The Joe Rogan Experience - #445 - Peter Schiff

Episode Date: January 22, 2014

Peter Schiff is an American businessman, investment broker, author and financial commentator. Schiff is CEO and chief global strategist of Euro Pacific Capital Inc.

Train by day, Joe Rogan podcast by night, all day. Peter Shipp, how are you, sir? I'm well, I'm well. Joe, thanks for having me on the podcast. Please, thank you. Thank you for doing this. I really appreciate it. I have zero background in economics. I'm a mathematical retard. And I really appreciate people like you out there that can spell things out and explain what's wrong with this ridiculous system that we operate under and what's right about this ridiculous system. Don't sell yourself short, though.

Just your common sense might mean you know more about economics than people who actually have Nobel Prizes in economics. But I saw that movie Inside Job and I saw how the whole system works where they essentially set these financial limitations and then wind up getting jobs after the economics professors set these limitations and then wind up getting jobs and wind up profiting off of the fact that they made it so that these things go through. You and your video from Occupy Wall Street is one of my all-time favorites. Thanks. When you went down there and you said, I am the 1%, and you started talking to just knuckleheads. And I know you didn't cherry pick because you had a few intelligent people in there too, but it was beautifully representative of what's actually going on, this sort of emotional outrage, this wanting to understand and explain why our economy is in such a mess, but having this very distorted perception of the actual facts themselves. Yeah. And my purpose of going down there was to call attention to, I think they misdiagnosed

or misunderstood what was really going on. And they bought into this idea that it's capitalism or the free market that is the problem. And so they were blaming maybe Wall Street because they looked at Wall Street as somehow epitomizing American capitalism. And I wanted to point out that what they were really upset at was not capitalism. It was because of government. It was because of central banking and central planning and crony capitalism. That was the source of all their problems, that really the solution to the problems is free market capitalism. They just don't understand it. And so I wanted to go there and explain to the people in that park. But more importantly, if people watch the interactions between me and the occupiers to try to really expose how ridiculous, you know,

the things that they're saying are. I understood that they were upset and they were frustrated, but, you know, the source of their frustration was misplaced. I mean, they should be protesting Washington. They should be protesting the Federal Reserve, Congress, not Wall Street. I mean, what's going on in Wall Street is a symptom of the problem, but it's not capitalism because when you have the government and Wall Street working together, you know, that's not the free market. I mean, that and it's government that is at the source of it. It's not necessarily the bank's fault. It's sure they everybody wants something from government, but the government should, you know, deny, right? When somebody wants a bailout or somebody wants something for

nothing the government should you know not supply it i can't necessarily blame wall street uh for wanting something for nothing but i blame the government for supplying it now how do how do they supply it do they supply it because the people that are asking for them to supply it are the ones who contributed to their campaigns and got them into office. And then once they get in there, they acquiesce. Is that what's going on? That's part of it. But a lot of it is the government wants to maintain the illusion of prosperity, the illusion of economic growth. And so the way they do that now is through the financial markets, through assets. And they get the stock market to go up. They get the real estate market to go up. And somehow they real estate market to go up. And

somehow they pretend that that means that the economy is getting better just because asset prices are rising. But that's not really economic growth just because the price of some asset goes up. I mean, what's economic growth is when your economy produces more stuff, when you have more output of the goods and services that make people's lives better, right? You want to grow your standard of living. If people are poor, they're poor because they don't have enough stuff, right? So we have to produce more stuff for people to consume. And that's not what's happening in the U.S. economy. It's not like we've got more factories turning out more stuff. All that they do is they get asset prices to rise so that people can borrow more money against those inflated asset values and then spend it.

But we're buying things that are made in other countries. It doesn't evidence economic growth here. It evidences the economic growth in the countries who are able to produce all the things that we have to borrow money to consume. But it doesn't benefit the average American. That's why the average American is suffering as a result of this massive transfer of wealth that is emanating from government, from the Federal Reserve, and from what's happening in Congress and the White House. But they point to these asset markets as evidence that their policies are a success. But

meanwhile, their policies are a complete failure if you judge it by what's actually going on in the economy. And of course, everything they're doing now is just setting the stage for a economic disaster that is going to be much worse than what we had in 2008. Well, you predicted the one in 2008. You saw it coming. You talked about it on multiple occasions that we're eventually going to have some large real estate collapse. When that happens, this is where I get confused. So that happens. And then when there's a real situation like that, where banks are in jeopardy, what transpires there? Who votes on it? Who decides and agrees that you're going to

take taxpayer money? And what are the repercussions of them not doing it? So if they didn't bail the banks out, what would have happened? Well, it would have been far more painful, certainly at that time, to deal with our problems. It's always painful. I mean, if you're a drug addict and you want to deal with it and you want to go cold turkey and go to rehab, that's painful. It's easier to keep taking drugs, right? If you're overweight and is it easier to go on a diet and exercise or just keep on picking out? So it's always difficult to do the right thing in the short run, but it pays off in the long run. And so if you want to go back to the origin of the 08 financial crisis, you go look to the stock market bubble that burst in 2000 and the recession that began

in 2001. A lot of it, you know, you had the September 11th tragedy and we were going into a recession. And so instead of allowing the pain of a recession to play out, and of course, nobody enjoys a recession, but recessions are actually necessary. That's the process where all the mistakes that were made during the boom are corrected. And of course, we made a lot of mistakes during the tech boom. Mistakes that were made during the boom are corrected. And, of course, we made a lot of mistakes during the tech boom. A lot of companies were funded, hired people, rented office space that never should have started because they had no real business plans. They couldn't make any money. We did a lot of stupid things during the 1990s bubble, and they needed to be corrected during the recession.

But the politicians, you know, Bush had just become president. He didn't want a big recession on his first term because, of course, he wanted a second term. And so Alan Greenspan cooperated with Bush because he wanted to get reappointed. And so they had a big monetary stimulus. They dropped interest rates down to 1%, which is high by today's standards, but it was record low back then. And a lot of the money that was going into the stock market went into the real estate market. So we replaced the stock market bubble with a real estate bubble that actually had began forming a few years earlier. But it really gathered momentum after the real

estate, the stock market bubble burst. And so the real estate bubble got all the air. And so now housing prices were going up. And because they were going up, people thought they were rich. So they went out and spent money they didn't have. They borrowed it against the appreciating value of their houses. They bought more houses. They bought cars. They took vacations. And during that time, I knew this was a mania.

I knew that the big crisis, though, for the real estate market was not going to be the buyer of real estate. Because in the stock market bubble, when the stock market bubble burst, it was the people who bought stocks who lost because they were buying, gambling with their own money. But when people were buying houses, they were gambling with the bank's money. But in fact, it was taxpayer money because the banks were all guaranteed by the government. And so I knew when the real estate bubble burst and prices went down, that the banks would be insolvent and that the banks would fail. Now, had the government allowed real estate prices to fall, which was a good thing, the problem was that they went up. Coming back down was reality coming back. Had the government allowed the banks to fail and real

estate prices to keep falling, it would have been more painful in the short run, but it would have been necessary pain. It would have been constructive pain because we would have laid the foundation for a legitimate economic recovery, which is what we should have done in 2001. We shouldn't have had all that monetary stimulus. We shouldn't have created a housing bubble. We should have just endured the pain and then we would have been in better shape. So they blew up this housing bubble. And now when it bursts, they didn't learn from their mistakes. Ben Bernanke just repeated all the mistakes of Alan Greenspan. Only this time, interest rates had to come to zero because it was an even bigger crisis. And now we have all the money printing they call quantitative easing.

But we have much easier, much more aggressive monetary stimulus now. We're doing far more damage to the economy. We've managed to reflate the stock market bubble. We've reflated the real estate bubble. We have more debt as a society than ever before. The government has more debt. Corporations have more debt. Individuals, there's been no deleveraging. We were in a deep hole, and then we dug it a lot deeper, and we've set the stage. Ben Bernanke has set the stage for a much greater economic crisis than the one from 2008. It's going to blow up on Janet Yellen, just like the Greenspan bubble blew up on Bernanke. The Bernanke bubble is going to blow up on Yellen. It's much bigger.

And I'm afraid that Yellen is going to do more of the same, only worse when she gets in. And we're in for a much worse economic crisis, because this one, I think, is going to be where the dollar collapses. And that's going to usher in a lot more pain for ordinary Americans than the bursting of the stock market bubble or the housing bubble. Let's go back to that word pain, because this is what I really was confused about. When you say that it would have caused a lot more pain if the banks had failed, but ultimately it would have been better because we figured out what was wrong and then not allow that to go. What kind of pain would that have been when you're dealing with federally insured banks? So if the average person, how much of their money

would be insured by the government if banks collapse? And then where does that money come from if they have to insure all the people who had money in the bank accounts? Yeah, well, theoretically, right? I mean, the government now stands behind, you know, the bank accounts. I mean, the FDIC has a limit, maybe $250,000. But the government has, you know, bailed out banks. You know, when they fail, they bail out everybody. I mean, that's a mistake. We shouldn't have any government-insured deposits.

I mean, it's a huge moral hazard because, you know, people now will put their money into banks, and no one cares what the bank does with their money because the government insures the account. So the banks can be as reckless as they want, and there's no free market penalty. If we had a free market in banking like we had at one point, banks couldn't be reckless because they wouldn't have any depositors. Depositors would care about what the bank does with their money. And so in order to get depositors, banks would have to be cautious, and they would advertise how safe their portfolios were.

And you would have companies that would rate them and say, this is a good bank to put your money. But right now, nobody cares. They're all the same. And so you put your money anywhere. How much of your money is insured? Well, theoretically, the government insures it all. So if you have $10 million in the bank and the bank fails, the government gives you $10 million?

That doesn't seem likely. No. Well, that's what they've done in the past. They're only technically supposed to give you now $250,000, but they have given you all of it. But the problem is only smaller banks have failed so far. But if a large bank were to fail, there's not enough money in the FDIC to bail out the depositors. So the government would have to create it. The Federal Reserve would have to print it into existence. And so what's ultimately going to happen is, sure, we've got all these insured bank accounts. But if a couple of big banks fail and the government has to print all the money to reimburse the depositors, you have massive inflation and you get your money back, but you can't buy anything with it or you can't buy nearly as much. What would actually happen if the government had done the right thing and

allowed banks to fail? Then some depositors would have lost money. Some depositors would have not got back 100 cents on the dollar. But in the long run, that'd be better off than getting back all your money and have it not buy anything. And, you know, there would have been pain for some people, right? The government would have been forced to cut a lot of spending. The government would have had to lay people off. And so that would be good for the economy. It wouldn't be good in the short run for the guy who got laid off. Now he has to go get a real job. But the government would have to start cutting spending. Real estate prices would have fallen. So people, you know, some people would lose that home

equity. But if you don't have a house, falling real estate prices is a good thing for you. I mean, the government always talks about trying to make home ownership affordable. Well, the best way to do that is let prices come down. Why is the government trying to stop real estate prices from coming down when they say they want houses to be affordable? What the government wants is to prop up real estate prices at artificial levels so you have to borrow a fortune to buy a house, but then they want to subsidize the debt. They do the same thing with college. They want everyone to go to college, but they don't want college tuition to come down

because the government guarantees all the student loans, and so that's why college is so expensive because the students take all that government money and they bid up tuition, and the colleges know that it doesn't matter how high the prices are, because the kids are going to get the money from the government to pay the price. But meanwhile, they graduate, they've got these worthless degrees, and they've got a pile of debt. If the government just got out of the way, and they didn't give out all this money to students, then the universities would have to slash tuition, or they'd have no customers. And now you can get a college degree without taking on a mortgage. Are you aware of that famous Putin quote before the crash about the economy?

What's the quote? Putin said, I don't understand the United States economy. It seems they only buy and sell each other's houses. Well, yeah, we had an economy that was all about flipping houses. That's strange, though. But we have this service sector economy now that is completely unviable because it's the result of our ability to borrow indefinitely from abroad to pay for the products that are manufactured in other countries. But this bubble is going to burst

because we can't keep borrowing. The world can't keep lending us money. It's like a giant vendor financing scheme where other countries produce products and then they lend us the money to buy those products. But we can't pay back any of the money we've already borrowed, yet they keep lending us more because they don't want to deal with the reality of how much money they've lost. What kind of an epic change would be involved in getting away from this trend? What kind of an epic change would be involved in making sure that the government doesn't subsidize universities, making sure that housing costs do go down, making sure that banks aren't government protected? I mean, that seems like it would take an epic change in our culture. I think it's going to take a crisis. And I think fortunately or unfortunately, that crisis is coming. There's going to be a crisis that we can't print our way out of, that we can't bail our way out of. And I think that's where we are. I mean, I think the bubble that we have now is just so big. And I think the Fed knows it's so big, it's too big to pop, forgetting about too big to fail, that there is no more bubbles. This is the last hurrah for our phony economy because there's nothing left to do once this collapses. And then maybe there will be the catalyst to do the right thing.

But I think the way the collapse is going to come is going to be in the value of our currency, which right now is relatively stable. It's actually risen recently against some currencies, although not all currencies. But I think that the Fed is going to keep on printing money. There's an expectation right now that there's a real economic recovery and that the Fed is going to be able to remove the monetary props. There is no real recovery and the Fed can't remove the props. It should, but the minute it did, the whole economy would implode. I think as people begin to realize that, to appreciate what the Fed has created, not a sustainable recovery but a bubble, the world is not going to want our dollars anymore because the Fed has to keep printing dollars to buy bonds so that we can keep borrowing money.

The government can keep borrowing money. The government can keep borrowing money. But when people don't want the dollars that the Fed is creating, now the value of the dollar starts to go down. And that's when you start to see a real acceleration in prices for consumer goods. I mean, and the government tries to deny that there's inflation, but there's massive inflation. It's not all showing up yet in consumer prices, although a lot of prices, look, you know, since 2009, milk prices have more than doubled. I think beef prices, chopped meat prices are up 80, 90 percent. I mean, look at gasoline prices at record highs. The government tells us there's no inflation, but there's plenty of it. But it's going to get a lot worse. That is the bad news.

Now, the government, you know, is actually trying to lay the foundation for higher inflation now by trying to tell us that it's a good thing. If you listen to the economists today, they'll tell you that the scariest thing, the worst thing that can happen is that we don't have enough inflation, that we have to make sure that prices are rising fast enough to have economic growth. They used to say that we want stable prices. Now they tell us that that's dangerous. That's a bad thing because if prices are stable, they might actually go down a little bit and that would be horrible. So the government wants us to be thankful when the cost of living goes up, when obviously a good, strong economy has falling consumer prices. That's the goal of an economy.

It's to bring prices down so that people can buy more stuff. Is the problem incompetent intervention in the market, or is the problem that it's just a system that can't be fixed? Well, right now the system can't be fixed. It's just going to collapse. So it has to. In your opinion, it should and it has to? Yeah, it will. But there are a lot of incentives to keep it going, right,

to keep the party going as long as possible. The politicians want to keep it going. I mean, they love phony prosperity because it's better than reality because if the public knew how screwed they were, right, they might not reelect the guys that are there. So they want to keep it going. They have no incentive to rain on the parade. They don't want to solve any problems. They just want to get through the next election.

Wall Street, I mean, they're making a ton of money. I mean, there are people that are making a fortune off of this bad monetary policy. And so they don't want it to stop. They don't want to deal with reality. They want to just, you know, keep making hay while the sun shines. And the academics, the media, I think these guys are just clueless. So nobody really, you know, either understands or has a vested interest to understand the truth everybody wants to keep the party going that was exactly what was going on

in 2003 and four and five and six and when i was going around going on tv shows given given lectures uh explaining all the problems in the housing market and how the fed was creating it and how bad it was going to be when the bubble burst nobody wanted to hear hear it. I mean, everybody either laughed at me, ridiculed me. And this stuff should have been obvious. This should have been crystal clear. Yet people couldn't see it. And then everybody was blindsided by what happened. They said, well, nobody could have possibly predicted this, right?

Of course, that was wrong. But, you know, and then instead of, you know, learning from the mistakes or instead of, you know, listening to people like me, and I wasn't the only guy that was out there talking about it. I just did it maybe more publicly than a lot of people. But instead of saying, hey, you know, let's talk to Peter Schiff. You know, he saw this thing coming. You know, what does he think? You know, they had a government inquiry to the financial crisis. Right after it happened, it was an investigation as to why there was a financial crisis.

And you would have thought, gee, I wrote a book predicting the financial crisis, crash-proof, had a profit for the coming economic collapse that described exactly what happened. I wrote about it. I talked about it for years. I have all these essays on the Internet. There's all these YouTube videos you can see, conferences. Look at my mortgage banker speech from 2006.

I was like, great, why don't I go and testify in front of Congress and explain why we had a financial crisis? They wouldn't call me. Of course not because you're going to say something exactly like you said in the first 15 minutes of this podcast. Yeah, they don't want to hear it. In fact, I did testify twice in front of Congress later on, and you can see those testimonies are on YouTube. And I was actually surprised that they invited me back a second time after I testified the first time. I think maybe some people didn't really realize who I was. And so they haven't invited me back a third

time. But, you know, I tell them the truth and I treat these guys like they ought to be treated. I don't really show any respect for people that are destroying our country. And so I put them in their place when I testify. But they didn't really want anybody testifying who knew why there was a crisis because they already had they already had a preconceived conclusion. They wanted to blame it on capitalism. They wanted to say we had a crisis because we didn't have enough regulation, because we didn't have enough government, which, of course, was the opposite of why we had the crisis.

We had too much regulation and too much government. The free market would have prevented that crisis. Now, you say that you don't believe in regulation, but do you agree with when it comes to regulation, when it comes to environmental protections, when it comes to things like the EPA, or when it comes to situations like, what do you do about when you have this massive Gulf oil spill? Do you believe in the government should intervene then? Well, first of all, there are market regulations, right? Markets in many cases regulate themselves because of the self-interest of the party. So, for example, when I talk about banks, right, if there was no government guaranteeing the safety of bank accounts,

in order for banks to thrive and get customers, they are going to have to provide a safe platform, a depository of their savings. provide a safe platform, a depository of their savings. And banks will compete with each other based on who's got the safest bank, where's my money going to be secure, because that's really what you're worried about. And so there is market-based regulation from competition. And you get that every place. I mean, people say, well, don't we need the government to make sure that the airlines are safe? Well, who's got a better vested interest in a safe airline than the owner of that airline? I mean, the last thing an airline wants is a crash. And the most important thing, you know, I fly a lot. The most important thing to me is that it's a safe flight.

And so, you know, I'm not going to go on a plane, on an airline that, you know, says, you know, they cut corners to save a couple of bucks. So there's going to be a lot of regulation in the market. Unfortunately, what happens is the government comes in and now they create a moral hazard that undermines the normal market regulation and replaces it with a government regulation that's nowhere near as good. Moral hazard. How so? Yeah. Well, moral hazard. Well, in the bank account, again, in the bank account example,

without government interference, I care about what the banks do with my money. I'm not just going to dump my money in the bank and not worry about it. I'm going to do some research before I open my bank account. I want to make sure that the bank is sound. The bank knows that in order to attract customers, it has to be safe. It can't just be gambling with depositors' money. attract customers, it has to be safe. It can't just be gambling with depositors' money. But when the government steps in, now no one cares about safety because the government says,

don't worry, we'll make sure the bank is safe. So now the depositors say, we don't give a damn. We'll put our money anywhere. I don't care which bank it is. Nobody does any research. I mean, people do more research before they buy a microwave oven or a television set than depositing their life savings into a bank. It's just whichever one is closest. I'm going to put my money there. The banks know this. Now, the only thing the banks have to do is convince the regulators to give them a pass, but then you've got all kinds of corruption, and the government has all kinds of corrupt incentives. So market-based regulation is much better, but certainly I do believe in some types of regulation when it comes

to externalities like pollution and things like that. But a lot of that is best done at a local level, not at a federal level. And a lot of it is done through courts because people are still liable in a free market. So if I damage you in some way, then I'm responsible for your damage and you can sue me. And so businesses don't want to be sued. They don't want to harm other people, and so they're going to guard against that. lost to the cost of regulation, right, then would be lost, you know, through, you know, fraud or unscrupulous actors that, you know, that might, you know, steal somebody's money. But yeah, but that money is not coming directly from victims. The idea being that, you know, if you're spending all this money on regulation, that that money is not coming.

