Peter Schiff: Gold’s Rise Is A Warning Everyone Ignores

Via SchiffGold.com,

In Friday’s episode of The Peter Schiff Show, Peter sets his sights on the market’s astonishing complacency in the face of gold’s surge, the misplaced confidence in U.S. trade policy, and the broader implications of America’s debt addiction. He makes the case that the real warning signals aren’t flashing on Wall Street or Capitol Hill, but embedded in the price of gold—while few seem willing to pay attention.

He opens by highlighting one remarkable aspect of gold’s climb—not the price itself, but the collective ignorance around it:

But you know, what’s more significant even than the increase in the price of gold is the fact that nobody cares. Nobody pays attention. You know, I’ve said this before, but it bears repeating. When you don’t know there’s a bubble, you don’t see the pin. And that is something that I came up with during the housing crisis. Because a lot of people, even after 2007, after the subprime market really started to collapse, most people just shrugged it off. They didn’t care. They thought it was nothing.

Peter moves to the unstable environment driving these changes—specifically, the trade wars ignited by tariffs under President Trump. He points out that the expert consensus was flat-out wrong when it came to the consequences for the dollar and the global economy:

What’s even more significant is that this is happening during a time of turmoil. Trump basically started it with these tariffs, launched this global trade war, created all this economic uncertainty. No one knows what the hell is going on. Trade is a big part of the global economy. And again, remember, all of these so-called experts predicted that tariffs would cause the dollar to go up. That’s why the dollar rallied right after Trump won, because the markets were saying, oh, we’re going to get tariffs, that’s good for the dollar.

Turning to international affairs, Peter takes aim at the mistaken belief that China is desperate for American consumers. He challenges the narrative of U.S. indispensability with a clear-eyed assessment of both nations’ economic realities:

I’ve got to counter all the nonsense that I’m hearing… Trump or one of his advisors said  that China is desperate to make a deal. … China needs to make a deal because China wants what we have, the American consumer.  China wants consumers. There’s a billion Chinese. Why would they need consumers? They got more consumers in China than we got in America. What’s so special about the American consumer that China needs us?

Reinforcing the theme of economic misunderstanding, Peter spotlights a fundamental error in how government officials—particularly at the Treasury—think about abundance and scarcity. He uses a simple analogy to question why policymakers seem to prefer an economy of limits, rather than one of overflow:

What is better if you can make more than you need, or you can’t make as much as you need, right? If you make too much food, what’s the worst thing that’s going to happen? Some of it’s going to rot. If you don’t make enough food, you could starve to death, right? So what do you want to have, a surplus? Do you want to have abundance or do you want to have scarcity? See, according to the Secretary of the Treasury … scarcity is better than abundance.

Peter wraps his analysis by returning to the heart of the issue: the United States’ addiction to debt and the inevitable consequences of monetary intervention. He warns that we’re heading toward not just another crisis, but a distinctly American reckoning—one that might spare the rest of the world for once:

I mean, that is the bottom line, right, massive QE. We are heading to another financial crisis, only it’s not a global crisis, it’s going to be a U.S. crisis. We’re going to liberate the world, because they’re not going to be dragged down, they’re not going to be buying our dollar and buying our debt. They’re going to be taking their money home, keeping their goods for themselves. And so the world is going to be better off keeping its stuff and investing its savings in their own economies rather than giving us their stuff and investing their money here in America. 

Be sure to check out Peter’s latest interview with Jimmy Morrison on “Let Us Disagree!”