Peter Schiff recently did an interview with Johnny Bravo. They talked about the gold standard, inflation, the looming dollar crisis, presidential politics, and the foolishness of Modern monetary theory.
Johnny opened up the show declaring that governments will never allow a gold standard. They hate gold. Why?
The reason that governments don’t like gold is probably for the same reason that kids don’t like chaperones at the senior prom. Because the chaperones are there to keep the kids in line and prevent them from doing things they really shouldn’t be doing. And that’s really what gold does. It’s kind of like a chaperone for government politicians because it keeps them honest. Because if you have real money, and government wants to spend money on programs, it needs to collect that money in taxes. And that generally puts a brake on a lot of programs because the public doesn’t want to pay.”
Peter said that when politicians can convince people that programs don’t really cost anything, they become much more popular. It’s easier for politicians to buy their reelection when they can give out something for nothing.
Gold stands in the way, because you can print paper out of thin air. But gold can’t be printed into existence; it needs to be mined. And if we’re on a gold standard, and gold is money, then the government needs real money. And since it doesn’t have the ability to make it, it has to collect it in taxes before it can spend it back into circulation.”
Government will always oppose honest money because it stands in the way of deficit spending. Sound money is crucial if you want to have a strong, viable economy.
The price of gold continues to climb. It has pushed above $1,800 per ounce and seems to have consolidated above that key level. Peter said it’s not so much that gold is going up, but the dollar is going down.
It’s not just the dollar. It’s fiat currencies around the world that are losing purchasing power as their central banks are conjuring them into existence at a rate that’s far more rapid than the miners are pulling gold out of the ground. Gold’s a good store of value. So is silver. Bitcoin — no. Because bitcoin doesn’t have any value and you can’t store what you don’t have.”
Johnny asked if we’re finally starting to see inflation.
It’s not like we’re finally seeing it. We’ve been seeing it for decades now. The monetary expansion is inflation. And the Fed’s been expanding the money supply — they’ve been inflating the money supply for a long time.”
But Peter said the impact of inflation on prices has been hidden from consumers in a CPI that is intentionally designed to hide just how much prices are rising.
So, I think that if we had a more honest CPI, the effects of inflation would be more apparent.”
Also, price inflation has been concentrated more in financial assets and real estate than in consumer prices. But Peter said he thinks the latest rounds of money creation won’t enter the economy through the stock market. It will run through the supermarket.
Source: SchiffGold
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