The Pomp Podcast - #851 Is The U.S. Dollar Reserve Status At Risk? w/ Peter Schiff

Episode Date: March 8, 2022

Peter Schiff is everyone's favorite gold bug. He is the Chief Economist & Global Strategist at EuroPac and Founder of Schiff Gold. In this conversation, we discuss Federal Reserve policy, monetary stimulus injected into the global economy, how the Russia/Ukraine conflict affects the U.S. dollar, and of course and Bitcoin vs. Gold debate. ======================= LMAX Digital - the market-leading solution for institutional crypto trading & custodial services - offers clients a regulated, transparent and secure trading environment, together with the deepest pool of crypto liquidity. LMAX Digital is also a primary price discovery venue, streaming real-time market data to the industry’s leading analytics platforms. LMAX Digital - secure, liquid, trusted. Learn more at LMAXdigital.com/pomp ======================= The Pod Pro Cover by Eight Sleep is the most advanced solution on the market for thermoregulation. It pairs dynamic cooling and heating with biometric tracking. Go to https://www.eightsleep.com/Pomp to check out the Pod Pro Cover and save $150 at checkout. Eight Sleep currently ships within the USA, Canada, and the UK. ======================= The world's 2nd largest crypto exchange, OKEx, has dropped the "E" to become OKX, reflecting its evolution from a traditional crypto exchange to a comprehensive, cross-platform crypto services provider. With OKX's decentralized platform and Web3 wallet, MetaX, you have full custody over your crypto. Explore DeFi, NFTs and play-to-earning gaming with the world's most powerful crypto exchange. Visit OKX.com to learn more. =======================

What's up, everyone? This is Anthony Pompliano. Most of you know me as Pomp. You're listening to the Pomp Podcast, simply the best podcast out there. Now let's kick this thing off. Peter Schiff is everyone's favorite gold bug. He's got Euro Pacific, Schiff Gold, and a number of other companies. In this conversation, we talk about Federal Reserve policy. We talk about the monetary stimulus that's been injected into the global economy over the last two years. We also talk about the Russia-Ukraine conflict, gold, Bitcoin, and much more. I hope that you enjoyed this conversation. I definitely did. Before we get into this episode, I want to quickly talk about our sponsors.

First up is LMAX Digital, the number one institutional crypto exchange. They offer clients the deepest pool of crypto liquidity on the planet, underscored by a 100% uptime track record through volatility spikes. They leverage LMAX Group's liquidity relationships and ultra-low latency technology. LMAX Digital is the market-leading solution for institutional crypto trading and custodial services. If you've never heard of LMAX Digital, it's probably because you're not an institution. They have no retail, only institutions. They feature a central limit order book streaming spot Bitcoin, Ether, Litecoin, and Bitcoin Cash, all paired with US dollars, euro, and yen. LMAX Digital, they're secure, they're liquid, and they're trusted. Learn more

at lmaxdigital.com slash pomp. Again, lmaxdigital.com slash pomp. This episode is brought to you by OKEx. OKEx has dropped the E to become OKEx. Founded in 2017 with a mission to deliver a cutting-edge crypto trading experience, OKEx, the world's second-largest crypto exchange by trading volume, has since expanded its scope alongside the wider industry, adding features from all corners of crypto. If EX is about exchange, X is about intersections. Cross-chain, cross-functional, cross-platform, an interoperable future that's not siloed into isolated platforms and blockchains. The name change and the new look and feel represent OKEx's ongoing move towards decentralized finance. With OKEx's decentralized platform and Web3 wallet,

MetaX, you have full custody over your crypto. Connect MetaX in your browser or within the OKEx app to explore DeFi, NFTs, and play to earning gaming, the world's most powerful crypto exchange. Whether you're just learning about crypto, you're a seasoned DeFi degen, an NFT enthusiast, or a pro trader, you're all invited to a better future. Go check it out today and let me know what you think. This episode is brought to you by Eight Sleep. Eight Sleep is the single best product that I have purchased over the last three years. It completely changed my life. I'm not joking. Pay attention. The Pod Pro Cover, which goes over your mattress by Eight Sleep, is the most advanced solution on the market for thermoregulation. It pairs dynamic cooling and

heating with biometric tracking. You can go to eightsleep.com slash pump to check out the Pod Pro Cover, and you save $150 at checkout. They currently ship within the United States, Canada, and the UK. And I told you, it changed my life. It helps me sleep deeper, helps me sleep longer. I feel much more refreshed, and I have better energy. You want to know how I have relentless energy every single day? It's because I sleep on an Eight Sleep. Seriously, go check it out, eightsleep.com slash pomp today. All right, let's get in this episode. I hope you guys enjoyed this one. Anthony Pompliano runs Pomp Investments. All views of him and the guests on his podcast are solely their opinions and do not reflect the opinions of Pomp Investments. You should not treat

any opinion expressed by Pomp or his guests as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his personal opinion. This podcast is for informational purposes only. Ladies and gentlemen, please, I want to present you my friend, Peter Schiff. Peter, how are you? I'm well, except I got a sore back. I hurt my lower back the other day, probably lugging around all that gold all right before we get started i gotta ask a question when you get a hurt back we all sleep on eight sleep mattresses do you have eight sleep

um i don't know i have a mattress does it get hot and cold i don't i don't i don't have eight people in there with me though so i'm not having as much fun as you but does it get hot and cold that's the key the mattress yeah thermoregulated you know what that means no no i don't have what are you are you selling that are they a sponsor they're a sponsor good job peter oh pass the first test can you hook me up pump can i get the insider deal i'm not i'm not buying you shit you're rich gold hit 2000 so you're double rich now so you can afford your own well i need an extra big mattress to stuff my gold under there you can heat it up too and maybe you could you know do stuff with it yeah sleeping on a mattress of bitcoin but

