Peter Schiff - Market Crash

Full transcript: Peter Schiff on London Real

0:30 Co-host today is Mr Alessio Rastani, the Robin Hood of Wall Street. He is a stock market and foreign exchange trader. You were known to the world first on BBC live television, telling us that yes, Goldman Sachs rules the world. You haven’t lived that down, have you? I still get people.

0:46 Do you like being known as that guy? You know, where did this term Robin Hood of Wall Street come from? You made it up? I did it. I did, I did it.

0:55 It’s my turn. So you were here originally about a year ago on the show, and then when we had Max Keiser here you came on as a co-host, and you’re here today. So thanks for much for coming. I appreciate it. Thanks for having me.

1:05 Okay, our guest today is Mr Peter Schiff, who is an American businessman, investment broker, author and financial commentator. You’re the CEO of Euro Pacific Capital and you’re the host of the nationally syndicated Peter Schiff Show. In 2010, you bravely ran for United States Senate. I want to hear more about that later. You’re a regular on CNBC, Fox News, Daily Show.

1:25 Welcome to London Real. Well, thanks for having me on. No, I appreciate it. Peter, I was just curious, like, when you land in heo and you kind of come into London, I was wondering if you see things about the UK or being in Europe that are like distinctly different from the US, whether it comes to the way people do business over here, or even the fact that if it’s more of a socialist government or do you see anything different, or even London is as a financial center?

1:49 Well, I mean, it seems not not much different to me than being in the states. I think it’s a little more charming. London is than New York just walking the streets here. And you know, it’s just been around for a lot longer. You have, you know, hundreds of years of architecture predating a lot of things that we have in the US.

2:07 But you know, it makes me think really of the glory days of the British Empire when it was still ruled by the Crown, and if you think about Britain back then before they had democracy, when you had a monarchy, there was actually more capitalism here in Britain. It was a freer society. The British subjects wouldn’t let the king get away with an income tax or anything. It’s, you know, tyrannical, as that. So most, you know, kings or monarchs treated their subjects a lot better than, you know, democratically elected governments treat their citizens today.

2:40 And I think that if the UK had still been ruled by a monarch and was a, you know, a constitutional monarchy with limited powers and you know, the rule of law and private property, and they still had that type of economy, you can imagine the wealth that would exist in the UK today. It might still really be the centre of commerce and, you know, and wealth in the world. Instead, you know, it’s another country. But it could have been a lot more, and it was a lot more before the disease of socialism infected it.

3:12 And a lot of it, did it through democracy because that’s what the people voted for. One of the beauties of monarchy is people aren’t voting. So instead, they’re just living their lives and they’re creating and they’re producing, and you don’t have people voting for theft. You don’t have people promising something for nothing because the monarchs are there, and they don’t have to worry about getting elected, and, you know, their children don’t have to worry about getting elected either because they just inherit the title.

3:40 I never heard it that way. I guess if they really screw up, then they get overthrown and killed. Right? Well, that’s right. I mean, well, history shows that the public won’t tolerate, right, a king or a queen, that would be so oppressive.

3:52 I mean, if there was a king today in America or the UK, you know, they still had the power, if they tried to oppose income taxes like the ones we have now, there’d be a revolution. Nobody would accept that type of tax system. I mean, think about the United States. You know, we had the Revolution and we broke from the British. We, it was over taxes, right?

4:15 And the taxes were tiny compared to what we tolerate today in the United States. I mean, Americans are paying levels of taxation that would be unthinkable around the time of the American Revolution, either in the United States or in the UK. Nobody would have tolerated that, yet we routinely do it when we we do it to ourselves when we think, oh, it’s okay because we vote for it, but you know, I didn’t vote for it. You know, there are a lot of people who wouldn’t vote for these taxes, but we can’t overcome the majority, and what we really have is a tyranny of the majority, not just tyranny from one individual but tyranny from the majority, and the problem is we, you, you can’t really overthrow it.

4:53 How much of your commentary gets into politics, and how much is pure finance? Because you obviously know history pretty well, and you obviously ran for office in the past. I mean, as you get older, do you find that you’re looking at things more from political spectrums as opposed to just pure financial? How old do you think I am? I don’t know.

5:08 Well, I guess I’m older than you guys. Well, no, well, I’m 50, so I am. I am getting older. But there’s, you know, there’s a lot of politics in in what I, when I talk about the markets, or a lot of economics involved in it because I’m, I’m generally investing about the big picture, so I don’t spend a lot of time when I’m, you know, talking, getting into the particular details of a particular company or, you know, the balance sheet of a company or, you know, what I think is going to happen to earnings because lots of people talk about that.

5:39 I mean, there’s nothing really unique about having an outlook on a particular company. So what I think is more unique is my perspective on the global economy and, in particular, on the US economy, and a lot of it relates to politics because a lot of what’s wrong with our economy can only be fixed politically. The problem is it’s very difficult to outvote the majority that wants something for nothing, and as the government gets people hooked on a handout, they vote for it even if the reason that they’re poor is because of these government programs.

6:11 Once the government creates this sense of dependency where people depend on the programs, then they, they, they just vote for whoever promises to continue them or expand them. They don’t realize that they’d be much better off if none of these programs existed and instead there was a lot more freedom and opportunity in the country, and then they could ultimately enjoy a much better lifestyle if we had a freer economy. Now I want to get into what you’re thinking what we’re going to go economically, but as a financial center, London, you know, it managed to battle off any other places in Europe like Frankfurt, and I mean, it seems to have survived.

6:46 But are you impressed with it as a financial center? Do you think it’s going to get bigger or smaller when it comes to, say, Singapore, Tokyo, New York? Well, relative to New York, it’ll get bigger, but I do think that Asia, so Hong Kong, Shanghai, I think those centers are going to grow in influence over time as more and more wealth is created in Asia, as more savings are accumulated that need to be invested. I think the capital markets will grow in those regions.

7:15 I mean, right now a lot of that is outsourced to places like London or New York, but I think over time they’ll do more of that in-house. You know, a lot of our viewers don’t know the details of the financial markets, but I always say to people, like, a lot of people just kind of say, oh, the bankers are greedy, they’re doing all these derivatives we don’t understand, and I’m always like, why don’t you educate yourself about the markets and protect your own savings? And you know, I think that’s what you were always saying as well, and I just wanted to know what you guys are thinking for next year.

7:43 You know, you were one of the people that called a lot of the recession of ’08. I think you both have talked about something big happening next year. You know, most people don’t know where we’re going. The property prices in London are going through the ceiling. Equity prices are going up.

7:56 People don’t know which way things are going. So I want to get your opinion, Peter, and then your opinion, Alessio, on kind of what’s going to happen next year? I know it’s a general question. Yeah, well, you know, it’s, it’s never, it’s hard to tell rather whether the collapse that I’m waiting for happens next year or not. I mean, it’s tough to sell into a bull market, isn’t it?

8:15 Well, it’s not even about selling, and you have to understand where the collapse is coming, because if you understand what you know, what the government and the Fed did in response to the 2008 financial crisis? They didn’t solve the problems. They made them all worse, but in doing that they postponed the consequence of dealing with those problems into the future. Now, whether we’re going to have to deal with it in 2014 or not, or maybe 2015, I don’t know.

8:40 I think the sooner the better from my perspective, because I think the sooner we have to deal with it, the less painless it’s going to be, because the longer we postpone it, the bigger the problems get in the interim, and then the harder it’s going to be. But all the Fed did is blow some air back into the deflating bubble, but I think the fundamentals for the US economy are much worse than they were when the Fed began QE1. And you still have this idea that the Fed can, you know, remove these supports and that the economy can somehow continue expanding on its own.

