Economist Blasts The Fed, Stimulus, Bitcoin & Makes Bold Predictions

[Music] the reason that the economy was so sick it's not the coronavirus it's because of everything the government did before the corota virus why do you think that argument of blaming capitalism is so attractive the government needs to bail out individuals the government has to bail out the states the government has to bail out corporations with what money the government doesn't have any money we're about to find out the hard way that the most expensive way to pay for government is through inflation this is going to end in complete catastrophe big government's the problem no it's bailout no we gotta look at the gdp no we gotta look at our debt ratio no we gotta look at the gold standard everybody is broke nobody has savings and then this crisis comes we can't kick this can down the road anymore if we're spending trillions on the military why can't we spend money on sending checks to people the idea is two wrongs make a right but they don't so now they want to make college even more expensive by making it free why do we bail out the too big to fail we elected donald trump and then as soon as he got to washington he became part of the very swamp that he wanted to drain trump wasn't expecting a pandemic though who cares about the stock market it's a bubble are you saying biden's going to be trump i think the odds are in my favor are you willing to bet an ounce of gold people don't vote for freedom they vote for free stuff we need to stop spending money we need to figure out a way to pay up our debt and in doing so we need to raise the taxes no one's going to vote for this person this thing is going to implode and it's going to implode soon the party is going to end the dollar is going to crash and we're going to see the cost of living go through the roof [Music] contagious this world are entrepreneurs we gain no value to haters how they run homie look what i become i'm the one [Music] so look i've had a different economist in the past whether it's arthur laffer whether it's even ray dalio or recently daniel demartino booth but when we had daniel the martino booth we put a comment saying who else would you like to see i'd say a thousand is a small number thousands of people requested my guest today who has a scenery con senior economist and a market strategist he's got a lot of strong opinions he's an entrepreneur uh he's somebody that was in the financial industry he's still in the financial industry and he's doing some incredible things and has always got strong opinions we'll talk to him today about it and with that being said petership thanks for being a guest on valuetainment oh patrick uh thanks for having me on you know i caught your interview with uh danielle dimitino booth a good interview i've known her for uh quite a long time i guess we speak at some of the same conferences uh you know we'll see i think the next one i i may go to is in new orleans and we'll see we'll see if that one actually happens live you know with all the cove but it's hard to say but you know if you see art laughter again i let them know i'm still waiting for my penny i don't know if you know about that that bet that we made on kudlow's show back in 2006 but i he's welched on that bet so uh but he's been saying some decent things recently now i gotta at least give him a little credit you know i've been hard on laffer but at least recently he's been in the correct camp he's been critical of the stimulus of of the cares act of the ppp so you know better late than never you know peter if we do this just just for some of the audience some of the viewers that don't know who you are ideas okay where do you position yourself economically if you were to say i consider myself xyz i'm a capitalist i'm a libertarian i'm a pro gold can you kind of say that and then i want to go to a couple of different areas from there well i'm all of those things i mean i believe in free market okay so which is limited government uh sound money uh you know i believe in the principles that the nation was founded on uh by by our founding fathers um and you know laissez faire uh you know the the idea of america as a nation of individuals rugged individuals self-reliant uh the idea of the concept of federalism uh where the federal government is supposed to live within its constitutional restrictions where the federal government does very little it's predominantly uh concerned about international affairs uh keeping us safe from uh you know international threats uh but all the domestic affairs are left to state and local governments uh so the federal government is very small does very little uh and and even the state governments don't do a lot um but but obviously we have the complete opposite of that now we have a very powerful a very strong a central government uh the antithesis of what the founders envisioned for this nation uh we don't have sound money at all uh we have fiat money just paper money they create a thin air that has no value we have more of a centrally planned economy where we rely on bureaucrats to make decisions uh about what they think is best instead of relying on adam smith and the invisible hand and and the wonders of of the free market and you know the problem is we have interjected so much socialism into the market-based economy that we once had the capitalist economy and we've created tremendous problems particularly the problem that we're in right now uh but what happens is whenever the government uh mixes socialism in with capitalism and creates a problem it's always capitalism that gets the blame for the problems that socialism created and then the argument is always well we need even more socialism which is what's happening now when everybody says oh we need to bail everybody out we need to stimulate the economy everybody needs government money the reason that the economy was so sick it's not the coronavirus it's because of everything the government did before the coronavirus so the government crippled the economy the solution isn't to find a bigger crutch a government crutch it's let's eliminate all these government programs make government smaller so that the free market can solve these problems but we're doing the opposite we have made government much bigger which is why this recession depression is going to be much deeper than it otherwise would have been had the government actually uh you know made itself smaller and reduced the burden that it imposes on the economy instead of what it's doing now peter why do you think two things by the way one uh the government smaller we'll get into that in a minute but the first thing you said was you know when when we face problems like this the immediate reaction is to blame capitalism where in reality socialism the reason why what caused it why do you think that argument of blaming capitalism is so attractive well because it's it's politicians right politicians want to get votes and the way they get votes is by promising to do something to give somebody something that they don't have uh and so if a politician says look the solution is let the free market work uh there's no votes in that and of course you know wall street everybody that that you know that made mistakes and borrowed too much money they all want to get bailed out they don't want to lose money i mean this is what happened after the 2008 financial crisis i mean i made a name for myself on national television for four or five years predicting the 2008 financial crisis and i said it was going to result from the bursting of the real estate bubble and all of the debts that would go bad when that bubble popped so i talked about the problems in the financial institutions i talked about the in the bankruptcy of fannie and freddie and what all that would mean but i blamed both the housing bubble that i was witnessing and the financial crisis that i was forecasting on the federal reserve on alan greenspan for his response to the 2001 recession the bursting of the dot-com bubble 911 i said the fed lowered interest rates too much when they went to one percent they kept them there too long and they raised them too slowly and during that time they were inflating a housing bubble that was also uh being fueled by the government agencies fannie and freddie both guaranteeing mortgages and buying up mortgages and also we were fueling an international demand for mortgage-backed securities by keeping interest rates so low everybody was stretching for yield and as the fed kept interest rates so low and real estate prices got too high consumers were levering up they were borrowing against their houses and buying more stuff so our trade deficits were going up hitting record highs and then what was happening was all of our trading partners were recycling their surpluses back into the mortgage bonds uh and to get yield so we had this huge bubble that the fed inflated in combination with the moral hazard of fannie and freddie and i said this is going to be a disaster when the bubble pops it's going to be the worst recession since the great depression we're gonna have trillion dollar deficits we're gonna have 10 unemployment everything that i said was going to happen happened in fact you could watch on youtube my mortgage banker speech from 2006 i spoke in front of 3 000 mortgage bankers laying out the financial crisis the housing collapse the subprime i actually went there raising money for the hedge fund that we had set up to short the subprime market in o6 so i i really knew what was going to happen but then the more important part of it and i put it all in a book you can see the the book crash proof uh uh you know on my bookshelf the original one was not 2.0 but crash proof that came out in february of 07 but was written largely in at the end of 0.5 the first half of 06 right the book was finished by by the middle of 06. and it just takes a while to uh to to come out but what i what i predicted was not only were we going to have this financial crisis but that after the bubble popped the government and the fed instead of acknowledging their fault and inflating this bubble and doing the right thing they would double down on the failed policies they were going to slash interest rates they were going to print all this money and they were going to uh reflate the bubble or attempt to reflate the bubble i i thought that they would fail in their attempt i thought the foreign currency markets and the gold market would put a stop to the party uh but i was wrong on that in that we actually succeeded in doing something that i didn't think was possible but we actually inflated a bigger bubble than the one that popped in 2008 and that's the one that just popped and in fact the air was coming out of that bubble last year i predicted when the federal reserve first announced that it was going to nqe and that it was going to normalize rates i said at that time that the fed was lying that it could do neither that it would never be able to normalize rates it would never be able to shrink its balance sheet that if it tried it would have to abort the efforts prematurely that it would go back to zero that qe4 would be bigger than qe one two and three combined i was saying that for years in fact on day one when ben bernanke uh went to congress when they first said hey are you monetizing the debt and ben bernanke said no no no this is all temporary we're not monetizing the debt we're not you know a permanent source of government funding it's an emergency as soon as the emergency is over we're going to sell these bonds i said at the time that ben bernanke was lying that the fed could never sell those bonds that they had checked us into a monetary roach motel uh that they could get in they could never get out and we'd have more qes than rocky movies so i was right about all that and now we're at the end game we're at the real crash that was the topic of my my my uh later book because we can't kick this can down the road anymore i mean what the politicians want to do is they never want to deal with the problem they want to postpone the consequences by kicking the can down the road even if doing that makes the problems worse and makes the consequences even more severe let me ask you care about that because they'll deal with that in the future and then when they catch up to the can they kick it again the problem is we are out of road at this point they don't know that yet they're gonna they're trying to kick it down again but this time we're gonna get a dollar collapse we're gonna get a sovereign debt crisis the party is going to end uh all the inflation that they're creating now which is unprecedented in scale right they've done it before but just not in this scale the amount of inflation which is the money printing uh is off the charts the deficits are exploding in a way that i've never seen uh uh and this is going to end in complete catastrophe and people are complacent because we got away with it after the 2008 financial crisis we're not going to get away with it again so so then here's a question how much i asked the question saying why do they constantly blame capitalism and and socialism is what is the benefit of doing that why why why blame an economical system that's that's proven that's work to constantly say black you know capitalism is getting a black eye capitalism is getting a black guy capitalism doesn't work we need a new form of capitalism how much of that argument is right and how much of it is just you know finding something to blame we don't need a new form of capitalism we need to go back to capitalism the type of capitalism that we've been practicing has been the problem because it's capitalism and name only right it's socialism or maybe more accurately fascism if you understand the true meaning because uh fascism is a form of socialism so is uh communism and what we've been doing is more of a mussolini type fascism obviously than communism but that is the problem with the economy that economic system but a in order to do the right thing first you have to have the politicians and the central bankers admit that they did the wrong thing in the past which they never want to do they never want to fess up to their mistakes and say we did this right we interfered with capitalism and that's why we have this problem so number one they never want to do that but if they finally embrace capitalism and say okay we're going to swallow this bitter tasting medicine because ultimately recessions is the free market's way of fixing the mistakes that the government and the central banks create because the mistakes are made during the bubble during the boom right everybody feels great during the boom but that's when all the malinvestments are made all the misallocations or resources are occur then when there's a bust that's the free market's attempt to restore order to create balance in the economy so it's viable and sustainable uh and so you have to allow a recession to run its course even though it's painful even though it means people lose jobs investors lose money uh you know loans go into default companies that are not viable go bankrupt and what happens in that cleansing process is that resources are freed up to be reallocated more efficiently and more productively that includes labor and and capital and land uh but that process obviously is painful to certain people uh and you know in in the immediate you don't know uh how it's going to end and so the politicians are under tremendous pressure to do something about it oh people are unemployed let's provide them with money businesses are going to fail let's bail them out instead of doing the right thing by allowing the businesses to fail right and allowing uh all the the the you know the reallocation of labor and capital they interfere but the interference is what makes it worse it exacerbates uh the downturn and it me it means that we don't get a real recovery the recovery that we had following the 2008 financial crisis was phony it was just a bigger bubble than the one that popped had we done the right thing in 08 and let real estate prices continue to fall let foreclosures happen let banks fail and not bail them out let the bad actors be punished right let new owners step up and buy in bankruptcy a lot of these companies that were so mismanaged and allowed you know consumption to come down and savings to go up which is the underlying problem that the fed created is a nation where we have too much debt and not enough savings so instead of allowing uh the savings to be rebuilt and balance sheets to be improved we inflated an even bigger bubble than the one that popped and so we didn't have a real recovery and that's why the economy is so vulnerable now to this uh covet 19 crisis because as i said the economy was sick long before the virus infected it and the air was already coming out of the bubble because the fed tried to do something that was impossible which was normalized interest rates with an abnormal amount of debt they got everybody you know hooked on the drug of cheap money and then tried to withdraw the drug from the market and then obviously we went into withdrawal at the end of 2018 that's when the fed came back and said okay more qe we're going back to qe we're going back to rate cuts but then we got the coronavirus and what everybody is focusing on is the virus the virus is the pin the problem is the massive bubble that