Gold Rush Ahead – Why the West Can’t Ignore Stagflation (Uncut) 02-17-2025

we live in a fantasy world now reality has been destroyed this is the time that we really need to pay attention the probabilities are overwhelmingly on Gold’s side that is the best environment to see gold increase its value welcome to Palisades Gold radio I’m your host Tom bodrick joining me today is Peter Schiff CEO and chief Economist of europacific asset management also the chairman of gold and the host of shiff radio Peter it’s a pleasure thanks for joining me today how are you oh I am doing okay thanks for

having me back on uh on your program always always a pleasure to have you and to have you make some time for us and I’d like to kind of start today by kind of separating a giant topic that I think is going to be quite important to pay attention to and that’s the this topic of inflation at this point how do we how do we try to separate let’s say the causes of inflation in the economy and is it important to be distinguishing what is causing inflation whether it was this monetary type inflation after covid

reshoring inflation or tariff inflation yeah well I mean first of all you have to understand what inflation is to know what causes it and there’s only one cause and there’s only one type of inflation so the the the the word inflation comes from uh the word to expand right that that’s what happens when you inflate something if you inflate a balloon uh the balloon expands right prices don’t expand prices can go up prices can go down but you can’t expand a price so the word inflation is not even referring to prices that’s not

the origin of the word it’s it’s it’s something that’s expanding well what expands the money supply the money supply can expand and it can contract right the FED could put money into circulation or it could take it out when money supply is expanding that’s inflation when money supply is Contracting that’s deflation now of course the supply of money is going to impact the price of goods and services right so the more money there is all else being equal the higher the prices are going to be the less money there is

the lower the prices are going to be so when the government is creating inflation prices will be higher than if they weren’t creating inflation now there are you know counterbalancing forces that impact prices inflation pushes prices up but productivity pushes them down right so a free market is always coming up with better more efficient ways of producing goods and services so absent any inflation the natural tendency of prices is is to come down over time now if the government creates inflation it

could prevent that process from from happening or reverse it so let’s say prices should have fallen by 5% in a given year because of increased productivity but the government expands the money supply and so prices Don’t Fall by 5% they Rise by 2% now somebody would say oh we have 2% inflation no we don’t you know without the inflation prices would have gone down 5% so the government robbed us of 7% of our purchasing power by creating inflation now the reason that um the public believes that inflation is rising

prices when Rising prices are just a potential consequence of inflation is deliberate uh I think on the part of the government and you know with the help of Academia and Wall Street to redefine inflation to help obscure the Cause right once you understand that inflation is the expansion of money supply well you know who causes it it’s the Federal Reserve right that causes it but if you think inflation is rising prices then you can gra blame the grocery store right for gouging you you you can blame

the companies that are raising prices or you could blame labor unions for demanding higher wages um and and that serves the government’s interest because they don’t want the public to know that they are the source of the inflation um and inflation is really a tax if you understand it because the government creates inflation just the way it lays taxes except it’s a secret because people don’t realize but most of the money supply growth is to fund deficit spending so if the government ran a balanced budget the Federal Reserve

wouldn’t have to print so much money and so prices would be lower but because the Federal Reserve constantly buys US Government debt um there’s more money and so there higher prices and so that’s a tax instead of sending the government our money they take our purchasing power they just do it surreptitiously now of course it’s not just the money supply that expands it’s credit right because credit is also uh money in the sense that you don’t need money to buy something you could buy something with

credit right and so if there’s more credit then there could also be higher prices because people take take that credit they go to the store and they buy stuff the same way they would if they had actual money and so credit has been very loose in this country because of fed monetary policy uh interest rates are too low so credit card debt is record high household debt government debt so there’s a lot of extra credit that is also pushing up prices so you can say inflation is this increase in the supply of money and

credit and and that’s what’s increased and if you want to know what’s going to happen to inflation or what’s going to happen to prices what do you think’s going to happen to the money supply it’s going to go up they’re going to keep on creating more money they’re going to keep on uh easing credit conditions and so prices are going to go up prices are going to go up more in 2025 than they did in 2024 that’s going to be very disappointing to a lot of people who voted for Trump because they thought he was going to end inflation

he’s not inflation’s here uh it’s going to get worse uh uh in his first year and I think it’ll be worse still in his second year and that’s because the deficits are exploding out of control uh we’re now borrowing or paying over a 100 billion a year just in interest on the debt and since we’re running a$2 to three trillion dollar budget deficit now all of the money to pay that interest has to be borrowed and so we’re now adding 1.2 trillion a year to the national debt just to pay the interest on the national

debt um which is phenomenal and of course it’s not stagnant by the end of next year we’ll be spending two trillion a year just in interest on the national debt right that means even if the budget was balanced we’d have a $2 trillion doll debt if it was balanced but for the interest on the debt which it won’t be it’s going to keep going up because Social Security Medicare government pensions uh are going through through the roof the cost of financing those um plus you know military spending and all

sorts of programs despite the good work being done by Elon Musk and the Doge Boys in fiing out uh corruption and fraud and waste which is rampant in any government I mean it’s not unique to America uh that’s just the way government works you always get the fraudsters and the conmen that are attracted to government you know power corrupts and uh you know so those seeking power are generally corrupt and once they get the power they get corrupted by it um but it’s you know it’s not going to be enough to offset all the increases in

government spending that are going to continue uh even if we manage to get rid of some we’ll never get rid of all but even if we get rid of most of the fraud and and and the abuse of the waste um government deficits are going to rise the FED is going to go back to QE in fact the money supply still grew about 5% last year even without even with quantitative tightening so we’re growing the money supply it’s going to grow faster in the years ahead and so prices are going to go up now if we can roll out a lot of

