Peter Schiff: It’s Time to Axe Entitlements 

On his latest appearance on CapitalCosm, Peter walks listeners through the current state of markets with a particular focus on gold and silver. He ties those moves back to broader policy failures at home and abroad, including recent escalation in the Middle East. He moves from praise for the technical strength in precious metals to warnings about housing policy, the dollar’s trajectory, and the speculative froth in Bitcoin.

Peter opens with the metal markets, where he sees technical strength and growing investor interest in both gold and silver. He frames the moves as more than a short-term trade; to him they’re a signal about confidence in fiat currency and the need for real savings outside the monetary system:

And they both pulled back, but gold has found support around 5000, which is still a pretty high number compared to where we were, not necessarily compared to where we’re going. And silver really has a lot of strong support in the low 70s. But there’s been a pickup in the volatility of silver, but the trend is clearly up when we’re trading at 87.5 right now. And more significantly for silver, we broke through that $50 double top that really overhung the market since 1980. And so I think the chart looks phenomenal for silver.

Turning to housing, Peter criticizes policymakers who try to keep house prices rising while pretending to solve affordability. He says the free-market cure — falling prices — is being avoided in favor of cheaper credit, which only masks the problem and amplifies currency weakness:

It’s not just keeping home prices from falling, he wants them to keep rising. Yet at the same time, he wants to do something about the affordability problem, because homes are already so overpriced that people can’t afford them. And rather than allowing the prices to go down, which is the free market solution, he wants to keep the prices high and artificially manipulate interest rates down so that people can borrow more money to overpay for homes. That is a horrible economic policy. It has all sorts of negative consequences, but one of them is a weaker dollar and higher inflation.

On crypto, Peter keeps a skeptical posture toward Bitcoin, calling it a speculative risk indicator rather than a store of value or monetary alternative. He warns that Bitcoin’s weakness could foreshadow a retreat from risk and broader market stress in risky tech names or AI plays:

So what is Bitcoin? It’s just a highly speculative asset that people buy when they want to take risk and they think risk assets are going to go up. So they put money into Bitcoin. The fact that Bitcoin is falling now could easily be a precursor that the appetite for risk is diminishing and potentially you’re going to see something happen in the broader market for assets that are less risky than Bitcoin but are still reasonably risky. These might be AI stocks or stuff like that. So this could be a harbinger of some bad things to come.

He follows with a blunt assessment of the dollar’s outlook. Using historical charts as his guide, Peter says he expects the dollar to break longstanding support levels, arguing that monetary policy and fiscal profligacy point toward a lower greenback even against traditionally strong currencies like the Swiss franc:

Well, I think it will break support. I think the dollar is headed a lot lower. In fact, if you zoom out on that chart, you’ll see that the lows were in just before the 2008 financial crisis. And I think we’re going to take out those lows. And in fact, if you put up a chart between the dollar and the Swiss franc, the dollar has already taken out its lows versus the Swiss franc.

Finally, Peter makes clear what he thinks the remedy should be: substantial cuts to government spending across the board, including entitlements and military outlays, plus an end to redundant programs and subsidies. He argues that politicians’ unwillingness to tackle these promises is political, not economic, and that only real spending restraint will restore fiscal sanity and the dollar’s health:

Well, we need to have massive cuts in government spending, number one, and that includes entitlements that he has promised never to touch, like Social Security, Medicare, Medicaid, Affordable Care Act. We also need significant reductions in military spending. And, you know, we need to get rid of a lot of government programs that we don’t need and that we’d be better off without, like all the agricultural subsidies. You know, there are a lot of things that we need to do. There’s a lot of government that needs to be eliminated and he’s barely scratched the surface when it comes to deregulation or shutting down government agencies or departments.