that pin pricked and in fact i said it was already kind of pricked that pin just put a gaping hole in that bubble and now the air is coming gushing out but the reason that the economy is so vulnerable is because we're broke and levered to the hilt the reason that nobody can do without uh income for a few weeks or a few months is because everybody has debt to service right corporations are levered to the max they've been borrowing all this cheap money from the fed they've been using it to buy up their overpriced stock so they didn't have any any any savings individual households are leveraged to the max on cheap consumer credit they got mortgage debt student loans auto loans credit card debt they're living paycheck to paycheck you take that paycheck away they can't pay their rent they can't pay their mortgage they can't pay their debts the same thing with local governments uh state uh municipalities have been uh you know making promises they couldn't keep they've been borrowing all this money they have underfunded pensions they got nothing saved for a rainy day then it pours so the states are broke and then the federal government of course is we've been running massive deficits even when the economy was supposedly recovering so everybody is broke nobody has savings and then this crisis comes right and and a lot of people want to talk about well this is like world war ii it's the opposite of world war ii because when world war ii hit nobody got bailed out nobody got a stimulus check every got everybody got a bill for world war ii first of all 16 million men had a fight they had to leave their homes and they had to go to europe and japan but the people who didn't fight had to finance the war the the government massively increased taxes when the war began uh fewer than three percent of the population even paid income taxes before world war ii uh once it started better than 30 percent of the people started to pay income taxes uh because we imposed withholding taxes for the first time as part of the victory tax but not only did we triple taxes on the middle class to pay for the war but the government borrowed money directly from the minimum middle class by selling war bonds and so everybody stopped spending and was giving all their money to the government in either taxes or in direct loans and where were all the customers where were all the businesses who now had a big drop in their sales right i mean restaurants i mean who was eating in restaurants when you know everybody was fighting a war where everybody was you know loaning money to the government i mean all of these businesses suffered consumer spending imploded uh during the uh second world war yet not a single business got bailed out no no no the government relied on the people to pay for that war now we're all we all believe that the government needs to bail out the people the government needs to bail out individuals the government has to bail out the states the government has to bail out uh corporations with what money the government doesn't have any money it's the people that support the government not the other way around but we're pretending that the government can support the people by using a printing press that all we have to do is print money and nobody has to work nobody has to produce we can have all this stuff for free well we're about to find out the hard way that the most expensive way to pay for government is through inflation through printing money that's what we're doing and we're about to relive uh the lessons of history uh because a lot of countries have tried this before and it has ended in disaster every time it's been tried peter let me ask you this so in the world of bodybuilding i ask bodybuilders tell me what are the most important qualities for somebody to win mr olympia and they'll say number one is you got to have good genetics it's number one if you don't have it forget it anybody can go out there and do it you're not going to win the stroller then they say number two is uh diet then they'll go number three is training then they'll go number four is cardio whatever they'll tell me on a height is one of them you can't be too tall because your muscles are long etc etc when when somebody when the average person turns on the news they'll say oh my gosh it's you know big government's the problem no it's bailout no we got to look at the gdp no we got to look at our debt ratio no we got to look at the gold standard no we got to look at the fiat currency you know we got to look at you know this if if the average person is watching this to say what are the most important numbers to look at you know gary keller wrote the book the one thing like you always go to the one thing that's the most important important thing to look at what what are the most important numbers to look at that can predict what's going to be happened in the future what would you say some of those data some of those numbers are yeah and i'll i'll mention that in a second but first you know when you're talking about uh you know the bodybuilder and how to in getting in shape and that's a good analogy because i often use that to you know describe the economy because the government is saying hey we're going to win mr olympia and we're just we're not going to train at all we're not going to exercise at all and we're going to stuff our face with junk food yet expect to win that that competition because you know when somebody is out of shape and overweight the solution is not to eat more you know it's to go on a diet it's to exercise but if you go to a person who is out of shape and is and doesn't eat well and you say look you know this is what you need to do uh they don't want to do that because it's going to temporarily uh you know cause some discomfort in their daily routine i got to stop eating what i want i got to wake up early and i got to exercise i don't want to do that that's hard i'd rather just you know lie in bed right and so um that's the problem the economy you know the fed is you know the we're out of shape and and what the fed said is just eat more junk food because it feels good to do that rather than doing the right thing i mean the right thing right now for the economy is for the government to shrink right the government is a burden on the economy that everybody must bear so the correct solution in a recession is to shrink government cut government spending and free up those resources that were being uh consumed by government and free them back into the economy to be used productively so you cut government spending you cut government regulation and you let interest rates go up so when interest rates go up we get more savings and when you have more savings you have more capital investment that's what the economy needs more savings and more investment we don't need more debt we don't need more consumption that was part of the problem excess consumption financed by debt and we don't need to make government bigger government was already too big but we are doing the wrong thing right now right we are simply increasing the problem we had a a a debt crisis in 2008 what was the government solution to have more debt well if we had a crisis in 08 because we had too much debt and if we have so much more debt now how much worse is this crisis going to be i mean greenspan only kept rates at one percent for about a year and a half and then it took about another year and a half to get back up to five we had rates at zero for six seven years we never got him back up to normal it took like three years to get back to two and a half percent and then it took a year to get back to zero and we're never going off zero now until the market forces us which answers your question what do people have to look at you got to look at the price of gold which is already going up but at some point it's going to go up much faster you got to look at the exchange rate of the u.s dollar versus other currencies now right now the dollar is stable right but it's not going to stay stable for long at some point the dollar is going to fall and then you got to look at long-term interest rates right wait for long-term interest rates to really start spiking higher that is ultimately going to happen now if you wait for those three things to happen a big move up in gold a plunge in the dollar and a sharp increase in long-term interest rates it's too late to do anything about it financially i mean you've missed the boat what you've got to do now what i've done personally what i'm helping my clients do is get out of u.s financial assets get out of the dollar get out of us bonds before that crisis but once the market finally reacts right ben bernanke or not ben bernanke jerome powell uh yesterday said that now is not the time he was at a press conference after they left rates at zero and he was asked about the debt are you worried about the debt which is exploding at an unprecedented rate and his response was no i'm not worried now's not the time to worry about the debt of course he's never worried about the debt that's the problem and we never want to fix the debt when times are good and then when times are bad we say we can't worry about the debt now and so we got to make the debt bigger and bigger but when the market finally worries about it because you know if the central bank is worried about the debt then that's good maybe the markets don't have to but if the chairman of the federal reserve says the fed is not worried about the debt and actually is encouraging the government to take on more debt that's when the markets ought to really worry about that debt because it's going to run out of control and when the markets put a break on the debt right by we're not buying these treasuries we're not holding these dollars and you start to see uh the dollar crashing a bond price is moving up right the stagflation really comes fully into play then that's when the party's over right that's when the fed is forced to make the decision that it has been reluctant to make for a decade or two and it keeps kicking the can down the road but when it finally has no choice because we're about to see a sovereign debt crisis we're about to see hyper inflation where the value of the dollar is completely destroyed right and everybody you know wants to think that we're going to get all this government for free right we're not raising taxes we're cutting taxes but everybody's getting a bailout everybody's getting a check and nobody is asking who's paying for it okay government has to be paid for now the government can fund its operations honestly through taxation where it actually takes money away from some people and gives it to other people or it can do it dishonestly the way it's doing now through inflation have the federal reserve create money out of thin air and just give it to people just spend it into circulation but when the fed does that it's not you're not getting that government for free that means that people that already have dollars in savings in annuities and pensions uh you know under their mattress wherever you have dollars those dollars lose their purchasing power and that purchasing power is transferred to the people who are receiving the government money so instead of the government taking your money the government is taking the purchasing power from your money so that's who's going to get paid i mean you're going to you're going to be stuck with this bill if you if you have savings if you've got a portfolio of bonds or you've got an annuity or cash value an insurance policy or you're working for wages the value of what you earn is about the collapse in that the cost of living is about to explode and that's how we're paying for this but the choice that the federal reserve is going to have to make when the markets finally take away the punch ball that the fed should have taken away on its own but when the markets force this decision on the fed then the fed's gonna have to do one of two things let interest rates go way up and they're going to have to go much higher than they would have gone have the fed let them go up before remember when when green when when volcker did the right thing who was the last fed chairman to ever do the right thing the market put pushed interest rates up to 20 percent i would say that they're going to go higher this time than 20 now imagine that because we couldn't even survive two and a half percent the fed had to start cutting imagine what happens to this over leveraged economy at twenty percent rates i mean even at ten percent rates or five percent rates imagine what happens so what would actually happen is massive default on an unprecedented uh uh scale including the us government if the federal reserve does the right thing the u.s government will be forced to default on treasuries it will not be able to pay the interest on the debt it will not be able to obviously pay the principal and it will have to default on its commitments to pay people social security benefits medicare benefits i mean it's going to be a wave of defaults uh on an unprecedented level massive bankruptcies massive collapses that's if the fed does the right thing but that's the problem though i mean if you think about that here here's what if you think about that this is what it seems like it's happening uh uh you said gold exchange of rate uh us obviously the currency and the long-term interest rates and i'll get to a second part of the question here is in order for the person to do the right thing so let's just say we know what the right thing is to campaign on okay so imagine i'm running for office and this is my campaign we need to stop spending money we need to have the 40 of businesses that are to be you know people that don't have the finances in order some of these guys need to get filtered out we need to figure out a way to pay off our debt and in doing so we need to raise the taxes we need no one's going to vote for this person look yes freedom capitalism liberty is a lousy campaign slogan people don't vote for freedom they vote for free stuff that is the problem look the founding fathers knew this that's why america was created as a republic they knew if we were a democracy we would collapse so they protected us from democracy with the republican form of government that they created and they and they bound the government in the chains of the constitution and it worked for a long time we were incredibly free throughout the 19th century i mean the most prosperous period of america of american history of world history was probably the end of the civil war to the beginning of the first world war that's when we had the smallest government the purest gold standard we really were you know following the constitution and and we prospered but yes you know it is very difficult when now everybody is voting and the government in particular has crippled so many people uh and now they have the crutch and people don't realize that they're crippled because of the government all they see is the government offering a crutch and they want that crutch and look you know you look at look at the example of student loans i mean this is one of the most obvious examples of a government credit problem i ran for senate in connecticut in 2010 and you know i was against student loans i wanted to abolish all government guaranteed student loans on all student loans and you know before the government got involved in student loans which it didn't always do it really started with the gi bill in the second world war but that was just you know to help the soldiers who were returning from the war they really started getting involved in the 60s so before that you know if you wanted to go to college you just paid for it and it wasn't expensive college believe it or not was not expensive before the government came in to help make it affordable if your parents were relatively rich they just wrote a check you know if they were upper class you know if your parents were lower middle class or middle class maybe you got a summer job that's what my dad did my dad went to college he he grew up his parents were relatively poor uh he worked his way through college like most of his friends by waiting tables over the summer that's it he graduated college no debt right and he you know and he lived away from home but he was able to earn enough just getting tips on a summer job uh to to put himself through college but what happened is a bunch of politicians came to the students in the 1960s and said you shouldn't have to work over the summers you should enjoy your summers you should be go to the beach and having fun will let you borrow the money right to go to college and you just pay it back after you graduate when you have a better job and you can earn more money and the students look oh that sounds great i can have fun this summer i don't have to work the government's going to give me this loan now of course without the government guarantees the students couldn't borrow the money because they had no collateral what bank is going to loan money to an 18 year old you know so uh they couldn't have got the loans but once the government guaranteed the loans then any anybody could get the loans so the minute the kids had all this money to go to college and bid up the prices the universities were like oh wow we can really raise prices now because the students can borrow the money from the government and and give it to us so the minute the government