Julian Dorey Podcast - "WORSE than 2008!" - The Great CRASH is Happening | Peter Schiff • 464

Episode Date: August 19, 2026

SPONSORS: 1) DOSE: Head to dosedaily.co/JULIAN or enter JULIAN to get 35% off your first subscription. 2) AMENTARA: Visit https://www.amentara.com/go/JULIAN and use code JDP22 for 22% off your first order. JOIN PATREON FOR EARLY UNCENSORED EPISODE RELEASES: https://www.patreon.com/JulianDorey CLIPPERS DISCORD: https://discord.gg/8QmWEKJ3BT (***TIMESTAMPS in Description Below) ~ Peter David Schiff is an American stockbroker, financial commentator, businessman & YouTuber. PETER's LINKS - YT: https://www.youtube.com/c/peterschiff - IG: https://www.instagram.com/peterschiff/reels/ - X: https://x.com/peterschiff FOLLOW JULIAN DOREY IG: https://www.instagram.com/julianddorey/ X: https://x.com/juliandorey JULIAN YT CHANNELS - SUBSCRIBE to Julian Dorey Clips YT: https://www.youtube.com/@juliandoreyclips - SUBSCRIBE to Julian Dorey Daily YT: https://www.youtube.com/@JulianDoreyDaily - SUBSCRIBE to Best of JDP: https://www.youtube.com/@bestofJDP ****TIMESTAMPS**** 0:00 - Peter Called the 2008 Bubble Before Anyone 10:20 - This Bubble Is WORSE Than 2008 20:34 - The Bond Bubble & Redefining Inflation 35:49 - Why We NEED a Severe Crash 45:09 - China's Economy Is Freer Than Ours 54:20 - Government CREATES Poverty by Design 1:04:24 - DOGE Was Doomed From Day 1 1:13:46 - Student Loans Ruined College, Lasik Proves It 1:23:27 - A House Is a MONEY PIT 1:33:50 - Tariffs Are Just Another Tax 1:43:23 - From Biggest Creditor to Biggest DEBTOR 1:53:02 - Government Kills Competition, Bureaucracy Ruined Healthcare 2:05:05 - The FDIC, Moral Hazard & the FDA 2:11:36 - Running the FDA & Ponzi's Ponzi Scheme 2:21:44 - The Government KILLED Peter's Bank 2:32:31 - Winning the Lawsuit Nobody Reported 2:40:22 - When the Collapse Comes 2:43:34 - Peter's Work CREDITS: - Host, Editor & Producer: Julian Dorey - COO, Producer & Editor: Alessi Allaman - https://www.youtube.com/@UCyLKzv5fKxGmVQg3cMJJzyQ - In-Studio Producer: Joey Deef Julian Dorey Podcast Episode 464 - Peter Schiff Music by Artlist.io Learn more about your ad choices. Visit podcastchoices.com/adchoices

You were trying to tell chat GPT you were black? I think, yeah, I wouldn't. I said I couldn't be black. But it said I could be, it said I could be a woman. Wait, so, but does that mean it was looking at you? Did you have to like, shoot in a picture? I was just saying, you know, yeah, I'm a Caucasian male, but I identify black was my race.

Oh, they said you can't do that. Yeah, it would. But it took me, I got it to agree that I was a lesbian. That, it pushed back for a while after it said I was a woman. It says, well, you can't, you can't be a lesbian. me, why not? I mean, I like girls. And I'm a woman. You agreed that I'm a woman. So how many like prompt back and forced at that table? You can play around with it. I mean, it's very politically correct. But when you, but you can, you can get it like you're getting the

arguments with it. Because it does think logically. Right. So you can push it. You can get it to to ultimately concede certain things. Sure. But, uh, yeah. Does it consider you a Puerto Rican as well? Oh, you know, I haven't, I didn't ask it about that. That, I just, I've gotten to trouble with that because I was on somebody's podcast and I said I'm Puerto Rican and a lot of people in Puerto Rico got really upset about that. They got upset at that. Because they said, you're not Puerto Rican. I go, what do you mean? I live here.

Yeah. How long have you lived there? Almost 10 years. Yeah. See, Dief and I were saying before camera, like if you're in New York for 10 years, they consider you in New Yorker. So if you're probably. But that's, but yeah, they have some whole thing about, you know, like more ethnicity or something. But I don't know.

I mean, I've raised my kids. And my kids, I have a daughter who's 10, she's spent her whole life in Puerto Rico. Oh, wow. You know, so it's like, is she Puerto Rican? Yeah. She's, you know, she's got white. She's white. But so almost all the Puerto Ricans are white.

They're just a little, you know, the little tanner. Right. This could be a real semantics argument for sure. Yeah. They're not, you know. But it's nice living down there. I mean, obviously it looks beautiful, but like, how is it from like a day to day being like a huge business guy living down there pretty much full time? No, I don't work that hard anymore.

You don't work that hard? But we have our whole company there, the whole asset management company is there. So I got like a dozen employees in Puerto Rico. That's cool. Are they all natives of Puerto Rico? Are they? A couple of them are. Most of them moves.

So you got a mix. That's good. Yeah. But most of them moved from California because that's where the company was located. Well, I've been seeing you on TV for years, even like when I was in high school. I'd watch CNBC. And you were on there all the time. And you are one of the guys and there's a list of them.

But we should get started with the interview. Yeah, we are. Oh, this is already it? Oh, no, I didn't know. I was, I didn't know you were recording that stuff. Yeah, you're good. That was great. No, that was. You're doing awesome. Yeah. But anyway, so you obviously were a guy who was among a very small list of people who in the years building up to the financial crisis, which is something I've studied a lot, but you know a lot more about it than I do, was able to determine that we had a real problem

here, particularly with the housing market and what was going to go on. And then you also went to things beyond that as well that we could talk about where we are today with the economy. But like, how did you see that so early on? I think you were first talking about that maybe like 05, 06. Well, actually earlier than that. Wow. Yeah. And, you know, we had a big problem back then. We have an even bigger problem now. We do. And it's, you know, the same factors are behind it. But the mistakes that were made leading up to the 2008 financial crisis, the mistakes that inflated the housing bubble, were pretty obvious to me as they were being made. And they really started after the bursting of the dot-com bubble.

And, you know, also we had these tariffs of tax in 2001, and we had a shallow recession. And so the Fed under Alan Greenspan, who just passed away a couple weeks ago at 100 years old. Hey, guys. If you're not following me on Spotify, please hit that follow button and leave a five-star review. They're both a huge huge help. Thank you. All right. Yeah, so he cut interest rates down to 1%, which at the time was really the lowest they've been in our lifetimes.

We hadn't seen rates that low. and that cheap money is what fueled the housing bubble because it enabled mortgage rates to come down. But also, they developed these teaser rates where because rates were so low and the Fed had pretty much committed to keeping them low for a while and then raising them very slowly in quarter-pour. increment. So lenders were confident that they could loan out money for two or three years, very cheap. And so they were giving out these teaser rates where people could buy a home, but for the first few years, the mortgage payment was really, really low. And so that enabled people to stretch to buy more expensive homes or pay more for homes than they could ordinarily

pay. And because interest rates were so low, everybody was looking for yield. Everybody on Wall Street wanted yield. And what they were doing was packaging up these mortgages, securitizing them and selling them. And there was demand for them. And because there was all this demand on Wall Street for mortgages, you know, mortgages were readily available and people were able to buy mortgages. And people now, you could have nothing down, zero dock, liars loans. There was all kinds of fraud in it. The government was guaranteeing a lot of the mortgages directly through FHA and indirectly. through Fannie and Freddie, and Fannie and Freddie became the biggest buyers of the subprime market. And I knew this whole thing was a gigantic bubble and that eventually it would pop.

Do you remember the moment where you were like, woo? No, I knew it was a bubble, you know, for years. And even like, you know, I rented some space. I had a, I had my broker dealer at the time. And I just moved down to Orange County from the L.A. area. had, I ran in a lot more space than I needed. And so I was sub-leasing space. And my tenants were always mortgage brokers. And I could overhear their conversations. And it was just peer fraud. I mean, they were just having people falsify their income and they were cutting and pasting. And, you know,

because they were cold calling people and telling me, hey, we can get money out of your house. You know, we could get, you could do a refinance and they would inflate their, the value. And they would, you know, There was so much fraud going on in the mortgage market. And I saw that, you know, people were being qualified for mortgages based on their ability to pay the teaser rate. And, you know, forgetting about, you know, what would happen if the rates, you know, hit their normal level. And so I saw all this going on.

And I saw people, you know, buying multiple homes, you know, leveraging up their homes. you know, leveraging up their homes and knew, okay, eventually rates are going to go up. The teaser rates are going to mature. You know, people, and nobody was even using fixed rates. People were using adjustable rate, you know, arms. So I knew that this was going to end badly. I knew that the entities that were securitizing or guaranteeing the loans, Fannie and Freddie, I knew they would go bankrupt.

I knew subprime was going to blow up. You know, that's how, you know, it got involved with that hedge fund, to short the subprime market, which, you know, you can see if you go, if you're on YouTube, and you look at Peter Schiff Mortgage Bankers, you'll see a talk that I gave in 2006. And in Vegas, it was the Western Regional Mortgage Bankers Association. And there were like 3,000 people there maybe. And I had spoke the year before in 2005, which really was the peak of the housing market. And I was the only one there who was bearish.

housing and all the other industry bigwigs were of course very optimistic. And so they had me come back a year later because some of those bearish forecasts were starting to come true by 2006. So I came on and the main reason I went is I said, look, you know, I'm trying to raise money for this hedge fund, the short subprime. I'll come down there, but I want you to give me like a room so I can do a workshop and let me promote this workshop because I'm looking for clients who might want to, you know, get in on this trade.

And they said, okay. And so that's why I went down there. But you watch the talk and I completely lay out exactly what's going to happen. And it all happened in 2007. About a year after my conference or that talk is when everything blew up. But I pretty much laid out how, you know, everything was going to collapse, how subprime was going to blow up, how the housing market was going to tank. I said, you know, all of these mortgage bankers,

you guys are going to be out of work. And I was hoping, too, that more of these mortgage bankers would want to hedge their careers by getting into this fund. And, you know, of the 3,000 people that were there, only one person invested. One guy. One guy sent me about a half a million bucks.

And about a year later, I think he got five million back. But that was it. But it shows you, like, that, Very few people, you know, they're trapped in the bubble. And even though they were part of it, they still couldn't see it. Well, like the bubble that we have now is much, much bigger. And it's a lot broader because it's not just housing. Because home prices are actually more overpriced today than they were back in 2007. They're even less affordable than they were then. But it's a big. bubble in that we have a bigger stock market bubble than the stock market bubble that popped in 2000. We do? Yeah. Oh, yeah.

Is that, do you derive that from a lot of like the hype with AI in particular? They're more widespread. Well, the AI related names, the hyperscalers, the companies that are fueling, the demand for AI, they're a big part of it. But the overall market is more expensive than it's ever been. history. Yeah. So you have a stock market bubble bigger than the dot-com bubble. And I would, you know, you could throw crypto in there that didn't even exist. That entire industry is a bubble. So throw that in there. But crypto, stocks and bonds, the bond bubble has already popped. But can you

explain that to people out there who don't understand that at all? Like don't understand the bond market and how it works. Yeah, and when I'm calling something a bubble, it's when the prices don't really reflect the fundamentals, reality, right? The prices are become completely divorced from the economic fundamentals. So with stocks, it's when the prices, you know, if you look at the earnings of the companies, the dividend yields of the companies and other metrics, the price that you have to pay is very excessive. That's right. And it's, it's a very, and it's a very, and it's, you It reflects optimism. The crowd is very excited, and they all believe that earnings are going to really grow.

And generally, they're wrong when you have that kind of mentality. And the same thing, you know, with real estate, I mean, one of the reasons I also knew that real estate was such a bubble was because I would compare the price of real estate to the cost of renting. And renting was so much cheaper back then. In like 06, 05. Yeah. I mean, I remember I was still living in Connecticut.

I had recently gotten divorced. And I was renting an apartment in Stanford. And my rent was about $3,000 a month. I had a really nice place. I was on the top floor. So I had like a duplex. I had my boat right below me. I could see the dock.

I kept the sailboat there. And, you know, it was a brand new building. It had, you know, concierge, it had, you know, gym. It had a lot of stuff. And right next door, there was. you know, some old townhomes. And nowhere near as nice as the ones I was renting. But they, you know, and I went there because they had like open house. So just for fun, I just, it was right next door. So I went in there. And I think they were selling these things for five or

$600,000 or $600,000 to units. And they were smaller than the one I was renting, not nearly as nice, not as nice of you, kind of dark, none of the amenities. And when I looked at what it would actually cost to buy it, assuming like an average person put 20% down and I got a mortgage, it was going to be more expensive. Can we talk about the most underrated organ in the body? It's your liver. It does 500 functions for you every single day, whether that's filtering unwanted elements, supporting digestion, or helping with energy, it's a lot. But we never think about our liver until something goes wrong, which begs the question, what if we actually supported it before the problem started? Well, that's why you gotta check out my friends at DOS.

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Your body does so much for you. Let's do something for it. That's D-O-S-E-D-A-I-L-Y.C-O-S-Julian for 35% off your first month subscription. And so I asked the realtor that was there. I said, you know, why would anybody buy this place? Because I live right next door. And for a lot less money, you could just rent like one of these condos. And they're so much nicer than the ones that you're selling.

And they said, well, you know, but when you. when you move out of your condo, you're not going to have any equity. I mean, said, well, if you buy this, when you move, you can sell it and you can make all this money on the appreciation. I said, well, why the hell should the price go up? I just told you, you can rent right next door a much better place for a lot less money. And they said, well, you know, well, that's how real estate works. You know, the price goes up. I mean, so you're telling me that if I'm dumb enough to buy this place instead of renting next door,

somebody even dumber than me is going to come along and pay even more money. You know, because that was the mentality, you know, prices just go up. They don't go up. Real estate, the value is the rental income. That's what real estate is worth, right? What you could rent it for. So right now we have a bubble in all these assets. Now, the reason I say bonds are a bubble is because the coupon on a bond.

And even as we're talking today, the yield on a 30-year U.S. Treasury traded to 5.1. 1.18 percent. That's the highest yield since 2006. So you're talking about 20 years ago. But 20 years ago, the national debt was like, I don't know, 8 trillion. Now it's almost 40 trillion, right? So it's almost five times the signs that it was back then. But the yield is only 5.18. That's not nearly enough yield to reflect 30 years of inflation. that you're going to be subjected to. Because if you loan somebody money for 30 years, when they pay you back,

the money's not going to be worth what it was when you loaned it. Especially when you look at the fact that we got a $40 trillion national debt, which will probably be $50 trillion in another three years. How does it even, Peter, how does it even get there? Like people at home when we look at this were like, this is monopoly money.

How do we have debt at $40 trillion and see that in any way? sustainable to where, to use your term, like it's not a bubble that's going to pop tomorrow. It's, well, it's not sustainable. And, you know, even the people in Washington at the Federal Reserve will say that it's not sustainable, that, you know, we have to address it. But they overlook the fact that nobody addresses it. Yeah.

