#1309 Peter Schiff Says Bitcoin To $100,000?

Peter Schiff is the Chief Economist of Euro Pacific Asset Management, and the Chairman of Schiff Gold. In this conversation, we talk about the current US economy, inflation, soft landing, global liquidity, national debt, credit system, gold, stocks, and why he is mentioning bitcoin and $100,000 in the same sentence. ======================= This episode is brought to you by Frec — Just as easy as investing in an ETF, Frec Direct Indexing can help you earn more by unlocking tax savings, no matter the market. Done for you, automatically. Check them out at ⁠⁠⁠⁠⁠⁠⁠⁠https://frec.com/⁠⁠⁠ ======================= Introducing Espresso - the world’s most interactive portable display. They have a portable screen that is incredibly light, comes with a nice stand, and the user interface is very easy. Anyone who listens to this podcast can go to ⁠⁠⁠us.espres.so/pomp⁠⁠⁠. They have a brand new offer waiting for you. ======================= Pomp writes a daily letter to over 265,000+ investors about business, technology, and finance. He breaks down complex topics into easy-to-understand language while sharing opinions on various aspects of each industry. You can subscribe at https://pomp.substack.com/ ======================= View 10k+ open startup jobs: ⁠⁠https://dreamstartupjob.com/⁠⁠ Enroll in my Crypto Academy: https://www.thecryptoacademy.io/

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:02Anthony Pompliano?

  What's up everyone? This is Anthony Pompliano. Many of you know me as Pomp. You're listening to the Pomp Podcast, which is my effort to find the most interesting people in the world and sit with them for hours while I ask questions in an effort to learn. So it would mean the world to me if you would subscribe to the show on your favorite audio platform, watch episodes on YouTube, and tell your friends and family about the podcast. My goal is to help millions learn from the world's most interesting people. So let's get into today's episode. Today's episode is with Peter Schiff. He's the chief economist of Euro Pacific Asset Management and the chairman of Schiff Gold. In this conversation, we talk about why he believes the current economy has many similarities to the global financial crisis, how he's thinking about inflation, a crash landing, a soft landing,

• 0:46Anthony Pompliano?

  global liquidity, national debt, the credit system, how he expects gold to perform in the coming decade, and has he finally capitulated on Bitcoin or not? And why is he uttering the same word Bitcoin with the number $100,000 in one sentence? Here is my conversation with Peter Schiff. I hope that you guys enjoy it.

• 1:05Speaker 01

  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.

• 1:29Anthony Pompliano?

  This episode is brought to you by Freck. Historically, the wealthy had a hidden secret in investing. They would spend a lot of money and use very big teams to conduct tax loss harvesting. Tax loss harvesting is the timely selling of securities at a loss to offset the amount of capital gains tax owed from selling the profitable assets later. But now, Freck is bringing this incredible advantage to any investor. They'll literally lower your tax bill, regardless of how much money you have. They use state-of-the-art technology through a product called direct indexing to allow investors to invest in the S&P 500 while getting all the benefits of tax loss harvesting without the big bill. If you want to learn more, go check them out at freck.com. That's F-R-E-C dot com. I'm a big fan of the product, and I even became an investor in the business.

• 2:15Anthony Pompliano?

  Freck.com. Go check them out today. Today's episode is brought to you by Espresso, the maker of the world's thinnest portable display. Now, listen up. If you're like me, you feel like you are at a command center when you sit down at your desk. I got a gazillion tabs open and different windows for different activities. There's my web browser, my text messages, I have Slack open, and I got a Notes app. I normally work on a desktop and it can be very, very productive, but everything falls apart the second I leave my desk. If I'm traveling, if I go to a coffee shop to do some work, or just want to work from the kitchen table, my laptop doesn't have enough screen space. I lose my command center and my productivity falls off a cliff. It's a major problem, but this is where Espresso comes in. They have a portable screen that is so beautiful that you think Steve Jobs came back from the

• 3:00Anthony Pompliano?

  dead to create it. The thing is incredibly light. It comes with a nice stand and the user interface is so easy that I figured it out, how to do it in less than three minutes. If you listen to this podcast, you know, that's not an easy feat. So the Espresso team and I, we became friends. I got to know them because I really like the product. And those screens, they now want to offer them to any fan of the podcast. So we struck a little deal. Here's how it works. Anyone who listens to this podcast can go to us.espress.s or that's too confusing, just go click the link in the description. If you go to Espresso's website, they've got a brand new offer there sitting for you. You get a little discount and you'll get a beautiful screen. Trust me, I use mine every day. You'll love the Espresso

• 3:45Anthony Pompliano?

  screen and I think it'll make you more productive. Go check them out today by clicking on the link in the description.

• 3:52Anthony Pompliano?

  All right, guys. Bang, bang. We've got Peter here. Peter, the US economy, everyone says that things are going well. Soft landing is here. Jerome Powell, he's the superhero. I'm assuming you disagree. What is going on in the US economy and where are all the dead bodies buried at the moment?

• 4:07Speaker 02

  Everybody is wrong. I mean, they're more wrong than they were in the summer of 2008, when everybody thought it was a Goldilocks economy and we were in the worst recession since the Great Depression. Remember? That depression or that recession started in December of 2007. But the government didn't acknowledge its existence for a year. It wasn't until December of 08 that the government said, you know what? We've actually been in a recession for an entire year. And in fact, it's the worst one since the Great Depression. So all the economic data that we've been spoon feeding the markets for the past year has been wrong. And everybody who thought we had a good economy based on that data was wrong. In fact, we were in a severe recession and we had a financial crisis.

• 4:52Speaker 02

  I think the economy is worse now than it was then. I think the recession that we're going to be living through, and it's probably already begun, is going to be far worse than the Great Recession. So it's going to be a greater recession. And what's going to compound the problem is going to be inflation, which is not dead and buried, as the markets believe. It's alive and well, and today's numbers from January CPI, you know, support that view. Inflation is headed back up. In fact, if you annualize the core number that came out today, it's 5%. You know, the headline is running closer to 4%.

