The Joe Rogan Experience - #1145 - Peter Schiff

Episode Date: July 17, 2018

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

The countdown. Three, two, one. Hello, Peter Schiff. Hello, Joe. So you just what? Were you going to ask? No, you just did a whole other show before this one. Yeah, I did.

Three hours? No, two hours. Oh, all right. It wasn't that hard. Oh, okay. Those are the comedian. Those are the easy ones. Oh, all right.

It's just basically talking to a friend. Okay, well, I'm a friend. You are a friend. That's right. Yeah. I basically talking to a friend. Okay. Well, I'm a friend. You are a friend. That's right. Yeah. I remember when I first saw you, when you were doing that, is Occupy Wall Street a thing anymore? Did they give up?

They stopped occupying? Yeah, they did. But you know, we just, maybe you saw that on my YouTube channel. I know we just reposted the Occupy Wall Street video. I never actually had it on my channel. Oh, really? Because it was originally done by Reason. And this is about five years ago or so, five, six years ago.

And so Reason TV did it, and so I let them promote it on their site. I didn't copy it. And they got millions and millions of views, and there were some other sites that went with it. It was Ask a 1%er, right? Wasn't that what you called it? Well, I went down there with a sign

that said, I am the 1%. Let's talk. And I went into Zuccotti Park. And the only reason I stopped, the long one, the long version is just under two hours, which is on my YouTube channel now. But the only reason we stopped is because we ran out of batteries in the camera. The camera died. But I could have kept talking

and we were losing the light. You can see by the end, you know, it's getting, it's getting darker. Just watching them get frustrated with you, but not having the words nor the knowledge to compete with what you were saying was very entertaining. Like agree with you or disagree with you. It was just hilarious watching someone so completely outmatched or a group of people so completely outmatched trying to debate economics with you and trying to understand the way business works. Except they didn't even realize they were outmatched. They thought they were smarter than me. But, you know, the main reason I went there was not so much to try to convince the people there that they were wrong and that, you know,

capitalism was, you know, the solution, not the source of their problems and that they, you know, should be protesting Washington, the Federal Reserve, or Congress. It was for the people that I knew that would watch it on the internet. And I still get emails, even now, at least, I don't think a week goes by where somebody from somewhere in the world doesn't send me an email about that. And I know another website, I forget the name of it, reposted it about a year ago and they got a couple of million views on it just posting it again so a lot of people have watched it and i get you know comments from people saying this is what changed me i was a socialist very left wing i watched this and that was the epiphany that was the moment and then i did more research

and i learned more and now thanks to you i'm a total libertarian or a free market capitalist and so it's it served its purpose yeah well it was enlightening it's it was it was good it's good to people to see people that are so involved in something that they'll go and they'll protest they'll hang out in the park but they really can't articulate their feelings or their thoughts in a well-reasoned debate they really don't have the facts but yet they're dedicating their entire life to protesting something. It's really interesting that people will spend so much energy and effort on something they're really not even educated in.

Yeah, and it's a lot easier just to talk about something just emotionally instead of actually taking the time to learn about economics and to understand, you know, the source of the problems, because anybody could just blame it on some rich person who's hoarding money and discriminating against them. People love that. They love doing that. And then just say, oh, the solution. See, if you blame the problems on some rich person, well, the solution is easy. Just take his money, right? Have the government come in and redistribute the wealth, which is another word for steal. Take money from somebody who earned it and give it to somebody who didn't. But if you actually take a little bit of time and use your head instead of your heart, your feelings, you'll learn that, you know, that the source of the problems is government

interference in the economy and that the protests should be directed at government, at their regulations and their subsidies and their taxes and all the things that government does to stifle economic growth and deny opportunities to people. I think there would be a really funny documentary if you could do like a documentary on the last occupier, like the last person to occupy Wall Street, because they had to be like stragglers, right? It eventually must have gotten to the point where there was like 30 people left, 20 people left, then one guy, no, fuck these people, man. Well, you know, they started occupying different areas, right? Because it caught on,

and it was all over the world. They were occupying here and occupying there. And they were setting up camps, right? They were essentially living there. Yeah, yeah. And who knows what else they were doing there. But now the Occupy movement kind of morphed into the Bernie Sanders movement, right? Because that's where all those guys are now. They were volunteering for the Sanders campaign. And socialism is really kind of going mainstream now because they put the word Democrat in front of it as if somehow that changes the meaning. I'm not a socialist. I'm a democratic socialist, meaning I want to vote for socialism as opposed to just have an armed revolution.

But the end is still the same. It's still socialism, and it doesn't work. Yeah, I was watching an interview with Tucker Carlson and some guy who's a professor at Harvard. And he said, I'll give you the last word. The guy said, socialism is going to win. He made the piece. I'm like, what is that? What does that even mean? Like socialism is going to win. What does that mean? And what is socialism? Well, it could win at the polls. That's the problem. It's very intoxicating to people who don't know any better. And the interesting thing about- They have too much money.

The interesting thing about socialism is that no matter how many times it fails, people expect it to succeed, right? That's the definition of insanity, right? Doing something over and over again and expecting a different result. Well, the socialists always expect a different result from doing something that has never succeeded in the past. So socialism by definition is one thing, but by the emotional

reaction that people have is kind of another thing. The emotional reaction is there's rich people that are a real problem. They're hoarding, they're greedy. I'm not concerned with money. I want, I'm concerned with people and community and feelings and health and welfare and education and all that money. We should take it from those rich people and we should funnel it into education and community. And they say all these words that make people feel good, like, yeah, we're not about money either. Yeah. It's all about feeling good. That's what the liberals are about. It's about, you know, feeling that they're better than everybody else because they're, you know, they're higher up on this moral pedestal because they

don't care about money. They just care about people. But when you talk about rich people, they don't hoard money. I mean, the way you get rich is not by hoarding. The way you get rich is by trying to figure out what problems people have that you can solve, right? Whether it's inventing something that makes their lives better or providing a service that makes their lives better because providing a service that makes their lives

better because the customers are in charge, individuals, right? That's what's going to allocate wealth. If somebody is better than somebody else at satisfying the desires that people have, right? If I can come up with something that you like, that you want to buy, that's cheaper and better than what somebody else has come up with, then you're going to buy from me. And so the person who ends up with the most money is the person who's satisfied the most desires, the most needs in the most efficient way possible. And that's what's benefiting society. I mean, it's great to have charity, and I'm all for private charity. But if you look at the wealthiest men in history, even though they've been incredible philanthropers and they've given away a lot of money, they helped a lot more people amassing their fortunes than gifting away what they made.

It was the businesses that they created, the products that they invented, the services that they provided, and the employment, right, that was all a function of their creating their wealth. That's what did a lot more to help society than simply giving away some of the money that they earned. Have you ever had a debate with a democratic socialist? Well, I mean, most Democrats are socialists. They just don't know it or they don't want to admit it. And a lot of people don't even understand what socialism is, because, you know, you'll have the left. I'll always consider somebody like even Donald Trump. There's always a fascist, right. They don't even realize that fascism is part of socialism. Socialism is a broad concept that includes things like communism and fascism. So if you're a

communist, you are a socialist. But by but it doesn't mean that if you're a socialist, you're a communist because you could be a fascist. You could be for a lot of things. But fascism is a form of socialism where the government doesn't just steal all the property. Like the communists want to nationalize everything and take legal ownership of the means of production, right? The government just owns all the capital. Under fascism, the government is a little bit smarter. They realize that people will work harder if they think they're working for themselves. So the fascist doesn't want to nationalize businesses. They just want to control it through regulation and taxes. And that's pretty much what the Democrats want to do. They want to control everything by taxing it heavily and regulating it.

And that's an important aspect of fascism. I mean, a lot of people associate fascism with racism just because the Nazis were racist. But you don't have to be racist. I mean, fascism started in Italy and there wasn't any racism there. And if you go back to the Nazi Party, it's the National Socialist Party of Germany. That's what the Nazis are. It's socialists. So fascism is a form of socialism. That's why the communists and the fascists, you know, argue so much because they're really, they're fighting over the same turf. It's which brand of socialism is better, fascism or communism, but they're not at opposite ends of the political spectrum. They're on the same end. So do you think that people are

frustrated with the current system? And so they see someone like Bernie Sanders come along that offers this radical change of pace? He's saying, you know, we need to end income inequality and redistribute wealth and all these different things, and it just sparks an emotional reaction in people that they know that the current system, the way it's in place, especially the way it was under Obama, they didn't like how things were, they didn't like how things were under Bush. They think we need someone who's not a career politician

or someone who has got a radical new approach. Oh, look at this Bernie Sanders guy. He wants to do some stuff with money. Let's vote for him. Yeah, look, people are grasping for straws when they're looking for a solution. That's why Trump is president. I mean, a lot of people think that Trump's election

maybe shows that the U.S. electorate has moved right, right, that we're more Republican or more free market. But that's not what that election was about. It was about the fact that we had a lousy economy and Trump was honest about that to the voters. Trump told people that the numbers are phony. Don't believe these unemployment numbers, four or five percent. It's a lie. It's fraud. It's fiction. And he was right, because the way they calculate it today, they don't calculate the millions and millions of people who have given up looking for work. Right. They don't count the people who just have a part time job and they're still looking for a

full time job. So the real unemployment number is much, much higher. And Trump talked about that. And he called out, you know, all the politicians from both sides, right, not just the Democrats, the Republicans. And he said, look, I'm going to clean house. I'm not a politician. Vote for me. Right. I'm going to make America great again. I'm going to drain the swamp.

You know, and he appealed to people's, you know, their fears about immigrants. I'm going to build this wall as if the reason that things are bad is because we have too many immigrants taking away the jobs. And so people decided, you know what, what the hell, let me give this guy a chance because things are bad. The media is lying to me, Wall Street's lying to me. And so, you know, Trump won. But unfortunately, now Trump is part of the establishment. And now all of a sudden, the fake economic numbers are legit. Now, every time there's an unemployment number out, he tweets about how it's the lowest it's ever been. So I think that when we get this next recession, which is going to happen while Trump

is president during this first term, which I think will be the only term. But when all the people... Really? Why do you think those two things? Well, because I think the economy is going to fall into a severe recession. What makes you say that? Well, A, we're overdue, right? I mean, you don't normally have an expansion that lasts as long as this one. I think we're the second longest in history. And if we go for another year, it'll be the longest expansion in history. So 2008 is when it started to turn around? 2009. 2009. Yeah, kind of the end of 2009. So we're nine years in now? Yeah, exactly. And what is a usual expansion and

compression? I don't know, five, six years. So this one is long, but also this one required more government stimulus than any other, you know, recovery. And I don't think we actually recovered. I think the government simply, you know, injected a bunch of cheap money into the economy and exacerbated the real problems, but, you know, reflated the bubbles in the stock market and the housing market. But, you know, everybody talks about how the economy is doing so great, but it's really not much better than it was under Obama, if it's any better at all. GDP growth for Trump's first year in office last year was 2.3 percent. I mean, nothing great. First quarter was 2 percent. This quarter might be better than three. Maybe, maybe not. But I mean, I think it's going to be the second quarter will probably be

the best quarter of the year. Maybe we're probably going to go downhill. But, you know, last year was, I think, the weakest year of job growth since 2011. So people want to talk about how great everything is, but it's more a function of people are hoping things are going to turn around. There's a lot of optimism now that things are going to get better. But I think that the people who are so optimistic, a lot of them are going to be disappointed because what we're going to end up with is a weaker economy. The only thing that's really strengthening is inflation. Inflation is going to pick up. So the cost of living is really going to be rising as the economy is falling into recession. So we get stagflation, which is probably the worst possible economic scenario. And, you know, I think that the the left and even the Fed is going to be

able to blame it on Trump because Trump has come in and, you know, claim credit for this great economy that he believes we have. And know, claimed credit for this great economy that he believes we have. And he's claimed credit for the record in the stock market. But he's basically put his name on a bubble. And when it pops, you know, it's going to be hard for him to try to blame the next recession on Obama when he's already said, hey, this is my economy. I created it. And so people are going to be disappointed. And they're going to vote, I think, for another person whose promises change. And unfortunately, that's going to come from the left. So you think this is going to happen within the next three years? Well, yeah. I mean, what is the bubble? What do you think is going to cause it to crash?

Commercial real estate? Is it credit? What is it? Well, I mean, commercial real estate is expensive. I mean, it's in the bubble, but that's not going to cause it. I mean, air is going to come out of the bubble. I think we would already be in a pretty severe recession now had it not been for Trump winning. Had Hillary won, I think we would already be there. But I think... What makes you say that? Well, we got a lot of false optimism as a result of Trump. And we did get the tax cuts. And the tax cuts, you know, just like, you know, any kind of artificial drug, you know, you can inject yourself and get a little bit of a phony high. Because remember, the tax cuts were paid for with debt. We didn't shrink government, right? If you make government smaller, that's great. Then you can cut taxes because now

government doesn't need as much money. And you can, you know, you can relieve the taxpayer of the burden of paying for it. And that's great. But if you just cut taxes, but you don't cut government spending. And of course, what the Trump administration did was even worse. They increased government spending. We increased welfare spending. We increased warfare spending. And so spending is more, but they reduced their tax revenue. So the deficits are just exploding out of control. And so spending is more, but they reduced their tax revenue. So the deficits are just exploding out of control. And those deficits are going to do more damage to the economy than the tax cuts were benefit, except you get the benefit first, maybe for the first year, and then you start to deal with the pain after that. And so I think that's going to set in

long before the end of Trump's term. So you think that this is what is causing the economy to be in a really, at least to look like it's in a really healthy state right now? Well, some of the numbers, right, some of the numbers look better. But beneath the surface, again, it's not improving, just like it wasn't improving under Obama. That's what laid the foundation for Trump's victory was because Obama and everybody kept talking about how great the recovery was, but the average voter knew that that was all a bunch of nonsense because he wasn't living in that reality. So if you were the financial advisor to the president, what would you tell him? How would you—he laughed at that—

what would you do to try to keep the economy moving in the same direction? Is it possible to ward off any kind of a crash right now? We don't want to keep it moving in the same direction. I mean it's in the same direction it was going in before Trump came in and that's towards the edge of a cliff. I mean so what we do, we need is an about

face and Trump is not doing that. An about face, so like for the people that are listening to this that don't understand, like they're saying, OK, the economy is supposed to be doing well. Black unemployment is the lowest it's ever been. Unemployment is down. All these jobs have been created. Yeah. Well, remember, again, the unemployment rate is mainly down because so many people that are unemployed are no longer counted as part of the statistics. So, you know, that's if you look at the labor force participation rate near a record low, I mean, certainly for men, it's the lowest it's been in the history of the republic.

But and look at the workers, the population. So fewer and fewer people are actually working. And more and more of the people who aren't working are not included in the unemployment statistics. So if you backed all those people in, right, able-bodied people who don't have jobs but should be working, then the unemployment rate is much, much higher. So that doesn't really paint a good picture. And then, you know, you look at the fact that so many Americans are unqualified, right? There's a lot of jobs out there that go unfilled because American workers aren't qualified to fill those positions because, you know, we take a lot of our kids and we keep them in high school until they're 18, 19 years old. Many of these kids should drop out of high

school and learn a trade. I mean, a lot of people, you know, they don't have the aptitude for, you know, academics. There's no point in just being in high school. A lot of times they're glorified daycare centers, but they should be out learning trades. And, of course, we make it harder for employers to train people on the job with occupational licensing laws and minimum wage laws. So we destroy a lot of the opportunities for younger kids to get skills. And then the ones that we send to college, they waste their time, you know, majoring in liberal arts. So they spend four, five, six years in college learning nothing of any real value in the market. They accumulate a massive amount of debt in the process. And so, you know, we have a labor force that's highly educated in that they've got a bunch of degrees. Maybe they didn't learn anything, but they got a piece of paper. But then what they have is a lot

of debt. And so we don't have a lot of people qualified to do a lot of things that need to be done. So what would you tell the president if you were if you said, look, Peter Schiff, I don't know shit about the economy. You obviously do. Help me out. How do we stop this bubble? Well, you know, first of all, you can't stop it. You've got to let it deflate. But the question is, how does it deflate? And then what do you propose as the solution? See, the problem that Trump already made was when he first got elected, he should not have changed his perspective. He shouldn't have said, hey, everything is great. Right now, he's planning on running his next campaign as Keep America Great. When Trump ran for office, he said America was an economic wasteland, that it was a disaster.

He's been president for a little over a year. All of a sudden, it's the greatest economy in the history of the country, which is not even close to being true. But if he's going to try to run for reelection on I've already made America great and now we just want to keep it great, that's not going to resonate. So what he should have done from day one is leveled with the American public. Again, this is how with the American public. Again, this is how bad the problem is. And this is what it's going to take to solve it, because there's a lot of, you know, pain, short term pain that we're going to need to go through in order to come to the other side, in order to get rid of all these problems. Like right now, look at the trade, right? Trump is making a big deal about the trade deficits and he's launching tariffs.

He's going to have this trade war that he's convinced that we could win. And this is very misguided. The trade deficits are not the problem. They are the consequence of the problem. The problem is that we have bad monetary policy, bad fiscal policy, too much regulation. That's why we have a trade deficit, because American industry is not productive enough. We don't save enough. We don't make the right capital investment.

That's because interest rates have been kept too low. Our tax code favors debt. And we have a lot of regulations that make American businesses less competitive. And so the result is that we import a lot of products rather than making them ourselves. And it's not because the other countries aren't fair or because they have tariffs. Tariffs are very low around the world. I mean, tariffs are not the problem. And so if Trump is simply going to erect tariffs, all that's going to do is tax the American public because the American public has to pay the tariffs whenever they buy imported products. So this is not going to going to turn the economy around.