You know, they'll talk about how we're on an unsustainable path. Yes. But the destination is, you know, we could get there any day. They don't know when we're going to become, it's going to become a crisis. Yeah, look at that. Look at where you started. And even a little after you started looking at the first bubble, it was $5 trillion. Now look where it is.

Well, that's, well, $5 trillion. It was a lot lower than that. If you go back to 2000, the peak of the NASDAQ bubble. But the reason that we have $40 trillion in debt. And again, that's just the tip of the iceberg when it comes to what the U.S. government owes. Right. Because the U.S. government is obligated to make a lot of payments in addition to the Treasury debt that it's outstanding.

The government guarantees mortgages. The government guarantees student loans. The government guarantees bank accounts. The government guarantees pensions. The government has obligations to its own workers' pensions, Social Security, Medicare, all that. You know, you're talking well over $100 trillion in unfunded liabilities. So the unfunded liabilities, which are still real, which is still money that the U.S. government is on the hook for, that dwarfs the $40 trillion that we're talking about here. But it's all part of what the government has to pay.

But why don't we see that on a chart? Because that's not part of the national debt, because the national debt is just the money the government has borrowed and has committed to repay. It doesn't count anything else. But if you go to the national debt clock, somewhere on that clock, I think they have. have like the unfunded liabilities. But that's not what people talk about. But they're real. There it is.

But that's where you're talking about? Where? The U.S. debt clot right here. Yeah. Yeah. Somewhere on there. There's so much data on there. They should put,

they should put your face as like the background. Yeah. You know what I mean? And somewhere along the way they added that little gold thing, that U.S. Reserve. That's a bogus number. I don't even know where that number comes from. It doesn't really exist.

I think they did that for you. Now, they did that for Trump, maybe, to make them. So he wouldn't look as bad. I don't know. But the answer to your question, where that debt came from, all that debt is government spending that wasn't paid for with taxes. It's the money the government spent, but they didn't take the money from us.

They borrowed it. Wait, I'm sorry. They didn't take our tax money? No, they just borrowed the money. They're running these deficits. Right now the government is running about a $2 trillion, $3 trillion debt. deficit every year. That's money the government spends on the military, on Social Security, above what they take on the tax. What they collect in taxes. Yeah, okay, got it. Right. But

the problem is, we're on the hook for every dime the government spends. Right. Even if they don't take it from us in taxes, we still owe it, right? That's why the big beautiful bill was such a lie, because the Republicans, Donald Trump, tried to claim that that was a tax cut. But it wasn't. It was a tax increase. because government spent more as a result of that bill, not less. They increase government spending. Yes, they cut income taxes for some people, but they increase spending. And so the difference is borrowed and then printed. And the reason that prices have been rising, the reason we have inflation is because of those deficits,

because the Federal Reserve monetizes those deficits. It creates money and buys government bonds. And that new money is what's bidding up the prices. The way we pay for government spending, when they don't take the money in taxes, we pay for it with higher prices. We pay for it with inflation or interest rates. So when you go to the store and you buy groceries and the food is a lot more expensive, the food isn't more expensive.

The government is more expensive. You're just paying a tax every time you buy that food. So you're paying for the military. You're paying for Social Security when you go and you buy. groceries or when you buy gas or when you buy everything, there's an embedded tax in there that is the result of all of these deficits. But the reason I said that bonds are a bubble is because I don't think the rates are high enough to reflect the real risk of owning bonds. And there's two risks, right? One is default and the other is inflation. Now, some people might think, well, the U.S. government's

not going to default. Well, maybe, maybe not. I mean, they might. They defaulted in the past on their obligations to pay gold. You know, at one point. When was that? Well, in the 1930s. Right. But actually in 1971, when Nixon took us off the gold standard, even as late as then, our foreign creditors who had U.S. dollars, we were obligated to pay them gold. Dollars, you know, Federal Reserve notes were IOUs for gold. And we defaulted. We told our creditors, We promise to give you 35, an ounce of gold for every $35 you had. Now we're going to give you nothing. We basically defaulted on these liabilities.

So, you know, we have a history of not honoring our debts when it becomes a problem. Because, you know, redeeming our notes in gold became a big problem back then because we had printed too much money. So it's not, the government made default. And default can happen in different ways. So the government could say, let's say, you know, you. own a U.S. Treasury bill that matures in a year, right? The government can say, you know what, we're not going to pay you in a year. We're going to pay you in 30 years. So now you have a 30-year bond. So now, you know, that's kind of a default because you're not going to get paid when you

thought. And if the government does that, your bill, which was worth a dollar, will probably be worth 40 cents, right, immediately, because now, you know, some would have to wait. And they could freeze the coupon or they can lower the coupon. Well, they could say, okay, you bought, you you bought a bill with a three to a half percent, four percent. You know, now you have a 30-year bond at four percent. Or they might actually say, you know what, we were going to pay you four percent. Now we're paying you one percent. You know, what are you going to do?

You can't sue them. So they can pretty much do what they want. So they may default. I mean, there's ways of default. They're like, yes, we're going to give you your money back, but we're going to give it back to you in 30 years. instead of, you know, 30 days, and we're not going to give you 4% or 5%. We're going to give you 1%.

So it really wipes out the value. But if they don't want to do that, they just print a lot of money, which is what I think is more likely to happen, which means inflation is going to go from a bad problem to something much, much worse. So, you know, people think that we had a lot of inflation, you know, in the past, you know, four or five years. That's nothing compared to what's coming based on all the money they're going to have to print because what I think is going to happen is that the world is going to stop, you know, loaning us money, stop buying treasuries because the yields are not high enough

to reflect the risk because they start to worry about the enormity of the debt, the trajectory, the fact that nobody is going to do anything about it. I mean, Even the Republicans, right, they've campaigned on fiscal responsibility. We need to shrink the government cut, the deficit, but they don't govern that way. No. And so the Democrats, of course, you know, they want more government. They want, you know, government spending to go up. So they're not fiscally responsible.

So if nobody's going to be responsible, why would anybody want to loan us money? And I think that the Federal Reserve is going to have to buy a lot more bonds in order to prevent rates from really skyrocketing, which is what they would do. Okay. Can we take a step back for one second just so people can follow this? I think before we get to what the prediction will be here, where you're laying out where the inflation is going to get way worse, I think what would be really helpful is if you could explain what the Fed did,

particularly with quantitative easing right after the crash in 08 to basically like buttress up the economy, because that kind of continued to get us on this road. Yeah, well, you know, first of all, quantitative easing is just a UFRAC, that the Fed came up with. Yeah, nice term. So that they wouldn't have to say inflation. Because quantitative easing is inflation. Yeah, it's quantitative, though.

Right. First of all, inflation, because a lot of people, a lot of people don't even know what inflation is. People think inflation is rising prices, and that's by design. But that's not what it is. If you get an older dictionary, even in the 1970s, a Webster dictionary,

and you look up inflation, it will say an expansion of the supply of money. That's what it is. And it's also credit, the expansion of money and credit, because you can buy stuff with credit, even if you don't have money. So money and credit, as you expand that, you're inflating. And that's what inflation is. That's the root of the word to inflate.

Prices don't inflate. They can go up, they can go down, but you can't expand a price the way you expand money supply. Now, what happens when you expand the money supply, you have more money, prices will go up. So rising prices are the result of inflation. They're not inflation itself. They result from inflation. Now, the reason that over time the government has worked so hard to change the definition of inflation is so the public doesn't know where the hell is coming from.

Because if you think that inflation is rising prices, then you blame whoever raises the prices. That's right. So you can blame the greedy gas companies or you could blame. whoever you want, the businesses. But the only reason that businesses are raising their prices is because the government is creating the inflation that is causing their costs to go up. And because their costs are going up, which are their prices, they raise prices to consumers.

So it enables the government to create inflation, but then blame somebody else for it. So when they did quantitative easing, it was inflation. They said, you know what? We're going to try to inflate our way. out of this problem. We're going to print a lot of money to stop real estate prices from falling, to stop stock prices from falling. And they succeeded in doing that. But they also caused consumer prices to rise. Now, you know, they would have actually fallen because people think that inflation, let's say prices go up 2%, 3% in one year. But had the government not created inflation,

maybe they would have gone down to a 3%. Sure. So the effect of inflation is not just that prices went up 3%, but that they didn't go down 3%. That's 6%. That's 6% more that you're paying than you would have paid absent the inflation. And the government tries to claim that we need prices to go up.

That's part of the justification for why they create inflation because they say we need prices to go up 2% a year. Why? Why do we need that? Why can't they go down 2%? Why do they have to go up 2%? Yeah, what's their argument for that? Well, they have bullshit arguments.

I mean, the arguments are that if prices don't go up, people won't buy anything. So it's only because we're worried that prices will go up that we buy, which is complete nonsense because we buy things that we need and that we want. And if prices go down, that's a good thing. We buy more because we can afford to buy more. I mean, everybody wants the cost of living to go down. Nobody wants prices to go down. Nobody wants prices to go up except the government.

And they claim that we need that. And the only time that you don't buy something is because you can't afford it. And the way you will be able afford it is if the price goes down. So if something gets cheaper, then you'll be able to buy it. If you can't afford it and it just goes up every year, then you may never be able to afford it. You know, they also claim that businesses can't make money if prices are falling, which is nonsense, because businesses are concerned about margins, not the price. So if their costs are going down and their prices are going down, they can actually make more money.

Even if the margin is the same because they can do more volume. You can always sell more at a lower price. That's why everybody is trying to lower their prices so they can sell more stuff. So it's just nonsense to say that we need to have. have rising prices. We don't. I mean, the economy had falling prices. If you look at the CPI in 1800 and you look at it in 1900, it fell by 50%. This is the consumer price. Yeah. Yeah. I've been microdosing something new lately, and it's not what you think. A lot of people refer to it as nature's wine. The mushroom I'm talking about is called Omnita Muscaria. You know, the red one with

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Once again, that's www. Amantara.com slash go slash Julian. Link by description below JDP 22 at checkout. Boom. So stuff was, you're not going to see a chart that's going to go back that far probably. But prices were half as much in 1900 as they were. in 1800. You remember that?

Well, I wasn't around, but you know, but funny, you know, like, because, you know, I talked to my kids and I say, hey, I, you know, I remember when I was your age, this only cost me a dollar. Right. And my father used to say, when I was your age, that only cost me a nickel, right? People always tell you how cheap things were. Yes. Well, in 1900, when grandparents talk to their kids, they say, you know, I remember when that costs 10 cents, now you can get it for a nickel, right?

Because things actually got cheaper. But we had a stronger economy. We had a booming economy in the 1870s, 1880s, 1890s, all at a time when prices were coming down. That was the peak in the Industrial Revolution. Yeah, that was, you know, that, and even Trump talks about that as the heyday of American dominance. And, you know, that's when we had the fastest growing economy relative to the rest of the world. And that's when we had no government. We had a tiny government.

We didn't have the income tax. We didn't have the Social Security tax. You know, we didn't have any of these government agencies and departments. It was, you know, the government was small. They had no income tax back then? No. Wow. No, the income tax came in in 1913.

But how did they pay the government bills? What was their number one? Well, the government was tiny. There wasn't, there wasn't much to pay. They had, they had some tariffs. They had, you know, some taxes on liquor, taxes on firearms, tobacco taxes. The government ran on excise taxes. There was no, you know, there were, nobody filled out tax returns.

So people had to. buy to support the government's revenue effectively rather than the government using a deductive tax. Right. And there was no deficits. The government just spent what it collected. That's nice. And the government was small. I mean, it was no big deal. It was an afterthought. And we, you know, we were a free country. That's why people were coming here from all over the world. They wanted freedom. They didn't want government programs or handouts. They just wanted to be left alone. And that's when we had a really booming economy. But getting back to your question on quantitative Eason. So quantitative easing was inflation. And, you know, the current chairman of the Federal

Reserve, Kevin Warsh, you know, he is correct when he says that inflation is its choice. And it's the choice that the central banks always make because it's the lesser of the evils from their perspective. I think it's actually the greater evil, but from a politically expedient perspective, it's better for the politicians to create inflation. So the policy following the 2008 financial crisis was to create inflation, which is what they did. Yes. And when gold, if you look at the price of gold, in 1999, 2000, gold was under $300. Per ounce?

Yeah. Now it's over $4,000. And the reason for that is we've debased the currency. We've created so much inflation. You need more dollars to buy an ounce of gold. Now, the stock market, the Dow is about $50,000. And in 2000, it was 10,000. So the Dow is up 5x.

But gold is up more than 10x during the same period of time. So what that shows you is, yes, we created a lot of inflation to get asset prices to go up in nominal terms, in terms of dollars. But in real terms, priced in real money, priced in gold, the market is a lot lower than it was 25 years ago. Lower. Yes. Not even.

Way lower. It's half of what it was. Wow. And that's why, you know, afford, everybody talks about affordability. We have an affordability crisis because the government has destroyed so much of the purchasing power of our money. And they did that, you know, to bail out the banks and bail out the stock market in 2008. They did it again during COVID, right?

They printed a crazy amount of money in 2000. The Fed's balance sheet doubled in 2020. We flooded the economy with inflation. That's why prices really soared in 2000, in 2021, 2022. You know, Trump and the Republicans want to say, oh, it was because of Biden. I mean, it wasn't because of Biden. The policies that created those price increases happened under Trump. It was, you know, Trump's final year, 2020, when we had COVID.

And that's when the deficits exploded with all these ridiculous government programs. Like what? You know, the purchasing power or protection PPP program, whatever it was, or the stimulus programs. But, you know, the Fed slashed interest rates back to zero in 2020. So we really primed the pump with a lot of inflation. There is a lag between the creation of the inflation, which is the expansion of the money supply and credit, and the impact it has on prices. So we created the inflation under Trump.

it manifests itself in rising prices, mainly under Biden. But if you look back at a chart of the CPI and see when it really started to rise sharply, it was in the last three or four months of Trump. And then that continued. And it was accelerating even before Biden's first bill was passed. And so even if Trump had served two consecutive terms, had he been elected president, would have had the same thing. inflation had been just as bad if Trump had been reelected back then as Biden.

And now I think it's going to be even worse, you know, in Trump's second term that it was, you know, under Biden's. Because I think we're going to see this big drop in the dollar as the Fed has to really crank up QE again. You know, worse said if, you know, inflation is a choice. And he's going to make that same choice. He's going to make that choice for the same reason that green spend chose inflation, the same reason that Bernanke and Yellen and Powell. They all chose it because the alternative was a crash in the stock market, a crash in the bond market, which we need a crash in the real estate market,

a severe recession, high unemployment. We need it. A financial crisis. Well, unfortunately, we need a lot of that stuff because the whole economy is screwed up because of years of artificially low interest rates, inflated asset prices. The economy is messed up by what the government has done. Free market forces have not been allowed to operate. And so we have all kinds of imbalances in the economy, bubbles, you know, misallocations

of resources. There's been so many mistakes that have been made as a result of this bad monetary policy. that correcting them, you know, will involve a severe recession, bankruptcies, you know, a big increase in unemployment. It's going to be very difficult to fix what the government broke. So I think we're the younger generations looking at millennials and Gen Z. And what's the generation below them that's not in the workforce yet called? I don't remember. They're called what? Gen Alpha. So they're not in the workforce yet. But if we're talking about a future crash year or something, five years or something, where people are going to take issue with that type of idea is that

the ones this entire bubble has been inflated by the older generations being in power. And those people own the homes that they bought for fucking 10 grand in 1972 and are now worth $3.5 million. They'll be okay when something like that happens. The people who will get hit the hardest overall by, and it said this isn't a perfect way of putting it, but the overall like weight of being hit when you look at unemployment, employment, opportunity, stopping the economy, taking away income, things like that are going to be the younger generations.