• 5:36Speaker 02

  I think it was 3.7% if you annualize it. But look at what's happening to oil prices. They're moving back up. Bond yields are rising sharply again. But I think the real key is that the Fed's rate hikes did nothing to reduce consumer borrowing or spending. Consumers continue to spend and borrow, even though credit card interest rates are at an all-time record high. They're above 20%. Credit card balances are at an all-time high. Consumers are not responding to higher interest rates by reducing their borrowing and spending. And they're not saving more, which is what they have to do. Savings is still falling. And look at the government.

• 6:19Speaker 02

  Government budget deficits are rising in the face of rising interest rates. So the government is not cutting back on its spending. So the Fed has done nothing to put out the inflation fire that it lit. So the markets have got this thing totally wrong. There is no soft landing. There's a crash landing. In fact, the markets don't even think there's going to be a landing. They think we've avoided recession altogether. But we're going to have a severe recession, depression, if we're not already there. And inflation is going to get worse the entire time, which is going to not only compound the severity of the recession, but expose the paper tiger that the Fed is.

• 7:01Speaker 02

  Because the Fed is not going to be able to raise interest rates in the face of a resurgent inflation. Because the economy can't handle it. I mean, I think that's the main reason that Powell pivoted. It's not because he won the inflation fight. It's because he realized that if he kept fighting, the economy would be a collateral damage. We'd have a financial crisis and everything would collapse beneath the weight of those rising rates.

• 7:29Anthony Pompliano?

  So let's look at the Fed's actions over the last two years or so. They, in November of 2021, said, hey, things are hot. We are going to start tightening up here. We're going to start increasing interest rates. We're going to stop buying assets in the market. They continued for a little while. By March of 2022, they begin to actually put that into effect. When I look at the Fed's balance sheet, it has come down. When I look at interest rates, they have gone up. But at the same time, politicians continue to spend money like drunken sailors. And so if you look at it on a net basis, both the central bank and the fiscal policy that's been implemented, have we actually been tightening the economy? Or is your argument that we're actually easing still,

• 8:12Anthony Pompliano?

  even though if you look at the Fed's actions, it looks like they're tightening?

• 8:16Speaker 02

  Yeah, no, I think we've had an easy policy, an inflationary policy, the entire time the Fed's been tightening. I mean, yes, the Fed has been less loose. But I don't believe that less loose constitutes tight. But the entire time the Fed was being less loose, the government was loose. I mean, because you have an expansionary monetary policy, even if you look at the Keynesian textbooks, which, you know, are worthless, but even according to Keynes, if you have an inflation problem, the government needs to raise taxes, cut spending, it needs to have some type of contractionary fiscal

• 9:01Speaker 02

  policy. The type of fiscal policy that we've been running for the entirety of the Fed's inflation fight has been the classic Keynesian stimulative policy that you're supposed to run when your problem is recession and you're not concerned about inflation. So these have been diametrically opposed policies. And anytime Powell gets asked about it, or doesn't even get asked about it anymore, if he's asked to comment about these, you know, government spending and budget deficits, he says, hey, I can't talk about that. That's not in my lane. He says, I'm only concerned about monetary policy. But he can't be, because the fiscal and monetary policy go hand in glove.

• 9:43Speaker 02

  You can't be oblivious to the spending, because the reason that, you know, money supply growth or low interest rates, the reason that causes prices to rise is because it fuels demand. And there's not enough supply, and so prices go up. But government spending also fuels demand, and so does credit. I mean, the entire time that Powell's been looking at interest rates, he's been oblivious to the credit markets, because credit continues to expand. And if you go back to the classic definition of inflation, it's not just an expansion of the supply of money, it's an expansion of the supply of credit, because you can buy without money if

• 10:27Speaker 02

  you have credit. Credit can also fuel demand.

• 10:32Speaker 02

  And so we've been spending and spending. The only thing that really brought down the CPI was A, we had a huge spike, right? So nothing goes in a straight line. But it was the anticipation of the rate hikes that brought the dollar up. The dollar gained about 30% against, you know, global currencies. That brought down import prices. That brought down oil prices. And that helped bring down headline number. But that's a transitory effect. I think oil prices have already bottomed that are turning back higher. And bond yields too. Bond yields came down. That helped bring mortgage rates down. But now they're going the other way. Bond yields are

• 11:13Speaker 02

  rising again. And so that's going to put more upward pressure on rents because now buying a home becomes that much less affordable. So all the factors are now operating in reverse. And the markets are completely clueless. They're positioned the wrong way. So we're in a very dangerous point for equities, bonds, everything, because everybody is betting on an outcome that is not going to happen.

• 11:45Anthony Pompliano?

  When we see inflation coming from over 9% to close to 3% in year over year, there is also recently a month over month number that came out where it's 0.3%. So you begin to annualize that out, and that's not a good number. How do you balance year over year measurements versus month over month? Which one's more important to you?

• 12:08Speaker 02

  Well, I mean, you could take all these numbers with a grain of salt because I don't think they they completely capture what's really going on. I think there's a lot more price pressure than is evident in these numbers. You know, ironically, Biden pointed this out in that little Super Bowl video where he started chastising companies for shrinking their product sizes rather than raising prices and kind of blaming the companies greed for

• 12:40Speaker 02

  For this, but the reason companies are doing this is to avoid having to raise prices. They're trying to figure out ways to raise prices without annoying their customers. And so they're doing it by playing around with the quantity or the quality. But ironically, this is helping the CPI keep stay low because the CPI doesn't really capture the degradation in quantity. They're just looking mostly at price. And so ironically, the companies that are doing this are actually helping Biden by obscuring the full extent that his inflation is driving up their cost of living. But I think that what's important when you're looking at the CPI

• 13:25Speaker 02

  is looking at what's happened over the last six months or so. If you look at these numbers, they've stopped improving. And to me, it looks like we've built a bottom, like a base. Like if the CPI was a stock, you'd want to go long. You know, it's, it's, it's, it's broken out. And now it's pulled back and consolidated. And it looks like it's, it's going higher. But again, from the fundamental perspective, you know that inflation is going to pick up. We're running $2 trillion a year budget deficits. How is that going to be financed? And the national debt is actually growing by almost $1 trillion a quarter. That's $4 trillion a year.