But, you know, and Trump is right. He points out that, well, you know, at one point in time, America ran on tariffs, which is true. During the 19th century, the government raised money primarily by tariffs, but we didn't have an income tax. And so this is the irony of it. The reason we have an income tax today is because the populist politicians of the day told the American voter, if we can tax the rich with an income tax, then we can get rid of tariffs that the average person is paying. So the average person understood that tariffs cost them money. And the politicians said, let's get rid of these tariffs and let's just tax the rich.

And the income tax that was originally proposed really was a tax on the very rich. I mean, even doctors and lawyers didn't pay it. I mean, you had to be super rich before you pay the tax. And then it was like, you know, 1% to 4%. So it was a small tax and it wasn't taken from your paycheck, right? I mean, first of all, if you got a paycheck, you didn't pay the tax, but we didn't have withholding until 1943. That was part of the victory tax to pay for the Second World War. But Americans were told, let's tax the rich and you won't have to pay for the Second World War. But Americans were told, let's tax the rich and you won't have to pay tariffs anymore. Well, the minute the government got the nose under the tent, right, all of a sudden now the income tax affects everybody, right? People pay a lot more in

income taxes today than they used to pay in tariffs. But now, now the president wants to bring the tariffs back on top of the income tax. I mean, if Trump wants to repeal the income tax and get rid of it entirely and then have some tariffs, I'd be okay with that. But you can't do that unless you dramatically shrink the size of government, which is the most important thing that Trump needs to do. But what he's not doing, he has to make the military smaller, not bigger. I mean, he's talking about a space force. I mean, we can't even afford the Air Force, Navy, Marines that we got now. We don't have enough money for a space force. But we have to cut everything.

We've got to cut entitlements. Don't you think we should be the first people to have a space force? What if the Russians come up with a space force? Yeah, no one's going to come up with it. They're out of luck. What do you think you can do with a space force? Who are we going to fight in space? Maybe we fight the Russians in space.

Why would we fight them in space? They're down on Earth. Well, maybe they want to fight in space. us? Who are we going to fight in space? Maybe we fight the Russians in space. Why would we fight them in space? They're down on Earth. Well, maybe they want to fight in space. It's more novel. Yeah, I don't think anybody wants to fight. Right? No, but they want to be protected, right? Yeah, I think we got that covered. I think we've got a pretty good-sized military. I don't think

anyone's going to mess with us. The problem is our economy. So when you say, let the bubble crash, like what would that entail? Well, basically, look, the problem, the basic problems with the U.S. economy, and this is because of monetary policy, fiscal policy, is we don't save anything, right? And because we don't save enough, we don't invest enough, we don't produce enough, we don't make enough real things, right? I mean, when Trump wants to say that foreigners are taking advantage of us by running these huge trade surpluses, he's got it backwards. We're taking advantage of them.

Like the Chinese are sending us all these products that they worked hard to produce and they had to use real resources, land, labor, capital to make these products. And they send them here. And what do we give them? We give them IOUs. We give them a piece of paper and they buy our treasury bonds. So in the short run, Americans are just putting everything on a credit card, right? We're living a higher standard of living because we can consume what we didn't make. But when you do that, you become poorer. See, America used to be the richest creditor nation in the world, right? The world owed us a lot of money. Today, we're the world's biggest debtor nation. How did we go from being the biggest creditor to the biggest debtor? It was trade deficits. Every year, we keep borrowing money to consume. And what this has done is this has turned a rich nation into a poor nation.

But we just don't live like a poor nation yet because we're still borrowing. Yeah, and you could be a rich individual yet maintain a rich lifestyle on debt. But eventually, you know, debt's going to catch up with you and then your lifestyle is going to come crashing down. And this is what's going to happen. But what we should do, instead of having a crisis

imposed on us globally with a crisis in the dollar and a crisis in our bond market, we should do it ourselves. We should set these forces in motion ourselves. So what we have to do is shrink government. We have to cut a lot of government spending, get rid of a lot of government agencies and departments to get government out of the way so we can lower taxes legitimately.

And then we have to allow the Federal Reserve to let the market set interest rates. Interest rates have to be much higher than they are now because that's going to encourage people to save. If interest rates are high, you'll put your money in the bank to earn that high rate of interest. When money goes into a bank, it can get loaned out to businesses. Right now, all that money is going to government or it's in the corporate bond market where it's not growing the economy or the money is being used to finance stock buybacks. We need money on Main Street financing capital formation, entrepreneurship, new businesses, new jobs. So we get higher interest rates. We'll get that. And we need people to stop buying things

they can't afford. You buy something if you have the money to pay for it. You don't just put it on a credit card. And if credit card interest rates went up and if credit was contracted so that credit card companies were not giving out as much credit, they're giving out a lot of credit now because the government is misdirecting it. But if we slow down our consumption, we increase our savings and investment, then the economy can actually grow. But if interest rates go up, asset prices have to come down. The stock market has to come down a lot. Real estate prices have to come down a lot. Now, that means people are going to lose money. They're not going to be happy about that. Yeah, this sounds counterintuitive to everything that I've always heard about how to boost up the economy. The idea

would be that spending and people buying things is great for the economy. We need more of that. No, that's putting the cart before the horse. You can't buy something that doesn't exist. Something has to be produced before it can be consumed. So it's the production that drives the economic train, not consumption. See, right now we're just consuming what the Chinese produce. But the consumption doesn't mean anything unless you produce something first. So you drive an economy by creating supply. It's supply that creates demand. If you just try to create demand without the supply, it's just inflation. It's weird, too, that we keep hearing things about Chinese telecommunications companies like Huawei in particular.

They're always telling you to not buy their stuff. There was something in the paper today about Huawei. It was about, I think, another country saying no to these. I guess Huawei in particular is the third largest cell phone manufacturer in the world. And they have a close tie with the communist government. And they believe there might be some shenanigans going on with their electronics. I don't know. I mean, I'm not familiar with that. I mean, I know that there's constant talk about trying to, oh, just don't buy certain products. Well, Huawei, they were actually, the State Department told people to stop buying them.

Was it a national security threat or something? Something along the lines of third-party spying. They were concerned. What does it say here? Australia to ban Huawei from 5G rollout amid security concerns. But U.S. had an issue, and I think the U.S. issue was slightly different. U.S. was the State Department that was saying for security concerns to not. Yeah, I don't know.

But, you know, whenever they talk, look, they're talking about the auto tariffs, and they say it's national security, as if somehow my buying a foreign car is somehow jeopardizing national security. I don't know. I mean, the Canadians have called Trump out on it. So what do you mean? We fought as allies at every single war. How are you saying that you have to put tariffs on Canadian products?

So why is Trump doing this? Look, again, he's going after the symptom. Trade deficits are the consequence of a problem. Most politicians ignore the trade deficits. Right. At least Donald Trump is putting them on the spotlight and saying, look, this is a problem. It is a problem, but not for the reason that Trump believes. In the short run, in the here and now, the trade deficits benefit America because the world is subsidizing our standard of living. Trade deficits benefit America because the world is subsidizing our standard of living. We're getting to buy things that we otherwise wouldn't be able to have. I mean, without these trade deficits, we wouldn't have all these consumer goods on all these shelves. I mean, people would not be able to buy stuff. Prices would be much higher if we had to make stuff ourselves. By having the Chinese make it, it's a lot cheaper.

Plus, it's great for our environment because we don't have to pollute our own air because the factories are over there. But so he's right that it's a problem, but in that it's a reflection of the fact that the economy is inefficient, and that's what needs to be addressed. It's like, you know, we have cancer, but you just can't put Band-Aids on the blemishes or something to cover it up. You just can't put Band-Aids on the blemishes or something to cover it up. You've got to actually get to the source of those blemishes, which is the Federal Reserve and their bad monetary policy and our government policy, our fiscal policy, our regulatory policy. We need to have that type of change, and then the trade deficits will go away. But if we simply try to put tariffs on, it's just going to make our own problems worse. All that's going to do is make prices higher. It's just going to mean that Americans are going to have to spend more money

buying stuff. And it also actually undermines a lot of American businesses that export into countries that are retaliating. And also a lot of U.S. businesses import components, and then they assemble the components here. But now those imported parts are going to be more expensive. And so their net exports are more expensive, and so they become less efficient. The people that are supporting Trump, the people that are happy with the way things are going, have said that him lowering taxes for corporations encourages growth, and it encourages, it gets more jobs, and there's more economic activity. Does that make sense? Well, look, if we eliminate taxes,

yeah, that'd be great. I mean, the lower taxes are, the better it's going to be, but not if you borrow the money to pay for the tax cuts. So the idea is if the government now has to go into the market and borrow money that it no longer collects in taxes, that's going to have an impact on the economy. That's going to further deplete our the economy. That's going to further deplete our savings pool. That's going to put real upward pressure on interest rates. And obviously, the Fed is trying to counteract that. But, you know, what they did with the tax code, though, they dramatically complicated it. I mean, there's a lot more complexity in the code now than there was before, not like it wasn't complex before. So initially, they talked about simplifying the code. They didn't do that. They made the code a lot more complex. And they

certainly, you know, they raised lower taxes for some people, but they raised taxes for other people. But depending on what state you're in, there are a lot of people now that are going to pay higher taxes. What people are doing? Well, people in California, right? You got a 13% income tax in California that's no longer deductible on your state income tax, on your federal income tax. So that's a new thing? Well, yeah. I mean, up until this year, you could deduct your state income tax from your federal income tax. So the effective tax rate was maybe 40% less because it was just money you would have sent to Washington. So instead you send it to Sacramento. But basically the state tax rates are almost double now what

they were last year in the way it impacts the payer. So there's a big increase in state tax. This is for individuals. You didn't know that? No. Yeah. You know, you ought to move to Puerto Rico with me. I know, but I hear you guys don't have any power. Well, we got power now. Yeah, you know, you ought to move to Puerto Rico with me. I know, but I hear you guys don't have any power. Well, we got power now. Now? How many months did it take? Well, don't you have a generator? Yeah, but you were the only one.

You're like Mad Max out there. Do you have armed guards? No, no. Standing outside making sure nobody steals your water? No, it's not. It's, you know, in fact, we're laughing about it, but, you know, I was on your show a year ago, right? We talked a lot about Puerto Rico. It was post-Trump, right?

Trump had already won. Yeah, Trump had won, but it was before Maria. Right. And so I was on the show, and we were talking about Puerto Rico. Yeah. And we also talked about cryptocurrencies and Bitcoin and stuff like that. But since then, hundreds and hundreds of crypto guys have moved to Puerto Rico. I mean, some of my neighbors now are these crypto millionaires.

I see them now on the beach. They weren't there a year ago. They're there now. They call it a Portopia. They all want to come there because there's no capital gains tax. But I got to kind of credit you because I think a lot of these guys didn't know about it until they heard about it on this podcast. And they said, wait a minute, there's no taxes down there in Puerto Rico. And now they're all there.

And they moved there just in time for the hurricane. No, they moved after the hurricane. I moved before the hurricane. Is moving after the hurricane a better move financially? It's probably cheaper land. Can you buy easier? I can't even tell. Some of the real estate has actually gone up. Really? Yeah, and the real estate that was untouched.

My community weathered a storm pretty well, so maybe it made it more desirable. Really? Why did your community do so well? Even though I'm on the beach, the elevation is very high, so we didn't get any flooding. And I guess the construction is much better there. You know, the houses are built better, so they didn't withstand, yeah, they didn't withstand

the damage and the community got up and, you know, up and running a lot quicker. So how long were you without power? Oh, there was, well, officially there was probably no power for a couple of months, but I have a, you know, my condo has power just as a big generator. And so we had, we had condo power there right away, but the house that I, I ended up buying a house there too, right before the hurricane. And I didn't have the generator put in yet. So the house didn't have power for months and months, which just exacerbated, I had some damage to the house. And then the fact that there was no power made it worse because it got very humid in there. But I've since purchased a generator, and I've got it all installed.

And so I'm ready for the next hurricane. But, you know, I got there. It was a funny thing. Before the hurricane, there was a lot of controversy from this podcast, from my talk about Puerto Rico. Because I mentioned on the show that I had moved some employees to Puerto Rico. I have three single guys that used to live out in Southern California, and they all moved out to Puerto Rico because I moved my business there. This was in 2013. I moved my asset management company, Europe Pacific Asset Management, moved it to Puerto Rico.

And so these guys moved out. They're single guys. And I mentioned that they were having a good time there. There's a lot of very beautiful women in Puerto Rico. And so these guys moved out. They're single guys. And I mentioned that they were having a good time there. There's a lot of very beautiful women in Puerto Rico. You know, I mentioned, I think, five Miss Universes have been from Puerto Rico, which is a lot for a small place. And I said that, you know, they have a good time there because the labor force participation rate in Puerto Rico is terrible. I mean, hardly anybody has a job. Maybe a third of the people who should be working are working. And that's, you know, and that's, again, because of the socialism down there,

the welfare state that's there. And it, you know, and the minimum wage in Puerto Rico is effectively like, you know, it's the medium wage. It's like having a $15, $17 an hour minimum wage here. So it destroys a lot of employment opportunity on an island. So I mentioned that, you know, if they, you know, they have a good time down there because there's a lot of employment opportunity on the island. So I mentioned that, you know, they have a good time down there because there's a lot of women. And if you're a guy and you got a job, I mean, you know, you could write your own ticket. That's a big plus to have a job because women want to date guys with jobs. That was controversial? You know, you wouldn't think it would be.

But all of a sudden, all these big guys down there in Puerto Rico, they'll probably say something again because obviously they watch your podcast. But a couple of really big guys were calling me out saying that I'm insulting Puerto Rican women. Like, you know, I'm calling them whores or something because I said that they want to date guys with jobs. Well, doesn't every woman want to date a guy with a job? Yes. It's not just Puerto Rican. What women are running around going, I don't want a guy with a job. No, exactly. Of course a girl

wants a guy that has a job. Every girl. Yeah, I mean, probably one of the main reasons we get jobs is to get girls. Oh, yeah. And generally, the more attractive the woman, the better your job is going to have to be to attract her. Yeah, there's a term

for that, right? Hypergamy? Like women tend to gravitate towards men with higher social status and higher incomes. Well, first of all, if you want a guy to take you out on a date, if he doesn't have a job, where is he going to take you? There you go. I mean, so it's not – I didn't think it was a controversial statement. I don't think it is. I think people are just making much ado out of nothing these days,

and they can write a blog, and then you talk about what they wrote because you were upset that them being upset at you. Yeah. So you come out on the podcast and talk about it again. So you're feeding it. No, but I'm correcting it. I mean, I just want to say that it's not just, you know, there's nothing wrong with a woman wanting a guy that has a good job.

Not only that, it's favorable. Well, yeah. Well, but it's not only just because he can take her on a date. I mean, when a woman is on a date with a guy, I mean, everybody is a potential husband, and you've got to bring something to the table. Yes. You've got to have ambition. You've got to be a go-getter.

You've just got to be living in your parents' basement. I mean, you've got to get a job, right, to get the money. So what was the protest, though? What were they saying? Huh? What were they saying? What was the protest? That I was insulting Puerto Rican women.

By saying they want a man with a job? Yeah, like they're just all gold diggers or something. I didn't say the guy, you know, it was just they only wanted money. But look, I mean, having a job is a key thing. I mean, we don't care. The guys don't care as much what the woman does. But women, I mean, that's a big thing. Almost nothing.

They don't care at all. If she's hot, if the guy makes a lot of money and the girl's hot, we don't care as much what the woman does. But women, I mean, that's a big thing. Almost nothing. They don't care at all. If she's hot, the guy makes a lot of money, and the girl's hot, who would care? She's hot and nice. She knows how to read. If a guy was going to set up a guy with a friend, the first thing the guy is going to ask is, what does she look like? That's the first question. Is she hot? Is she nice?

Is she hot? Right. If a woman is going to tell a girlfriend about a guy, what's the first question? Probably what he looks like first. Right. If a woman is going to tell a girlfriend about a guy, what's the first question? Probably what he looks like first. No. What does he do? First. I guarantee it's what does he do.

Really? What does he do for a living? I think first, it's what he looks like. Second is what does he do? No, no. I think what he looks like is lower down on. I think it's what does he do for a living? Does he have a nice personality?

Does he have a good sense of humor? I think how does he look is a little bit lower down on a woman's totem pole. Depends on how hot she is. Well, maybe. Yeah, depends on how good she's doing in the marketplace. But I mean, but all this, I mean, it was almost

part of the whole political correctness thing of it, like, or the Me Too, like, you can't you can't say something. Anything that you say is going to be spun like this is this is yeah against women because i'm stating something that's very obvious right that that that you know so you can't state obvious anymore no no no i mean it's all like look look at you but you can because i think these outrage peddlers that make these articles and write these blogs who the fuck is agreeing with them?

I just don't buy it. I think what they're doing is they're striking a chord and a few malcontents go along with it. But you read those things and you think, like, wow, there's some validity to this because it's in X publication. And so I got to comment on this. They're misrepresenting what I said. But they're outrage merchants. Yeah, and everybody wants to act like you can't say something that's offensive to anybody. Like if somebody gets offended, then, you know, like, you know, this, what was this?

You know, this one of these contestants, I read the story, but one of the contestants on The Bachelorette, apparently on his Instagram page, he liked some jokes that, you know, kind of maybe off-color, a little bit offensive jokes that right-wing, somebody on the right had posted on their Instagram page. And it was like a big deal. He had to take down his whole Instagram page. Like, I mean, it's obviously jokes. They're jokes. Jokes are offensive.

That's part of what makes them funny. I mean, almost all the jokes offend somebody. But now you can't even have a sense of humor. Everything has to be, you know, you can't offend anybody, which you don't have a right not to be offended. That's the whole part of freedom of speech. People are going to say things and do things that you might be offended by, and you just got to deal with it. You can't be looking like, you know, I got to have a law against that. But these offense merchants, these people that get offended, that's their currency.