And they're probably sitting here. I mean, I know I am looking at this going, well, wait a second. The people that caused this are the older people. And now they want us to carry the bag because it's a healthy way to reset the economy. It's kind of a tough argument. No, actually, it's going to be the reverse. You think it'll be the reverse. Yeah.

Well, right now it's my generation, right? I'm at the tail end of the baby boom. Fuck. But, you know, yes, you know, a lot of people, bought. bought of homes, you know, for 50,000, 75,000 that are now, you know, a million, two, whatever. But they're not really worth that because they can't sell them. There's no buyers who can afford to pay those prices. It's an illusion.

It's an illusion? Well, people can't sell their homes. I mean, look at the supply of homes for sale, that, you know, the price, you know, time on the market is going up. Sales are collapsing because people can't afford these prices. And the reason that prices are too high is because of the government. Government policy of subsidized mortgages, guaranteed mortgages, artificially low interest rates, the deductibility of mortgage interest. All of these policies were designed to increase housing demand. And all that did is push up prices. And in fact, even Donald Trump, you know, when he's asked about the housing problem, his solution is not lower prices. He wants prices to keep rising. Because he wants to protect the paper wealth of maybe his base. The boomers.

So he just wants to make it so that people can borrow more money to overpay for these houses by lowering interest rates, which we really can't do without just creating massive inflation. But what's going to happen is home prices are ultimately going to collapse. And so that will benefit people who don't own homes who want to buy them. you know, that same thing with stocks. I mean, all these prices are going to come down unless, you know, we have hyperinflation, then all the prices go way up. But people are in the streets. But it's only in inflated dollars.

The prices won't mean anything. That's right. If the dollar collapses and then, you know, you know, the price of gold soars. And ultimately, the younger people, I think, get out of jail when the whole thing collapses. because they don't have anything to lose. The people who are going to get wiped out have savings, have financial assets, have these overpriced homes. But right now, younger people are struggling because of the policies that are being pursued to keep the bubble from deflating. That is the problem.

The artificially low interest rates, the overvalued assets, that's what's harming. And in fact, younger people now, they're paying these payrolls. taxes, if you get a job or you're self-employed, you're paying 15% payroll taxes, that money is going to retirees who are, you know, playing golf. That's right. And, you know. I'm well aware. And a lot of young people are struggling.

And those taxes are going to have to go up. I mean, if they're going to try to continue this Social Security Ponzi scheme, they're going to have to continue to raise taxes on the younger people who are still working so that the older people who stopped working can keep getting money. But the money's not there. I mean, the money was spent decades ago. You know, just, you know, the government didn't set it aside and invested it. It was all spent. And so either there has to be massive cuts and benefits for the people who are receiving Social Security or they're going to raise taxes on the younger people who are still paying. But the problem is- How do we wind that down? Social Security, like you said, it has a Ponzi. We just had the fat electrician in here.

He laid the whole thing out. Like, it has a Ponzi scheme. it's got Ponzi scheme written all over it. So how do we just like cut the cord when all the people who would have to vote on that legislation or people who are incentivized not to cut the cord because they'll be voted out of office right away if they do? Yeah, well, you know, you have a lot of people who are living off of Social Security, who collects Social Security, and they're not going to vote for a politician who's going to take it away. That's right. You know, I mean, originally when Social Security was first proposed back in the 1930s, a lot of Republicans were against creating Social Security.

You know, Roosevelt created it. But none of them want to get rid of it now. I mean, once people get a benefit, it's almost impossible to take it away. Even the people that might have opposed it before it was created don't want to take it away. So that's why they call Social Security the Third Rail, because if you touch it, you know, you're politically dead.

And that is the problem. And it's one of the reasons I think that you have this big increase in the appeal of communism, you know, socialism among young people is because this maintaining this Ponzi scheme is very harmful to the younger generation who's holding the bag. And, you know, they kind of, you know, get led astray because they blame their predicament on capitalism. None of this is capitalism. This is all the socialism that crept into capitalism. You know, the government introduces socialism into capitalism, and that causes problems. And then the problems get blamed on capitalism.

And the solution is always what we need more government to solve these problems when it was the government that created the problems. Could you see how people might look at something like, say, a wide open policy, free policy like Reagan did with trickle down economics and say that that didn't, that ended up having capitalism lead to, and I say this as someone who believes in capitalism, by the way, I just want to be clear. I'm devil's advocating. But like, that led to people that it was supposed to trickle down to actually not receiving it and just the top half of society got, or the top 10% of society got way more wealthy.

Yeah, well, you know, the Reagan tax cuts, you know, they did reduce marginal, marginal tax rates. But the problem was government spending continued to increase. They never got the spending cuts that they were supposed to get. And so the deficits got bigger and bigger under Reagan. So it wasn't legitimate tax relief. Although I think the reduction in the marginal rate of tax was a good thing. And it ultimately led to the government collecting more taxes. But the spending outstripped it.

That was the big problem was the increase in government spending. But the way capitalism works, because forget about the taxes, the way anybody gets rich in a free enterprise, capitalist system, I have to figure out what people want and provide it to them at a price that they can afford, at a quality that they like. And so if I can do that, I can earn a profit. And I only earn a profit if I succeed. If I succeed in combining resources in a way that I can produce something. for a dollar, and you're willing to pay me $2 for it. And if you're willing to pay me $2 for it,

that means I've improved your life, or you wouldn't give me the money. You value whatever it is I've sold you more than what you paid to get it. And so you're benefiting from capitalism because I've improved your life. And what happens is I'm not the only businessman. I'm competing with other business. And they want your business. And so they might undercut my price. They might sell you the same product for less or they might come up with a better one. So you have all these people trying to figure out how to make your life better. And if they can make your life better, they get rewarded. So it's not so much trickle down. I mean, that's how everybody benefits from the invisible hand of capitalism. And in the process, if I'm creating a business, I'm going to need help.

I'm going to hire people. They're going to have jobs now. You know, having a job is a lot easier than starting a business. Now, when you run your own business, you know, it's a lot harder. Anybody can collect a paycheck, right? You get a job, your boss tells you what to do, and then you do what you're told, and you get a check every week. And you know, you know exactly what you're going to get. You don't take any risks. It's pretty secure. You know what your income is, and you just do what you've been assigned. Right. But when you start a business, you have no idea if you're going to make any money. You may lose money. You take a lot of risk. Maybe you have to save for a while. You have to underconsume. You need some capital to start your business. And you know, you pay your

workers, you pay your landlord. You know, if you borrowed some money, you pay interest. You only get money if there's something left over. If there's nothing left over, you get nothing. So, you know, it's a lot riskier. It's a lot harder to be the ball. and create the jobs, which is why most people want to be an employee. They don't want the responsibility. They don't want to assume the risk of being an employer. But it's the businesses, the entrepreneurs that create the jobs, that produce the products, that provide the services that grows the whole economy.

It makes everything work. When you have a socialist economy, and there are various forms of socialism, you have communism, you have fascism, they're all types of socialism. But in socialism, across the political spectrum. No, they're on the same side. And that's like a lot of people think that they're opposites, like fascism and communism

or opposites. They're not. They're close together. But one is more left-wing ideology. One is right-wing ideology. Now, they're both on the same side. I would put them, based on how we describe it today, they're both on the left.

Because if you look at a spectrum, if you want to look at a political spectrum, on one side would be anarchy, right? No government at all. So let's put anarchy on the extreme right, zero government, which really can't exist. On the extreme left is total government, right? Totalitarianism, complete government.

No individual liberty, complete government control of the economy. And so as you move from right to left, you're going from less to more government. And so as you're going left, that's where you're going to run into socialism. And fascism and communism are leftist ideologies that have a lot of government control. Like, if you look at the Nazi party, people, the Nazis were fascists. What are the Nazis? The nationalist socialist parties of Germany, right? They are socialists.

Mussolini was the first fascist. Complete so. I mean, if you look at Mussolini's platforms, there's nothing in there that Bernie Sanders is going to disagree with or AOC. I mean, it's their platform. I mean, it's government really controlling the economy through taxation and regulation. That's what happens in fascism. It's not some radical right wing.

It's not like you go from believing in limited government to a lot more government, which is what you have under fascism. But the problem with those types of economies is they are not efficient. They do not lead to the rising standard of living that you have under capitalism because you have no profit motive. You have no real pricing mechanism. nothing can get done. I mean, that's why... Then why did Germany's economy when Hitler came in, when Hitler came in, become more business-friendly? It didn't. The government, when you're talking about the government getting more involved

in business, that's not business-friendly. In fact, I think that's business-unfriendly, because you're tilting the playing field. The government is getting involved in some companies to the detriment of others. The government needs to stay completely out of it and allow the free market to allocate resources, to allocate capital, to set prices. You don't want government getting involved. I mean, that's why when the communist, you know, the communist government still rules in China. But they're not a communist economy. They're in many cases a freer economy than the United States. Free. Yeah. There's a lot of capitalism in China. Politically, they have less freedom, but economically, it's a market economy, much more so even than the United

States in your everyday life. So if you were to go out and start a business as a young man in China just set up a business, you're going to have less interference from the government than you would hear, not as many forms and taxes and licenses and there's more freedom to do things. That's why so many people were lifted out of poverty in China. That's how come China has a middle class today. It's because they abandon the capitalist economic model in favor of a capitalist model. They didn't become a democracy, but they freed up their economy. But the government does get to control kind of who wins and who loses. Yeah, the government does. That's why I'm making the comparison.

The government, the government does interfere in the economy, and that's to the detriment of the Chinese economy. The Chinese would be in better shape if the government did less. But the same thing here. Our government interferes in our economy dramatically, too. Can you give some examples? Well, just about everything. I mean, you know, your business, I mean, there are all these rules and regulations. You start a business. There's so many things the government says you have to do, and there's so many things the government says you can't do. Or you have all these rules and you break the rules. You can be fine, right? You could sometimes, you know, you can be in prison. And then, of course, the government takes a lot of taxes. away from you, right, from your business.

So they take a good chunk of your profits. They're like your silent partner. They don't help you make any money, but they just take a good chunk of what you earn. So the government is very active in the economy. And, you know, we would be much better off if they didn't do that. And, you know, and most of what the government does with our money is they just redistribute it. They take it from people who earned it, and they give it to people who didn't.

And a lot of the times, they're giving it to people who, you know, have political favors. You know, they're rewarding people who vote for them or who give them campaign money. But you don't want to have that. You want to have the government just staying out of the economy. And to the extent that, you know, people think, oh, we need government to take care of the poor. Well, in most cases, the government is creating the poor. but to the extent that you have poverty, we don't need government to take care of it. In fact, if you look at before the 1960s when we had the war on poverty, because that's when

Lyndon Johnson declared war on poverty, we had more poverty after the war than before, because government programs perpetuate poverty by design. They trap people in poverty. How do they do that? I agree with you, but how do they do that? Well, I mean, it's the incentives. They pay you, if they're going to give you money not to work, well, then, all right, I won't work. Give me money.

And especially when it came to women with children, they told young women, if you have kids and you're not married, will give you money. And the more kids you have, the more money we're going to give you. So what was the incentive? I'm going to go out and have some kids. I'm going to get some money from the government. And then the government says, if you get a job, we're going to take those benefits away from you.

All right. So I'm not going to get a job. I don't want to lose these benefits. And then they have things like the minimum wage law, which makes it very difficult for people to get their first job. And if you can't get your first job, how are you going to get your second job? How do you get your third job? And I think the minimum wage so low, though. Like people can't even pay for anything.

Well, fortunately, inflation has eroded away the minimum wage. And so it's not as big a barrier for some people as it once was. But a lot of states have raised their minimum wage, $12 an hour, $15. dollars an hour. Which still gets you dick in this economy with money. It gets you nothing. I know, but what it also does is prevents you from getting a job. Because most of the value that most people have to contribute to an employer, they learn on the job. They don't learn it in school. The skills that increase your value. And if you're not going to start your own company, if you're going to work for somebody and you're going to exchange your labor for a paycheck,

your labor has to have value. I'm not going to hire somebody unless I believe that hiring them is going to help me. You've got to give me labor that has value to my business so that I can earn more money because I hired you. And so, you know, what are your skills? What value can you add? most people gain those skills that help create value on the job, right? They learn, you know, as they're doing stuff.

It's not what they learn in school. So you've got to get your first job, right? And then you increase your marketable skills to get a promotion or to get your second job or your third job. So you got to get on the employment ladder. The problem with the minimum wage is it makes it so much harder to get your first job. because let's say the minimum wage is $15 an hour. All right, well, I've got to deliver $15 worth of value to get hired.

But not even $15 because if I hire you, let's say at $15, I've got to pay payroll taxes. You know, I've got workman's comp. I got other things. So let's say it costs me $20 an hour to hire you. Even though you only get $15, it costs me $20. Well, what if you don't have $20 worth of value to offer me? Why should I hire you? I'm not going to do it.

But if I could pay you five bucks an hour, maybe it might work. Maybe that's enough. Maybe I can make money. But some of it might say, well, $5 an hour is not enough money. How can you raise a family on $5 an hour? You can't. That's why you don't have a family

when you can only earn $5 an hour. But if you're still living at home, if you're 18 years old and you're living at home, who cares if the job pays $5 an hour? Take it. If that's the best you could do, you really need that job because you have no skills. You know nothing. But getting that first job is what will enable you to earn more money eventually. So that by the, then you earn $20 an hour, $50 an hour. Then you can start a family. Then you can move out and get your own place. Well, I think I think this gets to the crux of the problem too with the younger generation

up. Think about like Gen Z. They're born into a post-9-11 world. They're born into a world where that graph from 06 to 2026 goes from 5 trillion of debt that we know about to 40 trillion of debt that we know about. They're born into a world where now the older generations are bringing in AI to take away jobs and opportunities to where colleges through capitalism inflated their prices so much beyond what they were worth and the educations got way worse to the point that they're in debt forever with unforgivable debt. They're coming on into a world where they haven't known things that aren't an inflationary environment. Like, it's been that way forever. And the opportunities are less and less and they're not bought into the system. And like to go back to what you were opening up

this point with, you talk about like the rise of socialism. You and I both know everywhere it's ever been tried. It doesn't work. Like, I get that. But like, I understand why younger people who literally aren't a part of the system, they've never been given a piece of it. They don't even have a 401k or anything like that. They're going to be paying off the fucking boomers to live dead in a hundred years or whatever because they're living forever, you know, and they're like, fuck this and they're willing to try something that's entirely different. Do you see why they would be pushed in that direction? I mean, look, that's why, look, one of the, one of the most popular things I ever did on YouTube was I did occupy Wall Street. I went down to Zucati Park. Oh, I remember these days. Like a 2011 because

young people were protesting Wall Street because of the bailouts. Yeah. And I went down there because I agreed with the sentiment that the bailouts were wrong. But my point was don't protest Wall Street for accepting the bailouts, protest the government for bailing them out. That is the problem. And I said, you guys should be down in Washington. You should be at the Federal Reserve. You should be a Congress or the White House because that is your problem. And, you know, young people have been sacrificed by the Fed, by the government. All the policies. that we have pursued have, you know, made their lives a lot harder. Now, you know, capitalism is there trying to make our lives better, but the government is interfering with that. And, you know,

it especially affects younger people, you know, the minimum wage disproportionately impacts. You know, once you're, you know, have skills, the minimum wage is irrelevant, right? If you're earning $100,000, $200,000 a year, minimum wages are relevant to you, right? You're, you're, you know, you're It's not going to stop you from getting a job. But what it might stop you from doing is hiring somebody. That's the problem. You may hire, you know, the government, they vilify employers. And one of the reasons they do that is they go where the votes are.

