.
0:04:29 I mean, first of all, there’s always going to be income inequality in a free market, in
0:04:29 capitalism.
0:04:31 People are not equal.
0:04:33 I mean, they’re equal under the law, right?
0:04:38 That is a tenant of government that all everybody is equal under the eyes of the law.
0:04:44 But we’re all not equal in our abilities, in our intelligence, in our drive, in our goals.
0:04:48 And so there are going to be people that are more successful than other people.
0:04:49 And so they’re going to be wealthier.
0:04:51 I mean, that’s just what you’re going to have.
0:04:59 But under capitalism, the beauty of capitalism is even the poor people can be rich relative
0:05:01 to how they would be in another system.
0:05:06 And in fact, the poorest people in America today live better than the richest people did
0:05:07 hundreds of years ago.
0:05:14 If you look at all of the things that capitalism has produced that have increased the quality
0:05:19 of life, hundreds of years ago, if you wanted to listen to music, you had to be wealthy enough
0:05:22 to afford to have a live band play for you, right?
0:05:25 You couldn’t just, you know, go on the internet and, you know, and listen to stuff.
0:05:30 So a lot of things that you had to be rich to have, now everybody has them.
0:05:34 I mean, I remember when the first cell phone came out, I didn’t even want to buy one because
0:05:35 I couldn’t afford it.
0:05:41 I remember I went to a store and I saw this high def television in like a Best Buy or something.
0:05:46 And I was probably maybe in my thirties or like, I couldn’t believe the picture, how
0:05:48 great it was, but I couldn’t afford it.
0:05:51 It was like $10,000, which was a lot of money back then.
0:05:54 And Matt, you know, it’s still a lot of money, but it was a lot more money in the eighties.
0:05:59 But the reason that everybody’s got a television of, you know, high def television, the reason
0:06:05 that even people on welfare have cell phones now is because capitalism made them more abundant
0:06:06 and less expensive.
0:06:12 But income inequality today is actually higher than it’s ever been.
0:06:19 And the reason for that is because of the monetary policy that the Federal Reserve has pursued.
0:06:27 And as a result of that, we have an extreme income inequality that is not the natural byproduct
0:06:30 of capitalism and which is a problem.
0:06:35 But the solution isn’t for the government to try to redistribute the wealth from the rich
0:06:36 to the poor.
0:06:40 That always backfires and that will lead to even greater income inequality.
0:06:47 What we have to do is change the monetary policy that has enriched the few at the expense of
0:06:51 the many, because what the government has been doing is that they’ve been fueling inflation.
0:06:55 They’ve been running huge deficits, printing a lot of money, creating a lot of inflation.
0:07:03 The beneficiaries of that inflation are primarily the wealthy who own assets and who are able to
0:07:06 leverage those assets with cheap money to achieve more wealth.
0:07:13 But the middle class and the poor suffer because all they end up with is higher prices for the
0:07:14 goods and services that they buy.
0:07:19 And they’re also encouraged to go deeper into debt to afford to pay those bills.
0:07:22 And so instead of building wealth, they build debt.
0:07:26 They get poorer and poorer as they continue to borrow money to consume.
0:07:33 In the meantime, a lot of the money that should be invested productively that would result in
0:07:38 a higher standard of living for everybody that would create more goods and services and lower
0:07:43 prices, we end up just fueling speculative bubbles on Wall Street.
0:07:49 And so the policies that are being pursued are exacerbating the income inequality and they’re
0:07:51 undermining the collective standard of living.
0:07:57 And also the government perpetuates poverty with the welfare system that we have, where
0:08:03 people are paid basically not to be productive and it breeds a culture of dependency.
0:08:09 And we have a lot of things like the minimum wage law and occupational licensing and payroll
0:08:15 taxes and regulations that make it very difficult for people that don’t have skills to get jobs.
0:08:20 And the most important thing for somebody who doesn’t have a skill is to get a job because
0:08:23 on the job training is the best way to get skills.
0:08:26 And the more skills you have, the more money you can earn.
0:08:32 But if the government erects a lot of barriers to make it harder to get that first job, then
0:08:34 you never get on the economic ladder.
0:08:39 And so a lot of people have been trapped in poverty because of the welfare state and a lot
0:08:44 of these regulations that in some cases are well-intentioned, but they backfire.
0:08:49 I really love that you explained all this because I feel like it foreshadows our conversation
0:08:54 later because I’m going to ask you about why you feel we’re in a bubble economy and economic
0:08:59 policies and the Trump administration and what you foresee is going to happen with all of that.
0:09:04 But first, I really want to stick on this like high earner 1% topic.
0:09:12 And I want to understand what you think is misunderstood about 1%ers and also how do they bolster the
0:09:13 economy, these 1%ers?
0:09:22 Well, most people who get wealthy do it because they have created something of value.
0:09:25 The way you get rich, honestly, right?
0:09:29 I mean, obviously, there could be a thief that could just steal something and then he gets
0:09:30 rich dishonestly.
0:09:36 But if I start a business, and that’s the way most people achieve wealth, they start a business.
0:09:41 And when you have a business, you can’t force anybody to be your customer.
0:09:42 They have to choose.
0:09:45 They have to voluntarily buy whatever it is that you’re selling.
0:09:49 And people will always act in their own self-interest.
0:09:54 And so if I start a business and now people want to buy stuff from me, it’s because whatever I’m
0:09:56 selling makes their lives better.
0:10:01 And they value what I’m selling more than the money that they’re paying me to provide them with
0:10:01 that.
0:10:08 And so that’s a good thing because in capitalism, the more money you earn, by definition, the more
0:10:11 people that you’ve helped, you’ve improved their lives.
0:10:16 You’ve given them a better product at a higher quality or at a lower price.
0:10:21 And they voluntarily gave you their money that they worked hard to earn.
0:10:25 They gave you that money to buy your product or, you know, or utilize your service.
0:10:30 And generally, in the process, if I’m going to create a business, I usually can’t do it all
0:10:31 by myself.
0:10:32 I need help.
0:10:34 I have to hire some people to help me.
0:10:40 And so now I’m creating employment opportunities for people because a lot of people can’t start
0:10:41 their own business.
0:10:43 They don’t have the savings, the capital.
0:10:47 They don’t have the know-how and they can’t afford to take the risk.
0:10:50 When you start a business, you may not make any money.
0:10:54 I mean, there’s a lot of risk associated with setting up a business.
0:10:57 And usually you have to put up money in order to do it.
0:10:58 And you may lose.
0:11:00 You may, in fact, most businesses fail.
0:11:05 That means the people who start the businesses lose money, but their employees don’t lose money.
0:11:11 When you hire somebody to work, you got to give them a salary, a wage, whether you make
0:11:12 money or not.
0:11:16 If you rent office space, you got to pay the landlord, whether you make any money or
0:11:16 not.
0:11:21 So the business owner, the entrepreneur is the last person to get paid.
0:11:23 And he’s usually the hardest working.
0:11:27 I know when I, you know, and I started my business, I was the first one there and I turned off the
0:11:28 lights at night.
0:11:29 I worked harder than anybody.
0:11:32 And for the first several years, I made no money.
0:11:36 So there’s not a lot of people that are willing to put in that kind of effort.
0:11:39 People, some people don’t want to work 14 hour days.
0:11:41 They want to work for eight hours.
0:11:42 They want to take the weekends off.
0:11:45 When you own your own business, you never have a weekend off.
0:11:47 Even if you’re not at work, you’re still working.
0:11:51 So it’s very difficult to be a successful entrepreneur, but it’s very important.
0:11:56 And if you succeed, you deserve all the money that you make.
0:11:59 And the more money you make, the more people you’ve helped.
0:12:02 You’ve improved their lives or you wouldn’t make any money.
0:12:08 And the other beauty of capitalism is if I set up a business and I don’t make any money,
0:12:09 that means I’ve failed.
0:12:16 That means my efforts have not produced any real value, meaning I hired people to work
0:12:18 who could have worked someplace else.
0:12:20 I took that labor, which is not unlimited.
0:12:22 I took some scarce labor.
0:12:24 Maybe I rented some space.
0:12:25 I used some materials.
0:12:31 I used scarce resources and I couldn’t produce a product or service that I could sell at a profit.
0:12:37 That means the people don’t value what I’m doing as much as it’s costing me to produce it.
0:12:40 And so I’m net destroying value.
0:12:42 And so I go out of business.
0:12:45 But if I succeed, I stay in business and I make money.
0:12:47 But that’s how capitalism works.
0:12:50 That’s how resources get efficiently allocated.
0:12:53 That’s why socialist countries are broke.
0:12:54 Communist countries have nothing.
0:12:57 The people starve because you don’t have a profit motive.
0:12:58 You don’t have the right incentives.
0:13:04 When you have a bunch of bureaucrats in government trying to figure out what people want, it can’t work.
0:13:16 You need to have individual entrepreneurs incentivized by profit in order to have an efficient allocation of resources in order to create anything, in order to invent anything.
0:13:18 People operate in their own self-interest.
0:13:26 So if I know that if I start a business and I do something good, I could get rich, well, then I’m going to do it.
0:13:30 But if I don’t have that incentive, then why should I take the risk?
0:13:35 Why should I put in all the effort if I can’t benefit from that?
0:13:41 And so you can’t look at somebody who’s wealthy and think that, oh, they’re a bad person, they’re an evil person.
0:13:42 They’re not.
0:13:44 The people who have helped us the most.
0:13:47 I mean, everybody, you know, you look, oh, I’ve got this iPhone that I really like.
0:13:54 Well, you think you’d have an iPhone if Steve Jobs and his early investors couldn’t make any money creating those products?
0:13:58 The problem isn’t the wealthy people in the free market.
0:14:00 It’s the wealthy people in government.
0:14:07 It’s people who get rich off of government because that’s the problem, because government isn’t about voluntary transactions.
0:14:09 Government is about force.
0:14:12 A businessman can’t take your money away from you.
0:14:15 A businessman has to earn your money.
0:14:20 He has to convince you to spend your money at his business as opposed to somebody else’s.
0:14:23 And he can only do that by offering you a better deal.
0:14:25 Government takes your money by force.
0:14:28 Government says you have to give me your money whether you like it or not.
0:14:31 And so that’s what people have to be afraid of.
0:14:32 Big government.
0:14:34 Big government can harm you.
0:14:35 A big business can’t.
0:14:41 All they can do is try to earn your money by providing you things that make your life better.
0:14:42 You’re so right.
0:14:47 It’s the politicians and the government that get rich off our money.
0:14:50 That’s the bad thing because entrepreneurs, they’re taking risks.
0:14:52 They’re creating jobs.
0:14:58 They’re making our standard of living so much better through innovation and technology and better health care
0:14:59 and all these great things.