i didn't get any comfort out of that all right all right let's get into serious though you should get an eight sleep mattress though by the way i don't know what your sleep routine is you look like your back hurts you're a little tired i'm tired everyone's tired because a lot of stuff going on in the world. Let's start first with your read on the Russia-Ukraine conflict. Russia has $650 billion or so of foreign reserves and also gold. What happens now that the United States and allies have decided to kick Russian banks off a swift, seize and freeze foreign reserves, etc.? What are the implications of the sanctions that we're watching play out right now? Well, look, as far as the broader, you know, big picture, long term implications, and what it really portends for the

dollar, because I've thought the dollar's days as the primary reserve currency were numbered anyway. But this simply highlights the, you know, the risks that other countries take by basically relying on the US dollar and turning over the global financial system to the US and just kind of allowing the dollar to sit at the top of this system, which gives tremendous power to the United States, not only in that Americans get to live well beyond their means, we could print money and buy stuff. And it's a lot harder to make stuff than print money. I mean, anybody can print money as long as people are willing to accept it. But producing goods, quality goods, requires a lot of resources.

You need capital, which means you need savings. You need skilled workers. So a lot goes into that. And all we do is just create numbers on a computer and we get to enjoy all these goods. Our trade deficits right now are just through the roof. They are all-time record highs. We're doing over $100 billion a month in merchandise trade deficits.

None of this would be possible but for the dollar's reserve currency status. But right now, you have a situation where Russia is being punished. Whether they deserve to be punished or not is completely a different argument. I'm not trying to defend what Putin is doing. I'm just pointing out that if you're another country or you're China, for example, and you're looking at the way Russia is being punished and you're thinking, I don't want to be in that situation. I don't want to be vulnerable.

I don't want to tie a noose around my neck and throw the other end of the US and hope they don't yank it. So China's probably thinking, we need to get rid of a lot of these US dollars. We need to hurry up and get away from this system, get away from all of these transactions that are in US dollars. So we're not dependent on that ability to access these networks. And the Chinese are sitting on trillions, trillions of dollars in reserves, a lot of it invested in U.S. treasuries.

I mean, what if the U.S. government decides that it doesn't like something that China is doing and we're not going to pay you? We're going to default on the treasuries that you own and we're going to freeze your assets. So I think this is just going to accelerate the movement out of the dollar, which is going to bring forward the huge problem. You know, Ben Jerome Powell mentioned the other day at his conference hearings in front of Congress, somebody asked him, you know, what would it mean for the U.S. if the dollar was no longer the world reserve currency? And his response was, well, you'd barely notice the difference, which shows you how little he understands the benefits that are derived to the United States from enjoying that privilege and how dramatically our standard of living would collapse if that privilege were to be withdrawn. OK, so I think that a lot of what you're saying here, both the Bitcoin and the gold community are pointing and saying, like, hey, this has got long term implications that either one may not be understood or two may be way worse than we're willing to admit to ourselves now.

Their tradeoff with the long term implications is the short term need to address the current situation. And so I likened this to back in March of 2020, April and May, where central bankers and politicians came together and they said, hey, there's a pandemic going on, there's a financial recession that is underway, we feel the need to make the trade-off between the short-term pain mitigation and whatever the long-term consequences are, we'll deal with those later. now you me many people in the gold and bitcoin communities all yelled and screamed and said hey the long-term implications of this are going to be really really bad we should be more thoughtful about what actions we take in the short term they didn't do that they ended up going ahead and pumping trillions of dollars into the economy manipulating interest rates doing all the asset purchases etc we then saw that play out that was and that was the worst possible monetary fiscal response they should have done the opposite they should have recognized a contraction in

economic activity required a contraction in money supply so that prices would be stable and so that we would encourage people to consume more while they were producing less. We needed people who were less productive to reduce their consumption. You know, we needed to sacrifice in order to win a war against a virus the way we've sacrificed in the past to win other wars. Or we should have found another way to do it. I mean, if we weren't willing to pay the cost, then we shouldn't have had the lockdowns. We should have found a different approach to dealing with the health threat. But if we wanted to do it the way we did, if we wanted to send everybody home and have nobody go to work and nobody produce, then we had to accept the fact that a severe recession was going to accompany

that and not try to have our cake and eat it too and say, hey, nobody's going to work. We're all going to stay home, but we're not going to have a recession because we're going to print all this money and let everybody go and spend it. That was the worst possible combination of policies. And I was very critical of it when it happened. And now we're just seeing the beginning of the results. This isn't the end. We're going to see much bigger increases in consumer prices in 2022 than we saw in 2021. And we're going to see probably even bigger increases in 2023. I mean, this is the tip of an iceberg. All right. So if we look at what they did in March, April, May, and all the way through 2020 into 2021, we now are seeing the impacts of that to your point, 40 year high in

inflation. Yeah, yeah, yeah. When we start to more than 40, you know, it's because they're not measuring it right. You know, we're not using the same CPI we use 40 years ago. Of course. Now, Now, if we look at what's going on in terms of these sanctions, I think a very similar type of framework is playing out where we're trying to mitigate short-term pain at the expense of long-term implications. And so what those long-term implications are you described? Help me understand when we start to also think not just of the currencies, but it seems like we've made in the past short-term decisions at the expense of long-term implications around oil and natural gas. And we now have seen the United States and many other countries give up energy independence or slow down their pursuit of energy independence for environmental reasons or elsewhere. And now it seems like Russia is in a very unique position. They're the third largest oil producer in the world.