Because it's much easier to be an employee for the reasons I said, you don't take the risk, you don't need the capital, right? There are a lot more employees than employers. So if you're trying to get elected. and you're counting votes, which is why democracy is a problem and why we're supposed to be a republic and not a democracy. But getting back to that, if you're just trying to get votes, you're going to get more votes if you get the workers, the employees, to vote for you than the employers.

So what politicians do is they promise vote for me and I'm going to force your boss to do this. I'm going to force him to give you more vacations, more time off, to pay you higher wages. and I'm going to make it really easy for you to sue your boss. You can sue him if he discriminates against you, you know, if he doesn't give you the right work environment. And so people vote for these politicians that vilify their employers and put all kinds of, you know, punishments and taxes and fines on employers. And the way the employers respond to that is hiring fewer people.

I mean, there are a lot of businesses that will go out of their way. They will do everything they can to avoid hiring. people because of all the legal liability and taxes that they have to pay if they hire somebody. I mean, you have all these politicians that say, oh, we want more jobs. Okay, then why are you punishing the people who create them? Well, you know, it seems like that's what you would be doing if you want fewer jobs, which is probably what they actually want, because if they can make it impossible for young people to get jobs, then they're going to get their votes.

They're going to guarantee their votes because they're going to be trapped in poverty because, they can't find any jobs because the government has priced them out of the labor market. And a lot of the people in the government have never held a large percentage of them have never held a real job in their life or for a very short time did. And then they just went into career politicians. Yeah. I mean, there's these guys that are in government for their entire life. I mean, some of these guys, you know, the only way you get them out of office is they die. Right. Of old age. Yeah.

We just had Mitch McConnell in the studio. He's still kicking. Yeah, they're in there. You know, who's the just died? It was five, Senator, big Senator just died. Lindsay Graham. Lindsey Graham, right? But I mean, you know, how long was he there?

They're there forever. Yeah. You know. And now his sister's there now. And now his sister, it's like an hereditary title. That's right. It's monarchy. Yeah.

I mean, I don't have that in Puerto Rico, right? But we, it's probably even worse. There's a lot of nepotism. them going on down there. There's a lot of corruption in Puerto Rico. Don't get me started on that. But, you know, governments are always going to be corrupt. That's another reason that we need to limit their size. You know, they've got to be small because they're, you know, like when Elon Musk, you know, when Trump was originally elected, a big part of the campaign was we're going to get rid of the waste, fraud, and abuse. Yeah. The doge, Doge was going to come in. And I was,

Were you a doge guy? I mean, I want to get rid of waste, fraud, and abuse, but I know that that's impossible because that's government. If you're going to have government, you're going to have waste, fraud, and abuse. That's just part for the course. But I was telling, you know, my clients and my audience for my podcast that this was all BS, none of it's going to happen. Nothing's going to get cut.

Because I heard the same thing. When Reagan was first elected, it was the same campaign. Let's get rid of the waste fraud and abuse. They had something called the Grace Commission that they studied the government. They made all kinds of recommendations. The Grace Commission? Yeah, Peter Grace. They made all kinds of recommendations on how to cut government spending.

None of them were implemented. None of them. Because nobody, everybody wanted to have the commission to study it. But nobody wanted to implement the recommendations because there is a constituency. Nothing is in the federal budget by accident, right? So every dime of waste and fraud is benefiting somebody. And they don't want to take it away, just like they don't want to take away a Social Security benefit. And that's why they ran Elon Musk out of town because, you know, he came in there actually thinking that this was real, that he was actually supposed to cut waste, fraud, abuse.

See, Trump knew it was all campaign bullshit. You did. I mean, they had no intention of cutting anything. But they want to talk about it. It's good politics. Nobody is against that. Who's going to say, I'm in favor of fraud. I'm a favor of waste and approves.

Of course, no one's in favor. I could find you a few people. But, you know, so everybody is willing to cut until it comes right down to having to vote for it. And then you get some special interest group that comes into your office and says, you vote, you vote to get rid of this. We're, you know, we're not giving you any more money. You know, or we're going to, we're going to fund your opponent in the next primary. So nobody cuts anything. That's why the debt is only.

$40 trillion. We can't, we can't get rid of anything. There, there are government programs that were started 50, 100 years ago that are still around. That's right. That, I mean, but why are they there? You know, I mean, the income tax, the payroll tax started as part of the victory tax to win the Second World War. Nobody, nobody had income taxes deducted from their pay until 1940, 42. Wow. Well, we won that war. Why do we still have the tax? The war was over in 1945. That's why, you know, we actually lost every war we fought because every time we have a war, the government gains some new powers. And it never surrenders the powers when the wars are over. But it gets these new powers and they use taxes because they say we need this to win this war.

Yeah. Tupac once said, they got money for wars but can't feed the power. poor. Well, the poor, the capitalism would feed the poor. We don't, we don't need the government. We don't need the government. In fact, if you look at the history of government, if you look at the history of government policy, government policy with respect to food is designed to make food more expensive. The entire basis of our agricultural program, and it started in the 1930s, is to make food more expensive so the farmers can make more money. That is the entire purpose of the agriculture department. You know, they pay farmers not to grow food to take land out of production. Yes. To take land out of production. Wait, what? Yes, that's why those programs are there to make prices higher. Can you give an example of that?

That's the whole program. Look at, you know, in fact, it started during the Depression. They were saying that food was too cheap. Right? In the Depression. Yes. And you're saying, wait a minute. So it's a depression.

You're complaining that food is cheap? Isn't that a good thing? I mean, times are tough. Is it cheap food like a good thing? But no, because they want to get the votes of the farmers. Right. So the farmers want high prices. They want to sell their food for a more.

This is what you're talking about right here. So the 1933 Agricultural Adjustment Act passed during the Great Depression and paid farmers to leave land unplanted and destroy surplus. Yes. Reduce supply and drive up plunging food. Yeah. Look, and look at, you know, the government warehouses that buy a, cheese, they buy up all kinds of stuff to make the price go up.

Look, the free market feeds the poor. It makes food more plentiful and more affordable. And, you know, when what I was, the point I was going to make earlier about the poor, the government creates poverty and perpetuates poverty because it serves their interest, right? You set up a government program to deal with poverty, and now that government agency wants more poverty because now they're a bigger part of the government. They have a bigger budget. But private charity wants to end poverty. A lot of fraud in that, though. No, not nearly as much because private charity relies on donations.

And then they create jobs that they don't need. They pay administrative fees. When you donate to charity, one of the most important things that you look at is, okay, you got a charity. how much of my money goes to the cause versus how much is used in administration. And in a typical charity, if you give a dollar to the charity, maybe 10 to 20 cents goes to administer the charity, and 80 to 90 cents goes to the intended beneficiaries.

It feels like a lot of charities have flipped that paradigm, though. But the government, it's the opposite. The government takes a dollar in taxes and keeps 80 to 90 cents for itself. the poor people get like, you know, get a small fraction. I agree with you on the government part. I just think it's a lot more similar on the private charity part. But it's hard to do that.

Yes, I'm not saying that there aren't any fraudulent charities, but there is a check on that. Government is funded by taxation, which is a mandatory extraction. So the government is taking my money away from me. I got no say in the matter. Right. Right. but a private charity has to convince me to make a donation. And so if I'm going to write a big check to a charity, I'm not going to do that unless I'm

convinced that it's not a scam, that they're not just using the charity as an excuse to enrich themselves. And they're not. So there is some free market forces that are going to check on. And to the extent that you have a more vibrant, productive economy, which you will have with less government, you're going to have a lot more money available for charitable causes. Sure. And so I think there's going to be a lot more charitable giving if we don't nationalize that function

to the government. Because anything that you have the government do, it's going to do badly. It's going to be expensive and it's going to be inefficient. That's why the government should do as little as possible. That's why I don't like the government even involved in education. I think education is important. we shouldn't allow the government to do it. The education system is definitely got a lot of problems.

Well, look, everything, if you look at the things that the government is involved in the most, education, health care, and housing, those are the most overpriced things that we got, right? Because we don't have the free market involved the way we do in other things. No, there's no clothing crisis. Clothes are not unaffordable because the government doesn't make our clothes. The free market provides us with clothes. Same thing with food, right? It's getting more expensive due to inflation.

And yes, government programs jack up the price. But by and large, the supermarkets are full of affordable food. Well, I mean, my suit, I get the same shit every single time. I swear to God, the bills that I was getting like 1804, two years ago were like 3.30 now. Yeah, but look at the, compare that to the cost of education, cost of college. Well, it's insane. Right. And that's because of the government. The only reason- Because the government? Of course, the government did that. Look.

The government did that. So before the government got involved, the government got involved in education in a big way in the 60s. And it started after the 18-year-olds got the vote. So up until, I forget the year, but during the Vietnam War, people were making a big deal about the fact that they were getting drafted and they couldn't vote. Right? Now, I'm against the draft. But I would. have been against lowering the voting age from 21 to 18. But that's what we did. Now, once the voting age was lowered to 18, what are 18-year-olds concerned with? Well, they're about to go to college. And so the politicians, in order to get the 18-year-olds to vote for them, said, we are going to help you pay for college. We are going to make it easy for you to go out and borrow money to go to college. We're going to guarantee these student loans. Now, up until then, students

couldn't borrow any money. Nobody was dumb enough to lend money to a student. So you said, well, how did the kids go to college when they couldn't get loans? Well, they didn't need loans because college was pretty cheap. But to the extent that you came from a very poor family, so your family couldn't pay for your college, you got a job, which is what my dad did. My dad came from, you know, he said he wasn't sure if he was lower middle class or upper lower class, but, you know, they were, you know, his dad was a carpenter, you know. But so they didn't have money. He was the youngest of eight kids.

And I don't even think, I mean, so he, he put himself through college. He did it working over the summer. And it used to be a common expression, I'm working my way through college. Right. Right. That's what you did. So when my dad graduated from college, he didn't have any debt. He covered his tuition, his room, and his board with the income he earned waiting tables over the summers.

Yeah. you did. Now, what the politicians said to guys like my dad is, why should you spend the summer waiting tables? Go to Europe. Have fun while you're young. Borrow the money to go to college. We'll guarantee your loan. And then you could pay it back later on when you're making a lot of money with your college degree, right? You know, have fun while you're 18 or 19. And the 18, yeah, that sounds great. I'll vote for you, right? So once they did that, once the government started guaranteeing loans. And now anybody could just walk into a bank

and get a loan to go to college because the banks didn't give a shit about if you could pay it back because the government was going to pay it back. Didn't matter who you were. They didn't care what you majored in, what your grades were like. Yeah, they took away the liability.

Right. And so what happened? The kids just, everybody just wanted to go to college. So what the colleges do? Just raise prices. Oh, we got all this demand now. People don't give a damn what it costs because the government's giving them the money. And so they raise

price. And they also invented administrative jobs left and right and all this shit. There was no longer any market-based incentives to have low tuition because the kids didn't care. And so then as tuitions went up, the government would say, oh, oh, well, let's loan you even more money. Let's raise how much money will let you borrow. Okay, great. Now the colleges jacked up prices again. And they kept going up. And that's why it's so expensive. If you look like, I don't. I, remember I looked at college prices like for Yale or Harvard, and I went back, you know, 200 years and compared the prices. And, you know, they, you know, they, you know, they were pretty stable over 100 years. They, you know, they barely went up. You know, they, they,

they all started to go up in the 60s, the 70s. It was, it's all tied into government loans. If the government did not provide any college loans whatsoever, tuition prices, would collapse because the colleges would have no choice. Now, yes, fewer people would also go to college, but most people who are going to college are wasting their time. They are wasting money. They're studying stuff that is worthless. That's right. And that's another way the young people, they've been sold as bill of goods that, you know, you've got to go to college. I mean, in fact, what they used to tell when I was young, it was you got to go to college because if you don't go to college, you're going to end up working with McDonald's. Right. Now there's,

saying you better get a college degree so you can get a job at McDonald's because you know that's I mean I did this radio yeah I did this video on YouTube uh if you if you look at it Peter Schiff college in New Orleans this is over 10 years ago yeah we'll collab this so you guys can literally click the title and find Peter's channel and I was I was in New Orleans I guess I go to New Orleans pretty much once a year because I go to an investment conference there and and so one year I'm in New Orleans and I get an idea hey let's go to down Bourbon Street. And I took a guy with me, had a camera, and I wanted to interview the bartenders, the bouncers at the strip clubs, the pedicab drivers. Yeah, there's the video.

And every single person I talked to had a college degree. Every one of them. Some of them had double degrees. They all had student loans. And none of them had a job that required college. yet, you know, they were all, you know, this is all because the government has gotten everybody into college. Who benefits from selling these overpriced degrees? It's the universities. It's the administration bureaucracy, their professors. They make a fortune. And the kids are stuck with a bunch of worthless degrees.

And they also don't have the incentives with a lot of professors, like what it used to be in the purity of the day, was professors would make their money by doing the research on the subject matters that they taught. and, you know, sell books and write papers and go speak. And now they're in, there's, that still happens, but they're also incentivized, just be able to get to tenure. And then they're good. Yeah, and you can't fire them and they're, and, and yeah, look, look, you know, the government screwed up education.

They screwed up health care. I mean, look how expensive health care is. Look how expensive insurance is. This wasn't the case before the government got involved in the 1960s. You know, they, they stimulate demand. but also the way it works with insurance, why do people have health insurance for everything? People, you go in for a checkup, you know, your insurance is covering it. That people buy auto insurance.

The government doesn't really get involved, although sometimes government's mandate that you go out and buy it. Right. But the auto insurance is supplied in the private sector. And, you know, when you have auto insurance, it doesn't cover your gas. It doesn't cover your tires. It doesn't cover, you know, your winch your wiper blades. The auto insurance is there if you get to an accident.