started uh guaranteeing student loans tuition has started to explode and then as the tuition got higher and higher the government had to provide bigger and bigger loans to pay for it and then it became a self perpetuating spiral the more money the government made available to students the higher the tuition got to the point that now the students are graduating with a crippling amount of debt whereas they used to graduate debt-free when the government wasn't involved at all now they're graduating with massive debt and the irony of it is you see these democrats right in these debates pointing to this huge problem without admitting that the government is the only reason those student loans exist without those student loans college would be cheap and students wouldn't have any debt but because of government interference the cost of a college degree went through the roof and because everybody has a college degree now they're worth nothing before the government was involved most people didn't go to college a high school degree was all you needed now because everybody goes you need a heist you need a college degree to do what you used to be able to do with a high school degree now you got to get a master's or a phd but by the time you borrow all the money to get that and you're in school into your early 30s right you're in debt up to your eyebrows all this is because of government now what are these guys saying are they saying oh we really screwed up here we had good intentions uh but the road to hell is paved with good intentions and now we need to get government out of the student loan business completely we need to have free market capitalism working so that colleges are under competitive pressures to control their costs to get customers like everybody no no now the solution is completely nationalize it have the government pay for college let's make college free let's forgive all the loans so now they want to make college even more expensive by making it free right the most expensive things are the stuff you get for but from the government for free so they first they jacked up the cost by subsidizing it now they want to make it even more expensive by providing it for free they did the same thing with housing you know they did the same thing with health care every aspect of the economy that the government gets involved in they screw it up they make the price go up and the quality go down whereas when the free market is involved the opposite happens prices go down and and quality goes up but i got to finish the point i was making on the choice that the fed has either they do the right thing and let interest rates go up and the whole house of cards that they've been building crashes down or they don't do that because it's too politically difficult and they just print money they just continue the qe they bail out everybody and they destroy the dollar and then the dollar is worthless and then if they do that right a hyperinflation is much worse economically than just a massive economic collapse right the pain that that will inflict is going to be far greater but because it may happen six months or a year later or two years later who knows that may be the course that we end up taking so again everything you said let's just say common sense let's take common sense make the government smaller you know uh you know figure out a way to not spend the kind of money with school loans where the government's not involved in the school loans let the private folks do it you don't get involved so we don't have to have the what's the number today one trillion dollars a trillion uh uh uh one four or one it's somewhere around they're a trillion two or trillion three we have college debt right oh yeah it's like it's more than that yeah let's just say it's everything you're saying common sense somebody watching says okay this makes sense i get it but i want to go solutions i want to go next phase i talked to a guy at aig we were having a debate because i've been asking these guys to make some adjustments on their technology and they keep saying pat you know we're working on it we're working on it this was like four years ago finally one of the guys who's a stud quality guy trust them he said look you have to realize who you're doing business with i said what's that he said this is aig i said i know i've been doing business with you guys for a decade now he says we're so big that when you want to launch a new adjustment to a software or a technology it's not like a small business owner entrepreneur that's nimble to say let's make the change it's going to take you know 60 days 90 days yeah here's what i'm going with this let me wrap up the question here we're saying okay let's make the government smaller you got seven and a half eight million employees that are governed employees you got the military you got all these people that are working all these different epa all these departments that you have how do you make the government smaller on one term or two terms so again this leads to the next question is you got one term two term president then you got republican president bush senior then you got clinton then you got bush then you got obama then you got trump then you got you know you say cuomo gets elected one philosophy doesn't stay long enough for us to be able to pay off this that it's about what campaigns get it gets us reelected so i mean that's not going to be paid off that we have to be honest about that we can't even solve the problems unless we're honest about the situation so the debts are not going to be repaid the question is is it better to inflate them away or default i think default is better i think a legitimate bankruptcy and restructuring is better hey look we loaded all the kids up with debt yes students have much too much debt we cannot expect them to repay it but we can't solve the problem unless we first say okay no more government involvement in college we it was a mistake uh and and and colleges are going to have to compete in the free market for students no government guaranteed loans no government direct loans we we have to go back to capitalism uh in order for the solutions to work the solutions will work now people are going to lose money because if loans are not repaid then the lenders are going to suffer a loss that has to happen but you know when when you talk about making government smaller yes the government's going to have to lay off a lot of government workers that doesn't mean those people are going to be unemployed forever that means the resources that were required to employ them are now freed up back to the private sector the private sector is going to use those resources more efficiently and more productively than the government so whenever the government cuts spending right and and including laying off government workers now the private sector has more money to employ those workers productively in fact a lot of government workers not only are they not productive they actually work reducing the productivity of everybody else so it's like the people who are actually producing they are less productive because of all these bureaucrats getting in their way so you know the bureaucrats are riding in the wagon and the rest of us are trying to pull it if the people who are riding in the wagon not only jump out but help us pull right then we're going to make a lot more progress that wagon is going to be a lot easier we're going to take it a lot further so there's there's a lot of light at the end of a free market tunnel but first you've got to get over that hump of of letting voters know that you know yes if you if you died and exercise i know it's not going to be fun uh but you're going to be healthier you're going to have a better life you're going to live longer you know if you just do this if you just follow this program so capitalism uh is going to take us to where we want to go socialism never will it's it's a false promise that oh we're just going to solve this problem with more government but you know the other problem is you know so many americans have been brainwashed in government schools they don't understand free market capitalism they just see the problems in the economy and assume that they're a function of free market capitalism when they're not and they think that more government is the solution to a problem that they don't understand was created by government and by making government bigger we're just going to make the problems big yeah but that still doesn't answer my question for you the the the the uh the the question about you got something this big to want to re-haul and change it's not a small thing to change it's a massive massive thing to change and to have one president we elect who gets up there and comes up with this campaign to say let's do this the number of opposition is so massive for somebody to do this to have so many even whether it's a republican or a democrat or a libertarian or a third party or whatever you want to call it there are so many people on each camp that are relying on lobbyists that are relying on these people that are how do you how do you how do you fight those guys yeah it's look the founding fathers refer to them as factions and that's basically what we have look there is an entire establishment that is feeding off the status quo and so they want to perpetuate it and they're basically like sucking the blood out of the the economy right you have certain people getting rich bleeding the rest of the nation that's why you have this growing divide between the average american or the poor and the super rich this is not a failure of capitalism yes in capitalism there's always going to be income inequality and that's fine but what we have now is an extreme and it's not because of capitalism it's not a failure of capitalism it's a failure to have capitalism it's government that is doing this now the people who are benefiting from these policies have a vested interest to maintain them and they will pay the politicians in one way or the other in order to perpetuate this scheme and look we elected donald trump right an outsider not a politician who said a lot of really good things on the camp train trail about the phony nature of the recovery about the bubble he was anti-fed you know this is cheap money this is all artificial i'm going to drain the swamp he actually came at this like yes i am an outsider i'm not a politician i'm going to go to washington clean house and then as soon as he got to washington he became part of the very swamp that he wanted to drain he presided over a massive increase in government spending uh so government got bigger under donald trump he he went from being a fed critic to a fed cheerleader in fact the only thing he criticized the fed for was not printing enough money right not not cutting rates enough i mean he criticized the fed for being too easy as a candidate and then he said they were too tight when he was president he wanted the fed to do everything he criticized it for so he became the the leader of that swamp and yes we got some tax cuts but those tax cuts were a fraud because tax cuts have to do with cutting government spending the the cost of government is what it spends so government spending is taxation every dollar the government spends is a dollar that we have to fund and so when presidents sign budgets that increase government spending they are increasing taxation regardless of what they do with the income tax rate spending is taxation now how are they going to pay for it are they going to tax us today are they going to borrow the money which means they're going to tax us even more tomorrow because now we have to pay the taxes to cover the interest or is the federal reserve going to monetize the debt are they going to print more money which means we pay for government through debasement of the currency through inflation now we have not felt the full weight of the inflation tax because we've been able to export it because the dollar has functioned as the world's reserve currency we're able to run these massive trade deficits and we could export all the money that we're printing and we can get products in return so that's kept the lid on consumer prices and allowed the fed to pretend that even though they're creating inflation in an unprecedented scale that we don't have any inflation that there's not enough of it but that's why i said you got to watch the dollar you got to watch the treasuries the gold market this thing is going to implode and it's going to implode soon the party is going to end the dollar is going to crash and a tsunami of inflation that we've been exporting uh for years and years is gonna come hitting us uh our shores and we're gonna see the cost of living go through the roof and that is the cost of government and then once the world no longer accepts the dollar and we can't run these huge trade deficits we're stuck with all the money we print then we're going to feel the full weight of that inflation tax which means what then then we're going to be open to the idea of changing because every single this goes back to what you said earlier when you said every time there's a problem it's another uh avenue like even right now uh you see this is why we need a stimulus check this is why the uh plan that andrew yang talked about is effective we can't afford to pay people a thousand dollars a month we can't afford to pay people two thousand dollars a month if we're spending trillions on the military why can't we spend money on uh spending sending checks to people yeah but if we can bail out these big companies you they need to know the whole concept of our social i know too but yeah the idea is two wrongs make a right but they don't and and we couldn't uh the bailouts are a mistake i mean just because we made the mistake of bailing out the banks in oh eight doesn't mean that we should repeat the mistake by bailing out the airlines or the hotels uh and just because we made the mistake of bailing out wall street doesn't mean we compound the mistake by bailing out main street why not bail out nobody but why do we bail out like why do we bail out the too big to fail what is this well because obviously there's two reasons one is the politics of it you know from they're gonna the industries that get bailed out are gonna recycle some of that bailout money and line the pockets of the politicians that voted to bail them out right i mean that's a quick pro quo that's going to happen but also when it comes to economics right you have the scene and you have the unseen the effects and when a government bails out a business the immediate benefits to those who receive the bailouts are there the company is there the jobs are saved uh and so and the people who benefit from the bailout uh they are known and and they will vote for you the but what you don't see are the negative consequences that are widely dispersed throughout the economy where there's no political constituency for that but let's take one of these industries that get bailed out whether it's airlines right let's say we didn't bail out airlines or you know any hotels or any of these companies the way the politicians want to present it is that if we didn't bail out these industries they would disappear like oh we need airlines we need hotels we can't just let these countries go bank these industries go bankrupt how will we get around right see that's the lie of the bailout if the government didn't bail out the companies they would go through a normal bankruptcy during a bankruptcy the companies don't stop operating right they continue to operate what happens is they don't have to pay their debts anymore which is why they're in bankruptcy because of all the money they borrowed but they go through a bankruptcy and who gets wiped out the common stockholders the unsecured creditors there are investors who lose but the businesses to the extent that they have value survive and new owners come in and more importantly they're going to be more responsible than the owners who failed and the companies are not going to have all the debt the debt gets wiped out so now that the businesses no longer have all the debt they can be more efficient they can offer a more competitive product they can lower prices maybe they can pay better wages because they're not hampered with all this debt instead we're keeping these companies alive by loading up with even more debt so they're going to be even less efficient and some companies need to shrink you know the government is saying we can't we have to make sure that companies don't fire any workers why what if they need to fire workers what if they have too many workers what that's why they're not profitable because they they have to downsize their workforce to make the business competitive and reflect the free market demand for the products they're making or the services they're providing if we keep payrolls bloated that is a waste of labor resources we're squandering those resources we need to free up that labor to go work someplace else where the market would direct it but now we're creating these zombie companies that are wards of the state and the cost to society of subsidizing these businesses far exceeds the benefits to the people who are being bailed out but again that's the unseen consequence of government interference let the free market function and we will have an optimal allocation of resources and we will