{ "episodeId": "SLP208", "speakers": { "stephan": { "name": "Stephan Livera", "role": "host", "tag": "STEPHAN" }, "peter_schiff": { "name": "Peter Schiff", "role": "guest", "tag": "PETER" }, "host_of_schiff_radio": { "name": "host of Schiff Radio", "role": "guest", "tag": "HOST" } }, "segments": [ { "speaker": "stephan", "time": "00:09", "start": 8.71, "text": "Hi and welcome to the Stefan Livera podcast, a show about Bitcoin and Austrian economics. Does money need a non monetary use? Will the government return to a gold standard? Or are we doomed to repeat the same cycle of fiat money? Peter Schiff, the CEO of Euro Pacific Capital, chairman of Schiff Gold, and the host of Schiff Radio joins me to discuss for a bit. Episode two hundred eight. But first, a message on behalf of the show sponsors." }, { "speaker": "peter_schiff", "time": "00:35", "start": 34.83, "text": "Please hold my golden chalice. I would like to hear what Peter Schiff has to say about Bitcoin." }, { "speaker": "host_of_schiff_radio", "time": "00:41", "start": 41.11, "text": "I have a lot of sympathy with, the Bitcoin bugs, you know, and their, you know, skepticism or their concerns about our fiat monetary system and the problems that it has. But if people could invent something better than gold, they might have already done it. Bitcoins really replicate all of the properties of gold, even improving on some of them. The fact that it's easier to use than gold gives it intrinsic value. Bitcoins don't have any intrinsic value whatsoever. I will concede That the price of Bitcoin has gone way up. And what Bitcoin did very successfully is it managed to replicate a lot of those properties that gold had. Unlike gold, you can instantaneously, you can send your Bitcoin over the internet. You can't do that with gold. And I wish, you know, I, I wish you could have perve- persuaded me to buy Bitcoin a few years ago. Do I wish I bought it a long time ago? Yeah. There's a realistic probability that Bitcoin will make a new high. You know, Bitcoin has a- All of the characteristics of a bubble. In fact, I, I am sure that it is a bubble. In fact, it's probably the biggest bubble I've ever seen. It's a massive speculative bubble, and you're gonna be left holding the bag. There's no value in the Bitcoin. You can't use it as money. It's too slow, it's too expensive, and too volatile. I think this thing is gonna come crashing down. Please" }, { "speaker": "peter_schiff", "time": "01:58", "start": 118.36, "text": "enjoy" }, { "speaker": "host_of_schiff_radio", "time": "01:59", "start": 118.58, "text": "this" }, { "speaker": "peter_schiff", "time": "01:59", "start": 118.72, "text": "conversation between Stephan Livera and Peter Schiff. If you still want to buy some Bitcoin even after listening to Peter predict its demise, visit swan" }, { "speaker": "stephan", "time": "02:11", "start": 130.59, "text": "Unchained Capital, Bitcoin native financial services, Unchained are producing products and services built on the foundation of multi-signature, and they're really respecting the \"not your keys, not your coins\" ethos of Bitcoin. So if you're thinking about your Bitcoin security, maybe you're just sitting on a single hardware wallet, or maybe you've left them on an exchange, why not consider going to multi-signature with Unchained? They're even offering Vault Concierge onboarding packages now, so you can get a guided setup call, they'll send out the hardware devices to you, and that package includes Inside that vault. So the prices start at, fifteen hundred, which includes the two hardware wallets, and there are different, packages also. Use the code Livera for a discount there. Go to unchained dash capital dot com. So if you've got your hardware wallet set up or your multisig set up and now you need to start thinking about your backups, have you got a steel backup product? Well, this is where you can check out CipherSafe at ciphersafe dot io, producing the CipherWheel product, so you can make sure that your seed is backed up in It's a wheel shape and you get some tiles and essentially you slide in those tiles and that forms the backup for your seed. So make sure you check them out. You can also get that with a padlock tamper evidence seal so you know if it's been opened. Make sure your loved ones have access to your bitcoins if an accident occurs. Go to CipherSafe dot io, use the code Livera for a discount. Lastly, Knox. Knox is a Bitcoin custodian dedicated to ensuring their insurance protection covers the full value of their customers' assets. For example, suppose a fiduciary wants to hold two dollars worth of Bitcoin with Knox. Knox will seek to obtain two hundred fifty million dollars of insurance, dedicated exclusively to that account and adjustable to volatility, no fractional coverage or narrow scope, insurance for what it's worth, a tool to transfer risk. Knox is backed by investors such as Fidelity Investments Canada, Initialized Capital, and Inovia. If you are a Bitcoin company, investment fund, trust, or family office, check out Knox for your insured custody. KnoxCustody dot com. Here's my discussion with Peter Schiff. Peter, welcome to the show. Well, thanks for having me on your program. Peter, I've been following you for quite some time, and obviously, I know you've, gone back and forth with many, Bitcoin advocates, and discussing, you know, the relative, qualities of gold versus, say, Bitcoin versus fiat money. so I, I g- I, I guess maybe we could just start with a little bit of where are you currently at in terms of your thinking on Bitcoin? Has your sh- Has your thinking shifted in recent years?" }, { "speaker": "host_of_schiff_radio", "time": "04:42", "start": 281.63, "text": "No, I mean, I, I pretty much feel the same way about Bitcoin as I felt when I, when I first learned about it, which was, you know, many, many years ago when it was a much, much lower price. So, I mean, I've, I've certainly watched it catch on, and when I first heard about it, I, you know, obviously I had no idea it would rise to this level of popularity, but, I mean, I knew about it, and I thought it was interesting that, you know, that they had created it, but I, I still believed, at, you know, then, and I do now That it didn't really have the important qualities that would make it money, and so I didn't think it would succeed as money. And in fact, you know, one of the, the earlier things I thought, and this is before there were any altcoins, I was like, \"Well, what stops somebody from just coming up with some other cryptocurrency to compete with it?