• 14:08Speaker 02

  And we're not even, you know, officially in recession yet. The unemployment rate is still below 4%. Imagine when it's above 8%. I mean, if the deficits are this high now, imagine where they're headed. Plus you have all this debt that's maturing that nobody wants to buy. You know, so the Fed's going to buy it. Where's it going to get the money? The social security trust funds are already broke. They are in the market selling treasuries. The funds used to be the big buyers of treasuries, other than the Fed, now they're selling. And, you know, look at the interview that Tucker Carlson had with Putin. One of the things, at least, that Putin mentions was the de-dollarization.

• 14:48Speaker 02

  And he's pointing out, he says, "Why don't Americans, how can you guys be so clueless about what's happening?" I mean, he is warning us that we did something very stupid in weaponizing the dollar. And he's pointing out that, look, you know, global trade, a lot of this trade that used to take place in dollars ain't taking place in dollars anymore. And that trend is going to continue. And so that means less demand for treasuries from abroad. So if the social security trust funds are selling, if foreigners are selling, who the hell's gonna buy? It's just the Fed. And so we are gonna get hit with a tsunami of inflation in the years ahead. I don't know when the markets are gonna figure this out.

• 15:32Speaker 02

  But so far, they haven't. I mean, that's why the price of gold dropped $25 this morning. It's back below $2,000 for the first time this year. But the markets are saying, "Oh, no, we're not gonna get the rate cuts." Gold doesn't care about those rate cuts. What the markets don't get is that the Fed has lost the inflation fight. That inflation is not going away. And in fact, even though the Fed is not going to be cutting rates as much or as soon as the markets believe, in fact, they may not cut them at all, inflation is headed higher. And that means real rates are going down, even if the Fed stays put. And that's what's gonna be bullish for gold.

• 16:16Speaker 02

  And of course, it's inflation that's gonna be bullish for gold. So the markets don't get it yet. That's why gold is sold off. But, you know, at some point, you know, they're gonna figure it out.

• 16:29Anthony Pompliano?

  How much of asset price movements that have occurred over the last, call it, six months or so, is people positioning for a potential Fed pivot in interest rate decisions versus global liquidity? And global liquidity specifically saying the Fed may be tightening, but for a while, towards the end of last year, we saw China pumping tons of liquidity. And now China, all of a sudden, is talking about this massive issue in the stock market. And I've seen numbers in the trillions that they may pump into their stock market to kind of make sure everything is okay, kind of borrowing from the QE playbook that the US perfected in 2008. And so is it interest rates people are looking at? Is it global liquidity situation? Maybe it's both?

• 17:08Speaker 02

  Yeah, I think it is both. I mean, the one thing we know, it's not the fundamentals. It's all just inflation. It's anticipation of more cheap money, of not just rate cuts, but I think the market is anticipating a return to quantitative easing. I mean, probably first, an end to quantitative tightening, or some type of tapering of the quantitative tightening program, and then a return to quantitative easing. The markets are just expecting more of this, and I think that's what's driving it. But of course, if you look at the markets, you know, the market's not really going up. You have a handful of big stocks that are going up, and that is distorting the averages. I mean, most stocks are not going up.

• 17:54Speaker 02

  And, you know, companies are having a lot of problems in the current environment with, you know, rising rates or rates where they are. And, you know, consumers are broke. I mean, they've been able to get to where they are by, you know, maxing out their credit cards, but the cost of servicing that debt is increasingly higher. Student loans now, people are supposed to be paying those. A lot of people just aren't. But obviously, some people are paying the student loans, and they weren't paying them for a number of years. And so that's draining purchasing power. Rents have gone up. You know, I know, look, I just got a bill from my property tax in Connecticut, and

• 18:37Speaker 02

  all of a sudden, they revalued my house by like 30 or 40%. Now, some people might think, oh, this is great. Your house is worth more. No, they're doing that because they're going to hit me with a huge increase in my property taxes. You know, so I mean, people are getting clobbered with higher taxes, a higher interest rates, insurance. My homeowner's insurance is already more than doubled. You know, so these are huge price increases that are draining families. That's why you have this explosion and moonlighting. That's why so many people are taking two or three jobs. That's why the jobs numbers look so good, because so many people are forced to take on second and third jobs, because that's the only way that they can pay these higher prices.

• 19:21Anthony Pompliano?

  So when we are watching the US economy headed towards what many people are saying a soft landing could be achieved, we also see people like Barry Sternlicht saying that inflation is actually going to go negative. We're going to have a deflation reading on the CPI. We see things like credit card debt hitting all time highs, interest rates on that credit card debt hitting near all time highs. Like, there's all these data points that seem like investors are saying one thing, but the consumer is acting in a very different way. And so how do you look at the investment portfolio versus the consumer behavior? And who's right? Like, is the consumer

• 20:02Anthony Pompliano?

  able to obfuscate what they're actually doing by using credit and other means? Or do the investors have a better read in terms of looking at financial assets and they're really the ones who are highlighting? What is the current state of the US economy?

• 20:15Speaker 02

  Well, I think one of the best barometers of the state of the US economy is Biden's popularity, or his lack of popularity. I mean, what else would explain the fact that he is the most unpopular president in the history of, you know, these polls of, you know, popularity? I mean, the only explanation is the economy. And in fact, if you look at the questions when they poll voters, that's where Biden scores the lowest. It's on the economy. Now,

• 20:48Speaker 02

  That's because the people who are responding to these polls, they are living in the actual economy. They're not living in the fantasy that's created by, you know, government numbers. And that's the fantasy that Biden and all of his minions are trying to sell, right? The media is constantly bombarding the public with how great the economy is. You go to your ABC, NBC, CBS, CNN, right? MSNBC, any of these stations, with the exception of like Fox or like the, you know, like the Newsmax or the One American News, but you know, the mainstream of the media, the narrative is the economy is great and Biden gets the credit.

• 21:30Speaker 02

  Like he's like, he's a masterful economic, you know, strategy, Bidenomics. We've got this booming economy. Every time you hear Fed Chairman Powell speak, he talks about how strong the economy is, how resilient it is, how strong the labor market is. Right? So the public is being bombarded with positive messages about how great the economy is. Yet they score Biden extremely low when it comes to the economy. So it's because they are living it and they know it's bad. And so I think that's a good look. But obviously if savings are collapsing, that's a bad sign. People would rather have their savings going up. If you, if you ask the typical American, hey, would you rather have your savings increase

• 22:14Speaker 02

  or be depleted? Most people would rather have more money to save. If you look at credit card debt, you think people want to be, you know, this deep in debt? Is that a good sign that people are so deep in debt? I don't think the public likes the fact that they have to borrow so much money. And a lot of this debt is being taken on just to buy gas, to buy food.

