Schiff on Redacted: This War is a Distraction

Peter recently joined Clayton Morris on the Redacted YouTube channel for an interview on the latest economic and geopolitical news. The duo focuses on the economic and geopolitical fallout of a widening Middle East war, and Peter argues that it is already reshaping markets, energy flows, and monetary outcomes. He connects the conflict to higher prices (measured by CPI), a renewed bid for precious metals, and a market that was dangerously fragile before the shooting started.

(Click to watch on YouTube)

He begins by warning how political leaders will frame rising prices and use the war as a convenient scapegoat for an inflation surge he sees coming anyway:

But you know, we had already seen the lows in gas prices and I think they were headed much higher as were all prices. But now I think the big uptick in inflation in 2026 was already set to be the biggest increase in the CPI since 2022. But now Trump’s going to be able to blame that on the war. And even though, you know, he basically decided to have the war, he’ll be able to claim that he had no choice there. So it’ll be a way to divert attention from that.

Peter points out that precious metals are already reacting, and he frames gold as a monetary hedge that tends to perform when governments monetize conflicts:

But I think it’s important to point out that as we’re speaking, gold is still above $5,000 an ounce. You know, gold is still where, you know, this was a record just a few months ago. So gold is still way up. And I think once the noise is over from the short term trading, gold is just going to resume its climb and it’s going to hit new highs because wars are bullish for gold, mainly because of the way they’re financed. Governments tend to pay for wars by creating inflation.

He turns to silver, arguing that the metal has already cleared a long-term technical barrier and that its upside could be dramatic if industrial demand tightens against limited supply:

So it had a fourfold increase, which not only caught up with gold, it surpassed it. … But I think what’s significant about silver is that it’s taken out the $50 resistance that kind of overhung the market going back to 1980. So I think we’ve had a significant breakout in silver.  

That potential for metals to rise is tightly linked, in Peter’s view, to disruptions in oil and shipping that quickly translate into consumer price pressure and supply shock risk:

So if we have more demand and less supply, we’re going to have much higher prices. You know, I mean, this is a war in the Middle East, in Iran, but it’s already involving other oil producing nations. And so we have no idea what facilities are going to get bombed, what refining capacity could be lost. We know they’ve already stopped ships.

He also warns that stock markets—especially the tech-heavy indexes—haven’t priced in the downside that a real geopolitical shock would bring. Prior to the war, he says, the market was already stretched thin:

But of course the NASDAQ had a much bigger move up than the Dow. So I don’t think the markets have even begun to price in the negative possibilities that, you know, could be the result of this war. And plus there’s a lot of other negatives that the markets weren’t pricing in anyway. I mean, we were looking at some serious economic and financial problems and we had probably the most overvalued market in our history. So the market has been priced for perfection.

Finally, Peter emphasizes the political and human costs of military action, and he cautions that the blowback from killing civilians and declaring war will deepen anti-American sentiment and fuel future instability:

And you know, when you declare war on a country and you kill a lot of people in that country, not just soldiers, you know, a lot of civilians get killed as well, you know, you really create a lot of animosity. So the people who hated America in Iran are going to have more reason to hate America after the war than before. You think, oh, they’re all going to be celebrating the liberation. I mean, that usually is not the case. You end up creating even more enemies and, you know, enabling them to, you know, raise up more people against you.

For more of Peter’s wartime analysis, check out his other recent interview with Mario Nawfal.