They produce 17 percent of all natural gas in the world. And at the same time that we are trying to sanction them and be quite abrasive from an economic and monetary standpoint, we're still having to buy much of their oil and natural gas because all of these countries are dependent on it. What do you think happens to oil prices and gasoline in the United States or other consumption globally for that type of commodity? Well, prices are going up. I've been saying this for years. We've been underinvesting. And, you know, the politicians have been trying to push us into this green direction prematurely. I mean, you have to let the free market dictate the type of energy that you're going to use.

And if you're trying to force uneconomical forms of energy on the public, there are going to be ramifications. Now, certainly in the long run, you know, humanity is not going to exist on fossil fuels forever. Right. At some point, we won't use them at all. But I don't know when that point is, but I know that we're nowhere near it now. I know that the science and technology hasn't advanced to the point that we can move away from it. But, you know, I mean, at one point, I mean, all of our fuel was coming from whales, right? How would we get oil? We were harpooning whales, right?

But we got oil and natural gas. We didn't have to do that anymore. So that was a big positive, I think. Most people don't want to go back to the days of whaling. to try to get light. But at some point, there's gonna be more stuff in solar and wind, or who knows what they're gonna do. But right now, oil and gas, coal, those type of fuels

are still the most economical ways of generating the power that we need. And to the extent that we haven't been developing it as much as other countries, that is a problem. And the governments have created these barriers. And that the result of that is a lower standard of living. You know, if we're going to go for the Green New Deal or anything like that, the public has to know that there's a huge cost associated with that.

You can't just, you know, they try to market it as if it's going to be great news. We're going to have this Green New Deal and everybody's going to be better off. No, everybody's going to be worse off. That's the trade-off. You want to go green, you know, you're going to go poor because you're not going to have the standard of living that you have when we're not green. But the real problem is not going to be these prices going up as far as inflation is concerned. The big increase we're seeing in food and energy prices, this is going to cause a recession.

This doesn't cause inflation because as food prices go up, as energy prices go up, consumers have to spend more of their incomes on those necessities. They don't stop eating. They still need to heat their homes, electrify their homes, they need to drive. So money is going to be spent at the supermarket, but that money can't be spent someplace else. And it's the reduction in other spending that ends up causing recession. Then, of course, the Federal Reserve responds to that by printing more money. And that's where the inflation comes from, not from the isolated increase in certain

prices but from the fact that the federal reserve will end up compensating for that in fact in many cases what happens is oil prices go up food prices go up and the federal reserve thinks oh we need to print more money so people can afford to pay those higher prices and so but now that drives the prices even higher because we don't need more money we need more food we need more energy but the federal reserve doesn't create any of that it just prints money so when you start to think about whether it's oil or food. And obviously there's a lot of talk about fertilizer, wheat, et cetera, coming out of these regions as well. I've seen literally people on Twitter already talking about there's going to be a global famine. I've seen people talking about how oil could continue upwards to

$150, all kinds of things that whether they're crazy or not, right, it is less important as you're talking about a systemic misunderstanding of what to do in these situations. Your thought processes, as these commodity prices spike, the way to solve it is not printing money. It's actually to flood the supply side of the equation, to put so much supply into the market to drive those prices back down. You need more supply, but that's not going to come from government policy. It's going to come from the free market. It's going to come from the market responding to the signals that are being sent. If prices are up, farmers or energy industry, they're going to want to ramp up production in order to get those prices.

I mean, if they don't have any confidence that the prices are sustainable, then they may be reluctant to bring those resources on. But remember too, you can't just snap your fingers. A lot of this stuff takes years to bring the capacity online from when they make the decision to do the investment. But these trends were in place,

I mean, before Russia invaded the Ukraine. So you're just accelerating trends that were there anyway. And what's really going to kick it into a higher gear is going to be a reversal of fortune for the dollar, because these big commodity increases that we've had, including gold's move this morning above 2000, it wasn't able to hold it this time. But I think the next time it will, and maybe it'll be up there later today. We'll see. But these trends were already in place.

But when the dollar starts to fall, which I think is the bigger move, this is the head fake again, suckering people into the dollar. But when the dollar tanks, that's going to send commodity prices into another gear on the way up. And I don't know what the catalyst is going to be for the dollar tanking. I mean, clearly, if Powell pivots, Powell just finished reassuring everybody that come hell or high water, the Fed's hiking rates, 25 basis points later this month, and then it's going to keep on raising them.

Of course, you're talking about nothing. You're talking about spitting in the ocean. It's not going to have an effect at all on inflation. But there is the perception among traders that, oh, we have this hawkish Fed that's fighting inflation, which it's clearly not doing. But at least it's pretending it's going to do it, even if it's not pretending with enough firepower. But the markets don't seem to care about that. But it's hard for me to believe that if the markets keep tanking, and I think the U.S. market has barely started to fall.

I mean, the U.S. market was going down before Russia, just based on valuation and based on the direction of rates. But now when you throw in what's happening around the world, the carnage in Europe, what's happening in the banking sector, which obviously is going to impact the US. I mean, we have the makings of a financial crisis already, and the Fed hasn't even raised rates yet. But when we start to see even weaker economic data, is the Fed really going to start hiking into this data? I mean, we may have already entered a recession.

I mean, normally it's the hikes that cause the recession. You don't start hiking during the recession. By the time the hikes cause a recession, the central bank is scrambling to reverse the hikes. And we haven't even started yet. But at some point, there's going to be this pivot back to easier rather than tighter, even though tight is not tight. It's less loose.