• 22:40Speaker 02

  You know, so you eat the food, it's gone, right? But the debt is there indefinitely until you go bankrupt. So the anecdotal evidence is very strong that we have a weak economy. You know, the only thing you can point to is the low unemployment rate or these GDP numbers. But I think the GDP numbers, again, don't tell the story because so much of that spending, which is not really economic growth, is being financed by debt. Either the government is taking on debt and spending money, or the consumer is taking on debt and spending money. And we're scoring that spending as economic growth, and we're ignoring all the debt that we've accumulated to make it possible. So we're actually spending ourselves into bankruptcy is what's going on. So the real economy is very weak.

• 23:25Speaker 02

  So you've got to tune out the GDP numbers. And the unemployment numbers, I mean, they're going to revise these things. I mean, I just don't think they're accurate at all. And if you compare the establishment survey to the household survey, and you see these wild divergences in these numbers, you know, look at these massive layoffs. All the big companies have been laying off workers. Who the hell's hiring them? I mean, the government obviously assumes that a lot of businesses are being established. Who? I doubt it. I bet there are businesses that are shutting down. I think the government is miscalculating this because they're so optimistic on the economy. They just assume that new businesses are starting. But when in reality, they're probably shutting down.

• 24:09Speaker 02

  And that, you know, so they're making up jobs that don't exist. And the unemployment rate, you know, a lot of people probably don't qualify anymore for unemployment. They're not working, or they're working, you know, barely. You know, they got a job at Uber or something like that. But they're not really doing much, and they're not counted as unemployed anymore. So, you know, those numbers, I think, don't really reflect the weakness that's there in the economy. And I think, you know, that's going to continue to, you know, reveal itself, I think, as the year progresses and things get even weaker than they are now, and inflation gets stronger.

• 24:52Anthony Pompliano?

  How many of the jobs are government jobs? Like, is the government just hiring tons and tons of people?

• 24:57Speaker 02

  A lot, a lot of the jobs are government jobs, unfortunately. Whether it's federal jobs, and a lot of them are just in healthcare. And you know, a lot of the healthcare jobs are, in effect, government jobs because the government is paying all the bills for healthcare, a good portion of the bills. But government jobs are generally, not only not productive, they're counterproductive. Government workers actually undermine the ability of private sector workers to produce. Like, all these IRS agents that we're, that we're hiring, right? Is that a good thing? That the government is hiring IRS agents to go harass more people? And undermine their productivity? Uh, you know, people that are there to enforce regulations and stuff like that. Uh, you know, this is not a good thing.

• 25:41Speaker 02

  But the other problem, obviously, with the government job is where does the money come from to pay these workers? You know, because when the private sector hires somebody, the wages are paid out of the productivity of the worker. But the government workers doesn't have any productivity. Also, the private sector worker, his salary is paid by the customers of the business when they buy the goods or services. But the government doesn't have any customers. So who pays the bills? The taxpayer. And if the government's not raising our taxes, they're just gonna run bigger deficits to pay these salaries, which means even more inflation gets created. So we have to pay for all these government workers with higher prices.

• 26:24Anthony Pompliano?

  When we see the assets that are going up, AI stocks seem to be skyrocketing. Uh, the magnificent seven, which is kind of a proxy for AI because everyone thinks that AI is gonna be hot. Uh, we see Bitcoin going up, et cetera. Does that concern you? Or do you think that that makes sense?

• 26:44Speaker 02

  Well, I mean, I don't own, I don't own these stocks. Um, you know, that's a very narrow group, the magnificent seven, although some of those stocks, you know, seem to have broken down a bit. So maybe it's only four or five of them that are still magnificent. But, um, yeah, people are gonna get hurt, you know, in these names. I mean, certainly, they're, they'll benefit from AI. But, um, I think, you know, a lot of that...

• 27:10Speaker 02

  Has been more than priced into these stocks, at least, you know, the short-term benefits. And there's a lot of, lot of problems that are, that are overhanging the economy and the markets. So, you know, a lot of people rushed into these stocks. If they want to get out, you know, you don't have the buying there. Um, you know, Bitcoin, I think, is part of the, uh, you know, the, the, the, uh, the move to speculate and gamble, which is obviously what's going on. But Bitcoin kind of had its own narrative with all those ETFs being launched. You know, now there's a dozen or so Bitcoin ETFs. And so there was a lot of hype there that led to that rally.

• 27:52Speaker 02

  Uh, predictably, when the ETFs were launched, it was a sell the news event and they all dropped about 20 something percent. Uh, very quickly, they've recovered and made new highs, I think, on the back of, you know, uh, some renewed speculation. I think this ETF conference down in Miami that's going on right now, there's probably a lot of hyping. And from my experience observing Bitcoin over the last several years, you know, there are constant, you know, times where there's hype, where there's an opportunity uh, for people to pump it up. And then everybody kind of rushes in, they buy in, they, you know, they want to capitalize on that. They expect there to be some follow-through.

• 28:34Speaker 02

  Um, and so, you know, I think that this, you know, now that, you know, when this conference ends, which is Valentine's Day or, you know, maybe the hype will end before, but I would expect uh, the market to sell off. You know, Bitcoin got above 50,000 already. I, I wouldn't expect, you know, much more upside. I, I think it has a lot of, lot of, lot of resistance up in this area. Um. Why? Hold on, let's talk, let's talk about that. Through there, you know, I just, I, I, I, I just don't see what the next catalyst for the rise. I mean, unless. The ETFs ignite a whole new group of buyers. I just don't think they're gonna bite.

• 29:12Anthony Pompliano?

  All right, I'll take the bait. Ready? I'm gonna tell you what I think's gonna happen over the coming months. You tell me what you agree with and what you disagree with. Bitcoin, which really the long-term trend is just the more they print money, the more that hard assets or kind of finite supply assets are going to benefit. So gold, I think, will continue to do decently well, although the returns are small compared to Bitcoin. But Bitcoin and gold will both benefit from the undisciplined monetary policy. But now that we have the ETFs, there is $500 million a day of net inflows into these vehicles. We're a month out, right? So they got approved a month ago. It's not like it got approved yesterday. We're still getting $500 million a day.