9:15 It can’t. It’s all a function of that cheap money and the artificially low interest rates that come with it, because our whole economy in the US is based on debt. It’s based on borrowing to consume, borrowing to speculate. The government is financing itself based on debt. All these checks that they’re mailing out are based on debt, and the rates need to be practically zero in order for anybody to afford to even service the debt.

9:42 That’s how enormous the debt is, and when the Fed eventually lets interest rates rise, everything comes crashing back down, much worse than 2008, which is why I think the Fed is not going to allow rates to rise. It’s going to continue to expand quantitative easing until it can’t do it anymore, and what finally will stop the Fed will be a crash of the dollar. That hasn’t happened yet. In fact, the dollar strengthened this week against the euro. The Europeans decided to cut interest rates to generate more inflation in Europe, which buys the US a little bit more time, because it allows us to inflate, you know, inflate more, because the dollar now, you know, has a little bit of support against the euro.

10:25 I don’t think it will last. I think the dollar is headed lower. But at some point the market will figure out the box the Fed’s in, and it won’t want to hold the dollar. It will realize that it’s QE infinity, and when the dollar really starts to come under pressure, if it loses 10, 20% or more of its value against, you know, a basket of currencies, big currencies, that’s when the Fed is going to have to make a choice, a very difficult choice, that it has been avoiding for years, which is going to be to dramatically increase interest rates, even if the unemployment rate is rising and even though it’s going to force many banks into failure, even though it might force the government to default on its debt, even though it’s going to bring about a very severe recession.

11:08 The Fed’s going to have to raise rates anyway and start selling Treasuries, not buying them. Or if it doesn’t have the integrity or the courage to do that, then it’s going to print even more money, and then the dollar is going to crash, and that is going to be a much worse financial crisis than had they let rates go up, because then you have runaway inflation, and it doesn’t matter that your bank didn’t fail, because your deposits have no value, because it’s the dollar that’s crashed. What I mean, do we ultimately need to take hits by writing these asset values down and getting some banks closed?

11:41 Like, what are the hits that people need to take in order for us to, kind of, well, yeah, we have to realize that asset prices are too high. Property prices are too high. Stock prices are too high. They have to come down, but the Fed’s policy is aimed at keeping them inflated, and what they want is to try to make it easy for Americans to borrow money to overpay for houses instead of letting housing prices come down so that people can actually afford them without taking on all that debt.

12:11 People would need, uh, interest rates to be so low if housing prices went down. But you need these artificially low interest rates to sustain the artificially high house prices. But that’s what the government is concerned about when they talk about deflation. Oh there’s a worry about deflation. They don’t really mean prices coming down for consumer goods.

12:32 That’s, you know, what everybody thinks about. All they care about is asset prices. So when the Fed is worried about deflation, they’re worried about the stock market coming down or the real estate market coming down. They’re not worried about the price of food coming down or the price of gas coming down. Those prices aren’t coming down; they’re going up.

12:47 And it would be a relief for everybody if consumer prices were actually able to come down, but the government’s got everybody convinced that we need inflation, that inflation is good for the economy. It’s not. The government needs inflation to sustain asset bubbles, and they need inflation to wipe out the value of their liabilities, of their debt, because what inflation does do is reduce the value of what you owe by allowing you to repay it in cheaper money.

13:13 That’s what, that’s what the Fed is trying to create deflation for. It’s not to help out the economy or to help out the consumer. They would actually benefit from falling prices, as would people who want to buy homes. If you want to buy a house, if the Fed got out of the way, house prices would collapse. Homes would be more affordable, right?

13:30 Keeping real estate prices artificially high doesn’t help you. In fact, in America, I think home ownership rate is now at like a 20-, 25-year low, because people can’t afford to buy homes because they’re still too expensive. Okay, Alessio, what’s your take on this? Actually, first of all, I want to say it’s a great honor to be sitting next to Peter Schiff, because I’m familiar with his work. One of the things, which people who may not be familiar with Peter Schiff is, he accurately called it.

13:55 You accurately called it in 2006. I think there is a video people should actually go on and find on YouTube, where, um, Peter, I love watching this video. I don’t know if you’ve seen it, Brian. Basically, in 2006, Peter, you, on a, you know, the one I’m talking about, you, you’re having a debate with Arthur Laffer on CNBC, and he was saying, oh, the economy has never been in better shape, and you said, you actually accurately, these were your words, that it’s a phony wealth.

14:21 The real estate bubble is going to burst, and all that wealth is going to evaporate. And the funniest thing in that video, which people should watch, is in Fox on Fox News the same year, in 2006, you said the house prices are unsustainable. Speculative buyers will turn to sellers, banks will tighten up credit, everything which happened, by the way. And funny thing is, everyone on that show on Fox News was laughing at Peter, because, you know, it’s unbelievable how people were in this mindset of a bubble.

14:48 They were saying no, house prices are going to go up 10%, but Peter accurately was saying, no, you’re going to see house prices crash. And then the next year, in 2007, the funniest part of that video is that, um, in 2007, on Fox News, they have this end-of-the-year stock picks. So everyone’s saying, yeah, I’m going to buy Merrill Lynch, I’m going to buy Goldman Sachs. And then Peter says, forget financial stocks, they’re going to crash, and instead buy gold, and that’s exactly what happened in 2008.

15:16 And I mentioned this because I was doing this. I was very much in agreement with Peter in 2006. I was telling my friends, family, in seminars, we were doing seminars all over the country, we were telling our own customers, our clients, be careful, be aware, we’re going to have a crash in 2007, 2008. Again, we didn’t know exactly when it was going to happen. We knew it soon.

15:36 And there’s actually a question I want to ask you later, Peter, because I’m just astonished by the level of how disconnected people were at the time. Smart people, you know, on CNBC, and yet how completely in a bubble everyone was at the time. Something I want to come to, if you don’t mind. Uh, Brian, I just want to get your thought on what we’re going to do next year, but about what the levels of debt. Um, what Peter said in those interviews on CNBC, one thing you mentioned, we need a recession.

16:05 We need to have, um, a very small thing people don’t get, because I said pretty much the same thing a couple of years ago was on BBC. I said, look, we need, what I said was, in a different way, I said I was dreaming of a recession, which people, of course, misinterpreted. What I was trying to say was we need to have a recession it’s an opportunity. But look, here’s the thing. If I can show this to your viewers, this is from the New York Stock Exchange.

16:28 This is an, uh, this is an actual report from the NYSE, and it goes to what Peter was saying, and this is why I believe we will have a crash in 2014. Um, some sometime after May 2014. What this shows is the levels of debt, or the net worth of investors, and it shows right now, if you look at this graph, I wonder if I can hold this to you, people. What this level shows is the net worth of investors is negative right now. It’s negative.

16:53 This is margin debt, by the way. Uh, for people who don’t know, margin debt is the level is leveraging, where people are borrowing. I don’t want to get too technical here. You’re saying middle of next year exactly. Basically, cut out all the jargon.

17:04 What I’m saying is, look, the levels of borrowing and debt that people are getting in investing in stocks right now is negative. More, look at this. 2008, this is before the crash of 2007. That was where it was below this red line. Above the red line, look where we are now.

17:19 Okay, understood. So your call is mid next year, Peter? Do you have similar thoughts on this, or do you think maybe not next year, maybe the year after? Is it hard to call this stuff? Well, it depends on what the Fed does.