You get a wreck, right? But you're expected to cover your operating costs. So why do people have health insurance just, you know, to get a checkup, to go in there? You don't know what's going to happen to you. Your body has so many moving pieces. Shit can go down. Yeah, but before they got to be. got involved, I mean, people didn't even use insurance for childbirth. They just paid for it

because it wasn't expensive. Well, now it's expensive. And you can stay in the hospital for weeks. You know, people, now you're, you have childbirth. You're in and out in the day. When I was born, my mom was probably in the hospital for a week or two. Right. And it would, and they didn't pay for it with insurance because it wasn't expensive. Right. Because insurance screwed the whole thing up. People are over-insured because the government, based, basically gets people into insurance because they get it from their employer. And they get it from their employer because it's tax-free. So it's a way to avoid income taxes.

Because if you just, you know, if you just get paid, then you get to pay taxes. But people have insurance, and so they overuse. Like if your auto insurance covered your gas, I mean, can you imagine how expensive gas would be if people didn't have to pay for their gas? I mean, I mean, they wouldn't even bother. You go to the doctor. try asking what something costs. They don't even know.

Nobody even knows if you ask, hey, what's this going to cost me, Doc? I don't know. Take it up with insurance. See, gas stations, you know exactly what it's going to cost because they put it right up there and then you can shop around and get the cheapest gas. If you just pull up into a gas station and you just gave an insurance card,

nobody would care what the gas costs, right? Because it'd be a third party paying it. So we don't have the normal free market incentives. If you look at where there are free market incentives in medicine, look at Lasic surgery, those prices are lower today than they were 10 years ago, 20 years ago. Can we get a chart of that? Yeah, Lasic, look at cosmetic surgery, like breast implants or things that the insurance doesn't cover. They don't go up like the stuff that insurance covers because people shop around and because

the doctors know that people shop around. So they're cost conscious. They know if I charge too much, you're going to go to somebody else. So we need market forces in health care. The way it was before the government got involved in it. And again, housing. Housing is the most unaffordable it's ever been. Yet we have all these government programs supposedly there to make housing affordable.

Yet it's never been less affordable. That's actually a consequence of government policy, which is actually stimulated demand for housing. Not the supply of homes. They stimulate the demand for homes. And they cause price to go up. It's also market cycles, though, too, right? Because obviously when the housing crisis happened, housing prices crashed. And then it took time.

And if people sold at the bottom, they lost a lot of money and things like that. But it recovered. And if you look at housing prices since, I mean, I could say forever, but like since 1940 or whatever, yes, there are drawbacks when the economy has a down swing. But it does even adjusted for inflation go up. No? Well, had the government done the right thing? after creating the housing crisis, had we not had the bailouts and the zero percent interest rates

and the quantitative easing and all that stuff, home prices would have fallen a lot more than they did. And that would have been a good thing. Homes would have become even more affordable. We never allowed home prices to really bottom out because the government came in. But you can see in terms of gold how much cheaper homes are today than they were.

back then, because in terms of real money, prices kept falling. But in terms of paper money, they stopped falling, and now they rose again. And that is the problem. The prices are too high, and people can't afford it. And that's why Trump wants to defend the lower rates so that people can borrow the money. But again, the only reason they can borrow the money, too, is because the government guarantees the mortgage, which the government should not do. They shouldn't do that. Because when the government guarantees the mortgage... They have to print money to pay for it. Right, but also it's not responsible lending because you don't give a damn.

If the government wasn't involved and the banks were just evaluating the creditworthiness of a borrower based on his own ability to pay the loan, not based on the fact that the government's co-signing it, they'd have much higher down payments, and they would not loan nearly as much money. relative to your income, as they do when the government guarantees it. Now, people might think, well, that's going to make it harder for people to buy homes. No, it's going to make it harder for people to sell homes unless they lower their prices, which they will do. See, all of these government programs that are designed to make it easier for people to buy homes,

they actually benefit to people who are selling homes because it allows them to sell their homes at a higher price. I think you might be worried about that. So because it doesn't benefit you if you just have to pay a higher price. I'd rather get a lower price and come up with the down payment and make the payments because I can pay off the loan a lot quicker and own my home instead of renting it from the bank. But also because of all the government subsidies that went into building homes and to encouraging people to buy homes and to buy more expensive homes than they could really afford. We built bigger homes than a lot of people needed.

and we didn't build as much rental housing because we were using the tax code and artificial little interest rates to get people to buy who would have been better off renting. And, you know, a lot of people, they think that, oh, no, but homeownership is key because that's where you get your wealth from being a homeowner. No, it's not. During a bubble, when they inflate this on paper, yes, that's part of the problem. But a house is not an appreciating asset. It is a depreciating asset because you wear it down.

You over time, you know, you have to replace stuff. It depreciates. You don't wear down location, though, for example, if location booms. Yes, the land, the land that the house is built on, that can retain its value. It may even gain in value if the neighborhood becomes more desirable. but it could also lose value if the neighborhood becomes less desirable and people don't want to live there. But the structure that you put on that land. I understand that.

But then you may improve it over time. Yeah, but that costs a lot of money. Of course it does. Yeah. So people think that you make money owning your primary residence. No, you don't. It's a money pit. It costs money to own a home.

Yeah. But a lot of people end up buying them because of the tax breaks or because of the fact that they think the house is going to appreciate. But it's only appreciating. because of the artificially low interest rates and all the government stimulus, most people would be better off renting. You know, you don't become wealthy just by owning a home.

You become wealthy by earning money, starting a business, saving, investing, not by just living in a home. If you can start to accrue some form of like an actual asset rather than paying for something that you don't own over and over again, like there's something to that. If you can do that early

and then take advantage of it and maybe then accrue another hard. asset through that and be able to rent it. Well, people are making money in real estate now. I mean, obviously, if you can buy places and rent them out and get rental income and the rental income covers your debt and your taxes and your maintenance, that's very viable way to accumulate wealth. I'm just talking about where people buy a home and just live in it and they expect to get rich because they live in their home. That's right. And yes, you don't have to pay rent when you live in the home, but you have to pay a mortgage. You have to pay taxes. You have to

pay maintenance. You have to pay insurance. All that stuff can take a lot of money out of your pocket. For a lot of people, especially younger people, renting is cheaper than that. Yeah. And renting also gives you a lot of flexibility that buying doesn't give you. Defe, can you Google, what was the population of New Jersey in 2019 and what is the population now? And the reason I'm saying this is because, as you've pointed out several times in this conversation, the housing prices have continued to go up regardless of other economic constraints. No better example of that than the first five months of COVID when it just went through the fucking roof. And that's when the government's last interest rates to zero and long-term treasury yields went below 1%. And there were people getting mortgages

in the twos. Right. Dave, can you add in 2022 to New Jersey instead of 2019? Sorry. I should that. And you know, what are the reasons? I want to ask you about this, though, Peter, because we can see right here, the population in New Jersey from what was counted in the census actually has increased over the past few years, but not dramatically, whereas housing prices, I don't have the percentage in front of me, but they've increased more dramatically. And my real estate guy, Nico Aronson, was telling me, gave me an example a few weeks ago, he had a day where he put in an offer on behalf of clients across five homes. They were priced between 400, and like 750 grand.

One, the, the only one where he finished in the top five, he finished number four, was where he went, I think it was like 15% over asking price or, no, I'm sorry, he went 40% over asking price. When he went 15% over asking price, he wasn't even in the top 15. And when I keep, I've heard patterns like that before, when I keep hearing that and I see like the population hasn't necessarily boomed here or anything like that, that tells me something's out of whack and that like that air can't stay there. Yeah.

And well, what's going on? There's a lot of factors that are converging that eventually it's going to blow up and the prices are going to come collapsing down. But for now, and this is one of the things that I was forecasting years ago was going to happen. Because the Fed lowered interest rates so much and so many homeowners were able to refinance their mortgages in, you know, in, you know, the threes and the fours. and there's some that are even in the twos, right, where they have like a two and three quarters, you know, 30-year mortgage.

But there are a lot of people that are in the threes and in the fours. They're not going anywhere. They're not leaving. They're homes. It's not because the home is so valuable. It's because the mortgage is so valuable because they have the ability to make these low payments. And when everybody was talking about how great it was that people could get these low mortgages,

I was the only person that was pointing out, yes, it's good for. for the borrower, but it's lousy for the lender. What about the banks or the insurance companies or whoever that's stuck with this paper that's going to have to hold on to it for 30 years and collect three or four percent? How much are they going to lose on that lousy investment? Because inflation is going to be a lot higher than that. And in fact, now mortgage rates are six and a half, moving, you know, probably getting closer to seven now with what's going on with the bond market. But if mortgage rates are 7% now,

but you've got a 3% mortgage, you're not going to sell your house to buy another house. You're not even going to, even if you want to downsize, even if you're older and you need a smaller home, you're not going to, if you have a mortgage, you're not going to sell and have to get into a much higher mortgage.

So the supply of homes that might be on the market a lot of them are not there because the owners don't want to give up their mortgage. Maybe they'll put them on the rental market or something, but they're not selling. Construction is way down because construction costs are way up. Lumber, steel, copper, all these prices have gone way up. And of course, tariffs have made it a lot worse because now you have to pay the tariff on top of that. You don't like the tariffs. No, and I'll get into tariffs in a second.

And labor is getting more expensive, and especially with the crackdown on immigration, because a lot of the people that worked on homes were here illegally. And if you keep a lot of those workers out, one of the things that happens is, well, it's more expensive to build homes if they're not there. And so you're not getting the construction that you might have gotten. So we're not getting new homes built, and we're not getting the existing homes sold. And so that's why the prices are still so high. But eventually they're going to collapse because you're not going to get the buying. And people are going to have to sell their homes. And when they have to sell their homes, you know, the price is going to reflect what somebody can actually afford.

Once a lot of these homes are going to be forced out of the market, which is going to happen. and, you know, I think that you can see 30% or more decline again in home prices nationwide. And, you know, what's going to happen then? I mean, now people are going to lose their home equity. And now you've got defaults. You know, you've got foreclosures. You've got the banks in trouble again. But on tariffs, I don't like, I don't dislike tariffs as a way to raise revenue for the government

because it's better than the income tax. it's better than the payroll tax. It's better than the estate tax. So I would rather have the government pay for the services that it provides through tariffs than through a lot of other taxes. Okay. But the tariffs themselves are just another tax that we're paying on top of all those other taxes. So do I like the government taxing us more when it's already taxing us too much?

No. I want the government to cut spending. That's what they need to take. do. But Trump campaigned as if the tariffs were some kind of windfall where he could tax China. He could tax Canada. He can tax Mexico because that's where we're importing all these products. But no, the taxes are not on the foreign producers. They're on the domestic consumers. American consumers pay those tariffs. They pay it indirectly when they buy the goods. The person who writes the check is the importer. The American importer, if you bring the goods in, you pay the tariffs.

Now, you can do it yourself. You can, you can order something from China and you're going to, you're going to pay the tariff directly because it's going to be, you know, in order to get it, you have to pay the tariffs. It's also to help produce things. He wants to try to get things produced here. But yeah, but the tariffs are not going to work for that. They're not going to protect industries that don't even exist. And, and, you know, the reason we have these huge What do you mean by that? Industries that don't even exist? Well, most of the stuff that we import, we don't make it. Okay.

It's not like, you know, we have a choice. You know, I go into Walmart and there's, you know, I want to buy something and I can buy the one made in China or the one made in America. And I'm buying the one in China because it's a little cheaper. There is not, there is nothing made in America. I mean, I can buy something made in China. I can buy something made in Thailand. I can buy some, yeah, but there's nothing made in America and these products.

So tariffs aren't going to help American businesses. And what they actually do do is hurt a lot of American businesses that have imported components that are now more expensive to import because of these tariffs. So, and if you look at the trade deficits, they're higher. They're going up. They're not going down. None of these tariffs worked in reducing our trade deficits. And the problem is Donald Trump, when he says that the world is screwing us over, the world is taking advantage of us. actually got it backwards. We're taking advantage of the world. We're screwing over the world

because they're sending us a trillion dollars a year worth of stuff that we don't really pay for. We get all these goods that we didn't produce. And all we did is create money out of thin air. What do you mean we didn't pay for it if we paid them to get it? We didn't pay for it with exports. We have a trade deficit. Right. People don't understand, you know, just like a job is not an end in and of itself. It's a means to an end. People get a job in general, not because they want the job because they really enjoy doing the work. They get a job because they want to get paid, because they want to take their paycheck and buy the things that they really enjoy and that they want. Well, when nations are exporting, the purpose of exports is to pay for imports.

Because when you as a nation, and nobody organizes this, this is just how traditional. works, there's something called comparative advantage. Some countries can produce certain things efficiently. And so instead of producing everything, you focus on what you can produce really well, and then you trade. So I, you know, and so let's say I'm a farmer and I, my, my land is, is really good for apples, but not so good for oranges. I don't produce apples and oranges. I just grow apples. And then I trade with an orange farmer who needs some apples.

And now, you know, he gives me oranges. I end up with more oranges than had I grown in myself, right? Because I have land that's, you know. So countries, you produce what you can produce efficiently, and then you export and you import other things. So the purpose of exporting is to pay for your imports and trades your balance. Well, the rest of the world, every country has this huge trade surplus with us because they provide us with all kinds of goods, but we don't provide them with an equal

quantity of goods in exchange. Right. We just give them dollars. And what do they do? They buy our bonds. They buy our stocks. They buy our real estate. You know, we're selling off our assets to consume.

But in the short run, this is a huge subsidy. Because of our trade deficits, our consumer prices are lower, our interest rates are lower, and our asset prices are higher. So the world is actually subsidizing us. not the other way around. But the trade deficits are bad, but they are not the problem. They are the manifestation of the problem. The problem is the U.S. economy is not productive enough because of the artificially low interest rates and lack of savings and a lack of capital investment and excess taxation and excess regulation. We're not as productive an economy as we should be, as we once were.

And so we rely on the productivity of the rest of the world to produce the stuff that we can't. But that's only possible because of the current exchange value of the dollar. How would you, you talk about like needing some sort of crash recession to be able to reset things. How would you reset that problem if given that opportunity? Well, we really need to go cold turkey on government. On government. Yeah, and reembrace free market capitalism. We need to eliminate as much government as we possibly can.

Getting rid of entire government agencies, government departments, we need to free up the markets. And, you know, we need to default, actually. We need to default. On a lot of this debt. Well, we have so much unpayable debt. And can you explain why it's unpaid? Well, it's unpayable because we can't afford to pay it, right? I mean, look how much money we owe. I mean, look at the U.S. government. So the U.S. government now has a debt of almost $40 trillion. Forget about the unfunded liabilities. At 5% interest, that's $2 trillion a year in interest. That's about 40% of what we collect in taxes. And if you look at what we spent on interest in May of this year and annualize it, that's $1.6 trillion. That's more than the entire federal budget was as late as 1997.

And that's how much we're spending just in interest on the debt. And if interest rates went up, let's say interest rates went to 10%, which isn't completely out of the question. I mean, in 1980, interest rates went to 20%. So if they just... That was after stagflation and... Right, and we have, you know, we have as bad inflation, if not worse, now than we had in the 70s.

Really? We just don't measure it the same way. Interesting. Because the CPI that they used in the 1970s is very different than the CPI we used today. How so? They changed the methodology for computing it. So you pretty much have to double the price increases today to get something similar to what we would have got back then. Can we Google what the methodology was for the CPI in the 70s versus today?