0:15:01 And entrepreneurs really push the world forward.
0:15:07 So sticking on that topic of government taking our money and taxes, when it comes to the one percenters,
0:15:11 a lot of people complain that it’s the middle class taking all the burden with the taxes.
0:15:16 And even Warren Buffett once said that he gets taxed less than his secretary.
0:15:19 So talk to us about that and what you think about that.
0:15:22 Well, he doesn’t get taxed less than his secretary.
0:15:26 But, I mean, one thing about Warren Buffett is he worked for free, right?
0:15:31 Warren Buffett didn’t take a salary because he owned so much stock in Berkshire Hathaway.
0:15:34 He was earning his money on dividends.
0:15:35 That was his choice.
0:15:42 But Berkshire Hathaway, the corporation, paid a corporate income tax before Warren Buffett got his dividend.
0:15:53 And so when Warren Buffett said, hey, I earned less than my secretary, that’s because he wasn’t counting the taxes that he paid on the corporate level before he got his personal dividend.
0:15:57 So when you add it together, he did pay a higher tax than his secretary.
0:16:02 But, you know, people like to use those soundbites as if we need to tax the rich more.
0:16:04 You know, the rich are already paying a lot of taxes.
0:16:07 They pay the majority of the taxes.
0:16:15 But the problem with higher taxes on the rich, and I’m talking about, you know, not somebody that makes 200, 300, 400,000 a year.
0:16:20 You’re talking about people that are making 10 million, 20, 50 million a year, you know, making a lot of money.
0:16:23 What do you think rich people do with their money?
0:16:25 Most of it is invested.
0:16:26 It’s not spent.
0:16:29 There’s only so much money you can blow.
0:16:33 And so most money that wealthy people earn, they invest.
0:16:43 And that money, assuming they invested productively, the problem is now they just, a lot of it is gambled on the stock on Wall Street and stuff, cryptocurrencies or nonsense like that.
0:16:55 But without the artificially low interest rates and the things the Fed does, most of the money that wealthy people earn and don’t spend is invested productively.
0:17:05 It goes to help new businesses start up, all these venture capitalists, all these companies, you know, they get funded, seeded by wealthy people that have the money to risk.
0:17:11 They put their money at risk to create new businesses, they put their money at risk to create new businesses, which come up with new products and new services.
0:17:16 And so when you tax the wealthy people, that’s what you reduce.
0:17:17 You reduce their investments.
0:17:21 You don’t reduce their consumption because they’re going to buy what they want to buy.
0:17:23 They just invest what’s left over.
0:17:32 So the marginal tax rate on the wealthy ends up reducing investment, which means less economic growth and lower prosperity.
0:17:35 So just take it from the rich is not going to do it.
0:17:41 Plus, the more you tax wealthy people, the less incentivized they have to make the investment.
0:17:42 They’ll screw it.
0:17:43 I’m just going to spend the money.
0:17:46 Why should I invest it when the government is going to take so much of it?
0:17:49 Because if you lose money, the government doesn’t share in the losses.
0:17:52 They just they just want a big chunk of the profits.
0:17:54 And so that’s not a good partner to have.
0:17:59 So it’s counterproductive to say, hey, just let’s raise taxes on the rich.
0:18:04 But I do think that in America today, the middle class pays a tax rate that much too high.
0:18:07 It’s not just the income tax that they’re paying.
0:18:10 It’s the payroll tax, the Social Security and Medicare tax.
0:18:12 And a lot of people don’t realize this.
0:18:14 They think they just pay their half.
0:18:19 They just think they pay half of the Social Security tax and the employer pays the rest.
0:18:21 No, the employer doesn’t pay any of it.
0:18:24 The employer just collects it from the worker.
0:18:30 So everybody is paid a little bit less so that their employer can send Social Security
0:18:31 payments to the government.
0:18:34 All the Social Security money comes from the worker.
0:18:40 That’s why if if you’re self-employed, if you’re driving an Uber and you’re an independent
0:18:43 contractor, you pay a 15 percent self-employment tax.
0:18:45 But everybody is paying that.
0:18:49 They don’t realize it because they don’t see it out of their paycheck because the employer
0:18:51 already factored that in into the wage.
0:18:54 The wage would be higher without that obligation.
0:18:57 So everybody is overtaxed, I think.
0:19:01 But the reason for that is that we have a huge government that’s spending much too much money.
0:19:07 And so the way to lower everybody’s taxes is to cut government spending substantially.
0:19:11 But right now we have a huge budget deficit, which means technically we’re not even taxed
0:19:12 enough.
0:19:17 Given how much government we have, we’re not paying enough taxes to finance it.
0:19:23 And the way we end up paying for that government is through inflation because inflation is really
0:19:28 a tax and the way the inflation tax comes into existence is let’s say the government collects
0:19:32 a dollar in taxes, but they spend a dollar 50.
0:19:33 Where do they get that 50 cents?
0:19:35 They didn’t get it in taxes.
0:19:36 So they have to create it.
0:19:39 The Fed creates it or they can borrow it.
0:19:42 But now the borrowing is financed by the Fed mostly.
0:19:46 So the government creates that extra 50 cents and they spend it in the circulation.
0:19:49 And now the people that get that money go out and spend it.
0:19:51 And that bids up prices.
0:19:54 And so the increase in price is the tax.
0:20:00 So instead of the government taking your money honestly, they take it dishonestly through inflation
0:20:02 by taking your purchasing power.
0:20:06 So when people are complaining that inflation is too high, it’s taxes that are too high.
0:20:10 And it’s government spending because that’s the real tax.
0:20:11 It’s how much government spends.
0:20:16 So that’s why even when Donald Trump, when he claimed that he had this big tax cut when
0:20:21 he was president, there was no tax cut because government spending went up every year that
0:20:22 Trump was president.
0:20:26 And it’s the amount that government spends that is the actual tax.
0:20:29 That is the burden that government puts on the economy.
0:20:36 And all those resources need to be paid for by the public, either through direct taxation or
0:20:41 sales taxes or income taxes, social security taxes, or they’re going to be paid for by
0:20:41 inflation.
0:20:46 And recently, more and more of our government is being paid for by inflation.
0:20:51 And that’s why inflation, despite what Trump had promised to get elected, inflation is going
0:20:53 to get worse over the next several years.
0:20:57 Prices are going to go up more, I think, this year than they did last.
0:21:03 I could definitely imagine that, especially considering how much we spent on defense and how much we’ve
0:21:05 sent to Ukraine and Israel.
0:21:08 It’s been absolutely insane in the past year.
0:21:12 So I could imagine that that’s going to trickle to inflation in the country this year.
0:21:14 Defense spending is going to go up.
0:21:18 But defense is really the only thing the federal government should be spending money on.
0:21:23 I think we should spend less on defense, but we need to get rid of almost everything else the
0:21:24 government does.
0:21:25 That is the problem.
0:21:29 The federal government is doing so many things that it has no business doing, that it has
0:21:31 no constitutional authority to do.
0:21:37 Donald Trump talks about how, you know, 100 years ago, we had no income taxes at all.
0:21:38 We just had tariffs.
0:21:43 And we had taxes on liquor and tobacco and firearms, stuff like that.
0:21:44 But that was it.
0:21:45 That’s all the federal government ran on.
0:21:47 Nobody paid an income tax.
0:21:48 Nobody paid a payroll tax.
0:21:49 We didn’t have Social Security.
0:21:53 And America prospered without those taxes.
0:21:58 We had faster economic growth in the 19th century than we did in the 20th century or now in the
0:22:00 21st when we had no income tax.
0:22:05 But the reason we were able to exist without an income tax is because the government was
0:22:05 tiny.
0:22:07 The government hardly did anything.
0:22:09 So it didn’t spend very much money.
0:22:11 So it didn’t need a lot of taxes.
0:22:14 And so it could afford to raise that revenue through tariffs.
0:22:19 But today the government is so big that it’s impossible to get the amount of money that they
0:22:22 need through indirect taxes like tariffs.
0:22:26 And so that’s why they they need the income tax, because they take that money right out
0:22:26 of your paycheck.
0:22:29 You never get a chance to see it before you even get it.
0:22:30 The government has it right.
0:22:32 Same thing with the payroll tax.
0:22:35 So without those type of taxes, the government couldn’t be this big.
0:22:40 But those taxes are very economically destructive and they destroy individual liberty.
0:22:45 I mean, I think it’s horrible that people have to even keep track of how much money they
0:22:45 earn.
0:22:50 My grandfather, my father’s father, came to this country as an immigrant.
0:22:52 He had no money, didn’t speak any English.
0:22:54 And he never became wealthy.
0:22:57 He was a middle class guy, but he had a he was self-employed.
0:22:58 He had a carpentry business.
0:23:00 He employed a few other carpenters.
0:23:04 You know, he worked his whole life, but he never kept track of what he earned.
0:23:05 He had a little business.
0:23:06 He paid his workers.
0:23:09 Whatever money was left over was what he had.
0:23:12 But he didn’t he didn’t write it down because there was no taxes to pay.
0:23:16 You know, you paid your bills and that was that you didn’t have to have accountants.
0:23:17 You didn’t have to have lawyers.
0:23:20 You just earn money and you spend that’s a free country today.
0:23:23 You know, every you know, you have to tell the government everything you do.
0:23:26 They want to know everything, you know, all the money you earn, everything you bought.
0:23:31 I mean, so we have a lot less freedom today than we did before we had an income tax.
0:23:36 Do you feel like this new department led by Elon Musk is going to change anything?
0:23:38 Doge, I think it’s called.
0:23:42 I don’t think there’ll be a substantial change such that it makes a difference.
0:23:44 I mean, it’s not really a department.
0:23:48 First, it was going to be a think tank, but now Donald Trump signed an order.
0:23:51 So now he’s kind of brought Doge into the White House.
0:23:55 So the people that work for Doge are actually going to be government employees.
0:23:58 So that’s more money we’re going to spend hiring these these workers.
0:24:05 But I think their mission is going to be more trying to make our IT systems more efficient,
0:24:06 up to date.
0:24:08 That might save some money.
0:24:10 But in the scheme of things, it’s not going to be enough.
0:24:16 I mean, we’re not going to be eliminating government agencies and departments, you know,
0:24:19 like Malay is doing down in Argentina.
0:24:20 I mean, that’s what we need.
0:24:22 We need that type of reform.
0:24:24 But I don’t think we’re going to get it.
0:24:29 I don’t think we’re we’re desperate enough yet that people aren’t it hasn’t been bad enough.
0:24:34 It took a long time for the Argentine people to be willing to swallow the bitter tasting medicine,
0:24:40 because in order to really make America great again, in order to go from a bubble economy to
0:24:45 a real economy that would really benefit everybody, there’s going to be a transition that’s going
0:24:46 to require a severe recession.