\" And, you know, and when I said that, there weren't other currencies, it was the only one. And, and so I was right in that now there are thousands of these things. But the popularity has grown to the point that even these other cryptocurrencies, you know, have got an audience and now they have, you know, high market values too. So it's just got a lot bigger, than, you know, I thought maybe it could do when I first learned about it. But I don't think anything that's happened to Bitcoin, despite its growing popularity, all of the, you know, personalities that have been attracted to it All the infrastructure that has evolved around it, I still think it fails the basic test that it failed initially, and I don't think it's going to succeed. Now, I do think that people who bought it early on, some of them made a lot of money and got out, others have made a lot of money and have yet to get out, and we'll see how much, you know, they actually get out before the, the bottom drops out. But I think- I think at the end of the day, the, the gains that are made by the people who got in early and got out, will be equal to those who got in late and didn't. And, you know, the big question is if you're getting in now Where are you in the pyramid? I mean, are you still early? I, I think that's quite obviously not the case. are you in the middle or are you coming in at the end? And, you know, I still think it's closer to the end, but, but we'll see. I mean, it's certainly possible that there's more air that could go into this bubble, but I wouldn't wanna bet on it, and, and I'm not betting on it." }, { "speaker": "stephan", "time": "07:30", "start": 449.92, "text": "I see. So let's try to- Unpack some of that. So as I understand, you believe that Bitcoin doesn't meet certain hurdles, if you will, to try-- that it could even be a possible candidate money. Is it that there's no physicality to it? Is that part of your reasoning why? Or why-- Let's go into that a little bit further." }, { "speaker": "host_of_schiff_radio", "time": "07:50", "start": 470.18, "text": "Well, it, it's not so much that there's no physical nature of it. I mean, intangible assets can, can have a, a use case and, and have, have value to them. but you have to understand, you know, what money is and, and then what, what money substitutes are, like currency, because there's a big difference between money and currency, right? Money is a commodity. Money is by definition, the mo- Most liquid commodity that people will accept in exchange for other commodities, even if they don't need that commodity themselves, because they know they can hold onto it and they can exchange it for somebody else who will accept it. So, in money replaced barter, because before money, if you wanted, to exchange for something, you needed to find somebody who needed exactly what you had and who had exactly what you needed, and so it was a very inefficient way way for people to trade, but people then discovered that, hey, you know, there's certain commodities that everybody needs that can kind of function as a medium of exchange to facilitate these transactions. And over time, metals won out, and in particular, gold became the one commodity that was best suited to be money because of the properties that enabled it to store its value and the fact that all gold was the same. And so if I- If I owed you an ounce of gold, if I paid you an ounce of gold, it was exactly the same as the one you loaned me. I mean, there was all these unique properties of portability and scarcity and stuff like that that, that, that made gold a better form of money than other commodities that had been used as money. So then eventually society came up with money substitutes because sometimes you didn't wanna, you know, ho-- you know, lug around your gold. People would leave their gold with a, you know- Blacksmith or a banker, and paper would be issued that would circulate in place of money that was backed by the money, and that paper that circulated was currency. Now, the currency had no real use value, 'cause it was just a piece of paper. What gave it value is that there was some actual money in a vault somewhere backing it up, that the bearer of that piece of paper could go collect whenever he wanted it. And so- So currency became a money substitute that could circulate in addition to actual money. Then what happened later on is governments started issuing paper currency that wasn't backed up by gold, that was backed up by nothing. And so that's what fiat currency is. It's a piece of paper, and the government just says it's money, and it, it's not backed by anything. And so- Cryptocurrencies to me have more in common with that, right? That type of currency, a, a, a fiat cryptocurrency as opposed to legitimate a cryptocurrency, which would be a cryptocurrency backed by, by money like gold. So if you had, if I had gold in a vault and I issued some coin that was backed by that gold that could circulate as a digital currency but was ultimately backed by and redeemable In the gold that I had in a vault somewhere, then that would be a, a, a legitimate, cryptocurrency backed by real money, as opposed to a fiat cryptocurrency backed by nothing. But the cryptocurrency to me is no different than the piece of paper in that there is no real value in the cryptocurrency, just like there's no value in the paper. I can't do anything with that piece of paper, and I