They trade in being offended. And then once they find something that's in any way offensive, they just start writing blogs about it and making videos about it. And that's their, that's their in. Yeah. Their in is finding something Peter Schiff said about Puerto Rican women. Just saying Puerto Rican women's offensive. Why?

Just saying it. Because it's just, this is the world we live in. A white guy like you, wealthy guy. You're going to talk about Puerto Rican women. You fucking piece of shit. Yeah.

Well, they're, I mean, they're white. Most well, I mean, they're white. I mean, they're a little darker skin than most Caucasians. Yeah, but you can't say that. In this day and age, they're people of color. They're Latino. They're people of color. Well, what color am I? I got a little

color to me. That's an interesting conversation I just had with a friend of mine who claimed she's black. I'm darker than you. How are you black? Look, it's this whole mentality that people have now about not being offended is about feeling that they have a right to something or not being entitled or people confusing a privilege with a right. Right. So you have all these groups that demand women's rights or gay rights. Women or gays, they don't have rights because they're women, right? We all

have individual rights. And so men and women have rights because they're individuals. They don't get a separate right because they fit into a group. All that is about privilege. And you don't have special privileges granted to you by the Constitution, we all have rights. And when people try to pretend that a privilege or a group privilege and try to give that the status of a right, I know you talked about it on your podcast. We had the Supreme Court ruling recently regarding the gay couple that wanted a wedding cake. And they sued because the baker wouldn't make them a wedding cake with you know a couple of guys on the top and decorate it in a way that it was obviously for a gay wedding i had there's a lot of misunderstanding about that and i read something recently that

not only did they not do that but they weren't making custom cakes so they didn't make custom cakes for weddings. So when the gay couple came in and said they wanted a custom cake, they said, no, we don't make that. That was also part of the problem. That's not something they even do. They would have sold them a cake they already had, but they didn't have one with two dudes holding hands. problem is, first of all, it's not like you have this gay couple that just went into a bakery and then they were denied the ability to buy a cake. Right.

They probably went to 100 bakeries to find the one that wouldn't bake them a cake. They did specifically do that. That was part of the story was that they wanted someone to deny them. Yes. So they had a story. Right. And of course, if you're a baker, I don't know what the margins are on wedding cakes, but wedding cakes are probably like the holy grail of cakes, right? I mean, if you're sitting there in the small bakery shop, you're waiting for somebody to call for a wedding cake because those are the biggest cakes you could make, very expensive cakes.

So everybody wants to do a wedding cake. Nobody cares whether there's two guys or a guy and a girl on the top of it. You just want to make the money that you're going to get from baking a wedding cake. Nobody cares whether there's two guys or a guy and a girl on top of it. You just want to make the money that you're going to get from baking wedding cake. Now you come across a guy who just has a strong religious conviction. He just, you know, doesn't want to bake a cake for a gay wedding. Okay. I mean, he's the one that's losing. He's losing out on the commission to bake the cake. I mean, the gay couple isn't hurt by that. There's so many bakeries that would bake them that cake. But was this couple, were they denied because of religious reasons? Is that why the people said they wouldn't make the cake? Yes, they said it

was religious reasons, and that's what the Supreme Court, I think, went on religious freedom. But as far as I'm concerned, it doesn't matter what their religion is. Nobody is required to perform a service for somebody else if they don't want to. Okay, what if it was a black couple? Yes. And what if these people were racist? And what if they said, we don't want to bake a cake for a black couple? Well, then the black couple can go find a bakery that will bake them a cake. I mean, what's the odds of there being a racist baker out there? But, you know, I mentioned if I was— In today's day and age, it's less than ever before. Right, but look, look, look.

It's still possible, right? I'm Jewish, right? Let's say there's an anti-Semite baker, right? And if I go in there and the guy says, you know, oh, I don't want to bake cake for Jews, fine. You know, because let's assume that he knows I'm Jewish. He hates Jews. And he spits in the cake.

I mean, I'd like to know, like, right up front that this guy who's about to bake my cake hates Jews. So then I'll go and buy my cake from somebody who doesn't hate Jews because I don't want to worry about what I'm going to be putting in my mouth. I mean, why would you want to even force somebody to bake a cake for you that you've got to eat if you're forcing him to do it? Or, you know, this is all nonsense. But, you know, the idea that you can't discriminate, that you can't make choices, right? I have a right as an individual to, you know, to do things that I want to do, but I can't force somebody else. Rights are about the government. You can't rob from me and you can't steal from me. So you can't take away from me something that I

have, but I can't force you to give me something I don't have. And just because I feel a certain way, like if you go back to the gay couple to say, okay, you can't discriminate. How did the Supreme Court rule on that, by the way? Well, they upheld the right of this individual, but it wasn't like a – The right of the individual to not sell the cake? But I think it had to do with some esoteric state law. It wasn't a definitive ruling that says that you have a right to discriminate, which I believe you do. I don't think the government should be discriminating, but private individuals. But the point I was about to make is, you know, for gay. So let's say that you, Joe Rogan, were working as a gigolo. That was your job. You just

had sex with women and you charged them money. Nice. Yeah, that's your job. Now, what if a dude comes up to you and wants to partake in your services? Do you have to serve him? That's not the job, sir. The job is women. No, no, you can't discriminate. What? Right? That's my point. I can't discriminate in terms of having sex with men? Well, not if you're doing it for a business.

Not if it's your business. Well, what the hell? My job is gigolo. Gigolo is a guy who has sex with women. No, no. That's the job. It's like you're asking a firefighter to dig a hole for a pool. Gigolo is a guy that has sex for money.

Doesn't matter whether he's a guy or a girl. Sex with women, bro. That guy got a business card. But then you're discriminating against men. How could you deny a man the opportunity to have sex with you? Interesting. See, it's the same thing. You can't look.

And you can say, what if it's not sex? Okay, what if it's just massages? What if you're a masseuse, but for some reason you just don't want to massage guys you just only want to massage girls right shouldn't you be able to do that yes yeah i mean so what and so because it's it's it's touching people if you if your business you want your business to be limited all i do is massage chicks, bro. I don't touch dudes. It's gross. But you should have a right to do that. But then once you extrapolate it, you just make a decision. Now,

you could make more money if you massage girls and guys because you have a bigger market. But if you want to limit your business opportunity to just women, well, that hurts you, right? It's your right to do that. Like a massage therapist that doesn't want to massage guys, you never hear about those. And you don't get offended. Men don't get to do that. Yeah, like a massage therapist that doesn't want to massage guys, you never hear about those.

And you don't get offended. Men don't get offended by that. What? You won't massage me? What, do you hate men? Well, but you could do it as a customer. I mean, let's just say I want a massage, and I can say, look, I prefer to get a massage by a woman. I mean, most guys would probably prefer to get a massage by a woman. Well, that's totally legal. They always let the customer, the customer can

discriminate. The employee can discriminate. Right. Nobody would say, you know, hey, if I let's say I happen to be black and I want to work for a black boss, nobody would say that was wrong. I could go to a white boss and I could say, I'm sorry, I don't want to take the job because I want to work for someone black. You can't sue me for not taking the job. Right, but you're actively seeking out a black boss, which is the difference between that and being approached by a bunch of white people and saying, no, I hate white people. I don't want to work for you. No, the point is, if a white person or even a black person was seeking out a job applicant of a particular, they would say that's illegal. You can't discriminate.

But the employer can do it all – the employee can do it all he wants. Customers – if I was – if a gay couple wanted to have a cake baked and they went into a bakery and they said, yes, we'd like to have a cake baked. Are you straight or gay? Because we want our cake to be baked by a gay baker. And the straight guy said, no, I'm straight. Sorry. Fine.

They can keep searching until they found the gay baker. No one would care. And I'm not saying that we should make that illegal. I'm just saying the laws should be consistent. Yeah, that is interesting that the employer or rather the customer can basically go wherever they like. And no one says you didn't go into this restaurant because you don't like gay people because gay people run this restaurant. Nobody ever says that. Right.

And they can't force you to eat there if you don't want to. But the other way they can. They can force you to use or to have someone use your services even if you don't believe in what they said. Yeah. And the left always tries to make it out like if you have this perspective, right? Oh, like, oh, you must be a racist if you believe that people have a right to discriminate. Look, I believe that people have a right to say a lot of things that I disagree with.

I'm not going to stop them from saying things. You know, I believe in free speech, even if what you're saying is idiotic or offensive. And I believe people have a right to discriminate because the bigger problem is when the government becomes the thought police, because the minute you make it illegal to discriminate, now you have to get into people's minds, right? If somebody doesn't promote somebody or fire somebody and they happen to be black or a woman or too old or handicapped. You assume their motive.

But now you're going to say, oh, you fired that person because he's black. Well, what if that had nothing to do with it? Right. You're assuming the motive for firing people. And now I got to prove that I didn't do something for what I was thinking when I did something. I mean, none of that, you know, all of that, too, makes it so much harder for employers. I mean, look at what just happened. This isn't race, but it's part of it. Do you see that story the other day about Trump's driver is suing him for overtime?

Yes, I did see that. Yeah, so this guy worked for the Trump organization for like 25 years, driving, he was a personal driver for Donald Trump. And he's now suing him because he claims that he worked more than 40 hours a week, and so he wants more money. Now, of course, he worked for 25 years. Why didn't he ask for a raise during those 25 years? But apparently his job, he had to be on call for maybe, I don't know, 10 hours a day.

And on call doesn't mean he was actually driving. He just had to be available to Trump if Trump needed him. But that, you know, he could be on the Internet. He could be watching a movie. He could be reading the books, sending emails, you know, trading stocks, whatever he wants to do. So it's not like it was that like he was really working, but he had to be available. So he couldn't go out of town. Right. But he's going back and he says that, well, I had to be available for more than 40 hours a week.

Maybe it was 50 hours a week or 55 hours a week. And now he wants back pay time and a half, right? Because overtime laws say you got to get time and a half. But first of all, he wasn't even an hourly worker. The guy collected a salary, something like, I don't know, $65,000, $70,000 a year was his salary. And, you know, he knew what the salary was when he took the job he knew what the hours were if he didn't like it he could have said something to trump he could have demanded higher pay or he could have quit right but instead he works without complaint and then 25 years later files a big

lawsuit now the point he's out of work no he's still working there he's still working there he is yeah and he's suing while he's working yeah which you know and then of course if you fire them when they sue you it's like oh it's retaliation then it makes it worse but the problem is you know trump he's got a lot of money i mean he can deal with this but your average small businessman you know this kind of stuff kills you when people start suing you it It costs a lot of money. And a lot of that happens too with the discrimination laws. I mean, because small business owners are so concerned about getting sued that they try to hire people that they think are less likely to sue them. And then it ends up backfiring because it works against all the people who are protected classes who are now

able to sue you. But I also wanted to point out on, you know, the overtime laws, because so many people think, oh, this is terrible, right? I mean, you should pay overtime. You know, overtime is, those laws are probably some of the worst laws out there because they don't protect workers, right? Because what happens is, let's say you got a job and you're working 40 hours a week, and you're an hourly worker. And you want more hours.

You want more money. Maybe you're trying to attract a higher caliber of girls, so you're trying to get more money. You want to work more hours. Sexist. That's sexist, what you just said. I'm writing a blog. So you tell your boss, hey, can I work an extra 10 hours a week? I want to make some more money. Well, your boss says,, can I work an extra 10 hours a week? I want to make some more money.

Well, your boss says, well, I'm sorry. I'd like to let you work an extra 10 hours, but I have to pay you time and a half. And the guy says, well, I don't need time and a half. I'll just work 10 hours for the same pay. That's illegal. Sorry, I'd like to do it, but I can't. And if that boss needs extra workers, he has to go bring on a part-time worker. So now, let's say if I want to get an extra 10 hours work, I've got to find another job someplace else where I can work part-time where the time and a half law doesn't apply.

But now I've got to get from my full-time job to my part-time job. How long does that take me? How common is this, though, that people are denying people extra work even though they need it because they don't want to pay the time in half? Oh, it happens all the time. I mean, that's where moonlighting came from. That's the whole – I mean, obviously, people – you're going to have people that work for two employers and then other people working and they're going back and forth between

the same companies. So what you're saying is it's weird if someone has to work extra hours, why are you paying them double the money? Or time and a half. Time and a half. Why are you paying them the extra money? Because they're doing just because they're working more than eight hours a day? Well, but the thing is the employer doesn't want to pay the extra, and he doesn't have to if he can hire somebody part-time but the point is that all of these um the the details of employment should be negotiated by the employer and the employee the

government should stay out of it you know and that way time and half is a government law yes it's all nationwide yeah well different states could have different rules and and federally they have different rules over what constitutes uh how much pay do you have to earn before the overtime rules apply. Also, isn't it pretty arbitrary, like this decision that's 40 hours a week? Yeah. Well, look, everything the government does is arbitrary. That's what laws are. They have to come up with a number.

But all of this should be free for discussion. You know, it's interesting because you have the liberals believe that, hey, you know, two people should be able to, you know, have a relationship without the government interfering, right? You know, they can have a sexual relationship. It's none of the government's business, you know, who you're, you know, you're sleeping with. Well, why don't they have the same, believe in the same freedom when it comes to economic relationships. If an employee and an employer are having a relationship, why doesn't the government just butt out and let the employer and the employee negotiate the relationship and the terms of the relationship that they think is best for them? Because there are a lot of workers that, oh, I don't need the overtime, but maybe

there's another benefit that I would prefer to have that I could get but I can't because of government laws are requiring things that I don't want. So you're against minimum wage. You're against essentially all these government regulations in terms of what people get paid. Yeah. I mean the minimum wage is probably the dumbest law. I think we talked about that on the last podcast. But it's probably the dumbest law that you can come up with because all it does is hurt the very people that you are intending to help.

You're hurting the least skilled people. You're preventing people from getting jobs in the first place. And you're creating extra incentives for employers to eliminate jobs, to try to use capital instead of labor, to try to outsource. I mean, nobody is going to hire somebody if they're losing money, right? People have a certain amount of productivity that they can bring to the table. And when an employer makes a decision on who to hire, they have to hire somebody that brings them at least enough productivity to cover the wages. And so what happens is when you have a minimum wage,

let's say the minimum wage is $8 an hour, and I'm an unskilled worker, and I have to convince an employer to pay me $8 an hour, I have to also convince him that I can deliver more than $8 an hour of productivity to his organization. And if I can't do that, I can't get a job. Now, what if I can only bring $5 of productivity? Well do that, I can't get a job. Now, what if I can only bring $5 of productivity? Well, that means you can't get hired. Well, I mean, if I only have $5 an

hour worth of skills and I can't get a job to improve my skills, I'm stuck in unemployment forever. I mean, the worst thing you can do to a guy with minimal skills is prevent them from getting a job because it's the job that's going to enable them to increase their skills so they can earn more money in the future. I know what you're saying, but the idea is that if you have a minimum amount that you allow people to pay, then at least the people that are working for that company will have a real income where they can pay their bills and feed themselves. And that this company, because they have all the power, they have all the money, and a poor worker who's stepping into the market for the first time or just hasn't

been able to acquire job skills that would allow them to make much more money per hour that they would be taken advantage of by this large corporation. Well, the corporations don't have all the power because they're not the only employer. I mean, all employers compete with one another for labor and they bid up wages. I mean, you can't pay people less than the market value of their labor because somebody else will hire them. So you could talk about, oh, wouldn't it be great if everybody could earn more money? Has there ever been a proven example of this where they've had no minimum wage and it's been a financial boom? Oh, absolutely.

Well, first of all, we didn't always have a minimum wage in the United States. I mean, it happened really in the 1930s. But you can look at situations of countries that have no minimum wage and they have very low levels of unemployment. And you can look at areas where the government – Like what countries in this? Well, I mean, they don't have a minimum wage in Singapore. And there are countries that – Isn't Singapore an interesting example, though?

It's an extremely wealthy country, right? Well, that's one of the reasons. Is that why? Yeah, they don't – it's very easy to do business. But you can look at examples where the United States has imposed a minimum wage on other countries. I mean, the minimum wage did a lot of damage in Puerto Rico. But, you know, look at another American territory, American Samoa, right? American Samoa, we basically destroyed American Samoa with our minimum wage. I mean, the Samoans are, you know,

are furious about it. This happened years ago, actually. And the reason I even found out about it, I was watching 60 Minutes and they were doing a report about, I think, football players in Samoa. And during their report, they mentioned that there was like a depression going on in Samoa. And it was like there was 30 percent unemployment and really high inflation. I was like, what the hell is going on in Samoa? So I wanted to research that on my own. And I found out that we imposed the minimum wage on Samoa and we destroyed all their jobs. Their two biggest employers were Chicken of the Sea and Starkist. They were canning tuna, and then they were shipping the tuna back to

the mainland. But the minute they raised the minimum wage, they made the production uncompetitive, because now you had to pay the higher wages plus the shipping costs to get the tuna back to the mainland. So all the canneries shut down down and then it created massive unemployment. And then prices went way up on the island because they no longer had boats coming back and forth to pick up the tuna. So now all of a sudden the shipping cost of imports went way up. So they had massive inflation, sky-high unemployment, all because of minimum wage. So you could look at examples of how minimum wage destroys jobs, you know, right there. Yet, you know, they continue to advocate for these higher wages because it sounds good. Oh, everybody should earn a decent living. Well, you know, not if you don't have any skills, you can't. And of course,

you know, a lot of kids, you know, they're 16, 17, 18, 19, 20. I mean, people live with their parents still. The most important thing is getting a job so you can acquire the skills to get a better job, to move up the ladder in an organization, to enhance your value to employers in general. What's the argument against this? Against what? Against what you're saying about minimum wage, against all these ideas that you're just proposing. Do you get a lot of pushback? to all these ideas that you're just proposing? Do you get a lot of pushback?