0:24:50 We’re going to have falling stock prices, falling real estate prices.
0:24:52 There’s going to be bankruptcies.
0:24:54 People are going to lose money.
0:25:00 All that is constructive, necessary, you know, restructure the economy the right way to go back
0:25:04 towards savings and production and away from debt and consumption.
0:25:06 They’re doing that in Argentina.
0:25:08 But we need to do that here.
0:25:10 But nobody is prepared for that.
0:25:11 Nobody wants to do it.
0:25:13 Donald Trump didn’t campaign on it.
0:25:17 And so all he can do is try to blow more air into the bubble.
0:25:20 That’s going to continue to exacerbate the income inequality.
0:25:23 It’s going to worsen the structural problems.
0:25:29 And it just exacerbates the ultimate financial crisis that we’re going to have.
0:25:30 I mean, there’s going to be a day of reckoning.
0:25:32 We haven’t had it yet.
0:25:35 We’ve been able to kick the can down the road every time we’ve gotten close.
0:25:36 But it’s coming.
0:25:38 You know, it’s long overdue.
0:25:40 And it’s going to be a lot worse because, you know, it took so long.
0:25:46 And so basically you’re saying until the American people get angry enough about what’s happening,
0:25:50 nothing’s going to change because nobody’s protesting in the streets about inflation right
0:25:50 now.
0:25:55 I mean, they protested to the point where they elected Trump, but Trump didn’t get elected
0:25:58 promising to take away anybody’s benefits.
0:26:00 The reality is Social Security needs to be cut.
0:26:04 Medicare, Obamacare, government pensions.
0:26:07 There needs to be cuts because there’s no money to make the payments.
0:26:09 But they don’t want to admit that.
0:26:10 So they’re just going to print money.
0:26:12 And then that just means more inflation.
0:26:16 But until we have substantive cuts, the inflation is not going to stop.
0:26:18 But we also need higher interest rates.
0:26:21 They’re still too low and the Fed is cutting them.
0:26:25 But if we get higher interest rates, well, that’s a huge problem for the leverage in the
0:26:26 economy.
0:26:31 And so they don’t want to let interest rates go to where they need to be because of the short
0:26:33 term pain that that will create.
0:26:34 But that’s what’s needed.
0:26:36 Now, the pain itself isn’t what’s needed.
0:26:41 But unfortunately, it’s necessary for us to get to where we need to be because it’s higher
0:26:43 interest rates that will encourage more savings.
0:26:49 And it’s savings that will result in more capital investment, more economic growth, better jobs.
0:26:51 All that stuff comes from savings and investment.
0:26:56 But we’re not going to get that if people are spending all their money, if people are buying
0:27:01 everything on credit cards and taking out student loans and all kinds of consumption-based
0:27:06 loans that starve the economy of the investment capital it needs to have real economic growth.
0:27:14 Why do you think America should spend billions of dollars on defense for other countries than
0:27:16 our old and six people in America?
0:27:18 I don’t understand that logic.
0:27:20 We shouldn’t really be doing either.
0:27:25 And it’s unfortunate that a lot of Americans can’t afford to take care of themselves because
0:27:27 they were overtaxed for so many years while they were working.
0:27:28 That’s the problem.
0:27:30 The government creates that dependency.
0:27:35 But the reason that we could actually get away with all this stuff is because the dollar
0:27:37 is still the primary reserve currency.
0:27:41 The world wants our dollars, even though it cost us nothing to create them.
0:27:48 And so we’re able to finance these massive deficits because of the unique status the dollar
0:27:48 has.
0:27:54 So we could create dollars out of thin air and use them to buy the goods that other people
0:27:56 work hard to produce.
0:27:57 And we get it basically for free.
0:28:02 So that’s really what’s allowing us to continue to live beyond our means.
0:28:05 There’s a point where we’re not going to be able to do that anymore.
0:28:07 And the dollar will collapse.
0:28:10 So we won’t be able to import all these products.
0:28:12 And we won’t be able to rely on foreign savings.
0:28:15 I mean, right now, the world loans us their savings.
0:28:17 The world buys our debt.
0:28:20 But when the world doesn’t want to do that anymore, we’re stuck.
0:28:25 OK, well, this is a good transition because you were just talking about how the dollar is
0:28:26 really worth nothing.
0:28:30 And something else that you always talk about is this concept of real assets.
0:28:34 So first of all, talk to us about what a real asset is, in your opinion.
0:28:40 Well, a real asset, something tangible or even intangible assets sometimes can be real,
0:28:42 intellectual property, things like that.
0:28:46 But a real asset, generally, you’re going to think about real estate.
0:28:51 You’re going to think about stocks that represent ownership in a business.
0:28:52 And you can own your own business, too.
0:28:54 You don’t have to own part of somebody else’s business.
0:28:58 But if you’re working for a living, you have a job, and you’re not going to start your own
0:29:04 company, pretty much investing in somebody else’s company is the best way to get that type of
0:29:05 equity.
0:29:09 But you own real things that the government can’t print as opposed to just having paper
0:29:10 like a bond.
0:29:13 If I just have a bond, I’ve loaned somebody money.
0:29:14 They’re going to pay me back.
0:29:20 That could be destroyed through inflation because if dollars lose value, I loaned somebody $1,000
0:29:23 and they pay me back in five years.
0:29:25 What’s the $1,000 going to buy?
0:29:25 I don’t know.
0:29:26 It may not buy very much.
0:29:27 We have a lot of inflation.
0:29:32 But if I take that $1,000 and buy a piece of property or into a piece of property or I
0:29:37 buy shares of a company, if there’s a lot of inflation, well, then the price of those
0:29:38 assets would go up.
0:29:40 It’s not like the price of the assets going up.
0:29:45 The value of the money is going down, but now you need more of the money to buy the assets.
0:29:51 So real assets can be a hedge against inflation, whereas paper assets just get destroyed by
0:29:51 inflation.
0:29:56 I feel like that’s so helpful for us when we’re thinking about what we should actually be investing
0:30:02 in tangible things, businesses via stocks or even buying a business, right?
0:30:03 Or investing in a business.
0:30:03 Go ahead.
0:30:07 It’s unfortunate because savings is still, it should be a good thing to do.
0:30:11 Putting money in a bank used to be not a bad place for your money.
0:30:14 And then the banks could take your money and loan it out.
0:30:15 They would make loans.
0:30:16 That’s how they paid you interest.
0:30:21 You used to back in the day before the government screwed it all up, you would go to the bank and
0:30:25 put your money in the bank and they’d pay you six, seven, 8% interest on your savings
0:30:28 account and how did the bank get the money to pay you that interest?
0:30:33 Well, they, they loaned it out to entrepreneurs who needed the money to start businesses and
0:30:36 then they charge them more and then you got paid.
0:30:41 And so people put their money in banks, but the problem is now you put your money to bank,
0:30:42 they pay you nothing, right?
0:30:44 There’s like no interest on a bank deposit.
0:30:49 Maybe you get a quarter of 1%, but inflation is many, many times that you’re punished.
0:30:52 If you put money in a bank, the government is punishing.
0:30:53 The government is taxing you.
0:30:57 You’re losing a value every year that you leave your money in the bank.
0:31:00 So you’re forced to do something else with it.
0:31:01 Otherwise you’re going to lose it.
0:31:07 But that’s unfortunate because those bank deposits could be vital to helping us grow the economy.
0:31:09 And we want to encourage savings.
0:31:11 We don’t want to punish people for saving.
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0:36:14 You also talk about investing in gold.
0:36:16 You’re known for showing off.
0:36:20 I don’t see any gold that you’re wearing right now, but you’re known for wearing gold all the
0:36:20 time.
0:36:21 Oh, no, I do.
0:36:22 I have a watch on.
0:36:23 It’s gold.
0:36:24 Oh, there you go.
0:36:25 You got a gold watch on.
0:36:27 So why do you invest in gold?
0:36:29 Why do you feel like it’s such a great store of value?
0:36:33 I look at gold not so much as an investment, but as a store of value.
0:36:35 So gold is money.
0:36:41 Gold constitutionally, if you know, in 1789, when they established the United States and
0:36:44 they wrote the Constitution, gold and silver were written in as money.
0:36:46 It’s the only lawful money in the country.
0:36:50 It’s the only thing that states can make legal tender is gold and silver.
0:36:55 The only thing the federal government was authorized to do was to take gold and make a coin out
0:36:56 of it, gold and silver.
0:36:58 So that’s money.
0:37:03 And when the country was started in 1789, the dollar, $20 was an ounce of gold.
0:37:06 By definition, that’s basically what it was.
0:37:08 If you had 20 paper, you know, $20, you had an ounce of gold.
0:37:14 And in 1913, 120 years later or so, it was exactly the same.
0:37:17 An ounce of gold was 20 bucks in 1913 when they created the Fed.
0:37:21 Now you need $2,750 to buy an ounce of gold.
0:37:26 The dollar has lost more than 99% of its value relative to gold because we’ve printed so many
0:37:27 of them.
0:37:30 Before we had a Federal Reserve, the dollar held its value.
0:37:35 So when you’re holding gold, you’re holding real money that doesn’t lose its value.
0:37:41 And in the future, gold is just like gold went up 100-fold, it’ll go up another 100-fold.
0:37:43 But it’s not gold going up.
0:37:47 It’s just the money going down because they keep printing it in order to fund the deficit
0:37:48 spending.
0:37:51 So gold is the way you can save your money.
0:37:56 Unfortunately, if I save in gold, it doesn’t have any real benefits for society because I’m
0:38:00 not putting my money in a bank where it can be loaned out, I’m putting it in a safe hidden
0:38:01 in my house somewhere.
0:38:04 But it’s unfortunate that people have to just buy gold.
0:38:08 Now you could loan out your gold, but nobody does that really.
0:38:09 I mean, you just save it.
0:38:13 But it’s still better than putting money in the bank and getting hardly any interest.
0:38:19 Gold, the US stock market over the last 25 years, even though it’s gone up fourfold, the
0:38:24 Dow Jones is four times what it was in the year 2000, gold is almost eight times.
0:38:28 So the stock market is actually going down if you price it in real money.
0:38:29 It’s only up.
0:38:32 It looks like it’s up when you price it in funny money.
0:38:36 But I don’t look at gold as an investment, more of just a store of wealth.
0:38:41 So if you want to get rich, buying gold is generally not how to do it.
0:38:46 But I like to invest, like you mentioned Warren Buffett, I like to invest in productive assets.
0:38:51 I have some gold and I recommend that everybody, you want to keep some gold, but you want to
0:38:52 invest in productive assets.
0:38:57 Now, probably the most lucrative asset you can invest in is your own business.