I'd love to know like they did. Yeah, well, they rejiggered it in the 90s with the Boskin Commission. They introduced substitution, hedonics, I mean, all kinds of things. Edonics. Yeah, I mean, quality adjustments. I mean, it's all bullshit now. It's all designed to disguise how much prices are actually going up. So that's why inflation feels like a much bigger problem than the CPI.

Because it is. Because the CPI, by design, only reports a fraction of the increase in prices that people are actually experiencing. But what was I? What was I? I just lost my train of thought. We were on the tariffs for. a while and going through comparative advantage. No, no, just before I...

You're talking about the interests on our debt. Yeah, yeah. So if we got to 10%, which is half of what we were in 1980, right? And they should... If we got to 20% then, we should get to 10% now because we were a lot better risk, credit risk, because back in 1980, debt to GDP was about 30%. Now it's over 120%. Debt to GDP was 30%.

in 1980. Right. Now it's over 120. And in 1980, we had a trade surplus. So we weren't dependent on trade. We had trade, you know, we weren't dependent on imports. In 1980, we were still the world's biggest creditor nation. Now we're the world's biggest debtor nation. So a creditor nation means the world owed us money. Right. Now we owe the world money. So we were, we were more creditworthy back in 1980 as a nation. How does that, than we are today? How does that not make the dollar, like, Where is there a scenario where the dollar somehow continues to be the global reserve currency? Well, I don't think it will. I mean, again, the reason that we're able to live beyond our means is because of the dollar status.

Because the world is selling us goods to get our dollars, not to get our stuff. But they only want our dollars because of the dollar's unique role. Right. But once the dollar is no longer the reserve. We're fucked. Exactly. because that's what we're living off of. You take that away.

It's like pulling the rug out from under the whole consumer-based, debt-fueled consumption economy because now we're just another country. And people aren't going to sell us products unless we have products to export. But we don't make the products anymore. You know, we destroyed all of those industries.

We destroyed the factories and the supply chains and the infrastructure. We taxed it and regulated it out of existence. So it's not huge. anymore. But the point I'm making on interest rates go to 10%. Let's say there are 10% in three years. And let's say in three years, the national debt is 50 trillion. What's 10% of 50 trillion? Five trillion dollars. The government won't even collect five trillion a year in taxes if interest rates are 10%. They barely collect five trillion in taxes now. But can you imagine what the economy

would be like if interest rates got to 10%? I mean, everything would be crashing. I mean, companies would be failing. I mean, all these companies that are existing based on leverage and debt, imagine where the yield on corporate bonds. If we have 10-year, 10% on a treasury, imagine what corporate borrowing is. Imagine where mortgages are going to be. And people say, well, well, race will never get to 10%. Well, what's going to stop it? They got to 20% before. The only thing that would stop it would be the government just buying up all the bonds. but then we have something worse. We just have hyperinflation.

We have runaway inflation because the government is printing so much money to stop interest rates from rising. But if inflation, you know, let's say inflation right now is, you know, four or five percent, you know, something like that. But if inflation goes up to 10, 11, 12 percent,

no one's going to loan money for five percent. I mean, people don't loan money to lose money. Right. Right. You're hoping to make money. make money on your loan. And that's assuming that the guy that you loaned the money to pays you back, right? Because they might not. But under ideal circumstances, you get paid back. You're going to lose money unless the interest rate is high enough to compensate you for what you lose to inflation.

Because not only does you lose on your interest payment, your coupon, but the principle, if I loan you money today and you don't pay me back for 10 years, you know, what's that money worth in 10 years? And if it's going to be worth less than it was when I loaned to you, I got to charge you enough in interest to compensate me for that loss. But if I can't do that because the government, you know, the government is trying to artificially suppress rates, you know, print, then the government's going to be buying all the bonds.

Nobody's going to loan money if they know they're going to lose. And once the dollar really starts to fall, there's no more foreign demand for our debt, because people are going to lose it in the foreign exchange. If the dollar is going to fall, if I'm in Europe and I'm going to take my euros and convert them to dollars and buy treasuries, but if the dollar is going to lose 20 or 30 percent of its value against the euro, why am I going to buy those treasuries? I mean, I'm going to lose 20 to 30 percent just on the effects. I have to have really, really high interest rates, but we can't afford to pay the high

interest rates because we have so much debt. And the bigger problem is, in 1980, when interest rates went to 20%, it didn't affect the entirety of the national debt because most of that debt was long term, didn't mature for 10 years, 20 years, or more. So the 20% interest impacted the new debt, the new borrowing. And the government could still sell longer-term treasuries. maybe 13%, 14%, but the short-term stuff was like 20. So they could still sell, you know, finance with longer bonds. But today, about a third of the $40 trillion national debt matures within a year of now.

Yes. So we have to pay like 13, fucking $14 trillion next year. No, no, no. Well, the interest on the national debt is now. Now, if you average it, it's, you know, 1.3, 1.4 or what, no, it was 1.6 in May. So, yeah, it's getting closer to $2 trillion a year if you annualize it, although some of that interest the government pays to itself because it counts the interest that it pays to Social Security and stuff like that.

But if interest rates for 10 percent and $10 trillion worth of debt, matures, and now we have to re-borrow it, we have to pay 10% on that entire $10 trillion. Plus, we have to pay it on the new money that we're borrowing. But they continue to shorten the maturity of the national debt. It gets shorter every month because the government, when these bonds are maturing, they keep issuing shorter term because that makes the interest expense less because a 30-year treasury is almost five. 5.2%, whereas if they borrow for six months, they can pay 4%. Now, you might think, well, gee,

that's stupid. Why don't they just lock in the 5.2? They don't want to do that. It's like we have an adjustable rate mortgage instead of a fixed rate mortgage. You save a little money, but you take a lot more risk. So we're in a very vulnerable situation. If the Fed really has to jack up short-term interest rates to rein in inflation, we're screwed because that really increases the cost of constantly having to refund the debt. But of course, you know, I mentioned earlier, that's why the whole thing is a Ponzi scheme, because we can't, we can't repay that debt, right? So let's say $10 trillion of debt matures in the next year, plus we have two or three

trillion dollar deficit. So we have to, the government has to borrow $13 trillion. How, where's it, or has to repay $13 trillion? Where's the government going to get that money? They're going to bur, bur, bur, bur, print some money. No, but what happens right now is they just re-borrow it. Every time a bond matures, we just issue a new one to pay for it. We don't actually retire the debt.

We just take on more debt. It'd be like when you get your credit card bill, and instead of paying off your visa, you just put the whole thing on a master card. And then when you get that bill, you put it on another master card, or you throw it on the discovery card. But you never actually write a check. You just keep borrowing more money. to pay back what you've already borrowed.

But and the interest, the interest on the national debt, where do we get that money? We borrow that. And so the whole thing is just a big, you know, big posy because we can't, we couldn't possibly pay the money back without just printing it. People can say, well, sure, we can pay it back. We just crank up the printing prices, which we could do, but that destroys the value, not just of that money, but everybody's money, right? even if you didn't, you're not part of this process, you don't own any treasuries.

But if the government has to create all this inflation to redeem them, you know, you got cash in the bank, you know, that gets wiped out, right? You have cash value in an insurance policy. That gets wiped out. I mean, your savings get destroyed if the government has to inflate because it doesn't have the money to pay. Right. You had said earlier when we kind of started this whole loop, maybe an hour ago now,

where you talked about how it was socialism infecting capitalism to funnel it through the government that created the problems with capitalism now. And I keep thinking about that with everything you're saying. And I think the other side of the argument would be there that the winners of capitalism, because again, like I think capitalism is the best system. I think it is flawed, though, like every system. But the winners of capitalism are the people who generationally, have been able to pay the people in government to get into government and then use that favor to curry what they want to be able to get programs paid back out to them that then they're okay not left hold in the bag. I mean, I can look at Obama's city banker cabinet after the fucking

financial crisis in 2009. Like they were doing okay, those guys. And the little man loses everything on the end. So they say to themselves, okay, maybe if you want to play with what the end policies looked like there were some socialist themes or whatever, but the people who were permitted to create those themes were people who were allowed to win a game of capitalism that everyone else views is rigged. Well, first of all, under capitalism, everybody wins. Now, there are some people who win more, right? Some people are going to achieve incredible wealth under capitalism. But how does everybody win? Because everybody's lives are better off. Under socialism, everybody is poor. The only people who aren't poor are the government, right? Because they extract wealth from society. But you don't just

end up redistributing wealth. You end up redistributing poverty. Under capitalism, everybody is better off. Now, there are going to be some people under capitalism who achieve a lot more wealth than other people. But the people who actually benefit the most are not necessarily the people who get the richest. Because on a pure numbers basis, the middle class collectively enjoys much more benefits from capitalism than the 1% or the 1% of the 1%. Yes, individually, because their lives, the entire middle class was created by capitalism, because capitalism is what created the productivity, which allowed average people to have such a high standard of living, to have all the goods and services that capitalism provides.

Hold on one sec. I'm not disagreeing with all that because I think I think there's an argument there. But you can also say that like the rise of the American middle class and this is oversimplifying it really happened in the post-World War two years between then and say 1980. There was also. It started way earlier than that. It started. Yeah, yeah. But I'm saying like there was a real boom with it, no pun intended post-World War II where you had the house and the white picket fence in suburbia and you could, you know, apply and go to college. You already laid out how that system got fucked.

but like at the time there was also way higher income tax and things like that. I forget what it was under Eisenhower, but it was like... Yeah, the income tax was higher by then, and that's when America's decline really started. We kind of peaked out around the 1950s, and it's really been downhill ever since. And it's because of the growth of government. But just getting back to the idea that everybody wins in capitalism. Because as I said, the way you... accumulate wealth in capitalism is by enriching your customers, by convincing people to buy

your products or your services. And they're not going to do that unless you're giving them a better deal than a competitor. And they have to be better off. And you're also, you know, providing employment opportunities to people who really don't have what it takes to start their own business. You're giving them a way out of having to do that. You're giving them a job. You're creating employment. So capitalism, you just have a bunch of winners. And you can say, well, some people win more, yes, because they put in more. They contribute more. And so they're entitled to more. But collectively, you know, I'd say, if you look at a guy like, let's say Apple, right, let's say, jobs, you know, creates this company and becomes very rich. I would say that the customer,

Collectively have had their lives improved more than jobs individually. Because, you know, they have a phone that, you know, they just can't live without, and they use for so many things. And if you add up the net enjoyment, like if you said to a lot of the people that own an Apple, hey, how much would I have to give you for you to just never have another Apple phone again? Like, you know, would you take $500, you take $1,000? How much do you value that phone? And if you added all that up, I'd say that,

there's collectively more gain for the customers than just the job individually. But yes, he made a lot of money, you know, because he came up with a product that people really like and made their lives better and they were willing to buy it. But what happens is when you have government, right, businesses, they don't like competition, right? Because it's shit. I'm always having to improve. I'm having to watch everything that's going on.

It's a tough. It's doggy dog. You know, if I don't cut prices, I'm going to lose market share to somebody else. Right. So capitalism keeps entrepreneurs and businessmen on their toes. It forces them to constantly reinvent themselves, improve their products, lower their prices. And a lot of times, the entrepreneur would. rather not have to do that. And so what does he do? He goes to government and says, hey, you know,

can you help me? And the government will now create regulations or taxes that will stifle competition to make it easier for that business, man, not to have to work so hard to be so good. And so the problem is the government coming in. So yes, the government has come in and help people, help businesses, and that's wrong, and that's not capitalism. Under capitalism, you know, all those businesses have to fend for themselves. They can't rely on government to protect them. But governments erect all sorts of barriers to entry to limit competition, to make it easier for businesses not to have to be as responsive to their customers. And to the extent that you can extract a lot of rent from government, right? Then you're no longer

being rewarded based on your productivity. You're just being rewarded because of your connections to government. Because in capitalism, I make money because I earn it. But if the government gives me my money, I didn't necessarily earn that. And where did the government get the money? The government takes it. You know, a lot of people, they don't trust the capitalist. They don't trust a businessman, but somehow they trust government. But a businessman can't take anything from you. He has to earn whatever he gets from you. You have a choice when it comes to patronizing a business. I can buy these products or I can, I don't know, I take my business someplace else.

The customer is always right in capitalism. But under government, government extracts money from you by force. It just takes your money, whether you want to take it or not. You have no say in the matter. That is the type of power that you should be worried about. That's abusive. Yes. So you're getting also to like an age old question that's one I play with a lot because it's like the buck always has to stop somewhere in any system, right?

And if you want this isn't a perfect way to put it, but if you wanted to look at the scale, the scale could be everything from government to corporations. And it's a weird boomerang because the corporations are people who pay the government to curry favor to get what they want. But if the buck totally starts with the government, then they're like kind of more serving them, but it's still kind of the same self-serving circle. where people would argue with the semantics of what you're saying is that it depends on the product. And I'll explain what I mean by that. If I go, actually, this is even going to make my point for me because it oversimplifies it. If I go and buy an apple from the store, let's pretend there's no glyphosate on it or things like that. Just pretend. You're talking about the fruit, not the phone. Yeah, yeah, yeah, not the phone. I'm talking about the fruit. Like, it's an easier decision than

when I go to my doctor and he tells me I have a problem. And through that trusting relationship of someone who knows a lot more than me, he then says I should take this medicine that he was unbeknownst to me, sold through some fucking pharmaceutical salesman from a company that hid shit in this drug, but they're not telling people about. And then a bunch of people like me get cancer five years later because I took it. Meaning, there's different levels of knowledge for consumer decisions. And so when people see the capitalism, with help from the government, by the way, in a lot of cases, has taken advantage of them from a product standpoint, which, let's just bring it back around. That includes the very fruit we eat and the shit that we didn't know

they were putting on it for years. They go, well, wait a minute. If we left the big businesses to them, to their own devices to be able to do things to cut corners that then cause us to get sick or cause us to have problems that we didn't know about, then how much choice did we really have to actually, you know, get a benefit? Again, when you're talking about, you know, a lot of this stuff, I mean, I mean, the government has so many regulations now when it comes to food through the FDA and stuff like that, that all that does is drive up prices and diminish, diminish your choices. But if you're talking about

how complicated things are with health care, look, when my father was growing up, whenever somebody in the house got sick, they called the doctor and he showed up. He just came in the house. They were poor, right? There was no Medicare. There was no Medicaid. There was no government help. Yet poor people could pick up the phone when somebody got sick. And a doctor showed up at their house with his bag, right, and examined you and helped you. It wasn't expensive. Right.

Now, yes, we have medicines today that didn't exist back then, but that's capitalism that did that. Can you imagine how inexpensive health care would be if the government never got involved in it? In fact, my father had an insurance industry business, and he sold medical insurance back in the 16th. And he's, I think he, I forget the exact numbers, but his most popular policy was this major medical policy.

And the premium was like $5 a month, right? Major medical, because that's all people bought. You didn't, you didn't have health insurance because you sprained your ankle or because, you know, you got, you got a cold or you had, you had, you had, going through childbirth. I mean, you just paid for that stuff. But it was affordable. Yes. Because the government wasn't involved.