I mean, I'm sure what you're saying, this free market capitalism approach, there's a lot of people that oppose it. Of course. I mean, there's a lot of people that don't think it out. They think with their mind or their hearts, rather. And they don't even get the origin of the minimum wage was racism. I mean, the first minimum wage is here. It was designed to keep employers from hiring the Chinese or from hiring blacks because they, you know, that's where the

minimum wage came from, you know, to try to prevent employers from hiring certain people. So they said, well, let's have a minimum wage and that will reduce hiring of people who have less skills. And so and the labor unions, the biggest supporters of the minimum wage are the labor unions. And none of the labor unions' workers earn the minimum wage. So you might think, why do they so care about the minimum wage if they get paid a lot higher than minimum wage? And it's because you always have a competition between skilled labor and unskilled labor. So let's say a businessman has the option of hiring a skilled person to do something. And let's say the skilled person is going to charge $20 an hour,

or an unskilled person. And let's say I can hire three unskilled people for $5 an hour, and that equals 15. Well, hey, I'd rather hire the unskilled worker. I can pay three, $5 an hour to do the same job of one skilled worker. But now if the skilled worker can could lobby for a seven dollar minimum wage. Now, if I have to hire three unskilled people, it costs twenty one dollars. Aha. Now, all of a sudden I hire the guy with skills. So the labor unions benefit by keeping unskilled people unemployed because they have more skills and therefore they can get more work. That sounds like a complicated mess to me.

It is a mess for the people that get priced out of a job. Yeah. Now, democratic socialism is the thing right now. You're hearing it all the time. You're hearing it constantly in the news. To what do you attribute that? Do you think it's a frustration with uh just lifelong politicians like what do you think it is that's causing this uprise and upswing like the woman

what is her name that won in uh new york yeah you know she's actually half puerto rican one of my uh my countrymen but yeah i forget her name her country isn't puerto rico united states no actually you know i i found this out as I'm traveling now. You know, I still have an American passport. But when I mention what country I'm from and I look where you live, I always have to select Puerto Rico as a country. Even though it's part of America, it's still considered its own country, even though you still are American citizens when you live there and you travel on a U.S. passport. It's listed as a separate country from the United States. I was just going to read her name from a tweet.

Yeah, that's her. Alexandria Ocasio-Cortez, 28 years old. Yeah, well, she beat a 10-term incumbent. And, of course, he was a white guy. That's a negative for him. She's a woman of color. Yeah, you know. Latina.

Nice-looking woman, too, actually. Beautiful. Yeah. She's a woman of color Yeah, you know Nice looking woman too actually But the thing is People I think in that community Are just voting out of frustration In fact I looked at her commercial And it's a very powerful commercial Kind of like Women like me are not supposed to run for office

We're not supposed to That's all a bunch of nonsense But it's a story that I think resonated with a lot of people like, hey, let's stick it to the man, right? You know, and that's what they did. But I think that this wave is going to be bigger than people think. I think people are underestimating this. Oh, this is unique because, you know, she's in a, you know, a heavily minority community, and so that message worked better. But look, Bernie Sanders- Read this here that Jamie just pulled up.

She won in a district where she didn't even run. Progressive candidate also won a primary in her neighboring district in the Bronx as a write-in for the Reform Party. Oh, well, that's- But she won? She won? Yeah. I wonder...

Well, I don't think you could have two House seats simultaneously. This is crazy. But the... She's hot. But if you look at Bernie Sanders' appeal, it wasn't just, you know, poor people and minorities that were, you know, attracted to the Sanders message. And what was that message that was attracted to them? It was, you know, the corporations, we got to the Sanders message. And what was that message that was attracted to them?

It was the corporations. We got to tax the rich. We got to tax the corporations. Redistribution of wealth. And it's all about getting stuff for free. It's all about free health care, free education, guaranteed jobs. I mean, they want the government to guarantee everybody a job. Well, that was one of the things that Bernie said, that they could guarantee people jobs,

everyone in the country. How's the government going to guarantee each other? First of all, where's the government going to get the money? They did that in the Soviet Union. Yeah, everybody has a job, but nobody makes anything. And so everybody is poor. I mean, you can't, they want to guarantee a $15 an hour job, plus benefits, plus vacation, plus health care to do what? And of course, what's the government? The government's going to assign jobs to everybody? What are they all going to do? I mean, people forget that we don't want jobs. We want the productivity that result from the job. So it's about productive employment, not make work, right? We don't want

the government digging holes and filling them. We want real jobs. And how does the private sector know what jobs are needed? It's demand. It's individuals that want something. They're guided by a profit motive. You know, the government doesn't make a profit. There's nothing to guide them to efficiently allocate resources. And how is the government going to just figure out what people should do and just assign them, okay, this is the job you're going to do. This is, you know, it would destroy employment in this country if you did that. Well, it just doesn't even make sense that you could offer everyone a job. Like, you don't have those jobs, first of all.

And the idea that, well, what are we going to do? We're going to create X amount of construction jobs and X amount of dishwashing jobs and X amount of car wash jobs. You're not going to. And where's the money going to come from to pay for it? They're going to have to take the money from the private sector that would have created efficient jobs, and they're going to give it to the government to create inefficient jobs. It's a disaster. But the problem that I mentioned earlier is the economy is in bad shape because of all the government.

mentioned earlier, is the economy is in bad shape because of all the government. That's what went back to the Occupy Wall Street is that the people are protesting because there's serious problems in the country. They don't realize that it's not capitalism that is creating those problems. Capitalism would solve those problems. It's government interference that is causing the problems that they're protesting. And so the same thing with these socialists, that they understand that their standard of living is falling, right? Look at like, one of the things they want to do is they want to give free education, right? Because the liberals are all complaining about the fact that college is so expensive and that students have so much debt. That's because of government. Before the government got involved, college was cheap. I mean, government drove up the cost of college by guaranteeing student loans. I mean, that's how the government got the votes of students.

They promised the students something for nothing. They said, hey, vote for me, and I'll guarantee, I'll make it easier for you to get a loan to go to college. Well, the minute colleges knew that people could get these loans, they started jacking up the tuition so they could benefit from all this government money. So the colleges benefited, the banking system benefited by making riskless loans that the taxpayer was on the hook for. But the byproduct of all this cheap money being funneled at the colleges was that the colleges kept raising the tuition higher and higher and higher. And then the politicians kept increasing the amount of loans they would subsidize.

And so all of this is the fault of government. The government created the problem that they're now complaining about. But the students don't understand that that's why college is so expensive. Well, no one sees a clear way out. That's part of the problem, and that's one of the reasons why socialism is so compelling. It's like this seems like it's an alternative to what we're currently experiencing. So people look at that and go, maybe that's the solution. Yeah, look, people want something different. I said, that's why Trump was able to claim that he was going to shake things up and make America

great again, because I'm different. Because what's working, what we have now is not working. That's why I'm so afraid that when people who voted for Trump, you know, end up being disillusioned because nothing changes, their lives don't get better. And you're completely convinced that there's going to be a crash coming in the next three years. Yeah. I mean, look, there's going to be a big recession, right? I think it's going to be worse than the 2008 financial crisis. I mean that because the government was able to bail everybody out that time. They were able to print a bunch of money and go deeper into debt. And the financial crisis, if you didn't have money in the stock market and you didn't lose your job, it wasn't

that bad. Right. I mean, you know, you know, you were fine. But this next crisis, even if you don't lose your job, you're going to be affected by inflation. Prices are going to go way up because I think this is going to be a dollar crisis. This is going to be a sovereign debt crisis. And investors were bailed out. The government was able to bail out investors last time with quantitative easing and all the tarp and all that. But the next time, investors are not going to get bailed out, right? They're going to go down for the count because if they try, and I believe they will try to reflate the bubbles again by printing even more money, doing another round of quantitative easing, it's going to destroy the

dollar. So they're not going to reflate the bubble in stocks. They're going to prick the bubble in the dollar. And so when the dollar loses value and prices go up and you have stagflation, you have a combination of a recession and inflation at the same time. And then, of course, what is the Fed going to do in that circumstance? Because their playbook is, if you have recession, you ease. If you have inflation, you tighten. Well, what if you have them both together? They just did these stress tests. You hear these bank stress tests? And the Federal Reserve came out and they said that all the banks passed. Well, what a shocker, right?

The Fed came up with a test that everybody passed. But if you look at the assumptions that they made about the economy, under the worst-case scenario that they assumed, interest rates, 10-year rates, go no higher than 3%. They don't go down, they just don't go up. And they assume that inflation stays below 2% under the worst case scenario. And they assume that the Fed is able to lower interest rates to zero again to stimulate the economy. Now, I mean, what happens if inflation doesn't go down? What if it goes up? What if it goes up to 5%, 8%? You know,

what if interest rates go up to 5% or 8%, 10%? What happens then, right? All the banks collapse because what happens if we have a recession where the Fed can't stimulate because they have to fight inflation? Or what happens if we have a recession and the government has to raise taxes during the recession because the budget deficit is exploding and they don't have the money to pay the interest on the debt. What does happen? Well, I think that the politics are going to come into play and that the Fed is going to err on allowing inflation to run out of control. They're going to do what they can to try to prop up the economy and they're going to sacrifice the dollar. They're going to do what they can to try to prop up the economy, and they're going to sacrifice the dollar.

They're going to say, well, inflation is the lesser of the two evils, but it's actually going to end up being the greater evil. And remember, you know, when Nixon imposed wage and price controls, which was a very misguided effort, it's kind of like, you know, what Trump is doing with tariffs trying to cure the trade deficit. Rising prices are the result of inflation. It's not the cause. And so price controls don't work. They simply try to mask the problem while it gets worse.

But I think they're going to let inflation get a lot worse. And what that's going to mean is that, you know, people need to prepare for that. I mean, people need to do something. We talked about that when I was on your show before about buying gold. We talked about cryptocurrencies. I talked about gold money. And by the way, we talked about gold money on your show before. And so many people, this just shows you how many people listen to this podcast. So many people tried to open up accounts at gold money because of our conversation that the regulators actually shut them down. They actually stopped them from onboarding new customers because there was too many people coming onto the platform. And the reason, look, this is the system that we're in now because when you have a Gold Money account, right, it's not like just buying gold.

You have gold that you can actually transact in. I can take my gold and I can send it to anybody I want anywhere in the world who has an account for free. So it's like a money transfer. So gold has to be actually stored somewhere. There's actually some real gold that backs it. Exactly. There's gold stored in a Brinks vault and they have vaults all around the world, but I can transfer my ownership of that gold to you or anybody else. But because I can do that, now all of a sudden the regulations are there because they're worried about terrorists, they're worried about money laundering. And so everybody who has an account, there has to be a lot of scrutiny about those accounts and those transactions, just like it was a bank. And so

this, and a lot of people got frustrated. I got a lot of emails from people who were frustrated. They tried to open up an accounts and they didn't realize that it was the regulators. They get mad at gold money because they're not opening up their account or approving their account, but it's the regulations that are the cog in the machine. But the good news is I think they've made – they've satisfied the regulators recently. They've come up with some new systems. So the process is a lot more efficient now for people to go online and buy gold. And, you know, again, you can buy, you know, 25, 50 bucks worth, 100 bucks worth of gold. And you actually have another store of value,

another means of, you know, transacting with other people where you can have some protection against inflation. And, you know, I showed you, I have my, by the way, they're sending you one of those gold cards. I talked to them. Oh, yeah? Yeah, you know, I showed you this card that I have. So what do I have to do? I have to send them some money?

Yeah, well, you're going to have to get, I'm not sure if they're going to preload your account. You know, I went through, you know, I brought this card through the security today. And, of course, every time I go through security with this card, it rings. So I always have to take my wallet out and put it in a little bin. And it freaked out. They can never figure out what's going on because they see this thing of metal. They have no idea

what it is. So it's always like it stops me. But it's a conversation piece. I had about three or four different TSA guys were all looking at this card. Is that gold plated? No, this is pure gold. It's actual gold? Yeah, this is 24 karat gold. Which is gold mixed with metal, right? Mixed with steel? Well, no, no. This is pure gold. It's actual gold. Yeah, this is 24-karat gold. Which is gold mixed with metal, right?

Mixed with steel? No, it's not mixed with anything. But isn't 24-karat gold like gold that's also mixed with something else? No, it's pure gold. So it's not as malleable? Yeah, no, that's like that. If you go buy gold jewelry, right, you're getting an 18-karat gold or 14-karat gold. So how much is this card worth?

Yeah, like $1,400. This would be annoying to carry in your pocket. It's heavy. Yeah, but I mean, compared to other cards. But you know, gold money, another way that people can buy gold. Pimp slap, something like this. Yeah. They launched a company called Mene. The website pulled up.

It's M-E-N-E dot com. And this is a great way for average people to own gold, but also kill two birds with one stone. Because when you go out and buy jewelry, right, and you buy typical jewelry, maybe it's, you know, 14-karat gold, 18-karat gold. The Mene jewelry is 24-karat gold, and they sell it by the weight of gold. So if you – let's say you went to a department store and you spent $1,000 on a gold necklace, right? Maybe you'd have $100 worth of gold, maybe, right?

If you spend $1,000 at Manet, you're going to get $800 worth of gold. And Manet will buy that necklace back from you at any point in time in the future, two years from now, five years from now, ten years from now, at whatever the gold value of the necklace is. So let's say gold goes up by 30% from the time you buy the necklace, you can actually sell it back to Manet for more than you paid for it. Whereas if you have used jewelry that you buy at a department store, what's it worth on the secondhand market? 10 cents on the dollar, right? 20s, maybe. So this allows people to have nice jewelry, but also own real gold at the same time. I mean you're going to pay a higher premium to buy a gold necklace. I have a pair of gold cufflinks that I wear.

My wife wears this Binet jewelry all the time. She wears it every day. And so you can buy it instead of buying other jewelry. But you're not throwing your money away. You're actually getting gold. But the point is that people need to protect themselves from the inflation that's coming because that is where we're headed. The government is going to continue to print money to try to prop everything up, to try to delay the day of reckoning for as long as they can. And we've had a rally in the dollar recently because people think, oh, the trade war is good for the dollar. They're wrong. It's a disaster for the dollar. America can't win the trade war. I mean, we benefit from the trade deficit right now. All we can do is lose in the

short run if we lose access to all those goods that we're not having to pay for with exports. You know, they're actually trying to say that the budget deficits going up is good for the dollar, when it's not. I mean, big budget deficits are always bad for the dollar because it means the government is creating more debt. They're selling more bonds around the world. The supply of dollars also includes the supply of treasuries. And so if you're flooding the world with treasuries, you've got a surplus of dollars. The dollar is going to lose value. And so people have to find a way to protect themselves. And, you know, the average guy, I mean, gold is the easiest way to do that. You know, and, you know, with the gold money account, you could do it very, you know, very inexpensive. Of course, if you want to buy bigger amounts of gold, if someone wants to put

$50,000, $100,000 worth of gold, I wouldn't spend it on jewelry, right? You could just buy, you know, regular gold. I got a company, Shift Gold, where I sell maple leaves, cougarans, U.S. coins. So you feel like buying gold jewelry should be in addition to, not a primary investment? Well, because of the higher markup. When I sell gold bullion to people, coins, we mark it up 1%, 2%. It's a small markup. The markup on jewelry is higher because we had to pay to make the jewelry. It's more expensive to make a gold necklace or a gold bracelet or a gold ring than to make a gold coin.

So you wouldn't want to have all your gold in jewelry. But to the extent you're going to buy jewelry anyway, you might as well buy real gold because now you actually have some savings that has value in addition to having something you can wear. I mean I don't get a lot of value day to day by having gold in a safe. But if you're wearing it, right? I mean, so then now you're getting an extra benefit from the fact that you have gold because now you get to enjoy it on a daily basis if you're wearing it. And obviously, too, if you don't have that much money, if someone's not going to buy any gold, if someone has a couple thousand dollars, they were going to spend it on jewelry. All right, we'll spend it on gold jewelry because at least you still have the money, right? At least 80% of what you spent, you still have. Well, it makes sense to me, and I don't know

much about gold. But it's weird that gold is one of those things that's universally been thought of as valuable, like forever. Yeah, well, that's why it's money. I mean, gold has always been a— Is there anything else like that? Well, I mean, there are other metals that have been used as money. I mean, silver has been used as money. Right. But, I mean, gold has been the choice.

I mean, look, central banks own a lot of gold. I mean, not as much as they used to, not as much as they should, but central banks own it. Gold's a monetary metal, but, you know, gold is used in a lot of things. I mean, it's in cell phones, in computers, it's used in medicine, in dentistry. I mean, so there are a lot of uses for it because gold has properties that other metals don't have that gives it value, not just its physical beauty, but also the things that you can do with it. You can do things with gold that you can't do with other metals. And gold's not going to tarnish. It's not rust. So you can make something out of it and it's not going anywhere. Yeah. You can also plate things with it, right? You can take

a very small piece of gold, you could plate this entire table. Exactly, yeah. I've never seen that happen, but I've had it explained to me. It seems very strange. Yeah, the property is that it has, you know, no other metal can replicate. And that's one of the reasons that it's been so desirable for so many years. But it also makes it, you know,

ideally suited to be money. And that's, you know, one of the things that we, you know, Bitcoin, Bitcoin is trying to digitally replicate the properties of gold. I mean, that's the you know, one of the things that, you know, Bitcoin, Bitcoin is trying to digitally replicate the properties of gold. I mean, that's the whole selling point of Bitcoin. They say it's digital gold. And it does have a lot of gold's properties that helped it succeed as money, but it doesn't have any of gold's physical properties that gave it so much value in the first place. And so you can't separate the intrinsic value of money

from money. Money has to be a commodity. It has to have value. And that's where Bitcoin fails. I had a debate in New York, in Soho, last week on Bitcoin, whether it was going to succeed and replace the fiat currencies. And basically, technically I lost the debate, but I think it was rigged. Why was it rigged? Well, because the way they decide the winner is before the debate they have a poll, and they ask everybody where they stand. And then after the debate they ask them where they stand now to see if people change their opinion. And since everybody in there was a whole Bitcoin audience, and I had it

confirmed to me from several sources that basically everybody was saying hey, make sure you vote this way before the debate so you can change your mind after the debate so that the pro-Bitcoin guy is going to win. Why? Yeah, yeah, yeah. So did they initially vote neutral or anti-Bitcoin? No, no. So the proposition is, will Bitcoin replace the dollar or other fiat currencies in the future?