can't do anything with a Bitcoin. What gave the piece of paper- Value was what you could do with the gold that was behind it, because that gold was an actual commodity that had all sorts of uses, and it was very valuable because of the demand for those uses. but, but the paper doesn't have, there's no demand for the paper. It only has value because there's real money behind it, but there's no use case for cryptocurrency either. So I, I just don't see how it could be a store of value when it has no actual value to store. And eventually it's gonna crash Crash, and when it does, you know, then nobody's gonna want it anymore, 'cause I think the main demand for Bitcoin is basically because people believe if they own it, they're gonna get rich if they just hold onto it long enough, and that's what people are doing. They're hoarding cryptocurrency based on the perception that eventually they'll be so valuable because everybody else is gonna buy it, and then they'll be able to cash out and they'll be able to, you know, buy all sorts of consumer things because they're gonna be rich. but I think that- That's far going to pan out that way." }, { "speaker": "stephan", "time": "12:45", "start": 765.45, "text": "So let's try to go a little bit further into that. So I, as I understand you, essentially it's that you believe gold has other uses other than its use as money, that, that's why in your view, right? So I, I think the way, the main way I would sort of try to challenge that is, I think if we look at, you know, the writing of Mises, I think he, he recognized that even a total fiat currency could just piggyback onto any existing price framework, and in that sense The new currency need never have been valued directly as a commodity itself, because we're not coming from a pure barter world. So I guess my, my question to you then would be, why do you believe that in order to be money, something must have a use other than money?" }, { "speaker": "host_of_schiff_radio", "time": "13:32", "start": 811.5, "text": "Well, because you have another source of demand for the money. So for example, if the price of gold really started to fall There is going to be buying that is gonna come in, right? There's-- people are always going to need jewelry, and so the jewelers are gonna be there buying gold, you know, no matter what. you're gonna need gold in electronics for its properties, and so, people who are in that industry that need gold are there to buy gold because they need it. And in fact, even if the price goes down, people that weren't using gold because it was too expensive, and let's say they were using- Copper, which wasn't as good, but it was all they can afford. If the price of gold was low enough, they would say, \"Well, I'm just gonna use gold then. I mean, I, I don't have to use copper at this price, I'll, I'll use gold.\" So you have all this natural demand that is going to be there for gold, the commodity, even if you have a temporary loss of demand for gold, you know, as a store of value or as money. Although also, I think central banks, to the extent that gold got cheaper, Buy more gold as well, as a reserve asset. I mean, you have that other source of demand, coming from central banks who have been holding gold, you know, since they've, they've, they've come into existence, but you don't have any of that buying for Bitcoin. All of Bitcoin's buying is by speculators. There is no other buyer other than the speculator who believes the price is gonna go up. And so if you all of a sudden see the bottom drop out of the market And the speculators aren't no longer greedy about, you know, and wanting to get rich, but are now fearful that they're gonna go broke, and you have a lot of people selling. There isn't no natural buyer to come into the market and, and, and put it at a bottom." }, { "speaker": "stephan", "time": "15:28", "start": 928.28, "text": "I see your view here is essentially you're distinguishing here between natural demand, as you call it, and let's call it monetary demand. But even in the gold world, couldn't we also say that actually as a- As a fraction of gold's value, really the natural use component is very, very tiny compared to the actual monetary demand, if you, if you wanna call it that, the exchange demand." }, { "speaker": "host_of_schiff_radio", "time": "15:52", "start": 952.36, "text": "I wouldn't say that, no. I mean, I think that there's certainly a lot of demand for it as a metal, but the, let's say for jewelry, right? People are buying gold jewelry at the market price. So let's say even if gold went to five thousand dollars an ounce next year, people are still gonna buy gold jewelry. They're just gonna pay a higher price for it. They're still willing to do it. See, gold is a luxury good, and so the demand is gonna be there. Now, if there was no investment demand or monetary demand, then the price might be lower, but even at the higher price, because it is a luxury good, there is still gonna be demand for it, and it's other properties. You know, the, the properties of gold are so good, and where gold is needed in medicine and electronics and dentistry, they only need small quanti- Quantities of it, but it's so important that even if the price went way up, the demand would still be there at the higher price because it is so good at what it does. so and, and if you look back over time historically, you have thousands of years of historical comparisons where you can take the price of an ounce of gold and you can relate it to other commodities and to other financial assets to kinda- To figure out historically, you know, you know, what, where, where would gold be expensive and, and where would it be cheap? So there's, there's a market, frame of reference, you know, you don't have that at all with Bitcoin 'cause it's only been around for ten years, and there's no way to say how much should a, you know, bushel of wheat, cost in terms of, you know, a, a, a, a Satoshi or a Bitcoin, whatever you wanna do, or to