17:28 If the Fed continues to increase QE, if by the middle of next year we’re doing 125 billion a month or 150 billion a month, I think it’s going to be hard for the stock market to repeat, uh, anywhere near as great a decline as we did in 2008. The only way I think we get a stock market crash is if the Fed does the right thing. A stock market crash would be preferable to a dollar crash. Yeah, but the dollar crash is what I’m more concerned about, because I don’t think the Fed is going to allow the markets to correct.

18:00 And when you talk about, you know, needing a recession, right, and I know that a lot of people always think, why, you know, why should we need a recession? Why do you want people to be out of work? Why do you want these bad things to happen? It’s not that I want bad things to happen. I just know that even worse things will happen if we put it off, because what people forget is that all of the mistakes are made during the boom.

18:24 It’s the recession where we fix the mistakes, where we put things back to where they need to be. So during the boom, asset prices are too high. In the recession they come back to where they need to be, because when you distort the economy with asset prices being too high, there are other things that happen, you know, and when interest rates are too low, you know, people spend too much. They borrow too much. They don’t save enough.

18:47 They don’t produce enough. The economy gets all screwed up during the phony boom which is engineered by the central banks. And we need the recession to cleanse the economy, to put stuff back, you know, where it needs to be. When the governments come in and try to prevent that from happening, they prevent the cure, and they just give us a bigger dose of the disease, like putting a Band-Aid over something like cancer. What are we going to see?

19:12 Like the social, um, you know, the protests. We see it happening in Greece. We see Spain with unemployment high, youth employment. You famously went down to the Occupy movement at Zuccotti Park. You went down to the one here.

19:22 You know, you talk to those people, but that never went very far. I mean, is there going to be like a proletariat uprising, where people haven’t had it any more, because a lot of the things you’re saying don’t mean a lot to my viewers, cuz they’re like, they don’t understand all this QE stuff. When will it hit the bottom line, where the people will say enough’s enough? Well, you, the policies they’re pursuing now are making things more difficult on Main Street while they’re enriching people on Wall Street.

19:43 I mean, they’re focused on sustaining asset bubbles, and that’s making a small number of people very rich, but it’s impoverishing a greater number of people, because when you don’t have these assets, when all you have is a job, uh, and then you spend all your money on food and energy and taxes and insurance, you know, your cost of living is going up, right? The quantitative easing is just making it more expensive for you to eat, or to heat your house, or to drive to your office if you even still have a job. A lot of people don’t have jobs, or now they have, uh, part-time jobs or temporary jobs, so people’s living standards are going down, and you have a handful of people, relatively speaking, who are benefiting, but it’s not the type of wealth creation, because it’s not legitimate wealth in a normal free market economy where the Fed isn’t, uh, you know, artificially setting interest rates so low.

20:36 Entrepreneurs get wealthy, but they also benefit everybody else in the process. They get wealthy by coming up with new products and new services that we all consume, uh, and they create jobs for other people in the process. So, uh, we benefit through, you know, the invisible hand, Adam Smith. But when the banks get rich off of cheap money created out of thin air from the Fed, and they get rich by speculating, they’re not creating any wealth for anybody other than themselves.

21:05 Right? And where is the money coming from? It’s coming at the expense of real investment that might otherwise have taken place, that would have produced more goods to consume and created more jobs for Americans. We’re not getting that. You famously went down to the Occupy movement and you said, “I’m part of the 1%, but you shouldn’t be mad at the 1%.”

21:23 You said you should be mad at the government. And you went down there with a suit and tie and a microphone, and I must say it was very brave, and you, you, you tried to have a conversation with some people. What did you mean by that? Well, I think having the microphone probably was less brave, because, you know, there was a camera there. So if I was just there by myself, maybe they would have attacked me, but they knew it was being recorded, so, you know, so it, it, it was probably safer to go there with some cameramen and a microphone.

21:47 There were some angry people there. Yeah, there were, there were. But what did you mean by that? Because you said, I am part of the 1%, but you shouldn’t be angry with me. Yeah.

21:55 I, you know, I had a lot of sympathy for the position of a lot of people, because they had a right to be pissed off at what was going on, and they were pissed off at Wall Street, for the government bailouts, and I was pissed off too about the bailouts because I opposed them. But my opposition wasn’t so much on the banks that were bailed out, but the government for bailing them out. I mean, I’m not going to blame somebody for asking for something for nothing, right?

22:20 I blame the government for giving out the money that was my money as an American taxpayer that was given to those banks, and it’s the government, uh, that you know should have said no. And so if you’re protesting the bailouts, you should go not to Wall Street but to Washington, to Pennsylvania Avenue, to the Federal Reserve and protest over there, because that’s where the bailouts originated. And of course a lot of the other problems that the occupiers were protesting or upset about, their origin is Washington.

22:51 It’s its policy coming from Washington. It’s regulation, its subsidies, its taxation. These are the things that are undermining our economy and destroying opportunities for young people to get jobs. You know, Washington’s doing that. I mean, the free market is trying to create jobs.

23:08 Washington is trying to destroy them. And of course, a lot of these kids went to college and they overpaid for these worthless degrees, but that’s not the free market that did that. That’s government policy that did that, and they went to government schools. They got government grants. They got government-guaranteed loans, and those loans are the reason that colleges were able to charge so much, is because they were tricked into taking on all this debt, and now they’re upset, but it’s not Wall Street that got them to borrow all that money.

23:39 So their anger needs to be at the government, and if young people want opportunity, they need to get the government out of the way. They need to stop attacking employers. In fact, we’ve got a new Senate bill just passed in the US today, although it hasn’t made it through the House, but the president is ready to sign it, a new bill to punish employers if they discriminate in the hiring process against, uh, gays, homosexuals, transvestites. I mean, transgender.

24:07 I mean, again, it’s not that I’m in favor of employers discriminating, but what I am opposed to is new ways to sue employers, to find ways to file lawsuits against employers, because, you know, what they do, they stop hiring because they don’t want to be sued. You know, why don’t we leave the employers alone? Let people hire and fire for whatever reason they want and let them deal with it in the marketplace. So less government is kind of where you’re, I, I want to hear what you say about the banks, really quickly.

24:36 But do you think this Occupy movement will ever get enough steam to make some of these policy changes you’re talking about, like from the kids, from the unemployed youth, from the grassroots movement? Because you’re talking about political change. Well, unfortunately, I mean, the change that the occupiers wanted is not the kind of change that we need. They want more government, and I’m confident we’re going to get that. We’re going to get bigger government.

24:57 We’re going to get more programs. They’re just not going to work. They’re just going to produce bigger problems, which in many, in many respects is the goal, right? That’s the goal of government, is to create poverty and to perpetuate poverty, so that you can hold yourself out as a solution. Right, right.

25:15 And get reelected. Right, right. You know, if the government breaks your leg and then gives you a crutch, and now you can walk, the government takes credit for giving you the crutch, and and then they deny responsibility, or you don’t even realize that they’re the ones that crippled you. All you see is that crutch and that the government gave it to you, and you don’t realize that if it wasn’t for government, you could work, walk just fine, you wouldn’t need that crutch.

25:36 I want to hear about your run for Senate really quickly. I know you disagree and you think the banks should have been, been saved. Yeah, I mean, would you have been happy if Lehman had gone bust. Do you think that Lehman did go bust? It’s all the, it’s all the other ones that weren’t allowed to go.

25:48 No, I mean, just to add, they should have. Yes, they should have been allowed to fail. Back to what Peter was saying about the level of anger amongst the young people and the Occupy movement, because you went down, you, the only other suit I saw down there. Yeah, actually, they asked me to come, and I said okay, fine. I, I’ll make my case.

