Peter Schiff: Gold’s Bull Market Is Just Getting Started

On Tuesday, Peter joined The Street to sit down for a wide-ranging interview covering gold’s historic climb, the dollar’s ongoing collapse in purchasing power, and why he thinks Washington’s optimism on oil prices is misplaced. He also takes aim at Bitcoin, arguing that its five-year bear market is far from over despite the unwavering confidence of its holders.

Peter opens by explaining why he’s never wavered in his decades-long bullish stance on gold. He points to the Federal Reserve’s inability to ever truly tighten monetary policy as the root cause:

The Fed is never going to have a tight monetary policy. It’s always going to be easy. The question is how easy? And so the monetary policy is just always going to be bullish for gold. And that’s why gold, which started this century or this millennium, 1999, 2000 timeframe, gold was under $300 an ounce. And now it’s over $4,400.

He breaks down what that price move actually represents. Rather than describing it as gold becoming more valuable, Peter frames it as the dollar losing nearly all of its worth, and warns that the same math could easily repeat itself from here:

You used to need just 20 Federal Reserve notes to buy an ounce of gold. Now you need $4,400. That’s a 200X increase in the price of gold. But it’s really, you know, a 99% decline in the purchasing power of the dollar is really what’s going on. But the price of gold can go from 20 to 4,000. It can go from 4,000 to 800,000. That’s the same mathematics. It’s just a question of how long it takes to get there.

Peter doesn’t expect Washington to change course anytime soon. He believes policymakers will only act once every other option has been exhausted, and by that point the damage to the dollar will already be done:

There was an old saying that the US government will do the right thing eventually after it exhausts all the possibilities, all the other possibilities. And what that means is we are not going to prevent a currency crisis or a sovereign debt crisis. We’re going to keep pursuing these reckless policies until we have no choice. And by then the price of gold is going to be substantially higher.

To drive the point home, Peter compares the two-decade track record of gold against stocks. While the S&P 500 looks impressive in dollar terms, he says the picture flips entirely once you measure it against sound money:

The stock market is up in terms of US dollars over the past 25 years, but it is down in terms of gold. So people who heard me in 1999, 2000, 2001– “be bearish on stocks”– if they sold all of their stocks and put all the money into gold, they have more money today than the people who ignored me and just ran out the whole thing.

Shifting to energy markets, Peter pushes back on the Trump administration’s prediction that oil prices will fall sharply once the conflict with Iran concludes. He sees the opposite outcome as far more likely:

So I think Trump is wrong and his administration is wrong to forecast a big drop in the price of oil. $40 or $50 a barrel they’re saying when the Iran war ends. Now, I have no idea when this thing is actually going to end, probably not anytime soon or maybe not even during Trump’s term. But I think regardless, I think oil prices are headed higher, not lower when the war is over. And they could be headed a lot higher.

Finally, Peter turns his attention to Bitcoin, where he remains skeptical of the crowd’s persistent optimism. He argues that the buyer base has already dried up, leaving the token with little support left:

I think you have a lot of Bitcoin selling coming up. I don’t see who’s going to buy it. I think all the people who would buy Bitcoin already bought it. So I think the market really got one way to go, and that’s down. And of course, all the people that own Bitcoin are so confident that it’s going to go to the moon. Their confidence hasn’t shaken at all despite a five-year bear market.