all collectively benefit from a higher standard of living but we have the government interfering and diverting resources from where the market wants them to where the politics demand everybody suffers because we have a lower quality of living a lower standard of living because we're increasing uh production costs and making the economy less efficient so let's just say we were to make that adjustment let's say we are open to it let's say we get somebody that's strong enough that can present that to the american people and let's just say he can convince 51 percent of people to say i'm with it i'm with it let's go through this process of allowing the too big to fail to fail let's let's go through the process of you know me going back to maybe i can do 100 financing on a home maybe it goes to 60 financing on a home if you don't have 40 percent of down payment on a house you probably shouldn't own a house you probably should rent a house let's just say we go through alec who benefits right who benefits from government policy to guarantee mortgages it's actually not the person who's buying the house it's the person who has a house to sell because by guaranteeing mortgages the government is helping to prop up real estate prices if there was no government guarantee mortgages right if individuals had to convince the bank to loan them money based on their own credit quality their own ability to repay the banks would not be willing to loan as much money and they would want more collateral they wouldn't give you a mortgage with three percent down or five percent down they would want 20 25 down right and so if that happened real estate prices would collapse right so people would still be able to buy houses they just wouldn't have to borrow nearly as much money to do it because the price would be lower so maybe you can't afford a 20 down payment when the house you want to buy is 300 000 but if the house drops to 100 000 you could afford to pay 20 right you won't have all this debt the beneficiary of the policy is the guy who already owns the house who wants to sell it he can sell it for a much higher price if the government's going to guarantee the mortgage of the buyer but then you have a bubble you have a phony real estate market i want to have a real real estate market that reflects mark the free market not government subsidies uh because the government now has to keep this this whole pyramid going uh with more and more debt but yet it is going to be a very impossible uh you know political battle because right now right the republicans have already signed on to socialism they have basically agreed with the democrats that we need big government right and and it is it's a logical thing right see the the position that the republicans have is inconsistent logically the republicans are saying during good times the profits should be uh privatized but during bad times we need to socialize the losses so we we need to have low taxes and limited government when times are good but when times are bad we need massive government and we have to bail out everybody even the rich that doesn't make any sense at least the democrats can have a logically consistent though flawed argument we need big government all the time if we need big government during bad times we need big government during good times if we're going to socialize the losses let's socialize the profits right that's a consistent argument that i think is going to win which is why i think that trump is going to be a one-termer because i don't think he can out-promise uh biden or whoever is the the the top of the democratic ticket when it's a battle between two democrats the democrats biden you're saying you don't think trump beats biden no and i thought trump was going to be clinton very few people did at the time um because the reason i thought that trump could beat clinton is because trump was telling the truth about how lousy the economy was and he was promising a real solution now he's going to try to perpetuate the same lie that didn't work for hillary although now he's going to try to blame the problem on the coronavirus uh and maybe that strategy will work i mean do you actually believe biden's going to be trump but at this point look i don't think the democrat republicans can out promise the democrats because the election is going to be decided over who is going to give out the most free stuff and i think the democrats win that argument now what what's going to happen is when we have a complete collapse of the economy if we have hyperinflation or complete implosion and there's massive poverty inflation is so bad that they have price controls and the minute they have price controls you have shortages you have black markets i mean it's going to be a complete disaster then we can have a real campaign between do we go all in on socialism is this ca are we so broke are we destitute are we having this misery and poverty right is it because of too much capitalism and too much greed right or is it because of too much government too much central planning is it the bureaucrats and socialism that destroyed the prosperity that capitalism built or did did socialism build the prosperity and did capitalism destroy it and so do we need to be a nation of slaves or a nation of free individuals i mean that's going to be the real debate between uh uh big government and freedom and and and hopefully uh freedom could win that debate i don't know i mean it's a tough call uh you know but you're on record are you saying biden's gonna be trump i think well i think biden will beat trump or if biden ends up not being the nominee for some crazy reason i think whoever is at the top of the ticket uh will be trump but i mean is it a sure thing no i mean i think that what's your percentage if you were to betting menu or las vegas what's your percentage if i say i say i say he's 70 i think it's 70 80 percent at least that it's going to be biden you think 70 80 yeah because we're still going to be in a recession in november so you're going to have a bunch of people voting during a recession and you know trump promised a lot of people to make their lives better and their lives are going to be worse uh and you know are they wasn't expecting a corona virus trump wasn't expecting a pandemic though but he was going to lose even without this we were going to be in recession even without uh the coronavirus it was already starting the economy was already rolling over the bubble was already deflating so yes this may be his only chance which is a reason why uh trump may be incentivized to keep the shutdown going longer and longer because to the extent that everything is still shut down in november it's easier to blame it on the virus but let's assume that we try to restart the economy uh in may or june and then we're still in deep recession which we will be uh by november it will be harder for trump to to blame the virus i mean he will i mean i think before the virus he was going to blame the fed but i think the voters are just going to blame republicans blame trump and look they are not going to be able to out promise the democrats we're going to have a bidding war over who's going to give out the most free stuff who do you think wins that you know i i you know i just think that when it's when you have two people promising bigger government the democrats win it's not going to be an argument of less government versus more government or capitalism versus socialism capital socialism has already won the debate bernie sanders is now the mainstream of both political parties i mean stuff that the republicans are supporting today even bernie sanders would have been too embarrassed to recommend it six months ago yeah i i don't know if i i don't know if i uh uh see that happening because i don't think america is fully yet comfortable for the concept of socialism to come in i think it's getting a big surge because the last generation is the biggest generation ever you know for the longest time boomers were 76 million now you got a bigger generation that's got 80 to 83 million and they're younger you know how this works they have to go through their process of getting fired getting married losing jobs losing promotions you know and understanding what it is when uh you're working your ass off and somebody else who isn't through politics gets promoted over you then you say i'm sick of this crap you know i want to go out there and do my own thing we have to go through that but but this this this is this is the part that this brings me to as you're uh talking about the stuff with re-election uh as far as trump goes you're saying trump wouldn't have won without coronavirus you're saying with or without a coronavirus trump wouldn't have gotten reelected yeah yeah i don't think that trump was going to win in fact if you look at the politics of it i mean donald trump i mean he didn't win in a landslide he won the electoral college but if you look at the states that he won he won by very narrow margins in those states right and who were those swing voters i mean these were probably democrats that were tired of being lied to by the establishment they knew that the recovery under obama was phony that it was just smoke and mirrors it was a stock market right donald trump called it out who cares about the stock market it's a bubble the fed is doing that the economy i'm going to reindustrialize the economy right i'm going to we're going the economy is is a disaster it's been hollowed out i remember some of those last commercials that he ran about how the american economy had been destroyed we had these huge trade deficits the trade deficits are bigger now than they ever were before trump was elected none of the manufacturing has come back it's all been a lie the manufacturing sector is as weak as it's ever been so none of the substantive changes that that trump promised did we get rid of obamacare no we made obamacare worse that's all we did so you know and we perpetuated the same monetary policy that that trump criticized so the recovery under trump was just as phony as the recovery under obama and so i think the people who were who voted for trump because they kind of hoped that he would be different when they realized that he wasn't right that he was no different that nothing changed and then you have a democrat promising democratic socialism saying look this is what's going to help right the government's going to give you this and give you that and do all this those people may say okay i tried the republicans i tried trump that didn't work so now let me try this right i mean because it's always like things keep getting worse and then you want to vote for change and so i thought people would want to vote for change not more or the same yeah it's going to be here's here's what i predict since you've been famous for making predictions i'm going to make a prediction here for you okay i'm going to join the peter ship camp and make a prediction you said you made some good predictions you made some uh questionable predictions i think you said gold was going to get to 5 000 and what was it 2012 it was at 1700 today i think it's around 1700 but this is my prediction my prediction is i think republicans and democrats true democrats jfk democrats not bernie uh democrats i'm talking like a democrat of the 60s that was you know they had certain philosophies where jfk today would probably not be a democrat he'd be a completely different thing politically what about lyndon johnson well lyndon johnson is a completely different story to me i i i have a different opinion on him but this this is what i think about today this is what i think about today i foresee a ticket like this taking place in the next two to three elections here's a ticket that i think america is going to be more open to it than ever before i think we're going to see a president that's a republican with a vp that's a dem or vice versa a president that's a democrat and a vp that's a republican and they're going to come out and they're going to say listen i'm not we're not comfortable what's going on right now we just decided to bring one of each where he and i or she and i are going to debate it out and we're going to try to make our best decisions because we're not going to get a third party perot tried to do it it didn't work i think we may have in the next two or three elections somebody campaigning with a republican president and a democrat or vp or some of that taking place that will only happen once i think in a way well i mean but at this point there's so little difference between the democrats and republicans anyway that i don't even know how that even makes a difference there's very little daylight i mean we have a third party uh the libertarians have been there for a long time uh they're constantly they're on the ballot usually in all 50 states the problem is the media uh ignores them they don't get it their candidates don't make it into the debates and so the the two parties really have a monopoly a duopoly on power uh whether you want to call them republic rats or dem republicans and so they have a vested interest in maintaining that status quo of really one party that's divided into two wings and so they're preventing any any third parties uh from from gaining any traction so that is a big problem but you know what you have to overlook is how are we going to get from where we are to what you're talking about when we have to go through this complete economic armageddon that is around the corner we have a date with with destiny here we are going to have a financial collapse much worse than 08 much worse when it's happened now when the fed has to make that choice that i just described either letting interest rates skyrocket and letting the economy implode in a way that we've never seen before with massive destruction uh layoffs bankruptcies defaults i with no bailouts at all remember in order to do the right thing nobody gets bailed out even though it's going to be much worse than it is now no bailout no stimulus nothing the government has to sit back because if it doesn't have the fed you know uh providing the money the government has no money so the government is powerless all it can do is do what i said which is to cut spending and it's going to be forced to cut spending because it's not going to have the money to spend or how do we get through hyperinflation when we wipe out the value of our money i mean imagine imagine people who have millions of dollars in savings being destitute i mean maybe they still have assets that have value they have a house but they can't afford to maintain it they can't afford to pay the cost of repairs because well their savings have been wiped out what happens when we destroy the value of our money so we have to get through the the this this uh situation either we destroy the dollar or we have a massive economic implosion and of course if we destroy the dollar the economic implosion is even bigger so we're going to have to get through this to get to the other side and and so what is that process going to look like and what is going to emerge on the other side is it going to be a return of free market capitalism that leads to the promised land of you know a higher standard of living or are we going to complete the road to surf them is america going to be a totalitarian a nation with an all-powerful government i mean it's a very scary uh prospect i mean i can be hopeful that we make the right choice uh but you know i mean the wrong choice is very devastating do you think what america was founded on it's almost a model in a system that's uh not possible to last too long when the country gets bigger and bigger and bigger meaning it is a model that works well for a country of 30 million people 50 million people but maybe not 335 million people no it works great i mean the founding fathers i think they guessed that maybe it would last 200 years uh but the problem is the the safeguards get eroded away right they that because of the the elements of democracy that creep into the republic once you get to a point where people can vote themselves benefit from government you're that's the beginning of the end right and and it took a long time and we created a lot of wealth as a republic and it's taken a while for a democracy to destroy that wealth but that is human nature i mean so maybe if we can one day change human nature uh you know greed and envy and you know a lot of people too who are skeptical of human beings you know they're skeptical of capitalists they think that they're greedy businessmen that's fine greed is fine uh when you're an entrepreneur because the only way you can make money in a free market is through voluntary exchange yes you could cheat you could commit fraud and there's laws against that but to really succeed in a free market economy your success is measured by how much you help other people you have to convince them to buy your products or your services and and you have to provide it better than your competitor and if you do that and if you make other people's lives better they will reward you and you'll get rich the problem is greedy people also go into government they go into politics and there their greed can be very harmful because that's not about voluntary interactions they have the power of government they can force you to do things uh using the power of the state and what happens is those greedy people