But they wanted to propose it initially before the debate, get your thoughts. But they rigged it by having these people have contrary thoughts before the debate right get your thoughts but they rigged it by having these people have contrary thoughts before the debate right well so as if bitcoin was evangelized to them like oh now i get it yeah okay the idea is to have as like a bunch of people were in this debate that didn't believe bitcoin was the future but now after this hour debate they were convinced by my opponent that it was the future. Because then, you know, when I read all the stories, and if you go online, you read the stories about the debate, it's always like Peter Schiff lost, Peter gets bested, Schiff loses.

So it's almost like I got caught up in the Bitcoin propaganda. But there's so much, like, you want to talk about tribalism, Bitcoin and cryptocurrency, those people are all in. Oh, yeah, as I said. There's a giant group of them that are just all in. Yeah, they're all in. I said cryptocurrency, those people are all in. Oh, yeah. As I said – There's a giant group of them that are just all in. Yeah, they're all in – I said they're all in Puerto Rico now. So I'm hanging around more of the crypto guys than I used to. And what is your take?

Look, you know, I feel badly in that – well, first of all, some of them got very rich. So I don't feel bad for these guys that got rich, that put a few thousand dollars in and now have millions of dollars. I mean, obviously, I missed out on that myself. I mean, there's a lot of bubbles that I missed out on. I didn't make anything on the dot-com bubble. I mean, I made money when it came down. I didn't make any money on the housing bubble until it went down. And I missed out on the Bitcoin bubble.

But this bubble was tailor-made for me. If there was ever a bubble that I missed out on the Bitcoin bubble. But this bubble was tailor-made for me. If there was ever a bubble that I should have been part of, it was this one. This was all for the libertarians, right? Free market guys, anti-fiat currency. So, you know, I knew about it early on. I mean, not at the very beginning when it was like pennies, but I knew about it before it was $10. And I knew about it when it was pretty low. How much do you have invested in Bitcoin? Oh, zero. Zero. Yeah. Actually, you know what? I got $50 worth because... Oh,

big spender. Well, you know what happened is after the debate, I went out to dinner with Eric Voorhees, who is my opponent, his wife. My wife was there and we had a group of people. And so they gave me to show me how it works, they gave me $100 worth of Bitcoin. And then I gave somebody back $50, but I kept $50 of it.

Just in case. Yeah, although now it's only worth $48 because it's gone down. It moves all over the place. Yeah, but – so I mean I don't feel badly that some of these guys lucked into having a lot of money or it's luck or they took a shot and it paid off. They got in and the market exploded and they have an opportunity to cash out on a profit. But a lot of them are not cashing out. They're going to, I think they're going to go down with the ship. But when you say that, you think it's going down. Oh, yeah. Well, it's look, it's not going to succeed as money. It's not going to work. It's just a highly speculative asset. You know, and the last time I did your show, I mean, a lot

of people are, you know, what Peter Schiff got wrong on Joe Rogan about Bitcoin? I mean, everybody thinks I don't understand it, and that's why I don't believe in it. It's because I do understand it that I don't believe it. The people who think it's going to work, they may understand the technology, but they don't understand money. And so, but when I talk to these people, to me, it's very much like a cult. I mean, they believe so strongly in this. They're so caught up in the hype and the hysteria, and maybe they're blinded by the money they think they're going to make. You know, these things are a million dollars apiece or wherever they believe they're going. Yeah, that's what they think it's going to.

They think it's going to go to a million dollars or plus. Well, there was an article last week. Some guy was saying $100 million. $100 million of Bitcoin. You know, that's why nobody wants to sell. Right? But the smart people are selling. The people that got in earlier are trying to con people into holding on so that they can get out.

$100 million? They're talking about $100 million? It's basically some numbers on... Did they ever figure out who that Satoshi Ishii guy is? No, no. Satoshi Nakamura? That's no. Satoshi Nakamura? That's amazing. Satoshi Nakamura.

Yeah, I don't know. I mean, I don't know why the guy hasn't come forward, if it's a guy at all. Someone said that they think it's Elon Musk. I don't know. Whoever it is, you figure they've got a lot of Bitcoin. If they're a real person. I mean, it might have been a group of people. But, of course, now it's not just Bitcoin, right?

There's 1,500 to 2,000 of these other cryptocurrencies. Well, not just that. There's a bunch of different ones, right? There's different variants. Yeah, and that's part of the problem because they think, oh, there's 21 million Bitcoin. And they think that that means they're scarce. Well, they're not scarce. There's so many other currencies out there.

And it's only scarce because it's coded to be scarce. Gold is scarce because it really is scarce. Bitcoin is scarce because they decided to make it scarce. But it's not scarce in that there's nothing that any other cryptocurrency can't do that Bitcoin is doing. But they're looking at it as an alternative not to gold but to the currency that we currently use. Well, no. They look at it as an alternative to both, I think, a lot of them, although some people think it's maybe a compliment of gold, but it doesn't have any actual value. And that's where

I get into a lot of arguments with these crypto guys, because they say, well, gold doesn't have any actual value either, which is laughable, because of course gold has actual value. There are lots of things that I can do with gold, and that shows that it has value. There's nothing that I can do with Bitcoin other than give it to somebody else. I mean, that's the whole purpose of it is to give it to somebody else. Right. But our whole economy is kind of screwy. It's entirely possible that it could shift over to a crypto coin based economy. Don't you think? Cryptocurrency based economy? Governments could certainly issue crypto fiat currency the same way they issue paper fiat

currency. In fact, most of our paper currency transactions are digital anyway. I mean, how much cash do you use on a daily basis? You use your credit card. And so banks are transferring. They're not, you know, they're not shipping bills back and forth. Mostly it's just numbers on a computer. So the government could certainly do that. And I, you know, that would probably, you know, give them even more control over the economy, which is a negative thing. Because, you know, at least if you have cash, I can give you $100 and the government doesn't see that transaction. They're not spying on us. But if they eliminated all cash and all transactions were digital, then they would know everything I did. I mean, every dollar I spent would be

recorded on some government computer. And, you know, that's something that I don't want. And I think, you know, libertarians certainly don't want that, which is one way cryptocurrencies could backfire is if the governments end up monopolizing cryptocurrency and, you know, and issue cryptocurrency alongside or instead of the paper currencies that they issue now. But I think part of the biggest damage that's ultimately going to come from it is when the cryptocurrencies collapse and people lose a lot of money, which is going to happen. The government's going to be able to say, you see, we told you the free enterprise capitalism is no good. I mean, look what happens when you trust, you know, Bitcoin. It's going to help make the dollar and the euro and the yen look good by comparison.

Even though these are fatally fraud currencies, they're still going to look better than the cryptocurrencies of the people who have lost a lot of money. See, right now, there are a lot of people that like Bitcoin because they bought it real cheap. And even though it's gone down 70% from its high, it got up to $20,000, and now it's about $6,400. You know, there's a lot of people that bought it and still have big profits. But what about the people that bought it at 20,000, 18,000, 15,000, 10,000? They're losing money. And if it keeps falling and it goes down to 1,000 or lower, where I think it's going, you have a lot of people that have lost a lot of money. And so that's going to create a lot of problems. And I think the government's going to come in with all sorts of new rules and new regulations on transactions to try to protect us from ourselves. Again, it's just going to, you know, try to make government look

good and the free market look bad. But, you know, people get caught up in frenzies all the time. It doesn't mean that the free market needs to be shut down just because every once in a while people get greedy and get nuts. And it's not a reason to expand the power of government because government will do much more damage to an economy than small bubbles will do when you have a boom and a bust because you have a mania. Do you think that there's any cryptocurrencies that are compelling? Is there any one other than Bitcoin that you go, well, this one has a different set of parameters or different set of rules? No, because to me, I mean, you just can't have a digital token that you just create that's going to have – going to be a store of value. I mean money has to be a store of value. It has to be a medium of deferred payment. So what that means is I have to be able to take my money and save it for a year, five years, ten years.

I have to be able to make a loan. I can loan you money. I can't loan you a Bitcoin and you say I'll pay the Bitcoin back in ten years because none of us know what the Bitcoin is going to be worth. So how do you know what kind of interest rate to charge? You need to have stable money. And I don't think any of these cryptocurrencies can ever be stable because there's no real rate to charge. You need to have stable money. And I don't think any of these cryptocurrencies can ever be stable because there's no real value to stabilize. People say it's a store of value, but there's no value to store. So the only cryptocurrencies that would

work would be cryptocurrencies that were backed by a real commodity like gold. And that can work. But what gold money does is actually something better because you don't have to have a cryptocurrency. You just have actual gold. See, the reason that currency existed in the first place, because currency was always backed by real money. So let's say I had gold that I was storing at a blacksmith, at a bar of gold. And I had a piece of paper that said, you know, pay to the bear on demand, you know, this bar of gold, right? And it was written from a reputable blacksmith. I could negotiate that piece of paper. I can give you that piece of paper and say, hey, I own some gold at this blacksmith.

Take this piece of paper, and now you own the gold, right? And so that piece of paper is functioning as a money substitute, as currency. But the real money is in a vault. It's gold. But it's hard for me to – I can't break up that bar. I can't just give you a small portion of it. But what gold money is doing is taking that old blacksmith concept and bringing it into the modern era because I can store my gold in a vault at Brinks through gold money. And now I can transfer any portion. I can give you a gram of my

gold, a tiny amount of gold. I can just send it to you for free. And now you own that gold because now the ownership register is going to be changed. And instead of being in Peter Schiff's name, it's going to be in Joe Rogan's name. And so once you can do that, once I can take a bar of gold and turn it into liquid money that can be used to buy a cup of coffee and you're doing all this without having physical control of the gold no no you're not physically holding it in your hands it's in a vault somewhere yeah well somebody has to have physical control and that's what a lot of the bitcoin advocates don't like about something like a gold money they say well you have to trust a third party to store your gold. Yes, you do. I mean, but people have been trusting third parties with gold for thousands

of years. And, you know, you have reliable third parties that can hold on to something of real value because you have to have stability. I mean, that's the big problem that we have in the world today is we have no real money. We just have these fiat currencies that governments create out of thin air. And there's no real stability in the monetary system. If we had real money, if we were on a gold standard, which I believe we will be on again eventually, because that is the norm throughout history is to be on a gold standard. All these experiments with fiat currency, they don't work. But we haven't been on a gold standard since one of the 70s? Yeah, well, we went off it in 1971. Of course, you know, we were on a pure gold standard

in the 19th century and certainly the latter part of it. Do you think we're going to go back to that? I think so, because that's what works. I mean, what we have now works for government, but it doesn't work for the people. It doesn't work for prosperity. You know, when Trump is out there

trying to say we have the greatest economy in history, I mean, it isn't even close. I mean, forget about the fact that it's not even better than it was when Obama was president, and he said that was an economic wasteland. But you go back to the period of time, let's say 1870 through, you know, 1910 or in there. I mean, that was the golden age of America. I mean, that is what created the middle class. The middle class was a byproduct of the economic growth that took place in America. I mean, we basically had tremendous economic growth. We absorbed tens of millions of immigrants that were coming from all over the world. And they weren't coming here for welfare and food stamps because they didn't exist. There was no minimum wage.

You know, there was just freedom here. And people came here from all around the world because they could be freer in America than they could be anyplace else. And it was those free Americans working, you know, with a gold standard, with sound money that created the greatest amount of economic growth that the world has ever seen in the shortest amount of time. I mean, people talk about how great the Chinese economy is, but, you know, look back at the American economy during that period. And that was tremendous growth. And I think, you know, we could have great growth again, you know, to the extent that we, you know, you know,

substantially diminish the size of government. But part of that would be to return to sound money, and that would be gold. But the cult of personality, it's one of those things – man, I don't know. This is such a fascinating conversation because I would love to have a person who's equally educated on this stuff that opposes your viewpoint, and I'd love to see – Yeah, well, there are certainly people that oppose my viewpoint. There's no shortage of them. Right. But I'd be happy to come on the show. But you don't think they're correct?

No, no, they're not correct at all. Oh, you know, before I forget, too, I forgot to bring this up because you mentioned it on the other podcast. And you're like, I wish somebody would come in and talk to me about it. I was like, yeah, I got to talk about it, which is the Act 2022 in Puerto Rico and whether or not Puerto Rico is in trouble because you have a bunch of rich people who are there who are not paying taxes. Yeah, that was the charge, right? The reason why it was so difficult to rebuild the infrastructure post Maria was that all you rich guys had come there and you soaked off the economy and that's why you're there because you weren't paying any taxes.

Yeah, and so first of all, the tax breaks didn't start until 2012. So before that, what was going on and what changed? Well, if you were rich in Puerto Rico, you paid the same 30% tax as everybody else. Now, nobody in Puerto Rico has to pay federal income taxes. That is one of the big benefits that Puerto Rico has. You don't have to pay the federal income tax if you live there and you're working there and the money you earn. So if I had moved to Puerto Rico in 2010 or 2011, which I did not do, but had I moved there then, I would have had to pay the same high Puerto Rican income tax that everybody else in Puerto Rico is paying. But had I moved there then, I would have had to pay the same high Puerto Rican income tax that

everybody else in Puerto Rico is paying. But what enticed a lot of people to move to Puerto Rico was the fact that they reduced the taxes. Now, the taxes aren't zero, right? If you come there, you're still going to pay taxes on some of the money that you earn. Like my business pays a 4% corporate tax. So it's not zero, I pay 4%. I can give myself a dividend that's tax-free, but the corporations are required to pay out a certain amount of taxable salary to the owners.

So some of my salary is taxed as high as 30%. The majority of it is taxed basically at the 4%. But 4% of something is better than 30% of nothing, plus they're getting 30% of something. So a lot of the people who have moved to Puerto Rico over the last five, six, seven years that didn't live there before are paying a lot of taxes now to the Puerto Rican government. to the Puerto Rican government. Even though the rate is very low, the dollar amount is very high, and each individual person who has moved there is paying a lot more taxes than the average Puerto Rican who's already living there paying the higher rate. So the people who moved there brought significant tax revenue that Puerto Rico never was going to get. Because remember, if they were taxing people at 30 percent, people from California wouldn't have moved there. People from New York, people from New Jersey wouldn't have moved there. It was the low

taxes that brought all these people to Puerto Rico who never would have been there. And they're now paying taxes. But more importantly, they're hiring people who are also paying taxes. They're spending a lot of money locally in the economy, generating revenue and jobs. So they've been a big plus. And I can tell you, the people who have moved there, myself included, we donated a lot of money to the relief efforts. I mean, as soon as that hurricane was over, a lot of the ACT 2022 people, which is what they'd be called because they went there to participate, they were raising money, they were helping out. I mean, so there's a lot of charity that came to Puerto Rico that a lot of these people, they wouldn't have thought of it if they

didn't already live there. But by bringing a lot of wealthy people down there to Puerto Rico, and they're there living it, you know, they're more inclined to help out their neighbors than when they were still living in the U.S. So Puerto Rico has derived significant benefit from an influx of wealthy entrepreneurs. So this idea that you're taking advantage of them and that you moving in there and just exploiting that place by getting paid in low taxes and that it's a bad thing for the people that live there. That's a false statement. great thing for the people that live there because people are coming to the island bringing capital bringing businesses bringing employment opportunities paying taxes that they never would have paid let me ask you do you ever anticipate i mean it seems as puerto rico as big as any state like is as big as rhode island like how big is it no it's it's small i mean i

mean geographically it may be about the size i think it's like 30 miles maybe, and that's the length. It's skinnier than that. So it's a small place, but relative to the Caribbean, I mean, if you compare it to other Caribbean islands, it's pretty big. How long is a flight from like New York to Puerto Rico? Actually, in the air, it's about three hours. But I think the airlines, they leave about four if you look at the flight time. But actually, from wheels up to wheels down, it's about a three-hour flight. So it's not far. And there are a lot of places that you can fly direct.

To go to the West Coast, no, you've got to change planes. Now, would there be a way that all these people coming in, they could somehow or another fix this, the whole electrical system that they have there, their power grid? Yeah, look, the power grid, this just shows you all the people that think socialism is so great. Look at Puerto Rico. That's why they're broke, right? The socialists destroyed Puerto Rico. The socialists in Puerto Rico and, of course, the ones that we have in Washington, because all their problems aren't self-inflicted. But we created a problem for Puerto Rico a number of ways. First of all, we have the minimum wage. The average income in Puerto Rico is half of the poorest state in the United States, which I forget which is the poorest state.

It's like Kentucky. Kentucky maybe. But it's half of that. Half of that. Right. But now you've got a minimum wage that's the same as Kentucky. So it's basically keeping a lot more people unemployed. But then you still have welfare.