know anything, any, any kind of relative Any commodity in Bitcoin, there's, there's no way to, to know, because there's, there's, there's just no-- again, there's no, nothing you can even use Bitcoin for. But again, the problem is two is, you don't know. I mean, I hear all the Bitcoin people, they wanna say why Bitcoin is so great, and then they gotta dismiss the five thousand plus other cryptocurrencies. Well, why is Bitcoin better than those? And why is Bitcoin better than the ones that haven't even been invented yet, that may be invented next year or next month? Or in five years, you know, they haven't come up with a better gold in five thousand years, right? But I've never seen in my lifetime a technology that wasn't improved on over time, whatever it was, right? So, you know, they-- Somebody invented the cell phone, but the cell phone I use today is nothing like the one that was out thirty years ago. I mean, everything that's, you know, tech-technological, somebody makes it better, they make it faster, they, you know, They, they improve on it. So to think that Bitcoin, assuming that you, you know, the white click cryptocurrency, that nobody's gonna make something better or faster or, or, or more efficient. And if they do, well, then it renders Bitcoin obsolete, you know? And so I, I don't know how you can have this confidence that I'm gonna store my wealth in this cryptocurrency and just take a, take a shot, just hope that this is it, that the first, Cryptocurrency ends up being the best one, that, you know, this is like, you know, you, you put all your money into MySpace and just hope that nobody came up with Facebook, right? Or whatever, or SpyGlass, and you hope no one came up with Yahoo or then Google. I mean, you know, you don't know." }, { "speaker": "stephan", "time": "19:29", "start": 1168.68, "text": "Probably our main point of disagreement, so, so some of the earlier stuff you were chatting about there, is just around exactly how much of Gold's demand comes from the monetary cases, i- I guess I view it like that might actually be somewhat of a-- We view that more like that's, like Bitcoin is something that is taking just a very, very large percentage of its demand from the monetary component, and yes, I, I agree some of that is speculative based on the idea that we believe it has certain qualities. All of it is speculative," }, { "speaker": "host_of_schiff_radio", "time": "20:01", "start": 1201.39, "text": "right? I mean, n-n-nowhere is Bitcoin really being used as a medium of exchange, right? You, you can't go online and find- Products that are priced in Bitcoin, where it says, \"I'm selling this product, and here's how many satoshis it costs, right?\" You're not gonna find people negotiating contracts, \"Pay me a Bitcoin, a month,\" you know, or people aren't taking out insurance policies, you know, on their home, and they'll say, \"Oh, okay, well, here's your premium. It's this many satoshis every month, and your benefit is this many satoshis.\" Nowhere in the world is Bitcoin- Bitcoin being used as a medium of exchange, as a unit of account, as any type of monetary function. The only thing that I see it used for is speculative store of value and to a very, very small extent, barter. See, sometimes you will see people online that may exchange something for Bitcoin, but in that respect, it's acting more like a barter transaction where somebody who wants Bitcoin is exchanging or somebody who- Is ha-- somebody who, who wants Bitcoin and has something that somebody who has Bitcoin wants, they'll be willing to accept that Bitcoin in exchange for their, their other product or service, and so you have a barter arrangement, going. But i-- it's not where the Bitcoin is used as money to facilitate the transaction, it's actually the good that the person on the other side of the transaction actually wants. So you have maybe a tiny bit of use of Bitcoin for barter, maybe the- That's, I don't know, less than five percent of the use, I mean, of that, and the rest of it is people just hoarding it and either saving it or day trading it, right? 'Cause a lot of people are just buying it and selling it. I mean, it would, you know, they're just trying to make money trading it, 'cause it, it's a, a good trading vehicle. It has a lot of volatility, and you could look at a chart and you can buy it here, sell it there. So you got a lot of people trading it," }, { "speaker": "stephan", "time": "22:11", "start": 1330.84, "text": "So I think the main point I disagree there is probably just that maybe you're setting a bit of an unfairly high hurdle. It's not that Bitcoin could have emerged out into the world fully formed and everyone no-- is gonna start using it as money straight away. Surely these things will take time, and we view it like it's a network of people who are growing. And I guess probably the main way I would counter your, discussion around the altcoins is that really it's like we should think of it more like it's the creation of the internet, and we're just gonna keep building the internet as opposed to the kind of MySpace and Facebook example, and as I'm sure you're probably aware, that there were many failed attempts or concepts in the past, things like eGold, Things like, B-money or Hashcash as preceding ideas. So really, Bitcoin actually is the successor to many of those ideas. So I guess my question to you then, Gold Money was--" }, { "speaker": "host_of_schiff_radio", "time": "23:03", "start": 1382.76, "text": "But see, that was different because that was actually backed by gold. It was, and, and the companies that are kind of, that try to be like that, were like Gold Money, you know, where you have an account of physical gold, that's owned, and you can now exchange, your gold electronically, you can transfer- You know, fractional, you know, pieces of gold. You can transfer as little as one gram of gold, instantaneously to any other gold money account holder, and then you could use your gold as a, as an