those evil people go into government and then they enrich themselves by impoverishing others capitalists enrich themselves by enriching others the bureaucrats enrich themselves by impoverishing others but they also help enrich certain people that that that perpetuate their their their their incumbency and you know so they reward those that help them and it's an incestuous system and yeah it's a problem you know the key is to limit democracy so you don't have all this uh voting for theft voting to steal things from other people uh and and if you do that if you have liberty if you protect private property then everybody will prosper and of course people want to say well peter what about the poor people who fall through the cracks yes let private charity help the poor people that fall through the cracks because there's always going to be those people in a capitalist economy there's far fewer of them because there's a lot more opportunity and prosperity but when individuals voluntarily help other individuals it's much more efficient than when the government does it the government taxes somebody a dollar and by the time the money gets to the intended recipient there's only 10 cents left private charity they collect a dollar they spend 10 cents on it and 90 cents goes to the to the people that need it so government is not efficient at anything especially helping the poor the government and then then the government perpetuates poverty because the government wants people to be poor because that's how they get them to vote for them it's hey you're poor and i'm giving you money now i've bought your vote see if it wasn't for me you would starve because you wouldn't get these welfare checks see that's the government the government cripples you and then claims credit for giving you a crutch the free market makes it so you don't need a crutch by the way what are your thoughts i mean i know you're more on the economy side do you have any opinions on coronavirus and the handling of it the shutting down all that stuff what are your thoughts about what's going on right now yeah i mean look i i hear a lot of things and of course i'm generally skeptic skeptical of anything that happens and i certainly agree that regardless the government is using this situation to expand its power and to diminish individual rights that will haunt us you know for a long time just like 911 right the 911 was a tragedy but the bigger tragedy was our response we did more damage to ourself with the patriot act and things like that anti-money laundering we destroyed our liberties not the terrorists the terrorists won based on the legislation that we enacted during the hysteria that surrounded those attacks and we're still suffering we're still suffering a lower standard of living uh because of uh the way the government took advantage and exploited that crisis to make the government bigger and to diminish our freedoms and therefore our prosperity so the same thing is happening now and i am very worried about the rules that are going to be put into place as the economy is you know reopened what are the new requirements that are going to be put on businesses uh that are going to undermine their productivity that are going to increase the cost of maki of running a business and employing people and serving the public what other rights are we gonna lose uh going forward to give the government more power to supposedly protect us uh from future uh pandemics uh but as far as the coronavirus itself look i don't know uh i i i i tend to believe that maybe they're making a mountain out of a mole hill here uh that the coronavirus may not be any worse than an ordinary influenza uh that they're exaggerating the numbers that people are dying that happen to have coronavirus and now we're blaming it on coronavirus when there are other factors that are as important or maybe more important and that there's a lot of people who have the disease who are not uh you know in the statistics because they have such a mild case of it that we don't know about them that if we actually you know looked at the whole population that the percentage of death is actually very small because we have so many people who have it who aren't even showing symptoms so we don't even get them into statistics so uh there's a good chance that this whole thing is overblown but i i i also get the fact that maybe it's not and a lot of us are just taking you know what even though i think it's a bunch of bs i'm i'm not going to take any chances you know maybe they're telling the truth maybe it is as bad as they're saying so you know what i'm not going to go out to the restaurants i'm not going to travel as much just just in case even though i think it's probably bs and even though i think i'd probably be fine you know who knows maybe you know maybe you know so they've got everybody so scared that even people like me who are like looking at this is probably [ __ ] so then that means their formula of fear tactics is working on somebody like you who typically questions everything yeah well it's working all over the world i mean you know it's like you know it's like why take any chances you know it's like look you know people you don't have to there are a lot of things you don't have to do you can just decide i won't do that i mean i'm uh better safe than sorry right and so if a lot of people are making these decisions obviously it's it's a huge impact uh on economic activity where people are deciding that they have to alter their behavior and that's why i think that even when the government gives everybody the all clear people are still going to be nervous and they are not going to uh interact in you know social scenes to the extent that they did before at least for maybe a year or two right and so that's going to have lingering effects on a lot of these businesses that have been bailed out that are probably going to be in need of continuous uh bailouts but of course the problem is when all the money that we're we're using collapses right everybody can get a check from the government but what happens when that check doesn't buy anything that's the crisis that's coming but what is that check you know what the check is nothing to a guy making 130 grand a year that's only got 93 000 saved in a bank and he's uh going through his money very quickly that's that's not a lot of money yeah i mean the people the people who were higher earners who were living uh on the edge right they were you know they're they're suffering the people who are actually better off are lower income people who are now earning more money being unemployed than they were where they had to work and there's a big difference between just getting a check and having to actually go to work i mean most people don't enjoy working plus you have the commute time and all the other ancillary expenses and then they tax you so there are a lot of americans that are making a lot more money now that don't want the economy back why would they want their lousy jobs back when they're making more money and they have more leisure uh and now a lot of them don't even have to pay their rent it's okay not to pay your rent it's okay not to make your mortgage and by the way we're going to give you even more money than when you were paying your rent so this is a windfall for a lot of people who are going to want to perpetuate this gravy train you know and so a lot of these programs are going to be extended because now we've created this constituency just like with social security the government hooks everybody on a ponzi scheme called social security instead of having self-reliant people save for their own retirement we tax the hell out of them when they're working and we tell them to rely on the government ponzi scheme but once you've got a bunch of people who have none of their own retirement savings and the only thing they got is a government promise nobody will touch that you create that third rail where you have all these voters that have been bought and paid for because of social security we're now doing that now on a bigger scale by putting a lot of people on these programs where their their livelihood now is coming from the government and we'll see if anybody has the ability to take that away so you have that class of people that's actually making more money not being productive not working uh the people who are in the middle or yeah the guys that were maybe making 150 200 300 000 a year their uh unemployment is not supplementing their incomes um and you know but everything nobody should be getting these these these checks the a the government doesn't have the money and printing the money doesn't mean that we can afford it because the cost of them should be getting these checks peter when you say nobody should be getting these checks but we should trust the shutdown if that's a contradictory message because if nobody gets to check yet we do shut down then if they're not getting money there's many here's the thing getting money if the state governments knew that there was no federal bailout money coming would they be shutting everything down as aggressively as they are or would they be doing more of a cost benefit analysis i think it's because everybody believes that we can shut down and the government's just going to provide all the money and it's like okay let's play it safe yeah but if you have to realize that there is a financial cost of these shutdowns then maybe we can do it in a smarter way which is what i said from the beginning maybe it's the older people who are not in good health who have these other conditions that should be quarantined and young healthy people should be going about their day and maybe yes we could wear masks and things like that but we should have to make viable economic decisions knowing the cost and benefit of every decision we make if we operate under the false premise that there's no cost because all this money is coming from free for the government then we're not doing the right thing and i think a lot of these state governments too that were already broke going into this crisis because of bad decisions they made they're now using this as an excuse to say oh we need all this bailout money oh you have to give us this money now you can't let us go bankrupt it's kind of like a get out of jail free card for a lot of states and municipalities who want to milk this for all it's worth in a way i think they're kind of intentionally doing this to get more government money it's like the worst they can they can make it for themselves the more money they think they're going to qualify for so if if nobody thought that there was free money and we had a cost then i think we would have a more rational discussion on what to do and the you know if whether or not people don't pay their rent or don't pay their mortgages all of these decisions should be made voluntarily by the affected parties so landlords and tenants should make their own deal without the government because look let's say i'm a landlord and my my my uh tenant is unemployed and he can't pay his rent in this environment if i kick him out am i going to get another tenant right away how long is my apartment going to be empty anyway and if the guy was a good tenant for years and years there's value in that relationship landlords and tenants will work it out they worked it out during the depression there was roosevelt never said no one has to pay their rent during the depression it was a depression it was 25 unemployment and they didn't say you don't have to pay rent but landlords some people couldn't pay the rent they worked it out so we can work stuff out uh borrowers and and debtors employers employees they can work it out the problem is everybody's broke nobody has any savings whose fault is that the fed kept interest rates so low for so long they punished savers and they rewarded debtors so we got a lot of debtors and we've no savers how much how much uh i'm assuming you've read the book uh uh the the creature of jekyll island i'm assuming you've read it how about how much credence do you give to that yourself are you from the school of thought of ah i don't know about the you know the the sixth man or whatever it is that you got together how much value do you give to that look you know i i do not believe that the federal reserve was started with bad intent right and and the federal reserve act the way it was originally proposed and adopted was not a bad act it was not right the reason that the fed was created is prior to the federal reserve uh a lot of banks issued their own currency which was all and all of it was backed by gold right uh but you know if you were out in california and somebody gave you a note from a philadelphia bank how did you know the note was good i mean yeah i mean there's there were a lot of different notes that were circulating at the time and the idea was let's have one central bank that we could rediscount all these notes take the notes right and reissue its own notes so the federal reserve note was supposed to be backed 100 percent by notes of other banks and 40 by gold and the theory behind the the federal reserve 2 was to provide an elastic money supply and the idea at the time was that as the economy expanded and contracted the money supply would mimic the economy so during good times when the economy was expanding the federal reserve would create money and during times when the economy was contracting during a recession they would shrink the money supply right the opposite of what they do now so it was supposed to have an elastic money supply that reacted to the economy to kind of smooth out prices and to have a better quality of currency uh that would be more recognizable uh and the original federal reserve act the federal reserve was prohibited from owning any u.s government debt they couldn't own even treasuries that was not even allowed that was in the original act they couldn't do it so that act as originally intended was not bad the problem was the camel's nose under the tent the reason not to do it was because nothing stays good once you allow a central bank to form it gets corrupted and it happened right away because we we established the federal reserve in 1913. we got into world war one in 1917. the minute we got into world war one that's when the government wanted to use the fed to help finance the war and so they amended the federal reserve act during world war one to allow the federal reserve to own u.s treasuries so that we could finance world war one see they used the crisis the emergency of a war that we never should have entered in the first place we should have minded our own business and never got involved in that war and had we stayed out of world war one there never would have been a world war ii but that's the topic of a whole other podcast but because we got into war we were able to amend the federal reserve act and here's an interesting fact that people don't know you want to know why we have a debt ceiling we the debt ceiling came about at the same time because what happened was politicians back in 1917 were worried hey if we allow the federal reserve to buy u.s treasuries what if we what if the fed runs big debts right and so they said okay we'll have a debt ceiling we'll limit how much money the federal government can borrow so we won't have to worry about the fed monetizing the debt but the problem with the debt ceiling is that if they could raise it so we empowered the federal reserve to monetize debt and we impo imposed the debt ceiling at the same time understanding how the two were related but then every time we hit the ceiling we raised it nobody ever had the guts not to raise the ceiling see when i ran for senate in 2010 that was my campaign i was going to be the vote to filibuster the debt ceiling the buck was going to stop with me no more increase in the debt ceiling to force the government to cut spending see they always say we have to raise the debt ceiling because america always pays its bills right if we don't raise the debt ceiling we can't pay our bills the reason we raise the debt ceiling is because we never pay our bills we we go into debt instead of paying our bills i wanted to force the country to pay its bills by not raising the debt ceiling by saying okay no more borrowing so we got to pay our bills or admit that we can't we have to default or whatever but we're going to start to be to be honest but that's how we got the debt ceiling so i don't think that it was created in the as a conspiracy for an evil purpose i think it's another example of the road to hell being paved with good intentions and why we never should have had a central bank because the people who opposed the central bank like andy jackson who got rid of the first central bank right it's because they understand the potential for abuse right the founding fathers knew that paper money in central banking was a bigger threat to our liberty than the armies of other nations right we destroyed ourselves and i think money central banking also the supreme court has done a lousy job of enforcing the constitution so they've let us down uh as that branch of government judiciary has been a big failure uh but the central bank i mean that has been probably the biggest problem with hollowing out our economy and placing us in this predicament that we're in now do you believe the most powerful man in the world is still the president of the united