Schiff on Mining Network: Debt, Dysfunction, and the Case for Gold

In a recent interview on the Mining Network channel, Peter and host Peter Gadsdon survey a political and economic landscape that seems increasingly chaotic and explain why none of it bodes well for the dollar. Schiff touches on the resurgence of the Democratic Party, the exploding cost of servicing the national debt, doubts about the Fed’s willingness to fight inflation, and his long-standing skepticism of Bitcoin as a store of value. Through it all, he circles back to one consistent theme: gold remains the most reliable hedge against a government that can’t stop spending and printing.

Peter opens by weighing in on the current political and economic mess, framing it as a mixed bag depending on your perspective. He’s blunt about who stands to benefit:

I think it’s positive for gold. It’s not positive for the country. I think it’s a big negative for the country, which is one of the reasons that it’s a positive for gold. I think it’s a negative for the economy. I think it’s a negative for the markets.

He continues by taking aim at what he sees as a self-inflicted political wound. Peter argues that empty promises and scandal have inadvertently given new life to a party many had written off:

As all the problems that he [Trump] was supposed to solve got worse and he claimed he solved them all. And then by making all the money, the deals, the coins and selling the insider trading and all the things that he was doing, he basically resurrected the Democratic Party. People thought that they were dead and buried because they went out into Looney Tunes land.

From politics, Peter shifts to the numbers that worry him most. He lays out just how fast interest payments on the national debt are overtaking other major government expenses:

Right now, interest on the national debt is about $1.4 trillion. It was just earlier in the year, maybe the end of last year, that we got to $1 trillion and we passed defense. By next year, we’re going to pass Social Security, which is $1.7 trillion. And that will make interest on the debt our single largest expense.

With that fiscal backdrop in mind, Peter turns to the Federal Reserve and the prospect of new leadership failing to break from old habits. He singles out Kevin Warsh, questioning whether a changing of the guard will actually mean a change in policy:

Warsh has already acknowledged that the Fed is accommodative. OK, well, restrictive inflation has been above target for six years. You claim you want to do something about it, that there’s something different about this Fed than the prior feds that failed. You’re not going to succeed if you just emulate their policy of being too timid and, you know, tiny little rate hikes.

Given his doubts about the Fed’s resolve, Peter naturally circles back to the question of where people should put their money. He makes clear that Bitcoin isn’t the answer, dismissing it as a zero-sum game rather than a genuine store of value:

All Bitcoin does is transfer money from the people who sell it and from the people who buy it to the people who sell it. And some people make money at the expense of other people who lose money. I mean, there’s nothing there. It’s just gambling and more people. Gambling is not going to make the world a better place.

Peter closes by contrasting that verdict on crypto with his enduring confidence in gold. He points to a century of price history as proof that gold’s long march higher isn’t a coincidence, but a direct consequence of currency debasement:

Gold has done great in the past. I mean, gold has been going up for 100 years. It was 100 years ago. Gold was $20 an ounce. Now it’s four thousand. I mean, it only goes one way. It doesn’t go there in a straight line. But gold is the surest thing or closest thing to a sure thing you got because it’s a sure thing that the government is going to keep printing money and debasing the currency.