electronic, form of payment. So that, that, that, that's what I would say was maybe is a, a, is a, a advancement on that basic principle. Then what's going on with Bitcoin and other cryptocurrencies is totally different." }, { "speaker": "stephan", "time": "23:50", "start": 1429.87, "text": "For me, the important- Important point as well is to understand the historical context as well. So I think part of why Bitcoin was designed the way it was is that it, is that it is there to resist centralized ownership and storage. And so I think that was potentially what, was the fate that befell, you know, some of the earlier predecessor ideas, and so that is- In some sense, why it was designed in this way, because it's there to resist the centralized, yeah. I mean, custodianship. I mean, that was to me," }, { "speaker": "host_of_schiff_radio", "time": "24:24", "start": 1464.19, "text": "that was the original appeal of Bitcoin, was that since the government was so cracking down on the banking system with all of the AML and know your customer requirements, and I know those requirements 'cause I operate in that realm in financial services and in banking, and the government's been- Basically know everything that we're doing. And the idea that, hey, here's a way to, transact anonymously using Bitcoin, a-and so then it almost became, oh, okay, so this is a way that I can have a medium of exchange where I can engage in transactions that the government doesn't know about. And so immediately, you know, anybody who's doing something that they don't want the government to know about, and of course, a lot of that was illegal activity, kinda looked at, At Bitcoin as a way to launder money, and hey, I can do my transactions through Bitcoin, and even if, you know, I lose a little bit, maybe it goes down twenty or thirty percent, that's not that high a cost to pay to launder money. I'm gonna be doing this, you know, under the microscope. And I think that that's where a lot of the initial demand came from was from that illicit activity. But, you know, then as Bitcoin tried to go mainstream and tried to go, you know, to Wall Street and, and, and, and appeal to that type of type of crowd, they really had to distance themselves from that original use case, and other coins came up to say, \"Oh, we're the private coins, \" 'cause now, now I've been, you know, people were saying, \"Hey, Bitcoin isn't private. \" The government, everybody knows what's happening. I mean, there's a digital signature. I mean, you'd be a fool to use Bitcoin, to commit a crime, because it's easy to track you down. They can, they can find you, and a lot of people have been busted because they, they Appeal was something that it had going for it, but it's long since lost that, in, in its, you know, in its attempt to say that it's, well, it's, you know, it's a mainstream, You know, a, a currency. And, and once you start putting all those transaction costs on top of Bitcoin, I mean, once you find, oh, you wanna open up an account, you need a passport, you need a utility bill, everything you need to do, we need all these questions, and you start holding all the financial institutions liable for any crimes or even potential crimes where they don't catch a red flag, and now all of a sudden you have all these compliance and regulatory burdens, that are gonna overwhelm- The industry. And then of course, you know, the other problem with Bitcoin is how expensive it is. I mean, if people actually tried to use it as a medium of exchange, the, the amount of energy that it would consume because of all those transactions that had to be validated would run the, the, the costs of using it through the roof. I mean, right now, like if I wanted to send you a million dollars worth of Bitcoin, okay, I mean, I could do it for a low cost if I wanted to go out and buy a cup of- A cup of coffee costs a lot higher than using my credit card to buy a five dollar cup of coffee, and of course, it takes a lot longer for the transaction, to actually settle. The, the credit card will settle it instantaneously. but if people actually started using Bitcoin more often, that would just run up the costs of validating it, and it'd just be prohibitively expensive to actually use it as a medium of exchange. And even if we could afford it, I mean, I've, you know, all the energy would be go- To Bitcoin, there'd be nothing left over for anything else." }, { "speaker": "stephan", "time": "28:00", "start": 1679.51, "text": "Well, right. So there's a-- Let me, respond to a few of those points. So I think firstly the point around privacy, I think essentially that is coming down to people who are basically using Bitcoin the wrong way. There are ways to use it more privately, it just requires a little bit more work to use the right private techniques or to acquire it without KYC. Now, I, I'm in a similar boat to you in terms of being an Austro-Libertarian, I obviously want to see less government regulation You know, I want the government to be smaller, but I also recognize that there are almost two different spheres to Bitcoin, right? So there is that whole gray market or dark market, black market world where people are transacting without KYC and using privacy techniques, but then on the other hand, there is also the regulated white market world, which obviously they MLK YC and so on. And so there are many people who treat it more like it's a kind of reserve asset, and we're seeing more companies that are starting to try and, and you could argue, and I would, I'd say, yeah, you're probably right, you could argue that, look, some of that is, again, speculative demand, but would you not say that over time, we're seeing more and more people come around to that idea of perhaps speculating even with a small percentage of Bitcoin? So I guess bringing back to my earlier point, it's, it's that I think the some of the Bitcoin skeptics are almost imposing this impossibly high standard that it should be stable and well-accepted At