• 29:53Anthony Pompliano?

  There's only 900 Bitcoin a day being produced by the network. So 12.5x more demand than what the network is creating on a daily basis. And then we are heading into about 70 days away or so from the Bitcoin halving. So that 900 Bitcoin is going to get cut to 450 Bitcoin. And so if you have only $20 million or $25 million of Bitcoin getting created every day, but you have $500 million trying to find Bitcoin, the price has got to go up to accommodate everyone, right?

• 30:21Speaker 02

  Well, you're assuming that the only supply is the new Bitcoin that's being mined. I mean, how many Bitcoin is already in circulation right now?

• 30:30Anthony Pompliano?

  Good question. Right now, there is, hold on a second. Right now, there's just over 90% of Bitcoin that's in circulation, but of all 21 million Bitcoin, or I'm sorry, of all the Bitcoins in circulation, 80%, it's like 79.5% of that has not moved in the last six months. So that is an inelastic supply. People are holding it. They're not willing to sell it. And so really, you only have 20% or so that is tradable. So at a trillion-dollar asset, you've got about $200 billion. But the way I think about it is the Bitcoin ETFs, if they've sucked up $10 billion already in 30 days, that's 5%.

• 31:11Speaker 02

  Does that include whatever left grayscale?

• 31:14Anthony Pompliano?

  That's, that's all net inflows. Correct. If you include grayscale, grayscale's got another 20 billion. So now you've got $30 billion in these ETFs, including grayscale, 10 billion without grayscale. And there's only 200 billion that is actually tradable. Like this thing is highly illiquid and you have all of this inflow coming and the heavens on the horizon, I might convince you today to buy Bitcoin.

• 31:37Speaker 02

  No, well, you make a couple of assumptions there. One is that the Bitcoin that hasn't moved in six months, won't. That, you know, some people, whoever owns that Bitcoin can decide they want, they want to sell. Just because they didn't sell over the last six months doesn't mean they're not going to sell over the next six months. And also, you assume that all the people that bought into these Bitcoin ETFs are going to hold long. You have no idea what their time horizon is. They may have bought for a trade. They may sell. You know, just because somebody owns the ETF doesn't mean they're hodling for the rest of their lives. These could be a different type of investor who has come in. And you don't know how quickly they may, they may take the other side of this trade.

• 32:23Speaker 02

  But yeah, I mean, I can certainly see that there is potential. If enough in people, you know, FOMO into this thing, just out of greed. I mean, look, people do a lot of dumb things, you know, and, and Wall Street certainly will encourage it if they think they can make money. So you've got all these firms now that own these Bitcoin ETFs. It's like if I owned a casino, I'm going to try to get people to come gamble at my casino, even if, even if I know that it's bad for them, right? I mean, they're going to lose. I'm, I'm operating the casino. I'm going to win. And, and so the ETF owners, right, these big

• 33:04Speaker 02

  firms, yeah, they want to hype up their, their new casinos that they just spent a lot of money building, and they want to get people in. And, um, yeah, I mean, so are people dumb enough to buy these ETFs? Sure. You know, I mean, and just having money doesn't mean you're automatically smart. There, there's, there's some dumb people that have money. But in the end, the dumb people are going to be separated from their money. And, and so, but can Bitcoin rally to 100 grand, you know, or more?

• 33:36Speaker 02

  Sure, it can, but I don't even think it's worth betting on it because it's not even that big a rise.

• 33:41Anthony Pompliano?

  Do you think that that's gonna happen? Do you think Bitcoin is gonna go to 100K?

• 33:45Speaker 02

  I, I, it probably won't, but I'm just, I mean, it could, but I just don't think there's enough upside anymore in Bitcoin for it to be interesting to anybody. I mean, there, there are plenty of other things that you can buy that have more upside than Bitcoin.

• 34:01Anthony Pompliano?

  Not gold.

• 34:03Speaker 02

  But, well, I think gold does have more upside than Bitcoin long-term. But do I think, look, do I think gold is likely to double in the next year or two? Probably not. I mean, it could, but gold stocks could, they could triple, they could quadruple, they're super cheap. I, I, I'd rather do that, you know, um, than, than get into Bitcoin. You know, it, it, yeah, there was a lot of potential, you know, and not that I took advantage of it, but you know, when Bitcoin was, you know, under a thousand or under a hundred, wherever, even, you know, when it wasn't constantly talked about, uh, when, you know, people were, you know, most of the Wall Street community was bashing Bitcoin back then.

• 34:46Speaker 02

  I wasn't, you know, alone, everybody was bashing Bitcoin, all the big names were saying it was ridiculous, you know? So, nobody really was owning it, you know, there, there was no, uh, El Salvador or MicroStrategy, and other stuff was around. They didn't have all the NFTs, I mean, so there, you know, there was more upside in it, if you wanted to gamble on it, you know, yeah, you know, you, you know, it was like a lottery ticket and it paid off. But at this point, there's just not enough upside. I mean, it's been going sideways now for three years. I mean, it, it almost hit 70,000 in 2021, right? This is 2024, all the hype, uh, all the promotions, um, you know, I, I think the, I think these

• 35:29Speaker 02

  ETFs, this was the last chance to sucker in new buyers. And we'll see if, if, if it works, but it may not. I mean, I just, you know, I, I, I, I don't think it's gonna be sold. So, for example, I mean, I was a broker for 30 years, you know, licensed stock broker. This is the first year that I'm not Finra anymore, but.

• 35:52Speaker 02

  I don't believe that commission brokers or the firms that employ them are going to allow the solicitation of these ETFs, especially in an IRA. I don't believe there's any brokerage firm that is going to let a broker recommend that these be bought in an IRA. I mean, it's just you're asking for a lawsuit that you're going to lose if it goes down. So I don't see it.

• 36:18Anthony Pompliano?

  Why?

• 36:18Speaker 02

  Let me finish. I don't think any fiduciary money managers, of which I still am at your Pacific Asset Management, I'm a registered investment advisor. As a fiduciary, I don't think most fiduciaries are going to take the risk of putting this in the portfolios. I just don't think so. So I think that the demand for these ETFs is going to come from unsolicited buying of individuals mainly. And I don't think that's going to be enough to move the needle the way you need it to be moved, given where the market is.