AI and that AI can dramatically increase productivity then maybe uh you won’t see the price increases as much but what you’ll miss out out on are the price decreases that otherwise would have occurred you know now the government tries to get us to think that prices going down are a terrible thing like you know they have to save us from that disaster you know that’s why they say they need 2% inflation one of the reasons you know for them they say because they can’t let it go too close to zero because then it might go

negative and then that’s going to be a complete disaster I mean imagine how horrible it would be if all the things we needed became more affordable you know what if what if education was cheaper what if energy was cheaper what if Health Care was cheaper see that would be a real disaster and so the government wants to save us from from that um do you yeah I mean so do you think that the FED has accepted a new floor let’s say of 2% rather than trying to average out 2% for inflation now well in the average inflation lasted for just

a few months and then the fed put that away as soon as they realized how high inflation was but the interesting thing about this 2% inflation Target is it never existed when inflation was above 2% the FED only rolled it out when it was like one and a half and they said hey we don’t have enough we need to get it up to two but when it was three or four you know they never said oh no we need to jack up rates to get it down to two right they only invented the target when it served their purpose which was

to create more inflation but now they’re kind of stuck with it um and so but I don’t know that we’re ever going to be back at 2% so either they’re going to raise the target which for now they’re saying no we’re not going to do they could of course Jerry rig the CPI again to to rig it so that the numbers are lower they already did that with the bosin commission so even when inflation as measured by the CPI right even when it was one and a half it was probably three or four so we never really had inflation below 2% anyway but

and and the where they got this 2% right they got it from the Central Bank in New Zealand which introduced 2% as a ceiling in the 80s and um the it was a ceiling not a Target so it wasn’t like if inflation is a half you need to get it up to two it meant if it was a half everything was good no problem but if it got close to two they had to do something because it had to stay below two right it was never you know try to get it up there it was you know the lower the better but they took that and redefined it you know as

their mandate but they have no such mandate they made it up their mandate is price stability prices that go up 2% a year are not stable they’re going up every year stable if you go to the dictionary and look it up it’s like it’s the same unchanged so the target should be zero right if they want stability not not not 2% and yeah I mean if some years’s prices go up 2% they should have to go down 2% the other years in order to keep it stable right so I remember at one point being being part of a meeting where I asked this

Keynesian Economist why 2% is a good Target to have and the the basic answer that he gave me was so that we have room to be able to play back and forth to avoid recession to be able to stimulate or to you know adjust that thermostat perfectly because we know better than the market and I just yeah that’s assuming that you want to entrust the economy to a handful of bureaucrats who think they know more than the market I I I would rather have sound money and I don’t want uh central government planning I don’t want to deliberately

create inflation just so these idiots uh think they have extra room to micromanage the economy when it’s in a recession what if that recession is necessary and by inhibiting it they actually do more damage you know I you know let let the recession run its course uh and let it uh you know fix the problems that that led to the recession so that we could have a real recovery instead of a bubble which is all we get uh from the central banks right what they do is they create bubbles they they don’t they don’t solve problems they

create bigger problems well I I ended up rephrasing that question to him by saying why why is it okay for you guys to be stealing 2% of our purchasing power instead of trying to Peg it at zero and using that as the average but I got basically the same answer and I totally agree this this idea that this group knows better than the entire Market just does seem why why should the Central Bank even be picking interest rates you know I mean why don’t we have uh a government bureaucrat you know Bureau to set the

price of food you know bread uh you know corn weed I mean food is important probably more important than you know the interest rate I mean we we get have food we’re going to starve the death so why don’t we have the government picking the price of food if it’s if we they should pick the price of money of interest rates why not the price of energy know why don’t we have a government price Bureau for everything oh well yeah they tried that in the Soviet Union it doesn’t work right you need the free market you need price

Discovery we don’t have that in interest rate you know now we have it more on the long end but now the FED has its thumb on the scale by you know doing QE and stuff like that which I think they’re going to do because long-term bonds have been rising yields and I think they’re going to keep Rising um but I think short-term rates are still too low I think if the FED took its Thumb off the scale and If the Fed made it clear in fact if the FED made it clear right now we’re never going to do more QE uh I think uh bonds

would go down and yields would go up I think you know people still think there’s a fed put out there uh in the bond market and that the fed’s got everybody’s back well Peter you know this idea that the FED has perfect data and you know reacts or is completely data dependent all the time is seemingly a very challenging idea you know it seems like they’re getting contradictory signals from the market for example like the rising PPI as you recently pointed out that should make rates go up but yet we’re unchanged again right yeah you

know the CPI we we got the CPI uh yesterday or two days ago uh and it was up 0.5% on the month that annualized to 6% inflation I mean what were they talking too in fact if you annualize the last three months it’s five and the last four months sequentially every month is higher than the month before so inflation is going up it’s not headed down to 2% it’s headed back up to 9% right yet yet the markets the fed you know they’re just I guess they’re claiming it’s transitory again although they don’t want to use

that word because it really burned them uh the LA the last time that that that they did um but yeah you know inflation is is got no place to go but up because the the deficits get bigger and bigger and the next recession is is going to be worse than the last and you know like any drug addict you know you you you know every time you know you you know you come down you need more of the drug right because your body builds up a tolerance and you C you keep needing more and more well as the US economy gets deeper into debt we

need more more and more stimulus right to to to be able to handle it and and so that’s why you know the last time we did QE uh we did more QE and qe4 than qe1 2 and three combined which is what I was predicting and I think the next time the FED goes back to QE they’re going to double the balance sheet again this side you know so you know right now it’s back below what 7 trillion I think or is it below or let me see I think it’s just below I think they just got it below um 8 trillion so it’s like no below it’s