But we're going to go from less loose to more loose. And somewhere along the way, the bottom has to drop out of the dollar. And then you're going to see commodities really take off. And of course, the price of gold, the price of silver, that's when they're going to go ballistic. Now, as far as Bitcoin is concerned, Bitcoin has got nothing to do with any of this. Bitcoin marches to the beat of its own drum. Actually, if you listen to the music, it marches to the same beat as the Cathie Wood

ARK Innovation Fund. It's just an overvalued asset. In fact, Bitcoin is the epitome of overvalued assets because it has no value whatsoever. So any price above zero represents overvaluation. But I think the air is coming out of that bubble. But, you know, it's not too late, Anthony. You can get out. You know, you're way above zero.

You're still, you're barely below 40,000. And gold is still below 2,000. You can get a lot of gold for your Bitcoin right now, right? You got 40,000 Bitcoin, 2,000 gold. You can get 20 ounces of gold for a Bitcoin. Is that the math? You would sell your gold for Bitcoin. I know you would.

All right, hold on a second. No, no, no. Hold on, hold on. Before we talk about, hold on. Sell your Bitcoin. No, no, no, no, no. Buy some real, real money. Before we talk about Bitcoin and gold for a second,

I saw this meme Sven Henrik posted on Twitter today. And I feel like this is just like, this is the meme to describe the situation right now. At the top, you've got the first shooter laying on the ground saying inflation, war, energy crisis, stagflation. And on the bottom, you got Jay Powell shooting back at 25 pip rate hikes.

And to your point, it feels like that is the situation is there's this massive macro kind of chaos, uncertainty, complexity, just all these factors working against the Fed. And the Fed is talking about 25, even 50 basis point hikes. Does it have an effect? No, it's psychologically. Look, what's bullish for gold is negative real interest rates. And none of these rate hikes that the Fed is contemplating get rates even close to zero.

They're not going to be positive. So if you're already inclined not to own dollars because rates are negative and you want to own gold, making rates slightly less negative doesn't change the dynamic. You're still losing money holding dollars. But the reality is they're not even getting less negative. They're getting more negative. because inflation is accelerating faster than the Fed's rate hikes. I mean, by the time the Fed hikes rates, whatever it is, in a week or so, by the time they raise rates to 25 basis points,

real rates will be a lot lower than they were when the Fed first started talking about that hike because between the time they talked about it and the time they did it, inflation got a lot worse. I mean, let's say they get to 1% by the end of the year. They'll be further behind the curve than they are now. they need dramatic rate hikes, but the economy can't withstand them. You know, he said in that Senate hearing that he was prepared to do whatever it takes to fight inflation, just like Paul Volcker. Well, that's not true. If he was going to do whatever it takes, he would have already done it.

The reason he's not doing what it takes is because he can't. In fact, there was another congressman that asked him, how are you going to fight inflation without hurting the economy? And instead of being honest and saying, well, I can't, we're going to hurt the economy. There's just no way around it. He said, well, we're going to do it carefully. We're going to raise rates, but we're going to be very careful. Well, I mean, what does that mean? That means that you're going to raise rates, and then the minute you see there's a problem,

you're going to stop hiking. I mean, saying that you're going to be careful when it comes to rate hikes so that you're not going to hurt the economy, and then saying you're going to do whatever it takes to fight inflation, those are mutually exclusive concepts. You know, one of them is a lie. And, you know, my money is on the do whatever it takes. I call BS on that. There's no way they're going to do whatever it takes. They won't even come close to doing what it takes, which is why you got to get out of U.S. dollars, you know, and get into something safer. And that does not include Bitcoin because Bitcoin is not safer. Bitcoin is pure risk.

I mean, that's part of, you know, all of what Bitcoin was marketed to be. If you look at what's happening, it's failed in every aspect of what it was supposed to be. I mean, it's certainly not digital gold because it trades nothing like gold. If anything, it's the opposite of gold. If you want to know what gold is doing on a given day, look at Bitcoin. Bitcoin is down. Gold will be up. Same thing. If you want to know what Bitcoin is doing, just look at gold. You can pretty much figure it out because they're almost mirror images of one another.

But Bitcoin is also not non-correlated. They said its beauty is it's not correlated. Well, it's got almost 100% correlation to the riskiest tech stocks in the market. So it's like buying any of the stocks that Cathie Wood owns in the ARK Innovation. So it's not non-correlated. It's not digital gold. It's certainly not a safe haven because it's going down during times of turbulence, not up.

It's not an inflation hedge. It's nothing. There is no valid role for Bitcoin in anybody's portfolio. All you can point to is that, well, if you bought it 10 years ago, you're way ahead. Sure. But if you bought it last year, you're way behind. And most people who bought Bitcoin didn't buy it 10 years ago. I mean, maybe you did, but the vast majority of people who own it just got in and they're getting killed. And even if Bitcoin drops right now, it's like, what, $39,000, $38,000.

Look, if it drops in the next few weeks down to $10,000, you can make the same argument. Well, if you bought it 10 years ago, you're way ahead. It's the best performing asset. So what? What difference does that make to the people who bought it over the last few years? And when Bitcoin goes back down to 1,000, you can make the same argument. Well, it's the best performing asset. Had you bought it at a penny, look how much money you've made.

Well, sure. But who bought it at a penny and who still owns it? And how many people bought it at 40,000, 50,000, 60,000 who are down 70, 80 percent? How is that a safe haven? How is that a store of value? How's that an inflation? It's nothing. All right. That was a cute monologue. Yeah. You think you're funny. But can you remind us how much gold is being dug up out of the ground today? Well, how would I know? I don't know how much gold is being dug out. Not that much, though.