But, you know, the amount of money that you would lose if they weren't regulated would directly affect them. Well, it comes from everybody. Like, look at my industry. I mainly make my money in the investment business. I have a brokerage firm and an asset advisor company. And so I advise people on how to invest their money. Now, I have to spend a ton of money, a fortune, complying with regulation.

There's so much regulation in my industry. And it costs me, I mean, it's, you know, I don't know exactly what it is, over a million dollars a year, much more that I have to spend to stay in business. And of course, I have to pass on those costs to my clients. And of course, because the costs are so big, there's not a lot of, you know, there's less competition than there would be if the government didn't create all these barriers to entry. Because if you want to compete with me, you just can't do it. You've got to have enough money to set up the compliance apparatus that the government requires.

So there's a lot less competition in my industry. And so I think that investors suffer because they don't have as much choices and everybody has to pay higher prices for their services because the government requires us to spend all this money supposedly to protect my customers. But the government doesn't really give a damn about my customers. I do. I'm the one that suffers if my customers are mad at me because they take their business someplace else, right? I need happy customers. So I am going to do what's right for my customers regardless of what the government says. Now, there are some people out there that are going to steal. There's going to be criminals in every industry. There's going to be some guy that's going to, you know, fraudulently peddle, you know, penny stocks or something. That's going

to happen. But the problem is that's happening now, even with all the government. Look at Bernie Madoff. I mean, you have all this stuff going on on top of it. But if we didn't have any of this regulation, if we have a free market, yes, there would still be some fools that would lose money. But, you know, the losses would pale in comparison to how much everybody is losing now because of the cost of government. And at least the people who lose money would have to accept responsibility for their own bad decisions. Why do my clients have to spend all this extra money because somebody else is foolish with their money? Because now if you're responsible, you get punished.

Well, this rant started when I was asking you about the BP spill, the idea that the government should possibly regulate that. You feel that the market should regulate in situations like that where they should be responsible and be sued and that the government shouldn't step in and enforce it? Because it seems like when you're dealing with something like BP, you've got this massive corporation that has untold billions of dollars that they can funnel and move and adjust and spend to combat anything that would cost them money. But one of the ironies of the whole BP situation is why are we drilling in such deep water in the first place? And it has to do with government environmental regulation that made it very expensive to drill in shallower water. That

would be less of an environmental threat. It would be a lot easier. But the government, with all that regulation, actually helped bring that situation about. And also with insurance. Well, that situation was because they cut costs on the way the well was constructed. But also what happened is the government came in and the government capped liability, which was a mistake. The government basically told companies that your liability is capped at a certain amount. And that was the government, not the free market. And so because there was a liability cap imposed by government,

corporations were riskier than they would have been. And then, of course, then BP said, okay, we're going to pay even beyond these caps. But a lot of this was a byproduct of other government regulation and moral hazard that resulted in drilling in deep water when we should have been drilling in shallower water. We should be developing, you know, what if we were developing more up in Alaska? But, you know know the government will let you do that uh and so the people of alaska don't want it either it's such an unchecked wilderness no no i think the people of alaska do no i think it's i think it's i talk to them all the time i've been to alaska when you talk to the average person in alaska about drilling and there's some people

there that want jobs that might say yes but most most people who don't have a vested interest in that, they don't want any drilling up there. They want to leave that place alone. It's beautiful. Well, I mean, it's also pretty big. It is pretty big, but they don't want to fuck any of it up because if you start fucking up one part, why not fuck up other parts?

Before you know it, you're going to look out and you're going to see mountains with oil wells. You're going to see a lot of nonsense. You're going to see poisoning of the water. It's the last frontier. You're going to see mountains with oil wells. You're going to see a lot of nonsense. You're going to see poisoning of the water. You're going to see all this. It's the last frontier. I see what you're saying when it comes to this idea of government regulation and BP, but I don't see them spending money to fix it. No, no.

Believe me. You know how much money BP lost? Did you see what happened to the value of their shares, How much money they've had to spend in litigation and claims? Not enough. Not enough. They've done an unbelievable job of fucking up the ocean. They've killed massive amounts of wildlife. I mean, they should give everything they have ever made ever and then some.

What they've done is an unbelievable disservice to the planet itself. Well, you know, a lot of people want to vilify, okay, big bad oil companies. Well, they're a big bad oil company. They cut corners in making their well, and that's why it happened in the first place. Okay, so let's say we didn't have any oil companies, because they're bad, right? Let's not say that. That's a blanket generalization.

Let's say we have an oil company that's like BP, that cuts corners precisely to save money, and in doing so, they cause a massive, massive environmental damage that I believe, personally, you can't put a dollar value on. What they've done is enormous. They've ruined a part of the earth. Yeah, but they obviously didn't do it intentionally.

So what? And if you look at the damage- But they did it, and you know what they didn't do intentionally? They made money. And in doing that intentionally and making money, they made sure that they made as much money as possible in the shortest amount of time as possible, which led them to cut corners in the construction of the well, which makes them ultimately responsible 100% for the damage. And the damage is massive. They don't deserve a fucking penny.

But what if we punished BP to the point? Let's say we destroyed them. We wiped them out, wiped out their shareholders. The company is bankrupt, and they're no longer in the oil drilling business. In addition, we increased the risk so much that nobody wants to look for oil. We give them a new job. The new job is clean the ocean. That's your new job, BP.

That's your new industry. But meanwhile, I'm in Southern California. If we put the oil companies out of business— We're not putting them all out of business. Well, believe me— There's several oil companies, but this one is responsible for something horrible. If BP went away and if we raised the risks of drilling for oil, if we told companies, look, you screw up and you're gone, right? You're totally wiped out.

And so now insurance and liability insurance goes up. And let's say – so now gasoline has to be, I don't know, $20 a gallon, $30 a gallon. Wait a minute. Wait a minute. That's ridiculous. But that's not going to happen. One company going down is not going to turn gas into $20 a gallon, $30 a gallon. Wait a minute, wait a minute. That's ridiculous, but that's not going to happen. One company going down is not going to turn gas into $20 a gallon. It's not one company.

I'm talking about you're raising the cost throughout the entire, you're going to have less people exploring for oil, less people, you know, less money going in. In fact, right now, if you look at some of the oil companies, they're barely even making money at $100 oil. I mean, I got bad news for you. I mean, oil prices are going a lot higher anyway. They're already going making money at $100 oil. I mean I got bad news for you. I mean oil prices are going a lot higher anyway. They're already going a lot higher. So people in Southern California have got to get ready for $10 gallon gasoline or higher.

Couldn't someone listen to this conversation, listen to you saying this and say, well, this guy does – he thinks that banks should fail but oil companies shouldn't? No, no. I think the free market should be allowed to operate. And so – Well, then how do you assess liability in something like BP? Because in BP, I think that there's not enough money in the world to make up for what they've done. Look, well, a lot of people that are filing claims against BP, they don't have – they didn't even have – all kinds of fraudulent claims are coming in by people that have no real damage.

I'm sure there is a few, but there's maybe a few of those. But you can't doubt that there's a lot of people affected by that, the fishermen, the people that work there. Sure. But how about the actual impact on the earth itself? Shouldn't they be responsible for that? They are responsible, but you can't overlook how are people's lives improved by the fact that we have oil, by the fact that we can drive cars around.

BP didn't invent oil and BP didn't invent cars. They didn't invent it, but they're out there producing the oil. Right, but because of that, they should be able to do such a colossal fuck-up and then still do business as usual and make billions of dollars? The government shouldn't have removed the liability restrictions that said how much you can sue if you have real damages. I want real market forces to be able to... So you think that those real market forces would have influenced them

to spend more money in the construction of the well, not cut corners in order to reach a deadline? Yeah, and in fact, they might not have even been drilling there. I mean, if it was a free market energy, they might have been drilling in areas that were generally safer, but the government won't let them drill there. But don't you think that most people would vote against that, if given the opportunity?

Do you want to have a giant oil rig 50, 100 yards offshore where you could see it? Most people are going to say no. Most people are going to think that if there is a mistake, which there are quite often, I mean, it's not all the time, but we can think of several in our lifetimes. We know about big oil disasters, where's Exxon Valdez, or whether it's this most more recent one. Those happen. People don't want that risk. Yeah, but, I mean, people also don't want extremely expensive gasoline, so there's always a tradeoff. But the big risk that we face, I mean, you could talk about an oil spill.

I mean, the economic catastrophe that the government is in the process of creating is going to have such a profound impact across this economy that these things, while they're bad, are tiny compared to what's coming, compared to the economic. This is California, so we're going to get a 10 plus on the Richter scale. And the things that we're talking about really don't even register on it at all compared to what we're going to go through in the United States. Because of government, you can look at, hey, we think we want government to protect us

from this. But meanwhile, you've got this huge, enormous government that is creating a massive catastrophe that's coming. And then, I mean, we're probably going to end up with a lot more pollution when we're a lot poorer nation. We can't even afford to do the things that would keep the environment clean. Or we're going to be chopping wood to stay warm and there'll be no pollution. We'll go completely caveman.

We'll go all the way the other way and start trading metals that we find on the street. Well, look, initially there'll probably be some cleaner air here in Southern California when no one can afford to drive. I mean, see, the next crisis that's going to come is going to kill the dollar, and then prices are going to go way up. And they might end up with shortages because they might have price controls. I think there's going to be big power blackouts because when energy costs really soar, because when the dollar tanks, even though we're producing a lot of oil in the U.S. right now, none of it's going to be consumed here.

It's all going to be shipped over to Asia because their currencies are going to be stronger. You imagine you've got all these people in China. They're working hard. They're in factories. They're producing. They're saving. But they're sacrificing to prop up our economy because a lot of the stuff that they produce gets shipped over here. Well, when the dollar collapses, they're not going to ship stuff over here anymore. They're going to make it and then they're going to take it home. They're going to consume the stuff. And you have a lot of Chinese now that are riding around on bicycles. Well, when the dollar collapses, they're not going to ride bicycles anymore.

They're going to drive cars, and they're going to use a lot of gasoline. Americans are going to be riding around on bicycles. I still don't see how that relates to protecting environments from corporations that pose massive catastrophes. My point is that the greatest threat to America is not corporations. It's the government. And the interesting thing, when you have a lot of people that are afraid of corporations and they say, oh, big corporations are bad. It's like, well, but what could a corporation in general do to you? They can make a product and they can hope that you buy it. But it's your you know well but what could a corporation in general do to you if they they

can make a product and they can hope that you buy it but it's your decision you choose and and the way a corporation or you know and which is just a business right it's just the ownership structure is a corporation and the corporation is run by people just like everybody else but if the corporation wants you to buy their product they have to give you a good deal they got to give you a better price than somebody else they got to give you a higher, they have to give you a good deal. They got to give you a better price than somebody else. They got to give you a higher quality. They have to win your business and you only buy their products or consume their services if it's to your advantage to do so. So it's all voluntary cooperation. Both sides benefit or nobody would trade. But if you look at government, it's very different. We don't have a voluntary relationship with the government. The government

is forced. The government says, you have to do this or we're putting you in jail. I'm going to force you to do this. I'm going to require you to do that. You have to pay this tax and if you don't do it, we put you in jail. So government has real power. Corporations have no power. The government has all the power so we should fear government.

Corporations have money though. If corporations have money and there is a government, the corporations can influence the government. It's always been the case. It always will be the case. It hasn't always been the case, but you're right to the extent that if we allow corporations to buy government influence, that's a problem. Okay, so corporations shouldn't be able to donate to political parties. Well, that might be a good reform because let individuals do it.

But if we allow corporations right to uh to buy influence then that that's bad but the problem isn't that the corporations are buying it the problem is that we allow the government to sell it or to peddle it so if we were to go back to the constitution the problem is both yeah but if we force the government to obey the law then there is no influence to sell. If all we get from government is freedom, right, and liberty, which means we have laws that protect private property, but we don't create special privileges for some people, then there's no power to lobby for. But right now we allow our politicians to sell power to the highest bidder. That's not the fault

of the bidders, the fault of the bidders, because if I'm a business and I don't try to get a favor from government, what if my competition gets a favor and then uses government power to squash me? So everybody is forced to bid for that power, but the problem is government. We have to take the power away from government, and then there's no more lobbying, because there's nothing to lobby for. Right, but okay, so how about a situation where, like in the movie Inside Job, we have these economics professors that they set these standards and give advice,

and then they wind up getting jobs with banks. You clearly need economic advisors, though. Not really. I do. If I'm in the government and I'm a senator and my background is in real estate sales or what have you, let's say he's a businessman, he sells computers, and then he gets into politics. What do you really know about economics? You have to have a degree in economics to truly understand it.

No, I think if you have a degree in economics, then you've probably lost. You probably know more about economics before you get your degree than after. But you say you need economic advisors. So we have a council of economic advisors for the president. But we didn't even have that before the Second World War. There were no economic advisors. So we have a council of economic advisors for the president, but that, that we didn't even have that before the second world war. There were no economic advisors advising the president, but America became the wealthiest country the world had ever known. I mean, America in 1945, right? There is no comparison to America today. I mean, it was a, it was, it was a completely different planet. I mean, being American was something totally different than what it means now.

There was no other country where the standard of living was even anywhere close to what we enjoyed. But we built that. We built the wealthiest society in the history of the world, way wealthier than we are today in relative terms, without any economic advisors at all. I mean, we should fire everybody in Washington who has economic advisor in their title. We don't need any economic advisors. The best economy is a free economy. It doesn't need micromanagement. Don't you think that's –

If you want to be a socialist and you want to try to micromanage and centrally plan the economy, then you need advisors. But if you believe in capitalism, there is no advice. Just let the market function, and then you're going to have the most efficient outcome. You're going to have the most efficient allocation of resources. You're going to have the higher standard of living for your people. It's when the government comes in and tries to substitute individual judgments for the free market, that's when you create problems. But wasn't the whole situation after World War II based on the fact that most of the planet had been at war? The economic situation in Europe was terrible because they had massive amounts of destruction, massive loss of lives. Of course, Japan had just surrendered to

the United States. China was a communist country. There was so much different about the world then. But to say how great America was is to compare it to what? No. Then go before the war. Look at 1920. I mean, if you look at the rate of economic growth in the United States in the 19th century, take the end of if you look at the rate of economic growth in the United States in the 19th century, take the end of the Civil War to the beginning of the First World War. So forget about all the destruction in Europe. You look at 1865 to 1913. You look at the change in wealth. There was nothing like America. I mean, why do you think all the immigrants were pouring into America from Europe? It wasn't because they wanted to get on welfare because we had no welfare.

They wanted freedom. We had something that the world didn't have. You can come to America and do what you want. There was no income tax. There was no Social Security tax. You can start a business. You know, there was no labor law. You can anybody can get a job.

Anybody can hire somebody, but it could fire somebody. You didn't have the government looking over your shoulder. somebody, but it could fire somebody. You didn't have the government looking over your shoulder. And we created massive amounts of wealth, not just for the Rockefellers and the Carnegies and the Vanderbilts, but for average people. The standard of living rose rapidly. Poor people from all over the world came to America to pursue whatever they couldn't pursue in their own countries because they didn't have the freedom. Well, it was also a new territory. It was a completely new uncharted land that had just started to set up cities within the last hundred years. People had heard about all the jobs that were available. It was just a new thing.

But why were those jobs there? It was because we were free to create them. And in their own countries, they didn't have that level of freedom. That was it. It was capitalism on a scale that was never before tried. And this is where it succeeded. And we created that level of wealth without planners, without economic advisors, without these taxes, without these regulations. And even though we had a lot of very, very wealthy people, how did they get wealthy?

They got wealthy by satisfying the demands and the needs of the masses, of average people. And everybody got wealthy together. Today, what do we have now? How do people get rich now? Everybody didn't get wealthy together. There was a lot of people that were poor as fuck back then as well as today. No, no, no, no. There's always going to be.

No, no, no. There were people that were poor relative to people who were rich. But if you take the typical person in 1865, right? He lived on a farm. The typical person didn't live on a farm? Well, sure they did. They were most people were farmers. No, they weren't.

People lived in New York. They lived in Philadelphia. No, no, no, no. They lived in Boston. No, no. There were some people. What percentage of people lived on farms? Look it up.

I don't know the exact percent. But even if they lived in New York, they didn't have any electricity. They didn't have indoor plumbing. It was the gangs of New York style in New York. Okay. They didn't have any electricity. They didn't have indoor plumbing. It was the gangs of New York style in New York. But they didn't have air conditioning. They lived, you know, but by 1913, right now you had a lot of people living in cities, but they had indoor plumbing. They had electric lights. They had a telephone.

They had, you know, all kinds of gadgets that made their lives better that didn't exist in 1865. I mean, everybody's life got better. Yeah, but isn't that a symptom of just technological innovation and the constant improvement of devices and things that we've always gone through? No, we didn't always go through it. Human beings have always gone through that. If you go back for thousands of years, we didn't have that kind of progress. But that's because it's exponential. But it was the freedom that we had and that enabled us to do it.

I mean, it wasn't an accident. Sort of. But there was a lot of things that were created in Europe. There was a lot of things that were created in China. There's a lot of things that were created all over the world. If you look at where America was going into the First World War and you look at all the cars and all the – 90% of everything was here. I mean, we made everything. We consumed everything.

We had a standard of living unparalleled. I mean, poor people in America were, you know, were wealthy in other countries. That's where the whole expression ugly American came from. And somebody, an American, would go to Europe and they were just a school teacher or a plumber. And they got there and they thought they were king because everything was so cheap compared to things here. We had so much that people didn't have it. That's not where they turn. Ugly American came from us being assholes.

Because we were so rich. Well, no. We were ignorant. We didn't want to speak their language. We would go over there. Don't you speak English? We'd be in France. The attitude that we had when we got there of superiority

and how rich we were and how everybody didn't have any of the things that we had. That was really where it came from. I'm guessing and you're guessing as well. Neither one of us were in Europe in the 50s, so we don't really know where that term actually came from. That's how it originated. I think we're assholes. I think there's a big percentage of us that are shitheads

and we go to other countries. I've seen it. I've seen people that are American that are in other countries act stupid. But not so much anymore. We go to other countries and now we complain about how expensive everything is. We don't brag about how cheap it is, you know, because those days are those days are gone. And of course, you know, back then all the products were made in America and we exported all those products. I think it was not because we had cheap labor. We had the highest wages in the world.

There's a lot going on there. I certainly think that creativity and innovation help or it helps it to be free. To have freedom certainly is going to enhance the ability to create and ability to put out new inventions and new things that are going to make life easier. No question about it. But the idea that that has to be all completely unregulated by the government makes me very nervous. And I know the word, I don't trust the government either. I don't like the word the government. But I think unregulated industry that can pollute like BP has is incredibly dangerous. But you've got regulation, though. I mean, government takes it down.

Like here, if you want to cut hair, right, if you want to be a barber, you've got to get licensed. You've got to take exams. Why? Why? Because you don't want some crazy crazy asshole doesn't know how to use a pair of scissors well just open up a shop and you're the first guy he works on pretty much yeah but so you get a bad haircut you don't go back i mean what's the worst thing that can happen to you okay in haircuts yes yeah i mean how about fixing a car but even but look even fixing a car your tire could come off you can fly down the highway and die. Well, so if there's a mechanic, right, that doesn't know how to put on a tire, and a couple of people have an accident, he's out of business.

No one's going to go there anymore. Fuck him out of business. People are going to die. I think the money is not as important as making sure this guy knows how to fix cars to keep your family safe. But if you invest money in a business, right, the most important thing you have is your reputation, your brand, your customer goodwill. The business owner is going to make sure that he's got mechanics that know what they're doing. No, they're not. They're going to take a chance. And maybe they'll go out of business, but they might fuck up.