6.8 trillion so it was nine I mean they’ve managed to reduce it quite a bit actually uh but I think they’re pretty much near the end and they’re going to go reversing it and next thing you know it’ll be 15 trillion so if they go back into or go back overtly into expansion of the money supply and let’s say we do get some type of a recession and they slash rates does that end up serving Trump’s Trump’s aim of having a lower dollar which is better for trade for the US well a lower dollar is is going to you know make the

inflation problem worse one of the main reasons that prices eased you know from 9% year-over-year to 3% was the strong dollar that that kept the lid on prices but they’ve already blown off that lid I mean the crb index is up 25% now since the first of last year so this is you know this is exactly how it started last time you you saw it in Commodities first and then it bled into you know the the price level but commodity prices went up first and that’s exactly what you’re seeing uh the only commodity that really hasn’t taken

a big move up is oil and I think that’s coming but a lot of the other Commodities have uh have already moved um but you know that the powers that be are oblivious maybe it’s just wishful thinking they just want to hope that this is just you know an aberration but they’re continuing to pretend that they got it all under control which they don’t I mean I pointed out the FED never got to uh restrictive territory I mean they claim that they did but they didn’t rates never got high enough and then they

started cutting uh as soon as the banks started failing and that just shows you you know how vulnerable the banks are uh to uh to Rising rates and in fact the one thing that would cause all the major Banks to fail would be stagflation that’s why the FED doesn’t even test for stagflation and it stress the most severe economic condition that the FED could imagine is when interest rates and inflation go way down that that that’s the worst that they could imagine right they think a situation where inflation and interest

rates go way up uh and the economy is weak they they think that’s an impossibility right so in other words they think what happened let’s say in the 1970s could never happen again now obviously it can happen again that’s just the FED just doesn’t want to call attention to the fact that every bank would fail if it did and that’s also why they don’t have a contingency plan for stagflation when when when pal was asked in one of these press conferences what’s your plan for stagflation he laughed it off and said

well we’re just going to hope we don’t have it so he doesn’t have a plan a plan because there’s nothing the FED can do they’re they’re you know they’re powerless when there’s stagflation so uh that’s that’s where we’re headed because you know the next recession the problem is the deficit is going to explode the big problem with bond market is the enormity of the debt and so if we have a recession that drives the budget deficits from three to four trillion to five or six trillion I mean you’re talking just astronomical

amount of debt plus every year there’s another 10 trillion or so that matures that has to be rolled over uh so the funding problem is going to explode during the next recession which I think is going to put upward pressure on interest rates and that means the FED is going to have to get even more aggressive to stop rates from rising which is what their goal is in a recession they want to lower rates and they have to print money and buy bonds but they were able to do that you know when inflation was relatively low and

they can hide it behind the rig CPI but it’s not going to work next time inflation is going to be high and if they do this it’s going to be a lot higher and then it could create you know a real run on the dollar I mean Gold’s you know just below $3,000 an ounce I mean this is not happening you know this is not a pure coincidence that gold is you know almost $3,000 an ounce you know when I started telling people to buy it because I saw a monetary Crisis coming it was $300 an house so it’s it’s 10x now we haven’t had the monetary

crisis yet but it’s you it’s coming and it’s going to be worse now that we were able to delay it for as long as we did because during that delay all the problems that make it inevitable got much worse Peter what’s your take on let’s say the Deep seek news as you brought up that AI idea it really didn’t have much of an effect on the NASDAQ and it seemed that it should have sent let’s say stocks like Nvidia down much sharper than it did well you know it’s hard to say I mean obviously I I still think there’s a

bubble in AI not that I don’t think AI is real and it in fact we may even be underestimating the impact it’s going to have ultimately on you know our way of life our and our economy but you know like most things that have to do with technology you know you it gets improved and what are the odds that you know five years from now you’re going to still need these expensive Nvidia gpus to make AI work um maybe we’ll have a more efficient way of doing it uh there’ll be more competition uh for those gpus uh maybe a lot of the companies

that are spending so much money buying them will start building them themselves you know and not buying them from uh you know I remember in during the dot bubble the big stock that everybody had to own was Cisco Systems because they made all these routers and all the things that you needed to build out uh your Broadband or your you know but the whole nature of the internet changed the internet got a lot more efficient people didn’t need all that Hardware anymore and uh the next thing you knew they were competing with themselves they

had used Hardware on the market uh they a lot of the companies they loan money to went out of business they they vendor financed a lot of stuff so Cisco Systems is still trading for less than it was back in 2000 you know um so the same thing could happen to some of these stocks like Nvidia it turns out that you know yeah they made a lot of money but you know the margins aren’t sustainable you can’t keep making that money uh because you’re opening up a window for people that come in and compete and innovate and yeah

what happened with deep seek is yeah look hey here’s the Chinese came up with something that’s more efficient less energy but I think the narrative right now is that okay great that just means more AI because if it’s more efficient more people can build it out more demand for you know these gpus and when we’re talking about these crazy valuations of companies something like paler which is trading at something like 600 times earning right earnings right now do you think that attribute some of that

overvaluation to passive flows just going into buying the momentum in you know names like this no matter the fundamentals behind them or the actual valuation yeah I mean I think the the Federal Reserve with all the cheap money has turned the stock markets into a casino and I don’t think there’s a lot of act actual research that goes into buying stocks I think people just buy what’s going up they they buy whatever has the sexiest story right you know the the the um old saying on Wall Street is you sell the sizzle not the stake well