26:05 Um, recently, in this year, I was invited to a few universities. I went to Manchester University. I just, I went to debates between capitalism versus socialism. Which one were you? Yeah, okay, went for capitalism, but I might as well have been, the students were so angry towards me without me even speaking anything, because you were a capitalist.

26:24 They would have embraced you if you were a socialist. Probably the ti, probably jailed her as well. But the bottom line is, um, I sympathize with a lot of what Peter says. The level of anger amongst young people and what’s happened the last few years, the recession and the crash, is justifiable, because not a single banker has ever been punished for what’s happened, you know, for the recession and the levels of risk-taking they took, and they just allowed the taxpayer to uh, to bail, uh, to bail them out.

26:54 But here’s what I would say. I would say people have three choices, and this doesn’t matter if you’re young, middle-aged, or old. People have three choices. Either people can just get on with their life hoping everything will just turn out well, which is what most people are doing, 90%, or they can protest about it, which is what the Occupy movement is about. You go out there, you shout your anger and protest.

27:16 The fact is none of those two things are ever going to be a solution. I would say you only have the third option, which is you adapt. You say to yourself, look, it’s not about what the market or the economy should do. It’s not what I hope it will do. It’s about, look, get real, understand, like, this is the way the market’s always going to be.

27:37 You’re always going to have these bubbles. You’re always going to have these crashes, and as Peter was saying, a recession is a necessary part, uh, which is a cure, uh, for cancer. People need to adapt and learn what to do in those kind of situations, about educating yourself about the market. What I’m saying is being able to time when they should invest and when they shouldn’t, right? This is what I’m talking about.

27:58 People should make themselves more aware of what they need to do so they don’t end up losing their pension, end up losing older savings, and relying on, relying on hope is not a strategy. Most, most people, you know, disputer, most people, exactly what they do in America, in here, is, uh, oh, um, the banks are, you know, the banks, they know what they’re doing, but if they knew what they’re doing, how they cause a crash, you know what I’m saying? Same with government.

28:22 I understand what I’m saying, so educate yourself about the market. It’s like what you do, basically. All right, you went to run for Senate. It was a few years ago. Um, you didn’t get elected.

28:29 I’m curious, if you would have got elected, would you have gone crazy in DC trying to deal with all these people you’re talking about? But what made you, what led you to do that? I mean, for people that don’t know, in the States there’s a lot of Congress people, but there’s only two senators per state. It’s a big, you know, being a senator is a big run. It’s a very important position.

28:45 How did you find running, or running for the primary? Well, all I know was a frustrating experience. Most of the time, I mean, I enjoyed it some of the time, but, uh, you know, it’s not an easy thing to do, and of course the government over-complicates it with the campaign finance laws. So I just subjected myself to all sorts of new government regulation, uh, just to run for office, and they make it very difficult for nonprofessional politicians to run. So if you’re going to run, uh, you know, not as a professional, a career politician, it’s very difficult, and unless you’re going to spend a tremendous amount of your own money, which is what one of my opponents did, Linda McMahon.

29:21 She spent $30 million of her own money in the primary. I spent about a million of my own money, but, you know, and I raised another 2.2 million, which was much more than Linda McMahon raised. She didn’t really raise any, but it was difficult. Uh, even spending the million that I did, um, I would have had to spend a lot more, and but if it wasn’t for all the rules, campaign finance laws, I could have run a much better campaign. I mean, I was so bogged down with paperwork and limits on how I could raise money, and it was, it, it made it so much harder for me to fundraise.

29:56 And a lot of real politicians, they can raise money from a lot of the special interest groups, uh, that know they’re going to have these guys in their hip pocket. Nobody knew that, I, you know, you couldn’t buy me for any amount of money. So the only checks that I got were for people who believed in freedom, and they thought that I would be a good senator, wasn’t because they thought I could take something from somebody else and give it to them. But you know, it’s difficult, because you know, when you’re running for office, you have to be more careful about the things that you say, which a lot of times I don’t do.

30:26 And you know, you’ve got to get a majority of people to vote for you, and you know, in order to get the majority to like you. I mean, it’s difficult, because you know the majority is generally going to be wrong, and they’re not going to handle the truth very well. You know, I would, you know, when I talk about investments, I don’t care if 90% of the people that listen to me speak disagree with me, because I can make a lot of money if the other 10% open up accounts with me.

30:50 I don’t, I don’t have to be everything to everybody. But the politician, you have to appeal to a, you know, the majority of people to win. Um, you know, I got 23% of the vote, which wasn’t bad. There were three of us that were running. The guy that came in that got 27% was in politics for his entire life.

31:07 He had been in Congress. He had been, you know, a state representative. He had a lot of friends. He was the establishment candidate, and he barely beat me, and then Linda McMahon, you know, just spent all twice as much money as I did. That’s a lot of money, and she had all this fre.

31:21 I got no publicity when I ran for Senate, so I didn’t get any media coverage. In fact, the traditional media coverage that I got before I ran, once I announced my candidacy, nobody would put me on television, nobody would talk about me. So it was kind of like a stealth campaign. But you know, had I actually won the nomination, you know, I mean, let’s, I probably wouldn’t have won the Senate seat. Let’s, so I probably still wouldn’t have been a senator, but had I actually won and been the only Republican senator in all of New England, you know, so it would have been difficult for me to have done that.

31:53 Why was that, by the way? Um, you said they wouldn’t put you on television. Why? I don’t know. I don’t know.

31:57 I couldn’t, I, you know, people wouldn’t book me, you know, on, on, on, on shows. So what would you have done if you had been on that floor afterwards? Or, oh, look, I, you know, you a protest candidate, basically. Well, one of the things that I was campaigning on was to be the guy to lead the charge to not raise the debt ceiling under any circumstances. So that’s what my main job would have been.

32:22 I knew that nothing I couldn’t get any legislation through Congress, right? Nothing that I want to do I could get support for doing, right. But I thought the one thing that I needed to accomplish is to try to convince, uh, one, you know, body, whether it would be the House or the Senate, where I was, to not raise the debt ceiling, because that’s all it takes to begin to fix our problems, is not raising the debt ceiling, because if we don’t raise the debt ceiling, then we can’t borrow more money, and if we can’t borrow more money, the government can’t keep spending, so the government would be forced to eliminate a lot of the programs and departments that I want to get rid of.

33:00 I know if I knew that if I tried to, you know, get legislation to eliminate some of this government, nobody would vote for it, but if the debt ceiling isn’t raised, right, and that has to be raised, they have to pass that. If I could have just convinced you know, one body to not allow the debt ceiling to be raised, that would mean huge reduction in government spending. We would have to actually deal with our problems, uh, which would be great for the long-term health of the US economy, which is why I wanted to, was why I was running.

33:30 Okay, do you think we should go back to the monarchy like you were talking earlier? Well, over here in the UK, we look at the US and we look at this, you know, government closure. We look at the debt ceiling argument, and it just looks like a big mess. Well, look at, look, look at the way the UK handled Hong Kong. If you look at, and it was turned over to the Chinese, but if you look at the prosperity in Hong Kong under the British rule, Hong Kong prospered to a much greater degree than than England, right?

33:57 I mean, it wasn’t even close. The wealth that was created in Hong Kong while it was under British rule. But what was the difference between Hong Kong and Britain? They didn’t have the income tax in Hong Kong. They didn’t have a minimum wage law in Hong Kong.