You still have food stamps. So you have all these people now that are not working because they're getting paid by the government. But then you have the Puerto Rican government, which is a major employer of people who work for the government. And a lot of them are just doing nonsense. Right? I mean, there's so many people that are working for the government. They're not productive, but they're draining resources from the Puerto Rican economy. I mean, part of it was a power company. You know, I mean, it's a disaster, but the government is running everything there, and so everything is inefficient. And meanwhile, a lot of the productive people, people who want

jobs, have left the island. Like, if you think a high minimum wage is the productive people, people who want jobs have left the island. Like if you think a high minimum wage is great, all the people who are leaving Puerto Rico to go to Florida are effectively – even though it's the same minimum wage, they're actually going to a state that has a much lower minimum wage relative to the minimum wage because they can get jobs in Florida. They can't get them in Puerto Rico. So you have that situation where very few people are actually employed, so you don't get them in Puerto Rico. So, you know, you have that situation where, you know, very few people are actually employed, so you don't have a real tax base. And then what America did, what really screwed them over, was we made all their bonds triple tax-free. We said, if you live in New York and you buy Puerto Rican government bonds, you're not going to pay any local income taxes. You're not going to pay any local income taxes. You're

not going to pay any federal income taxes. It's all tax-free. Now, if you loan money to a Puerto Rican company, right, if you loan money to a private business in Puerto Rico, you got to pay taxes on whatever they pay you in interest. But if you loan money to the Puerto Rican government, the interest is tax-free. So America subsidized, loaned money to the government in Puerto Rico, but not to the private sector. And so they made it very easy for Puerto Rican politicians to go into debt because all these muni bond funds all over the country needed Puerto Rican paper to increase the yield on their fund. So you have everybody wants Puerto Rican government bonds. So the Puerto Rican government is creating these bonds and they can now buy votes.

They can promise all sorts of goodies to people who vote for them. They can overpay government workers, give them all sorts of holidays, right? Lots of time off and they can keep borrowing money. So they got deeper and deeper into debt because we created an incentive for them to do that. And now they have a debt crisis because all of a sudden Puerto Rican bondholders realize that Puerto Rico is never going to pay back their money. And then the other thing that we did to them and I talked about, I think, on the show is the Jones Act, which, if you remember, Trump suspended it for like a week or two after Maria. But the Jones Act should be completely repealed, and especially if Donald Trump's going to be talking about tariffs.

What's the Jones Act again? Well, there's a number of aspects of it. But the most significant to Puerto Rico is that the Jones Act says that if you want to transport goods from one U.S. port to another U.S. port, it has to be an American ship. Right? So Trump is out there talking about free trade. We need free trade. The Jones Act is the opposite of free trade. It's complete protectionism. It's saying that if you want to take something from Florida to, you know, if you want to take something, no, if you want to take something between the U.S. and Puerto Rico, you've got to

use a U.S. ship. You can't use a foreign ship, right? So there's no competition. But what this has done is this has dramatically increased the cost of living. So even though the average person in Puerto Rico earns half of what the average person in Kentucky earns, groceries in Puerto Rico are more expensive than groceries in Kentucky. So you have lower income but a higher cost of living. That's thanks to the Jones Act. And if they repealed the Jones Act, the cost of living in Puerto Rico would plunge. And that's one of the reasons, too, that the tourism industry – Puerto Rico is a beautiful island. I mean if you haven't been there, you should come. It's a magnificent island.

And what's also great about it is it has a real culture. It has a real vibe to it. It's a city. It's like it's a Latin American city on an island. It's not just like a remote little island. So it's a really nice place to it. It's a city. It's a Latin American city on an island. It's not just like a remote little island. So it's a really nice place to be. And it's one of the only places that I think you can really live in the Caribbean and not feel like you're just on Gilligan's Island or not, but just like on vacation all the time. It's a real city with real stuff going on.

And I've been there now long enough that I would go there even without the tax breaks. I like being there. I look forward to going back. What about crime and poverty? Yeah, I mean, look. There's crime there in the big city in San Juan and certain areas just like there are in New York and just like all major U.S. cities. You've got crime problems. And, again, there's a lot of reasons for that.

Again, it has to do with government. It has to do with the drug laws and all the other things. Although they got medical marijuana in Puerto Rico. I think eventually they'll probably have recreational, but at least they have medical. But what was I – I just lost my train of thought. What was I talking about? What were we talking about? Oh, the Jones Act.

Jones Act. Right. And so, oh, yeah, so how it hurts the tourism industry. So the Jones Act makes Puerto Rican hotels, you know, unable to compete on the low end with hotels in other Caribbean islands because everything is so expensive because of the Jones Act and because they have the U.S. minimum wage. What specifically is the Jones Act? What is it? It's on the shipping. Imports, right? So all the food in Puerto Rico is more expensive. All the U.S. minimum wage. What specifically is the Jones Act? What does it say? It's on the shipping. Imports, right?

So all the food in Puerto Rico is more expensive. All the supplies. So hotels have a lot of things, right? You go into a hotel, there's all kinds of products. You got bath products in there. All that stuff has to be shipped in. And all the food that you eat, all the drinks, all the stuff is shipped in. And to bring it to Puerto Rico is a lot more expensive than to bring it to the Bahamas

or bring it to Barbados or someplace else. So all these other Caribbean islands can get a lot of American tourists to go there for bargain vacations. But Puerto Rico can't compete on the low end. On the real high end, they can compete because people are not as concerned about the cost. people are not as concerned about the cost. But on the lower end, the budget traveler, a lot more people would be going to Puerto Rico if it wasn't for the Jones Act, because the hotels would be able to cater to a lower price point because they could hire the chamber mage for less money. They could have lower prices at the restaurant. So this is really destroying the tourism industry in Puerto Rico, which could

be thriving, but for the Jones Act, but also it is diminishing the standard of living of Puerto Ricans who are forced to pay higher prices. I mean, what happens is, let's say there's a big ship coming in from China with all sorts of goods, and it's headed for a U.S. port. China with all sorts of goods, and it's headed for a U.S. port. If it could stop off at Puerto Rico, drop a few things off, and then continue on its destination, that would be great. It would be inexpensive, but they can't. What it has to do is it has to bring all the stuff that's going to Puerto Rico to the U.S., unload it, and then load it back on a U.S. flagship, and then send it back to Puerto Rico, which costs a fortune. And then load it back on a U.S. flagship, and then send it back to Puerto Rico, which costs a fortune. And then the same thing with Puerto Rican exports. So the whole Puerto

Rican international commerce is being limited by the Jones Act. Now, this also affects Hawaii. Hawaii suffers from the Jones Act, too. But Hawaii is much richer than Puerto Rico. They have a much higher average income. And so even though it affects them, it's not as big a deal. It's the same thing with Hawaii, even though Hawaii is a state? Yeah, because Hawaii is a U.S. port. So Hawaii has to have all these Jones Act ships as well. So if something gets delivered to Hawaii, it has to get delivered to somewhere else first and then ship to Hawaii? To go to California first? Yes. Most stuff that's going to Hawaii that's coming from the Pacific,

they don't stop off at Hawaii. But that seems so crazy if Hawaii is actually a state. Like Puerto Rico is a strange thing. It's a territory, right? Right. That's the best thing that Puerto Rico has got going for it. If it was a state, they'd have to pay the state income tax. They'd have to pay the Obamacare tax.

They'd have to pay the federal gas tax. They're exempt from all that stuff. But the Jones Act has to do with you can't take a ship between two U.S. ports. It has to be a foreign port to a U.S. port. So Puerto Rico is not considered a foreign port. It's a domestic port. Hawaii, of course, is domestic because Hawaii is a U.S. port. So Puerto Rico is not considered a foreign port. It's a domestic port. Hawaii, of course, is domestic because Hawaii is a state. And so Hawaii, things are very expensive in Hawaii for the same reason that they're expensive in Puerto Rico. But Hawaiians

can afford it more because Hawaiians, on average, have more money. And so if your average income is higher, then your food budget is not as important to you. So if we got rid of the Jones Act, that would be a big benefit for Puerto Rico. But the worst thing that could happen to Puerto Rico is it becomes a state. And I get tired of when I keep hearing these politicians say Puerto Rico needs to be a state and all the problems will be solved. Their problems will go through the roof. The only thing that will happen if Puerto Rico becomes a state is the welfare checks will get bigger to people in Puerto Rico. But that's the last thing they need is more welfare.

They need more freedom. They need more opportunity. They need more free enterprise. And all that will go away if they become a state because if you imagine all the problems that Puerto Rican has now, imagine leveling the income tax on top of that. Imagine sending the IRS to Puerto Rico. They're not even down there now. Imagine having IRS agents in Puerto Rico. With this support for socialism, is there any place where socialism has worked, where there's some extreme benefits to the people that live there, where they can show?

Because guys like you, the free market capitalist guys, you're always saying, this this is the solution. Capitalism is solution. Give people freedom is solution. Deregulation, that's the solution. Let businesses thrive. More people make money. Businesses will grow. People have more opportunity. Yeah. People think it's worked in Scandinavia. They always want to talk about Sweden as an example of where socialism works. Well, talk to a Swede, right, and they'll tell you that it doesn't work. But if you want to look at the history of Swedish socialism, Sweden became a very wealthy country before they had that socialism, right? They were very much of a free market economy, and it was the freedom that produced all the wealth. But then whenever you have wealth and you have freedom, you're always going to have inequality, right?

Because people are smarter than other people, more ambitious, harder working. So whenever you have freedom, you're not going to have equality in outcome, even if everybody has, you know, an equal opportunity. And of course, even that's not true. Everybody is equal in the eyes of the law, but there's always going to be some people that will have an advantage. You they have better connections. They were born to parents that have more money and they can give them a leg up. So you're always going to have unequal outcomes. Some people are going to be rich relative to other people. But the beauty of capitalism

is that everybody is better off. When you end up with socialism, you equalize everybody, but you equalize them at a lower level. You redistribute the poverty. The people who end up wealthy are the people who have political connections. So the wealthy people in socialist countries are the people who have political connections. Well, what happened with Sweden? So let me go, yeah, I'm going to go back to Sweden. So Sweden was very rich. And then, of course, you have the demagogues, the politicians who will get votes by appealing to envy. Hey, this guy has more than you. It's not fair. And of course, politicians always promise something for nothing, right? Vote for me and I'll give you this that you don't have to work for. Right. I mean, that is the problem with a

democracy. I mean, people vote for crazy things. That's why the founding fathers, when they created America, they created a republic, right? People don't understand the distinction, but we're not supposed to be a democracy. The word democracy does not appear in the Constitution. It does not appear in the Declaration of Independence, you know, just the Pledge of Allegiance, right? I pledge allegiance to the flag of the United States of America and to the republic, right? So we're a republic, we're not a democracy, because the founding fathers knew the dangers of democracy. Well, democracy is what brought socialism into Sweden, and it screwed them up, right? It screwed the economy up so much

that in the last 10 years, they've gone the other way. They've lowered income taxes, 10 years, they've gone the other way. They've lowered income taxes. They've abolished the inheritance tax in Sweden. I mean, does that sound socialist? So the last 10 years, so previous to that, socialism had a stronghold. Yeah, it was getting bigger and bigger, probably going from the 70s, 80s, the Swedish mixed economy, just like it bankrupted New Zealand. I mean, New Zealand used to be the poster boy for mixed economy socialism until they got bankrupt. So Sweden is the only successful. No, no, they're not.

And it's not. No. But I was just going to say that it's the only example that someone can cite. Well, that's not a successful example. They'll cite Norway, a lot of the Scandinavian countries, Denmark. But you have to look at how successful they were before they became socialist. And then you also have to look at what the government is doing there, because the taxes on business are not, you know, extreme. The taxes are on the average guy. They have, I think,

in Sweden, I think the VAT is about 30 percent sales tax that you have to pay. I mean, this is a high sales tax. I mean, and then the income taxes impact average people. So, because they know, the Swedes know if they really jack up taxes on businesses, the businesses will just leave and they'll destroy their economy. So at least they're trying to redistribute the wealth from the middle class to the middle class, you know, but this stuff doesn't work. And you create generations of people who now don't want to work, who just want to live off of other people. You destroy the initiatives. You destroy the incentives. And so the success that Sweden enjoyed is a byproduct of freedom and capitalism. And since they moved in that direction, they have slowed down that

progress. But the Swedish people have recognized that. And that's why the reforms that have been made over the last decade or two have been to turn back the clock, to move away from those socialist policies and to try to dismantle. Now, they haven't gone completely the other way, just like New Zealand. I mean, New Zealand went so far. They became they went from like a totally socialist type economy, one that was like – this was the example. If you believed in socialism, you would point to New Zealand as, see, this shows you. And then they went bankrupt. They went through a huge economic crisis in the 80s.

Previous to being socialist, were they successful with capitalism? Yeah, of course. That's how it always works. Because if you're always socialist, then you never have any wealth to redistribute. It's capitalism that creates the wealth that the socialists want to redistribute. So let me ask you this, though, because we're going to keep going around in circles with this. You're going to study this for a long period of time.

What is it about socialism that's so appealing to people if there's no examples of it being effective? Why does it keep coming up? Well, again – Is it a lack of education or a lack of understanding of economics? Like what is it about it that keeps – like when this woman who just won and she seems like a very nice person, when she talks about being a democratic socialist and everybody gets fired up, is it ignorance?

Yeah, look. Certainly, it's a lack of understanding of economics. a democratic socialist and everybody gets fired up and is it ignorance yeah look it you know certainly it's a lack of understanding of economics um most people don't understand it but look i mean there are a lot of reasons that socialism is appealing to people especially when they're young right there's an old saying that if you're not a socialist or if you're not a you know liberal by the time you're 21 you don't have a heart right if you're not a conservative by the time you're not a liberal, by the time you're 21, you don't have a heart. If you're not a conservative, by the time you're 28, you don't have a head. So liberals are just people that never grew up. It's like they still believe in Santa Claus. That's what it is.

You just never – Socialists in particular, not necessarily liberals. Well, even people believing in big government. Because usually what happens is when you're a kid and when you're in big government, because usually what happens is, you know, when you're a kid, right, and when you're, you know, in high school, you've never had a job and all this stuff sounds great until you're out in the real world paying taxes. You know, that's why it was a mistake to lower the voting age down to 18. I mean, I don't even think 21, it should be higher. If you think about the original voting age when it was 21, 100 years ago, 150 years ago. Think about a guy who was 21 back in, you know, 1850. Different

person. I mean, think about, I mean, the guy probably got out of school when he was 10. Probably already had kids. He's been working, he's got a family, he's in the real world. And I know people are going to say, look, women weren't voting. Fine, you know, whatever. I don't think that... How old do you think it should be? I think maybe 28, 30. I mean, I...

Look. Look. Look. Let's make it 50. Fuck it. The reason they... 30 years old. Imagine being 28 and not old enough, son. You know, the reason they raised

the voting age was because of Vietnam, because of the draft, right? They were saying, old enough to fight, old enough to vote, which was a bunch of nonsense. Lower, you mean lower the voting age. No, they lowered it, right, because you could get drafted when you were 18. And they were saying, look, you know, if you're going to draft, look, I don't believe in the draft. I would rather get rid of the draft and leave. I agree with you that 21 sounds better.

I would say 25 because that's the age that your frontal cortex develops. But no, what's important about voting is not voting. Look, when I moved to Puerto Rico, I gave up my right to vote. That's one of the things I can't do. You don't vote at all for president, for anything? No, I can't vote for Congress because they don't have a Congress. There's nobody. But it's still a state, right? No, it's not a state. It's a territory.

It's a territory. But so if you live in Puerto Rico and you move to Florida, now you can vote for a congressman in your district. You can vote for a Florida senator. How much time do you have to spend in Florida to be officially living there if you kept your place in Puerto Rico? Well, I wouldn't want to do that. But if you're in – it's 183 days is the cutoff for where your residence is going to be. But the important thing about voting is the, you know, the cutoff for where your residence is going to be. But

the important thing about voting is not that you get to vote. The important thing is to have good government, right? And what is good government? Good government is government that respects private property, that respects that, you know, if you go back and look, and I mentioned this on my own podcast recently, I talked about the meaning of America and what government is for in America. And if you go back to the Declaration of Independence, we just had, we celebrated our Independence Day, you know, just a couple of weeks ago. But government is here to protect life, liberty, and the pursuit of happiness. Government is here to protect our rights. It's not here to give us free stuff. It's not here to take stuff from other people and give it to us.

It's there to protect us, right? It's there protecting life, liberty, property. And so the goal of government or the goal of an election is to have good government. Now, as far as I'm concerned, I would rather have good government where I don't vote than bad government where I do vote, right? Because, you know, one of the things people said, oh, you're going to move to Puerto Rico. You can't vote. Who cares? I vote for the loser in every election. What difference does it make when some idiots are going to outvote me? And that's basically who's voting in America. I mean, if you think about it, the elections are decided by the TV commercials, right?

Because most people, they know who they're going to vote for. Can you imagine the person who decides who's going to vote for based on a TV commercial? I mean, these guys are morons. So the swing. Yeah, the swing voters are determining the outcome of these elections. And we end up with horrible government. I mean, democracy almost guarantees horrible government. But one of the things you want to do if you're going to have democracy is, OK, let's have responsible people voting who understand what they're voting for,

OK, let's have responsible people voting who understand what they're voting for, who have actually lived and worked in the economy, who have had a job, who have paid taxes, who have run businesses, who have employed people. If you've never had a job, if you're still living with your parents, why are you voting? I mean, we might as well lower the voting age and let people in kindergarten vote. I mean, right. So they can vote for whoever promises them free toys. I mean, people say, you know, oh, it's unfair. Look, if we could have good government without 18-year-olds voting, that's fine. But the left wants the young people voting because they're stupid enough to vote for them. They're idealistic. Yeah, and you said why is socialism appealing to somebody who's young?

Because they don't know any better. They haven't lived. And it sounds good, right? Oh, you know, I care about people. That's why liberals think conservatives are mean, right? Conservatives don't think liberals are mean. They just think they don't understand. They're misinformed, right?