in a lot of cases there’s no stake there it’s just it’s just sizzle um and you know the the epitome of that is the crypto market right I mean look what’s going on there look at a stock like micro strategy you know now GameStop comes out yesterday oh you know we’re thinking of buying Bitcoin with our money oh but you know so the stock will go up I mean people just buy ticker symbols or they buy you know a crypto just because they think it’s going to go up and they want to get in on it right everybody wants in on the

action uh and everyone’s afraid of missing out on the big gains so it’s just one gigantic Casino and and and the problem with that is you end up getting a big misallocation of capital because all the capital flows into the bubble uh and it doesn’t go to where we might need it I mean we have a record trade deficit now the the trade deficit that we had in December merchandise trade deficit 122 billion we’ve never seen anything that bad I mean we came close one month when we reopened the economy after covid but that was an

aberration now this is just standard operating procedure but one of the reasons that our trade deficits are so big is because instead of investing in the factories that build the products that Americans actually need and want we’re wasting money creating cryptocurrencies that nobody needs or whatever else we’re funding what do you mean we don’t needin build yeah you know you can’t you know but um so we’re just it’s a misallocation and and and that is being fueled now by the government because bit

you know Trump embraced Bitcoin and now you have all these politicians talking about setting up Bitcoin reserves and using taxpayer money to buy Bitcoin now more people want to buy into it so they can sell their Bitcoin to the US taxpayer so that’s sucking in more money into this you know Ponzi uh but it’s all to the detriment of the economy because money that’s used to fund this nonsense you know does go into the real things that we need to be making and so we become more and more reliant on the

countries that are making those things do you think Trump’s threats with these tariffs is going to be a good way to combat this trade imbalance or you know is there is there a fine line that needs to be struck there before you start alienating people and they find other markets to sell to well first of all you alienate people just by making the threats and of course if they’re threats then they really have no impact right because they’re never actually imposed but to the extent that we get all the tariffs that are being

threatened uh it’s not going to solve the trade deficit I mean is it possible that we have a somewhat lower trade deficit as a result of the Tariff sure you know because tariffs makes Imports more expensive now in some cases people will buy domestically produced Goods that are a little bit more expensive or you know or much depending on the tariffs they’ll pay more money for those goods than what they were paying to get the Imports um but in some cases they’ll just be priced out of the market entirely and

Americans will just not buy those things but yes we could have a smaller trade deficit um as a result of the tarff but I don’t think it would be significantly smaller because I think at the end of the day there are no real viable us made substitutes for most of what we import and a lot of the categories of our Imports we import 70 80 90% of that that stuff right and so if we made that those Imports very expensive you know the small capacity that we have to produce those goods could not be ramped up you know so the

domestic producers could jack up their prices quite a bit and start making some money um and that may eventually you know uh encourage some Capital to move in but some Capital might be reluctant because you know what if you invest a bunch of money in a high cost us plant and then the tariffs are removed and then you’re screwed right because they can go away at any moment so it’s really hard to invest in an industry that you know is dependent on tariffs that can go away with the next Administration um so I think what the

main thing that’s going to happen with tariffs is that the Imports get more expensive um and you know but we’re still going to have big trade deficits and the the negative of the tariffs is there are you know some us companies that may become less competitive because of the tariffs and how it affects their Imports and um and especially when it comes to exporting so if American companies that are trying to compete and we want to export our products if to make those products if we don’t get a credit now maybe they can

arrange so if you export something you can get a credit for the Tariff you paid but I mean if we don’t have a credit then that tariff is going to be embedded in our export prices which could make them uh less competitive on global markets so you know there always could be unintended consequences of the tariffs but the bottom line is we don’t have trade deficits because our trading partners have tariffs that that that’s not why we have them we have trade deficits because it’s cheaper for us to import stuff than the

make it ourselves and that’s the reason and the tariffs don’t change that unless they’re high enough so that now it is cheaper to make it but it’s still going to be a lot more expensive than it was and so that means prices will be a lot higher and a lot of people just will have to stop buying stuff one of the last things I wanted to touch on here Peter with you before we get to gold and the gold story is I know that you pay attention to the yield on the 10 10-year Japanese Bond and that yield keeps climbing as

you know soon we’re going to be at 1.5% why could this be so catastrophic for anybody other than Japan well it’s not just Japan that’s going to have to deal with this because the the low rates and right now yields in Japan at 1.33 the highest I saw was 1.36 but they closed I think at one point no 1.35 is I think where they closed the week but um the reason this is so important is you know this is a 15-year high in in you know I mean one and a half may seem low but it’s the highest in 15 years right

so talk about a society that has grown accustomed to ultra low rates and remember for years the short-term rate in Japan was negative it’s now positive but you know it was negative for years um and and during those years a lot of Japanese borrowed Yen and then took those Yen and invested in all sorts of assets all around the world the Yen carry trade and there was a positive carry because they were earning more uh on the assets they owned than the cost of the debt and of course the Yen was weakening which you know

augmented their returns so let’s say the interest rates really start to rise I think they’re going to get to 2% this year and then really start to rise now the cost of funding these Investments really starts to go up because now people have to pay much higher yield on the Yen and the Yen starts to Rise Against these other currencies and so now they start to lose on the FX and the cost of the carry is going up basically they have to start unwinding this stuff and that means the Japanese become big sellers instead of big buyers of