the get-go, and unfortunately, there is no central bank or government telling people to use Bitcoin, there's no central bank stabilizing the price of Bitcoin, and so it necessarily will be volatile in these early stages. Well, what would you say to that? Well," }, { "speaker": "host_of_schiff_radio", "time": "29:39", "start": 1778.54, "text": "there's no precedent for that, because, you know, e-money is either a commodity that is known and has been used, right, a long time before it became accepted as money, or you have had the government. The, the only reason that a, a fiat currency- Works is because it has all the government behind it, right? Without that, it wouldn't work. And in fact, even with that, it doesn't work for long. I mean, there hasn't been a fiat currency that has survived, you know, they've all crashed. I mean, it's not like this is the first time we've experimented with it. I mean, even, you know, the United States, when we were established, on a gold standard in, you know, seventeen ninety or whatever, when they, you know, we went on the gold standard or we were very familiar with fiat currencies of the past that had collapsed and become worthless. So, fiat currency's been around for a while, and they've been, you know, they've been collapsing in value. There's been hyperinflations, for thou-hundreds of years. So, but the only way they've been able to work is if the government is there. So what Bitcoin is trying to do is create a, a fiat currency digitally and hope it's gonna succeed without any of the government And, support backing it up, and I just think that that is a very, very, risky bet for people to make because there's no precedent in it ever working, and, and, and, and I don't see it, that it will. And when you talk about the fact that there's, you know, all these institutions that are using it as a reserve asset, look, there are no central banks that are holding Bitcoin and, and, and counting it as a reserve. as far as investors, major investors I mean, I've heard of, you know, John Paul Tudor Jones is a hedge fund guy, who apparently, stuck his toe in the Bitcoin water. How long he's gonna leave it there, I have no idea. and for all I know, he's already gotten out. I mean, I don't really know. but, I mean, he's an outlier. It's not like you have a lot of funds. I mean, they're barely buying gold at this point. I mean, they're just starting to. Warren Buffett finally, after all these years, bought a gold stock, and now, you know, I read there's a, a, a big endowment or a, a pension fund from a government that's gonna go five percent into gold. So they're finally starting to move into" }, { "speaker": "host_of_schiff_radio", "time": "32:10", "start": 1929.57, "text": "For some of these mainstream investors to go into, into Bitcoin, I mean, I don't see it happening. I still think that the height of the Bitcoin popularity was in two thousand and seventeen, that's when the price ran up to twenty thousand, and that's when you had a lot of companies that were coming out with the gimmicks of, \"Hey, we're gonna accept Bitcoin.\" I mean, mine was one of them, Schiff Gold. We were one of the first to jump on that bandwagon by partnering up with BitPay and trying to say, \"Hey, if you get- Got some Bitcoin, spend it over here, you know, buy some gold with it, and we partner up with BitPay, and back then there were a lot of companies that were signing up All that died down. I mean, nobody's doing that anymore. I never hear companies making announcements, so now we're going-- I mean, it's, it-- I think that was the height. And in fact, if you look at, you know, all the Google search trends, Go- Bitcoin was-- is still not as popular as it was in two thousand and seventeen. So I, I already think it's died out. I, I think, you know, the, the, the, the pyramid scheme peaked, but, you know, the, the, the price, you still have people And you have a lot of people that have a lot of Bitcoin that they wanna sell, and, and so those people have a vested interest in maintaining, this momentum and trying to s-get more people to buy into this pipe dream because they need to maintain that market, because they, they need to get out, because the minute people stop thinking Bitcoin is gonna go to the moon, and that's why every time people talk about Bitcoin and where it's gonna go. Fifty thousand by the end of the year, a hundred thousand. I mean, everybody's got these pie-in-the-sky price forecasts. I mean, nobody comes out from the Bitcoin community and says, \"Yeah, I think you'll get a ten percent return in Bitcoin this year.\" I mean, nobody says anything like that, because nobody is gonna hold it if they only think they can get ten percent. The reason you have to believe you're gonna hit a home run is because the odds of striking out are so high. So everybody is only in it because they think it's, you know, gonna go but the minute people don't think that anymore, then the whole scheme collapses. So, the, the people that own a lot of these Bitcoin, you know, and they've got hundreds of millions of dollars worth of these things, they, they have to keep this hype going or it's all worthless 'cause they, they won't be able to sell." }, { "speaker": "stephan", "time": "34:40", "start": 2080.03, "text": "Right. So, a, a few points there. in terms of the twenty seventeen being the peak, I think that's an interesting point, but also at the same time, we should recognize now that we are actually seeing more Volume than twenty seventeen in certain circumstances. In trading, maybe in" }, { "speaker": "host_of_schiff_radio", "time": "34:54", "start": 2093.78, "text": "trading. Although I don't even know how much of that is legitimate or how much of it is wash sales and, you know, people just trading back and forth among themselves. But where you don't see more Bitcoin is in the real world. You don't see more people using it as a medium of exchange, right? As, as a payment mechanism. That's where it's not growing. And that's what it was supposed to be. It was supposed to be an alternative, for- the dollar or the euro. And then what happened is, when nobody was using it as, as digital currency, that's when they reinvented it as digital gold. They were saying, \"Well, no one's actually gonna use it, right? It's just gonna be like gold. They're just gonna hold it, right?