But he said that there was a maximum on the policy. Like the most it would pay out was like $5,000, right? And that was supposed to cover like, you know, if you're, you know, you got in a car accident, you know, you broke a couple, you know, or you got cancer or whatever. You got something really bad happen. But he said that he never remembers a situation in all of his time selling that policy where anybody ever had medical bill that got to $5,000. Like the worst thing that had, it.

could even get to that high back back then in the 60s. Obviously, there's been inflation. Sure, sure. But today, I mean, you can spend $20,000, $40,000 like nothing in a hot, you know, going to the doctor. Shoulder surgery, was that? Yeah. How much was it?

Do you know? It was like 25, something like that. But was that, the insurance pay for it? Insurance paid for a lot of it. Yeah, I had a deductible. So I paid at the time I want to say $2,500 out of pocket and then insurance paid for it. Yeah, yeah. But all of this stuff, people paid for by themselves. And doctors, you know, doctors did a lot of pro bono work, you know, just like, you know, like lawyers. I mean, doctors worked for free a lot. For people, if people were poor, they just, you know, they would, they don't even do that anymore. It's kind of anti-capitalist, right? No, because, well, doctors like, look, they take, you know, they want to help people. And people don't have money, they'll, they'll, they'll, they'll, But they didn't pay any income taxes back then.

So if doctors don't have to pay any income taxes, they don't have to pay any, you know. And now, you know, doctors spend so much money just dealing with insurance. All the paperwork and all the forms that are required, everybody coming in, nobody has, you know, no one actually pays. Everybody has, the insurance companies have to be built. There's such a huge bureaucracy now built in around any kind of doctor's office. None of that stuff existed back then. You just paid cash, you know. and you had free market forces.

So the government has driven up the complexity of health care. And that's why it's a lot different. And people say, well, maybe the public, it's how do you know who, you know, like banking, like it's a good example, right? The government guarantees all the bank accounts now. Well, before the 1930s, no banks were guaranteed by anybody. Right. So you put your money in a bank. If the bank failed, you know, your SOL, right? I mean, now the government guarantees every bank account. But because of that, the banking system is

completely insolvent today. I mean, the only reason that the banks aren't all failing is because the government is backing them all up. Because the government created a moral hazard in banking in that when you put your money in a bank, you don't really. the financial statements. You don't do any research to find out, is this bank safe? You don't give it down. Because it doesn't matter which bank you put your money in. If it's FDI insured, FDIC insured, and the banks know this. The banks know that the customers don't give a shit. So they could take whatever risk they want because nobody cares. But before we had the FDIC, the banks cared.

They competed based on soundness. And even somebody might say, well, how am I supposed to know as an average person? Well, you know, they have rating agencies that would look at the banks. And you could see where the wealthier people are depositing their money figure, okay, they know what they're doing, right? They got a bunch of money. I mean, the banks were competing for reputation. And part of that reputation was how sound they were.

And in fact, during the 1930s, during the Great Depression, I forget what the percentage was, maybe a third of the banks failed, which is a lot of banks, right? But two-thirds of them didn't fail at all, right? And they didn't need the government bailout? No, there were no bailouts. Yeah. But the banks had failed. They didn't lose everything, right? They didn't lose 100% of their money.

So I think that during the entirety of the 1930s, something like 2 to 3% of the deposits were lost. That's it. Now, if you are one of the people who lost half of your money or maybe all your money, right, that was bad for you. But overall, the banking system withstood the depression, actually very, very well. And if you figure that prices went down about 30% during the depression, right? So the cost of living went way down. Bank deposits actually gained value during the depression because only a small percentage of the deposits were lost due to bank failures. But the deposits that were lost, gained in value. Everything got cheaper. Stocks went down, real estate went down, food prices went down. So people who had bank accounts were better off during the Depression. Their bank accounts

gained in value with no government insurance whatsoever. There were a lot of people that fucking lost their ass, though. Well, more people are losing their ass now to inflation. The inflation is destroying a greater percent. But they have a, here's one difference, though. I'm not disagreeing with you that people are losing to an invisible tax horribly and it's caused enormous problems half of americans don't have five hundred dollars in savings i i agree with you but like there's these levels of comfort that we at least have a basic level of now that didn't exist back then if you look at the famous pictures of central park during the great depression it's a fucking it looks like a western movie with nothing there now you at least have a roof they have a

fucking iPhone, they have Netflix, and like they live. The things that we have now that we didn't have then, that's from the capitalism that we still have in this system. I mean, we, we didn't go to a complete, I thought you were going with that. No, but we didn't go to a complete totalitarian communist country. We still have capitalism, just not as much as we had in, you know, the 19th century or the early 20th century. But we have the collective. benefits of the capitalism of the past, right? We're constantly learning more, improving. We have more knowledge. We have better technology. So yes, we have things that we didn't have back then, but we would have a lot more had we maintained the same level of government that we had.

Like if you go back to the 1940s, 1950s by then, right, if a guy, you know, even even didn't even graduate high school. But let's say a guy with a high school degree could support a family of four kids and a wife who didn't have a job and support them without going into debt, could get a house and pay all the expenses, get a car, you know, support the entire family on one paycheck without even having a college degree. Now, of course, you have two people working sometimes multiple jobs, can barely make. make ends meet are loaded up with debt.

That's right. That's because the family is paying for this massive bureaucracy, this huge government that families didn't have to support back then and say they don't have to pay all these taxes. We had a more productive economy. We had more factories. We produced more stuff because we had legitimate savings. We wouldn't have this huge bubble economy that's been created. But had we maintained the same limited government,

throughout the 20th century and into the 21st century that we had in the 19th century, my guess would be that today, you know, you'd still have one person working and probably the work week would be down to two or three days. We'd probably have five-day weekends by now. We'd probably, it'd be flipped, right? And we'd have so much more stuff than we have now.

We'd have a much higher standard of living because we would have invented a lot more. We would have produced a lot more. We would have achieved a lot more if it wasn't for the government. I mean, think about all the diseases that we might have cured. I mean, we've made so much advancements. But what if the FDA wasn't there making it so expensive to develop drugs? I laugh because the FDA also like is such a joke with what they decide to be strict on

and what they don't decide to be strict on. Yeah, I mean, you know, well, the FDA didn't even exist. I forget until the early 1900s. I forget when it was started. But it wasn't until the early 1970s, I think, that you had to prove that a drug worked to get it approved. Because initially, the way it worked initially, when the FDA was first established,

they could only, they could go after companies if it turned out that their drugs were harmful. But anybody had the right to put a drug on the market. The government didn't have to approve it. If you wanted to put something on the market, You did it. Right. And then at some point later on, the FDA required drug manufacturers to prove that their drugs

weren't harmful before they would get approved. You didn't have to prove it worked. You didn't have to prove efficacy. You just had to prove that it wasn't going to hurt you. And as long as it wasn't going to hurt you, you can sell anything that people wanted to buy. And then in the 1970s, they said, okay, no, now not only do you have to prove that the drug doesn't harm you, you actually have to prove that it works. You have to prove efficacy.

You don't like that. You don't like that they have to prove that. Well, because that cost a fortune to prove that. And because drug companies have to spend so much money convincing the government that the drug works, the drugs cost a lot more money and a lot fewer drugs actually get onto the market. Well, also, even with that system, Peter, we were able to see corruption happen to where drugs like what Purdue Pharma was able to flood the market with for so many years fucked over and killed millions of Americans. Yeah, look, I would rather have drug companies putting drugs just create drugs that you think

work and let doctors decide, you know, let free markets fail at that so much. We would have far more drugs. It costs, and, you know, so you don't think doctors would have an exponential. crisis of prescribing drugs like, say, SSRIs or pain killers or some other controlled substances that we've seen just explode over the past two, three decades in that scenario? I think more choice is better. And I trust my own doctor more than I trust some bureaucrat to try to tell me what drugs I can and can't take. You know, you should have a right to use whatever you want to use. But the thing is that, because...

It costs it's so expensive to do these random double-blind tests in order to prove to the government that some drug works. And I don't know what is, 90% of the drugs probably fail the tests, and they never make it to market. But by the time a drug company gets a drug approved to sell, not only do the drug companies have to recover all the money they invested in getting this drug approved, they have to recoup all the money they wasted on drugs that never got approved. So it is so expensive.

We've made it, you know, much more expensive than it needs to be to innovate. And especially, like, if you want to try to cure a disease that's small, that maybe a lot of people don't suffer from it. I mean, how are you ever going to make your money back on that? I mean, we make it so difficult to do that. There's an argument there. There's an argument. I would agree on the nondescript ones.

There's an argument. And, look, you know, and people think, oh, we need the government to protect us from bad drugs. Why? I mean, the government doesn't protect us from anything. I mean, the free market is what protects you, because people compete for reputation. People care. People don't, you know, people just don't want, like, you know, do airlines want their planes to crash? All right. You know, no, but it's bad for business when you're plane crashes, right? People aren't going to want to fly on your airline if your planes keep crashing. So you have an incentive, right, to make sure they're safe. But if, if big pharma companies can basically, can hide behind the free market and then pay off the government to not get involved in that scenario. The government, if they're paying off the government, you're not in a free market. Okay. Because the government, the government is now corrupting up the process where the government, and that's what happens.

Whenever you have. But if you leave it completely to the free market to do that, you could quietly through complication and noise, fuck over people into perpetuity and then use your economy of scale and brand power to silence the. people who would be pointing that out. No, it's the free, you can't fuck people over in perpetuity in a free market because they figure it out. Look, we talked about Ponzi schemes, right? The first guy to run a Ponzi scheme was Ponzi, right? So Ponzi's Ponzi scheme didn't even last a year. Now, there was no SEC, there was no FINRA, right? I've operated, you know, broker dealer,

and I have an asset management company that are regularly. Did you have a bank, too? Yeah, I had a bank. We'll talk, let's talk about that. Yeah, I want, yeah. I'm going to tell you about that a minute. But anyway, so Ponzi came up with this, you know, scheme to trade postal coupons where he convinced people that he could make them rich by trading postal coupons. He wasn't actually trading anything. He was just using the money from new investors to pay out the returns to old investors, right?

That's a Ponzi. This is Steve's great-great-grandfather, by the way. But the whole thing blew up in less than a year because, you know, newsmen newspapers reported and, you know, he, some dirt came out on his, you know, past that Ponzi was involved in this. And so the free market destroyed Ponzi before too many people were able to get into the scam. If his name had been Winthrop, though, you think they would have destroyed him? I think it was anti-Italian defamation.

Bernie Madoff, right? Bernie Madoff ran a much bigger Ponzi scheme than Ponzi. and he did it with the SEC and FINRA because the governments basically gave him their good housekeeping seal of approval. He was basically paying off the politicians. Right. And they were legitimizing his Ponzi. And so it didn't fall apart because the government protected him for so long. But when you outsource your due diligence to the government, you don't get due.

good due diligence. Government is susceptible to bribes. But in a free market, you know, the market will ferret it out. I mean, yes, you're going to have crooks. You're going to have, you know, people who, you know, who are dishonest. But they're not going to go very far in the free market. There's a limit to how big you can get if you're ripping off your customers because you're not going to survive, your reputation. But if you really want to succeed and grow your business, you need to preserve your customers. You need to do a good job. You need to have a good reputation. You need to have goodwill.

And goodwill has a lot of value in the free market. And so in order to preserve your goodwill, you're going to treat your customers well so that you get more. In your argument, let me use my example to see if I'm understanding you correctly. you think that if we had had a perfectly free market in 2000 pre the opioid crisis, because the Sacklers then and Purdue Pharma would not have been able to curry favor and pay off the right politicians and corrupt the process at the FDA, which then gave the stamp of approval on these drugs, you believe that the free markets, which includes some of the very doctors who would end up under that system prescribing this drug incorrectly, would have given the doctors more clarity to be like,

wait, let me look at this more before I actually prescribe it and realize that it was causing more harm to their patients, their customers, and stop it from happening in the first place. Yeah, I think whenever you have more individual liberty and freedom of choice and competition, you're going to have a better outcome. Okay. You know, and it's not going to be corruptible because it's based on voluntary exchange and free markets and reputation. Whenever you have government coming in with arbitrary force.

And, you know, the politicians, they don't care. If I'm working for government, again, I don't, I, the customer, you know, look at, look at the post office, right? You think the postal workers really give a damn about customer service? They don't care. They don't care if you come back. I know some good post office, for sure. You're going, you're stuck.

And they're not going to get fired if they don't do a good job. I mean, there's no, there's no reason to try to, you know, work extra hard or, you know, they'll, you know, if you get to the post office at 501, they're shutting the door on your face. They're like, they don't give a shit. They're not going to like, oh, let me, you know, because it's a bureaucracy, right? There's no positive feedback to them. They don't make any more money if they do a better job. And the post office doesn't care if they, if they lose your business. So you want to privatize the post office? Well, of course. In fact, that's one of the few things that the government does that's actually constitutional.

But we don't need a post office. And by the way, have you seen the price of a stamp now compared to what it used to be? But you're never going to get quality from the government because you don't have the free market-based incentives that you have in the private system. But since you asked me about the bank, I can tell you. Can I just go to the bathroom and then we'll talk all about that? That cool? Sure. All right.

We'll be right back. All right, we're back. So you had a bank in Puerto Rico and it blew up. What happened? Well, the bank didn't blow up. The government blew it up. The government blew up. And this is an example of how bad government is, how corrupt.

The Puerto Rican government? Well, our government too. Look, the most corrupt people are in government. The greediest people. I don't disagree with that. People think that greed, oh, capitalists are greedy. Sure. But so are everybody is greedy.

Everybody wants more. But at least the capitalist has to earn my money. When there's a greedy politician, he could take my money. Right. And so some of the greediest people work for government. They just steal the money instead of earning it honestly. But anyway, so I had this bank in Puerto Rico. You just started a bank.

Started a bank. I didn't start it in Puerto Rico. It was in St. Vincent's and the Grenadines. And where? It's an island of the Caribbean, right? Yeah, you got to watch. islands of the Caribbean these days. I'm just saying. Look, it was an offshore bank. Okay. And the reason I set up an offshore bank is because there was a lot less regulation. So it didn't cost me as much

to do it. Okay. And I didn't have American customers at the time because there were so much regulation if I took American customers that I decided to have a bank that didn't even accept Americans. And I was doing this to just have lower costs of my business, right? Not because I wanted to cater to criminals. I just wanted to have lower cost business, right? And so I didn't want all those rules and regulations so I could, you know, charge lower prices and run the kind of bank that I wanted to run, which was 100% reserve bank. I didn't make any loans. So every penny and deposits was there. So you did not make loans to the Russian mafia? Didn't make loans to anybody. Okay. And, and so we didn't have any government insurance. But we also provided, you know, gold accounts. We had accounts.

and gold and silver. We allowed our customers to open up investment accounts. But we didn't make loans. We didn't lever up. And we made money based on fees only. And because I was charging fees, I had to keep my costs down. And so we wanted lower regulation. Anyway, but I was also an outspoken critic.