risk assets around the world including you know things that aren’t like Treasury they had a positive carry in treasuries but that turns negative and um so it’s it’s like a major rug pull from uh all over the world or you know giant Margin Call plus I think that Japan has got more treasuries in any other uh nation and I think one of the things that Japan might do to try to reduce its debt is to sell off its treasuries to pay off its own debt uh and so that is also going to have a big impact on um on the US

economy so it’s not just a Japanese problem when they’re the big lenders in the world and they’re the ones that are you know buying everything and and they become big sellers so people have to pay attention to what’s going on over there and and and these years because you know the Japanese debt to GDP is like 250% so you think we have a problem paying high interest imagine what the problem is over there now they’ve got a a stronger tax basee than we do the Japanese have more savings than we do so

uh they they’re better prepared to handle the crisis that we are so Peter when we when we’ve heard all of these threats for the tariffs here that seems to be one of the let’s say the the proximate causes or one of the rumored causes of the lbma greatly expanding delivery times and lease rates blowing up do you think that this is a reasonable explanation to get gold into the US before these tariffs are implemented um potentially I mean if the tariffs uh are applied to Gold um I mean they might be and if

they’re implied you know you know no matter where we import it now the US also produces gold you know so we are we have gold that we produce ourselves obvious viously that wouldn’t be subject to the tariffs um but obviously if demand for physical gold increases and it’s beyond the ability of the US domestically to produce to supply that demand um then gold is going to get more expensive if you got to pay a tariff to get it um and that would also probably open up depending on how high the Tariff was that people might start

smuggling gold in in um and and selling it that way because the black market price for gold would be a lot lower uh than the the legal price which would include the embedded eded tariff um but yeah so that that that could be a reason you know but that would be you know the the companies that want to sell the you know want to get it in before there’s there’s a tariff of course you could also buy gold and keep it stored offshore and never take delivery of it which case it wouldn’t be subject to the tariffs so

there’s nothing that would stop Americans from buying gold and having it delivered to a vault in Switzerland or Singapore and then you wouldn’t pay the Tariff you’d only pay the Tariff if you you know brought it in right uh but of course you could you know try to bring it in you know secretly in your pocket or something and not you know you if you maybe bring it in less than $10,000 worth at a time you know if you make a lot of trips and then you know you don’t you don’t pay any taxes on it and even

people that brought in more than $10,000 worth you know they could take a chance that nobody nobody stops them I mean you know but do you think that there’s a better explanation for for that delay and that demand for gold from the lbma then well there you know I mean it may be it may be that the people who have bought a lot of Futures contracts want the gold maybe they bought the Futures contracts with the intention of taking delivery because they want to keep it and they they thought hey I’ll buy these

gold Futures contracts uh and and then take delivery because they you know they’re not speculators they they actually you know want to own this gold uh and maybe it was less disruptive to the markets to just go into the Futures markets than try to buy it on the spot market so who knows we’ll find out uh what’s going on with that um but you know as far as our tarff like if we had tariffs on gold see it’s not going to impact uh Canada let say we buy a lot of gold from Canada if we have tariffs so Canada will sell that gold

you know to China or somebody else I mean there’s it’s it’s very easy to to ship gold right put on a plane and go anywhere right um it’s a little bit different you know when you’re talking about oil you know natural gas electricity where it’s a lot easier for Canada to sell it to the United States than it is to sell it to China right um but gold you know if Americans don’t buy it somebody will very easy MH well I understood some of the Nuance with that was more so on country of origin so if it was gold that was

produced in Canada let’s say and the US still wanted that gold or for it to be brought in then there was the possibility that it could be remelted and recast and brought in under you know as being produced from another another country right yeah I mean gold is pretty fungible I mean so I mean obviously yeah gold could come in if we said we’re not going to take any gold from country X well country y could buy that gold and just resell it to us you know and if they had to melt down and recast it in their own you know mint

branding I mean they could do it very easily yeah um I mean already that already happens right now I mean a lot of the goods you put a tariff on Chinese Goods but you don’t put a ter on Indonesian Goods Indonesia just buys a bunch of stuff from China and it resells it to us as if it was made in Indonesia just like Russian energy yeah I mean now it’s going to increase the cost somewhat I mean let’s say there’s a 25% tariff on Chinese goods and so they end up selling the goods to IND Indonesia and they just

Chang the labels on the garments or whatever the hell it is and they sell it to us maybe we end up paying 10% more instead of 20% more right right um so Americans pay more and the government doesn’t collect any tariffs right because they got no tariffs because we didn’t buy it from China we bought it from Indonesia but we paid more money for it because it was cheaper when we bought it for so everybody loses except Indonesia they they win they get they you know China you know are so usually this stuff doesn’t work I mean and and

then if we go into the trade War everybody loses uh you know because we all benefit from free trade and the less free trade is you know the more of those benefits we lose well there was also the government has to raise revenue see you could say well is a tariff a better way to raise revenue than an income tax and I would say yes because income taxes harm the economy too I mean there’s no way the government can take money away from the economy without doing harm now you can argue that well when they put the money

back in you know there’s some gain right and you could debate how much I mean I think there’s very little that the government does that’s actually a benefit most of it is a net negative but we have to pay for government right once we decide we’re going to fund government we got to cover the cost and I believe that tariffs do less damage than the income tax so if given the choice I would rather pay with tariffs now the problem is the government is now so big you can’t run it on tariffs but 150 years ago yeah no problem because the

government was Tiny Hardly did anything which was a good thing and you could pay for but now the government is so enormous that tariffs alone won’t do it right you need an income tax you need a social security tax you need all these taxes if you’re going to have all this government now you know I’d rather get rid of the government and then we can get rid of a lot of the taxes well we’ve also had the recent announcement of Chinese insurers being allowed to invest in gold is that going to be a new big source of demand going