Look, people aren't rational. Your idea that everyone who starts a business is going to know exactly what they're doing because they're going to have to or they're going to go under. That's preposterous. The ones that don't know what they're doing will go under. Will go under. But shouldn't you stop that if it's a case of something being safe? If someone's a doctor, if someone's a dentist, if someone's working on your health or working

on your car or working on your house, they put your pipes in incorrectly and your fucking house catches on fire. You don't think they should have to be certified by at least but hold on a second by at least some sort of a standard in their industry well their industry agrees upon a standard why does it have to come from government doesn't have to what they used to have before government is it you would join a society right a voluntary society which would give you like a good housekeeping sale seal of approval so you would say hey i'm a mechanic look, I'm a member of this organization, and they come and they periodically examine my business, and they certify that I have all the safety.

I mean, the free market will find solutions so that companies can say, you know, yes, like a better business bureau kind of seal of approval. But when the government does it, I think it's not nearly as effective, and I think it does create a moral hazard. You have a lot of corruption there. But even, look, it goes to everything. Look, you need licenses to arrange flowers. I mean, so if you want to get a job as a floral arranger, you got to get a government license. I mean, so what? If the guy doesn't arrange the flowers right, what's the big deal? But you know what happens? Who suffers from all these occupational licensing laws and regulations?

It's poor people. It's inner city people that never can get jobs. They never can improve their skills. They're permanently locked out of a profession or an occupation. Meanwhile, the consumer has fewer choices and has to pay higher prices. We all suffer from this. You can say, well, maybe a few people that wouldn't have got bad haircuts don't. All right, well, let that happen. I'd rather have that than everybody have to pay more for a haircut. The haircut example, yes, I'm with you. It's a frivolous thing. It's not that big a deal. The real issue I have is with things like construction or things like electrical, things that involve safety. And I think you and I are both not in favor of the government

regulating these things because I don't necessarily think they're going to do the best job. The industry itself should regulate. If the industry could prove some sort of a very efficient, very competent, and very educated regulatory system, then the government should just step down and say, hey, we're not going to do this anymore. We're going to let the Haircutters Association of America license people. Most of these organizations started out in the private sector, but the reason they got government involved is they wanted protection from competition. Really? And how so? Well, because let's assume that we're basket weavers, right? And we all weave baskets. I always wanted to be a basket weaver. You say, look, if you pay your dues, we'll give you a certified member of Basket Weavers of America.

And if anybody sees that sign on your shop, they know that you really know how to weave a basket. You went through our vigorous training program. You took a course. But once you have this group, they say, you know what? If we can simply require everybody to be a member of our group and make it illegal for them to sell any baskets if they're not a member of our group, then we can charge a lot more money because we won't have competition. So they go to Washington. They say, hey, why don't you require anybody who weaves baskets to join our organization and force them into it, right? That's what I'm in, in the brokerage industry. I'm only allowed to be a stockbroker because I'm a member of FINRA, right? Now, I don't want to be a member of FINRA.

I'd rather just be a stockbroker and not be a member of FINRA, but I can't. The government made it illegal. So in order for me to be a stockbroker, I have to be in this organization and I have to spend millions of dollars a year to comply with all these ridiculous rules and regulations. But the net effect of it is that there's a lot fewer brokers than there would be if we didn't have FINRA. Now, if FINRA was voluntary, if it was private, then I could just say, hey, I'm a broker and I'm not a member of FINRA. So caveat emptor, you know, just, you know, I would much rather have that than have to be. But all these organizations, they always want it. They always want the government to prevent, you know, force people to join so that they can charge more money and have less competition.

Well, I think also the idea is that the government is going to be the one that's impartial. The government is going to be standing outside looking at this industry, having no vested interest in you profiting over you or you over you, and say, hey, these are the rules, and this is how we can make this fair and ethical. That's the idea that most people have about the government. But they do have a vested interest because now this organization, right, that got the government to force everybody to join it, now they're going to give donations to the government to continue. We stopped that already.

We stopped that. Remember you and I when we became president, we said that that's not legal anymore. But we haven't stopped that, so it's still going on. Let's say we did. That's part of the problem. If we step in and stop that, no one is allowed to give any more money to the government, no campaigns, no nothing. Well, that's actually not even going to stop it what has to stop it is you have to you have to take away the government's power to do all these things because they're going to as long as

they have the power uh there's going to be people will get around those requirements and there'll be ways to do it you have to limit the power of government which is what we did so successfully for our first 100 150 years as a republic we were very successful at limiting the power of government. And that's why we achieved so much. The problem is, you know, we lost that advantage. The government, you know, was chained up by the Constitution, but it freed itself from those chains. And so now it does whatever it wants. And we're suffering as a result because we've lost a lot of freedom. And by losing the freedom, we lost all the opportunity and economic growth that went along with it. Yeah, but someone has got to keep these corrupt, evil fucks that have billions of

dollars from running amok. At this situation, where we are right now, who's going to run amok? Who's going to run amok? How did this financial crisis happen in the first place? Didn't it happen from people running amok? No, but they couldn't have run amok if the government wasn't guaranteeing their businesses, their loans, their portfolios. But do you think that they acted knowing that they could fail, and if they did fail, the government would bail them out? Absolutely. Or do you think they acted in hubris, thinking they wouldn't fail, they're going to pull this off, they've been pulling this off? Do you think all these people knew that the edge was coming and they just kept running?

Look, it was something that the government was going to be there for them. Some did, and it was a little bit of both. But if the government wasn't there, right, saying, I'll catch you if you fall, then you're not going to get up on that high wire. You're going to be a lot more cautious with what you're doing. I agree that you would be more cautious, but I think that people are assholes. And I think that people who have a lot of money and a lot of hubris and a lot of ego and they're probably on pills, they're going to do some wild, wacky shit. And they always have and they always will. In a free market, they won't.

Getting rich in a free market is they will they will they may fail in doing so but they certainly will no when see people when when you when you earn a lot of money the most important thing is not to lose it right you want to protect what you earn and so people are going to act to preserve what they have there's fear and greed that that are that are that are there yes people want more but they don't want to give up what they have the government's fear and greed that are there. Yes, people want more, but they don't want to give up what they have. The government comes in and says, don't worry. Take all the risks you want. We got you covered. We got you back. That's what was going on in Wall Street. With all this cheap money, they make it a lot less expensive for everybody to lever up and

go out and borrow and speculate. And all this wealth that is being generated for a small number of people, this is not the way it used to be when you would get rich by helping everybody, by providing people with goods and services and creating jobs. That's how people got rich 100 years ago. That's not how they're getting rich now. They're getting rich off the government. They're getting rich by they get the money first. They get the money cheapest. They get to borrow money at practically nothing and speculate with it.

They create no real wealth for society, but they're getting rich on their own. But all of this is phony. All this is going to end in complete disaster. But it is not the market's fault. It is not capitalism that has done this. It's the government. It's the central bank. I think we both agree on government intervention, but I think where we're disagreeing is on human nature. And I think that people are naturally greedy. They're naturally likely to do something illegal and try to get away with it. Sure they are. If they can profit off of it.

Are you? No, I'm not. Neither am I. Why do you assume somebody else is? Because there's murderers in the world. Look at the crime reports on the internet. Read the news. There's a million things that go on every day that will prove to you that people don't abide by the law when they don't have to. Or they

think they can get away with it. Yeah, look, there are bad people in the world. I think they're in the minority. I think the majority of people are good. I think there are bad people. Unfortunately, a lot of them are in government and they have a lot of power there. And bad people gravitate to government. Don't you think that that keeps people from doing some of these bad things,

knowing that they're going to get in big trouble for it? No, no, no. I mean, most people, I don't steal because it's wrong. I don't not steal because I might go to jail. I just morally know that I'm not going to take somebody that doesn't belong to me. And most of us are the same way. It's not that we're, you know, and most people who get rich are good, hardworking, honorable people. Most.

The majority. But even one out of 100, one out of 100, which is 1% of people that are scumbags. I don't know. Fuck up and do – that's a lot when you're dealing with 300 million people. No, but in a good free market economy, the scumbags are only going to go so far. They're going to ultimately get weeded out. You don't build a great business, lasting business, being a scumbag. I mean, maybe you can succeed in the short run, but eventually you're going to go away.

And that's the free market. It's going to purge itself of the bad operators. And yes, some people are going to get ripped off. I mean, that's the nature of it. But in a free market, fewer people will get ripped off than in the type of government market we have now. But I am not afraid. I am not worried about a businessman, an entrepreneur, because I know that all of my associations with him, absent government or voluntary, all he can do is try to offer me a good deal and I can turn it down. But when they go to government and say, we're going to force you to buy this product, like here with Obamacare, okay,

you've got to buy insurance. You know, well, what? What if I don't need it? What if I don't like it? I mean, I want to be able to make a decision because in a free market, if I buy something, it's because I thought it was good for me. Now, maybe I'm wrong, but at least I came to a decision that I thought something was in my interest. But now the government says you have to do something, whether you think it's in your interest or not. And that's power. And that's something that people should be afraid of when the government can force you to do things that you don't want to do. Corporations can't do that unless they get the government involved to help them. And that's not the fault of the corporation. It's the fault of the government or the people that allow the

government to have that power. I feel you. I see what you're saying. And I agree with you for the most part. I think the only problem that I'm having with what you're saying is the idea that the government would regulate environmental protection or that rather industry or business would regulate environmental protection. I don't think they would. And I think that if they were in a situation where they're making billions of dollars and they had some sort of a catastrophic oil spill or chemical spill or some sort of a disaster, they would cover it up. Just like it's been proven that's been done with fracking. I mean, there's a real issue with fracking right now in America. And if you've watched any of the documentaries or read any of the articles that are written about people's areas, farms, water supplies destroyed, oxygen level in the atmosphere

changes. Well, you know, I'm involved, I mean, pretty heavy with fracking myself because we have a lot of wells that we own. I own myself and my own on behalf of my clients. So you're a fracker? I guess. I mean, I heavy with fracking myself because we have a lot of wells that we own. I own myself and my own on behalf of my clients. So you're a fracker. I guess. I mean, I'm in North Dakota. I'm up in the Bakken.

I started there about three years ago. And look, I mean, there's tremendous wealth that's been created up in that region in North Dakota. And it's one of the bright spots of the U.S. economy. I mean, fortunately, the energy industry, you know, domestically is doing something. You know, it's a pocket of strength, you know, or an island of strength in a sea of weakness. I mean, most of what's going on is bad, but that's one of the one things that we got going. And we're going to need to develop our energy resources even more effectively, especially once the dollar collapses. What are the actual, since you know, then, Well, all I'm doing is reading about it online.

What are the actual environmental effects? I don't think there are any environmental problems with fracking. I think it's more – I think you have a lot of people on the left who – they're really socialists, but they don't want to come out and just – they were communists or whatever. So they want to clothe everything in an environmentalist language. They really want to take away private property, but they don't want to come out and say it. So they clothe themselves. You think that everybody that doesn't want frackers to ruin the drinking water. They're not ruining it.

They're not ruining the drinking water. They certainly have. They certainly have in many places. They're not ruining the drinking water. No. Why have these companies that have been fracking come in and shipped fresh water to these people that have lost their drinking water where they can fucking light it on fire now? What's going on? It's not happening in any circumstance whatsoever?

Why would you laugh about that? That seems like a terrible thing. Go up to North Dakota. Do I have to go to North Dakota to get an answer? No, but it's not this horrible thing. I think they overplay. Oh, it is in some places. I think they overplay what's going on.

And the same thing, look, they've been doing this with various, we've got to say this species, this subspecies, that subspecies. We can't go here, we can't go there. I see how you're painting this. But a lot of it. Did an environmental disaster happen in the Gulf? Did millions and millions of gallons of oil get spilled? No, I'm not saying. Please, did it?

Yes? Yes, there was an environmental disaster. So people should probably be concerned that that could take place almost anywhere in the country because the systems that we have in place are not foolproof. And this is a new thing that is not just... Not just is it a new thing, but most people are not even aware of it. They start getting aware of it. They start seeing things like people's water being able to be lit on fire.

They start talking to people that have been forced out of their farms because their groundwater is polluted. They can smell it in the air. This is some sick shit. And they're ruining parts of the country. Yeah, but the accident with BP, and it wasn't just BP. There was other companies involved. But the accident there happened with all the regulation that we have.

But it did happen, right? Right, but we have regulation. So it's not like the regulation prevented it. Exactly, but I'm saying... So more regulation. I'm not saying more regulation. I'm saying, should you do it at all? Just because of the fact that you can do it

and make wealth out of it, if you are causing massive environmental disaster, should that be okay just because you're making money? As I said, if you want to have a trade-off, if you want to say no drilling offshore, right, because something bad might happen. If you want to eliminate all that water, that oil, then be prepared to pay a lot more for gasoline and a lot and a lot more for products that we consume that not only have gasoline. But by the way, right now, and of course, this is going to change. But most of the stuff that we consume in America isn't made here.

It has to get shipped here on a on a big ship that comes across from China, and it takes a lot of gasoline to get it over here. So every single thing that we buy in America, there's a lot of energy that goes into getting it here. And so if we're going to make energy much more expensive because we want to make sure that we can't have another environmental accident, then we better be prepared to accept the lower standard of living that comes with that. But you see what you're doing here that's problematic?

You are automatically leaning towards the profit side over the environment side. This is what makes people really nervous about people that are really into the market. What your concern is is not about the earth itself, the very place where your children are going to grow up. That's not what you're concerned about. You're not concerned about that. You're concerned about the devastation to the market by regulating these businesses and forcing them to raise the price of gasoline.

And everyone's going to suffer because we didn't let everybody take this fucking wacky chance and pump fluid into the ground and pull out oil or whatever. I'm not saying. But do you see that argument is a very callous argument. But I'm not saying that a business shouldn't be held responsible for the damages it causes i'm not saying not just responsible fracking is fucking dangerous you everybody that's fracking isn't uh isn't uh you know causing you know pollution for somebody else but a lot of people are well then but then that can be addressed on a case-by-case

basis but once those places are poisoned, they're poisoned. Once those farms are ruined, there's family farms that people can't have cattle grazing anymore because the cattle are getting sick. They can't grow food there anymore. Well, the biggest problems the farmers have is the government, and it's a farm program. It's not fracking. If you want to find out what's going on with our farms, get rid of the Department of Agriculture. That's not necessarily true. Government programs.

Hasn't the government allowed people, the frackers, to use all that water in fracking? Taking millions of gallons of fresh water? I have small farmers come on my radio show and they tell me about all the problems that the government has created for them, putting them out of business. I'm sure. And the things that they're doing to regulate them out of existence. I'm sure the government is evil, but that doesn't have anything to do with fracking. No, but the dangers of fracking are very real. Well, I think the dangers are way overblown.

And I think that maybe you've read some things and you've seen some of this stuff, and I think it is distorting the reality of fracking. It is not as dangerous as some people would like everybody to believe. I think things are more significant to me than they are to you if there's an environmental disaster. I think that's a big concern to me. I don't think it's as big a

concern to you. Why would it be more of a concern for you? Because I don't have a vested interest in profiting. You've already said that you profit off of fracking. I don't have an interest in that profiting. You've already said that you profit off of fracking. I don't have an interest in that. But there's nothing wrong with that. I would tell you this.

If we were not producing all that energy that we're producing now out of North Dakota, prices would be much higher already. Well, no, no. I'm not saying the sky is going to fall anyway because we've got bigger problems than fracking. But the fact that we have been able to generate more energy, you know, that's something that we've done that's been a net positive, that's been helping us. If we didn't have that, things would be a lot worse. I mean, if you think the economy is bad right now, it would be a lot worse if we weren't generating that energy. If instead we had to borrow money to buy that, you know, from Saudi Arabia or wherever we're importing it,

it would be even worse. But there's nothing wrong. A lot of times people have a bad view of profits. Profits are some kind of evil, bad thing. That's not what we're saying here. What we're talking about is environmental concern over profits. And you have this

profits over environmental concern. When you keep going, oh, there's a few little things might happen here and there, but look at how much money we're going to save if we do this look at how much money is being generated look at how much wealth joe if you look around the world and you look at which countries have the most pollution generally it's the countries that have the most government and the countries that have less pollution will have less government i mean you know a clean environment is a valuable asset that the market will preserve. Am I saying that there should be no regulation?

How is the market going to preserve it? Once it's ruined, it's ruined. You're extracting money out of an area by consuming its natural resources. Once that area is ruined and polluted, it's ruined. Well, you can look at some of the areas of Africa where a lot of private money has come in and tried to create wildlife reserves where there's now, instead of hunting elephants now for their ivory, there's a lot of people now that are spending money preserving them because people, you know, they want to come and take a safari there and they want to see them in their habitat. So you have entrepreneurs seeing a profit in preserving an environment in a way that they can profit from it. If there was no way to profit from it, people wouldn't be expending their money to do that. Well, that's actually a really good example because you know how they really profit off of elephants? One of the big ways?

Allowing hunters to go over there. They have people spend exorbitant amount of money to kill these animals. That's their idea of preserving them. No, no, no. The people that are trying to preserve them are trying to stop the poaching. We're not talking about poaching. We're talking about regulating hunting. They have regulated hunting expeditions for elephants. Well, I mean, look, I know there's some big game hunting, and I'm sure that to the extent that there's hunting, I mean, they're not hunting them to extinction. I don't know what it costs to shoot an elephant.

I mean, I'm not a hunter. It's very expensive. Probably, especially if you're going to have the head mounted and take it back. Well, it's just to pay to shoot them. It's very expensive. Yeah, but they have to. That's how they're keeping these animals alive. But in order to be there to shoot it, it has to exist.

You can't wipe out the herd. But could you imagine if that argument was used for people? Well. That we have to keep the population healthy by hunting them. We have to shoot a few people every now and then. That would be an absurd. It costs a million dollars. You'd be on here.

It's a million dollars in profit is generated if you shoot a person. Do you know how much gas would cost if you didn't shoot people? You take one person, you shoot them, and you keep everybody else healthy and well-fed. If we had a Hunger Games type scenario where we had to kill a couple of people every year but everybody else lived great, I think I know what side you'd be on. That's got nothing

to do with my argument. You're off in left field. But I'm not even the left guy. The environment is not left. It's not always left. It's the earth itself. To the extent that we need regulation for externalities that result from pollution, it can be done at a more local level than having it done in Washington. Where do they get the funding?

Where is South Dakota going to get the money to pursue a gigantic oil company that's ruining its environment? It's North Dakota where all the fracking is going on. Let's just say South Dakota comes up with a new fracking organization. But where do you think the federal government gets the money? From the North Dakotans. I mean, the federal government doesn't have any money. It has to take it from us. So why send it to Washington?

I mean, you're out here in California. Why does California have to send money to Washington and beg for it back? I mean, let California deal with its own problems and keep the money here. But what you're saying is essentially that no one deals with it. Who's going to deal with it if South Dakota doesn't deal with it? If the government doesn't deal with it and South Dakota doesn't deal with it, who deals with it? The people have to go up against the frackers and show up with torches? There's a government in South Dakota.

Oh, the government's going to deal with it. No, no, but if you're going to let a government do it, why does it have to be the federal government in Washington? Why can't it be a local government? So the state government's okay, but the federal government's not okay when it comes to regulating environmental protection? The closer you are to what you're regulating, the more efficient it's going to be, the least corrupt it's going to be. If you're going to regulate, you want to regulate as close to the activity as possible. You don't want to have it outsourced to Washington, D.C., because it's going to cost much more and it's going to be less effective. But a lot of people want Washington to pay for it because somehow they think it doesn't cost anything. But it actually costs more when

Washington pays for it than when your local government pays for it. But most of the stuff is going to be in the courts. I'm not saying that a business should be able to dump pollution onto your property. I know you're not saying that. You can sue them for that. That's a tort. That's wrong. They have to take care of it to make sure that they don't – But that's sort of disingenuous because you know how incredibly difficult it is for a

farmer to sue a gigantic corporation. They've ruined all their land. The corporation has billions of dollars to spend on lawyers. No, they won't. The lawyers will take the case on a contingency. If you've got a big plaintiff, no problem. People don't have a problem. The problem that we have in this country with lawyers is it's too easy to sue people.