34:10 Britain left them alone pretty much the way the monarch would have left the English alone. So, you know, yes, I think Britain would be much better off if it was governed the way Hong Kong was, if the laws and the rules that were applied to Hong Kong. In fact, I, you know, if if, if, if we could have been, uh, a British protectorate, I would prefer to be ruled from Britain the way Britain ruled Hong Kong than to be ruled by Washington. You know, is there any solution going forward?

34:41 I mean, is this just going to be a continuous mess? No, I mean, there are a lot of solutions. I mean, the problems are easy to identify, and, you know, the solutions are simple. The problem is in a democracy, getting the solutions adopted, because everybody wants something for free, and everybody thinks the government can provide prosperity, the government can provide wealth. They can’t.

35:04 They can destroy that, but they can’t provide it. Yes, they can steal from one person and give to somebody else, but in the process of doing that, they make everybody poor. And, but, it’s hard to convince people to vote for freedom, right? Uh, to vote for less government. It’s much easier to convince them to vote for more when it becomes difficult is when government is so big and it’s destroyed the economy so completely that the public finally wakes up to it so I think the catalyst for change is extreme, you know, collapse, extreme despair and disaster, when that message can no longer sell, the politicians promising prosperity and promising that recovery is around the corner, promising that the stimulus is going to work when enough people just simply don’t believe it anymore, and they’re finally ready for something else, and then maybe what they’ll be ready for is, you know, freedom.

36:00 Okay. And, and, and, and, once they have a taste of that, you know, it’ll, it, it’ll, it, it’ll last for a long time. And once people really see what it’s like to be free, uh, free from government, free from regulation. We had this government shutdown, this fake government shutdown. The problem is government didn’t actually shut down.

36:16 We still had to pay our income taxes. We still had to pay our payroll taxes. We still had to abide by all the rules and regulations that the government put in place. The only thing that shut down was a few of the services that we actually enjoyed. We still had to pay for the services.

36:30 We just didn’t get them. But I think if we really had a government shutdown and people really saw how much better the government, the country, functioned, how much easier it was, uh, to, to live and to do business and to create wealth and to get jobs without, without the government uh, you know, then, then I think it’s going to, that it’ll stay for a while. It’ll take a long time, several generations before socialism can find an audience again. Okay, fair enough.

36:54 Let me just talk really quick about kind of commodities. You you’ve been talking about gold for a long time. I want to just get your thoughts on that, and I want to get your thoughts on Bitcoin. I don’t know if you’ve ever talked about what you think about it, but everyone is talked about this obviously. We’ve had Max Keiser on here before.

37:08 He’s a big proponent of Bitcoin, has been for a long time. What are your thoughts on that commodity? Well, I mean, first on gold. I mean, you know, going back to traditional money. I mean, look, when, again, when Britain was ruled by the monarch, the money, the coin of the realm was gold, right?

37:23 Bank of England started on gold, right? And England prospered under the gold standard, you know, and so did the United States. And so we need to go back to real money. What we have now, uh, fiat currencies instead of real money doesn’t work. Uh, so we need to go back to real money.

37:43 Now, do I think Bitcoin is real money? No, I don’t, right? I, it doesn’t satisfy to me the definitions of money, what money needs to be. Uh, it doesn’t have any intrinsic value on its own, right? It doesn’t.

37:57 There you can’t, can’t do anything with a Bitcoin, right? You can do something with gold. Gold has a value unique to itself, but does Bitcoin still have a value? Well, Bitcoin’s value is only in your ability to spend it, that somebody will accept it. So it doesn’t have any more value than euros or pounds or dollars.

38:19 In fact, it actually has less, because I can pay my income taxes in dollars. You know, the US government requires me to pay income taxes in dollars, so there’s a need for dollars. I need dollars, even if I’m living on the gold standard. Personally, even if I’m transacting all my business in gold, I still have to buy dollars to pay my taxes, but I don’t need Bitcoins for anything. Um, now, what makes Bitcoins popular for people is, say, well, the supply of Bitcoins is limited, right?

38:49 Unlike the supply of dollars or euros or pounds, which is unlimited, so politicians can create an unlimited number of dollars, but there’s a finite supply of Bitcoins, and I don’t really think that that is significant enough, because, yes, just because there’s a finite supply of something, it doesn’t mean, uh, that it’s, it’s, it’s money, and it doesn’t mean, you know, uh, that, you know, it can be a substitute for gold. I think to me it looks like there’s a bubble in Bitcoins. How much higher the bubble can go, I have no idea.

39:22 I mean, maybe it’s the ultimate bubble. What about its frictionless transferability? You think that’s something that can be an asset for Bitcoin? And then I want to hear your, well, part of the appeal to Bitcoin, uh, is that you can transact in Bitcoins without the reporting requirements that banks would have, uh, if you were using currency. Now that’s going to change over time.

39:43 Um, these, these rules and regulations are going to be applied to virtual currencies. Bitcoin is not the only one. There are a number of them out there. Um, and, and so I think it’s going to lose a lot of that appeal because of the additional scrutiny that’s going to come on. But when I said it, to me it’s like the ultimate bubble, is because people are buying Bitcoins right now, not really to use them in commerce, even though there is a way to use them.

40:10 But if you look at the daily fluctuation in the price of a Bitcoin, and whether it’s 10 or 20%, I mean, they’re too volatile to really be used in commerce. They’re too volatile, uh, you know, because you don’t know what they’re worth from even hour to hour, right? That’s, that’s what you said 6 months ago. You didn’t like the volatility. I think the majority of the reason that people are buying Bitcoins is because they believe that they’re going to get rich.

40:33 I think people are buying Bitcoins like they were buying Beanie Babies at one point. They’re not, they’re not buying them to use them. Pure speculation. They’re just holding on to them, and the reason the price is going up is because nobody is selling and everybody is storing their Bitcoins and they’re watching, uh, their wealth go up. But at some point people are going to want to cash in these Bitcoins, and when that happens, you know, the bottom drops out of the market, because you, all, everybody can’t sell.

41:00 There needs to be a buyer. Right now people are thinking that they’re going to be multi-millionaires. I mean, you have kids that have a few hundred worth of Bitcoins that think they’re set for life. I mean, people start doing the numbers and they think, well, everybody on the planet’s going to use Bitcoin, so, uh, what you know, how much could they be worth? And people are making these crazy, oh, they’re going to be worth a billion, a million dollars a coin.

41:21 You know, meanwhile, you know, there is an increased supply. People say there’s no increasing supply. Yes, there is, because you can take the Bitcoin and you can break each one up into little teeny fractions, so as as people break the Bitcoins up, that really, it’s like, it’s like a stock splitting. You could say there’s only a thousand shares, but it does a split, and then it does a split. Bitcoins can split many, many times over, because you can take your Bitcoin and you can crack it into little pieces, right?

41:47 How many decimal points can, can you, can you break off a Bitcoin? No, I totally agree. I think the whole idea that there’s a finite supply of Bitcoin is totally bogus. I totally agree with that. Uh, and I think it, it is, some people have compared the Bitcoin bubble to the the first bubble in history, which is a tulip tulip bubble.

42:05 Yeah, exactly, the, in the Netherlands in the 1600s but it’s, it’s even worse, because at least the tulip, I mean, I guess it was a flower. It had some, you could, what you could, what you, you could put it in your lapel, you know. I mean, you had some, there was some use for it, right, even though obviously the value of the tulip bulb bore, you know, no relationship to its utility as a flower, but there is no utility. There is nothing you can do with a Bitcoin other than pass it to somebody else.