They don't get it, right? Well, that's sort of shifting. It seems like there's more people that are thinking that liberals are mean now than ever before because the way they're attacking things yeah because liberals are now so intolerant which is the craziest part like they like to pretend that they're so tolerant but they're the most intolerant people out there only tolerant if you agree with yes and to be tolerant you have to tolerate intolerance. Right. See, we talked earlier about discrimination. Look, if somebody is a racist, I'm going to tolerate that. Fine. You can have your own opinion. I can disagree with your opinion. But fine. Live and let live. I live in a free country. People can do things I don't if you don't think exactly the way they think then oh they oh yeah they're you know harass you so they're becoming uh evil and mean so they used to just be ignorant now now

now they're now they're ignorant and and mean well not just mean but harassing like people encouraging people to harass people that have separate political views and opinions yes it's it's it's very militant it's strange. Like anybody who supports the Trump administration or is even a part of it, they're encouraging these people to get harassed at restaurants. Yeah, and you know, I wish I could be a bigger supporter of Trump. I mean, I voted for him. I really like Trump as a candidate because he was saying a lot of the same things I was saying when he was a candidate.

It's just that the minute he won, well, about the phony economy and how we have to – the numbers are not right and we have to shrink government. So for you, economically, it made more sense than Hillary. Well, I mean Hillary would be – I mean certainly a disaster. But the irony of it is – Why would she be a disaster? Because she was just more big government. I mean – and I think she would have continued the failed policies, but unfortunately, Trump has continued

those policies as well, and he could end up being a bigger disaster if he is the catalyst to put a Bernie Sanders type into the White House in 2020. In response to him. In response to how much worse the economy gets, and he takes the blame for it.

So this is all predicated on your initial view that the economy is going to crash inside the next three years. If it doesn't and it does really well, it stays in this state. Is it doing that? It's just a bubble. It's no different than it was when Obama was president. There's just some more optimism that things are going to change. Well, when you were talking about this before it happened, and I remember you going on these

different talk shows saying, this is going to crash, and people weren't listening to you. And they were like, oh, Peter Schiff doesn't know what he's talking about. And then it did crash. And then they listened to you. You're the only one that's saying it's going to crash again. Well, they never really listened to me. They kind of tolerated me. Here's the- Well, they had to because you were right. Well, here's the irony of it all, because, you know, leading up to the 2008 financial crisis, and if you go to my YouTube channel, you can see like my introductory video is a little montage that I actually shot as part of my Senate campaign when I ran for Senate in 2010. But it's a bunch of people, you know, mocking me. And then a lot of the shows that I went on where they said, hey, you were right.

You were the one guy that called it. So I used to be on – I was on television a lot, on Fox, CNBC, CNN, Bloomberg. Probably once a week for three or four years I was on something. And then I used to get – you know, the Washington Post used to call me, the New York Times. You know, people – magazine articles were written about me. When I was this lone kind of crazy guy talking about a housing bubble, talking about a financial crisis that was coming, they at least, you know, gave me a platform to air my views, even though they mocked them and laughed at them. I was still there.

I was like the gloom and doom guy, Dr. Doom. I think Time Magazine did an article with me. I had a sickle in my hand. I was the Grim Reaper. But anyway, so then we get to financial crisis. And all of a sudden, I get a little bit of notoriety. You're Nostradamus. Peter Schiff was right.

But over the last few years, nobody will talk to me. I'm not on any television shows. Why? nobody will talk to me. I'm not on any television shows. Well, I think that at this point, people just think, look, you know, I've been saying, talking about this problem for so long. They look, he doesn't know what he's talking about. They forget that I was warning about the problems in the housing market for four or five years, you know, as the prices kept going up, you know, it's not like the things that I see happen immediately. But I think, you know, at this point, maybe in the past, they thought maybe there was a chance I could be right, even though it was a slim chance.

Now they probably think it's impossible that I could be right. So why even give me any airtime? So, I mean, I come on shows like yours and people actually get to hear the truth. But if you go back to what I was actually predicting, 2008, that financial crisis was the beginning of the end, not the end. What I was predicting, and I wrote a book about it, Crash Proof, How to Profit from the Coming Economic Collapse. It came out in February of 07. I said we have this huge bubble. We have this housing bubble that the Federal Reserve created, right? Not the private enterprise. It was created by government. And in fact, after the financial

crisis happened, Congress had a hearing to try to determine why we had a financial crisis. And I tried my best to get invited to testify, and they refused to let me be there because they didn't have anybody there that predicted it, because they wanted to basically come to a conclusion that they had already arrived at was that it was caused by a lack of regulation and we need more government, right? So they didn't want me there to say it was caused by government and we needed less government. Although, by the way, I have testified at Congress twice since then, and both of my testimonies are on YouTube. And you got to watch them. It's incredible stuff. And in fact, after I was on the first time, I was convinced they would never invite me back because I don't treat these guys with the type of respect that they normally get.

So I thought they would never invite me back, and they actually invited me back. And then the guy that invited me back got fired. For inviting you back? Yeah, yeah. So I'll never – there's no way that they're going to bring me on again. Well, you're so much better suited for – I mean, those talk shows they bring you on, you're so much better suited to doing your own videos or doing something like this where you could just go on and on and on. Well, yeah. I mean, now, see, now I have a much... These are complex issues.

Yeah, now I have my own platform. I have a lot more people who listen to my podcast and who, you know, than I did back then. But the point that I wanted to make about the crisis is I wrote back then that we had this bubble and we were going to have this crash. But the economic crisis was not going to be that. It was that the collapse that I saw coming in 08 was the beginning. I said that we have this disease that the Fed has created and it's manifested itself in this housing bubble. And it's going to pop. And we're going to have the worst recession since the Great Depression. We're going to have double-digit unemployment. We're going to have the worst recession since the Great Depression. We're going to have double digit unemployment.

We're going to have trillion dollar deficits. But I said, that's not what's going to kill us. I said, we're not going to die of that disease. That disease is survivable. I said, what's going to kill us is the government's cure. They're going to print so much money. They're going to try to reflate these bubbles. And that's going to cause a dollar crisis and a bond crisis, and that was what was going to destroy the economy.

And that's not happened yet. Now, what I did not know at the time, and I didn't put a date on it, I didn't know it would take so long. I mean, here we are 10 years later almost, and that hasn't happened yet. But you think it's got to happen. It's got to happen. And what I got wrong, I said the government was going to try to reflate the bubbles. I assumed they would fail. They succeeded. The bubbles now are bigger than the ones that popped in 08.

And what's the difference between bubbles and an actual functioning economy that's sustainable? Like if it's doing well right now, you agree it's doing well right now? No, it's not doing well. It's a bubble. So the difference between a real economy, right? A real economy grows from production and savings, right? In a real economy, we're making stuff and consuming. Like if you look right now at the savings rate, right? The savings rate is near a record low. And the politicians try to say, oh, this is because the economy is so good, right?

Everybody is out there spending. That's a bunch of nonsense. If the economy was good, people would have more savings, right? If you ran into a friend of yours that you hadn't seen in a while and you asked him, hey, how you doing? And he said, oh, well, I maxed out all my credit cards. I took out a second mortgage on my house. You know, I blew through my retirement account, right? You wouldn't say, oh, you're doing great. I blew through my retirement account, right? You wouldn't say, oh, you're doing great. Whereas if another friend said, how are you doing? Oh, I just fully funded my pension. I got massive savings. I got, you know, I mean, I paid off all my credit cards. I own my house free and clear. That's the guy that's doing well, right? When you're doing well, you get out of debt, you know?

So we're not doing that. We're all living based on a bubble, based on cheap money being sped out into the economy. Why is the stock market going up? Because of buybacks. Why are people spending? Because they're going deeper into debt. We have record student loans, record credit card debt, record auto debt. Everybody is loaded up with debt. They just had a survey out, I think, that less than half the people could come up with like $400 if they had an emergency.

I mean, that's nothing. People have nothing. They're living paycheck to paycheck. And even that, they need credit cards. We have huge budget deficits. We have huge trade deficits. We've got record numbers of people, older people that are working because they can't afford to retire. Meanwhile, the young

people can't get jobs because they have no skills. So the economy is not real, right? It's all this illusion, just like it was what was going on before 2008. People were living off their home equity. Out here in California, homes were going up. People were taking out home equity lines of credit. They were taking vacations. They were buying new cars. They were remodeling their houses. All that prosperity was phony. It wasn't real wealth. They were borrowing upon fake wealth. less prosperous. Even fewer people are feeling the benefits than before. So the real economy is getting sicker and sicker as it takes more and more air to inflate the bubble. Because in order to keep the bubbles from popping, the government and the central bank has to keep misdirecting resources out of the real economy to sustain the bubbles. All right, so talk me through two things.

One, what is going to happen that's going to cause this big collapse you predicted way back in 2007 that hasn't actually hit yet? What's going to cause that? How's it going to go down? And what can the average person like me that knows jack shit about economics, what can we do to protect ourselves? First of all, you probably know more about economics than the average guy with an economics degree from an American university. Probably from talking to you. Or just for having common sense. I mean, when you go to U.S. college and you study economics, they basically beat all the

common sense out of you. And by the time you graduate, you're a complete moron when it comes to economics. How do they do that? Well, they teach them all this Keynesian nonsense. And that's why all the big economists in academia, on Wall Street, in government, they're all a bunch of idiots when it comes to economics. So you know a lot more than they do. Not that you're an idiot, but, I mean, you just have to have common sense because they lack common sense.

But to get back to your question, this is how – Okay, the bubble. How's it going to go down? This is how I think it's going to go down. believes that the Fed's policy of quantitative easing and, you know, and and, you know, low zero percent interest rates. Everybody believes it was a success. They believe the Fed revived the economy, right, that they put out the fire. That's the narrative.

Right. They still don't realize that the Fed lit the fire and they didn't really put it out. It's just kind of it's simmering and people don't notice it. But what's going to happen is the Fed never was able to normalize interest rates, right? Rates are still 2%. That's still really, really low. And for all the talk about shrinking their balance sheet, it really hasn't shrunk, right? It's still enormous. And I think that the economy is going to slip into recession, right? And when it does, the Fed never got interest rates back to 5% or 6% where they

normally bring them. They never shrank the balance sheet. So now all of a sudden, we go into this recession, but it's going to be a stagflation because inflation is now really starting to pick up. Prices rise with a lag. The inflation is the expansion of the money supply. That's what the word inflate means. It's to expand, right? You can't expand prices. Prices can go up and they go down. They don't expand. What expands is the supply of money. And so the supply of money expanded, and a lot of that went into financial assets. So inflation caused stock prices to go up. It caused real estate prices to go up. It caused bond prices to go up. It caused the price of rare art to go up. And all sorts of things went up because of inflation.

Ultimately, a lot of that inflation, though, is going to end up in the supermarket, right, at the gas station. And so you're going to have that at the same time that we have the recession. Now the Fed is going to have to go back to the only thing it knows how to do. We're going to do QE4, and we're going to cut rates back to zero. But now the markets are going to see this and they're going to wait a minute. You never normalized interest rates. You never shrunk your balance sheet. And now you're going to expand it again. Now you're going back to zero. Wait a minute. Wait a minute. If you couldn't normalize interest rates following, you know, this last recession, how are you going to do in the future? I mean, if you couldn't shrink a four and a half

trillion dollar balance sheet, how are you going to shrink a six or a seven trillion dollar balance sheet? If you couldn't raise interest rates back to normal with the national debt, you know, our national debt's now 21 trillion. What if it goes up to 25 trillion, 30 trillion? I mean, one of the reasons the Fed can't raise rates is because we have too much debt. Nobody can afford to pay the higher rates. You know, when inflation was running out of control in the 1970s, and it's going to be a lot worse now, right? The inflation that we had in the 1970s was created in the 1960s by Lyndon Johnson, right? By the Great Society, the War on Poverty, the Vietnam War,

going to the moon. We borrowed all sorts of money. We ran big deficits. And the consequence was the dollar crashed in the 70s. Gold went through the roof. Oil went through the roof. And finally, you know, we had to do something about it at the end of the 70s because when Nixon came in and Ford came in, they just continued the same policies. They were very liberal Republicans, Rockefeller Republicans. And we didn't do anything about inflation until Reagan came in and Volcker was there. And so how did they stop the inflation from running out of control? Volcker jacked interest rates up to 20 percent, 20 percent. And we had a recession where the fed was raising

interest rates but that saved the dollar and it it broke the inflationary cycle that was in the economy raising the interest rates yes they well they had to stop the inflation right they had they had they had they had to bring and of course you know reagan did some other you know tax reform and things like that but the fed really finally you you know, got out in front of the inflation curve and they brought it down. But if you think about the difference between the United States in 1980 and the United States today, we were still the world's biggest creditor nation in 1980, not the world's biggest debtor nation. The national debt was a fraction of what it is now. I don't know, maybe it was like a half a billion, you know, 500 billion, or I don't know the exact amount, but well under a trillion. But the national debt was financed with long-term bonds, like 10-year, 30-year bonds. So when interest rates went up to 20%,

that didn't affect the majority of the debt that was out there, that only increased the cost to the government of the new debt that came out, right, the new borrowing. But today, the $21 trillion national debt is predominantly Treasury bills, stuff that matures in a year or less. And so if interest rates had to go up to, let's say, 10%, the government would have to pay 10% within a few years on the entire national debt. So where would the government get all to pay 10 percent within a few years on the entire national debt. So where would the government get all that money? And it's not just the government. Corporations have never been this levered up. Individuals have never been this levered up. They didn't have adjustable rate mortgages back then. You know, now you still have a lot of people that have arms, you know, where their mortgage debt would go up with. So at this point, the Fed

can't really fight inflation because it doesn't have the tools because we have so much debt. If they raised interest rates to fight that inflation, the collapse would be so much worse than 2008. All the banks that they bailed out would fail again, but they couldn't bail them out a second time because they can't bail them out and fight inflation at the same time because you can't ease and tighten simultaneously. It's one or the other. So I think when the markets see that we're going back to QE, that we're going back to zero, they're going to realize that this is not temporary, that this is permanent, that the Fed can never normalize interest rates, that the balance sheet is never going to shrink, that we're a banana republic, that we are monetizing our debt, that the Fed has no ability to drain that liquidity and no

ability to fight inflation. That means the dollar is a bottomless pit. That means the dollar is going to keep falling. That means nobody is going to want to own it. And everybody's going to want to get out of dollars and everybody's going to want to get out of any bond that is denominated in dollars. And then the Federal Reserve, in order to keep interest rates from rising, they might have to start buying muni bonds. They might have to start buying corporate bonds. Otherwise, interest rates are going to skyrocket. And that just fuels the inflationary fire.

And then we get a currency crisis, right, where the dollar is plunging. Prices are skyrocketing. That is real pain. And who knows what they're going to do. Maybe they're going to have price controls, which are just going to backfire. Then we're going to have shortages. We're going to have rationing. We're going to have civil unrest. I mean, this is going to be ugly when it hits the fan. And, you know, it's dangerous to do this in a backdrop where so many people are inclined to vote for socialists, because that's going to be the type of economic

environment where socialism can thrive, because socialists always want to look for a scapegoat. Who can we blame this on? And it's very easy to blame it on the rich or the businesses or the corporations or the Republicans. And I think that's what's going to happen if this happens sometime over the next few years. But if it doesn't happen in Trump's first term, there's no way he finishes the second term without this happening. No way. I can't happen in Trump's first term, there's no way he finishes a second term without this happening. No way. I can't see it.

So let me ask you this. If he calls you up and says, Peter Schiff, heard you on the Joe Rogan podcast. It was huge. You were amazing. What do I do? What do you tell him to do? You know, I think he has people

that were listening to me on the campaign trail. Because I used to, I would say things on my podcast or tweet something. And the next day, you know, he'd say something pretty similar. I'm sure. Because my rhetoric, he had to appeal to certain voters that, you know, and so he was throwing them this type of red meat. But look, look, I know some of the guys that are close to him, you know, like Larry Kudlow, like Steve Moore. I mean, I know Steve Moore pretty well, because we speak in a lot of the same things. I used to be on Larry's show a lot back in the day when he used to have his show on CNBC. So I know some of these guys. I don't know Art Laffer as well. But, you know, Art Laffer,

right? If you go look at the debate I did with Art Laffer in 2006 when he said everything was great and, you know, there's no recession coming and then he bet me a penny and welched on it. I mean, if you can't even. Welched on it. Yeah, he bet me a penny that everything was great and there was nothing to worry about. And we weren't going to have a major decline. And then he wouldn't even pay up. But let me ask you this.

If he calls you up and says, what do I do? What does he do? Well, at this point, look, it would have been better, as I said, had he come clean right away. That's nice, but what does he do now? You know, now he's got to have to come back and say, look, I just listened to the Joe Rogan podcast. I listened to Peter Schiff. Genius, guy's a genius, financial genius, wizard, he's huge. I'm not a genius. I just have common sense. It's these other guys that are just, you know, their judgment is so clouded by the bubble. That's – when you get a lot of people that can see things.

The reason I saw the crisis coming, the housing bubble, it wasn't that I was so smart. I was just thinking clearly. Everybody else was so delusional. What does he do though? Yeah. I mean so what he's got to do is basically he's got to come clean now and tell the truth about how screwed up this country is after years of big government and after years of a central bank that has inflated bubble after bubble and say, look, this is what we need to do to really make America great again.