I mean, there's so much lawsuits here because, you know, if you sue somebody, you basically can extort money out of them because it costs so much to defend yourself. I agree with you that there are frivolous lawsuits. There's lots of them. And so it's not that people can't sue if they've been wronged. We have too many people suing who haven't been wronged because they're shaking down businesses.

But it's crazy to pretend that corporations would automatically give people money if they were wrong. All someone has to do is get together a lawyer and sue them, and it'd be easy. It's not going to be easy. They're going to fight tooth and claw. They're going to put it off as long as possible. They're going to drag you through the mud. They're going to drown you in legal fees.

That's what they do. That's what they've always done. But they've got to pay those legal fees themselves. But they don't care. The legal fees are pennies to them. In comparison to what they'd have to pay if they gave you millions of dollars because they ruined your farm, what they could save in legal fees by just dragging the case out and using quality lawyers that really know how to manipulate the system. The idea that they would do it on their own because of the market is that I have a problem with that.

I don't know who should regulate it. You seem to think that the state government would be qualified. I see state governments as being woefully understaffed, woefully underfunded. California's fucking bankrupt. California's not going after anybody and fixing anything. But it's not because California's underfunded. I mean, look at all the revenue. Look at all the income taxes that are paid in the state of California.

Look at all the property taxes that are sent up there to Sacramento. I mean, California is, you know, the problems in California are not because the government doesn't have enough money. The government has too much money. There's too much government. There's too much taxes. There's too much government. There's too much taxes. There's too much regulation. There's too many people who work for government because they have to be supported by everybody else.

I mean, they don't produce anything. I mean, most people who work for government, not only don't they produce anything, they get in the way of other people who would produce stuff, but the government won't let them. So we're all poorer because we have to pay the salaries of all these government workers. And now if you actually look at how much government workers make relative to private sector workers,

you throw in all the benefits, the average person working for government is making twice as much as the average person working in the private sector. Why do you think all the wealthiest counties in America are all surrounding Washington, D.C.? I mean, they're sucking the life out of the rest of the country. Sure, lobbyists. Yeah, they're all getting rich, the lobbyists and the politicians and the lawyers, because that's where all the power is. That's where, you know, as

Washington gets wealthier, everybody else gets poor. Because they don't make anything. They don't produce anything. They suck the blood out of everybody else. Well, I agree with you on that. I mean, we're in total agreement. Where we seem to differ is on the idea of environmental protection. That's where we seem to... You seem to think the market will take

care of it. I seem to think there's no fucking way the market would ever take care of it unless you held a gun to their head. You know what? I would be okay if they left all

the environmental rules in place that I think shouldn't be there because this... Which ones specifically? Whatever they are. Which ones do you have a problem with

you don't think should be there? Because I've heard you say that you think the EPA shouldn't be... I don't have the environmental codebook in front of me. No, I understand, but I'm sure as a fracker, someone who has a vested interest in fracking, there must be a few concerns you have.

I just know that I think there's more laws on the books than we should have, certainly for the federal government. But I'm saying my point is even if – I'd be fine leaving them all there because the problem that we are creating from excess environmental regulation is small compared to all the other problems. I mean, like, you know, there's a regulation. You always talk about what about drugs, right? What about, oh, you know, the government needs to, you know, make sure that the drugs are safe. But I'm pretty sure that more people die because drugs that might have helped them are kept off the market than people who die because a drug, you know, killed them, you know. And I think the reason that pharmaceuticals and drugs are so expensive in America is because it's so expensive to get something approved by the FDA. I think we had a much better and much healthier system before the FDA existed.

And at least initially, the FDA only made you prove that your drugs weren't harmful. Now you have to prove that they're not harmful and that they work, right? That they're efficacious. And that is extremely expensive. But that's ridiculous. How could you possibly sell something if you don't prove that it's not dangerous? All right. No, no.

Because the doctor has to prescribe it. So let's say I'm a medical doctor, right? And let's say I'm your doctor and you trust me. And I actually looked at a drug. And I'm convinced, based on my my examination i looked at their own studies i'm convinced it's a good drug and i think it's going to help you right but but companies doctor studies all the time like who's this tell but why but but when they have why do you trust the fda why do you trust we need to trust someone well okay but who would you rather trust a doctor that you know

or some bureaucrat you've never met who doesn't even know who you are? Well, I don't think my doctor has enough time to review all of the medication in the world and all the studies that have been done, all the different tests that have been done on different types of people. Okay. Let's forget about the harm part because that's a little bit maybe – Well, the harm part is probably the most important. Efficacy is important, but the harm part is probably the most important. But the efficacy is the more expensive. Okay, but the efficacy should also be in place when you're dealing with things like cancer drugs

and dealing with things that devastate the immune system and may or may not be even effective. But if it doesn't harm you... But if people are profiting... If it can't harm you, then why can't the government let it on the market? Because it's bullshit. But let people decide if it's bullshit. Let doctors decide. Let doctors decide. Let patients decide.

What if there's a drug that would save me? But the government says, no, we want to keep testing it. We know it can't hurt you, but we want to just do another three years of testing. Meanwhile, I die while I'm waiting for that drug to come. Why can't I say, look, I don't care about the test. I just want the drug. The government says, you can't. You have to wait.

And I know that there are a lot of drugs that work that they don't let on the market. And you're talking about, what if I'm a big pharmaceutical know that there are a lot of drugs that work that they don't let on the market. And you're talking about what if I'm a big pharmaceutical company and I have a lot of money, and here's some small company that comes out with a new pill that's better than mine, that has no side effects. I don't want it on the market. What do I do? I give money to my politician in my pit pocket, and I say, you kill that drug because that's better than my drug. It has less side effects, and I don't want the competition.

And so they keep it up. But that's conspiracy and a crime. That really has nothing to do with the FDA. The FDA is not involved in these conspiracies. No, but a politician on these committees can squash these drugs. You don't think they do that? You're talking about how you're saying how evil companies are. When they get in bed, you don't think they would...

No, some people are evil. Right, but wouldn't some of those evil people are. When they get in bed, you don't think they would. No, no, no. Some people are evil. Right. But wouldn't some of those evil people try to have their friends in government squash a competitor's product? It's very possible. Yeah, that would be a crime. Yeah, but they do it anyway. You don't think politicians commit crimes? But don't you think that that would always take place, those kind of crimes?

Yes, because of the FDA. So you think that if there was no regulatory commissions or no governing bodies when it comes to drugs, that what we would do is just put it all on the market and we would all figure out what was effective, what was not. At a minimum, you just say, show that it doesn't hurt you. But the minute you have to prove that it works, it's so easy

for them to say, ah, the proof is inconclusive. We're not going to prove you. It's too subjective because showing that it doesn't harm you, okay, you can show that. Yes, people took this drug. They didn't get sick. They didn't get harmed. But what if there's drugs out there that actually do work and you're taking a drug that doesn't work because the company lied and then it takes you years to find out because it's a new product. But now you're assuming that your doctor is an idiot who prescribed it to you.

How would the doctor know if he prescribed Fen-Phen or Vioxx or all these different drugs that have been pulled off the market after they have been prescribed by people who went to medical school. But if your doctor doesn't know, who went to medical school and is a doctor, how does some bureaucrat at the FDA know who maybe didn't go to medical school and isn't competent enough to be a doctor? Because they force these companies to show a tremendous amount of work showing the efficacy and safety of their product. That's what the FDA's job is. They might not be that good at it. It might cost a lot of money. But the idea behind it is that you have these stringent extreme tests. Meanwhile, Joe, it takes you a lot more time to develop a drug, and it takes a lot more money.

And because of that, too, companies can only – you have some illnesses or some diseases that only affect a small number of people. And so because it's so expensive, nobody can do it. So what do drug companies need to do? They come up with, you know, cures for baldness because that they can mass market or they want to, you know, deal with erectile dysfunction. But if you've got a, you know, a disease that might kill you, but it's only affecting a small percent of the population, nobody can afford to spend the R&D on it. It's too, the government makes it so expensive for companies to do this why not just get out of the way why not trust human beings

and just don't assume that everybody else is an idiot and let people make decisions for themselves I mean I know look I can smell the pot when I walk in here how dare you I mean look I want marijuana to be legalized I mean so because I trust people to make decisions well you don't want that because if people are going to get high, they're going to not let you

frack. They're going to be like, what are they doing? They're fucking up the earth. But I'm sure you agree with me, right, that it should be legal to smoke marijuana. Well, it certainly should be. It should be legal to do almost everything. Right. Everything that doesn't hurt people. But there's a difference between that. Well, how is it different? In what way? Well,

you trust people to smoke pot responsibly or to drink or do whatever. If you're smoking pot, you're not fracking. They're two different things. The worst case scenario if you smoke pot is you might get you guys high because you're in the room. You might get some secondhand pot. The difference between that

and environmental protection, there's a huge difference between that and regulating environmental disasters or the potential for environmental disasters. I'm just very consistent in my view of the world. I can see that. You're all about money and marketing. No, no, no. I'm about individual

liberty and freedom. You're also about the market. No, no, but that's because that's an expression of free people coming together in a free market. It's individuals making exchanges that are mutual beneficial to both parties. That's what freedom is all about. The minute you involve government, the minute you have laws and regulations, what that does is diminish our freedom because the government tells us what we can't do,

right? If the government doesn't say we can't do it, then we can do it. And so that's why government laws should be about protecting private property and life and liberty that look i can do whatever i want as long as i don't infringe upon you right i can't i you know i have a right to pursue my own happiness but i can't steal from you to do it i can't you know i can't injure you and that's where yes i can't pollute your air i can't pollute your water i agree with you there but as long as i'm not harming you but you are if you're polluting my water i just said i can't do that but you do if you're polluting my water and polluting my air. I just said I can't do that. But you do if you're fracking.

No, no, no. But your response to that was that you could sue and you can get money. Yes, you can. But you see that that's not an answer. But people don't want to get sued. I mean, people are going to. If you're doing something like fracking that's generating billions of dollars and you have to pay off a million here, a because you fuck up some guy's farm that's not that big of a deal you know but that's not the answer the the answer is not you can give them money or they can give you money because they

ruined your life well if you if if you say okay we're not going to have any fracking because a couple of farms got fucked up okay if that's the trade-off if we value those farms that heavily uh with the whole nation is going to be worse off. Including those farmers, because I'm sure the farmers will get compensated. I don't even know the particular situation you're talking about. But you know how many farmers are now multi-millionaires because they lived in North Dakota and now they can frack instead of farm?

I mean, so many farmers are making a fortune, and you're trying to find the one that's suffering. But I can show you many more. I mean, isn't it quite a few? The earth itself. Forget about the people property. Whether we frack or not frack.

You don't think that the wildlife or the fresh water or all those things, the poop poisoning, that stuff is bad? It's something to chuckle about? I don't think the Earth is going to, you know, obviously it can't care, but I don't think we're going to destroy the planet whether or not we frack or not. I don't think it's going to, in the scheme of things, make a difference in our ecosystem or our environment. But it will make a difference in our standard of living. That's for sure. Let me ask you a question. Okay.

Let's pick a lake, Lake Michigan. Okay. Say if there was something that you could do that would guarantee kill every fish in Lake Michigan forever but provide massive economic prosperity to everyone else in the country, lift us out of a recession, would you be in favor of doing it? Well, what kind of prosperity are you talking about? Just like the fucking best it's ever been times 10. So you're telling me- Kills off everything in Lake Michigan.

Everything near the lake is dead. You can't, no fishing, no camping. But everybody else, it's like, you're talking like- Roaring 20s. You're talking about like the lake is dead. No fishing, no camping. But everybody else, you're talking like the Jetsons. I'm talking about a future utopian world. And all we've got to sacrifice is the fish. Forever. Just in that one lake. Yep, forever.

Probably sounds like a decent tradeoff to me. That's a terrible tradeoff. Is that the only way we could do it? No, but you're telling me you care more about those fish than your fellow human beings? No, I have more faith in my fellow human beings, sir. What do you mean? I think it's possible for us to achieve prosperity without killing the fuck out of everything in Lake Michigan. That's the difference between you and me, sir.

No, but that's not the tradeoff you told me. You said if we can instantaneously create all this wealth by killing those fish. I set a trap for you. No, but I am going to. I set a trap for you. But I hold human life more valuable than a fish. Look, I eat fish, right? I don't trap for you. No, but I am going to. I set a trap for you. But I hold human life more valuable than a fish. Look, I eat fish, right? I don't eat human beings.

I probably eat fish more than anything else. Of course you understand, though, as an intelligent man, that the ecosystem is incredibly complex. And when you kill off an entire lake, you don't just affect the fish. You affect everything anywhere near it. In fact, probably the whole country. Well, I doubt the whole country would collapse if we didn't have that one lake. I wouldn't say we'd collapse. We could adapt.

Human beings are incredibly adaptive. Plus, you said we were going to have a massive tenfold increase in our collective standard of living. Yeah, we're going to pull gold dildos out of Great Michigan. But doesn't that mean, by definition, that we didn't have any downside from the loss of one of the Great Lakes? Well, you have downside to the Great Lakes itself. The lake itself is fucked. One of the great wonders of North America. Well, you have downside to the Great Lakes itself. The lake itself is fucked.

One of the great wonders of North America. Yeah, I know, but you told us that everybody else would all be better off, including the people who used to live by the lake.

Because now they can live by a different lake. Because everybody would be better off doesn't mean that's the only way we could do it. Yeah, no. I think there could be

a way to do that without doing that, and that should be pursued above all else. The idea of figuring out a way to make this world better without polluting it. Well, we already know how to make the world better. I mean, it's freedom.

It's the freer we are, the more prosperous we're going to be, and the enemy of freedom is government, right? Now, if you have a little bit of government, that's a good thing. If you have just enough government to secure your freedoms and secure your liberties, then you have prosperity. But if you have too much government, then it's an impediment to liberty and prosperity. But what we should really be talking about is what's going to happen. You know, and you've got all this propaganda out there by the government that is being spread by, you know, by Wall Street as well, that what Ben Bernanke has done has worked, that we've got a

real economic recovery, that the jobs are on their way, that there's no inflation. All of this is wrong. The economy is suffering because of what the government is doing. There is no recovery. I think we're in a depression. I think we've been in a depression the whole time. I think the numbers are manipulated. I think the government is understating the true rate of inflation. So that means it looks like the economy is growing, but it's actually contracting. That's why the labor force is imploding. That's why people, there's no good jobs. That's why people have a falling standard of living. People feel like it's a recession because it is. The government is trying to pretend that it's not because they point to the stock market. But so what? Stock

market going up doesn't mean anything. I mean, it's not even that earnings are going up. Corporations aren't really earning more money. Just their stock prices are going up. And there are a lot of people that say, well, the corporations have a lot of cash. Well, because they borrowed it. They only have that, because they borrowed it. They only have that cash because they issued debt. Corporations now have more debt than ever before, even if you net out the cash. The government has more debt than ever before. Americans have more debt.

Look at all the student loans we have. Look at the mortgage debt, credit card debt. We are leveraged up to the hills. And the only way we keep this thing going is because we can borrow more because the people loaning us the money don't realize that we're too broke to pay it back. Well, what about a company like Apple that has billions of dollars in cash? Apple is a good company. How many companies are like that out there? Not that many.

We need more of them. How many do you think there are that have like a pile of cash? Not that many because most of them have cash, but then they have debt. Apple just issued a bunch of debt, by the way. They issued long-term debt. So some of that cash they borrowed. But, you know, a lot of the cash that Apple has is offshore. They can't even bring it home because the tax rates would kill them.

So the tax, the money is out of the country. When you see things like France imposing a 75% tax on the very wealthy, does that freak you out? Well, it's not that much lower here. I mean, you're living in California, right? Yeah. So the California income tax is 13.3 is the top, but the federal, what's the federal tax? It's 39.9. So call it 40. Plus you get another 4% for Obamacare. So you got 44% federal tax. Is Obamacare really 4%? Yeah, it's a 4% extra, 3.9. So call it 4. So you got 44% federal tax. Then you add California, right? So 44, 57. So you're at like 57% marginal tax rate in California, but that's just your income tax. What about, you know, what about your property taxes, your sales taxes, all the other taxes you pay? I mean, the government's taking 57% and then out of the 43% you got left. You know, I was looking at, listening to one of your other podcasts and you were talking and you said something like, look, you know, I don't want the government to take half, more than half or something like that.

Why half? Do you know a medieval serf, and this is feudal system of serfdom, which was considered very repressive, you know, in the Middle Ages. If you were a serf, you had to give the Lord 25% of what you produced. So you were in the 25% tax bracket and you got to keep 75 cents on the dollar, and that was considered exploitation. What I would give to be a – I would love to be able to be as free as a serf. If the government just treated me like a lord treated a serf, I'd be awesome. I'd have to cut my taxes in half to get my tax bracket down to just 25% so I could be a serf. But at one point

in America, the government took nothing, nothing. In fact, when they first created the income tax, right, in 1913, they got an income tax 100 years ago. The reason that they created it was because the government told average Americans, if we tax the top 1% of the top 1%, it was a tiny tax. You had to earn something like the equivalent of like $2 million a year before you had to get into the 1% bracket. And the top bracket was 7%. But what Congress told the average American is that if we can tax the very wealthy a tiny bit, you won't have to pay any taxes at all. We'll get rid of all of the duties and the import taxes and all of the federal government, because the federal government was tiny back then. They said, we'll pay for everything just

by a tiny little tax on the rich. Now the income tax taxes the average guy at rates far in excess of anything contemplated for the Rockefellers or the Vanderbilts. I mean, we got caught. That was the original 99% versus the 1%, right? Because the 99% wanted the income tax on the 1%, and now they're clobbered with tax rates that nobody would have even considered. Because the top tax bracket initially was 7%. That was as high as it went. And of course, you know, there was no Social Security taxes back then, there were no state income taxes. So Americans were really free. You kept it all. Everything you earned. I'm with you that I think we pay too much in taxes. But my question would be,

how would we run this country if we didn't have all that money going in? How did we run it back then? Well, it's a different country. There's far less people. There's far less expenses, right? I mean, isn't that funny? The population was growing faster. I mean, you think about how we were able to win the Second World War. Because you mentioned, you know, we kicked the crap out of Japan, Germany. We single-handedly fought wars in the Pacific and in Europe. Where did all the factories come from to produce all those planes and those tanks and those bombs? I mean, the government didn't create them. The free market built up that arsenal.

We had the industry that enabled us to go and win those wars. But that happened without government. It happened, you know, it was in the absence of government. Because government was caught in a cage. They couldn't interfere. And so we created all this wealth. The country ran very, very well up until the 1920s and 1930s. You know, we had a great country. Go back and look at the 1890s. These decades were phenomenal economic

growth. Now, when people say, well, Peter Schiff, you want to go back to, you know, the 1890s. I don't want to go back to the 1890s technology. Clearly, right, we've benefited from the technological advancements that have taken place. But if we had the same amount of government today as we had back then, we would have much more in the way of technology. We would have a much better standard of living. We would all be fine. I think the environment would be in much better shape. We'd have a cleaner environment had we been able to progress at the rate that we were progressing back then. How do you figure that?

How do you figure the environment? Because the wealthier you are, the more you can take care of your environment. Because it takes wealth to be able to do it. And we would be a wealthier country today if we were freer. So you think what's keeping us from taking care of our environment is wealth?

Yeah. You look at some of the poorest countries. They don't have any money to take care of their environment. Now, I guess if you're so poor that you can't do anything, I mean, maybe the environment was pretty good in the Stone Age. But do you want to be in the Stone Age? What more countries are more economically prosperous than us?