0:39:01 And again, I said earlier that the people who are really wealthy, that’s where their wealth
0:39:02 came from.
0:39:04 Now, yes, you could lose money in your own business too.
0:39:09 But if you’re successful and you do it well, generally investing in a successful business
0:39:14 that you own and control, the return will be better than just giving it to somebody else.
0:39:18 But if you don’t have your own business, you’re just working for wages, you’re not going to
0:39:22 get rich that way, but you can invest in other people’s businesses.
0:39:26 So you can invest in stocks, but you need to look at the companies.
0:39:30 You need to have some understanding of what you’re buying because a lot of people today
0:39:32 just buy a ticker symbol that’s going up.
0:39:37 And a lot of the stocks that people are buying are overpriced dramatically and that the people
0:39:42 who are buying them, ultimately someone’s going to get left holding the bag when the market
0:39:42 tanks.
0:39:48 So you have to look at undervalued companies that you could buy that pay good dividends and
0:39:52 have good earnings that may not be the sexy story that everybody’s talking about.
0:39:57 In fact, generally, if you want to buy something that has value, nobody’s talking about it.
0:39:59 When everybody’s talking about it, it’s expensive.
0:40:02 When all your friends are buying something, chances are they’re overpaying.
0:40:04 I mean, I do a lot of that.
0:40:09 I have in my company, Europe Pacific Asset Management, I have a team of portfolio managers and we’re looking
0:40:12 for these undervalued companies and we’re buying them for you.
0:40:18 I have five mutual funds that I run that people can buy a no load at any of the discount brokerage
0:40:23 firms or they can contact, you know, go to my website at europepack.com and get information
0:40:24 or talk to one of my representatives.
0:40:27 We can help you by buying the right companies.
0:40:32 I’m investing mostly outside the United States right now because most of the good companies
0:40:35 in America are very overpriced right now.
0:40:35 That’s a problem.
0:40:41 And so in order to get real value, a lot of times you’re in emerging markets to get that
0:40:41 value.
0:40:46 But long-term, and especially if you have a young audience, you got people in their
0:40:50 twenties and thirties and they’re trying to build a portfolio for when they get to be my
0:40:51 age, you know, I’m 61 or older.
0:40:57 I think the stocks that I’m buying are going to deliver much, much greater long-term returns
0:41:00 than people who are gambling on what’s hot right now.
0:41:04 And that would include anybody, you know, who’s been, you know, suckered into the crypto craze
0:41:09 because that’s the epitome of speculation because you’ve got absolutely nothing behind
0:41:09 it.
0:41:11 It’s just all air.
0:41:11 It’s all hype.
0:41:18 And so, yeah, people can make money off of other people’s greed and ignorance, but at some
0:41:19 point you run out of fools.
0:41:21 It’s called the greater fool theory.
0:41:26 Like you buy something because you expect some other fool to pay more and that fool buys it
0:41:30 because he thinks another fool will pay even more money than he did.
0:41:34 And so far that’s worked really well for the Bitcoin and some other things.
0:41:36 But it can’t go on forever.
0:41:38 Eventually, you run out of fools.
0:41:41 Now, right now, they’re trying to force the government to buy it.
0:41:47 Donald Trump was able to get a lot of campaign contributions and a lot of votes by pandering
0:41:48 to crypto.
0:41:51 Now they’re expecting, you know, something for that.
0:41:54 I don’t think Trump is going to deliver on those expectations.
0:41:56 I don’t think we’re going to have a Bitcoin reserve.
0:42:02 We may have some more regulation that is less obstructive, which is fine with me.
0:42:03 I don’t like regulation.
0:42:04 I mean, the less, the better.
0:42:05 And that would include crypto.
0:42:08 I just want less regulation and more freedom.
0:42:11 And that includes the freedom to lose your money.
0:42:12 People can do foolish things.
0:42:14 I don’t want to stop you.
0:42:16 You know, if you want to smoke cigarettes, smoke them.
0:42:17 I don’t advise it.
0:42:19 I don’t think it’s a healthy way to go.
0:42:20 But if you like it, go ahead and do it.
0:42:23 If you want to lose your money in crypto, go ahead.
0:42:26 It’s not up to me to tell you what to do with your money.
0:42:28 But the government shouldn’t buy any of it.
0:42:30 The government should encourage it.
0:42:39 Because, you know, the more resources, unfortunately, that go into crypto, the less resources that can go someplace else where they’re actually needed.
0:42:41 We want to produce things of real value.
0:42:43 We just don’t want to create worthless tokens.
0:42:45 That doesn’t give you anything.
0:42:50 I mean, yes, you can make money in crypto, but there’s no wealth that’s actually created.
0:42:56 All that happens is wealth is transferred from the people who buy the crypto to the people who are selling it.
0:42:57 You know, it’s like at a casino.
0:43:02 I mean, if I make money playing blackjack, I didn’t, you know, it’s because somebody lost money at the table.
0:43:05 There’s no wealth that’s created from that.
0:43:10 Now, maybe the casino makes a little money because they’re cutting the pot, but, you know, we’re not creating any wealth.
0:43:12 And that’s what’s going on with crypto.
0:43:20 I’d rather see people investing money productively, you know, so that we can have more goods and services to consume, not just more gambling.
0:43:24 There’s so much that I want to highlight and touch on and what you just said.
0:43:29 First of all, I feel like for my listeners tuning in, there’s a lot of people who want to be entrepreneurs.
0:43:36 And I want to highlight what you said about the fact that investing in your own business is probably the best investment that you can make.
0:43:39 I remember I started my business in 2020.
0:43:43 I took all my money out of the stock market because it was like tumbling.
0:43:47 And I decided I was just going to pour it into my social agency, my network.
0:43:50 I took all my podcaster sponsorship money.
0:43:51 My podcast was big back then.
0:43:54 And I just pumped it into hiring employees and all this stuff.
0:43:58 And I didn’t save any money, literally no money for like two years.
0:44:00 And I was just pumping it into my business.
0:44:04 My business made $7 million last year on track to make $10 million this year.
0:44:10 And I’m doing financially better than I ever would have if I like just put it in stocks.
0:44:10 Right.
0:44:11 I just invested in myself.
0:44:13 I mean, look, congratulations.
0:44:15 And that’s still what you’re saying.
0:44:16 You didn’t save any money.
0:44:20 You had savings and you invested those savings in your business.
0:44:27 But see, the way you get savings, and this is how it’s all upside down, you under consume, you earn money.
0:44:33 And instead of spending it on vacations or a fancy car or jewelry or handbags, right?
0:44:40 Like a lot of other gals might, you took that money and you forego those things, even though those things are fun.
0:44:47 I still bought a lot of handbags and clothes, but I’m sure you’re buying them now making $7 million a year.
0:44:49 You probably have a pretty nice closet there.
0:44:55 But the point is that years ago, instead of buying handbags, you invested in your business.
0:44:59 And so you delayed that gratification.
0:45:00 You under consumed.
0:45:02 You live beneath your means.
0:45:05 And that enabled you to grow your business.
0:45:07 And in the process, you hired other people.
0:45:09 You created other jobs.
0:45:18 And you’re also providing a service because people listen to your podcast because they enjoy it, because they gain something from the experience.
0:45:21 Either it’s entertainment or they get knowledge.
0:45:22 So you’re helping people.
0:45:25 And as a result of that, you’re making money.
0:45:29 And so, yeah, I mean, and you deserve what you’ve earned.
0:45:36 And if you probably look at all the people that are listening to your podcast, you’re not actually getting that much money from any one individual.
0:45:38 But you add them all up, right?
0:45:44 A lot of people, you make a little bit of money from a lot of people, and it turns into a pretty lucrative business.
0:45:46 But I’m sure you enjoy what you’re doing.
0:45:47 Yeah.
0:45:48 That is the key.
0:45:53 I mean, I tell a lot of people, look, you’ve got to go into business, but you’ve got to figure out what you enjoy.
0:46:00 Because in order to succeed at something, you have to spend a lot of time and devote a lot of efforts into doing it.
0:46:03 And if you don’t like it, it’s going to be very difficult to do.
0:46:07 Well, you’ve got to figure out what you’re good at, and you’ve got to figure out what you like.
0:46:09 And hopefully, they’re the same thing.
0:46:12 And then you have the ability to really grow a business.
0:46:17 And some people maybe don’t have a lot of the skills that might be required.
0:46:24 And so you might need to take in a partner or have somebody else that might be able to do parts of the business that maybe you can’t do on your own.
0:46:32 And I’m sure now, too, now that you’re bigger, you said, you know, you have employees that, you know, you have tasks to do certain things so that it frees up your time to do other things.
0:46:37 So I want to talk to you about Bitcoin, because I also was skeptical about Bitcoin.
0:46:43 I remember I did like basically a documentary series about Bitcoin in 2018.
0:46:45 I interviewed like all these experts.
0:46:48 It took me three months to put out the project.
0:46:49 And then what did I do?
0:46:52 I didn’t invest in Bitcoin after all of that.
0:46:59 And I am kicking myself now because I would have been so rich had I just done that in 2018 when I was doing all this research about it.
0:47:02 But I was always skeptical about Bitcoin, too.
0:47:07 But I just don’t understand really like logically how it’s actually that much different than gold.
0:47:09 Gold is a finite resource.
0:47:12 Bitcoin has a 21 million cap, right?
0:47:15 There’s only 21 million Bitcoin out there.
0:47:17 They both don’t really have that much utility.
0:47:19 So how are they much different?
0:47:24 Well, first of all, there’s a there’s a big difference between gold and Bitcoin.
0:47:42 But Bitcoin was modeled after gold in that they tried to replicate in Bitcoin some of the properties that made gold better money than salt or cattle or other things that have been used as money over the centuries.
0:47:48 That’s why Bitcoin is represented to look like a coin and its color is gold.
0:47:51 It’s not an accident that they chose gold, right?
0:47:52 They wanted to make it look like gold.
0:47:55 The way you create a Bitcoin is you mine it.
0:47:57 Well, there’s no mining.
0:47:58 There’s no picks and shovels.
0:47:59 Why do they call it mining?
0:48:00 Well, because you mine gold.
0:48:04 But the way you create a Bitcoin is you solve a mathematical equation.
0:48:07 So that’s not doing math problems isn’t mining.
0:48:11 So they try to kind of counterfeit the properties of gold.
0:48:12 They made it visible.
0:48:15 Yes, Bitcoin is scarce.
0:48:17 There’s 21 million Bitcoin.
0:48:20 But, you know, there’s 2.1 quadrillion Satoshis.
0:48:21 That’s the smallest unit.
0:48:24 So 2.1 quadrillion is a pretty big number, right?
0:48:27 So there’s plenty of Satoshis to go around, right?