OK. The supply grows very slowly. Did you know that there's only 900 Bitcoin that are going to get created today and put into circulation and i can show it to you 900 bitcoin are worthless what difference does it make how many bitcoin yeah well i mean you do you know how many all coins there are right now hold on a second we're talking about bitcoin there's 18 000 well there's no difference i don't care what you want to name it it's all the same crap well silver and gold silver and gold are the same then no they're not they're very different metals they have different uses but there's nothing different between bitcoin and those other 18 i can't do anything with any of okay it's just an illusion it's nothing okay hold on just because it went up it doesn't mean it's

going to stay up i mean people bought it because i have some questions for you just hold on sorry so we don't know how much gold's coming out of the ground but we do know that there's 900 bitcoin that are going to put in circulation today we don't know can't prove how much gold comes out of the ground second thing is the gold that's sitting in your vault i know you got a lot of gold right you're you're a big gold guy i got some gold yeah i don't know how how do you know it's real well because when i buy physical gold from shift gold right right over there where do they write a shift gold right we don't sell fake gold how do you know gold because we sell gold from reputable myths where they don't put they don't mint fake gold when they when how do you

know they put because they would destroy their free market reputation i mean now you can test it yourself there's ways of assaying it you know i mean you act as if it's hard to tell real gold from fake gold. They've been using gold as money for 5,000 years. We have much better technology today than we had back then. So it's a lot easier to verify real gold today than it was hundreds of years ago. Yet they still had no trouble doing it. So that's a canard that the Bitcoiners come up with that, oh, you're going to get fake gold. Look, all the Bitcoin is fake. There's no difference between fake Bitcoin and real Bitcoin because none of it has any value. You can't do anything with any of these cryptocurrencies, except hope some other fool buys it from you at a higher

price. Well, eventually you run out of fools or the fools run out of money. And one of those things is going to happen. You know, we are very close to a major meltdown in Bitcoin. I don't know if you ever look at a chart. You've been saying this for a decade. Well, you know, I've been right. But if we go we go below 30,000 in Bitcoin, there is a big there's nothing but air there between 30,000 and 10,000. There's just an air pocket. And if we drop from 30,000 to 10,000, you know how many people over the last year or two have loaned, taken out loans against their Bitcoin? I mean, Bitcoin is pledged as collateral for all sorts of debt. All that's going to be blown out of the market when you get a price drop from 30,000 to 10,000. And, you know, there's no

circuit breakers in bitcoin you know there's no way to halt it i mean it's you know i mean this thing can just implode because there is nothing there there are no real buyers i don't think there's a lot of shorts out in bitcoin i mean there could be some but i don't think there's a lot of shorts that are going to come in and rescue the market by covering uh there's no real buyers that are going to come in like oh good bitcoin is cheap i need a bunch of bitcoin you know nobody needs bitcoin for anything uh you know because bitcoin's value is that it's going up so the minute it's going down it's lost that value there's no reason to hold it okay so hold on a second so we have another chart here that we're going to pull up which is russia's central bank

reserves and there's a part of this chart i think you and i are going to agree on there's a part of it that we're not going to agree on the first part is that uh russia has 21 22 percent of their central bank reserves in gold physical gold and then they've got good pretty big okay then they've got as you can see 13 foreign reserves in china then they've got you know the rest basically outside of of russia and so obviously what we can see is that the things that are not gold and not in china have been frozen seized confiscated etc yeah that's now that's a risk yeah hold on china still have access to right the gold if the gold was not physically sitting inside of russia it could be confiscated if somebody was hold on yeah if if the gold was

custodied let's say in the united states or in germany or someplace that was freezing their assets they'd have the same problem accessing their gold as they have accessing their other foreign reserves okay and then people on the other side of this conflict in ukraine who are trying to leave i saw a picture yesterday at the train station uh in ukraine just packed with people who are basically get me the hell out of here right taking whatever they possibly can to carry and leaving if they have gold and they get stopped by a russian soldier or somebody at the border or nefarious actor or whatever the gold can be taken from them very easily so the confiscation or seizure of the gold is pretty simple even if you have it in your possession and you're somebody

who's fleeing ukraine bitcoin ultimately it's the single hardest asset in the world to seize from somebody it's possible if you put it on government has already seized a lot of bitcoin i mean a lot of criminals have had on third party custodians right so but if you don't have a third party custodian if you just have your bitcoin you know memorized in your head or you have it on a piece of paper and you don't lose it. But that's not the way most people are thinking about having their Bitcoin. They want to have it in some way that it has more liquidity than just having to hand deliver it to somebody. All right. Now, the only other question I have for you is moving forward, before my brothers ask you some questions, what are you doing differently in your

investing portfolio, given the Fed situation, inflation, geopolitical conflict, all these different components that are playing out? Are you changing anything in your investment portfolio? No, not really. I mean, everything, my strategy was working out beautifully up until the Russia. I mean, our value stocks, our dividend paying stocks were on fire, defensive stocks, our gold stocks were creeping higher. Now they're moving up. The gold portion of my portfolio has now kicked in a lot better. The gold stocks are doing better. Some of my oil stocks are making new highs. Some of them are having trouble because of their Russian connections. I have some agriculture and other base metal stocks that are making new highs. But a lot of my defensive names,

my telcos, my tobaccos, some of these other chemical companies that I had that were doing well are getting hit now because of the Russian concerns. I think it's being overblown for the European market and the euro. And so we are looking to add to those positions on this weakness. And we did anticipate some weakness. So we did have some dry powder there. We're still positive on the year in our funds and our strategies, which is great because hardly anybody else is making money. And that's on the long side. I mean, we're not short. We're still making money long, because on average, what were long is still going up, even if some of it is having some problems now with the situation. But I think the US market has a long way to go down