42:33 I think, to be fair to the people who are Bitcoin, um, fans or enthusiasts, what their argument is, and again, I’m not, I’m not at all a Bitcoin investor, but I see their point of view, that they’re saying is that it’s a, it’s a digital currency which has no political or any exchange or any, you know, it’s not aligned to any political institution or anything like that, and I think it’s, um, in some sense, the people who in favor of Bitcoin, they want some sort of freedom completely from financial institutions. That’s what they want. They don’t want a fiat currency that’s linked to any financial institution.

43:13 They see it as a sort of anarchist. The problem, though, money, I mean, money needs to be a long-term store of value. If you’re going to actually transact in things, if you’re going to have a bond that’s, you know, denominated in Bitcoins that doesn’t mature for 50 years, right? I mean, people have to have confidence in what something is going to be worth, and how the hell do you know? Absolutely, I agree.

43:37 I mean, could you put your life savings in Bitcoin? I mean, you, but it, it doesn’t work that way. But I, I’m pretty confident that gold’s still going to have value in 50 years, because you have hundreds of years, thousands of years of history that shows that this metal is valued by humans, that it has properties that make it special and that give it intrinsic value. What I think the way of the future is, kind of what I’m doing at my bank, at my offshore bank, Euro Pacific Bank, and what we do, and I’m sure other banks will do this over time, but what I do is I allow my bank customers to denominate their account in the currency of their choice, or gold or silver, so they can have their deposit stored in gold or silver.

44:23 So if you live here in the UK, you can open up an account with me and say, okay, I’m going to fund it with £50,000, but I don’t want it in pounds. I want it in gold, and then I buy you gold, and now your account has gold. You get a debit card that you can use in commerce. You don’t even have to know that you have gold in the account. As far as they’re concerned, you’ve got pounds, because when you go into the store and buy something, or you go into an ATM machine and take out cash, you’re taking out pounds, or the merchant’s getting paid in pounds.

44:54 He doesn’t know that we’re liquidating gold in order to provide them with the pounds. So that enables people to, to use gold, and ultimately what I’m going to be doing with my card eventually is, when merchants, if merchants elect to be paid in gold instead of the pounds, they’ll be able to do that. So if, if you use my card and the merchant is saying, look, I want gold, don’t give me the pounds, just directly transfer gold into my account. And I think that the you know, the computers that we have now, it is very easy to take gold and really put it in a digital form where it’s just as easy to use in commerce as any other form of fiat currency.

45:35 The difference: governments can’t create it. But unlike Bitcoin, right, it’s a, it’s real money. It’s real. It’s tangible. You can take delivery of it, and, you know, gold has a use.

45:46 I mean, gold is a valuable metal that serves all of the required functions of money. That’s why gold became money. Now, gold didn’t become money because some politicians said, we’re going to be on a gold standard. Gold was money before any politicians ever came around. I mean, uh, you know, kings, they just recognized gold as money or silver as money, cause that’s what was being used in commerce because it worked.

46:12 You know, but when, uh, governments, you know, realize that they can seize control of the money and they could just declare paper to be money, they did it, uh, because it allowed them to confiscate the wealth of their citizens. But free people want real money. You don’t want your government to steal your money by debasing the currency. And, you know, before they even had paper money, the way they would debase the currency, which is where the word comes from, is they would take the precious metal out of the currency and they would put base metal in the coin, and you would know that your, your money was being debased.

46:43 Yeah, in fact, I just want to ask Peter really quickly about you. You do a radio show every week, and, uh, you talked about it earlier when you ran for Senate, you weren’t getting the calls that you would normally get from the media, and I’m just wondering what you think of independent media, which I guess is what you do every week, and the normal, you know, Fox News, the typical stuff you see promoting Wall Street. Are they diverging? Do you, do you think the, the regular media gives that a fair shake to Wall Street?

47:07 What’s your, well, I think the, the regular media bends over backwards to help Wall Street out and to help perpetuate the myths that benefit Wall Street. But I think the best source of information right now in the media, real information, is the alternative media. There’s a lot of good stuff on the internet, you just have to look for it. Unfortunately, most people don’t know where to look, and so they never come across it. But I started doing my radio show partially for that reason after the Senate run was over.

47:35 I started Schiff Radio, and you can listen to it. You know, we’re syndicated in the US, but you, any, you can listen anywhere in the world at schiffradio.com, and I do the show for two hours a day, a day, a day, and I take calls. so you can, if you listen live, you can call in, or you can just listen anytime. Uh, but I know I have people listening to this show all around the world, and I’m trying to get this information out there, because I know if you rely on conventional sources, media, you’re going to get disinformation.

48:07 You’re going to get a lot of regurgitated government propaganda. You think it’s unintentional on their part? I mean, are they complicit, or do they just do what’s in their best interest? It’s probably a little of both. I would say there’s a famous phrase that says, uh, I’ve always said this: there are two types of information, information for the masses and information for the classes.

48:26 And I would urge people to actually find out, okay, is the information I’m getting information for the masses or for the classes? So, uh, the classes. I would say yes, absolutely. And you do two hours every weekday, and you just talk about markets and that kind of thing. Yeah, yeah.

48:42 Okay. But I would say you should do a show. Is there a third class, though, for the asses, or is that the masses or the asses? They’re synonymous, but I mean, going back to, uh, this, actually goes I’m glad you brought this up. At the whole media thing, going back to when you were standing your ground before the financial, before the crisis, in 2006, when you were on CNBC, when you’re on Fox, and you were saying, no, there’s going to be a recession, there’s going to be a crash, and everybody was laughing at you, because I remember everybody was laughing at me, uh, because when people are in such a bubble-minded state, people, oh, the house prices are going to go up 10%, stocks are going to go up, buy stocks, buy, uh, housing.

49:19 I mean, what were you thinking? I mean, what were you thinking to yourself? Because I was thinking, I’ll be honest with you, when you’re the only voice standing apart from the crowd, when the herd is, when the herd is going one way, following the media, following the financial pundits, and all this kind of stuff, and when there’s one voice maybe speaking reason, like you did in 2006, um, do you ever doubt yourself? Do you ever say, you know what, maybe the herd is right?

49:48 It’s a good question, actually. Good question. I, you know, you doubt yourself, maybe a little bit. I mean, because I, I went through that experience with the dot-coms, and I was confident that most of these stocks would go bankrupt, and I refused to buy them, and for a while, yeah, I looked pretty foolish, and then I was vindicated when they collapsed. And so I had, you know, I had lived through that, you know, arguing with people.

50:13 I had a lot of arguments with people I knew, friends and family members, about the dot-coms, where people thought I was a fool. And so when I had those arguments a few years later, in many cases with the same people, over real estate, at least I felt a little, you know, empowered by having been right about this, the dot-coms. But they didn’t, they didn’t seem to notice that they just seamlessly moved from one bubble to another without missing a beat, and they, they still, they still couldn’t understand that I was right.

50:41 But I’m still confident, and now, you know, it’s my, my prediction, still. I mean, you still have people, uh, that are listening to things that I’m saying, and, and still act like I didn’t get anything right in the housing market. I’m just how could you think this way, this is crazy, fool, uh, and all they want to say is, well, you got lucky on the housing market. You just were a stopped clock, and so you were right twice, you know, twice a day, or whatever it is.

51:06 Um, that is complete nonsense, because if people just look at, they, extremely bullish sentiments, you know, but the other thing, though, you have to look at: if you look at what I was saying and writing in ’04, ’05, ’06, and that’s easy to do, it’s all on the internet. I mean, you can’t say I just got lucky, because I was very precise in my explanation of what the problem was, what was causing it, how it was going to unwind. It wasn’t like I just said house prices are going to come down, and then they finally did.