states well obviously the president has a lot of power but probably the the fed might have even more power for now but that power is going to go away when the dollar collapses and the u.s dollar is no longer the reserve currency uh then the power is going to collapse with it i mean we still have a military obviously but the soviet union had a big military what happened to it it crumbled right because the soviet union uh was also a mirage uh the same as the united states i mean you know we exist based on debt it's a debt bubble and it's the world that is financing it the world is making this possible uh by accepting the dollar as the reserve currency and living beneath its means so that we can live above our means the world has to produce extra so that we can consume the world has to save money and lend it to us instead of using it productively in their own economy so we're basically a parasite right now feeding off the global economy as soon as they realize this and and and want to extricate themselves from this uh you know relationship uh then the power of the united states is going to implode so the most powerful person in the world today you're saying is the is the fed the powell is more powerful than the president well i think i think if powell did the right thing uh you know but you know trump could do the right thing too you know trump could trump could stop the spending he doesn't have to sign uh these uh uh these government uh bailouts and these deficits i mean all he needs all trump needs is uh a third of the the senate a chunk of the republicans to stand with him and he could shrink government i mean trump could do the right thing right now if he wants to the problem is he doesn't get elected though he will not get re-elected though who cares he's probably not going to get re-elected anyway but why did we elect trump trust that's been set up in america though the system in america is when you become a president on first term don't push the envelope too much push it on the second one because you know this it's not like i'm the first one telling you this if you push too much on the first one you won't get reelected but you know what when they get re-elected they don't do anything either look if if i ever had the opportunity to be president i would not be planning on my second term i don't guess you don't know if you're going to get one i would want to do it all in my first term and trump had the opportunity for his first two years when he had the republican congress that's when he could have leveled the public and used his political capital to do the right thing to step above politics and to level with the american public instead he as soon as he became elected he became another politician and all he cared about was getting having a second term and he was willing to sacrifice everything that got him his first term in order to buy the second term well i mean he had to debate this russia deal for the entire time so that that that made it pretty uh annoying when you're going in and you're kind of trying to fight off something else but gold standard okay i know you're a big fan of going back to the gold standard if if we do decide to go back on the gold standard how do we do that well we're going to go back on the gold standard eventually you know it's not going to be our decision it's going to be the market's decision i think the world is likely to go on the gold standard before we do even though we still supposedly have a lot of gold because the u.s dollar is now the world reserve currency before the dollar was the reserve currency gold was the monetary reserve right and we changed that at you know in in brentwood but the reason we were able to get the world to follow us onto the dollar standard was because at the time the us was the world's richest creditor nation we had massive trade surpluses or big creditor nation uh and we had all the gold we had all the factories we were the big producer of manufactured goods low-cost producer of everything manufactured was made in america so we had a powerful economy a real wealthy economy and the dollar was not only backed by gold but it was convertible into gold americans couldn't convert it anymore thanks to fdr but foreigners if you had 35 dollars federal reserve notes you get an ounce of gold and so what we told all the central banks around the world was hey back your currencies with dollars instead of gold because the dollar is as good as gold because 35 are one ounce of gold but the difference is if you have 35 dollars you can buy a us treasury and earn interest right but still have a gold standard because we got your gold at fort knox and so the the world made that deal with us but of course once they made that deal we exploited it because now all of a sudden we convinced the world to hold treasuries as reserves to loan the us government money so we could spend more but what really happened during the 1960s is we abused that we really started running big deficits because we didn't have to have the gold anymore we can just print money and everybody was holding on to it so we had uh the great society the war on poverty vietnam the moon mission we had the guns and butter and we printed all this money and um then we started you know our creditors got smart de gaulle and france in particular wanted his gold is this [ __ ] you don't have any you know you know and in fact prices really started to go up because of all the money we were printing but the price of gold wasn't going up all the other prices were going up and so it was clear that gold was undervalued and so the world wanted their money and and then we went off the gold standard instead of doing the right thing which would be to devalue the dollar officially to a point that the gold price would make sense or to allow deflation so that prices would come down back in line with a 35 gold price we did the worst thing possible we went off the gold standard and the price of gold went up to 850 we had all the inflation of the 1970s we really you know had a terrible a decade uh but even though the dollar got marked down dramatically it lost two-thirds of its value against the the swiss franc the d-mark uh the yen uh the dollar continued to function as the reserve currency despite the fact that it was backed by nothing right now once that happened we really abused that then we started running massive deficits because we didn't have to have any gold and no everybody knew that we didn't have any gold and we just kept printing money and then we developed this completely phony economy this service sector economy that was based on the ability to print money and just send it abroad and the world sent us all our stuff that we didn't have to produce and now no one had to save anything because we could just rely on the foreign savings but when the dollar crashes and it's going to because this system has screwed up the entire global economy um then the world is not just going to anoint some other currency as the king right we're not going to have the euro as the reserve currency or the yen or the chinese r b uh none of that right we're just going to go back to gold gold works as money and gold is a viable reserve for currency and that's why a lot of central banks still hold gold and that's why central banks have been buying gold is because they are preparing for a return to a goal-based monetary system that works instead of this fiat system that doesn't but that principally benefits the united states the united states benefited because we were the monopolist in the creating of the dollar we got to print them and so we got this extraordinary privilege but in the process we have hollowed out our economy so when we lose that privilege we're going to have a huge price to pay we are very vulnerable because of you know of of this system but in the long run i mean we'll we'll benefit too from a return to the gold standard but that's what's going to happen and and so and the way you go back to a gold standard is you simply announce right that your currency is now tied to gold at a particular rate and obviously that rate is going to be a function of how much gold you have and how much currency is in circulation but obviously the gold price for the u.s to return to a gold standard at this point i don't know if it's ten thousand fifteen thousand twenty thousand i don't know where we have to fix the price of gold to make it work in dollars but we can do it but then once you get on a gold standard you got to stay on a gold standard that means the budget has to be balanced that means trade has to be balanced right be we we can't run these big budget deficits we can't run these big trade deficits so now all of a sudden gold is going to force fiscal responsibility on our elected officials which is what they don't want that is the opposition that is why government doesn't want the gold center because they don't want uh that kind of restraint it's like dude if if you're at a high school prom did the kids want the chaperones there of course not they don't want the chaperones there they want to have fun they don't want the chaperones uh and so the politicians don't want chaperones at their prom they don't want gold ruining their party they want to be santa claus they want to get they want to promise something for nothing when you're on a gold standard you can't print gold it has to be mined out of the ground right so then the question becomes to go back to gold standard the history of it if you can help me out with this part here i think it was what fdr went on gold standard he asked people to bring back the gold and they were you know compensated i don't know we were the we were on a gold standard from the constitution and in fact the constitution established both gold and silver as money so we're on a buy metallic standard right so the dollar was actually defined as a weight of gold or silver that was the definition of a dollar right it's a it's a measurement of how much gold or silver that you have right and that's where it came from and it was actually it was named from the spanish mill dollar which was a coin that was uh circulating around the time of the revolution and in fact during the revolution uh we did have paper money right the government issued continental uh money that was actually backed by gold uh but they issued too much of it and it ended up collapsing and and people got 10 cents on the dollar and it gave way to the expression not worth the continental uh which is one of the reasons that the founding fathers when they established the united states did not want paper money and so they specifically banned it if you understand how the constitution is written you'll see that paper money is illegal in the united states they said gold and silver are legal tender they said no state can make anything other than gold and silver legal tender and the only power they gave to congress was the power to coin money which is gold and silver they didn't give congress the power to emit bills of credit which is paper money and they denied that power to the states so we there was no paper money and we had no paper money at all in the united states until the civil war right so we went until 1961 right without any paper money so if paper money was constitutional we would have had it before 1861. so we got paper money in 1861 and it was backed by gold the greenbacks that were issued were backed by gold and they were they challenged it there were several supreme court cases because people said hey this is unconstitutional you can't print money even if it's backed by gold and if you read some of these supreme court decisions the reason they said it was constitutional was not because of the monetary powers that were given to congress everybody knew that they had no power to print money they looked to the necessary and proper clause and said we were in a civil war it was an emergency and so it was an emergency wartime power if the government could requisition goods in a war they could requisition goods and give you a paper iou so it was because it was a war and there was an emergency that we were able to issue the paper money back by gold and then what happened was after the war ended they stopped doing it they i mean they've been they so the paper money didn't even come back until the federal reserve brought it back in 1913 right and we were still on a gold standard i said federal reserve notes had to be backed by by real money in fact federal reserve notes were not dollars federal reserve notes were ious four dollars the dollars were the gold that the federal reserve had a coin right that's a dollar an ounce of gold is a dollar right a 20 gold piece about an ounce of gold is 20 the dollar is the gold and silver the piece of paper the federal reserve note which is why it's called a note is it's a note because it pays the bearer dollars the real money the notes aren't the money the dot the gold and silver was the money so we were still on a gold standard and then what happened is when the depression hit right stock market crashed uh and roosevelt i mean hoover made all his mistakes of hoover was like the george bush of his day with big bailouts and stimulus his own version uh to turn that downturn into what became the great depression had we handled the 1929 downturn the way we handled the 1920 downturn had we done nothing had we just cut government spending and let the free market work there never would have been a depression and we never would have elected roosevelt but because uh hoover uh intervened for political reasons and made the situation worse uh we ended up with hoover and believe it or not hoover campaign i mean roosevelt campaigned against hoover by campaigning against the deficits that he ran the big deficits and saying you know he's he's intervening too much he was like trump he kind of ran criticizing the big government policies of hoover but then when he won he adopted the entire agenda with the new deal and and and made it and made it even worse but one of the things that uh roosevelt wanted to do was he wanted to increase government spending and the gold standard stood in the way so rather than just abandoning the gold standard he said it's illegal to own gold everybody has to turn in their gold right so everybody turned in their gold they're not everybody but a lot of people and the government gave everybody 25 right for for an ounce and then as soon as roosevelt got everybody's gold he devalued the dollar and said now you need thirty five dollars to buy an ounce of gold so that's how the he they took all that money because they they had to devalue the dollar but they wanted to get all the gold first right and then they used that to fund a lot of the the government programs but we stayed on a gold standard even though we devalued the dollar we stayed on the gold standard and it was illegal still to own gold because the government in order to get everybody's gold they had to make it illegal to own it and it stayed illegal to own gold until the early in the 1970s it was illegal um but even when the government made it legal again and you could always own gold jewelry you just couldn't own it in a monetary form you could have a necklace made of gold or you could have silverware you know made of gold but you just couldn't have a bar a bullion or a coin um but certain collectors coins you're allowed to have they couldn't take your coin collection but what happened was when they when they made it legal again to own gold it wasn't remonetized because now we were totally off the gold standard we didn't leave the gold standard completely until 1971 when nixon you know said that's it but the reason we went off the gold standard was because nixon had a choice cut government spending right or sever the link to gold because we were reaching the point where we could not do it anymore we were going to have to act responsibly right or to continue to be reckless but the only way to do that was to get off the gold standard but the politicians want to pretend that oh the gold standard is bad the gold standard is good you know they say oh if we're on a gold standard we can't stimulate the economy in a recession exactly because the stimulus doesn't work it's actually a sedative the government causes the recessions with the policies that it uses to get us out of the last recession and instead of allowing the free market to cure the economy government intervention makes it sicker so if if somebody does believe that we're going to go back on gold standard would this be a good time to buy gold absolutely look we can't go back on a gold standard at the current price of gold the price of gold is going to have to be much higher why is that yesterday why is that but because it did look at all the money that's in circulation i mean look the other way to do it is if the price of everything else goes down so if we allow complete deflation if we allow prices to collapse and gold stays the same then then it can still work but it has to do with relative and in deflation the government would destroy a lot of the money that's in circulation so we can go back to a gold standard through massive deflation i just don't think that that that's politically expedient i think the easiest way to go back to a gold standard is just to revalue the one price of gold up to me to match everything else uh but either way if you own gold you win either way right if the