• 36:55Anthony Pompliano?

  What is the price in which you will admit you're wrong? Is it 100K? Is it a million dollars?

• 37:02Speaker 02

  No, I mean, look, obviously too, and it's funny because on Twitter, or not Twitter, on X, you know, I made this comment because somebody said, well, Bitcoin is going to go to a million or some crazy thing like that. And I said, well, you know, if we have a situation like Weimar Republic, Germany, and we have hyperinflation, well, then I guess Bitcoin can go to a million. But so will everything else. I mean, if a loaf of bread is $10 million a loaf, does it matter if Bitcoin? I mean, none of that matters. So I kind of said that in jest. The only chance Bitcoin has to go to a million is hyperinflation. And now I read, you know, dozens and dozens of articles from all these Bitcoin publications. Peter Schiff predicts million-dollar Bitcoin.

• 37:47Speaker 02

  But um, so yeah, I mean, there is a scenario where the price of Bitcoin could go to a million. Or, I mean, but it's not going to mean you're a millionaire if you own a Bitcoin. I mean, you're a millionaire. I mean, yeah, on paper, but there's a lot of millionaires in Zimbabwe. There are a lot of millionaires, uh, you know, in, in, in countries that have had hyperinflation. Um, Venezuela has a lot of millionaires, but right, but their millions don't buy anything. So that's the way that, yeah, Bitcoin might go up in that, in that, in that sense. But it's not going to go up in a real sense. If Bitcoin is a million, you know, gold is probably going to be higher than that.

• 38:30Anthony Pompliano?

  You think that gold, hold on a second, back up. That's an absurd statement. You think that if Bitcoin goes to a million dollars?

• 38:37Speaker 02

  That's hyperinflation. It's so if, if, if a ham sandwich costs a million dollars, what do you expect an ounce of gold to cost?

• 38:46Anthony Pompliano?

  Let's just say that Bitcoin goes to a million dollars. I don't expect an ounce of gold to be a million dollars.

• 38:51Speaker 02

  Well, no, I don't think Bitcoin is going to go to a million dollars unless there's hyperinflation. I, I don't think that Bitcoin is going to trade up to a million dollars on, on just pure people gambling on it. I, I just don't, I just don't see it. It's, it's too big a move. There's too much money would have to come into it. And, you know, I, I just don't think there's that much dumb money in the world. I mean, there's definitely dumb money out there. I mean, don't get me wrong.

• 39:14Anthony Pompliano?

  What do you think? What, what do you think about, what do you think about central banks who, uh, they've been holding treasuries? And they've been holding gold as treasury reserve assets. Uh, they've been doing this for a long time. Um, and the United States, they, they got a little bit more sticky hands these days. They, you know, they confiscated or they've frozen assets of other central banks. Um, do you think that central banks may look at, uh, Bitcoin, given that it's decentralized and censorship resistant? As a way to insulate themselves from potential sanctions or freezing of their nation state assets?

• 39:47Speaker 02

  Well, I think central banks look at Bitcoin, but I don't think they're considering buying it. If that's what you mean by look at it, I mean, they look at it, but there's no way they're going to buy it. Um, you know, but they are buying gold and they're going to continue to buy gold. They're going to buy more gold. Um, you know, they

• 40:02Anthony Pompliano?

  But how many of them?

• 40:03Speaker 02

  They are de-dollarizing. They're trying to get out of the dollar. And they're not going to get into Bitcoin. There's just no way they would do that. You know, they are looking for a conservative store of value to act as a reserve. Bitcoin, even if you like Bitcoin, Bitcoin is not a safe haven, low volatile store of asset. If your currency were to come under attack, you wouldn't be able to defend it with Bitcoin. I mean, because Bitcoin can crash more than your currency. I mean, Bitcoin is very unpredictable and very volatile. So there's no way it would not be able to satisfy the criteria of a central banker. They're not looking at the upside, right?

• 40:47Speaker 02

  When you're a central banker looking for reserves, you're not thinking, hey, I want to buy Bitcoin because it can go way up, even if you think it might go way up. You have to concede that there is a risk that it can go way down, even if it ultimately goes way up. Bitcoin could crash at any moment. And so that's not the type of asset that a central banker is going to have as a reserve asset on his books. The only real alternative it has to another fiat currency is gold. So if I'm a central banker, I can choose between dollars, euros, yen, pounds, Swiss francs, gold, right? That's, those are my choices. Bitcoin is not even within the realm of possibility. Even if they thought the price was going to go up, they're still not going to buy it.

• 41:32Anthony Pompliano?

  So let's just say everything you just said is true, which it's not, but let's just say it is.

• 41:38Speaker 02

  Well, no, it is true. What's not true? You're saying Bitcoin's not volatile? It can't drop a lot?

• 41:44Anthony Pompliano?

  I'm saying that central banks, that's not the only thing they look at is protecting. So here's a good example.

• 41:49Speaker 02

  Why do you think central banks have reserves? Do you know what the purpose of reserves are?

• 41:53Anthony Pompliano?

  Do you think that Venezuela, when they were begging, when Venezuela was begging for their gold back, do you think that they started to think, maybe we should try to find an asset that no one can take from us?

• 42:04Speaker 02

  No, you know what they probably thought? We should store our own gold. We shouldn't leave it at the Fed. I mean, that's what more countries are going to do. They're going to store their gold themselves. That way they don't have to worry about getting it back from anybody because they'll still have it. No, but answer my question about what do you think the purpose of reserves are that a central bank has? Why do they have them?

• 42:26Anthony Pompliano?