Well, there are a lot of countries that are... Well, China... How fucked up is China's environment? Pretty bad, right? It is pretty bad. And they're richer than us right now, right? Well, not on a per capita basis. But they are kind of richer than us, right? Doing better than us? Well, they are doing richer than us right now, right? Well, not on a per capita basis. But they are kind of richer than us, right?

Doing better than us? Well, they are doing better than us. And in the process, because they don't have any regulation, they're completely destroying their environment. It's not that they don't have any regulation. Do they have regulation? They do. They actually have less than us, though, which is why they're producing so much stuff. Which is also why they have fucking skies that are black.

I mean, literally, you drive down the street and you see half the people have masks on. Yeah, I know. And where's all the stuff they're producing? We get it here in America. Right, but listen again. You're going towards producing over the environment. You're doing that again. You immediately side towards this is the glass half full aspect of it.

They're producing all these things. They're making all this money. I think if the Chinese weren't obsessed with selling stuff to Americans who can't afford to pay for it, if they simply let their currency go up in value, their own citizens would be able to consume those products and they'd have a lot more wealth to take care of their environment. I think they're sacrificing to keep our economy propped up. What are they going to do for a living? If so many of these people are actually making things for Americans, they're going to stop and just concentrate on their economy and concentrate on what they're going to do. I'll go back to World War II. So during the Second World War, Americans were employed either if you were a man, you were in the army.

If you were A1, I mean if you were 4F, you were working for a factory that made bombs. Women who were formerly housewives were now in factories working, making bombs. So everybody had jobs. Everybody was making stuff for the war. Meanwhile, everything that you needed was rationed at home. It was very tough being in the U.S. during the war because we had nothing, because everything was used to supply the war. Now, as the war was nearing an end, there were a lot of economists who were advising the president, President Truman, you know, we can't end the war because there's going to be massive unemployment because all the soldiers are going to be unemployed.

The people making bombs are going to be unemployed. We know what we're going to do. And they were actually worried about this. That's how stupid it was to have economic advisors. But but then the war ended. And did we have a collapse? No, we had a boom because now all the people that were making stuff that blew up started to make things that we actually wanted.

Right, but the origins of those industries were in fact in war, right? No, no. Wasn't that what started off building all this stuff? Tanks and planes? No. We had factories that were making automobiles before the war. Those factories started making tanks. We were making commercial

airplanes. We started to make military airplanes. So the factories came for a civilian purpose, and then they were retrofitted for military purpose when the government started ordering all this stuff. But didn't the government give the economy a bump by buying all this stuff from all these people? No, no, no. The economy suffered because of all those resources being squandered by the government. Now, maybe we needed to do that. Maybe we needed to get rid of Adolf Hitler. Maybe we needed to fight that war.

How dare you, Peter Schiff? Well, I'm talking about the things you could say that we're better off in the long run because we got rid of Adolf Hitler. But in the short run, the fact that we had to divert all those resources out of peacetime production to military production was a burden on the economy. People suffered during the war. Now, they didn't complain because the war was on. But this is my point about China. Right now, you have all these factories in China, and the Chinese are working there. But the stuff that they're making is going to America.

It's kind of like when we had factories and we were making stuff for the war. They're making stuff that they can't use. We're using it. Now, if they let their own currency go up, because the Chinese government is actively suppressing the value of their currency. That's why they have $4 trillion in foreign reserves. That's why China is the biggest owner of U.S. treasuries other than the Federal Reserve, because they keep buying them up in order to keep their currency from going up. But when they keep their currency from going up, they keep their own citizens from buying their own products.

But if the Chinese let their currency go up, the idea is that, well, if Americans now can't afford to buy Chinese products, all those Chinese workers are going to lose their jobs. No, they won't. Just like the soldiers didn't lose. The factory is still there. They just made stuff for Americans. So you've got all these factories.

The Chinese people, there's almost a billion people in China. They need a lot more stuff than we do. They need all the stuff that they're producing in those factories. They don't need us to consume it. They're perfectly happy to consume that stuff. The reason they can't consume it

is they can't afford it because their currency is too weak. But the Chinese government lets their currency go up. now all of a sudden the chinese are going to have the jobs and the stuff see right now they get the jobs and we get the stuff that's a lousy trade-off for them but it's good for us because we get stuff without having to work for it they get to work without any of the stuff but that's what you want when you when you have a job you don't want the job you want the stuff that you can buy with your paycheck. Nobody works. Most people don't work because they enjoy work.

They look forward to quitting time. They look forward to the weekend. They want to spend the money. And right now, the Chinese aren't able to spend it because we're spending it for them. But how do you stop this? Look at these images. What images? These images of pollution in China. How would you stop that? Because obviously they have less

regulation than us, and this is the result of it. They have slaves making pennies an hour. They don't have slaves. They might as well be slaves. No, they're not. They live in these concom factories. What is it called? Foxconn? Foxconn factories? I had a woman on my show. I forget her name. She was Chinese American and she lived with the Chinese peasants for a while. She wrote a book. And I asked her, I said, look, these are all these young girls. It was about Chinese women and they would leave the farms and they would go and live in cities and work at, you know, work in these factories. And I asked her, you know, you know, and they're they're very happy. Their lives are much better. You know, they're out on their own. They were able to leave their home. They aren't they aren't they

the companies are taking care of their room and board. They have plenty of spending money. They have no debt. They have fun. They go out. I mean, they have plenty of spending money, they have no debt, they have fun, they go out. I mean, they're actually enjoying their lives. I mean, and now young Americans, I mean, they're too broke. They're living in their parents' basements. They can't get out from under their college debt. You can't sell these anecdotal stories like this.

No, there's not a bunch of slaves in China. Okay, but you understand. You're a very smart guy. You understand what you're doing here. You're flavoring this argument by these anecdotal stories about this person is so much happier now. And I knew a lady who knew the peasants. And those peasants are happy. You know, that's what rich people say when they don't have to live in China. Look at that fucking sky over there.

Jesus Christ. And, you know, and when the Chinese cut the cord from the United States, when they stop subsidizing our economy, when they let their currency go up up they will be able to deal with their pollution and they're also going to enjoy a greater benefit for their effort nobody knows nobody but nobody puts it if somebody in china right moves from a farm into into into a city and gets a job at a factory nobody is forcing them to do that they wouldn't do that if their life didn't improve as a result of doing it now their lives would be a lot better if the government didn't suppress their currency. But America's lives would be a lot worse.

And unfortunately, that is what's going to come, right? Because we are living, right, because of all of their production, right? And so imagine what it would be like in America, right? If we could only consume the things that our own factories could produce. So what if Walmart only has stuff made in America on the shelves? I mean, what could you buy? Not much. Not as much.

Well, no, barely. I mean, you certainly couldn't buy anything that plugs in, right? You couldn't buy anything that was electronic or that had an on-off switch or something. But you couldn't buy much in the way of furniture or clothing. Wouldn't you just assume that just like the regular market itself, like you feel if government regulations stepped out, if we had less imports, we would pick up the slack with American construction and innovation and designing of new materials? Well, not with the regulatory and tax system we have now.

That's why the business is left. And so what would happen is, yes, we would have to produce it ourselves, but we would produce a lot less of it at a much, much higher cost. Because manufacturing would be impeded by government. It'd be much more expensive. And so you wouldn't have middle class people walking out of Walmart with a shopping cart full of stuff. But you can't say things like the reason why people go from farms to cities is because

they make a choice. Well, that's a good choice. They made a choice because it's better for them that way. These people are fucked. They're in a terrible, terrible, terrible situation, a horrible spot on earth. Economic depression beyond belief for the average American. But the human condition, you don't have anything when you first start out. You've got to improve your life.

You make decisions. That's why I was at the Occupy Wall Street. But this decision that they're making allows them to make $5 a week and jump off buildings because they want to commit suicide. But that's a better opportunity than the one that they gave up in order to pursue it. They both suck. This idea that your anecdotal story about I had a friend and she lived with the peasants and they're all happy. Meanwhile, over in America, people just can't make any money. There are a lot of people.

Government's on your neck. Well, forget about China. There are people here in America. China's a good example, though, isn't it? Let me bring this back to home so I don't have to talk about an anecdote. So there's a big movement now. A lot of people are saying that people that work in the fast food industry or people that work at Walmart should be paid more money. They shouldn't be paid the minimum wage.

And, of course, there should be no minimum wage. The minimum wage is, does a lot of harm. It's one of the stupidest laws that we've got. Uh, but there are people say, look, they should, we should pay, pay them more. They're being exploited, right? They should get paid, you know, $15 an hour, whatever it is. But if somebody has a job at Walmart, right. And Walmart's paying them, you know, eight 50 an hour, $9 an hour, whatever it is. And they took that job. They took that job because Walmart offered them a better deal than anybody else. Because if somebody offered them a better deal, they would have taken that job instead. So the fact that somebody voluntarily accepts a job at a given rate of pay means that they're not being exploited.

Nobody volunteers to be exploited. If that's the best job you can get, then you should be thankful that Walmart is there offering it because they outbid everybody else. They're offering you a better deal than you can get someplace else. Well, the idea is to keep away from some sort of a Foxconn type scenario where one group has a gigantic amount of money and they take advantage of these incredibly poor people paying them a tiny, tiny, tiny amount of money and forcing them to work ungodly hours to the point where they have to put nets all around their building. It's right there. No, but if I advertise- Do you not agree with that? That's a strange situation? No, if I advertise a job at a particular rate of pay

and somebody shows up, when Walmart runs an ad, they get like, I don't know, 50 applicants per position. So obviously they're not exploiting people. I mean, 50 people wouldn't apply for the job. If Walmart was out there netting people and they had people with guns standing around the workers making sure that they didn't leave, then you'd have a point. But nobody is forcing anybody to take these jobs. They're taking them because it's the best job they can get. And why is Walmart bad for offering somebody the best job they can get? Now, some people will say, well, they should offer even more money. Why? The worker's not worth it. They don't have enough productivity. They don't have enough skills. And a lot of people, and this is what I did with Occupy Wall Street, but a lot of people who want to criticize people

who hire people, and they said, look, you don't pay your workers enough money. They don't have any employees. They don't pay their workers anything. I said, look, you don't think the guy at Walmart is making enough money? Then you hire him and pay him more. So how does something like Foxconn happen? How do you have a gigantic business that makes billions of dollars and pays people pennies and makes them work 16 hours a day and takes advantage of these people that

don't have any other opportunity? Nobody makes anybody work 16 hours a day. So they don't have to? Who are you talking about? The Foxconn people don't have ungodly hours that they work? I don't know what their hours are, but no one's forced to work the hours. They choose to work the hours. I don't think they have a lot of choice. I think if they want to keep their job, they have to do it, right?

But if they want to keep their job, then they must like it. And there's competition. No, they don't have any other opportunities. But then they should be glad they got that one. Oh, wow. So they should be glad that someone's paying them pennies? Well, if that's the best they can get. I think the idea is to keep this big, evil corporation.

This is the idea that people have in America. But what if that company wasn't there? I'm just using that in quotes. It's not my words. Okay, what if that company wasn't there? They've been doing what they've been doing for thousands of years. But obviously the company is an improvement over what they were doing or they wouldn't choose to work there. And what happens is...

You can't make that leap. Unless you're in that environment and you understand those people. I'm assuming that people are rational. And I don't want to superimpose my judgment over somebody else's. If somebody makes a decision, again, just like you want to choose to smoke marijuana. Right, fine. You keep bringing that up, man. You're making me nervous.

No, because you want to make a choice, and I agree you should have that choice. Well, I want to drink coffee, too. All right. I want to take naps. There's a lot of things I want to do. Why do you keep saying marijuana? I don't want to make caffeine illegal because marijuana is illegal, right? And coffee isn't.

Not in California. Well, it's only medical. Yeah, I got a headache. You got a headache. But in some places, even that. But there's other – look, I think cocaine should be legal. I think heroin should be legal. That doesn't mean I think people should go out and shoot up.

Right. But I recognize all the damage that the government does. Not only is it infring infringement on liberty. I think people should be able to choose to make a bad decision if that's what they want to do. You know where pot's legal? Colorado. North Korea. All right.

Well, then they got something right over there. But, you know. It fucking throws all my arguments right out the window. But it's, you know. But I forgot where I was. Yeah. But the government not only does that infringe upon your liberties and your freedoms, but it actually creates a lot of problems. And the biggest problems in America is not drugs, but the war on drugs.

Right. That's what does a lot much more harm to the economy. In fact, I actually think that more people do drugs because they're illegal than they were probably if they were legal. But certainly they would be safer if they were legal. We wouldn't be dealing with criminals. I'd rather buy drugs from a company, a pharmaceutical company, than from a gang in South Central LA. I mean, I think they're going to be more concerned about their brand

and the purity of their products than the Crips or the Bloods or wherever you have to go to buy your heroin down here. So, you know, and what I don't want. Johnson & Johnson, we have the best heroin. Well, whatever. I don't want, look, nobody, people here, you know, you get your car ripped off, someone steals, you know, your radio or they break into your house. Why?

Because they need money to buy illegal drugs. If drugs were free, they'd be a lot less expensive. You wouldn't have to steal to buy them, right? You could buy them, you know? So, you know, now you have all kinds of victims of drugs. When you say free, meaning legal. If drugs were legal, they would be a lot less expensive. And so drug addicts wouldn't have to commit crimes to support their habit.

Well, this is supported by the prohibition. It's very obvious that the prohibition propped up all sorts of illegal activities, Al Capone, what have you. Of course. I mean, that's where it started. But you've got – in fact, the people who would be most against legalizing drugs is organized crime because that takes away all their money. Well, here's their argument against that. Do you know the situation in Florida where Florida for the longest time didn't have a database? They had these things called pain management centers where people would

go in and they would say, oh, my head hurts. Okay, we'll go right next door. I'll write you up some OxyContin. And they would go in the same facility. They'd go to a doctor and then to the pharmacist that only prescribed pain pills. And because of that, they have this massive amount of people that are addicted to OxyContin in Florida. In fact, there's an area of Florida leading up to the northern states that's called the OxyContin Express.. In fact, there's an area of Florida leading up to the Northern States that's called the Oxycontin Express. Vanguard actually did a show on it called the Oxycontin Express. And we had them on the podcast and talked about it. There's 90% of all Oxycontin in the country is prescribed in Florida. And why is that? It's because of deregulation. It's because

of a lack of regulation. It's because they weren't forced to have a database where they made sure that people weren't doing something unethical and just prescribing pain pills all willy-nilly. That kind of goes against your theory. Well, I don't know that it goes against it. I'm not really familiar with it because I'm hearing about it for the first time from you, so I don't know. But I know it's not that there's no regulation down there because obviously these are doctors or if they're writing prescriptions, there is a lot of regulation involved in that process. So I'm not familiar with it to really comment on it. Well, OK.

Well, then that's unfair to try to bring it up to you. But that is a huge issue and it's an issue in Florida because Florida is such a fucking crazy state. But I do believe – I mean the war on drugs has destroyed our inner cities. It's corrupted the police forces. It's screwed up police south of the border. And now you have a situation, too, where you're an inner city kid. And you've got minimum wage laws and you've got occupational licensing laws that make it almost impossible for a young kid to get a legitimate job. Yet you've got the gangbangers flashing around a wad of cash.

Hey, just deal drugs. You can make a lot of cash, hey, just deal drugs and you can make a lot of money. Wait, wait, wait. You think that minimum wage and the difficulty in getting licensed for certain positions are what's keeping people down? Of course. Minimum wage is keeping people down. Absolutely. How is that true? Well, because remember, when you're young, when you're a teenager, you don't have a lot

of skills. I mean, you might have never even had a job. Right. And what's more important in getting a job is not necessarily the paycheck. That's kind of secondary. It's what you learn on the job. And, you know, when I had my first jobs and I was working, I mean, you know, you're living at home.

You're talking about outside of high school? Or in high school. All that's important is money. After school. The money is the only thing that's important. No, no, no, no. I mean, when you're- When you are, look, you want the money, right?

Right. Because you want money to take a girl out on a date or maybe you need gas money, right? But you don't need rent money. You're living at home. You don't need food. Your overhead is taken care of. The real benefit is acquiring skills on the job training that will enable you to earn more money as you get older and take on more responsibilities. You're not getting any skills when you're working at a fucking hamburger joint.

What skills am I getting working at Newport Creamery? There are a lot. I'll give you an example of gas stations because gas stations are a good example. I worked at a gas station. Because at one point in time, there were a lot of jobs for young kids at gas stations. And they worked mainly for tips. They would pump gas. They would check the air on the tires.

They'd wash your windows. And they didn't make very much. But between Phillips, and these were the pump jockeys, right, between Phillips, maybe they worked with a mechanic, and they helped out the mechanics, and, you know, a lot of auto mechanics got their start as, you know, pump jockeys. And, you know, eventually, you know, they were able to become a mechanic, and they can earn more money, and some of them maybe eventually opened up their own gas station and, you know, became entrepreneurs and had a few, but they got started at an entry-level position.

Now, of course, the minimum wage law, it's all self-serve. I mean, you go to a gas station, there's no human beings there. Maybe there's one guy that's in a little booth that's kind of overseeing. But if you want to check your air and your tire, you do it yourself. You want to wash your windows, you wash your own windows. All those jobs have been eliminated by the minimum wage. But so have the opportunities that came with them. And now if you want to get a mechanic, well, you got to go to vocational school, you got to pay money, you got to go into debt, you know, maybe you can learn to be a mechanic. But, you

know, on the job training was how young people used to acquire skills. You know, now we've got all those guys going to college, they get a philosophy degree, you know, they spend six years, you know, you know, barfing at frat parties, but they graduate with a huge debt. They know nothing. A lot of them would have been better off getting a low-paying job and learning how to do something. But during this time of this, when people did learn how to be a mechanic by becoming a pump jockey, there was a minimum wage in effect. Well, the minimum wage in America didn't start until 1938. Yeah, but I worked at a gas station. I know, but let me... And I had a minimum wage.

It started in 1938, and it only affected some certain federal workers. It wasn't... And it was, what was it, 25 cents an hour. It didn't apply to most workers until the mid-1960s. So it was the war on poverty that really brought about the minimum wage. So it was the war on poverty that really brought about the minimum wage. So and of course, over time, as the minimum wage got higher and higher during the 60s and 70s, that's when it really began to take a bigger toll. But if you look now at like black teenage unemployment, which is off the charts, which is what, 50, 60, 70 percent, I'm not sure exactly what it is. But if you go back before the minimum wage, right, black teenage unemployment was, I don't know, 15 percent.

It was actually lower than white teenage unemployment. And all this stuff, you take the bottom rung off the job ladder and you just obliterate it. You just make it impossible for young, unskilled people to get a job. And it's not just the minimum wage because that's the beginning, right? Because if you employ somebody at the minimum wage, you still got to pay payroll taxes. You got to pay unemployment taxes. You've got other mandated costs, legal costs that increase the cost of hiring. So maybe even though the minimum wage is $7.25 an hour, maybe it costs you $10 to hire the guy an hour, even though you only give him $7.25. It costs you $10. What if their productivity is only worth $6? You can't hire

them. It's impossible. You're not going to hire them to lose money. You're not going to train somebody. I mean, you know, there are a lot of people, these success stories, you know, people go from the mailroom to the boardroom. You know, it's harder to start, you know, at the bottom because it's hard to get your foot on the bottom, right? Because, you know, you have to be at a much higher level and it disproportionately impacts poor kids, inner city kids, and it favors, these minimum wage laws will favor skilled workers over unskilled workers, because if I have to pay a certain wage, well, then maybe I'll hire somebody that has more skill. In fact, it was the skilled workers, the labor unions, that lobbied for the minimum wage,

not because it benefited them, because they made much more than minimum wage. What they wanted to do is make it expensive to hire unskilled labor. So you wouldn't hire the unskilled labor. You would just hire the union labor. I see what you're saying. So what you're saying essentially is that minimum wage is just more government intrusion. And the more freedom that you have the government take away from you, whether it's minimum wage freedom, whether it's tax freedom, whatever it is, the worse you're going to be. You're going to have more regulations.