relative to Europe and Asia. I think it's been defying gravity. We had a bounce in these tech stocks. They were selling off pretty hard before Russia. And I think they're going to continue to sell off after this bounce, that would include Bitcoin, you know, Bitcoin and some of these other beaten down, money losing companies did have a bounce. I mean, Bitcoin got down as low as maybe 33, 34,000. Then it rallied back up to 44,000, 45,000. And I think that rally has run its course, you know, tech stocks and other risk assets like Bitcoin are getting ready, I think, to roll over. and we don't have those. We have no weighting to tech. I have a very, very low weighting to the financials, way underweight there. They've been getting hit pretty hard. I expect that to

continue, but I may have to look in that direction at some point. But we're loaded up on materials, and that's what's doing well, inflation sensitive. And I like the businesses that have the pricing power, the companies that are going to be able to weather inflation because their customers are just going to pay higher prices. They're just going to cut back someplace else. So I don't want to own the companies that are consumer discretionary, the items that can be foregone because you're spending too much money on food and energy. But I'm confident, again, that we're going to get the Fed pivoting its monetary policy. They're going to surrender to inflation. They're not going to best it in some kind of Paul Volcker-style battle because

it's impossible. So inflation is going to be here for a long, long time. It's going to be a new reality as far as the American experience. And people are going to have to adjust to high inflation the way people in Argentina adjust to high inflation. And you just have to try to figure out how to deal with it, unfortunately, because it's not going to go away because there is no political will to do what's necessary to solve that problem. So we're all going to be dealing with a much bigger problem. But, you know, I feel bad for people who think that they're taking refuge in Bitcoin. I mean, a lot of the Bitcoin guys understand the problem. They just don't understand the investment solution for themselves because they put their faith into Bitcoin as if

the whole world is just going to magically move from a fiat standard to a Bitcoin standard. That ain't going to happen. You know, just like, you know, we still need fossil fuels. We still need oil and gas. You know, we still need gold. We still need silver. Bitcoin ain't going to cut it. You know, it derives all of its value from faith. And this is not a time for faith. This is a time to rely on real facts and real value in history, not just make a pie in the sky bet that all your fellow hodlers are never going to sell. You know, you're just buying into something on the belief that nobody's going to sell it. Well, if nobody sells it, what good is it? Because it doesn't do you any value. You can have your gold and you can sell it because there's always going

to be demand for gold. You don't need people constantly hodling it because there's real demand and people are making stuff out of gold every day. Nobody makes anything out of Bitcoin and no one ever will make anything out of Bitcoin. So when people stop believing in it, it's going to implode. Right now, you've still got this opportunity to get out. I mean, look at these prices, don't look at $39,000 Bitcoin and think that it's cheap because it was $69,000. Think about how expensive it was because it used to be nothing. It came from zero, and it's going to go back to zero. It's the life cycle. You start out as dust, and then you return to dust. Same thing is going to happen with Bitcoin, from dust to dust. I got enough of this blabbering about Bitcoin.

it's not blabbering one last thing you guys this just happened a good deed here this just happened i want to show it to you what do you think about this so there's six uh gold refineries i believe is what they're uh what they're referenced as uh all six of these uh are from russia six russian refiners will no longer be accepted as good delivery by the london bullion market until further notice is this a big deal i don't know that sounds like it's bullish for gold that means is less gold, right? Is there less gold? Well, I mean, is less gold going to get refined? I mean, if you want to buy coins in bars, maybe the premiums will go up if that happens. But that's happening with a lot of commodities, not just gold, right? I mean, Russia is a big commodity

producer, a big commodity exporter. But the world needs what Russia is producing. What they don't need is what we're producing, which is paper. You know, we print a bunch of money. You can't eat that. You know, you can't you can't teach your home with that. I mean, yeah, you can burn the dollar, but how much heat you're going to get. And a lot of the dollars you can't even burn because we didn't even bother to print them. We just created them digitally. So you can't even you can't even get that that much value out of them. Joe, what questions you got for friend Peter here? Peter, thanks for the advice on Bitcoin. I don't think I'm selling yet. You know, you can sell while you're doing this interview it's like real quick just you know get your wallets out

you know you can take your bitcoin to shift gold and we work with bit pay and we'll make it easy to get rid of your bitcoin your fool's gold so you're getting so you're getting rid of gold for bitcoin interesting go ahead joe i'm helping you get rid of bitcoin for gold i don't need help i don't need help i'm good no you need encouragement i don't know how to sell you're like you're it's like you're like got to go to like an alcoholic anonymous you know you know you have to confess that you own Bitcoin. I'm just trying to get you to sell it, you know, you know, because you're, you know, you're an addict right now. You're, you're, you're, you're hooked on it. And I got to get you to, you know, go cold turkey for your own good. That was quite the speech there, Joe.

Hi, my name is Anthony Popliano. I'm a big callaholic. I need help. Please help me. Go ahead. Okay. Uh, let's move off of Bitcoin. Let's talk about Russia and the sanctions. Just So in your opinion, what impact do the sanctions, the financial sanctions that have been levied against Russia, like, how does this play out? Is this a massive deal? Does it not make a huge difference in their invasion of Ukraine? How does this work in your mind? Well, I mean, obviously, the sanctions impact Russia, but they also impact everybody who deals with Russia. I mean, you know, people engage in trade because it's mutually beneficial. So countries that decide to trade with Russia, either they buy from Russia, they sell to Russia,

They're doing it because there's an advantage. Otherwise, they wouldn't do it. So everybody is being hurt by the sanctions, not just Russia. But clearly, there's more pain for Russia than collectively for the rest of the world. You know, how they're working, will they backfire? I don't know. I mean, I'm not, you know, a geopolitical guy. I mean, I'm not a general or a military strategist as far as that's concerned.