I said, we're going to have to shrink government. I know I said I wasn't going to cut entitlements, but we got to do that. We can't afford to make these commitments. We can't pay all the Social Security benefits that have been promised, because if we try, we're going to destroy the dollar, right? Because if the government tries to give everybody a Social Security check, they can't do it without destroying the dollar. So we've got to shrink the program. We've got to means test the program. We've got to make it a lot smaller. We've got to end it for the future. You know, we can't have this, you know, intergenerational Ponzi scheme that was a mistake

to create it. Nobody wants to admit that Social Security was a mistake, that Medicare was a mistake. One of the things about Social Security that's been harped on and on is that one day, it's not going to work. Well, it doesn't work now. It's never worked. But the idea is that you're paying into it now. If you're a 30-year-old person paying

into it now, there's strong odds you're not going to get it when you're 65. But you're not paying into anything. I mean, Social Security is a Ponzi scheme. It's not a legitimately funded retirement program. It's not like your Social Security money is put in a real trust fund somewhere and invested. And when you retire, you're going to get payments out of this trust fund. No, your money is going to the people that are spending it right now. Yeah. And so when it first started, Social Security started a long time ago. The first woman that got a check was Ima Fuller or something was her name. And she lived to be 100 years old. And for her, Social Security was a was a windfall because she paid into it for a couple of years. She collected for like 40 years. And when Social Security

started, it was a one percent tax on payroll and it was only a small amount. And then the employer paid one percent, which, of course, comes from the employee. That's part of the fraud, right? I mean, the employee pays the whole thing. It doesn't matter if it's considered the employer. But it didn't – self-employed people weren't even included. I think we didn't include the self-employed until like the 50s, right? Because the government figured if you're smart enough to run your own business, well, then you're smart enough to save for your own retirement.

The government figured if you're smart enough to run your own business, well, then you're smart enough to save for your own retirement. But the government tried to say, look, some Americans are not smart enough to save, which I think was a mistake because the government didn't save anything. Because what the government did is the minute they got the money, they spent it. But before they spend it, they write themselves an IOU and they call it a trust fund. See, what happens is the government collects the Social Security money and then they spend the money on the current employees. But what they don't spend, they put into the so-called trust fund. But then they borrow it right out and they write themselves an IOU called the government bond. But if the government owns its own bond, that's not an asset because they keep saying, oh, the trust funds are going to be solvent until the year 2040 or something like that. But they're not.

They're insolvent right now because there's nothing in them. Because if the government has to tap the trust fund, it has to sell a bond to the public, which is what it would do if there was no trust fund. It's like if you wrote me a check for $10,000, right, and I had that check, that would be an asset to me if I had your check for $10,000. If you wrote yourself a check for $10,000, that's And I had that check, that would be an asset to me if I had your check for $10,000. If you wrote yourself a check for $10,000, that's not an asset to you. Because it's an asset and a liability at the same time, you owe yourself the money. So if I buy a government bond, if I own the government bond, it's an asset to me. If the government owns its own bond,

it's not an asset at all. That makes sense. It's a liability. So the trust funds have been a fiction from day one. I mean, Roosevelt sold this to the American public. It was a con. That's why they call it Social Security contributions. They call it you're paying premiums. It's a trust. They tried to make it sound like legitimate insurance, but it was never legitimate insurance because that would have actually been unconstitutional. The reason that the Supreme Court said Social Security was

constitutional was because it wasn't legitimate. They said it was just like any other welfare program. Okay, we went off on a deep... I want you to bring back, though, because we're getting off track. I really want you to say, what would you tell them to do? So Social Security, limit entitlements or eliminate them? We've got to start eliminating lots of government agencies and departments, whether it's education, energy. I mean, there are all sorts of government departments that we need to abolish. We need to cut back on government spending. We need to economize. We need to make government as lean as possible because we're broke.

Government is like, you know, it's like if you're trying to run a marathon and you've got a 50-pound sack on your back, you know, you're not going to run very fast. The secret is to take some of that, you know, weight out of the pack. So you think that limiting government and getting rid of all the spending is going to allow the economy to be more powerful? But yes, but initially, you know, it's like if you're going to train somebody to come into your gym, and they come in, and they're real fat, and they're overweight, they have a lousy diet, right? And you say, okay, I've got a plan for you that's going to get you into shape. In the short run, they're not going to like that plan. They can't eat their favorite foods. They're going to be getting up early and training.

And so their lifestyle, it's not going to be as enjoyable to them. There's going to be getting up early and training. And so their lifestyle, it's not going to be as enjoyable to them. There's going to be all this pain, right? So in order to do the right thing, I'm not saying there's a panacea, right? In order to fix the economy, we are going to have to go through a recession, a very bad one, in order to reallocate resources to where they need to be, to let the free market reallocate them. So when the government gets out of the way and starts shrinking, a lot of people who are getting government checks are not going to get those checks. A lot of people who had government jobs are not going to have jobs. They're going to have to get productive jobs in the private sector.

So there's going to be some transition there. We're going to also have to get rid of a lot of regulations that make it so difficult and expensive to hire people and train people. So we have to downsize government. And again, as I said, we have to let interest rates go up so that people will save, so that entrepreneurs can get the capital they need to make the investments, to make the tools that their workers need to be more productive. But then we have to let asset prices fall. We have to stop trying to create this phony wealth effect. See, the central bank thinks what we need is to make the stock market go up, and then people will think they're rich and go out and spend money. Stocks are not supposed to be the – stock price appreciation is not supposed to be the source of wealth.

It's companies becoming more valuable because they're earning more and producing more. That's supposed to make the price go up. They're trying to put the cart before the horse. They think that just making the stock market go up is going to make us richer. It doesn't. So in your opinion, deregulation, smaller business, all these things are going to help letting people know that we are fucked and that this whole economy is doing great thing is a ruse. Yeah, and a lot of people who are not working have to start working. They've got to start doing stuff.

is a ruse. Yeah. And a lot of people who are not working have to start working. They got to start doing stuff. We got to get people off of, you know, the dole and start, you know, they're riding in the wagon. They got to start pulling it like everybody else. And you think smaller government and less regulation is going to enhance that? Of course. Well, that's what's keeping them from getting jobs in the first place. I mean, it's, you know, they make it hard for you to get a job with rules and regulations and taxes, And then they reward you for not working with all sorts of subsidies and programs. I mean, and then there's also a fear of automation. Automation is going to eliminate a large amount of jobs, including driving jobs. Yeah.

But, you know, that's all going to make us richer. I mean, we've had automation, you know, since the Industrial Revolution. But even before that, there was automation. I mean, look at people on the farms. Look at how many people don't work on farms now because we have machines. Right, but people are worried about universal basic income, that this is the only solution for automation.

It's not the only solution. Automation makes us wealthier as a society because it eliminates work. Work is not an ends in and of itself. Work is a means to an ends. Nobody wants to work. They want the fruits of the labor. And so to the extent that we can have a machine

do the work for us, that frees us up to do other things. So, you know, if we have autonomous cars and I don't have to drive anymore, you know, A, Trump won't have that problem being sued for overtime by his ex-driver because he won't need somebody to drive. But imagine if everybody had a self-driving car.

Think of all the free time now that you have. You could work while you're in your car or you can watch a movie while you're in the car. I mean, you won't be dreading a long trip because you'll be able to be productive while you're in that car. And so there's a lot of things that will happen. Yes, we'll eliminate truck driver jobs, but we'll have safer streets and it'll be less expensive to transport goods. But that frees up that worker to do something else with their time now that they don't have to drive that truck.

So the idea that universal basic income is the only solution to that isn't appealing to you because you think that they really – the real solution is not to give them free money. The real solution is for them to find something else to do that contributes to society. The appeal of universal basic income is almost like two wrongs make a right. I mean the problem is the welfare state discourages people from working. See, the highest marginal tax rate that anybody pays is going from welfare to work because not only do you pay the taxes on what you earn, but you lose all the benefits because you now have a job. So welfare and the welfare state creates a huge incentive for people not to work. So at least the argument with universal income is, look, we're not going to take away your welfare if you get a job. So if

you improve your lot in life, if you go out there and you become productive, we're not going to punish you by taking away your welfare. Well, the better answer is let's not punish you for working. Let's get rid of the income tax. Let's not tax labor. Let's get rid of the payroll tax to make it more... Did you ever foresee getting rid of the income tax in this country? Yeah, we didn't have one. But since the we didn't have it, but since the 19-what? 1930s? 40s? It was introduced in 1913, but nobody really paid it until 1943 when we had the withholding tax. But we could get rid of the income tax.

Do you really think that that would ever fly in this country? I hope so. But people are so addicted to that money. Well, but people don't like paying the income tax. But we can't get rid of the income tax unless we shrink government. I mean, back in 1900, government was only like 5% of the GNP, all levels, state, federal, and local. Now it's like 40%. So we can't have no income tax and no payroll tax if we want to have all this government.

But if we're willing to do without the government, then we don't need the taxes. And you think most of this government is ineffective? Of course. I mean, government, you know, it's always inefficient. I mean, it's a necessary evil, but that's why you want to minimize. So what would you want to keep? Power, maintaining streets, things like maintenance, utilities. On a federal level, I would – Well, the federal government should not be involved in education at all. At all. And in fact, if you look at the Constitution, again, the word education is not mentioned.

The word school is not mentioned. They all had buggies back then, and they were writing with feathers. But they had schools. They knew what they were. So how do you fund education? And the Department of Education didn't even exist until what was it in the 60s? I forget when they started it. But look, the federal government should be involved primarily with external matters. So we should have a national defense. I think it should be much smaller. I think that we spend more money than we need on the military. I think we could have a defensive

military for a fraction of what we currently pay. But I think the federal government should be predominantly focused on external matters. To the extent that we're going to have public education or government spending money on the schools, let them do it on a state level or a local level. I mean, it should not be done at the federal level. You know, those are issues that can be, you know, managed by the state tax money. Yes. And, you know, what happens now is everybody sends all this money to the federal government, and then they beg to get some of it back. They have state aid where you send money out and you try to get some of it back. Just don't send it to Washington in the first place. I mean, look at the five richest counties in America.

They all surround Washington, D.C. It's all the lobby. It's where all the power is. I mean, we've got to get rid of that. I mean, the federal government is like a cancer. Right. You know, we have, you know, we now we were talking about we got a new nominee for the Supreme Court talking about, you know, about but nobody really talks about the role of the Constitution. Everybody's like, oh, are we going to repeal Roe versus Wade as if the most important thing is whether or not,

you know, there's this federal, you know, abortion. The important part of the Constitution is that it is the law that applies to the government. It limits the power of government, right? Thomas Jefferson said that we will bind up the government in the chains of the Constitution. But at this point, the government does whatever it wants. The government is not abiding by the law. I mean, they try to pretend that we're interpreting the Constitution. It's not up for interpretation. The Constitution is not written in Chinese. You don't have to interpret it, but the government likes to talk about interpreting the Constitution because they want to ignore it. They want to do all sorts of things that are not authorized by the Constitution.

The Constitution only authorizes a few powers to the federal government. They're enumerated there in the Constitution. And if the Constitution doesn't say the government can do it, it can't do it. And almost everything the government does today is unconstitutional, is doing stuff that it has no constitutional authority to do. And that's what we need a Supreme Court for. I mean, a lot of people don't like Congress, very low opinion of Congress. A lot of people don't necessarily like the president. But everybody loves the judiciary, right? We have three branches of government, the executive, the legislative, and the judiciary. And everybody likes the judiciary, but I think it's the judiciary that has sold us out the most because they have let the government get away with murder. They are not

enforcing the law on the government and making the government abide by the law. I mean, the laws that apply to me and you aren't up for interpretation. You know, they mean what they say. Right. But somehow the laws that apply to the government, you know, well, they can be interpreted, which means they can be ignored. Right. They want to say, oh, the Constitution is a living, breathing document so that it can change with the times is a way of saying it means nothing. So we need to reclaim the republic by actually enforcing the government to live by the Constitution. That's one of the things Trump can do is say, look, we are going to restore

constitutional government to this republic. We are going to make sure the government only does what it's authorized to do in the Constitution. And the smaller you make government, the freer you make people, right? That's what it's all about. I said earlier in the podcast about this whole idea about group privilege. The more privileges that you give groups, the fewer rights that you have for individuals. And the more government you have, the less free we are. So that's actually the real definition of freedom is freedom from government. And so the smaller your government, the less they regulate your activity and the less money they take from you, the more freedom you have. And the more free we are, the more freely we can interact with one another,

the more prosperous we're going to be. Now, second step, what does a person like me do to stop or to mitigate the effects of this bubble that's going to crash? Well, I mean, as I said, the only thing you can do, personally, because politically, there's really very little we can do. I mean, it's going to hit the fan, right? I mean, there's nothing we can do about that. I mean, the only thing you can do personally, because politically there's really very little we can do. I mean, it's going to hit the fan, right? I mean, there's nothing we can do about that. I mean, because Trump's not going to call me down to the White House. Maybe he will after this. Peter, I loved you on the Joe Rogan podcast, even though sometimes you talk shit about me, that little weasel.

You know, I was his biggest defender after the Access Hollywood stuff. I was on podcasts. I defended him when nobody would defend him for that. Because I understood those comments and what he was doing and I called everybody out. He was talking shit. He was just being a guy with other guys. He didn't know he was being...

He wasn't saying that for public consumption. He was saying something funny. My friends have said horrible things to me and I've laughed. Yes, of course. And the thing that Billy Bush got in trouble for sitting next to him and laughing, he wasn't taking a stand. He's on a broadcast next to a guy who's a crazy

person who is literally known for being a crazy person saying outrageous stuff. His tagline is, you're fired. Look, you know some of the stuff that women say about guys when they're just together? Women chatting. No, I forgot your question about. Oh, how do we fix?

How does a person like me prevent the damage? We're not going to prevent it. What I am hoping is people like you and people like me, after it collapses, that if we can at least come out there with an alternative version of what happened, like after the financial crisis happened, and I was one of the few people saying, it's not, it wasn't the banks, it wasn't greed, it was government, it was the Federal Reserve, it was Fannie Mae and Freddie Mac, they were the problem, right? But the government got away with blaming capitalism and making government bigger. What we need to do and what you can do with your audience, which is much bigger than mine,

we need to do and what you can do with your audience, which is much bigger than mine, is when it hits the fan again, to put the blame where it belongs on government and say, government did this to us. It's not an accident that we have all this government and we have all these problems. And, you know, it's government interference in capitalism. That's the problem, not capitalism itself. If the government stayed out, it would be working beautifully. So we don't want to throw the baby out with the bathwater. We want to preserve the baby. The government's the bathwater. So what you can do with your soapbox is get people to understand the real source. Now, what you can do now, what your audience can do now to protect themselves so they don't go broke. And I think that to the extent that you don't go broke, you're in a better position to help the economy and help the country if you have resources.

I said if a ship is going to sink and I can get you off the ship onto a lifeboat, then when the ship goes down, you might be able to help some of the people out of the water if you're not drowning yourself. So what you could do is protect your finances. your finances. If you've got a large portfolio, right, what I do with my own money and what I, you know, I advise people, I manage money at Europe Pacific Asset Management, at my broker dealer, Europe Pacific Capital, is I invest in countries that, you know, I think are in relatively better shape, whether it's Switzerland or Singapore, you know, or, you know, New Zealand. I mean, even though New Zealand just elected a leftist, you know, their economy is strong enough that I think they can withstand it. They've made enough progress. So there are countries out there that are not nearly as screwed up.

Nobody is perfect. Nobody is as good as America used to be. But there are a lot of countries that are much better than we are now. And they have assets that you can own that are not in bubbles. You can get good dividends. You can protect yourself from this coming stock market crash, dollar crash, bond market crash, so you can preserve your wealth. And as the dollar goes down, so if you went through the 1970s and you had your portfolio, because the 1970s, the stock market went way down, but the dollar went down even more. The

dollar lost two-thirds of its value. The reason oil prices went up tenfold in the 70s, the reason gold went from $35 an ounce to $850 was because the dollar collapsed. Well, the dollar is going to have a bigger collapse this time than it did last time, right? This time, I think the dollar is going to lose its status as the reserve currency. Last time, it didn't lose the status. It just got marked down because we went off the gold standard, but it didn't get knocked out. I think the next one is going to be a knockout. So you got to invest your money outside the U.S. to preserve your wealth when everybody else is going broke. And you got to own real money. You got to own gold. You own physical gold,

right, which you can buy, you know, larger quantities of gold through shift gold. You know, I got, you know, very low prices. You got to be careful out there. There are a lot of companies that will try to, you know, bait and switch you into collectible coins, rare coins with these huge markups, 20, 30, 40% markups, sometimes 100% markups. Stay away from that. You know, you just want to buy bullion

and you want to buy it as cheap as you can over spot. The only time you'd want to pay a little bit more is to get some jewelry because you want to wear it. Then it's probably worth it to pay a little extra if you want to, you know, buy something that you could wear, you know, at many. But so you can do that. I think the stocks that are going to go

up the most, if you really want to potentially make a lot of money on this crisis, it'll be gold stocks. Gold bullion is not about getting rich. It's about staying rich. It's about not getting poor. Buying physical gold is about preserving the wealth that you have. But I think that these gold mining companies, when the price of gold goes up, I think some of these stocks will go up 10, 20 times or more. So you can tolerate the risk because if I'm wrong, these stocks could go way down. But if I'm right, they're going to go way up. So a way that you can really profit from what's going to happen is by having some money investing in these gold mining companies. And then when we have a dollar crisis and the price of gold goes way up, these stocks can go ballistic.

The voice of doom and the voice of reason all in one man. Peter Schiff, ladies and gentlemen. That was awesome, man. Hey, how long we've been talking? Three hours. Three hours already? Yeah. How crazy is that?

See, time flies. Just flies by. Joe Rogan's studio. Thank you, brother. Always good to see you. My pleasure. Thanks for everything Studio. Thank you, brother. Always good to see you. My pleasure. Thanks for everything. Peter Schiff, folks.