Schiff on Wolf Financial: Corporations Should Be Buying Gold

Earlier this week, Peter appeared on Wolf Financial to discuss his favorite themes — the unraveling credibility of fiat, the quiet reallocation into gold, and the costly mistakes corporate treasuries make when they confuse speculation with prudent reserves. He walks through how central banks are voting with purchases, why parts of the market look mispriced, and why corporate cash belongs in something that preserves value, not a volatile token. He even takes a detour into politics to underline how geopolitical bluster can complicate economic decision-making.

He begins by explaining the big-picture signal central bank buying sends about the dollar and the global reserve system:

It’s pretty clear that it’s telling us that central banks have lost confidence in the dollar in the US government’s commitment to maintaining its value and getting a handle on its fiscal house. I think they’ve made a decision to move on and they’re clearly moving to gold; that is the replacement reserve asset for the dollar. It’s gold and that’s why they’ve been buying it. That’s why they’re going to keep buying it. And I think this is a significant game changer for the global economy.

Next he points to market mechanics and valuation — arguing that, in his view, the sector most tied to sound money still looks cheap relative to fundamentals and expectations:

I think that the whole sector is undervalued and maybe Wall Street will start crunching the numbers again after the next quarterly earnings come out, you know, so much better than what had been expected. Maybe they’ll start raising guidance, but even the companies are reluctant to base their guidance on these numbers. So they take a more conservative approach that the prices are not going to hold up. Everybody expects the prices to come down.

He then turns to one of the highest-profile corporate experiments with cryptocurrency and why it’s been such a poor store of value for that firm:

Strategy’s down 80% from its peak price. But what’s probably more significant is Strategy has spent the last five years buying Bitcoin. They have spent about $54 billion buying Bitcoin and the Bitcoin that they own is now worth about 13% less than what they paid. That is the horrible investment result for five years of buying. And the losses just keep piling up now, especially if they keep buying Bitcoin, which they seem to do every week.

Peter follows that by unpacking how investor expectations and corporate actions interact — why a company’s stock can look strong on paper even when its underlying bet is failing:

So that really shows you because the reason that Strategy was able to raise so much money to buy Bitcoin was because the people who were buying Strategy stock wanted exposure to Bitcoin because they thought it would have this great return. And they were wrong. The return on Bitcoin has been lousy the entire time people were buying MicroStrategy.

From there he gives practical advice for corporate treasurers: cash is not neutral when inflation chews away purchasing power, and Bitcoin is not a sensible corporate reserve asset in his view:

I believe [corporations] should keep gold on the balance sheet as opposed to keeping dollars. I think it’s a better store of value. So I think, you know, companies that have a large, you know, cash position should think about diversifying that. I mean, either paid out in dividends, buy back stock, but you know, why leave it in cash with inflation eroding away the value, you know, much better to just hold it in gold, but it made no sense for any company to hold their cash in Bitcoin. I mean, that’s just like gambling, taking it to his casino.

Finally, he broadens the conversation to an example of how political posturing can complicate international relations and economic strategy — a reference to the high-profile talk about Greenland that served as a reminder of how rhetoric and geopolitics can distort sensible policy:

I think all of those things added to the concerns that the world has, probably especially that the Greenland stuff, where obviously Greenland is not doing anything wrong. They’re not criminals. You know, it’s not a situation that’s anywhere analogous to Venezuela.

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