  I think that most countries, the reserves that they have historically have been for two things. One, they want to protect the wealth of the country. And then two is, I think that there are certain assets that they own, not gold, but let's say treasuries, etc., where they essentially are trying to participate in the global financial system. But

• 42:47Speaker 02

  Well, no, the reason they have reserves, because the currency isn't backed by anything, it's a piece of paper. But they have reserves so that they can move into the market if their currency starts to fall, for whatever reason. It's the reserves of the central bank that enables the central bank to go into the market and intervene and buy back some of those currency units. And they pay for it with their reserves to support the price, to maintain confidence in that currency. If you didn't have any reserves, you have no way to protect your currency. There's nothing behind it. So you need to have an asset that you know at any moment, if you need to,

• 43:30Speaker 02

  at any moment in time, you can use that asset, you can sell that asset to buy back your currency and support the price. You can't do that with Bitcoin, because you got no idea where the hell Bitcoin is going to be. And the Bitcoin market isn't liquid enough. If you need to dump a whole bunch of Bitcoin on the market, and in fact, if a central bank was actually dumb enough to hold its reserves in Bitcoin, and its currency started to fall, and the market sensed, oh my God, this central bank is going to have to dump Bitcoin to protect its currency, they would dump the Bitcoin first. They would start selling Bitcoin. It's like they'd put the central bank in a box. It would make you very vulnerable. You need a big liquid market, like the dollar,

• 44:15Speaker 02

  or like gold. Gold is liquid enough. If some central bank has gold reserves, and that central bank is in trouble, the gold market's not going to crash. You're not going to be able to crash that market, it's too big.

• 44:27Anthony Pompliano?

  How much trading volume?

• 44:29Speaker 02

  Bitcoin market is easy to manipulate and crash and if you get a bunch of selling. So it just would, it would never work. All of this is a pipe fantasy. Central banks are not going to buy gold. If that's why you're buying Bitcoin, then stop buying it. You know, I agree with you. Other individuals might buy gold. There may even be some hedge funds, you know, or some private equity or some pension fund that might be dumb enough to buy it. I don't think there'll be a lot of those, but yeah, I mean, that could happen. But there's no way the central banks, that's not even within the realm of possibility.

• 45:02Anthony Pompliano?

  Do you think Larry Fink is dumb?

• 45:04Speaker 02

  No.

• 45:07Anthony Pompliano?

  Okay. Well, Larry Fink, he thinks that this is a flight to quality, people buying Bitcoin. He thinks that Bitcoin is an asset that has unique properties that make it incredibly attractive for every investor in the world to hold.

• 45:20Speaker 02

  Well, I don't think that's the case. I don't think Bitcoin has unique properties because I think there are plenty of other cryptocurrencies that have similar properties. I don't think it's a flight to quality in Bitcoin. I think it's, it's, it's, it's a trade. I think it's a, it's, it's a, it's a gamble. Now, in some people's mind, I have no doubt that you think it's quality. In your mind, when you're buying Bitcoin, you know, you're buying what you believe to be quality. You think it's a hard asset. I mean, I don't think there's anything hard about it, but, but you believe that. And there are a number of people who also believe that. I don't, I don't deny that. But just because people believe a lie doesn't mean it's true. It just means that you believe it.

• 46:03Speaker 02

  But the question is, how much longer will you maintain this belief? You know, because eventually people are going to stop believing, right? Um, you know, all little kids believe in-

• 46:16Anthony Pompliano?

  Well, they are. No, no, you're right on that.

• 46:17Speaker 02

  In Santa Claus, they believe in the tooth fairy, they believe in the Easter bunny, but they don't believe in these things forever.

• 46:23Anthony Pompliano?

  Are you worried? This is a great point. You're, you're a very smart man. This is a great point. Are you worried about the younger generation having stopped believing in gold and they're buying Bitcoin instead and they're diverting what would have been capital flows into gold now going into Bitcoin?

• 46:37Speaker 02

  No, not really. I mean, it's gold doesn't need people to believe in it. Gold is gold, you know, whether you believe in it or not. Um, the young people who are buying um Bitcoin, I think that the vast majority of them, if there was no Bitcoin, they would not be buying gold. I mean, on the margin, some of them, like the libertarians or the anarcho capitalists, but I don't think those are the majority of the Bitcoin buyers in the, you know, the twenty-somethings or the teens, whoever's buying it. I think that people who are buying Bitcoin are buying Bitcoin instead of, you know, some other tech stocks that they might have bought, or maybe they're using money that they would have spent on gambling on sports or lottery tickets,

• 47:20Speaker 02

  or maybe they're just, um, you know, putting money in there that they would have spent. They, you know, they, maybe they would have bought a nicer car or rented a nicer apartment, but instead they're, you know, they're, they're putting some money in Bitcoin because they think they're going to get rich. I don't think it's taking that much of the demand away from gold, because I think most of the demand for gold outside of industry and jewelry is, is coming from um central banks and, you know, more sophisticated, larger investors. Um, and I think that the older people, I mean, if you look at the customers of Shift Gold, um, you know, our customers are older by and large, and it's the older people, you know, forties,

• 48:01Speaker 02

  fifties, sixties, seventy-year-olds, uh, that have most of the money. You know, I mean, you know, now, I've heard the argument that, well, when they're, the kids finally inherit this money, they're going to put it into Bitcoin. Uh, well, you know, by the time, uh, they, they inherit it, we'll see, because they, A, they may grow out of their infatuation with Bitcoin, or they may have lost so much money in Bitcoin that they, that they no longer care about it.

• 48:27Anthony Pompliano?

  When you think of the future, give me how you're thinking capital allocation for your own portfolio. Are you a lot in gold? Are you in gold stocks? What else do you own? How do you think of the percentages in the portfolio?

• 48:42Speaker 02

  Yeah, I mean, I mean, unfortunately for myself, I've been very over invested in gold stocks for a long time. I've had about half my portfolio in gold stocks. And at times, you know, that it's done well. But overall, I mean, the other half of my portfolio was done better, which is not in gold stocks at all. And but I do eventually think that gold stocks are going to be the best performers. I just, you know, I've been waiting for that for a while. But as far as what I advise that my, you know, clients do, I don't advise that people go as heavy as I did. I mean, you can if you want to. But for most people,

• 49:24Speaker 02

  it's more of a 10, 15, 20% ish, you know, allocation to these type of stocks, gold stocks. And the rest I invest in, you know, good quality dividend paying companies that are not dependent on the price of, you know, a commodity like gold. It's people that we're selling goods and services that we know people are going to use, they're going to buy regardless of price, they may buy less, but they have to buy the products, they need the services. And I like to buy value. I don't like to overpay for the stocks. I like to get a good dividend. I want income. When I own a business, I want to share in the profits. I want I want checks. I want I want to I want to see my my piece of the action. And I, you know,

• 50:07Speaker 02

  I've been investing abroad because I've been anticipating this situation that is going to unfold here for a long time. I mean, it's a long time coming. It's going to be where the game finally ends, where the market stopped believing the fantasy that everything is great. Because at some point, inflation is going to run out of control, and the Fed's not going to be able to do anything about it. I mean, the Fed could bark and bark and bark, but they can't bite. I mean, they tried. And every time they've tried, they have to back off. Because we have too much debt and the reason we have too much debt is because of how easy they've been in the past and that's made it impossible to tighten it in the future. Because it's like, once you get everybody addicted to drugs, you can't take the drugs away. You know, that's what the Fed tries to do.