I was critical of the income tax, which I don't like. I was critical of a lot of the banking regulations, especially the ones that came in after 9-11 with the Patriot Act, very onerous regulations. That's true. Where, you know, opening up a bank account now, it's, you know, it's like, you know, you're getting an exam. You know, you've got to tell them all this information about yourself. And, you know, we were, you know, I was monitoring every transaction.

And by the time my bank was shut down, I had 65 employees, about 30 of them, 35 of them, were in compliance. And it took somebody to open up an account of my bank. It took three or four weeks because there were so much compliance before we would approve you. We turned down about three quarters of the applicants because of some red flag. And every time somebody wanted to send any money anywhere, we were like, okay, well, who you're paying? Why? Where did you get the money?

Send me the invoice. I mean, there were so many questions. You know, once upon a time, we had privacy, right? It was none of your business. I mean, where are my money going, you know? But, you know, so I'm critical of these laws because I think they're a violation of individual liberty and I think the government is too intrusive. And, of course, it cost me a fortune to comply with these.

They didn't like that. Right. So anyway, so I'm a critic. But I'm abiding by all the rules and regulations. I'm not dumb enough to criticize regulations and then break them, right? Anyway, so at some point, the government in Australia or the Netherlands or whatever, they became suspicious that, hey, maybe people were using my bank to evade taxes and launder money, right? Because I'm such a big government critic.

So, and I guess, you could kind of see why I might say that, right? Maybe, look, as I said, I'm not dumb enough if I was really going to be breaking. If I was really going to be using my bank to help criminals launder money, I would want to be under the radar. Right. I would want to, like, be a low profile. You would do it the right way. But anyway, so they got the IRS to open up a criminal grand jury to investigate my bank in Sacramento, California. Even though my bank's in Puerto Rico, I have no nexus to California.

I don't know why they chose Sacramento, California. But the IRS opens up a criminal grand jury investigation. This is January of 2020. So it's over six years ago. They started this investigation. So maybe about seven, eight months into the investigation, they're pretty much finding that we've done nothing wrong. Like, holy shit.

Like, this bank is really extra compliant. I mean, we went- So you were in communication with them and they're telling you that. Yeah. Well, I have a lawyer. I hired a Sacramento lawyer to deal with the IRS. I mean, they came to my house, like on January 16th in Puerto Rico, they gave me a subpoena.

They said, you know, we're in debt. investigating these customers. And I asked them initially, are you investigating the bank? And they said, no, we're not. We're investigating your customers because we think some customers are using this bank for, and I said, oh, okay. But they wouldn't tell me which customers. But we ended up giving them information on like 2,000 customers.

It cost me almost a million dollars just to comply with the subpoena, right, to give them all the information that they wanted. And hundreds of thousands of documents. We were spending so much time, you know, complying with the subpoenas, giving the government all the information they were asking for. But anyway, so they find nothing. So what happened is at some point, and I don't know all, because I've been putting these Freedom of Information Act requests, and I have all this stuff on a website. People can go to my website, ninefraud.com, and they can read a lot of the evidence. But anyway, and nine, nine is the name of the network in Australia that initially framed me.

So anyway, so the government, probably in Australia, the Australian tax office, the ATO, leaks, leaks information to these journalists that they're investigating my bank, which is supposed to be confidential. You're not supposed to leak the target of a grand jury investigation. Because what if you don't end up finding that they did anything wrong? You don't want to, you know, if I'm going to investigate you for child molestation, I'm not going to say, hey, I'm not going to announce that I'm investigating you. I'm only going to announce it if I find evidence to charge you. That's right. I don't want to taint your reputation unfairly. That's the whole point of a confidential grand jury. You don't want to embarrass or ruin somebody's reputation because you have a hunch that maybe they did something wrong. Because there's always going to be, you know, where there's smoke, there's fire. People are going to, you know, be suspicious. So, They investigated me for committing these crimes that they found no evidence that I committed. So they should have just kept their mouth shut.

But they leaked that I was the target. So they get this information. The Australian journalist contacts me. And he's writing a story about my bank being investigated for tax of Asia mail. But he doesn't tell me that. So they called me up and they want to interview me like you are. And they said, hey, we want to talk to you about inflation, about gold, about the economy. So they show up at my house in Connecticut to interview me in what I think is, you know, this type interview.

And they ambush me about the bank. And they say, hey, your bank is a target of this investigation. And, you know, you're helping these criminals, you know, laundering money and evade taxes. And I'm like, no, I'm not. This is all, you know, bullshit. And they end up, it ends up on 60 minutes Australia. And it's this giant, you know, it's like, you know, America's most wanted. Like, you know, they. They got me. I'm the mastermind behind. They say I'm helping the mafia, you know, the mob, launder money and evade taxes. They say I'm helping hundreds of Australians evade their taxes. And then the New York Times does a article too. And so all these, this bad publicity basically destroys my bank. Two thirds of my customers pulled out their money.

Everybody I'm working with, you know, I had a deal with American Express to issue their cards. They canceled a deal. A lot of these other, my correspondent banks, you know, won't do business. because now, you know, I've been branded as this mob bank, and I'm like, you know, doing all of it is a lie. So I sue the, I sue the journalists and 60, you know, 60 Minutes Australia for defamation. It takes me two years to win that lawsuit, right? In Australia, you won the lawsuit?

Because they had no evidence that I did anything wrong. In fact, during the trial, we asked them, okay, you said that hundreds of Australians use my bank to evade me. taxes. Can you identify them? Identify one. Yeah. Just identify one. They couldn't identify even one. But they had, in fact, all the evidence that they had, and I put all this on the nine fraud, because I got it in discovery. All the evidence they had exonerated my bank. Everyone they talked to told them how strict our compliance was, yet they lied about all that. They falsified their own findings. So it was a complete fraud. But before I won the defamation lawsuit, the government came and shut down my bank.

And I was... The Puerto Rican government? Yeah, the Puerto Rican government. Shut down my bank. And the day they shut it down, they held this big press conference where the head of the criminal investigation, this guy, Jim Lee, who was the head of criminal investigation of the IRS, and, you know, came there and it was a press conference to announce that they were shutting down my bank without, you know, nobody knew that it was happened.

It happened like, you know, out of the blue. and there was a big press conference and they said, we're shutting this bank down. You know, we started the investigation, you know, two years ago, two and a half years ago. And we believe this bank was helping criminals launder money and evade taxes and helping people, you know, use, you know, using numbered accounts, all this bullshit. And they shut down the bank and seized it. They threw it into a receivership where it's been for over four years. A receivership? Yeah, like in bankruptcy.

And, you know, now only a handful of customers have gotten any money. Most people, you know, haven't seen a dime in four years of the money that was in my bank, which they could have got. But what people should get very upset about is that governments can do this, that they can use their power to obstruct justice. They can abuse their power. They can just destroy property without any due process. All in a lie. I mean, there are so many IRS agents. I made a small little video that I put up on, it's like a 15-minute video that's on that nine fraud, like framed that's up on YouTube. But at the end of it, I show all these IRS agents that were involved in this conspiracy to destroy my bank. And, you know, half of them still work at the IRS. I mean, others have gone on to, you know, private sector jobs where they leverage, you know, their relationships, you know, because a lot of people in government. Yeah, it's a revolving tour.

They sell their influence. 100%. And that is the problem. The problem is not that the private sector buys the influence, but that the government has the influence to sell in the first place. But people should be upset that these government officials just completely lied and framed an innocent business, me, for committing crimes that they investigated me for years and could find no evidence were committed.

I mean, obviously, if they could have found that they could have found that they were the bank did anything to facilitate tax evasion or money laundering, they would have filed charges. That was the whole purpose of the grand jury. It was a criminal grand jury that ended up closing without a single indictment. What does that tell you? They couldn't find, but now they're all celebrating the fact that they're shutting down a bank for tax evasion and money laundering when they didn't find any evidence that it was ever committed. And it's not hard to get a colonel of something just to be able to get an indictment

from a grand jury. Yeah, I mean, there's an old saying that you can indict a ham sandwich. Well, they could not indict anybody. Right. That's how good my compliance was. I mean, yes, I didn't like these laws, but I complied with them. Right. Yeah. And I probably went above and beyond because I knew that I might be under a microscope because of my public criticism of government and government regulations, I knew that I had to dot every eye twice and double cross every T because I wanted to make sure that if I was ever investigated. And in fact, when the investigation happened, I was not only wasn't I worried about it, I was actually, no, this is going to be good. Because.

This is going to be good. Yeah, because they're going to know that we've done nothing wrong and they'll leave us alone, right? Yeah. But they weren't satisfied with that. They had to salvage. They had a save face. Because the problem was when the news reports came out of the investigation, the stakes were now a lot higher because now everybody knew, oh, you know, we've got, we're doing this big investigation. We've got this bank that we think is doing all this bad stuff and we've invested so much time and so much money. Coming up empty was a political embarrassment. That's right. And so they had to manufacture a fake success. And so they did it. But this is criminal. activity that these IRS agents, you know, committed and these ATO agents and in the UK that they did. And the public should be outraged. This is exactly why we have freedom of the press to report about this stuff. Yet nobody will report about it. I can talk about it on a podcast.

Right. You know, but to get a mainstream, a newspaper. Sure. I mean, you know, I mean, they reported when Watergate broke. They like reporting on things where it's like people who are not in power get fucked over or stuff like that or people who aren't wealthy and successful like you get fucked over and stuff like that. There is a bias against people who obviously like have done well for themselves in life to report on how they've been kicked down and stuff like you were in this case, which I'm not saying is right.

That's just how they look at it. Yeah. But you know, you'll have like in the Republican Party and even with Trump, there's a lot of, you know, hey, let's criticize the weaponization of the IRS, right? They'll talk about people being targeted for their political beliefs. But then let's give 85,000 of them guns, which I think I was actually Biden that did that. But I mean, I have all the proof that I was targeted. The IRS was weaponized against me.

And this was all political. And there was all these lies. I mean, these people should, there should be a congressional investigation. There should be prosecutions of this. I mean, I'm not even, you know, that kind of. concerned about monetary restitution, about, you know, being compensated for my loss, which, you know, which is substantial. Uh, because look, I'm still wealthy with the loss, right? Yeah, you know, it's not, it's not, you know, it's the principle that's important.

Right. And it's, you know, we have to have checks and balances against this type of widespread corruption in government because, you know, if they get away with it, they're just going to do more of it. Right. And, you know, I'm not the only victim here. You know, and, you know, apart from all of the innocent customers on my bank who have been victimized. I mean, think about what, you know, all the people who can't fight back that, that can't, you know, I mean, look, I look how much, you know, for the FOIA, my, when, when I went after the IRS to get the documents, you know, they refused to provide them and they lied about them. I had to sue them. It took years to win in federal court to force the IRS to comply with the FOIA law.

So first, first, you know, they break the law, and then they break the law again by covering up the evidence that they broke the law. Because they're the government. They make the law, so they get to do that. And they get the benefit of the doubt. And people always assume that if they're working for the government, they must be honest. No, they're not. They're dishonest. Right. I don't think a lot of people assume they must be honest if they're working for the government. Well, the courts, there's a lot of deference when it comes to the government. Yeah, the courts do that. They act like, you know, they're the good guys. Right. No, they're not. They're the bad guys. Right. Right. They're the, they're the, they're the. ones that have all the power. You know, the public, you know, they're innocent victims of corruption in government. Yeah, we got to get back to a point where the government fears the people instead

of the people fear in the government. Exactly. I think that's a widespread problem for sure. When the government, when the government fears the people, you have liberty. When the people fear the government, you have tyranny, right? That's the quote from the framers. I mean, that's why we have a constitution. The constitution is there to limit the power of government. Not to give government power, but to limit the powers that they have. And the federal government under the Constitution doesn't have a lot of power. It only has the powers that are delegated to it in the Constitution. It's increased over the years.

Because the courts have allowed the government to violate the Constitution and to usurp powers not authorized by the Constitution. That is the problem. But even the laws that we have, the government doesn't obey. Yeah, no, I see it all the time. Look at them with the Epstein files. release the files, no. Like they just, and nothing will be done. The government, the government now is above the law. So instead of a nation of laws, we're a nation of men. And, and, and, and, and when, when you,

when that's the case, you have rampant corruption. And, and what happened to me, you know, is a perfect example. And that's why, you know, I'm trying so hard to expose all of this. And, you know, I'm going to get more evidence when the government releases, you know, more emails that the courts have ordered them to release and that they're still holding on to. And, you know, I even had a more recent FOIA. You know, I went on Fox and Friends in December of last year. And I, you know, I talked about inflation and how it was getting worse. And I was critical of the Trump economic policy, which was inflationary.

And Donald Trump was so, you know, irritated by my comments. And, you know, he was, it was six in the morning, five. They embargoed you? Well, he went on truth social and said, who is this idiot? This Trump hating loser, you know, he doesn't know he's talking about who booked this, who booked this idiot? And, you know, so he went off on me. And ever since then, no one at Fox will even return my emails.

I haven't been invited on. But somebody from the Federal Housing Finance Association wrote to get a copy of the video. And so when I found that about this, I submitted a. FOIA request saying, hey, I want to see all the emails from these guys about Peter Schiff and about his Fox and friend's appearance. And initially, they said, after four months, they came back and said, there are no documents that mention this. And I said, well, that's a lie because I know of at least one. So you got to go back and look again. And after a couple of months, they gave me the one document I already had. But of course, that was the document, the email where

they asked for the material. And there was another guy copied. But they didn't even give me the reply where they got the material. But I know they're covering this stuff up. But I think that the Trump administration reached out to Fox and said, don't have Schiff on anymore. Of course they did. Just like they reached out to them and said, it's L. the Iran War. It's what they do. And it's very sad. I'm very cynical about it with both parties and what we see is arms in the media that they take advantage of. And like, it's this exact type of attitude and just chummy type relationship that's gone on now across party lines for so long that has led us to have so much, so much problems in society that I think what you point out with the debt and the inflation is actually at the top of everything,

because everything's downstream from economics. Yeah, and I actually look, you know, I talk about these topics all the time on my own podcast, Peter Schiff's show. I do one or two episodes every week. I would encourage people, you know, to listen on YouTube, to follow me. I'm constantly on, you know, X, you know, formerly Twitter. I mean, that's that, I mean, I'm there every day. I don't have other people posting for me.

I write my own stuff. Oh, that's cool. Yeah. And, you know, I've got over 1.6 million followers there now. So I've got a platform to get out these, you know, ideas about free market capitalism, about sound money. I'm trying to push back against the false narrative, presented in the mainstream media that is always defending government and attacking capitalism.

And I think it's important because as I mentioned earlier, we're going to be at a fork in the road. And one way leads to freedom and opportunity and prosperity. And the other road leads to more government, more poverty, less freedom. And we have a better chance of taking the right road if more people understand the source of these problems. Educate the people. You got to learn it on your own. The information is out there. You just have to know where to find it.

Well, you can go follow Peter Schiff on YouTube and you're going to learn all of it. Peter, thank you so much for coming. Thanks a lot. Good time. All right. Everybody else, you know what it is? Give it a thought. Get back to me.

Peace. Hey, guys. If you're not following me on Spotify, please hit that follow button and leave a five-star review. They're both a huge huge help. Thank you.