You're going to have more people involved, more red tape, more bullshit, more waste, more corruption. Yeah, I should have a right to work if I want to. For a dollar an hour. If I want to. Right. And look, the interesting thing, look at all these lawsuits now, the internships in the entertainment industry.

This is the perverse effect of it. So the government made it illegal to pay somebody below the minimum wage, but it was okay if they worked for free. So now you have all these interns who probably would have been paid something if it wasn't for the minimum wage. But since it was illegal to pay them something, they ended up working for nothing. Of course, now they're suing and they're winning lawsuits saying, hey, you have to pay me. So now they're going to destroy the internships. And now a lot of these companies that used to have internships aren't going to have them anymore. But don't the interns get college credit? Wasn't that the whole idea behind it? Some of them do. But then that was even worse because what would happen sometimes in order to keep themselves safe, because the

employers didn't want to run afoul of the employment law. So they would only give you the internship if you got it through a college, right? So now what would happen is you'd actually have to pay to be an intern because you'd go and pay tuition to a college just so you can go and work for free. I mean, wouldn't it be better not to pay the tuition and go into debt and just work for a low wage than to pay to work for no wage? I mean, this is what happens, you know, when you have all these government regulations, everybody is worse off. And, you know, people think, oh, these, you know, the young, you know, people are being exploited. No, they're not. It's not exploitation. A lot of times it's the best thing that can happen to them is they get a

job. And, you know, people say, well, you know, you can't raise a family on the minimum wage. Of course not. And you shouldn't even try. I mean, if all you can do is flip burgers, why are you starting a family? I mean, you should, you know, you got to develop your skills. You got to be able to earn more money than that before you take on those extra responsibilities. But if you say, hey, every wage has to be a wage that could let you, you know, support a family, then there are no entry-level jobs. Well, then how do you enter the labor market if there's no entry-level position? You know? Well, if you're in a situation like a fast food gig, I mean, where does that lead to?

The manager? I mean, how do you rise through the ranks at a fast food place? Well, some people, right? Some people start out, you know, cooking French fries or mopping up and go on to own a franchise. I mean, so you can certainly move up. And there are people, I think the guy who's about to be the new CEO of Walmart, his first job was working on a loading dock in one of the distribution centers. And now he's going to be the CEO. He worked his way up to the very top of the company. Well, he went to college.

But I mean, that's not how he got his foot in the door. And I probably, you know, but the- But I mean, they wouldn't have hired him to run the company unless he went to college, right? I don't know. But maybe the fact that he worked there, maybe that gave him a leg up to begin with. Yes, I'm sure that definitely had an impact.

But if you take a look at someone that works at McDonald's, you don't necessarily have to work up the chain at McDonald's. McDonald's could be your first job. Look, what were my first jobs? I delivered groceries. I bagged groceries. I sold clothing and retail in the mall. I sold shoes. I sold cable door-to-door.

Now, you say, well, did I move up in the mall. I sold shoes. I sold cable door to door. They say, well, you know, did I move up in the, no, but I, I ended up getting other jobs where, you know, the sales skills were important. Uh, you know, you get, you just, even when I was got my first job at a supermarket, a lot of times I was just mopping up the floors. I was bagging the groceries and I would deliver the groceries, but you just learn to show up at time, you know, and now you have something that you've done. I mean, a lot of it. So you get a job at McDonald's and then you get a job someplace else that's better because, well, what did you do before you were here? Well, I worked at McDonald's. How long were you there? I was there for a couple of years. In fact, I still have the job. Oh, well, that means at least you didn't get fired. You had the job. I mean, you've got something.

You've got to start somewhere. Everybody starts somewhere and you can't expect to get paid a lot of money when you first start out. You've got to make yourself more valuable because what you are – individuals, we sell our labor to the highest bidder. And so what you have to do is you've got to figure out how can I increase my value to a potential employer so that he'll pay me more money. But isn't the idea of minimum wage is to keep it from being gross? No. Just like make it – so it is low. $15 an hour is pretty low. It's incredibly it so it is low. $15 an hour is pretty low. It's incredibly difficult to make a living getting $15 an hour.

No, but I'm not saying you don't have to make a living. Just feed yourself. If they enforced a minimum wage of $15 an hour on like McDonald's, there would be no human beings working there. It would all be automated. There might be one guy there that made sure that the robots didn't break down, but there'd be machines making the hamburgers, making the french fries. It would be like a gas station.

Wouldn't that be good, just like we were talking about deregulation of the government, forcing them to get real jobs? Wouldn't that be good for the people that work in the fast food? Take them off the tit of Burger King and force them out there? No, but then what would they do then? Just go on welfare? Find a way. Figure out a way. Get a real job. But no, but that is their entry to the job market. I mean, they have no skills. Look, believe me, if these people had better skills, would they be working at McDonald's?

Now, part of the problem is, and this isn't, you know, that there are some people that really could be working better jobs. But they're not because we have this phony economy that is preventing those better jobs from being created. That's the problem. There are a lot of people now that are working at McDonald's because that's all they can get. And, you know, it's not like, you know, at least they got that to fall back on. But the problem is why aren't there better jobs? Why aren't there jobs that would normally be there for you to work up, right?

The jobs that are higher up on the ladder, where are those jobs? And those jobs are being destroyed by the government because we need more savings. We need more capital investment. We need higher interest rates for that to happen. And the government is so busy inflating this bubble economy that they're sucking all the air out of the real economy. They're diverting resources from Main Street to Wall Street, and they are preventing these jobs from being created. In fact, they're destroying a lot of the jobs that exist. So how would you fix that?

If I'm Obama and I say, Peter Schiff, I heard you on the Joe Rogan Experience. You make a lot of the jobs that exist. So how would you fix that? If I'm Obama and I say, Peter Schiff, I heard you on the Joe Rogan Experience. You make a lot of sense. Listen, the guys I got working for me fucking suck. Come over here, man. Sit down. Tell me what the fuck to do. What can I do here? How do we fix this mess?

Other than resigning. I guess if he's going to. Oh, how dare you. If he's actually going to listen to me. That's not a way to make friends. But if he's actually going to listen to me, then I don't want him to resign. Let's pretend. Let's pretend.

He actually has that kind of epiphany. Let's pretend. Let's pretend Jamie's the president and you've got to make friends. But if he's actually going to listen to me, then I don't want him to resign. Let's pretend. If he actually has that kind of epiphany. Let's pretend. Let's pretend Jamie's the president and you've got to convince him. Yeah, well, then he's got to – What would you tell them to do? What would you tell them to do? He's got to start repealing rules and regulations and shrinking government and closing down agencies and departments and laying off government workers. Like which government workers?

Where do you start? I'll start at the top. No presidents. Fire the president. Listen, if you want to save the company, you've got to go under yourself. But I said get rid of all the economic advisors. Look, we have the Department of Energy, the Department of Agriculture, the Department of Education.

Assholes, every one of them. Some of them are, some of them aren't. But we can't afford them, and they're not helping. They're not making the country richer. They're making it poorer. We didn't always have these departments. A lot of these departments weren't even created until the second half of the 20th century. America made it without all those agencies and departments. We didn't even have the Department of Energy came in in the late 1970s. I mean, what do we need it for? In fact, when we first developed the Department of Energy, it was because we imported like 30 percent of our oil.

We said this is too much. We have to do something about it. So then we were reporting 70 percent of our oil. I mean, the Department of Energy doesn't produce any energy. I mean, it just produces jobs for bureaucrats. But there's all these agencies and departments that we can't afford. We never needed them. It was a way for politicians to buy votes and to peddle influence.

We've got to get rid of it. But what we also have to do is get to the Federal Reserve because interest rates have to go up. We can't have 0% interest rates. Let's pretend we're taking care of this right now. So Department of Energy, they're fucking useless. They don't do anything for us? Well, they're worse than useless. If they were useless, that would be an improvement.

So obviously the world has changed drastically since the time when we imported 50% and maybe our needs are greatly disproportionate to back then as well. That's why we need 70%. But what you're saying is there's no benefit in having the Department of Energy. No, we would produce a lot more energy without the Department of Energy. We'd have much better education without the Department of Education. What do they do wrong? We don't need the Department of Energy.

What do they do wrong? Because they get in the way. In what way? Well, first of all, we have to pay their salaries. Right, okay, pay their salaries. It's expensive. It's expensive to support all these bureaucrats. And then once they have a job, they've got to figure out something to do.

They've got to make up stuff. I mean, that's how government works. I mean, government doesn't want to solve a problem because then there's no need for the agency. The minute you have a problem and you say, okay, let's have the government solve it, the last thing they want to do is solve it because then there's no reason to exist. They want the problem to get bigger so they can demand more resources. They can have more people, a bigger department. So it's like the opposite of capitalism.

It's not the survival of the fittest. The worse you do your job, the more you're rewarded, right? And so you don't want to have government doing all these things. You want to let the market – you want individuals that have an invested interest. You want the profit incentive, you know, the invisible hand, all the benefits of capitalism. You don't want to get it screwed up by government. But the thing that we have to understand is we can't have this phony service sector economy. We can't have everybody working in healthcare and education. We can't send every kid to college. This idea that

everybody needs to go to college is nonsense. Most people don't need to go to college. You know, at one point, people went, you know, maybe, you know, before the Second World War, maybe, I don't know, not even one out of ten people went to college. But if you went to college, you know, it's because you wanted to be a doctor or you wanted to be something that you really needed to go. I mean, now you have more people waiting on tending bar, waiting tables, driving cab with college degrees. Some of them have advanced degrees. You know, you want to get a laugh. I did this video. I don't know if you saw it. I was in New Orleans and I was walking down Bourbon Street and I was interviewing people and asking them, you know, if they graduated from college and what their major was and when they

graduated. And they all did. And some of them had two or three degrees and they were all, you know, if they graduated from college and what their major was and when they graduated. And they all did. And some of them had two or three degrees. And they were all, you know, bartenders or bouncers at strip clubs or pedicab drivers or screeners. Everybody had a college degree, but nobody needed it. But they all had debt that they were working off. I mean, the idea that we have to send every kid to college, regardless of their aptitude, regardless of whether or not, you know, they're going to have any real benefit. Who benefits from this? It's the colleges, the universities, the administrators that make a fortune off of all this money. And the kids graduate with a worthless degree because everybody else has one. So who cares? You don't know

anything, but you got all this debt. And are the kids better off spending the first six years of adulthood, you know, in college, you know, and that, you know, a lot of them, they move out of their parents' house because they can borrow all this money to live off campus or frat or live in the dorms. But now they're 22, 23, 24 years old. They have such a pile of debt they can never get out from it. Now they're back home for good. I mean, I'd rather have the kids stay at home after they graduate high school, get a low-paying job, don't take on any debt, maybe get some skills, and then when they're 20 or 23, then they can move out.

They can rent their own place. They're self-sufficient. Instead, now they got no options because they follow the government's advice. Well, obviously some have options, and obviously some people go from college to get jobs. And I don't know what the percentage is of people that have successful careers after college, but I assume it's, I mean, we're not dealing with a nation of constantly advancing homeless people where every year the homeless population goes up 3 million. So obviously some of them work. Most people on college campuses, there's no reason for them to be there and they will not benefit from being there. Well, I think there's a lot, there's a growing process going on. And I agree with you that if you look at the end result yeah most of them didn't benefit from it but they probably did

anyway because they benefited from knowing that this is not how to get through in life they benefited from knowing that you know you look some people that they went to college with i'm sure did some people did find a path it's too expensive a lesson i agree expenses for society yeah i'm on the same page with you there you know Department of Education, let's fuck them too, right? Let's get rid of them and the energy guys. So what are we down to? Well, we've got to get rid of a lot more, but we've got to go after the entitlements. We've got to go after Social Security and Medicare.

I mean, these are disasters. You've got to lighten up. You want a drink? You want a little bit of alcohol? I'm drinking this. You want alcohol? What do you got? You want a beer?

You want a little scotch, a little whiskey? Yeah, I could go for some scotch on the rocks. Let's get some whiskey for this fellow. He needs to to lighten up what time is it we got plenty of time don't worry about the internet goes on forever and time is an illusion it's created by the man they've created these fucking clocks so energy done we'll get rid of those we'll figure out the energy we'll we'll regulate it statewide that's how we'll deal with environmental concerns i okay i like that education let's be honest it's a mess right the the the levels of educations that we're accepting for high school

students are is absolutely ridiculous i agree that college educations are insanely expensive the idea behind it is absurd the idea that you can go to school for x amount of years come out and be more in debt than you're going to make in a decade of working every fucking day of your life. We also have to let young kids off the hook for Social Security. I mean, they didn't vote for this Ponzi scheme. It was conceived before they were. And it is a Ponzi scheme. That's all it is.

Explain it to people who don't understand because I've seen your explanation of the Social Security system, and it's very enlightening because it's disgusting. Well, it is. Yeah, they ought to erect a statue of Ponzi right in the lobby of the Social Security administration. But, you know, Social Security was conceived and sold to the American public as a complete fraud, right? The idea initially, and the government deliberately used this kind of language, was that it was

like insurance because the taxes that you pay are called premiums and you're a beneficiary and they have a trust fund, right? All this is what an insurance company does. But Social Security doesn't have a real trust fund. Nothing is invested. It's an intergenerational Ponzi scheme. And what happened is people paid into Social Security. They paid Social Security taxes.

Did that get on the rocks? On the rocks, yeah. On the rocks, yeah. You're a gentleman. So people paid Social Security. Jack Daniels or what's the other stuff? Jack Daniels is fine. Oh, fucking American.

I love it. So people paid Social Security taxes, rights or what's the other stuff? Jack Daniels is fine. Oh, fucking American. I love it. So people paid social security taxes, right? And the government spent the money. They didn't invest it in anything. They didn't put it aside in a trust fund. They just spent the money. Now, as the population grew and they kept raising the tax, because originally it was just a 1% tax, right? And it didn't affect self-employed people, right?

Salute. Yeah. It didn't affect self-employed people right salute yeah it it didn't affect self-employed people okay because the government said look if you're smart enough to run your own business you're smart enough to save for your own retirement so the government was supposedly going after the average worker who wasn't going to save any money so they said look we're going to save the money for you we're going to have a forced savings but of course the government didn't save anything they spent every nickel but as the year as the years went by, they kept increasing the payroll tax. And of course, the population was growing. And so what the government does is they tax young

people and pay off the older people. And of course, the older people, they vote, right? The most important thing to them is their social security check. And so they vote for whoever promises more benefits. And so eventually they got more goodies added on, you know, prescription drugs, different things. But the young people now are coming in at the end. The people today, Generation X later, you know, you are just holding the bag. You are at the end of the chain letter or whatever it is. And we're paying people, a lot of young people now pay more in social security taxes than they pay in income taxes. And of course you pay your employer's half. The entire 15 percent comes out of the employee's pocket.

The employer just, whatever money your employer sends to the government is the money that he would have sent you if the tax wasn't there. Right? So it's all part of the cost of labor. But the government did it this way so that people wouldn't realize how expensive the social security was. But there is absolutely no way that someone in their 20s or 30s or 40s or even probably my age, 50, is going to collect. This is going to blow up. This is going to collapse. So the sooner that we can level with the public, the better. We got to end this thing. We got to stop the social security tax, right? Let the young people off the hook. And now we have to deal with the consequences of a failed system i think we have to means test it i think we've got to tell wealthier people hey you know you know you basically what was that uh um from uh animal

house hey you fucked up you trusted the government you know you're screwed you know the government made a bunch of promises that it can't keep we're not going to steal from your kids in order to make you whole so if you're, if you have assets or income, no social security check, right? Because we're not going to rob from the young and the poor and give to the old and the rich. You were dumb enough to vote for these policies, so deal with the consequences. And I would have an asset test and means test. And then if somebody is in dire situation, maybe buy them some kind of a minimum annuity or something. But we got to admit that Social Security is welfare.

That's all it is. The money comes from the same pot. Nobody paid into anything because whatever money the government collected was spent. It's all gone. Now, to play devil's advocate, the benefits of Social Security are that some people that made decent waves their whole life but lived check to check would someday be able to stop working. No, they're not going to they're not going to whatever the people that are doing it right now there well there are people

doing it now just like any ponzi scheme or rather a chain letter or pyramid there are people like the first person that collected social security her name was ima fuller i think and she lived to be a hundred years old and she only paid in like i don't know 20 bucks in taxes and she collected tens of thousands, right? She made out like a banshee, right? But, you know, it's the people that come in late. I think it's a bandit, not a banshee. Bandit, whatever it is.

But she made out, right? You know, she did. But the reason that pyramid schemes are illegal is because they don't work, right? They benefit the people that get in at the beginning at the expense of people that get in at the end. Well, if a pyramid doesn't work, the government can't make it work. If the government runs it, they're not going to be more successful than the private sector. The only difference is when people in the private sector figure out it's a Ponzi scheme. Why did Bernie Madoff's Ponzi scheme fall apart?

Because when people realized it was a Ponzi scheme, they wanted their money back. Social Security is the Ponzi scheme you can't get out of. The government requires you to participate at gunpoint. And even if you know it's a Ponzi scheme, I'm paying Social Security taxes, even though I know it's a Ponzi scheme. If it was a free market, I wouldn't be paying. And you would have to be able to say whether or not you wanted to contribute and benefit from it. It's like an opt-in. If it was an opt-in thing, would you be willing to?

I would opt right out. I mean, I would give up. You would, but... Yeah, but first of all, I don't even think the government... Why is the government involved in Social Security? There's nothing in the Constitution that gives the government the authority to take care of this. Look, if I want to buy insurance for my old age, let me buy it in the private

sector. I mean, you know, and let me save on my own. Where does most of the money go? Where does most of the money go when you do, but when you buy insurance? Well, if you buy legitimate insurance, the money is invested. Right. And it grows so go when you buy insurance? system, a legitimate system. You take money as you work and you invest it. And over time, compounding interest or the investment returns, eventually, based on your contributions and the gains and the reinvestment of the interest and the dividends, you accumulate a portfolio of stocks and bonds or whatever, real estate, whatever you bought, that you can live on. You can live off of your income from your investments. Now, how is that different than how Social Security handles it?

What happens when your money goes into Social Security? They spend it. The government spends it on current Social Security recipients. They spend it on the war in Iraq or Afghanistan, wherever they are. They spend it on the war on drugs or on poverty. So it's totally speculative because we don't get a receipt. There's nothing there. But you don't know what you're spending on what because it's just a bunch of money.

But there's also no return because there's no compounding But you don't know what you're spending on what because it's just a bunch of money. But there's also no return because there's no compound. You don't generate anything. And so the only way the government can pay you the money when you retire is if they can get it from somebody else. But how is the baby bust, Generation X, going to pay for the retirement of the baby boom? It's impossible. I mean, they don't have the incomes. They're loaded up with debt themselves. If you've got a bunch of college debt, how, you know, not only do you have to pay that, but you've got to pay somebody's social security and their Medicare, you know, it is impossible. So we've got to admit,

the politicians have to admit all the false promises that they made in order to buy votes, right? That's what they do. They promise something for nothing because that's what people vote for. People are dumb enough to do that. They vote for something for nothing. But, you know, there's nothing more expensive than something you get for free from the government. And we're going to find out just how expensive all this free stuff is. But we got to level with people and say, look, you know, there is no trust fund. There is no money there. And so let's end the program. Let's stop it. Let's, you know, and then let's end the program let's stop it let's you know and then let's figure out how to deal with uh the people who unfortunately now because of this program now depend on this

program but who would have been self-sufficient if the government had let them plan for their own retirement and also deal with the unemployment of all the people that worked in the various organizations well no no that's good unemployment they're going to get jobs you know because yes because if we get rid of all these government rules and regulations, there will be jobs for them. I don't want them working in government because now I have to pay their salary. If they work in the private sector, I don't. I don't want to employ all these bureaucrats, especially when the average bureaucrat is making more than the average person who's paying the taxes that pay the bureaucrats. And they just gave everybody in

Washington a 1% pay raise. Who could afford that? that i mean they should be giving these guys pay cuts but part of the deal uh to you know fund the government was to give everybody a raise in washington they're already overpaid excellent argument so department of energy dead department of education gone social security go fuck yourself what do we have left how do we deal with well we got to cut defense massively that's the next question yeah well the problem with our the military? Well, we've got to cut defense massively. Defense, that's the next question. Yeah, well, the problem with the military is it's not the Department of Defense now, it's the Department of Offense. What we need to do is mind our own business.