51:36 In fact, you can look at my mortgage banker speech, which is the one I thought you were talking about when you mentioned 2006, but this is a typical talk that I gave. This was to mortgage bankers in 2006. There were 3,000 of them, and I made some of the same points the year earlier, which is why they invited me back. But if you have an hour to kill, you know, go to YouTube and go to Peter Schiff Mortgage Bankers and watch that speech, uh, from fall of 2006.

52:01 Everything that happened in 2008, I laid out in that speech. Yeah, and that wasn’t the first time I said it. I’ve been saying it for years. It finally happened. Yeah, you know, and going forward, I mean, now we’re in the subject, going forward to 2014.

52:16 Do you feel that the same level of, you know, if they’re in a bubble, because, let’s be, stock markets are just, you know, going higher, there’s no end in sight? Uh, and again, as you said, back in 2006, and I, the fundamentals do not support this rising stock market, or the bubble we’re in. In London, there’s a housing bubble, uh, in London right now. I spoke to my mortgage broker only a few months ago. He said, don’t buy a house in London now, it’s a bubble.

52:43 Wait, prices went up 10% last month there. I mean, again, the fundamentals do not support these rising house prices in London or, indeed, the stock market. Yeah, I, I think it’s all part of the same bubble, you know. I mean, the Fed’s been blowing it for years and years, and every once in a while part of it bursts. Uh, first the stock market, housing market.

53:01 The Fed keeps blowing more air in and reflating them, you know. The bubble is in the bond market, in the US Treasury bond market. There’s a bubble in the US dollar, but it’s all part of the same bubble. Uh, and eventually it’s going to burst for good, and there’s, there’s, the Fed is not going to be able to reflate, reflate at all, and the air is going to come out, and then people are going to see, obviously, you know, how bad the situation is. I mean, you know, when I, when you’re talking about, you, during the housing bubble, when I was pointing out some of the absurdity of what was going on in the mortgage market, uh, with the zero down and the negative am and the liars’ loans and the, the securitization process, nobody, people thought that I was nuts for even thinking that it was a problem.

53:46 Right? The things that everybody now agrees were a problem, nobody found them problematic at the time. But now, of course, it’s obvious, and now you even got Fed officials coming out and saying, oh yeah, the housing bubble was obvious. Believe me, it wasn’t obvious at the time. It was obvious to me, but to the powers that be, to the, to the masses.

54:06 That’s right. It was completely not obvious. Bernanke and Greenspan themselves were in denial about it. Yeah, the problems that we have today, to me, are even bigger and, more, more obvious than the housing bubble, yet fewer people can actually spot it. But after it all collapses, yes, the problems today will be as obvious as those problems in the housing market are now.

54:28 In hindsight, it just is that when you’re in the bubble, the participants don’t know it’s a bubble, you know, and the definition of a bubble, isn’t it? And if you’re in, and if you’re invested in the market, you probably are so biased. You want, you know, and, you know, the reason that so few people were able to make the same prediction that I did is because they didn’t understand the problem. They still don’t understand it. That’s why there’s still oblivious, right?

54:51 They, even after the 2008 financial crisis, they still don’t get it. They still don’t know what’s wrong with the US economy. They think that the problems have been solved, even though what the Fed did to solve them is exactly what it did to cause them, and even though the problems that caused the financial crisis are actually bigger now than they were before the crisis. That’s right. Okay, that’s a word on the bubble.

55:13 Peter, I have to ask you, are we going to see more stand-up comedy from you in the future? Oh, did you see that? Uh, that New York’s funniest reporter, is that video, I saw you? Like, I saw you doing some stand-up with a brick wall behind you. Yeah, that was it.

55:26 That was from New York’s Funniest Reporter. Unfortunately, I got second place. Really? I didn’t win, but yeah, you know, I, I did everything that I said during that, you know, 10-minute sketch. That’s just lines from my presentations, you know, and I have a lot of things that I say that I think are funny because they get a lot of laughs.

55:47 And the reason I do that is because when I talk for an hour in front of a large audience of people, I don’t want them bored, number one, and I know I am giving them information that in many cases isn’t pleasant to hear, because it’s about how bad things are and how much worse they’re going to get. So I’d rather pepper my comments with humor, so that, you know, it’s a spoonful of sugar to make the medicine go down. Uh, but also, you know, a lot of the things that we’re doing, I try to use analogies to describe what’s going on, and they’re generally funny, and the humor has to do with the stupidity of the programs.

56:25 Once you find the proper analogy to describe a government program, what the Federal Reserve is doing, it’s actually funny. You know, the truth is funny. Yeah, because when you really understand it, it’s laughable how ridiculous what they’re doing is. Okay, understood. I want to finish up here with a question we always ask all of our guests.

56:44 Here it goes. Peter, if you can make a phone call to the 20-year-old Peter Schiff and give that young man a bit of advice. Oh, well, what would you tell him? Oh, I have a lot to tell him, because I’ve made so many mistakes in my life since I was 20. In fact, if I could make that phone call, I wouldn’t be sitting here right now.

57:01 I’d probably, I’d be on top of the world. What’s the biggest mistake you think? Oh, I don’t know, my personal life, my business life. I mean, I don’t know. I mean, I, I, I, I made a lot of mistakes.

57:12 I’ve done more things wrong than I’ve done right, and, any, but just advice you would give to that kid? You know, it doesn’t have to be specific, but, uh, you know, where were you at the time, 20? I, I, well, I just dropped out of college after two years. Maybe my advice would have been to drop back in, because I, I went back, and I graduated from Berkeley in ’87, but I took a couple of years off, which was a dumb move. Anyway, I shouldn’t have done that.

57:36 Um, but why, why did you say that? Why? Because I, I mean, because I really didn’t accomplish that much during those two years that I was off. I should have just gone through college. I mean, if I wasn’t going to go back, I didn’t need my degree.

57:47 My degree didn’t do anything for me, job-wise. Um, but it just seemed like it was, I shouldn’t have just, uh, stayed off those two years. I should have just gone through, and, you know, um, and maybe I’d have gotten a better job. I don’t know. I mean, maybe getting a good job, I didn’t get a good job out of college, and maybe had I got a better, maybe had I gotten a good job, I, I, you know, maybe I’m better off today because nobody hired me and I was kind of on my own.

58:11 Um, but, know, there’s a lot of mistakes that have been made in business, uh, but, you know, I, and I, I think though, as far as understanding the big picture of the economy, I mean, I’ve gotten that right, and, you know, and and, um, so that part. But obviously, you know, with the benefit of hindsight, I mean, the, you know, I, I could have participated in the dot-com bubble, I could have participated in the housing bubble, and I could have made more money shorting them, right? Because I would have known exactly when they were going to burst.

58:37 So obviously, if, you know, if somebody could tell you, you know, 30 years later, hey, this is what’s going to happen for the next 30 years, you know, yeah, you’re not going to do anything wrong. You’re, you’re going to, spoken like a trader. What I’ve done, I think what I’ve generally done wrong is I look at a problem and I immediately see the end result, but I miss a lot of the stuff in the process. Like, I, I, I know what’s going to happen, and then I immediately start connecting all the dots to what happens next, what happens next, what happens next, but a lot of times it doesn’t necessarily happen that way, uh, in the dot-connecting.

59:14 And so I think you have to, you know, play for the original reaction. Like, you can’t say, well, this is going to happen, and so then this will happen, and this will happen, and this will happen, so I’m going to prepare for this fourth thing. You’ve got, if you do it one step at a time, you can make, you know, you can actually make a lot more money, because I start thinking too far ahead. I start, I, I start overestimating the intelligence of everybody else to figure out what’s going on.