forward here I think it’ll be a source I think that if they were legally prevented from owning gold Gold’s been a very good performing asset it’s actually beaten the stock market over the past 25 years or so uh you know it’s up 10x the Dow’s not up 10x um over that time period so you know it’s done well um and so I think it’s a good portfolio insurance it’s something that I think if you add it to your portfolio uh it reduces the overall risk of the portfolio so I think these insurance companies would probably want to have

some gold uh in their portfolio so sure I think you know they as a new buyer you know it it will you know obviously at the margin impact the price I don’t know how much they’re going to buy but I do believe that over time a lot of uh institutions that are not buying gold will start buying it I mean the the reason that gold has gone up is because central banks have been buying the public has been selling especially in the US and and Western Europe maybe in China and India you know they’re probably still

buying but Americans are selling their gold you know I mean we had net outflows all year last year in uh GLD we had net outflows in all the gold ETFs you GDX gdxj we’ve had a pickup in net outflows of not outflows but Redemption sales that shift gold we’re getting a lot more people than we used to calling up and selling us their gold hey Gold’s $2,900 hey let me sell some I can use the money we’re not getting a big increase in people saying oh my God Gold’s 2900 let me buy it before it goes even higher

right we’re we’re not getting the oh my God I you know I Gotta Buy I’m I’m afraid to miss out on more gains it’s I better sell while I can before the price goes down so we don’t have any kind of speculative uh fever uh surrounding gold gold mining stocks it’s the opposite so it’s the central banks that have been buying that’s one of the reasons that the gold silver ratio I think is 90 to1 uh because the central banks don’t buy silver they don’t have the room to store it that’s not what they want they want

gold uh it’s generally the public that that buys silver uh and so when the public wakes up to the real inflation threat and when they realize that they’ve been sold to bill of goods with Bitcoin and other cryptos um they’re going to be looking for gold and silver and there’s not a lot of it you know the supply especially with the central banks buying gold but there’s not a lot of silver out there um so I I expect prices to go much much higher when the Americans and the Europeans wake up to reality and and the reality they wake up

to is stagflation and that you know inflation is here to stay inflation is not going anywhere the central banks spent over a decade deliberately creating inflation as a policy choice that was their goal quantitative easing is just a euphan ISM for inflation they said we need higher inflation and we’re going to print more money we’re going to let governments go deeper into debt and I kept saying you know you be careful what you wish for because you’re going to get a lot more inflation than you bargain for and

there’s no way you’re going to be able to stop it right you’re not gonna be able to turn the spigot off uh and and so that’s where we are this is going to be the most inflationary period of time that uh United States Europe Japan have have ever seen uh it’s it’s going to be way worse than the 1970s because we were in a position in 1980 to put the breaks on inflation because we had Ronald Reagan we had Paul vuler we jacked interest rates up to 20% 20% now the highest inflation ever got on the CPI was 13

yet we had 20% raise so this cycle we had inflation go to nine and the highest we got was five and a quarter clearly not enough right so we didn’t do what they did and they brought about the worst recession since the Great Depression in the early 1980s but when they did this when they went on this uh inflation fight debt to GDP was 30% not 120% um the average maturity on the national debt was probably at least 20 years not four years um the US was still the world’s biggest creditor Nation not the biggest

debtor we were still running trade surpluses in 1980 not massive trade deficit so we are not in a position to survive the inflation fight the way we did in 1980 so we were in a position and we had the ability to ended and the stock market in 1980 the Dow was what seven eight times earnings I think the dividend yield maybe was 6% or I mean the do the stock market was cheap the Dow was under a thousand the price of gold was a th I mean the gold and the Dow were the same price right I mean that I mean you talk about cheap right I

mean it was it was as cheap as stocks were at the bottom of 1932 you know after the after the market crash so we had cheap stocks uh we had you know interest rates were 133% on it on a a 10-year treasury so you know we were in in in in the opposite position that we’re in today we have no ability to wage a winning war against inflation that’s why we surrendered already that’s why the FED started cutting because five and a quarter was too much to bear um so there the inflation is not going to end it’s just going to get

worse and worse and worse um the only thing that could save us I guess would be uh Ai and a massive productivity boom that you know could eventually bail us out but but you know but it’s that doesn’t mean we you know we it’s a bailot it just means that you know we’re you know we would have been much better off had we not had the inflation but we could have such a massive productivity miracle that we could afford it right because you know we’d be rich enough we’d be productive enough to to be able

to deal with it yeah but I I I don’t know that that’s going to happen quick enough and the inflation that we have and the Calamity that it unleashes you know could really uh put on the back burner a lot of the AI because we just don’t have the capital to invested it you know because we’re it’s we squandered it well Peter we’re recording this on Friday February 14th and three out of the four big miners beat their expected earnings estimates so why do you think gold miners are not reacting to Gold

being at their all-time highs yeah and you know the only one that went up on the beat was Barrack it was up like 6 and a half% yesterday when it beat it’s down 2 and a half% today but Barrack’s trading at like 11 times earnings I mean that’s a fraction of the market multiple even though their earnings are growing dramatically it was record quarter record earnings a billion dollar share buyback was announced but you know I looked at the analysts who cover baric and I looked at their 2027 estimates and

they’re based on 26 $600 gold but it’s already 2,900 why are you assuming that three years from now gold is cheaper than it is today they they they just assume that the price is going to go down but they assume the price of mining keeps going up right but the only thing that goes down is you know so Wall Street is so biased to be negative on gold that they can never uh recommend buying gold stocks because they expect their earnings to collapse because that’s their Outlook that’s why the stock is is is so cheap you know ago