0:48:30 Everybody can have several hundred thousand of those things.
0:48:33 So it’s not like it’s scarce in that sense because you can divide it.
0:48:39 You can’t divide gold into that small particles because they’d blow away.
0:48:40 You wouldn’t have any idea where they were.
0:48:42 And you need a certain amount of gold.
0:48:44 Like I showed you my gold watch.
0:48:46 I’m sure you have a lot of gold jewelry.
0:48:47 That is utility.
0:48:52 Gold is the most useful metal on the periodic table.
0:48:55 There’s more you can do with gold than any other metal.
0:49:00 The reason we don’t use gold more is because it’s too expensive, because it’s so valuable.
0:49:03 But for certain things, gold is used.
0:49:05 There’s gold in every cell phone.
0:49:14 Gold is a very useful metal in industry, in electronics, in medicine, in dentistry, in aerospace.
0:49:22 They’re constantly coming up with new uses for gold because there are things that you can do with gold that you can’t do with any other metal.
0:49:28 And so the reason that gold is a store of value is because, unlike other metals, gold doesn’t decay.
0:49:30 It doesn’t tarnish.
0:49:35 You find a wrecked ship that went down in the Caribbean 500 years ago.
0:49:40 If you could find that shipwreck, if there was some gold, it’s still there.
0:49:44 It looks exactly the way it looked, but the day it sunk, everything else is gone.
0:49:50 But the gold is still there, and it’s just as beautiful as it was 500 years ago when the ship sunk.
0:50:02 So if you have gold and you don’t use it to make a product, if I just hold a gold bar, a gold coin, in 1,000 years, somebody can take that gold coin and do whatever they want with it.
0:50:05 They can melt it back down, and they can use it for whatever they want.
0:50:11 So when you own gold, you are storing all of the things that you can do with gold in the future.
0:50:16 If I tried to do that with anything else in 1,000 years, it might not be there anymore.
0:50:17 It’s gone.
0:50:19 It’s disintegrated, decayed.
0:50:24 And gold is relatively inexpensive to store for all the value that you pack into a small place.
0:50:28 So Bitcoin isn’t a store of value because it doesn’t have any actual value.
0:50:30 You don’t do anything with a Bitcoin.
0:50:32 Nobody does anything with Bitcoin.
0:50:33 You just hold onto it.
0:50:37 You can trade it, but that doesn’t mean it has any intrinsic value.
0:50:38 You just buy it and selling it.
0:50:41 The person who buys it just turns around and sells it.
0:50:43 No one does anything with it.
0:50:50 Even if you don’t do anything with the gold that you buy, somebody in the future could do something with that gold, and that’s why it has value today.
0:50:55 Bitcoin has a price, and price and value are two totally different things.
0:51:02 And Bitcoin’s price has gone up dramatically since I first learned about it when it was under $10.
0:51:06 But it doesn’t have any more value because the value is zero, really.
0:51:10 But if the longest people want to buy it, the price can keep going up.
0:51:14 The problem is when people stop wanting to buy it, then the price crashes.
0:51:16 And why do people want to buy Bitcoin?
0:51:17 Because they think they’re going to get rich.
0:51:19 They think the price is going to go to the moon.
0:51:21 That’s why they’re holding onto it.
0:51:27 But the supply of cryptocurrencies continues to explode.
0:51:30 You know, now they’re creating like a million meme coins a day.
0:51:34 The Donald Trump meme coin, that has a limited supply, too.
0:51:36 I mean, it’s a billion of them.
0:51:40 But again, I said there’s 2.1 quadrillion Satoshis, so forget about the numbers.
0:51:43 And there’s a Melania coin, and who knows how many other coins.
0:51:50 But there’s all kinds of tokens before the coins that you could buy that all compete with Bitcoin.
0:51:56 There’s an unlimited supply of cryptos that could be created that are exactly like Bitcoin.
0:52:02 In fact, a lot of them are better in that they’re cheaper to transfer.
0:52:05 And so why not use those, right?
0:52:10 I mean, it costs less money to actually send them or try to use them for whatever.
0:52:11 They’re faster and cheaper.
0:52:14 So what’s so special about Bitcoin?
0:52:17 The only thing that’s special about it is that it was the first one.
0:52:21 And because it’s the first one, it’s got the most capacity behind it.
0:52:24 You have a lot of Bitcoin miners that are out there.
0:52:28 You have a bigger network that has been built up surrounding Bitcoin.
0:52:30 But that’s today.
0:52:33 Who knows what it’s going to be like tomorrow with Bitcoin and that?
0:52:36 I mean, the first is never the best.
0:52:37 I talked about cell phones.
0:52:41 The first cell phone is not the cell phone that people use today.
0:52:42 They made better cell phones.
0:52:43 They made cheaper cell phones.
0:52:46 The first car, the first television.
0:52:48 I mean, those are antiquated at this point.
0:52:50 I think it’s just a passing fad.
0:52:53 Yeah, it’s been around for 15 years or so.
0:52:58 But it hasn’t really been on most people’s radar until the last five years or so.
0:53:06 Really, 2017, it kind of like showed up and more people started to talk about it when it shot up to 20,000, you know, out of nowhere.
0:53:09 And then all of a sudden, people started talking about it.
0:53:12 It hasn’t really been around that long.
0:53:13 But it’s not money.
0:53:15 It’s not digital gold.
0:53:19 Any more than an image of a hamburger is digital food.
0:53:22 You can’t eat an image of a hamburger.
0:53:30 You can’t use a picture of a Bitcoin to make jewelry or to conduct electricity or any of the things that gold is used for.
0:53:32 You can’t just substitute Bitcoin.
0:53:34 Now, there are a lot of people who say, well, you know, it’s digital gold.
0:53:36 It’s not digital anything.
0:53:39 They confuse, like, digital music.
0:53:47 I don’t need a record or even a cassette tape or a disc anymore to listen to music, right?
0:53:49 I don’t need to buy a physical object.
0:53:52 I can listen to music digitally.
0:53:55 And that’s fine because it’s the same experience.
0:53:57 I can dance to digital music.
0:53:58 I can sing along to it.
0:53:59 I can tap my foot to it.
0:54:05 So I don’t need the physical record and a phonograph or, you know, whatever, you know, to do it.
0:54:07 But it’s not the same thing with food.
0:54:09 And it’s not the same thing with gold.
0:54:11 Gold’s an actual metal.
0:54:14 I can’t just substitute an image of gold.
0:54:19 Like, I can substitute digital music for a record or even a book.
0:54:21 I can have a digital book that I can read.
0:54:23 So I don’t need a physical book.
0:54:25 I can just read the words on a computer.
0:54:27 But I can’t do that with gold.
0:54:28 So it doesn’t work.
0:54:30 Just because it works for some things.
0:54:35 People want to say, oh, you know, you have analog gold and Bitcoin is digital gold.
0:54:36 No, Bitcoin is nothing.
0:54:37 It’s digital fool’s gold.
0:54:40 It’s not actual, actual gold.
0:54:45 But, you know, initially, when if you go back and read the white paper from Bitcoin, it was
0:54:53 supposed to be money, a peer-to-peer monetary system that people would use in transactions to purchase goods and services.
0:54:57 But it doesn’t actually work for that because it’s so slow and so expensive and it’s volatile.
0:55:01 So nobody uses it for the purpose that was created.
0:55:04 Now, early on, it was used to some extent.
0:55:08 You know, they just let Albright out of jail and he did the Silk Road.
0:55:14 In the early days of Bitcoin, you did have people using Bitcoin to buy things that were illegal.
0:55:21 And it didn’t matter that the price was very volatile because, you know, whenever you’re laundering money, I mean, you’re always going to lose a bunch.
0:55:30 Right. And so if you lose 20 percent in the VIG because the guy that laundered your money charged you 20 points to clean it up, that was OK.
0:55:34 So people didn’t mind if they were drug dealers were selling drugs for Bitcoin.
0:55:38 If the Bitcoin went down 20 or 30 percent, it’s OK.
0:55:41 I still got 70 percent left, which is pretty good.
0:55:45 But nobody really used it for legal, ordinary transactions.
0:55:46 There was no reason to do that.
0:55:48 But now nobody does that.
0:55:51 They just hold it and all the all they do is trade it.
0:55:58 And now you have ETFs that own it and companies have been going into debt to buy it like Michael Saylor.
0:56:02 I mean, that’s one of the reasons that the price does not collapse is you got these big companies.
0:56:06 Michael Saylor is borrowing a billion dollars a week to buy Bitcoin.
0:56:08 Does that Bitcoin generate any real income?
0:56:09 No, it doesn’t generate anything.
0:56:13 He’s just propping up the price by going into debt to buy more of it.
0:56:15 Well, let me tell the listeners about this.
0:56:15 They probably don’t know.
0:56:17 It’s a micro strategy.
0:56:25 It’s a technology company and they are buying Bitcoin and they have two percent of the world’s Bitcoin as their investment.
0:56:28 They’ve like made Bitcoin their corporate strategy.
0:56:30 They used to be a software company.
0:56:36 And I suppose also tiny software company buried beneath all that debt and Bitcoin.
0:56:41 But for all practical purpose, they’re now just a Bitcoin, a levered Bitcoin company.
0:56:47 Their business model is to go into debt and issue shares to buy Bitcoin.
0:56:50 And then they try to encourage everybody else to buy Bitcoin.
0:56:51 That’s their business.
0:56:55 But the whole thing is going to collapse at some point.
0:56:56 The stock is going to implode.
0:56:58 I think it goes bankrupt eventually.
0:56:59 The question is when.
0:57:02 But Bitcoin is not digital gold.
0:57:04 It’s not real money.
0:57:08 It’s really a digital Ponzi, like a pyramid scheme, a chain letter.
0:57:10 I call it a blockchain letter.
0:57:14 The fact that it’s digital internet and all that, that’s what’s new.
0:57:17 But the idea of a pyramid, that’s old.
0:57:21 I was going to ask you, could it replace the dollar?
0:57:23 But you answered that because you said, no, it’s too volatile.
0:57:25 We’ll never just replace the dollar.
0:57:27 It’s not going to replace any currencies.
0:57:30 And it’s certainly not going to replace gold.
0:57:35 I mean, people are gambling on Bitcoin instead of gambling on other things.
0:57:40 It’s certainly a substitute for other ways that you could gamble with your money.
0:57:42 But that’s because Bitcoin has been hot.
0:57:43 People have been making money.
0:57:47 Once a lot of people lose a lot of money, it’s going to be a different story.
0:57:49 Bitcoin is at $100,000.
0:57:56 When it’s at $10,000 and people have lost 90% of their money, it’s not going to be so popular anymore.
0:58:01 And a lot of people who own Bitcoin now own it through these exchange-traded funds.