\" So they had to reinvent it when it wasn't doing what it was originally promised to do. But, you know, this whole idea that it's digital gold, it's not digital gold, right? It's no more digital gold than a digital house is And I could design a digital house on my computer, but I can't live in it. It doesn't provide any shelter. And so I don't care if you make Bitcoin look like a gold coin and you put a B on it, it doesn't make it real gold anymore than my digital house can provide actual shelter." }, { "speaker": "stephan", "time": "36:09", "start": 2168.87, "text": "So let me try and, counter that in this way. So let me just finish that point there before. So around the twenty seventeen versus now, we are seeing additional-- we're seeing higher volume in certain continents in terms of local Bitcoin. And trading. So things like on platforms like Local Bitcoins and Paxful, we're seeing more volume in places like Africa, South America, and so on. And then the other point I wanted to touch on, relating to how you're saying, \"Oh, everyone's always pumping the price of Bitcoin and so on,\" it is. I was chatting with my friend Safiin, who you know, a-and, he mentioned that if you run the numbers in terms of Kager, cumulative, cumulative annualized growth rate for the first nine years of Bitcoin's life, or up until Hit a two hundred percent kager, right? As in two hundred percent, basically, in other words, it has tripled every year. So it's factually true to say that. and I think- Well, it hasn't" }, { "speaker": "host_of_schiff_radio", "time": "37:00", "start": 2219.97, "text": "tripled every year since two thousand, since its peak in twenty seventeen, it's roughly half of the price it was back then." }, { "speaker": "stephan", "time": "37:09", "start": 2229.32, "text": "So I think what he's saying is he, he, if you run, if you run the numbers from the start to now, right? The annualized growth rate. So if you're sort of zooming out. And so I think he was saying in this example, it would have to be around seventeen thousand to maintain, at the end of this year, to maintain that two hundred percent CAGR rate, right? but I think, but more broadly, I think the point really is, and probably this is where most Bitcoiners would disagree with you, is that it's just going to be a day to day trade, because people, a-and obviously people, some people do use it in day to day trade, but I think the way we would think about that is more like, it's just going to grow through these phases, and we are seeing, if you zoom out, but how do you know it's gonna grow? What if it doesn't grow? I mean, what do you base it on other than hope? So let me, here's how I would answer that. So I would say, Bitcoin achieves what no human institution could do, and what, what is that that we're Fundamentally, it's the ability to send it anywhere and not be blocked by a government. Because I think, and this is fundamentally where probably a kind of Bitcoin versus gold disagreement lies, which is that gold tends to be stored in vaults and it relies on custodians. And so in that sense, it presents more of a political risk because the government can go and shut them down or stop them. Well, I think it's less--" }, { "speaker": "host_of_schiff_radio", "time": "38:31", "start": 2311.25, "text": "Well, I think it's less of a risk in that I can have a physical gold coin in my hand, right, that I can physically- hand to somebody, and the government isn't going to know about that transaction. You know, I would agree that, you know, they could go to, you know, banks or other institutions that may be storing it, but they really can't go to the individual who has gold in his possession and, and monitor everything they do with the actual, you know, coins. whereas, i-if I have Bitcoin and I, I, I have to transfer it using my computer, that it's going to be much easier for the government to, you know, interfere or get a record of that transfer. And they're already, you know- We have a, a bank. I have a, an, an offshore bank. And from the very beginning, I mean, even though I wasn't into Bitcoin from a, you know, I didn't think it was gonna work I really wanted to provide banking services to people in the Bitcoin community. I thought this would be great. I mean, I would love to bank Bitcoin people, right? 'Cause I, I would want their, the banking fees. But I couldn't do it. And the reason I couldn't do it was because I couldn't be a bank and touch that business with a ten-foot pole, because I was gonna get shut down. Nobody would deal with me. No counterparty banks. I mean, basically, in order for me to exist, I had to prove that I, I won't- Won't allow anybody, to deal with me that even remotely looks like they have anything to do with cryptocurrency, because the government has made it so risky and so dangerous based on the fines and the penalties having to do with money laundering, even if the people who are using the cryptocurrency are completely legitimate, they're not laundering any money, they're not involved in narcotics or terrorism or even tax evasion, totally legit. It's just the fact that they're using it raises the red flags To raise the possibility that they may be involved in these activities, and that's all it takes, to, to, to, to, to make, to make sure that I can't get involved. And I, I think that even if Bitcoin could succeed, and I don't think it will, but I think if it did succeed on a wide scale of kind of, you know, circulating as a medium of exchange or somehow, and to the point where it actually threatened the dollar or the euro or the yen or any of these currencies. The governments would kill