Eagle which put out earnings yesterday and it’s down 4 a. half% today they actually beat their earnings um uh by quite a bit I thought it was a pretty good report record quarter record earnings a big increase in profits and the stock is down right if this stock was in any other industry other than gold it would be up quite a bit the the most ridiculous one was kin Ross kin Ross was down yesterday because it missed right it missed its earnings so it was down like 6 or 7% and it’s down another one and change today but so

quarter over quarter earnings were up like 82% right but the estimate was for 109% gain right and and so okay the stock went down but earnings were up 80 something 82% year on year it was still a record quarter record production you know it’s not like the stock was priced for Perfection or anything like that I mean yeah it had been going up but these all these stocks are still cheap uh and again gold I think their average realized gold price was $300 lower than it is now you know ago Eagle its cost of mining was

about $900 an ounce that means they’re making $2,000 an ounce that’s an incredible profit margin on your goal you take it out of the ground for $900 and you sell it for $2,900 how how many companies have a margin like that right you know as the St you know and goals going to keep going up so again nobody is paying attention to these stocks everybody is selling these stocks because they they need money to buy Nvidia they need money to buy Bitcoin where are they getting it or you know they sell their gold stocks

uh and the and as they don’t perform more people want to sell because again it’s a Cino they want to be at the hot table right they they’re at they’re at they’re at the goal table and everybody keeps crapping out and they look over at the AI table or the crypto table and everybody’s got this cheering and ah this is great so that’s where they go but um look eventually these stocks are just going to take off in a very short period of time I mean I could see these stocks doubling in a week you know maybe

in a day one day I mean so the key is you got to have them before because it’ll be very hard to chase them people will be afraid to buy them let me get a pull back I mean I I mean it it’ll right now it’s easy they’re Dirt Cheap you know I’ve got a go fund the EUR Pacific go fund epig GX is the um no EP GI wait EPG iix yeah EPG iix is the no load symbol you can buy that at any discount brokerage firm uh we’ve got a great portfolio that Adrien day has built for us we have lot of real Junior miners in there’re not

the fake Juniors that are in the gdxj real real real small companies that I think could just go to the Moon uh when uh investors start to take an interest in in the sector uh and they will eventually so I think I think that’s where the big money is going to be made I mean you want to find uh the stocks that people hate that nobody is buying and that way you get them cheap and I’ve never seen a more bullish uh set of fundamentals for gold than than there is right now uh yet nobody’s there it seems

like with you know margins expanding with lack of capital being invested in this sector with just the sector being so hated and a possible just reversion to the mean reversion to historical gold owning dollars as a percentage of dollars in the world economy you know as you said there isn’t hasn’t been a more bullish setup yeah you know I mean it it it really doesn’t even make sense to buy gold at $3,000 an ounce when you can buy these mining stocks because when you’re buying gold you’re buying above ground

gold that has already been refined and and made into a coin or bar but when you buy into a gold mining company that I’m talking about a producer not like an expiration company but a genuine producer like ago Eagle like barck like like Ken Ross the other one that beat was Royal gold came out with a good report they were up yesterday about 5% you see what happened today they probably went they were down they were down almost 4% so made a new high today for the year but so so now after the beat and of course all of

it happened because gold was down 40 bucks big deal it’s barely below 2900 who cares you know I think you know people maybe were unwinding some gold silver sprits because silver was up over a buck early this morning and then they sold into that all day and uh or they sold gold and people I think you know I think it was a lot of uh stuff going on but these gold stocks should just be be going up but when you buy a company like you know baric or ago you’re buying the gold that’s still in the ground that Gold’s going to come

out of the ground eventually and what you’re paying right now to buy gold in the ground has never been cheaper relative to Gold above ground right so to me I want to buy stock in these mining companies and have that gold knowing that it’s eventually going to be mine and sold for a much higher price than what I’m buying it and eventually the goal that’s yet to be mined is going to be assigned a much higher value than the market is currently assigning it and you know the higher the price of gold goes the more

that unmined gold is worth because some gold is expensive to get out of the ground right so let’s say you’re a big gold company and uh Gold’s at 3,000 but you have some gold that would cost you $3,500 to get out of the ground maybe you have a lot of it but it you know at 35 you know you’re not going to spend $3,500 to to sell it for 3,000 so that gold is really worthless to you right but if goal goes to 5,000 all right it’s worth spending 3500 I make, 1500 bucks an ounce right let me go get it if

there’s a lot of ounces there it adds up so you know this is the the economics of the gold mining industry as more and more their reserves become viable at higher prices and so that’s what’s going to happen so I think more people should be buying the mining stocks uh you know my fund you you can come up with a separately managed account we we manag individual gold mining portfolios Adrian manages them through your Pacific ass management so if you don’t want to be in a fund you want to have a separately

managed account you can talk to the representatives uh but this is where people should be focusing you know we’ve got gold has gone up 10x over the last 20 25 years baric I mentioned bar Barrack is lower than it was 20 years ago it’s the stock the actual the actual nominal price you know imagine where it is adjusted for inflation but you could buy Barrack cheaper not now not amem am has gone up you know I remember buying am for $10 a share after this rock slide it went down from 15 to 10 I remember

buying I still have that stock that I bought at 10 and now it’s at 100 but baric when when is was higher back then than than it is now uh Ross too was higher back then you know kin Ross I think was a $20 stock back in the early 2000s you know it’s got a triple to get back there so um this is what people should be buying you know people your people will be kicking themselves in a few years if they didn’t buy and if you’re not you know and if you want to you know you don’t want to trust your own judgment I think Adrian’s the best in