0:58:03 They’ve bought in their brokerage accounts.
0:58:07 They just bought it because it was going up and there was a lot of hype around it.
0:58:11 But when the price really starts to fall, they’re just going to sell.
0:58:12 They’re not going to hold on forever.
0:58:14 They’re going to move on to something else.
0:58:21 They’re going to cut their losses or take whatever profits they have left and move them to another casino.
0:58:30 And then the price is going to collapse instead of, you know, right now you have a lot of stories about people who bought Lamborghinis because they put a little bit of money into Bitcoin.
0:58:32 And, you know, now they’ve got all this stuff.
0:58:40 But they’re going to be replaced by stories of people who went bankrupt because they bought Bitcoin, because they borrowed money to buy Bitcoin.
0:58:44 And, you know, right now people are still trying to say that you’re getting in early.
0:58:47 Buy Bitcoin because you’re getting in early.
0:58:47 It’s still early.
0:58:48 It is not early.
0:58:50 Everybody knows about Bitcoin.
0:58:53 Every cab driver, every cocktail waitress.
0:58:57 You’re not getting in early when everybody knows about it.
0:59:00 There’s an old saying, you know, you’re at a poker player, poker table.
0:59:02 And, you know, if you don’t know who the sucker is, it’s you.
0:59:04 People buying now are the suckers.
0:59:10 But if everybody just keeps believing in it and nobody ever stops believing in it, then what will happen?
0:59:13 Yes, but people do stop believing in it.
0:59:15 It’s like if once people get nervous, it’s just going to crumble.
0:59:19 Nothing that can’t go on forever will.
0:59:26 I mean, that’s why Pyramids schemes, Ponzi schemes, they’re illegal and they’re illegal because they can’t go on forever.
0:59:32 Look, Bernie Madoff had a Ponzi and it went on for a long time, but they can’t go on forever.
0:59:33 They eventually collapse.
0:59:40 And so the same thing is going to happen with crypto, not just Bitcoin, the whole the whole thing, all these tokens.
0:59:44 Now, is there a future to tokenization?
0:59:44 Maybe.
0:59:47 I mean, they talked about this 10 years ago.
0:59:49 We can tokenize real assets.
0:59:55 You can take real estate and tokenize it so that ownership of real estate can be evidenced by a token.
1:00:02 And so instead of selling you a physical deed, I sell you the token that that represents ownership.
1:00:07 You can tokenize companies instead of having shares on an exchange.
1:00:14 A company can issue tokens and those tokens can trade on a blockchain and cut out the exchange and the brokers and all that.
1:00:18 So is there a potential to tokenize real things?
1:00:19 You could tokenize gold.
1:00:24 I mean, gold can be stored and then ownership can be evidenced by a token.
1:00:29 And now I can go into a Starbucks and pay for coffee with gold.
1:00:33 More importantly, Starbucks can receive real gold for their coffee, right?
1:00:36 We can tokenize gold and then it can circulate as money.
1:00:40 So is there a potential for blockchain and tokenization?
1:00:40 Sure.
1:00:47 But so far, nobody has even bothered to go in that direction because all everybody cares about is creating coins for nothing.
1:00:58 When you create a coin out of nothing and then sell it, why create a coin out of something that actually costs you money when I can create one from out of nothing that costs me nothing?
1:01:00 Now, Bitcoin doesn’t cost nothing.
1:01:03 You actually spend a lot of money to solve those math problems.
1:01:10 And that’s why people think Bitcoin is different than, let’s say, Trump coin because of the proof of work.
1:01:17 If you create a Bitcoin, you had to do the work of solving this problem to get that Bitcoin.
1:01:20 And so people think that that work gives it value.
1:01:23 Just like if I want to mine gold, that requires work.
1:01:25 I’ve got to physically get it out of the ground.
1:01:29 It takes a lot of effort and energy to produce that gold.
1:01:32 And it does take a lot of energy to produce a Bitcoin.
1:01:33 I’m not denying that.
1:01:40 The difference is when you use energy to produce Bitcoin, you’ve wasted all that energy because at the end of the day, you’ve produced nothing.
1:01:41 Right.
1:01:46 So proof of work doesn’t mean anything if my work didn’t create anything of any value.
1:02:05 If you think about it this way, if I have a piece of property and I spend $10,000 digging a gigantic hole in that property, and then I spend another $10,000 taking all that dirt and filling the hole back up so that I have exactly what I started with, a flat piece of ground.
1:02:07 But I spent $20,000.
1:02:08 What’s it worth?
1:02:09 What did I create?
1:02:10 I created nothing.
1:02:13 Also horrible for the environment with all the data centers that it takes.
1:02:14 Yeah, exactly.
1:02:21 I mean, Michael Saylor, again, says that Bitcoin is like digital energy because it takes energy to produce it.
1:02:22 Yes.
1:02:25 But once you’ve used that energy, it’s gone.
1:02:26 You waste energy.
1:02:33 It’s not like Bitcoin is a battery where if I own a Bitcoin, I can plug it into something and get that energy back out.
1:02:36 All the energy that was used to create Bitcoin is gone.
1:02:43 The energy that was used to create gold is still there in the gold because now I can use the gold for something.
1:02:45 Bitcoin isn’t used for anything.
1:02:56 So while using energy to mine an ounce of gold is a productive use of that energy, using energy to solve a math problem to create a Bitcoin is a complete waste.
1:02:59 That energy should be used for something that energy that energy should be used for something else.
1:03:02 But unfortunately, it’s being wasted on these digital tokens.
1:03:05 It’s really interesting to hear your thoughts about Bitcoin.
1:03:14 My main takeaway from this is don’t put my cash in the bank invested in gold because it’s not going to be impacted by inflation.
1:03:20 If you want to save your money in this nice, safe store of value, buy gold.
1:03:34 If you want to make investments, talk to my team at Europe Pacific Asset Management about finding good quality investments outside your own business, companies that pay good dividends, that are growing their earnings and I think will be a lot more valuable in the future.
1:03:43 If you want to gamble, right, if you just have some throwaway money, you want to gamble with it, you could bet on the Super Bowl or you could buy some Bitcoin.
1:03:50 I mean, I’m not telling people that you can’t buy it and you may make money as long as you sell it before the bottom drops out.
1:03:55 You could make money, people, you know, in Bitcoin and maybe it will go higher.
1:04:01 I can’t say for sure where the top is, but somebody is going to get stuck holding the bag.
1:04:06 The only way you make sure that it’s not you is not to buy it, but don’t think of it as investing.
1:04:11 If you buy it, you’re just, you’re just gambling and you’re hoping that you could sell out before the music stops.
1:04:12 That makes sense.
1:04:13 And we saw it with NFTs.
1:04:15 NFTs were like so hot.
1:04:17 Nobody’s even talking about them anymore.
1:04:19 Well, because it was just, again, it’s nothing.
1:04:20 I mean, what were they?
1:04:23 I mean, they, they created all the hype.
1:04:24 They did it with this Beeple.
1:04:32 They had some insiders in Ethereum, whatever, that paid 40 million worth of Ethereum to buy this Beeple.
1:04:34 And that set off the craze.
1:04:36 And everybody and their brother just launched NFTs.
1:04:41 I remember in Art Basel, I was there one year and they, they’re trying to show their NFTs.
1:04:45 Like it’s actual art because, oh, we got this image of it, of something.
1:04:49 I could just take a photograph of an NFT and I have the exact same thing, right?
1:04:55 A digital camera, just, you know, just because I own the original image, why not just own a copy?
1:05:03 And they would say, well, you know, you can own a copy of a Rembrandt, but yes, but that’s different than the actual Rembrandt that the, that he painted himself.
1:05:06 Like, you know, 500 years ago, that is actually rare.
1:05:09 No, I mean, so there’s somebody creating an NFT.
1:05:10 I mean, I was nothing.
1:05:15 It was a bunch of hype and people made some money on it really quickly.
1:05:23 They got in and they got out all that money, all the profits that people make in those things comes at the expense of the money.
1:05:27 Everybody else loses those zero sum games or negative sum games.
1:05:29 They’re not good for society.
1:05:38 If somebody creates a business and the shareholders get rich by investing early in that business, everybody wins.
1:05:42 The investors win, the customers win, the employees win.
1:05:44 It’s not a negative sum game.
1:05:53 It’s a productive use of money, unlike crypto, which doesn’t benefit anybody except the people who cash out at the expense of the people who buy in.
1:05:57 We’ll be right back after a quick break from our sponsors.
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1:09:07 Hey, young impropters.
1:09:10 I know so many of you are in your grind season.
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1:09:16 That’s how I started Yap Media.
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1:11:05 Okay, as we close this interview out, the last thing I want to talk about is the potential of a recession.
1:11:12 So I saw you on Tom Bilyeu’s show last year when you said 2025 might be the worst recession that we’ve ever seen.
1:11:15 You called it, I think, potentially a Great Depression.
1:11:18 I know that at that point you didn’t know Trump was going to be president.
1:11:21 So you are famous for predicting things.
1:11:23 You predicted the 2008 crash.
1:11:26 So what do you predict is going to happen with Trump’s presidency?
1:11:30 And do you still think we’re going to see a big recession?
1:11:33 Well, first of all, I did think that Trump was going to win.
1:11:37 I was one of the first people publicly to say he was going to win.
1:11:47 And the reason I knew Trump would win, or I was pretty confident, was that I knew that the economy was not nearly as good as the media claimed, as Biden and then Harris claimed.
1:11:51 I thought we were in a recession pretty much all of last year.
1:11:55 And I think beneath the rosy statistics, there was a recession.
1:12:00 And when they polled the voters and they asked, why did you vote Trump?
1:12:02 The number one response was the economy.
1:12:05 Now, that’s because the economy was bad, right?
1:12:09 If it was good, they would have voted for Harris because they would have wanted four more years.
1:12:11 They voted for Trump because the economy was bad.
1:12:17 All the jobs that were created that Biden was bragging about, they were all part-time jobs.
1:12:20 And they went to people who already had a job or two.
1:12:22 People were struggling to make ends meet.
1:12:25 They were working multiple jobs that they would rather not have.
1:12:27 People were living on debt.
1:12:30 You know, we have record high credit card debt and household debt.
1:12:31 That’s not a good sign.
1:12:34 And if the economy was good, you’d be paying off your debt.
1:12:40 You wouldn’t be putting on more and you wouldn’t be having record debt when credit card interest rates are at 24%.
1:12:46 And a record number of people right now are just making the minimum payment on those credit cards at 24%.
1:12:50 So I think we’ve had a weak economy and I think it’s going to get weaker.
1:12:55 But I want to tell you something about recessions and the business cycle.
1:12:59 Because recessions are actually good.