price of gold goes up way up then you have more purchasing power if the price of gold stays the same and real estate crashes stocks crash then you're still have more purchasing power right you could still buy more stuff with your gold so regardless of how we go back to a gold standard if you have more gold now you are the winner right the central banks that are adding to their gold holdings now their nations will be winners right it's the central banks that were dumb enough to sell their gold that still haven't bought any back uh those are the you know ridiculously foolish decisions you're a pro gold guy so then the uh the other question would be when is it bad time to buy gold well look as a trader look obviously after a big spike it's probably not the best time to be a trader but as far as if you don't own any gold the best time to buy some is right now because it's like you know what if you don't own any insurance you know what if you have a house when's the best time to buy your insurance policy just go out and buy it because you don't have insurance you know if you have a family that depends on you you don't have life insurance when's the best time to buy it you better buy it now right i mean now if i knew exactly when uh i was gonna die well then i i would could buy it the day before but since you don't know that right gold is insurance so you need to have it you need to own it so if you don't own any gold you buy some today doesn't matter the price now do you buy all that you can afford no keep a little powder dry buy some more if it goes down and in the future if you have more money but people should have five or ten percent of their money in gold but as they earn more money they need to buy more gold right because now you have a bigger portfolio that you need to to protect so you know my company is shift gold i think i got the best prices if you don't believe me just shop around don't buy numismatics you know that's not a gold investing that's a coin collector this is not the time to start a coin collection you just want to own bullion that's the cheapest way uh to acquire gold or silver uh so people should do that you know and you know i i think the mining stocks are really good investments because i think that they don't reflect uh what's gonna happen that's more speculative uh but i think you know people should be buying and i've been telling people to buy gold for over 20 years when i started recommending it as a broker gold was under 400 an ounce it was actually under 300 for a while but i didn't really start buying it for my clients until it was in the threes i started buying silver it was under five bucks it's around 15 now it got as high as 50 uh in 2011. i think it's going much higher than that in this bull market so are you more bitcoin or are you more gold well i'm i don't have any bitcoin at all i mean i i i don't think uh the crypto currencies are going to work i think they're fool's gold i think that they're they're speculative vehicles i think there are a lot of people who think uh that bitcoin is gold uh because it's replicated some of the properties that made gold a better money than other commodities that have functioned his money but it misses the point the most important point of any uh money is its intrinsic value the reason that gold worked as money is because of the inherent value of the metal uh its properties as a metal and the fact that it has so many uses uh it's the most useful metal on the planet uh whether it's uh for conducting electricity uh all the other applications it has that makes it such a good metal for jewelry or you know or other applications uh you know gold is valuable and gold can store that value indefinitely uh which is why it's so good as money and it has other properties as far as uh its liquidity and its divisibility and its durability and its immutability and there's a lot of things a lot of characteristics that make gold better money than salt or cattle or you know or wampum or cigarettes or different things that could function as money but what what what gives paper money value is the real money that backs it up right because fiat money doesn't have any value on its own unless it's tied to something real but bitcoin has no actual value there's there's you can't do anything with a bitcoin there is no real world demand for bitcoin yes you can sell it to somebody else but they'll only buy it if they think the price is going to go up but somebody will only buy it from them if they think somebody will pay more but the minute you run out of greater fools the pyramid implodes and that's really what we have i feel badly for a lot of people who are going to lose a lot of money uh who have bought into this uh pyramid uh but a lot of people who got in early uh who are smart enough to get out will make a lot of money if they're smart enough to to convert that those paper profits into gold then they'll keep the money they'll keep the purchasing power but you've been an entrepreneur before multiple times you have businesses you you've done well for yourself whether it was companies i mean i read somewhere where i think for like a three year span your salary per year you were making somewhere around 17 million a year i don't know if that's accurate or not but it's it's said that you've made some legitimate money you've done well for yourself well all the money all the money i've made has been legitimate i haven't stopped when i say legitimate i mean believe me i've interviewed mobsters i don't mean that's my money i'm talking about like you've made money like you're not somebody that has opinions that just wrote wrote a couple of books well i and then you started giving your opinions yeah look this is the question i was going to ask you if you're the 35 year old leadership today you're running a small business you got employees you you got you got you know the challenges you're facing with shutting down what would the 35 year old pedo shift be doing in today's economy well i mean you know if if i had my business which you know my business was very small when i was 35. and that's perfect that's the person that i i want that person's counselor i could have easily never i did the first two years that i ran my business i didn't even earn any money i had no income i had to spend all my revenue on my rent on my salaries and the reason i was able to go into business is because i had personal savings uh and how did i get personal savings when i worked uh for an employer like sears and lehman like we discussed and i earned money i didn't spend most of it i saved it right and and so i was able to use my savings to start my own business and i was able to survive on those savings and some profits i had from on investment i had invested early on in some cellular phone deal and i made some money there back in the days where they were lottering off the sell signals so i had some income from an investment i had some savings from work and that was able to tie me over for a couple years where i earned no money um and and and i started a business but you know so i was already used to earning no money at one point i mean if if i would have maintained as i i've always had i've always maintained my business in a way that i can go without revenue that i i you know i and as an entrepreneur as a businessman that is a risk that you take as an entrepreneur is you may not get any money but you may have to be on the hook for all costs of costs and so that's part of what you do as a business is that you you have reserves and i've always operated my businesses where if i don't earn any income i'm fine i can cover my overhead with my past income i can use that right now obviously taxation diminishes people's ability to do that uh but you can still do that but i you know i i would not be looking for a government bailout my look i didn't take any of this money they got like i could have i could have signed up and i could have got a bunch of money i have several businesses that have employees that i have no intention of firing so i could have got all this free money but the problem is you know i don't i i knew i didn't need the money so i didn't want to stay to the government i need the money but look i'm i don't want to pay taxes i'm in puerto rico now right when when i was making a lot of that big money uh back back back then i was half of it was going to the government so i made a lot of money but i i have the government took half now the government's not taking any at least the federal government or very little of it uh and so uh you know now i'm able to keep keep what i hear but i'm earning the money i'm earning it legitimately by providing services that people are voluntarily paying me to provide uh you know my my main business is asset management where i manage people's money uh through individual accounts through my mutual funds uh which people can you know go to your pacificfunds.com to check out my mutual funds or europe pacific capital your pac.com uh to look at having a counseling i have a bank here your pacific bank you know shift gold where we sell gold so i i'm in the market competing with other gold companies you know i compete with other broker dealers and banks and asset management companies and obviously there are people who choose to do business with me uh when they could do business with somebody else but they choose to do business with me but but i think it's something that's very powerful though you said something that's very powerful i think the small business owner the entrepreneur can take that it's it's not what you're doing today that matters it's what you did a year ago two years ago three years ago to prepare yourself for a crisis like a time like this where you can at least survive during times like this because yeah and people forget you know when everybody thinks it's easy to be the businessman like oh it's not fair you know the workers you know they need to share in the profits the workers don't share in the risks you know when when people take a job right the easiest thing you could do is accept a job from somebody else because now they are on the hook with paying you right they have to figure out how to cover the pay right you're you get a guaranteed salary right where the employer is going to pay you every friday or every other friday whether he's got a profit or not when you own a business you are the last one to get paid that's right you only get paid after you've paid everybody else you've paid your workers their wages you paid the landlord the rent if you borrowed money you paid interest to your lenders right only if there's something left over do you make any money and that is the risk that the entrepreneur is rewarded for taking because you set a business you have no idea if you're going to succeed or fail yeah and so if you succeed you need to be paid for that but you also then are responsible as you're making money not to just spend it all workers okay if you're going to live paycheck to paycheck that's on you but if you're the employer and you're living paycheck to paycheck you're putting all of your workers at risk you're putting your whole company at risk so you don't do that you save your money but you know you have the federal reserve and the government coming in and encouraging debt encouraging encouraging leverage screwing up uh the system but the entrepreneur deserves what he earns but if he's not responsible enough uh to be a steward of capital and and prepare for potential downturns which always come then the free market will clean house and what happens is you learn by example when people go bankrupt not only does that send a message to the person who went bankrupt but to all the other people of what what you don't do here's an example of what not to do because if you run your business like this you can lose your business you can go bankrupt but what we're doing now is we're rewarding the people who were reckless by bailing them out and then we're telling the people who weren't reckless you were a bunch of chumps why were you saving for a rainy day just wait for the government to bail you out we're going to do the same thing with the state governments if we bail out all these states that should fail not only are we sending the bad message to those states keep acting irresponsibly we're telling the responsible states you're a bunch of morons you guys are idiots for acting responsibly cut taxes government spending because why should you be frugal because you're just going to be bailed out we're going to just tax the other states uh to cover your proficiency very weird i mean you saw harvard took 8.55 million dollar check themselves from uh the bailout and lakers took 4.6 million and then after a bunch of people talk smack to the lakers they gave the money back and uh they said yeah we don't need the money by the way in 30 seconds peter who were you in high school if i was if i was in high school with you 16 years old who was the 16-year-old peter schiff well you know i had my father had a lot of influence on me as far as my thinking erwin shift and understanding economics austrian economics uh iran you know the constitution so i had a lot of uh my political philosophy even even back then just like my own my oldest son who's now 17. you know he's done a lot of reading and because of me i've put him on the right uh path and then he's you know kind of traveled uh pretty far down that path himself so yeah i i i've i've had uh my uh political feelings and my economic understanding for almost my entire life and so i do have a lot of respect for people who didn't have the advantage that i did of having a father like i had because a lot of people start out when they're younger uh they're they're very socialist which is a natural thing to be uh you know because you're you're ruled by your emotions and you're caring and and you don't have the real world experience to understand all of the negative consequences of all the well-intentioned uh programs so a lot of people start out as a liberal start out socialist and they have to learn they have to evolve they have to experience life and and then get experience in in into intellect and learn to realize that all the ideas they had when they were young were wrong that they were well intentioned but wrong because intentions isn't what counts it's the outcome that's what liberals still don't understand right they they can have a well-intentioned law like the minimum wage and not understand the unintended consequences of impoverishing the people that you're trying to help of throwing people out of work of making it impossible for non you know low skilled people to get skills and earn more money i mean people can't can't get behind yeah but this guy is not earning enough money so let's just let's just pass a law so that he'll earn more and not understand the consequence of that law is that he earns less or he earns nothing uh and so but so other people have had to uh make that evolution of thought right they started off over here and they had to come over here on their own i i started off here i was already here so i have more respect for people who had to make that journey right who had to question what they once believed and overcome that which you know and there's an old political saying right if you're not liberal by the time you're 22 you don't have a heart if you're not a conservative by the time you're 28 you don't have a head uh and and those sayings they're free you know and that's why a lot of people on the left think that conservatives or libertarians are mean right because they just they're just against these programs because they're mean it's not that we're mean it's that we understand that they don't work that they're that they backfire see the liberals don't understand that they actually think the programs work so that's why conservatives don't think liberals are mean they just think they're foolish but liberals are convinced that conservatives are actually mean bad people that they want to deny all this government help what we're denying is the problems that that health creates the dependency and the poverty that it perpetrates the liberals just haven't had that epiphany yet they never made that journey their kids like they never grew up they're like little kids that believed in santa claus and now they're adults and they still believe we're uh i love that part by the way where by the way your father the more i read about your father your father is a very very unique human being you know what he did and his level of conviction in certain areas a lot of respect for that man i can only imagine what it was like being around him and he's sharing his philosophies with you and his teachings with you uh uh i bet that was he was a great guy a patriotic guy uh really you know did what he thought was right for his country and he paid the ultimate price for that as dying as a political prisoner uh in in in in the united states which political prisoners do exist here my father was one of them uh he was in prison for his politics not because he was a criminal uh but yeah his books live on you know you've got his website paytonwincomtax.com is still there i have some of his books at shiftbooks.com some of his books you can download for free on the internet you know his book the federal mafia we still have copies of it uh it shift books but it was actually banned it's the there's only been two