We need to stop stirring up hornet's nests and then being surprised when we get stung somewhere. Peter Schiff, freedom ain't free though, don't you know? I'm not saying that we're not vigilant. I want to have a military that's strong enough that nobody's going to want to screw with us. But we've got that many times over.

In fact, all we're doing is instigating. If we just mind our own business and protected our own borders, right, who's going to be dumb enough to attack America, I mean, in a real way? I mean, a terrorist, okay, but what nation is going to launch a war? Nobody. I mean, there is no threat. This is ridiculous. But we are creating threats that wouldn't exist if we had a more defensive posture.

Why do we have all these bases all over Europe? I mean, the Soviet Union is gone. This is the problem. It's like once you create a government department, they never go away. So we have all this NATO. We built up all this stuff in Europe because of the Soviet Union. Well, the Soviet Union is gone. Why are all the bases still there?

Why are all the troops still there? This is all government bureaucracy just perpetuating itself. I mean, we can't even afford it. But if Europe wants our troops there, then let's invoice them. Let's say, you know what? We got all these troops in Germany. This is what it's going to cost you, Germany, to keep these troops there if you think you need them. If you don't want them, then we're going home. And, you know, but that's what we need to do. We need that. We

need to dramatically reduce what we're spending on the military. But I think the military should be a much higher percentage of the federal budget than it is today, you know, because that's what the federal government should be doing, protecting us from foreigners. Let the state governments protect us from local criminals. Let the state governments protect us from local criminals let the federal government protect us from international criminals but that's it but you know right now the government is doing all these things that it shouldn't do that it can't even do the things that it's supposed to do efficiently effectively now when you hear like the eisenhower speech when he was leaving office and he warned of the military-industrial complex. That's essentially what he was warning us about, the fact that this business has arisen that profits off of war.

And once it becomes big, like any bureaucratic institution, like any gigantic corporation, like anything that has too much power and influence. Yeah, look, we're the warfare state. We're the welfare state. All of that has to end. I don't want the guns or the butter from government. I want the freedom. I just want government to secure liberty. That's why it's there.

So a larger percentage of money goes towards defense, but less money. A lot less. And how much less? I don't know. I don't know either. If we're going to run this motherfucker correctly, we're going to have to sit down and think Here's what I'd like to do. Okay.

At the turn of the 19th century, so 1900, 1901, the government, federal government, state government, local government, collectively, all the government was 5% of our GDP. What year was this? 1900. Yeah, but what the fuck? They didn't have the internet, no TV.

They were idiots. That should make it worth it. But let's double it. Let's let the government be 10% of the economy. So let's just start slashing it. We have too much government. Remember, the more government you have, the less freedom you have. Everybody is focusing on what can I get from government. The government doesn't give.

It has to take. If it gives to one person, it has to take from somebody else. If it legislates a special privilege for one person, it's imposing an obligation on somebody else to pay for it. That's not freedom. Okay. So what's next? The government, we set up that we're going to get rid of energy, we're going to get rid of education,

we're going to get rid of change, alter the way we deal with defense, make it actually defense, not offense. We're down to how many, what percentage of the economy? How much should we eliminate about the government? We've got to eliminate most of the federal government. Most of the federal government. But the benefit of it. What do we need, though?

What do we need? What's important? Not much. National defense. That's it. Just defense? That's pretty much. We're going to be run by fucking military people.

Those guys like to fight. They get crazy. I mean, obviously there's foreign embassies we can maintain. There's certain things that we could do. Was that it, though? But if we do this, right? Who fixes the roads? But that's local.

The federal government's got nothing to do with the roads. State highways. But they have to take the money out of the states, and then it's like federal aid, right? It's like trying to give yourself a blood transfusion from your right arm to your left arm, and you spill half the blood on the floor. There's no point in doing it. If we could eliminate the federal government, think about this. Here are people in California. If no one in California had to pay federal income taxes,

if no one had to pay Social Security taxes, right, how much more money would be here? I mean, we could deal with problems if you didn't have to send all the money to Washington and beg for it back. You know, and it always comes back with strings attached. You know, you look at these states now like Colorado where they, you know, they legalize marijuana. But now what's the federal government doing? The federal government is making it impossible for a guy that opens up a store to sell marijuana. He can't have a bank account because the banks are afraid of money laundering. He can't rent a storefront because of the forfeiture laws.

The government's going to come in and seize his property. I mean, the federal government is trampling all over us. I mean, we fought a revolution to get away from that kind of stuff. And now Washington treats us much worse than the British did. I mean, King George never could have got away with this stuff. If this is the case, should we actually be hoping that everything falls apart? Because, in fact, that might be the only way that all this gets changed. Ironically, yeah.

Because the thing is, it's going to fall apart eventually. The sooner the better. I guess the longer it takes, the worse it's going to be because we are getting, you know, we're digging ourselves into a deeper hole every day, right? The sooner that the phony economy collapses, the sooner we can start replacing it and building a legitimate economy. So, yeah, I know this huge economic crash is coming. That's way worse than 2008. If it happens in 2014, it won't be as bad as if it happens in 2015. And if it happens in 2016, well, that's even worse than 2015 because we're going to have that much more debt.

It's going to be that much bigger a bubble. The bigger the bubble, the bigger the fallout when it bursts. So the sooner we can stop doing the wrong thing, the sooner we can start doing the right thing. So explain to me how it does collapse. So let's say, worst case scenario, it goes to shit in 2016. It survives another couple of years limping along with band-aids on, then one day it implodes. What happens? Well, this is my best guess for how it's going to happen, right?

So the economic data is going to start to come out weaker than a lot of people think. I think the jobs numbers are going to deteriorate. And, of course, they never really improved. The reason the unemployment rate has come down, it's not because the unemployed have found jobs. It's because they've stopped looking. They've left the labor force, and now they're collecting disability checks instead of unemployment checks. But the numbers are going to get worse. Janet Yellen is going to be the Fed chairman, and she is going to prescribe more quantitative easing.

And so they're going to reverse this tapering process, and they're going to do more quantitative easing. Now, everybody is assuming that the Fed is going to continue to reduce these purchases and eventually unwind their balance sheet. And, of course, that's impossible. I was saying that from the beginning, that there was no exit strategy, that it was a lie, that they had checked into a monetary roach motel, that once they had committed to this, that they couldn't stop, and if you live by QE, you die by QE. And so the Fed is going to come in, and they're going to do more quantitative easing. They're going to print more money to try to bring interest rates back down, to try to artificially stimulate the economy.

But the market is expecting the reverse to happen. And as a result, the dollar has risen a little bit. Gold prices have come down. Markets come up because people are optimistic about a legitimate recovery. When they realize that it was false optimism and that the Fed is going to do even more monetary stimulus because none of the other stimulus worked, right? And that's what they do in Washington. If something doesn't work, you don't reevaluate, you just do more of it and just assume it will

work if you do it bigger. So I think when that happens, you're going to see a lot of downward pressure on the dollar. It's going to really start to fall on foreign exchange markets, and that's going to have a profound impact on consumer prices, price of gasoline, price of food, stuff like that. And now the fed is going to be looking at cpi inflation which is much higher than it should tolerate but the fed can't do anything because the fed raises interest rates to fight that inflation the stock market will crash the real estate market will crash and all the big banks that we bailed out are going to fail again only now they're going to have even more debt so we'll be at an even worse financial crisis in 2008

so the fed can't let that happen so they got to print even more debt. So we'll be at an even worse financial crisis than 2008. So the Fed can't let that happen. So they've got to print even more money. But now the dollar goes down even more, and now inflation is even bigger. And maybe for a while the government will try to convince us that inflation is good for us and that we should be happy because at least we're not suffering deflation. But at some point you're going to reach a critical point where the Fed is going to have to either dramatically raise interest rates to protect the dollar and stop hyperinflation and allow the markets to implode and allow a much worse financial crisis in 2008,

or they're going to keep printing the dollar until they print it into oblivion, and then it's worthless, and then everybody is wiped out because no matter how much money you have, you don't even have enough money to buy a cup of coffee because the currency has been wiped out. Now, when you deal with currency, this is where it gets really weird with people. Most people don't even understand what a dollar bill actually is. And they think somehow or another, a lot of people think that it's based on something. That there's like a pound of gold waiting somewhere for your $100 bill or whatever. Well, it used to.

A lot more than a pound. I mean, a lot more than $100, obviously. But it used to a pound i mean a lot more than a hundred dollars obviously but well used to be right if you go back to the beginning if you go if you look at the constitution and you read uh you know article one uh section eight and article one section 10 you read them uh but it says that uh money is gold and silver and that's what's legal tender in the united states and up until uh 1971 uh that's you know we were on a gold standard. I mean, we were on a more pure gold standard before the Federal Reserve came in in 1913, but we were always on some kind of standard. So the first dollars were receipts for gold and silver. If you go back and you get an old

dollar from before, let's say you had a $10 bill. It would say on the bill, You know, let's say you had a $10 bill. It would say on the bill, pay to the borrower on demand $10. The $10 wasn't a piece of paper. That was a representation. It was an IOU $10. The $10 was the gold. There was $10 worth of gold on deposit.

And you could... Sitting somewhere. Fort Knox, right? Yeah, in Fort Knox. And you could take your $10 to the U.S. Treasury and you could say, give me my dollars. This is my receipt because it actually was an IOU. It was a Federal Reserve note, even though it was a note, but it was a note payable in lawful money. The lawful money was the gold or silver because there were some silver certificates, there were some gold certificates. But there was real money backing the notes, backing the currency.

And that money varied depending upon the price of gold and silver? Well, the price of gold and silver was the same. What your return would be? But your return never changed. Yeah, there was real value. Okay. And when we had real money, we had prices that went down a little bit every year because money gains value when it's legitimate. Right.

So if our money is illegitimate, how does our economy ever recover? Well, it's now counterfeit. What happened in 1971 when we went off the gold standard, right? The government basically repudiated its promises. So instead of the $10 bill saying we'll pay to the bearer on demand $10, it just says $10. You know, it's not, you know, it's kind of like if I go to a coat check and I give them, you know, my coat, and they give me a little claim check and says, I owe you one coat, right? You know, the claim check is just a receipt for the coat that the coat check has. But imagine if you went down there, and you gave them your claim check, and they just crossed out the I owe you one coat, and they just gave you back your receipt that said one coat.

Here's your coat. That's not my coat. Well, it says one coat, but it doesn't matter what it says. It's not a coat, right? The $10 bill, just because it says $10, it's not $10. It used to represent an IOU for $10. Now it's just a piece of paper with writing on it.

But it doesn't represent anything. But right now, all we have is this fiat money, which means just, you know, let it be made. It's just paper money. And the founding fathers, when they established... That's what fiat means? Let it be made? The car company? That means let it be made? I don't know.

Maybe. I don't know. But that's where Fiat comes from. It's a Latin word. Okay. It must be. But it's not like paper money is new, right? They had paper money before the United States existed.

In fact, we experimented with it in the Continental Congress. They issued something called the Continental, which collapsed, and they had an expression not worth the Continental. Continental, which collapsed, and they had an expression not worth the Continental. So people like George Washington and Thomas Jefferson and John Adams and Benjamin Franklin, these guys hated paper money with a passion. They knew how evil it was and how dangerous it was. They didn't want any paper money in the United States. They wanted us to be on a gold standard. And so we had a bimetallic standard with gold and silver, and it served our country very, very well. But unfortunately, we did not listen to the wisdom. We forgot the wisdom of the founders. And now we have the exact kind of fiat money that the founding fathers wanted to make sure we never had because they knew what a

disaster it would be. And we are going to have a disaster because we don't have real money. We have this phony money, fiat money, and it is the root cause of a lot of our economic problems. If we had honest money, we wouldn't have these problems. We wouldn't have this enormous government. We wouldn't have all this debt because it would be impossible for the government to have all this debt if they had to borrow gold. It is quite impressive when you look back at what the founding fathers predicted and what they were trying to ward against and protect us against. And what an amazing job they did in predicting it. They were very enlightened men.

They were very learned men. A lot of them self-educated, some went to colleges too. But, you know, and this is, you know, they were very, very bright men. It's unfortunately, with all the population we have now, I mean, there's no way that Congress today can come even close. I mean, maybe there's a couple of guys, but I mean, nothing mean nothing like i mean because we only had three million people back then and we had such a an intelligent uh group of men in congress compared to now we're drawing off a 250 million and we have a bunch of idiots okay what do we do about that there's there's no fort knox anymore there's no big fat pile of gold right well you know that you know well we where'd all that money go i don't know we claim that there is a bunch of gold there but

you know it's interesting that germany which you the United States, in addition to our own gold, right, we also store gold on behalf of a lot of other countries. So Germany a year ago asked for half of their gold back. They told the United States government, look, we want half our gold. And we basically told Germany, okay, but it's going to take us eight years to give it to you. Why? Because we've got to dig it out of the ground. I don't know. Now, meanwhile, it's been a year, and we haven't even come close to giving them one-eighth of it.

Good. Germany should watch its fucking mouth. How about that? You make some nice cars. Let's leave it at that. Don't get crazy. You guys are about that big. But, you know, they want their gold back because they don't trust the—

Theirs, ours, mine. When they die, who does it really? That's why, look, you know, I think people— The people asking don't live forever. You know, I own a lot of gold. When they die, who is it really? But that's why, look, I think people should own gold. The people are asking. Don't live forever. I own a lot of gold. Are you one of those Alex Jones guys?

You got gold in dried food? Well, you know- You store it? I got more gold than dried food, but I think gold is going a lot higher. I have a gold company. Europe Pacific Precious Metals is my gold company, but I recommend that people own gold. I own gold. I own a lot of gold mining stocks myself.

Do you wear any gold? Do you wear, like, fat chains around the house? No, I got a little gold in my watch. I mean, I'm not very flamboyant. You don't wear any ropes or anything like that? No, no, I'm not. Might be a good thing to have if the shit hits the fan. Well, look, I mean, you know, it's definitely valuable.

I don't wear my gold. I have it in a safe. Okay, so our money is not backed in gold. There is no more Fort Knox. We don't know what happened to all that? Well, I don't know. I don't know if it's there or it's not there. How do you not know, though?

You're the guy. Well, how am I supposed to know? I'm not privy to this information. Listen, ask me some questions about martial arts, and I'll give you some definitive answers. Yeah, but I've never been down to Fort Knox. I asked you about economy. No, no, but I don't know. Look.

You've never been there. I don't know. There are people who have wanted an audit of Fort Knox, but they haven't had one. Those motherfuckers. The government claims that the gold is there. I hope it's. There are people who have wanted an audit of Fort Knox, but they haven't had one. The government claims that the gold is there. I hope it's there. But as a gold investor, certainly if it's not there, the price of gold is going to go a lot higher, because

eventually the world is going back to a gold standard. There's no question in my mind that we will be back on a gold standard, not because we want it. The politicians will never want it, but they're going to be forced to adopt it because it's going to be the only way to end the chaos. But it's like a chaperone at a high school prom.

I mean, the kids don't want the chaperone there. Gold is the monetary chaperone. That's because they want to fuck. Yeah, and the central bankers, the government wants to fuck us, but they can't do it on a gold standard. Touche, touche. They can't do it when we're on a gold standard. That's why they don't want it.

That's why they want funny money. Right. I mean, your advice has nothing to do with the fact that you actually sell gold. No, no. I sell gold because I believe in it. I believe in it. See, I'm going to – see, I want to do the right thing for my clients. Sell them gold.

My brokerage clients. If I thought that they should own something else – I mean, oftentimes, you know, it's easier to sell people what they want than what you think that they need. I mean, I, you know, I actually built my brokerage business really in the late 1990s when everybody I talked to wanted tech stocks. And I used to spend all day and all night trying to talk people out of those stocks saying, look, this is a bubble. You don't want to buy this. This is what you need. You should buy this, you know, this company or this dividend, you know. And it was difficult. A lot of my friends were making a lot more money than I was back then because they were just

selling their clients what they wanted. But I make a lot more money than they do now because I took a long-term approach. I wanted to do what was right for my clients, not what made me the money in the short run. I was concerned about my reputation and building a lasting business beyond the tech bubble. You know, and I, you know, and, you know, it made it hard for me in 98, 99 and 2000. But, you know, and, you know, but now I'm getting the same kind of thing again, you know, where now a lot of people are buying these social media stocks and, you know, they're succumbing to the hype again. There's a lot of similarities between what's going on now in the markets and what was going on in the late 1990s.

You know, people forget the past. They keep reliving it, even if it's recent. It shows you how worthless our schools are. I mean, history, not only don't they know history of 50 or 100 years ago, people don't even know history from 5 or 10 years ago. That's how ignorant they are. What do you think about Bitcoin? What do you think about cryptocurrencies?

What do you think about emerging currencies? Look, there are a lot of people that are libertarian. There are some people that believe in hard money. There are people that believe in gold that are in Bitcoin. And I think that a lot of people who bought Bitcoin a few years ago, and I didn't buy it. And sure, I wish I had bought them because I would be selling them now. In fact, I would have already sold them. You would have dumped it already? Oh, is that because i think it's i think

it's a bubble i think that i think that bitcoins are gonna collapse though you hear with vegas casinos two casinos just started accepting bitcoins yeah but you know i think merchants starting to accept bitcoins are actually going to be negative for bitcoins not positive because well here's why you know when bitcoins went up from pennies a coin to $1,000, right, you really couldn't do much with them except hoard them. Before you go there, I'm sorry. I'm sorry to interrupt you,

but explain to me, what is it actually worth? What is a bitcoin? It's worth whatever somebody will give you for it. I mean, it has no actual value because you can't do anything with it. All you can do is give it to somebody else. So is it in ones?

I mean, is it in one Bitcoin, two Bitcoins? What is the volume? Well, they usually sell them in one Bitcoin. But you can break a Bitcoin up into like 100,000 pizza Bitcoins. Okay, but give me, how much is a pizza? How many Bitcoins is a pizza? Well, a fraction. Because right now an entire Bitcoin right now is, what, $950.

So how many pizzas you can get – a pizza is like $9.50. So you get like 100 pizzas. They don't have any other thing other than a Bitcoin? That's it? It's just a Bitcoin? Well, I mean you can get Bitcoin. I mean you can get fractional coins. You don't have to buy a whole coin.

Yeah, but they need to figure it out. You have to have like nickel quarter. No, it's just Bitcoin. You can have – I don't know. A deck of coin, a cent of coin. I don't know what they call it. So it's the exact opposite of pesos. Like a million pesos is like a dollar. But the important thing is that

you can't do anything with it. There's no actual value. You can buy drugs right now, right? Silk road? Yes, but you can spend it as long as somebody is willing to take it. Right. But there's no end user. It's not a commodity like gold. Isn't that the same with our currency currently?

Yeah, well, our currency is crap. So Bitcoin is crap and our currency is crap. Well, the difference between the crap the government issues and Bitcoins is the crap the government issues for now is legal tender. People will accept it. I can pay my taxes in it. I mean, I have a use for it. Right, but it's the government saying it's legal tender.

And the government enforcing... But being someone who's so anti-government as you, I would assume that you would... That's why I own gold. But you would enjoy something like Bitcoin coming along. But Bitcoin has... But it has no real value. I recognize that it could collapse. I don't...