• 50:52Speaker 02

  They, they, they, they get the economy hooked on 0% interest rates for a decade and all this quantitative easing and we build this whole phony economy based on all this debt. And then they say, oh, let's, we're just going to take it away. The whole thing comes crashing down. Every major bank would be insolvent today if the Fed actually raised rates to an appropriate level. Um, the government would have to default on the national debt. I mean, it would, it would be a financial crisis, you know, on an order of magnitude many times greater than 2008 with no bailouts. So the Fed can't do anything. But when the markets figure this out, that, you know, it's, it's high inflation as far as the eye can see. Uh, and with the potential of maybe hyperinflation, who the hell knows, you know, how it's going to end.

• 51:37Speaker 02

  But the one thing we know is we're not going back to 2%. Those days are over. That was transitory. You know, it's high inflation is a permanent part of the American way of life, you know, for the foreseeable future. The markets just haven't come to terms with that yet. When it does, the price of gold is going to go way up, I think, and these gold stocks are going to go up even more. And, you know, then I'll end up, uh, you know, with a big gain on, on this portfolio. But to the extent that I don't get a big gain, I'm fine. The other half of my portfolio is plenty. I, I could lose half my portfolio and I'm still fine. Right? So that's part of it. You have to be able to lose money when you invest in gold stocks. So, but if you're willing to lose money, um, you know, then you should, because I think the opportunity to make money is, is, is phenomenal.

• 52:21Speaker 02

  And, you know, people, you know, don't do it yourself. Hire, you know, I hired Adrian Day. He runs my gold fund. He runs our separately managed accounts at, um, your Pacific Asset Management. So if you want to try to, uh, you know, really hit the home run and go to the moon, you know, rather than gamble on, on Bitcoin, I would buy these mining stocks. If you want just a safe haven, store of value, uh, to, you know, to preserve wealth, well, then Bitcoin doesn't. For that, real gold does, you know, so now gold is back below $2,000 an ounce. I think anything below 2,000 is a great buy. And there you just want to go to shift gold and buy yourself some gold there. Uh, but so again, you know, if you, if you want to store value, gold is better than Bitcoin.

• 53:03Speaker 02

  And if you want to gamble and you want to try to hit a home run, I think the gold mining stocks are better than Bitcoin.

• 53:08Anthony Pompliano?

  All right, we're at the end of the episode. Nobody's made it this far. No, nobody made it all the way to the end. So you can tell me. You think Bitcoin's going to, nah, do you think Bitcoin's going to 100K? That's what you think, isn't it? You keep using that number. That's what you think is you think Bitcoin's really going to go to 100K.

• 53:22Speaker 02

  That's the laser, that's the laser beam number, right? That's what everybody put the laser beams on their eyes. Do you still have your laser beams?

• 53:28Anthony Pompliano?

  But what do, what do you think?

• 53:30Speaker 02

  Do you still have laser beams on your eyes?

• 53:32Anthony Pompliano?

  No, I don't have them on. No, I don't have them on. Do you have?

• 53:35Speaker 02

  That's what everybody was, that's what they were for. It was for Bitcoin 100,000. So.

• 53:39Anthony Pompliano?

  But so, but you, but you're convinced too. You, you, you think it's going to hit 100K?

• 53:44Speaker 02

  I don't think so. I mean, as I said.

• 53:46Anthony Pompliano?

  Oh, that's a telltale sign. No, when you, when you go like this, when you, when you put your hand on your face after you say something, that means they, that you're lying. You definitely think it's going to 100K.

• 53:55Speaker 02

  Oh, that's my tell?

• 53:56Anthony Pompliano?

  Yeah, you definitely think it's going to 100K. Don't you? You really think that?

• 54:00Speaker 02

  No, I got my, I don't know why my eyes, I got something in my eyes and it's like, like dust or something.

• 54:06Anthony Pompliano?

  I'm proud of you. I'm glad that you finally are coming around. You're, you're seeing, even if you're not going to buy it, you at least see that Bitcoin likely is going to do well in, uh, in the future environment.

• 54:15Speaker 02

  No, I don't think it's going to do well. I mean, I don't think it has any value. That's, that's the, that's the problem with it. Now, I, I conceded that, look, investors have surprised me in the past

• 54:28Speaker 02

  by doing dumb things and, and how, you know, how big a bubble can get before it pops, right? Somebody said, you know, no one ever went broke, underestimating the intelligence of the American public. And it probably applies to the American investor too, you know, uh, so. Um, you know, but, but I, I think I've overestimated their intelligence for quite some time. So, uh, which is a lot easier to do.

• 54:55Anthony Pompliano?

  All right. But where can we send people to find you on the Internet?

• 54:59Speaker 02

  It's easy to find me on the Internet. Yeah, you find me at, you know, Schiff Radio. And the Peter Schiff Show, that's my podcast. I'm going to be doing my, my own podcast later today. So people should tune in, you know, later this evening after the markets have closed. I'll be doing a podcast and you can also listen to it on YouTube. On my YouTube channel Schiff Report. But, um, you know, if you're interested in having me manage your money, either in gold stocks or conservative dividend paying foreign stocks, you can visit the website that's above my shoulder at europac.com and talk to our representatives. And if you want to buy some real gold, instead of just fool's gold, go to Schiff Gold. And, you know, talk to my guys. We have real live people that are there to talk to you,

• 55:42Speaker 02

  to help you pick out the right coins, the right bars, and, and we make sure you don't overpay. And we don't try to, you know, bait and switch anybody into these semi-numismatic, collectible type coins. We just try to get you as much gold and silver as possible for the money at the lowest possible cost.

• 56:02Anthony Pompliano?

  All right, my friend. We'll do it again soon.

• 56:04Speaker 02

  All right, Anthony.