But I know if I were Putin, certainly to me, and I'm not defending Putin or think he's a good guy or anything. But to me, what our response, even though we're not firing missiles, to me, it's like an act of war. It's economic war. We're trying to inflict harm on Russia. We're coordinating our efforts. So I mean, that would be the same thing if we said, OK, we're going to drop bombs on

you. We're doing these sanctions. And I don't know. I mean, maybe it would be better to actually have a real war and get it over with, rather than doing this, if it ultimately is going to lead to war. I don't know. But you back somebody into a corner, obviously, maybe this guy is not that very stable. But unless this is all part of his plan, unless he just assumed this was going to happen and

he's like, OK, it's no big deal. He's got an agenda that he thinks is going to, there's going to be some kind of compromise with the Ukraine. I mean, I think the main thing is he doesn't want the Ukraine to be a NATO. And I think he wants some of the territories, Crimea, he wants to have that and some of these other separate independent territories that are aligned more with Russia or he thinks they are. He wants to annex them or make them part of Russia and not part of the Ukraine.

I don't know what his ultimate ambition is, but I have been critical on my podcast of our role in even having NATO, because I've been a big critic of NATO for years, decades. I mean, ever since the Soviet Union fell apart and the Warsaw Pact nations no longer existed, NATO had outlived its purpose. I mean, even if you argue that we never needed NATO to begin with, if you want to accept the fact that we needed it during the Cold War. We needed a way to counteract the expansion of the Warsaw Pact nations. And so we had the NATO alliance. Well, once your enemy is gone, well, can't you just claim victory and just go home? Right. But, you know, the problem is you

have this huge bureaucracy that's in place and everybody loves being a part of NATO. They're all making a lot of money. They have all kinds of power. And so NATO didn't go away. It got bigger. And now, like all the countries that were part of the Warsaw Pact, slowly but surely, they're all joining NATO. And obviously, that's not something that was sitting well with Putin. To me, if we just would have got rid of NATO a long time ago, you know, we wouldn't be in this situation today. And we would have saved a lot of money because I don't know that NATO is something that we need. I know that the United States, you know, a lot of countries probably feel they get a good deal out of NATO because, you know, you know, we protect a lot of different countries, but we can't afford to protect other countries. We can't even afford to protect ourselves.

We're having to borrow all this money to finance this military empire. So I would just assume have us spend a lot less borrowed money on a bloated military that we don't need. John? Peter, I actually agree with you there completely. we need to stop spending borrowed money on things that we don't need. But I'm curious what your thoughts are around weaponizing the US dollar and the idea that has come into fruition in the last few years, especially the last week or so. Does that make the dollar stronger, what they're doing and the position they're putting it in on the global stage or not?

I think it makes it weaker because I think that we shouldn't be weaponizing it. I mean, And if we really want to preserve the dollar status, we should resist any temptation to weaponize it, because we should let people know, hey, if you trust the dollar, we're not going to pull that rug out from under you, even if you're our adversary. But the minute you say, look, we're going to use this against you as a weapon of war, because we don't want to engage in a hot war, because we don't want to put soldiers on the ground that might get killed, because apart from the loss of life, that's not good for our politics to see Americans coming home in body bags.

So we want a war where nobody dies. So our weapon is going to be the US dollar. Well, if you know that the dollar is going to be a weapon, why do you want to put yourself in a position where that weapon can be used against you? So the way to make sure the dollar weapon is not used against you is to not use the dollar during peacetime, not put yourself into a position where it can be used against you. So divest of it.

Don't trade in it. don't have all these relationships in dollars, don't have own U.S. dollars, don't own U.S. treasuries, you know, have a way to conduct commerce another way. And obviously what we're going to end up doing is we're going to be driving Russia and China even closer together. And if we believe that Russia and China are our adversaries, bringing our adversaries closer together can't possible to be good, right, because now they're a stronger force to be adverse to. And obviously, if Russia and China are very close together, India is going to get in on that.

I mean, and now you're talking about nearly 40 percent of the world's population. You're talking about tremendous natural resources and manufacturing capacity. I mean, that's a big block. And if those nations basically de-dollarize, that is a game changer, because Europe has already got the euro. I mean, we really need the emerging markets. We need Russia and more so China, India to be big in the dollar. And if they just get out of it, and how far off would the Middle East be from getting

out of the dollar if some of these other big customers are getting out of the dollar? So, you know, I don't think anybody likes giving the U.S. disadvantage. I mean, the U.S. obviously enjoys having it, but that doesn't mean we're going to have it forever. And we're especially vulnerable because our economy is a complete basket case, because having that reserve currency status for so long allowed our economy to disintegrate to the point we now depend on it, because we don't have the industrial capacity that would be required if we had to fend for ourselves. We can't produce the things that we consume. We have to print money and use that money to buy the things that everybody else produces, because they've got all the factories.