1:13:05 They may not feel good, just like sometimes medicine doesn’t taste good, but it can cure what ails you.
1:13:08 And the problem isn’t the recession.
1:13:11 The recession is part of the solution.
1:13:18 The problem is the artificial boom that precedes the recession and that makes the recession necessary.
1:13:27 So what happens is the government interferes in the economy by keeping interest rates artificially low and printing too much money, which is what we did.
1:13:31 As a result of that, resources become misallocated.
1:13:35 Capital is malinvested.
1:13:38 And so projects that shouldn’t be funded get funded.
1:13:42 So the economy gets all screwed up because of the government intervention.
1:13:52 And then, eventually, the market tries to fix everything that the government broke and put the resources back to where they need to go.
1:13:56 But that process always leads to a recession.
1:13:59 But the problem is the government tries to fight the recession.
1:14:01 They try to stop it.
1:14:03 What they’re really trying to do is stop the cure.
1:14:06 And the way they stop the cure is they make the disease worse.
1:14:12 They do more of what created the bubble that the recession is trying to cure.
1:14:16 You know, an example that I gave in my book, I’ve written several books.
1:14:18 I haven’t written one recently.
1:14:29 But in The Real Crash, which is the book that predicted the 2008 financial crisis and the recession, which came out in 07, I use the analogy of a circus.
1:14:32 And I don’t even know if you’re old enough to remember traveling circuses.
1:14:39 But when I was a kid, Ringling Brothers, Barnum & Bailey, they would come into town and they’d have a big tent and you’d go to the circus.
1:14:43 But the circus was there for a couple of weeks and then they left.
1:14:50 They pulled up the stakes and all the bearded lady and the elephants and everybody went to another town, right?
1:14:51 So in my book, I wrote an example.
1:14:53 Hey, let’s say a circus comes to town.
1:15:01 And now all the circus, all the performers that work at the circus start going to a local restaurant to eat.
1:15:05 And now this restaurant in this small town is really busy.
1:15:07 He’s got all, you know, oh, my God, look at this, all these people coming.
1:15:09 And he thinks, you know, I should expand.
1:15:12 Maybe I should take on, I should build out more space.
1:15:14 I should rent the place next to me.
1:15:15 Let me staff up.
1:15:16 I need more waiters.
1:15:19 I need more cooks because, you know, business is booming.
1:15:21 So he does this.
1:15:22 He does all that.
1:15:23 And then the circus leaves.
1:15:25 And now the business collapses.
1:15:27 Well, now what does he have to do?
1:15:29 Well, I got to lay people off.
1:15:30 I hired too many people.
1:15:31 I have excess space.
1:15:33 So now he has a recession.
1:15:40 The problem is that restaurant owner misinterpreted the information he was getting from the circus.
1:15:45 He looked at this increase in demand and he thought it was some permanent increase in demand.
1:15:51 And so he made investments based on that information that he misinterpreted.
1:15:53 He hired people he shouldn’t have hired.
1:15:55 He expanded when he shouldn’t have expanded.
1:15:59 So during the recession, he fixed what he got wrong.
1:16:00 And so that’s what the government does.
1:16:03 The government prints a bunch of money and people spend that money.
1:16:10 And businesses make decisions on who to hire, on where to invest based on what they think is a real increase in demand.
1:16:11 But it turns out it was all false.
1:16:12 It was all a bunch of inflation.
1:16:14 There was no real increase in demand.
1:16:16 People didn’t really have that.
1:16:18 There’s no savings to support that.
1:16:24 Because when interest rates go down in a free market economy, interest rates go down when savings go up.
1:16:27 When you have more savings, you have lower interest rates.
1:16:36 And people can afford to make long-term investments because people are expressing a preference to consume in the future and not in the present.
1:16:37 That’s why they’re saving their money.
1:16:41 And so businesses can invest in capacity that’s going to pay off in the future.
1:16:43 But the government comes in.
1:16:44 They artificially suppress interest rates.
1:16:46 Businesses misinterpret that.
1:16:48 They make investments they really can’t afford.
1:16:51 The economy just, they make all kinds of mistakes.
1:16:55 The recession is when the market tries to fix what the government broke.
1:17:04 So we need recessions and all of our policies that are made to prevent recessions, to mitigate recessions are all misguided.
1:17:09 And they end up just sowing the seeds of the next recession and making it worse.
1:17:19 And so when the dot-com bubble popped in 2001, the Fed cut interest rates to 1% and inflated the housing bubble.
1:17:27 Instead of allowing a deeper recession, we bought time by slashing interest rates and inflating a housing bubble.
1:17:31 And then that bubble popped and we had a worse recession than the one we had in 2001.
1:17:39 But instead of letting that recession run its course, they cut interest rates to zero and they did quantitative easing.
1:17:50 We haven’t even had the real crisis that is the result of these mistakes because they’ve been compounded and then they were compounded even more during COVID.
1:18:01 The problems are just so pronounced at this point that the collapse, I wrote a book in my last book, which I wrote in 2013, was called The Real Crash, America’s Coming Bankruptcy.
1:18:05 And that’s a book that people could still read, even though I wrote it a long time ago.
1:18:08 The crisis that I was predicting hasn’t happened yet, but it will.
1:18:13 Because all the problems that I laid out have just gotten worse since I wrote the book.
1:18:15 And so the piper is going to have to be paid.
1:18:16 And that’s coming.
1:18:18 I mean, there’s still some bright spots out there.
1:18:25 There’s a lot of promise with AI and the increases in productivity that will ultimately result from that.
1:18:31 But, you know, before we can get to that, we got a lot of stuff that we’re going to have to go through first.
1:18:41 And people should understand it, be prepared for it, understand the cause of the problems that, you know, so they don’t blame capitalism, the free market, you know, the rich.
1:18:43 It’s about too much government.
1:18:50 It’s about government central planning and central banking and regulating that that is screwed up at the economy.
1:18:53 And the solution is not going to be even more government.
1:19:00 The ultimate solution is what they’re doing in Argentina, which is to take a cleaver to government, not just to waste, fraud and abuse.
1:19:02 But you have to get into the meat, right?
1:19:02 Not just the fat.
1:19:09 You got to cut down to the bone to free up those resources and liberate the economy from the government.
1:19:14 In terms of entrepreneurs, how can we prepare for this type of recession?
1:19:19 And what is our role in terms of a capitalism to help boost the economy?
1:19:28 Definitely recognize that if your business is dependent on U.S. consumers, you need to recognize that you could see a big downturn.
1:19:33 Because Americans, many of them are broke, and they’re only consuming because they can keep going into debt.
1:19:35 And that’s going to come to a stop.
1:19:45 So I think that most businesses should try to focus on trying to find consumers that may be able to afford their products or their services in the future.
1:19:46 And so they may be abroad.
1:19:48 They may be in the emerging markets.
1:19:56 So to the extent that you can have a business that does some exports, that can tap into what I think is going to be an emerging market.
1:20:02 Because I think as the world stops buying our dollars and loaning us money, they’re going to have a lot more of their wealth for themselves.
1:20:07 And so I think as consumption goes down in the U.S., it’s going to go up in other parts of the world.
1:20:08 And so you could profit from that.
1:20:11 You can position yourself to profit.
1:20:13 You could also have savings.
1:20:16 Again, as I said, have some rainy day money in gold and silver.
1:20:20 You know, I’ve got a company, Shift Gold, that people can go to to buy gold and silver.
1:20:22 What are the problems in gold and silver?
1:20:30 And the reason that I ended up starting that company when I did is a lot of people were getting ripped off because they were getting talked into buying numismatics.
1:20:32 And most of them aren’t real collectibles.
1:20:41 They’re just pumped up, heavily marked up products that a lot of gold and silver companies push on their customers because that’s the only way to make any real money.
1:20:43 There’s not a lot of people buying gold and silver.
1:20:47 So if you get a customer, you just overcharge them for this nonsense.
1:20:49 And so we don’t sell any of that.
1:20:52 You know, so if you go to Shift Gold, you’re just going to get bullion.
1:20:57 You’re going to get bars or coins where the markup is very slim.
1:21:02 And so if gold goes up 20%, you can sell your coins back and make 18%.
1:21:04 The markup is very thin.
1:21:13 You go to a lot of these gold companies, you need the price of gold to go up 50% just to break even because that’s how much they marked up the coins that you bought.
1:21:18 So you want to just buy bullion so you have, you know, the liquidity and it’s a good rainy day fund.
1:21:23 But I also encourage people, I’ve been encouraging people to do this for years now.
1:21:24 And this is not just businesses.
1:21:26 This is just consumers.
1:21:30 And it’s unfortunate that this is the advice that I have to give.
1:21:47 But if you have extra money, one thing you can do with it is stock up on stuff that you’re going to need, stuff that doesn’t perish, things that have a long shelf life, whether it’s, you know, razor blades or batteries or a shaving cream or a toilet paper.
1:21:59 I mean, although toilet paper, you know, it takes up more room, but, you know, things that are expensive that, you know, you’re going to need, you might as well buy them now because they’re just going to be more expensive later and they could be a lot more expensive.
1:22:04 And what I’m worried about is price controls because they’ve already hinted at it.
1:22:06 Harris talked about it.
1:22:10 Even Trump talked about price controls when it comes to credit card interest.
1:22:11 He wanted to try to cap that.
1:22:23 But I think prices are going to start to rise so quickly that there’s going to be a lot of politicians looking for price controls to just prevent prices from going up.
1:22:30 And that doesn’t get to the source of inflation that gets to the consequence of it.
1:22:37 It’s like if you have a cancer and, you know, a skin cancer and you put a bandaid on the cancer, you’re not stopping it.
1:22:38 You’re just covering it up.
1:22:45 And if you try to control prices, but you keep creating inflation, expanding the money supply, you haven’t done anything about the problem.
1:22:48 You’re just trying to hide the consequences.
1:22:52 But what happens when the government has price controls is that you have shortages.
1:22:54 You just don’t have products.
1:22:55 You have rationing.
1:22:57 You have black markets.
1:23:02 And so if you want to buy something, you can’t buy it legally because there’s nothing there.
1:23:03 So you have to go to the black market.
1:23:06 And now it’s even more expensive than if there had never been a price control.
1:23:14 So rather than waiting for products to be illegal where you have to buy them on the black market, just buy them now.
1:23:25 Because if you buy something and a year from now it’s 10% more expensive, but you bought it now, that’s a 10% return tax-free on your investment in whatever product you bought.
1:23:27 So it’s better than just putting the money in the bank.
1:23:33 And, you know, what’s going to happen too, as prices really start to go up, people are going to start hoarding stuff.
1:23:36 So then the government says, okay, you can only buy one at a time.
1:23:38 And now people have to wait in a long line to get stuff.