59:38 Okay. Instead, people seem to remain oblivious longer than, than you would think. Okay, understood. On that same note, what’s the best advice you’ve ever received throughout your life? I know these aren’t easy questions.

59:49 Yeah, I know. I haven’t had time to think about what the best advice I’ve, I’ve gotten is. I mean, you get a lot of advice. Most of it is no good. Okay, no.

59:56 Nothing brings to mind that last part of that question is to the 20-year-old listening to us right now who wants to, you know, get into the investing business or grow up one day and be like Peter. What do you tell them? You know, what to do, you know, or to that 20-year-old that’s at the Occupy movement, that’s frustrating. I mean, I know it’s hard. I mean, if you’re, if you’re, you know, if you’re following me and if you believe in what I’m doing, you know, we’re hiring people.

1:00:17 You know, we’re hiring people at Euro Pacific Bank. You don’t even, you don’t need to have a lot of experience. I mean, I think it’s a great opportunity to get in and help, you know, work at my bank. You don’t even have to live. I mean, you could live in the UK.

1:00:28 You don’t have to live, you don’t have to move to the Caribbean. It doesn’t really matter where you are, but we’re hiring people to help with the bank and help grow our clientele and service the clients that we have. Um, and so that’s a way to get into it, you know, because we do brokerage, we do asset management, we do, you know, the bank accounts. We have proprietary funds, so we get into, you know, a lot of aspects, and eventually I think the bank will get bigger and start to do more of the capital markets things that I do in the US.

1:00:56 I mean, do institutional trading. We do uh, investment banking in the US. We’re not doing that offshore yet, but I think we will. In fact, I’m moving my asset management company, uh, out of the US, or actually it’s still in the US, but I’m moving it to the Caribbean and to Puerto Rico from, uh, California, but I want to start expanding, uh, my presence outside the United States. And so there, you know, there are opportunities for people who, uh, want to work outside the states.

1:01:20 Okay, and a career in finance is something you do recommend to young people, you know, that are for the right person? So I mean, that’s what I’ve done. You know, and it’s interesting. I mean, I, I do think, though, that it’s not going to be as lucrative in general. Uh, I think when the crash comes, I mean, one of the corrections that we’re going to have is we’re going to have a big downsizing in that occupation.

1:01:39 There’s not going to be as many finance jobs, bankers, and brokers, which is going to be a good thing, because I think we have too many. Right now we’ve already seen a downsizing in the last, you know, five years or four years. Yeah, and I think that’s going, I think it’s going to continue. So it’s not just going to be as plentiful and as easy to make as much money as it has in the past, but, you know, there’s still going to be an industry. It’s going to change a little bit, and as I said earlier, I think more of it is going to move east, uh, to places like Singapore or Hong Kong or Shanghai, and I think, I think you’re going to get in the emerging markets in general, so it’s not going to be so much New York, London, you know, that are going to be where it’s at.

1:02:15 Um, so you might, you know, you might want to, you know, be mobile. Speaking other languages probably doesn’t help, uh, you know, or doesn’t hurt, rather. Right? Can I ask a question? I got a small question.

1:02:26 Yeah, last question, last question. Uh, sort of along the same lines, uh, there’s a question I always ask, uh, my own friends and people I bring to my own seminars, which is, if you had, let’s say, only $5,000, let’s say 10,000, whatever, let’s say you only had $5,000 to invest. Okay, that’s all you had. Okay. Most people out there, most folks, probably that’s all they had.

1:02:45 Where would you put it? So if I had, if that’s all I had, I mean, if you took all my money away, exactly, and all I had left was $5,000, where would you invest that? Right? I probably, I probably would have to spend it, but that’s all I had, but you know, people, if somebody other than me, right, if somebody had an extra 5,000 that they didn’t need, right? Right.

1:03:03 They said, hey, here, I’ve got five grand that I don’t need. I want to invest it, and I have no other investments. This is, I, I finally scraped together this $5,000. Um, yeah, I think they should have some silver, maybe, with it, uh, or if they want to buy an emerging market fund, uh, try to get into very cheap right now in their value. Yeah, I think the, uh, if, if you want to get in the stock market, you know, I have my own, you know, my, uh, your specific, uh, funds.

1:03:26 I, I have, so they can invest in some of my mutual funds or some other ones, but I think the emerging markets, southeast Asia, if you’re a long-term investor in the stock market, that’s where you want to be. Uh, and you can, again, I think commodities are going to go up, but particularly precious metals, so you can have some precious metals and gold stocks as well. Yeah, maybe I could put $1,000 into silver and $4,000 into emerging market stocks or something like that.

1:03:50 You know, a good SP. Peter, how do people get in touch with you if they say, want to open up an account in gold like you said, or they want to come work for you? What’s the best way they can find you? Well, to work at Euro Pacific Bank, the website is europacificbank.com, for my offshore bank, uh, and people can email me, though, uh, if they’re interested, and get email me at EUR Pacific at Schiff europa.eu. Uh, I mean, for my radio show, is that on iTunes as well?

1:04:29 Your radio show, you know, I, I think, I think there’s a little bit of it. I forget, but schiffradio.com. I got a YouTube channel, The Schiff Report. We do a lot of videos. Some of the videos are of the radio show.

1:04:39 Yeah, yeah, good videos. My books are out there. You know, I’ve got a revised edition of my book, How an Economy Grows and Why It Crashes, coming out in December. It’s a cartoon book on economics. It’s a great book to read.

1:04:50 But my, my other book that’s recent is How an Economy Grows and Why It Crashes. People can still, uh, pick that up. And, um, precious metals. I, I, I’m in the gold business. Uh, SchiffGold is the website, SchiffGold.com, for people who want physical precious metals delivered, although we deliver them from my bank as well, so not only can you store your metal with us, but you can actually have it shipped to you if you want.

1:05:14 Full service. It’s not, not a lot. You don’t do. Um, that’s awesome. Alessio, what’s going on with you?

1:05:19 Uh, in the next few months? Yeah, actually, we’re doing, um, a, a live online seminar, a webinar. Yeah, uh, actually in December on this very subject we talked about today. Uh, the webinar is going to be called How to Profit from a Crisis. So we’re going to show folks, so we’re going to show you a number of different strategies, very useful strategies, on how you can make money from the next oncoming crisis.

1:05:41 Being prepared is 90% of good investing and good trading. So we’re going to show you some really great simple strategies, but effective strategies, to make money from the next crisis. Uh, there’s one strategy called the markets ATM machine, Mach. We’ll talk about that as well. Uh, webinar, the seminar is on the December 5th, yeah, Thursday.

1:06:00 I was at your last one. A bunch of our London Real audience went to it, they loved it. So the link I should mention is, uh, go to Leading Trader.com 201014 and how to take advantage of the crash. Look at you. Um, cool.

1:06:12 I, I’ll be there. I think last time we, we even chatted beforehand or something like that. So I think it’s really good. I tell my audience, I mean, I have a lot of people that, that choose, like, sometimes they would rather occupy and not get involved, but I say, look, take control of your own finances, whether you want to put your money in gold or learn about the markets. But, you know, in my opinion, if you’re going to be part of this society and have money in a bank account, then you might as well be doing something intelligent with it, and not just sit around and then complain when something goes wrong.

1:06:37 So I’m big into activism. Peter, thank you so much for being here. It was a lot of fun. Um, please come back next time you’re in London. Alessio, thanks a lot.

1:06:46 As we say on London Real, it’s about the journey, and, uh, best of luck to both you guys.