the business at picking stocks that’s why I hired him uh but you know talk to the you know go to europe.com talk to the representatives you know read up about it you could just buy the fund anywhere or you know talk to our guys and in fact if you don’t have a brokerage account you can just go to my website europa.eu went up quite a bit before New York opened and then on the New York open it went down quite a bit you know profit taking whatever explanation you want to use but do you see a time that silver

investors are going to be rewarded for their patience yeah or has it lost its role as a monetary metal and is only industrial now yeah I mean what I think might have happened is there was some people that were buying silver and then so people decided to sell gold to cover their uh silver shorts because they had long gold and that started bringing down the price of gold and then silver eventually followed gold and gold was down like 40 bucks silver you know was about unchanged on the day um but that

still is significant if you’re you know because a a long gold short silver bet is is kind of a bearish bet on the whole complex you know when things are really going to get interesting is when people start going long silver and short gold to hedge their long silver because normally in a bull market uh silver is is out shining gold and I expect you know I expect that to happen as this ratio you know closes I mean right now Gold’s down about 50 bucks and Silver’s down four cents so about unchange see normally that wouldn’t be

the case gold down 50 bucks silver would be down a dollar and a half right so there is a lot of unwinding going on I think behind the scenes here but also you know we got some hotter than expected inflation news again today the third time in a row and you know I think that initially knocked gold down you know the big pop in export prices um but again that the markets have got that wrong High inflation is good for gold it’s not bad that the the reason they think it’s bad for gold is whenever uh the algorithms you know

they’ve been programmed when inflation comes out hotter than expected you sell gold why well that just means the FED is going to have to keep rates higher for longer to win the inflation war and higher rates are what’s going to hurt gold but what’s actually happening is the Fed already lost the inflation war and that’s what these hot inflation numbers are showing you because the FED should be hiking and they’re not and because the FED is not hiking as inflation is accelerating real interest rates are falling doesn’t matter what

they do with nominal rates real rates are coming down and that’s very bullish for gold and in fact runaway inflation that the FED can’t control is Extreme bullish for gold and that’s where we are well Peter I think that’s a a perfect place to wrap up for today um is there anything that you want to leave our listeners to think about before we do um you know as I said earlier I I think these gold mining stocks are the gift that will keep on giving if you you know don’t look it in the mouth and just

you know get in there and uh you know as again the best way to do it is with with our help at EUR Pacific Asset Management either with my go fund or the separately managed accounts um and we also have a lot of other uh funds that I think will do very well in a stagflation environment with a weakening dollar which is what I think is going to Define uh the rest of this uh this decade um but also you know I’ve got a new newsletter free newsletter at shifts sovereign. comom that people can sign up for uh we also have some premium

letters that you could learn about and sign up for the introductory premium is still pretty cheap so you might want to you know give that one a try uh but you know there’s a lot of content available even on the free one we’re putting out stuff every week um I do my podcast once or twice a week I would suggest that people listen you can listen on my YouTube channel you can also go to shift radio or my podcasts are on you know iTunes or any of these platforms you know Spotify Stitcher anywhere that you

can listen to podcast mine it’ll be there uh so make a habit of listening but you know subscribe to my YouTube channel you know you get like a little alert because I do them live with videos too so if you check them out on on YouTube you’ll get the you’ll get the video sometimes I do uh some spaces on X X is my most active platform I’m constantly posting on X I do all my own posts uh so you’re reading my thoughts I’ve got just over 1.1 million followers now so gaining some traction so definitely follow me there and encourage

your friends to do that in fact I’m on Facebook Instagram Tik Tok so anywhere there’s social media you should try to find my account and uh and and follow me and encourage more people to do it you know you gotta spread the word you don’t you know I’m not on the mainstream media very often I mean nobody really wants my perspective the left doesn’t want me on because they don’t want me criticizing the Democrats and the rightwing don’t want me on they don’t want me criticizing Trump because because

everybody you know is making mistakes and I and I point out the mistakes that regardless of party affiliation I mean I encourage my listeners to vote for Trump I would have voted for him s actually I did but it didn’t count because it was Puerto Rico um but it’s not a Panacea it’s not a you know we we have a huge uh problem that uh we’re going to have to pay the piper I’m glad we’re exposing some of the corruption that’s a step in the right direction uh but the real cuts are not going to happen uh and we’re I think

we’ve been in recession all year that’s why Trump got elected uh I think it’s going to get worse uh and the media is going to blame Trump unfortunately uh for it uh but you need to be prepared you can hope for the best but I think you better be prepared for the worst You Know M Murphy has a law anything that can go wrong will and believe me there’s a lot of stuff that could go wrong and a lot of it will so get prepared absolutely well Peter I appreciate you being out there and spreading the word

as much as you can we’ll we’ll do our best to do that as well and we have to see you back on Rogan soon oh yeah I haven’t been on there in quite some time so maybe you have to uh request it I don’t know what happened I’ve been on I was on four times and um and then you know I haven’t done it I know I haven’t done it since he moved to Austin so uh he was he was in LA but you know that’s still Austin’s actually a little closer for me now from Puerto Rico but anyway Tom thanks for everything and uh keep keep up with the

good work thanks Peter you too always appreciate the time this podcast is for General informational purposes only nothing on this podcast should be taken as investment advice guests on this show are not compensated for their appearance listeners are urged to educate themselves and make their own decisions do not base any investment decisions on the information contained to view our full disclaimer please visit our website