1:23:44 And eventually you could barter some of these things, you know, so people, people need to buy real things, unfortunately.
1:23:46 So, and businesses, right?
1:23:55 If there’s certain inventory that you need in a business, you can buy that inventory now rather than waiting till you need it when it could be a lot more expensive.
1:24:02 If you can invest in your inventory, if you know you have a good that it isn’t going down in price, it’s just going to keep going up.
1:24:08 It’s better to buy the inventory than to leave the cash in the bank and buy the inventory later when it’s a lot more expensive.
1:24:10 Such good insight.
1:24:11 A little scary.
1:24:12 I’m not going to lie.
1:24:15 I’m like thinking about like, okay, what storage do I have?
1:24:18 I got to load up on this toilet paper or whatever I’m going to buy.
1:24:19 Right.
1:24:21 During COVID, toilet paper was valuable.
1:24:22 I know.
1:24:23 It was crazy.
1:24:24 It was absolutely nuts.
1:24:25 Well, I hope that doesn’t happen.
1:24:29 I hope AI saves us like you were mentioning, but we’ll see what happens.
1:24:31 So, Peter, this has been awesome.
1:24:33 I end my show with two questions that I ask all of my guests.
1:24:35 You can just answer from the heart.
1:24:37 It doesn’t have to be about anything that we talked about today.
1:24:43 So, what is one actionable thing that my young and profiters can do today to be more profitable tomorrow?
1:24:47 I think one thing they could do is start educating themselves.
1:24:50 You know, and they’re doing that now by listening to this program.
1:24:52 But, you know, I’ve got a lot of content online.
1:24:53 I have my own podcast.
1:24:55 I do one or two of them a week.
1:24:57 I put out a lot of stuff.
1:24:59 I put out a lot of interesting stuff just on X.
1:25:05 I mean, a lot of the news that people get from the conventional sources is inaccurate.
1:25:06 It’s more propaganda.
1:25:09 The news, there’s a lot of fake news out there.
1:25:14 And I think I do a pretty good job of distilling what’s actually going on and telling people the truth.
1:25:22 So, you know, they can make a point to, you know, start following me and listen to what I’m saying and get a better handle on what’s actually happening and having a better understanding.
1:25:25 And I think that probably could help in their business.
1:25:38 And apart from that, again, they can start investing the right way instead of just chasing what’s going up and hoping that it continues to really buy things of value that you can hold for the long run, knowing eventually you’re good.
1:25:43 What you’ve invested in will be worth more in the future because of the value that’s being created.
1:25:53 The business that’s growing, the income is growing, the dividends are growing, and people can do that themselves or they can hire my company to help them do that.
1:25:57 You know, my mutual funds, people can start buying my mutual funds, no load.
1:25:59 I think the minimums are maybe $2,500.
1:26:09 I forget it, you know, Schwab or Fidelity, but they could just go there and just all the information on those funds and the symbols, the ticker symbols for the funds they can find on my website.
1:26:12 In fact, you can actually buy the funds directly on the website.
1:26:17 If you don’t have a brokerage account, you could just buy them directly from EuropePAC.com.
1:26:18 Amazing.
1:26:22 And I’ll make sure I stick all your links in the show notes in terms of that.
1:26:24 You also have a really popular YouTube channel.
1:26:26 Like you mentioned, he’s on X, very active on X.
1:26:33 So my last question to you, and this can go beyond financial, what is your secret to profiting in life?
1:26:39 Well, as I said, I mentioned earlier, you know, you have to find something that you’re good at and something that you like.
1:26:46 And then I started my own brokerage firm years and years ago in the 1990s, and I built it up.
1:26:50 And, you know, for the first few years that I worked, I didn’t make any money.
1:26:53 I made less money than I worked when I had a job.
1:27:01 But the reason I even had the money to go a couple of years without any income is because when I had a job, I saved up some money.
1:27:08 I didn’t just spend everything I earned because if I did that, I wouldn’t have had the resources to be able to invest in my own business.
1:27:21 And so that’s important that people just not go out there and just buy whatever they can buy because they have the money or even worse, borrow money on a credit card to buy stuff they can’t afford.
1:27:30 People have to try to find a way to delay that instant gratification so that they have the resources to start a business.
1:27:37 But the rest of it, I mean, it’s good to marry right, you know, you know, have some kids and enjoy your life.
1:27:39 I mean, you got to have a mix.
1:27:43 And, you know, I have it now that I’m in my 60s.
1:27:49 I mean, I don’t spend nearly as much time working as I did when I was in my 30s and 40s.
1:27:52 So, you know, you got to stop and smell the roses.
1:27:54 But what I do do, I enjoy doing.
1:27:59 I think as I was younger, a lot of the stuff that I did wasn’t necessarily as enjoyable.
1:28:00 I had to do it.
1:28:02 It’s like the grunt work that you’ve got to do.
1:28:06 A lot of stuff that I used to do myself, I now pay other people to do.
1:28:11 I have the freedom now to just do the stuff that I like and pay other people to do the stuff that I don’t.
1:28:13 That’s the dream, Peter.
1:28:16 Well, thank you so much for joining us on Young and Profiting Podcast.
1:28:18 Where can everybody go find you, follow you?
1:28:21 Yeah, as I said, I’m on X, just Peter Schiff.
1:28:24 I’ve got almost 1.1 million followers now.
1:28:25 So it’s starting to grow.
1:28:27 I think that’s my biggest social media.
1:28:30 But I am on Facebook.
1:28:31 I’m on Instagram.
1:28:33 I’m on TikTok.
1:28:35 So, you know, you can find me, Peter Schiff, on all those.
1:28:39 My YouTube channel also, yeah, you know, that one I’ve got.
1:28:39 It’s growing.
1:28:42 It’s about 600,000 almost subscribers.
1:28:46 The podcast that I do, The Peter Schiff Show, I put it out on my YouTube channel.
1:28:48 But you can also listen to it at SchiffRadio.com.
1:28:53 It’s on iTunes and Spotify or Stitcher.
1:28:57 Wherever there’s podcasts, if you look for The Peter Schiff Show, it’s there.
1:28:59 When I do them, I do them live.
1:29:02 So you can listen to them or watch them on YouTube live.
1:29:05 So you can come and you can do it whenever you want.
1:29:05 I don’t like you.
1:29:06 Like, you’re interviewing.
1:29:07 You have guests.
1:29:08 I don’t do that.
1:29:12 I just kind of speak for an hour and then I, you know, that’s it.
1:29:14 I used to have guests.
1:29:19 I did a radio show for a couple of years, two hours a day.
1:29:23 And I’d have at least a half hour of a guest every time I did one.
1:29:24 I’d have, except for Fridays.
1:29:25 It was free form Fridays.
1:29:26 I just took calls.
1:29:29 But Monday through Thursday, I always had a guest.
1:29:31 You got enough to talk about yourself.
1:29:33 That was just me.
1:29:33 Yeah.
1:29:35 Now, but because now I only do it once or twice a week.
1:29:37 I don’t do it every day for two hours.
1:29:38 You know, I do it once.
1:29:40 So it’s hard to fill two hours every day.
1:29:45 So I needed, I needed guests to help me, but I talk about important stuff.
1:29:50 I talk about like, I’m going to do one tomorrow because we have a fed meeting tomorrow and pal
1:29:55 is going to give his press conference and he’s going to say a bunch of nonsense and the market
1:29:58 commentators are also going to repeat the nonsense.
1:30:03 And so then I’m going to do my podcast and tell the truth and about, you know, what should
1:30:04 have been said and what was said.
1:30:08 And, and so, yeah, so people, I don’t know when people are going to listen to this.
1:30:10 Maybe that one will, you know, the live one will be over.
1:30:13 But it’ll be up on, it’ll be up on the YouTube channel or the podcast.
1:30:16 So you can always go back and listen to the prior episodes.
1:30:18 You don’t have to just listen to the live one.
1:30:19 They’re all there.
1:30:19 I mean, I’ve been doing them.
1:30:25 In fact, I’m over a thousand now on my podcast because I think I just crossed a thousand episodes
1:30:26 like a month ago.
1:30:27 That’s a big deal.
1:30:27 Yeah.
1:30:29 Yeah.
1:30:31 Well, you’ve got a new subscriber and fan with me.
1:30:33 So I really enjoyed studying your work.
1:30:35 I really enjoyed this conversation.
1:30:38 I think my listeners probably like learned so much.
1:30:40 So you’ve got thousands of new fans.
1:30:45 So thank you so much, Peter, for coming on the show and for sharing your wisdom with us.
1:30:46 Yes, Hala.
1:30:51 I really appreciate the opportunity to talk to your audience and I wish you continued success
1:30:52 in building out this business.
1:30:59 And there you have it, folks.
1:31:04 Some great pointers from Peter Schiff about navigating today’s turbulent economic waters
1:31:05 and making smart investments.
1:31:11 Peter argues that by focusing on assets with intrinsic value, you’re better positioned to preserve
1:31:13 and grow your wealth in the long term.
1:31:17 While bright, shiny investments like crypto may be hot right now in some quarters, you need
1:31:20 to be wary of investments that don’t appear to create much value.
1:31:25 Don’t just invest in something because you think you can find a fool to buy it at a higher
1:31:26 price.
1:31:30 That may work for a while, but like Peter said, eventually, you’re going to run out of fools
1:31:32 and the whole thing will collapse.
1:31:36 Perhaps the best thing you can invest in as an entrepreneur, however, is yourself.
1:31:41 When I started my business in 2020, I took money out of the stock market and I put it in
1:31:42 my social agency.
1:31:45 I invested in hiring employees and building out my business.
1:31:49 I lived modestly and delayed my own personal gratification.
1:31:53 Now, sure, I may have made some money in the stock market over the past few years if I left
1:31:59 it in there, but I have so, so much more today because I invested in myself and my company.
1:32:04 I not only have a return on my investment, I have an asset that continues to grow even more
1:32:07 valuable and I’ve made millions of dollars in the process.
1:32:12 Remember, as Peter says, it’s not just about preserving your wealth, it’s about putting
1:32:16 yourself in a position to thrive regardless of what the future holds, whether that means
1:32:22 buying stocks, gold, or real estate, or maybe just investing in some spare batteries and toilet
1:32:22 paper.
1:32:25 Thanks for listening to this episode of Young and Profiting.
1:32:29 If you listened, learned, and profited from this conversation, then before you run out and
1:32:33 buy toilet paper, why not share this episode with somebody else who could benefit from it?
1:32:37 And if you did enjoy this show and you learned something, then drop us a five-star review
1:32:40 on Apple, Spotify, or wherever you listen to your podcasts.
1:32:43 I got to shout out the Yap production team for all their hard work.
1:32:49 As always, this is your host, Alataha, aka the Podcast Princess, signing off.