books in the history of america that were ever banned by the federal government the first one was fanny hill which was banned at 18 something for being pornographic the next one was my father's book the federal mafia so it's a tr i don't know if it'll ever make it on a trivial pursuit card but uh that's hilarious uh uh uh you know but uh galileo said in 1600 he says the earth revolves around the sun and they arrested him so a lot of princess yes my father used to point to galileo a lot not to equate himself to galileo to say that i'm as smart as galileo but just the fact that when people would say well irwin you went to jail well that doesn't mean he was wrong he would say galileo went to jail he wasn't wrong just because the government put him in jail for saying something doesn't mean that what he was saying was wrong and so my father said things that he believed were right and i think many cases were right but the government put him in jail for expressing those opinions uh anyways respect your pops man it's it's good that the legacy continues on with you and you're pushing the envelope i want to do a speed round with you i'll give you a name tell me the first thing that comes to your mind i'm gonna give you a name tell me the first thing that comes to your mind milton friedman he's a great economist but i disagree with him on on money ronald reagan the first uh president i voted for but i was very disappointed in him uh in his and i voted uh libertarian i voted for it was ron paul in uh when he ran for reelection uh because reagan and i had a i had a poster of ronald reagan on my dorm room wall as a freshman at berkeley yeah you know in his cowboy hat and in berkeley you know i was a big reagan guy you know uh wow and as a kid i mean i love reagan um but i was disappointed because reagan promised to get rid of the department of energy the department of education cut government spending and he made the deal with tip o'neill and government spending went up and the deficits went up and that frustrated me back then uh we got the tax cuts that was the easy part we didn't get the spending cuts and initially there was a deal that he made with tip o'neill it was supposed to be two dollars of uh of tax cuts for every dollar of spending cuts rather you know for the tax cuts and we never got to spending cuts so i was disappointed but look i i still thought reagan was a great man and i you know and he tried but somehow he got to washington and he got corrupted by that swamp alan greenspan uh he's uh he was the ace of spades in the deck that created the financial crisis so i guess the word for him is traitor that's the word i think of it because i really liked greenspan as he as a kid you know i mean because greenspan he wrote that brilliant piece uh in iran's book capitalism the unknown ideal uh gold and economic freedom and i still have you can go to my website uh shift radio and i posted up there two letters that alan greenspan wrote me in when i was in my 20s see he had just become fed chairman in 87 and then we got the stock market crash in october and the first thing he did is he cut interest rates and i thought that wait a minute you're doing what you criticized the fed for doing in uh 1929 you you're making the same mistakes right and so i wrote him a very nice letter and he wrote me back you know on the fed you know the fed sent me the letter it was you know stamped you know because federal reserve is not part of the government right so they have to pay for a stamp it's not like a government agency it's private so they have to have to buy a stamp when they send you a letter but it was his signature he sent me a letter and he kind of explained why he was doing what he was doing and i didn't i didn't like the explanation but i said but you know and i and i wrote back and then he wrote me again but basically what greenspan said is look it's better to do this and cushion the blow in the short run than to let the market you know he basically he basically laid out everything he was gonna do uh for his entire tenure which was long as far as trying to ease the short-term pain and he and and and and i knew it was a mistake i knew as a you know youngster that greenspan was making mistake and i knew he knew it too and and you know when you listen to greenspan talk today i mean he sounds you know he's predicting stagflation like me and he was always saying the debts were too big and we're borrowing too much money yet he enabled it i mean he was criticizing the deficits as he was the biggest enabler of the deficits by keeping rates artificially low uh and trying to prop up and sustain and sustain bubbles so i was very critical of greenspan in my book uh you know i said he was the uh the real architect of the housing bubble and the uh the primary reason that we had a financial crisis uh richard nixon one word um well i already used traitor uh you know uh you know a disaster uh keynes i mean he i mean he he was the one that said we're you know we're all uh keynesians now uh took us off the gold standard uh you know imposed wage and price controls terrible terrible uh policy and you know i mean he he was you know one of these you know rockefeller republicans he represented everything that was wrong with the republican party that ronald reagan tried to fix um you know and and and the reason that we got reagan was because carter was such a disaster but carter simply expanded the policies that he inherited uh uh from nixon um and nixon just expanded on on on what was happening under johnson and you know so it was a perpetuation of that of that type of economy and reagan took us away from that for a while uh but yeah i know he was a bad republican he helped give republicans a bad name uh and and and and you know took us off the gold standard which again was one of the worst uh political decisions that was made and by the way my father my father testified in the senate in 1968 against uh going off the gold standard and you know the secretary of the treasury and the secretary of the federal reserve or the chair of the federal reserve testified in favor of it and they said that if we went off the gold standard the dollar would rise in value and the price of gold would fall my father said that the opposite would happen that the dollar would lose value the price of gold would go up and inflation would surge right my dad was the only one that was right he knew exactly what would happen if we went off the gold standard and the secretary of the treasury and the chairman of the federal reserve were 100 wrong so at least we have that consistency because now the current secretary of the treasury and the fed chairman are 100 wrong and my father's son is out there sounding the alarm on what uh on what the real consequences of these policy mistakes are going to be so frederick hayek and my father did my father was an insurance agent he he went to congress even more now yeah he was insurance and see this is the reason my father understood money because my father went to congress and said i sell money for future delivery people are buying insurance policies for me where they're paying premiums today to collect benefits tomorrow and therefore the value of money is very important to my business because i'm selling money for the future and so what it buys its purchasing power is very important and that's why he didn't want going off the gold standard because his customers his clients were paying premiums in gold he didn't want them being paid benefits in paper because if he didn't know what the paper was going to be worth he knew it it would depreciate which is exactly what happened one word frederick hayek he's a great man okay great economist ludwig won mises same thing brilliant brilliant man michael bury well you know uh you know i did that you know i mean he's a smart guy too uh you know i had the same trade on as mike i didn't get as much uh recognition uh and i didn't you know i did i you know uh so i think he i think he's a good guy too you know and uh i like him uh but you know i i it would have been nice if you know a little bit more people in the mainstream would have recognized uh you know my understanding of um of the housing bubble you needed a movie you needed a movie yeah yeah i didn't get you know i didn't get it i didn't get in the book i didn't get in a movie yeah uh but you know i was there i mean you know i think i was the one giving the lecture he you know you watch the movie he attends i was giving the lectures about the housing bubble i was writing articles in 2002 3 4 5 writing about the bubble writing about the mortgage market writing about securitization writing about subprime saying it was going to collapse it was going to implode it was a bubble i was the guy trying to convince everybody remember that that that that so it yeah i didn't get convinced i was the one for all i know he he he heard me i don't know how he eventually how he's initially gone he's an interesting guy by bringing out hundreds of emails to all the newspapers for years again watched that mortgage banker speech on youtube in 2006 and i and i was at that convention in 2005 too i wish i wish i had that on tape they don't have that one i have the oh six one but i told the same story in 2005 about write a script let somebody do the movie this michael guy is a low-key guy who can't stand the camera and he got the movie jerome powell well he's another disaster i mean you know um he is he's maybe he's the fall guy i don't know this could be the it all all comes down i mean yellen got out of dodge bernanke got out of dodge you know greenspan minute well i mean he he he's another one he's another fraud i mean art laffer arthur laffer my penny i just think that penny he owes me hey but i mean it's not just the laffer curve on that napkin of course you think of that but i just think of the the the fact that he that he welshed on that debt and that he doesn't want to acknowledge you know he still doesn't want to admit that he lost uh because he see laffer was too partisan when bush was president to recognize that we had a bubble and that's the mistake a lot of republicans make they think if there's a republican president who's cut taxes they have to pretend that the economy is great they can't tell the truth that the economy is bubble but as i was warning people back then when the bubble pops then you have no credibility if you're a cheerleader for the bubble because there's a republican president then what do you do when it pops you know and that's the problem now with trump i mean i i voted for trump i told people that he to vote for him over over clinton but i was very critical of him the minute he started making mistakes i didn't want to look the other way just because he was a republican and not a democrat and pretend that he was doing good things when he was doing bad things and he was telling me we had a great economy when we just had a bigger bubble aoc america's future hopefully not but uh bernie sanders she just epitomizes everything that's wrong with this country and it's the reason why we're not supposed to be a democracy if you want to know why the founding fathers created america as a republic and not a democracy aoc ray dalio oh well you know he's a smart guy a very wealthy guy uh you know one of my neighbors in uh in connecticut uh but yeah i know he's uh you know i i i agree with a lot of what ray says but then they're you know there there are things where we disagree i mean i'm we're not friendly but i i know i know of them are you by the way are you related to adam schiff or no you guys are not related no no no in fact i joke that i i gotta have to change my name you know it's like he's really he's really screwing up the name shift you know yeah i'm not related to jacob schiff either the banker a lot of people assume that i'm related to although coincidentally my grandfather's name was jacob schiff but he was jacob schiff the carpenter not jacob schiff uh the banker i mean i would have loved to inherited some of that shift money uh you know my my branch of the shift family uh wasn't that successful uh you know you inherited a good part of the the the shift mindset your your pops might well i learned that yeah you don't just get that by osmosis yeah my dad had had to teach me stuff but i mean once your mind is open i mean it's amazing how much you can learn once you're when you're not brainwashed i mean the problem is we send these kids through these government schools and so by the time they're 22 they've been so thoroughly brainwashed you know that it's so hard for them i mean even their common sense is gone by the time they graduate so not only are these college degrees you know so expensive they're so completely worthless because you end up graduating knowing less than you knew before you enrolled so uh peter are you still uh would you consider yourself a betting man i'm not a big gambler i mean i i mean i you know i mean are you are you into better announcements i i i enjoy uh gambling you know but are you willing to bet an ounce of gold you said 70 to 80 biden yeah i think i think biden is probably going to win uh you know do i i mean would i be willing to bet an ounce a goal i think the odds are in my favor but they're not so overwhelming in my favor that it's like ah you know this is the best bet i want to make with an ounce of gold i've got various ounce of gold bets going around here and there i collected on one just recently from a conference i did where i we we made a bet of an ounce of gold in january of 2019 and i bet the next move the fed would make would be a rate cut and the other guy better rate hike and of course everybody thought he was going to win and i ended up winning because the fed cut is this a bet you're willing to make in this area or no this is not too high i mean i can make it with you i mean it's only an ounce of gold i know but your thing is though i hope here's the problem i would rather see trump win so i hate to i hate to make a bet and then like hope to win it you know what i mean because i i just i just i i even though i know it's going to be difficult if trump wins even though i know that it's going to implode around him it's just that donald trump for all the mistakes he's made and all the things he's done wrong he still has a better chance of eventually doing right then then that then um then uh biden or whoever's going to control biden i mean if i don't next president let's face it he's not the president he's just no you want he's just the mouthpiece somebody's gonna be pulling those strings but he can't sell you you need charisma nowadays once the camera came out you need charisma like if cuomo was out there andrew cuomo was out there be a different story because he knows how to sell and command president peter thank you for being a guest guys what we're going to do is i'm going to put all the links below to his books to his site uh he mentioned several sites mario we'll put those below for people to go find and if you uh uh want to follow some of his content make sure you go follow him down he's got a youtube channel as well you can yeah people there too yeah the shift report on youtube or shift radio from my podcast my listeners have been growing uh but you know i need you know more and more people to listen i've been saying that since the coronavirus uh has come on the scene that the only thing spreading faster than that virus is economic and financial ignorance and you're helping uh to do something about that i think i got the anecdote the cure for uh that ignorance so the mainstream media has got everything wrong everything the government is doing is wrong everything the federal reserve is doing if they only would do the george costanza uh and just do the opposite you know we would be in much better shape instead of they're doing what they think is right but i'm i'm coming out there and doing these podcasts and and talking about what's happening in the financial markets in the economy and and telling the truth about it and and kind of unspinning uh what what the nonsense that people are getting on a daily basis now you got to keep doing it you got to keep doing it more because there's many other audiences that need to keep hearing you peter again thanks for getting being a guest thank you for coming out so i want to hear your thoughts on what you took away from peter schiff's ideas and thoughts and opinions about many different things and again i got two videos i want you to watch if you've still not watched the ray value interview this is a great one it goes with economy uh which makes sense if you've not seen before the other one is a video i just recently did which is about seven seven ways to grow your business during the global economic crisis and in there i talk about three different types of entrepreneurs so if you've not seen this one click over here if you want to see the ray value interview click there and if you've not subscribed to the channel please do so thanks for watching everybody take care bye [Music] you

Channel: Valuetainment

Views: 778,606

Rating: 4.7095213 out of 5

Keywords: Entrepreneur, Entrepreneurs, Entrepreneur Motivation, valuetainment, patrick bet david, peter schiff, bitcoin, peter schiff gold, europac, Economist Blasts The Fed, Stimulus, Bitcoin & Makes Bold Predictions

Id: mzDKHi-wEoc

Length: 136min 49sec (8209 seconds)

Published: Tue May 12 2020