There's no history... But if everybody agrees there's a value, isn't there a value? Just like we do with the dollar bill? But tomorrow, everybody can agree there's no value. See, gold was valuable long before it became money. Bitcoin had no value until it became money. But I don't think it can withstand the test of time. I don't think it represents a store of value.

But let me tell you why. But you say that, though, but we're not on the gold standard right now. So our dollars are essentially just like Bitcoin. Well, they're not just like it. They're not? Well, the government won't accept Bitcoins in payment of taxes. Not yet. The motherfuckers will cave in eventually.

But let me tell you, though, if you go, if I go to a store that accepts dollars and I pay with dollars, right, they don't sell my dollars. They use their dollars to pay their employees their wages. They use their dollars to pay their landlord the rent. They use their dollars to pay their salary. to pay their landlord the rent. They use their dollars to pay their salary. The employer, the owner of the business takes the dollars, pays his mortgage, you know, pays his tuition for his, I mean, everybody uses it.

Here's what's going on with Bitcoin. So a merchant decides to accept Bitcoin. They don't price their products in Bitcoin. What they do is they allow you to pay with Bitcoins using BitPay. But then what they do with those bitcoins the minute they get them they sell them okay so now the more merchants that accept bitcoins now all these bitcoins are for sale see before when very few people accepted them everybody was hoarding them and so the reason the price was going up is because nobody was actually spending or very few people but as more and more merchants accept them now people take bitcoins that they were hoarding and they go to spend them.

But now the merchants want to get rid of them because they need dollars or euros or whatever their currency is. Who is going to buy them? Meanwhile, if you look at Bitcoins for the past few months, they haven't been going up anymore. They stopped going up. I think it's a distribution top most likely. And I think the bottom eventually is going to drop out of the market. I think a lot of people who own Bitcoins are going to, you know, the fear is going to take over, not the greed. Right now, people who have Bitcoins, they think they're going to become billionaires if they just hold them long enough.

I think at some point they're going to be worried about losing what they have rather than getting more. And then they're going to start using them? They're going to try to get rid of them. Look, you know, now is it possible that Bitcoins go to $2,000, $3,000? I don't know. I mean, sure, it's possible. Is it possible that it becomes a viable alternative to the dollar? Well, no.

No. I mean, because, look, there's already – you go to this website called – it's coinvalue.com or some cryptocurrencies. There's like 60 or 70 digital currencies that have already been created. People talk about the fact that, well, you know, there's only 21 million potential Bitcoins that can be mined into existence. But what they don't say is there's an unlimited number of alternative digital currencies that can be created that are identical to

Bitcoin. Some might be better than Bitcoin. And so you can keep creating them. And so what does that mean? And people say, well, Bitcoin got here first. Therefore, it's always going to be the one that everybody wants. Well, does everybody use MySpace? Facebook wasn't.

There's a ton of them now. Look at how many cryptocurrencies there are. Do you use AOL as your internet provider? Always. I mean, they were first. I mean, just because you're first, I mean, it doesn't mean anything. Yeah, right. That's true.

This is all a bunch. Look, but to me, I see a lot of similarities in the people who are irrationally defending the Bitcoin to what I saw in the dot-com bubble or the real estate bubble. Look, I believe in sound money. I want to take power away from government. But I think a lot of people, if they get into the Bitcoin market now, they're going to lose a lot of money. Even if it goes higher first, I think eventually it goes down. Now, I know there's a lot of people that got in early

who have a vested interest in expanding the market so they can sell, they can cash out and actually convert their paper wealth into real things that they want to buy. And, you know, I know it makes me unpopular with some people because, you know, they want me out there. They want everybody in the hard money community, you know, but, you know, I am an equal opportunity bubble spotter. I mean, I'm not going to let my ideology get in my way. So if I see a housing bubble, it's a bubble. If it looks like a duck and it walks like a duck and it quacks like a duck, it's a duck. I don't care if I have something philosophically in common with people who are anti-Fed. I just don't think that Bitcoin...

Now, if you get a real digital currency backed by gold, I can be on board with that. Because if you go back, the original paper money was backed by gold, and it was issued by private banks, not a government. It was like the original warehouse receipt from a goldsmith. They had your gold, and they would issue an IOU, and it would circulate. But then you'd have to have a stockpile of gold somewhere. Yeah, but you'd have something real. Right now, you don't know. So you can't put your savings into Bitcoin at $1,000.

There's no history of value to Bitcoin. I mean, how much is Bitcoin worth? I mean, they mentioned some guy bought a house for $7 million worth of Bitcoins. Well, are you going to accept 7 million Bitcoins for your house? I mean, how do you know what those Bitcoins will be worth next year? Like, yeah, I sold my house for this pile of Bitcoins. The only reason you'll do that is because you can dump your Bitcoins on the market and get something else.

There's no real frame of reference. Well, this is very recent, though, and very new. How old is Bitcoin? They're just a few years old. Well, the dollar bill is how old? Well, the ones that are backed by nothing started in 1971. Isn't that like looking at a baby and go, this little motherfucker is not going to be shit. He can't talk. He doesn't know how to change his own diapers. He's a little asshole. He's never going to amount to anything. But the only reason

the dollar worked for a while, not backed by gold, and it hasn't worked very well, is because it had a history of being backed by something. So the public was kind of fooled. They were using currency backed by real money. But it's not anymore. Yeah. So as this little baby, this Bitcoin baby grows up, he's going to realize this dollar that everybody's been holding over my head as being superior is just older. Yeah.

Well, look, if you look at- It's like some old asshole that just happens to be your dad but doesn't know fucking jack shit about the way the world runs, and he's telling you how to live your life. Meanwhile, he's a fucking mess. Maybe Bitcoin's going to grow up. Maybe bitcoin's a little baby that doesn't know shit now but one day bitcoin's gonna grow up and realize you know what there's a better way well i think that yeah it's the people buying them that that would grow up but you know there is you you have people get used to it like if you look at the money that we have now the chain you

look at a quarter right you know you think it's you know you? You know, if you look at the ridges of a quarter, at the side of a quarter, you'll see that it's got these ridges on the sides. And people say, well, why are they there? Why are there these ridges? And why is a quarter even silver in color? Because it's mostly made of copper, and it's coated with a little bit of zinc.

But why does the government go through the process of binding zinc to copper, and it's coated with a little bit of zinc. But why does the government go through the process of binding zinc to copper, and why do they go through the expense of making all these little ridges on the sides of the coin? Well, it's because the coins were originally made of silver, and the ridges were there, so you couldn't clip the coin, because when it was valuable silver, people would try to take some of the silver off the coin and then spend it. But when the, but when the government, nobody is going to clip the copper.

Is that why those old coins are always fucked up and they're never like totally circular. No, no, no, no. Like old Roman coins. They're just worn out.

They're just worn out. Most likely if it's a Roman coin, it's, it's worn out. But you know, but when the government originally made, uh, quarters, when they took the silver out, they made it look like the old silver coins, even though there was no silver in there.

It was like people were used to silver coins. And so when the government debased them, which is that's where the word debase comes from. The Romans is when the Romans, you know, debased their currency by putting base metal into the currency instead of gold. Right. So but they dumb you down over time. But now our money is just tokens. We don't have any real money. And we have fiat.

We have counterfeit paper. We have tokens for coins. We have, you know, we have this monetary system that is the root cause of, you know, all these problems that we have. And I think it's all coming to a head. I think, you know, we're at the end of the game now and it's about to blow up. And, you know, 2008, that financial crisis, that was the beginning of the end. It wasn't the end of the game now, and it's about to blow up. 2008, that financial crisis, that was the beginning of the end. It wasn't the end of it.

The real crash is coming. That's why if you go and look at my book, the book that I wrote, Crash Proof, that came out in February of 2007, the crash that I was writing about isn't the one that happened in 2008, even though I predicted that crash. The crash that I was worried about was the one that's coming, the one that was going to be a consequence of what I knew the government was going to do to artificially stimulate the economy after the 2008 financial crisis. I was against the government bailouts and the stimulus before the government even knew they were going to do it, because I knew exactly what they were going to do.

And unfortunately, I was right about that. And that's, you know, my book that's out now, my most recent book, other than the one I just gave you on how an economy grows and why it crashes. The real crash, that's out. That's coming. Take a breath. People, we're not going to buy your book. How an economy grows and when it crashes.

And why it crashes. Why it crashes. Okay. How an economy goes and why it crashes. Peter Schiff, S-C-H-I-F-F. Buy it. Go to Amazon right now, you fucks. All right.

So we've figured out a lot of things. We figured out fuck Lake Michigan. Well, that was your idea. That's my fake scenario. We can't write kill off Lake Michigan. I love Lake Michigan. Don't get me wrong. Okay.

The Department of Public Education, or Department of Education rather, Department of Energy, the government itself needs to shrink down. We need to have a gold-based economy. Is it possible? Gold-based monetary system. Real money. Gold-based. Right.

We've got to follow the founding fathers. Not the guys in Congress now. They don't know what they're talking about. What do you think about resource-based finances? Is it possible to have other resources and have our economy based or our finances based on other resources? Not really. I think the reason that gold became money, and remember, government

didn't make gold money. The people made gold money, and governments just recognized that fact. It's because gold was better suited. It was a better commodity to serve as money than any other commodity. How did they originally get people to give up things for gold, though?

Back when donkeys were worth a lot, you could carry things for your donkey. How did someone give you a stupid piece of metal to give them their donkey? People always valued gold all around the world. I don't know, because it's pretty. It's a very good metal because it's very good. It's malleable. It doesn't tarnish. because it's a very good metal because it's very good.

It's malleable. It doesn't tarnish. You know, like if there's a Spanish ship that sinks 500 years ago, if you can find the gold, it's in perfect condition. And it's fairly rare. But it's also you can take gold and you can make things out of it because it's very easy. You can smash it down into a very thin strip, very fine pieces. So it's good for jewelry.

It's good for, you know, you can make dishes. I mean, there's a lot of things that it's useful for. But even before we had electronics, it was a symbol of wealth, right? If you were wealthy, you had gold. Either you wore gold or you had it in your house. You had gold, you know, vases or you had gold, you know, in gilded wood. You know, gold was just, you know, people valued it everywhere, and you can trade it. And then it became money because people realized that whatever you needed,

you can pay for it with gold. Even if you didn't need the gold, you can give it to somebody else who valued it. And it's scarce. It's not like there's gold everywhere. You can't just strip over it. So it's rare, and people like it. What if they find a new pocket of gold, though, and it's worth a lot of shit? But they're not going to.

You know, like they found this underwater freshwater lake in Antarctica under the glaciers, gigantic freshwater lake like the size of an ocean. What if they dig in and they find some gold somewhere? I'm like, oh, shit. Gold is like aluminum. It's everywhere. But they haven't. They haven't done it yet. They're not going.

There are people saying, well. I'm a devil's advocate kind of guy, Peter Schiff. Do you understand this? You got people saying, you know, maybe there's gold in outer space. Maybe there's gold in asteroids. Yeah, well, how expensive is that going to be to get? Well, you know, that's the fringe conspiracy theory of why we like gold in the first place. It has to do with the Anunnaki.

Do you know the whole story of Zacharias Hitchin? Do you know who that guy is? Nope. Biblical. He shouldn't. I shouldn't even tell you. But he wrote a series of books deciphering the Sumerian text, the oldest written language that we're aware of. And one of the things that he believes the Sumerian text depicts is that the Anunnaki are this race of beings that created human beings.

And they live on a planet that's in an elliptical orbit that comes around near Earth every 3,600 years, and they need gold to sustain their atmosphere. They suspend particles, reflective particles, because they've ruined their atmosphere, sort of like the way we've ruined ours, like the way China's fucking up. Well, they created a bunch of computers over there, and they fucked up their atmosphere too. So they have to come over to the Earth and take gold, and that's why we've always used it as currency. But I would surmise this.

They created us out of monkeys. My guess would be, and I'm sure there's intelligent life on other planets. We're not the only planet to have evolved the way we did. But I bet that if there's intelligent life on other planets, that they're going to value gold. If you can somehow go to another planet, if you can bring gold, you can probably buy something. If you brought a bunch of paper Federal Reserve notes, no one's going to give you anything for them. Do you think if there's intelligent life on other planets, it's a million

years ahead of us they have currency? And it's based on gold? Well, I mean, ahead of us in what way? Just everything. They've been alive longer. Well, you know, but just because they've been around longer doesn't mean that they've advanced more. But if they have advanced more, chances are they do have sound money.

Because I do think that if you have free markets and sound money, you're going to achieve a lot more. And I can only imagine how much more we would have achieved in America had we had more freedom and sound money for the past several decades. I mean, I think it would be night and day where we would be as a society. I love how you go from aliens to free market. Peter Schiff says aliens equal free market. If they're advanced.

I can imagine what you would do with Bigfoot. No, no, that's if they're advanced. I mean, there could be aliens that are living in the Stone Age. There might not be. That's true. I don't know. I mean, I know. Look, nobody is advanced enough to get here, right?

No one's visiting us, or at least I guess if they are that that advanced they're advanced enough to not let us know that they're here. So all these people that are talking about UFOs are liars? Is that what you're saying, Peter Schiff? They might have a vivid imagination most likely. Could be. I'm with you on that, unfortunately. It's not impossible. I mean, I'm not going to be naive

to think that out of all of the billions of stars and the billions of planets that may be orbiting those stars, that we are the only one that evolved intelligent life. That's probably not the case. The universe is vast and the distances that you're talking about are vast and whether we'll ever be able to navigate them, I don't know. What do you think about the successful cultures that haven't relied on

resource-based economies, or haven't relied, rather, on... What do you mean by resource-based? What I mean by... Well, I'll explain. Obviously, we're dealing with primitive tribes and people that live in indigenous cultures, like, say, in the rainforest, or what have you. Their economy's not

really based on money. It's not based on gold. It's based on what they can get from their environment. Their lifestyle, rather, is based on what they can get from their environment. How they stay alive and their happiness is based entirely on what they can get out of their atmosphere, the world that they live in, the jungle or what have you. I mean, isn't that like a more efficient and more natural way to live than the way we're living now with these propped up ridiculous economies and well the way we're living now employment well the way we're living now is not natural because we have all this government that we don't need but we're talking

about a primitive society i mean the only way and that's why this how an economy grows and why it crashes i start this book off three guys living on an island and they've got nothing that's exactly what i was asking and so this is where it starts because they're fishing by hand and the way they, the first improvement is somebody invents a net, you know, and somebody comes up with a net that can catch more than one fish a day. But the way humans advance is they come up with capital. They come up with equipment that can increase their productivity so that they can produce more stuff with less effort. That's the only way that we can improve our standard of living is to find ways to create tools. I mean if humans never had any tools, well, we would still be living – I mean like chimpanzees or even chimpanzees have tools. But I mean –

Not a lot. But they got something. They never have the right screwdriver. But at least they got something. They got a stick. Not a lot. But they got something. They never have the right screwdriver. But at least they got something.

They got a stick. But the reason that we have an advanced society is because we have tools, because we were able to improve upon our hand. If all we had as humans was what we can do with our bare hands, if that's all we could do, I mean, we can only eat what we can kill with our bare hands. I mean, we would – Well, it's an interesting example because a lot of indigenous cultures have tools they've actually created. They teach each other how to create those tools. Yes.

They still don't have money. Well, money was an invention, just like anything else. There was a purpose to me asking this question. The purpose was, if you were going to go to a culture, say like the Native Americans when the Europeans arrived,

and say you weren't an asshole, you didn't give them polio and diseases, and you didn't kill them all. If you were going to try to create an economy from scratch based on people who were essentially living off the land, how would you go about doing that? Well, but first remember, the Native Americans, you know, they had money. They had

wampum, right? What was wampum? What was that? It was shells. Shells. Yeah. So they had money. They had essentially bullshit based on nothing, just like us. No, but they valued them. They were pretty. They could make necklaces out of them. I mean, Right, but did wampum, was there like a just like us. No, but they valued them. They were pretty. They could make necklaces out of them. I mean, but- Right, but did Wampum, was there like a pile of shit that like-

No, but look, money is a great invention because without money, it's all barter, right? And so barter is an inefficient way to organize an economy because, I mean- Too much time is based on doing that and not enough gets done. Right. I mean, look, you've got your podcast, right? And let's say you've got... My podcast has me. Right.

But, I mean, you have sponsors. They pay you money. Bitcoins. Whatever they pay you. But if you had a barter, you would have to find a sponsor that actually had the actual thing that you wanted. That's how we get C2O coconut water. You know, instead of... Right.

But instead of money. Money makes transactions a lot more efficient. Yes. And money allows for loans because I can loan you money, you can pay me back so we can have capital investments. The economies function much more efficiently with money than through barter. So money was an improvement. It was an advancement. Just like plumbing was an advancement or electricity was an advancement or the wheel was a great investment. All these things, money was a great invention of mankind that allowed for a more efficient allocation of resources, a better distribution of labor. So if you say – if you take money away from a society, you're going to make that society less efficient and less productive, and so the people are going to have a lower standard of living.

Peter Schiff, you're a bad motherfucker, but we're out of time. We are. You could do this for about 1,000 hours, couldn't you? You could keep going. I could do this with you. I have more questions. You got plenty of scotch there. Yeah, we could get liquored up and do round two.

I just might eventually have to take a bathroom break. There would be something that would have to happen, but listen, I really appreciate you enlightening us. I really appreciate you tolerating my devil's advocate questionnaire. I think that this is a fascinating episode for a lot of people because a lot of people like me are very uneducated when it comes to finances, don't really understand it, and never really have the opportunity to sit down with a guy who knows as much as you do.

So I really thank you very much for that. I really appreciate it. It was a lot of fun. I appreciate it coming on. So follow Peter Schiff on Twitter. Go to his YouTube page. What is your YouTube page? It's called The Schiff Report.

The Schiff Report is fantastic. I have watched many videos myself, but yet I am still retarded. But I'm learning. I'm trying. Keep watching. I've learned a lot today, I think. I think this has been very enlightening for me and for a lot of people. So that is the best way to follow you, The Schiff Report.

The Schiff Report on YouTube. But, you know, the Schiff Report on YouTube. But, you know, I do a radio show, SchiffRadio.com. I do two hours a day, five days a week. People can listen live from 10 a.m. to noon Eastern time. They can just subscribe. They can become a premium member. There's a free trial they can try. Or, you know, you can just listen any time.

Because whenever I do a live show, we then repeat the broadcast for 24 hours until the next live show. So if you can't listen live, you can just go to SchiffRadio.com and just listen at your leisure. SchiffRadio.com. Educate yourself, ladies and gentlemen. Understand how you've been fucked and then live the rest of your life in a paranoid frenzy trying to prepare yourself for the imminent demise that Peter Schiff has described. There is no escape. Be nice to your neighbors. Collect water.

Find a nice stream. Learn how to hunt and fish. no escape. Be nice to your neighbors. Collect water. Find a nice stream. Learn how to hunt and fish. All right, we love the fuck out of you people, and we'll see you next week. We have a lot of podcast shit coming at you. This weekend, I will be in Chicago. I'm at the Chicago Theater Friday night with Ari Shafir. There's a few tickets still available.

And then the weekend after that, I'm at the Grand Ballroom in New York City, and that shit is sold the fuck out. We will be talking about Bitcoin on Monday with an actual expert, unlike myself, Andreas Antonopoulos. He knows a lot about Bitcoin. He's going to be pissed off at Peter Schiff.

He's going to be really fucking mad. No, I don't know. We never even got into Obamacare. We forgot about that. Yeah, Obamacare. Round two will be Obamacare. Thanks to Squarespace. Thanks to all the people that won the Squarespace contest. You will all be contacted, and you will get a free year of Squarespace and a higher primate t-shirt and a bunch of swag. And onnit.com, O-N-N-I-T.

Use the code word ROGAN to save 10%. We'll see you guys tomorrow, next week, whatever it is. Good night.