They've got all the infrastructure. They've got the supply chains. They've got the trained workers. And we're feeling that the consequences right now, just from COVID, all these supply chains that are that are broken down. Had we had our own supply chains in the United States like we did once before, we wouldn't be as vulnerable. I mean, look what's going on in these ports in California. Why? Because everything has to be imported. We don't make anything over here. Everything we're consuming has to come through these ports and the capacity isn't there. Gotcha. Peter, as always, I appreciate talking to you. I know that you probably wish that you had some Bitcoin over the last decade. Right now, I wish I had it over the last decade. I'm glad I

haven't had it over the last year. And I have no intention of buying it now, because if I buy it now, it's just going to go down. So why do that? The trade is over. You guys congratulate yourselves. Ring the cash register. Get out. You made your money. Right. Let let the suckers buy it now. I mean, you know, anybody who's buying it now is a bag holder. But if you want to if you want to feel smart that you got in early, you better get out before it's too late, because, you know, you write it down and all your paper profits go away. You're you know, you're not going to look so smart, you know, and it's it's tough. A lot of people are going to have a hard time living with all the money they could have had had they only sold, you know, what it could have should have.

Those are the famous last words. If I could have sold my Bitcoin, if I would have sold it, I should have sold it, but I didn't sell it. I would have, should have, could have bought Bitcoin when it was $10 and Max Keiser was telling me about it. Yeah, Max Keiser was telling me about it. But you know what? Max Keiser is going down with his ship.

Unless he's secretly sold his Bitcoin, because I don't believe the crap. You know, he says stuff and he says stuff. You don't know. All right, listen, listen, listen, listen, listen. Gold hit $2,000. I think that's the first time ever in history. It only took- No, it was above $2,000 and $2,000 as well.

So it's been above there. It just didn't stay there very long. Whoa, rewind, rewind, rewind, rewind, rewind. I mean, not 2000, 2020. It got above it in 2020. Oh, okay. All right, still. The high in 2011 was like $1,900,

but we're getting ready to take off. Here's a question. Here's a question. What are we going to get first? $5,000 gold or $5,000 Bitcoin? What do you think? Peter. Gold?

Neither of those are going to go. My money's on Bitcoin. $5,000. I think they're both going to $5,000, but I think Bitcoin gets there first. I don't think either. What if we're going to $5,000? They're both going to go. By the time gold hits $5,000, we'll have flying cars.

There'll be a colony on Mars, and literally you and I will be dead, buddy. don't worry 5 000 is barely a double that's not a big move no first of all it's uh two and a half x is uh is the way to do that math but yeah you guys count yeah you guys count dollar movements you guys are freaking out because gold's literally up eight dollars over the last uh last 24 hours yeah it's better than being down though like bitcoin people make fun of me oh you're celebrating gold being up 20 bucks that's one percent yeah well bitcoin's down five percent today i'd rather to be up one and down five. What do you think happens first, gold 5K, Bitcoin 100K? Well, I think that gold is more likely to hit 5K than Bitcoin 100K because I think that I think

Bitcoin is going down. I mean, I think that there's a good chance that the high for Bitcoin is in. We'll see. I mean, if it holds this 30,000 level and if it doesn't crack, maybe it could rally again. But if it cracks and we go from 30,000 to 10,000, it's it's it's that's it. That's the end of the party. It's not going to resurrect from that. All right. Listen, listen, you guys. So it's got it. There's got to be some big buying that comes in. And what you got to ask yourself is where is the big buying right now? Why is it you've got this perfect situation in Russia and the Ukraine? This is tailor made, scripted for supposedly what Bitcoin is all about, what Bitcoin is for. It was up 25%. It literally, since the invasion, it was up 25%. Right now,

it's up 12%. Gold is moving around. Gold doesn't even know what it's doing. Gold is excited. Bitcoin is only up because it crashed before the Ukraine. And the only reason it rallied was because you had a bounce in the risk assets like the ARK Innovation Fund. Bitcoin is going down. You know, gold is making 52-week highs. Bitcoin is doing nothing like that. The air is coming out of this crypto bubble. And think about all the money that was spent last year by all these advertisers. The epitome of that were the four ads on Super Bowl Sunday, you know, just reminded me of the stock market in the 2020 dot combo.

Gold doesn't need to be promoted. Did you hear what I said? Did you hear what I said? The gold companies don't have enough money to afford Super Bowl ads. They don't have to waste money on Super Bowl ads. You've got an ad behind your head right now. Yeah, but it's free. I'm not wasting any money on it.

There's nothing free in life, Peter. All right, we've got to go. Listen, we've got to go. Because I've got to go do other things. When I buy an ad on the Super Bowl for, like, you know, your Pacific Asset Management or Shift Gold or something, then you can talk about a top of the market. I mean, that might be.

You have to remind me. When I finally get around to spring it for a Super Bowl ad. They don't take gold. All right, listen. by that they may only take gold by that everyone go follow peter on twitter literally he he lies in his bio because he should say comedian it doesn't say that anywhere there that that's about the uh the value on the gold tweets go ahead what well you know how'd you get 1500 15 1.5 million followers 1.5 yeah it was simple i just told people what was going to happen i told the truth

all three things that's what ended up happening keep telling me i'm just tweeting anti-bitcoin to get followers see if i was pro-bitcoin i'd have a lot more followers like you well that might that might be true if you i'll tell you right now listen the day you're ready to do it the day you're ready to really tell the world what you think you call me i'll bring you on this show and we'll and we'll reveal peter schiff is now a bitcoiner you'll triple every stat you have including your heart rate your network and your twitter followers look just look look at the charts of my gold stocks now they're going up as bitcoin's going down so see you buddy we'll do it again soon all right guys bye thanks so much for listening to today's

episode i really hope you guys enjoyed this one make sure you're subscribed on apple spotify or your favorite podcast player and if you're looking to try to transition to get a new job in the Bitcoin or crypto industry, we've got you covered. Head over to palmscryptocourse.com. We've developed a curriculum with the top teams across the industry. It's a three-week intensive training program with over 50 events packed into that three-week time period. Go to palmscryptocourse.com to learn more, and I'll meet you guys for the next episode.