it. They would just punish it as contraband. They would have penalties, five years in jail, ten years in jail, twenty years in jail for anybody caught with cryptocurrency, anybody using cryptocurrency. And, and, and the minute they did that, then you, you wouldn't be able to use it. I mean, it would be completely in the realm of the criminal, right? Who, who was risking going to jail anyway, who was, you know, committing other crimes. And so, you know, you know, committing it in- Additional crime of having Bitcoin, may not, concern them, but if you're a law-abiding guy, you're not gonna wanna go to jail for five, ten, twenty years for being caught with contraband. So I think if, if it doesn't die on its own, it'll be a victim of its own success, and that the government will kill it." }, { "speaker": "stephan", "time": "41:52", "start": 2512.36, "text": "So I think the problem I would say, I would say with that kind of argument is that Bitcoin is a global phenomenon, and governments won't be able to effectively stop it everywhere. And so I think the other, is that things take time for society to accept them, and I, I see it more like as more and more people adopt Bitcoin, and I think it's coming because it is super scarce, that they will essentially-- it takes time for, like, it-- and you probably have some experience even in this, in looking at the way, you know, maybe a gold ETF was hard to do earlier on, and then it eventually happened. And so I think it, or like maybe the first person who maybe spoke about handwashing Right, so this is like a medical example, but he wasn't exactly a popular guy because they-- it was seen as like doctors were, good people and therefore it was, you know, because they were in a different paradigm. And so I think it just takes time for people to change their minds on some of these things, and we're seeing some of the, you know, US banking regulators come around to this idea. The OCC recently came out saying, you know, banks are allow-- are enabled to custody, Bitcoin for their customers. So wouldn't you say this is more Changing of the, the paradigm and a changing of the way people think. So I think it eventually gets to the point where it's like being a, a Bitcoin user is like being a known internet user, right? It's just gonna become part of the infrastructure that society uses. It's just gonna take time for that mental shift. What would you say to that?" }, { "speaker": "host_of_schiff_radio", "time": "43:21", "start": 2600.84, "text": "Well, look, I think that's wild speculation at best. I mean, I think more, more realistically, it's, it's, it's just, it's people. That's what people hope will happen because they have such a vested You know, sometimes when, you know, you, you have such a vested interest in something that it makes it really hard to see things clearly or objectively, and, and, and so, you know, when you have so many people that- Have bet their whole lives really on that happening. They really ignore any possibility that it won't. But I think, I, I would assign a very low probability to something like that happening. I mean, yes, is Bitcoin scarce in the sense that there's twenty-one million Bitcoin? Sure. But there's an infinite number of cryptocurrencies that could be created that can do exactly what Bitcoin could do, which is pretty much nothing, right? I mean, gold is scarce, yes, there are other metals in the world, but they can't do exactly what gold does 'cause they don't have the properties that gold has. so- The fact that Bitcoin is scarce doesn't necessarily mean anything, right? I mean, I, I, I, I could come up with a Peter Schiff, you know, a, a, original artwork, and, you know, it could be scarce. I can make, you know, ten of them or whatever, but if they may not be have any value just because they're scarce, if they stink and nobody really wants them, I mean, just being scarce doesn't make it valuable. I mean, gold is valuable not because it's scarce Scarce. I mean, gold is expensive because it's scarce, and because it's scarce, it's, it's good money, but its, its value comes from its inherent properties that it can be used for, that make people value it because of all the things that you could do with it. The fact that it's so scarce means that it's gonna be very expensive. but you can't just say something is valuable simply because it's scarce, right? No, that's, that's not the case. and, and, and so I don't, I don't This argument that Bitcoin is, is so scarce is the reason it's going to become so valuable and how it's going to succeed. But what I do think could happen, and this is where I would agree with you, is it's possible that more people- May want to make this bet. I mean, especially in the environment of central bank money printing and rising inflation and the gold price going up, people might think, \"Well, Bitcoin is also a store of value and it's another safe haven.\" They're wrong, but if in the short run more people are gonna bet that that's gonna happen, then the price could go up. But, you know, I think what you really have to ask yourself, was, as somebody that has a lot of money in Bitcoin, is why hasn't it already happened? Why is it still just eleven thousand six hundred? I mean, given all the things that have happened, with the, the money printing and the QE and the zero percent rates and, and given the environment that we've seen with two thousand dollar gold, I mean, if I had told you, a couple of years ago, when gold was- was twelve hundred, thirteen hundred, that in twenty twenty gold would be at two thousand, and I asked you to give me a prediction for Bitcoin, there's no way you would have said any, you know, that it would still be below twenty thousand, right?" }, { "speaker": "stephan", "time": "46:55", "start": 2815.29, "text": "Well, I, I think this is just a, it's a cycle thing, right? So, I would say the other point is, remember, Bitcoin earlier this year, just in March, was around what, three or four thousand, and now it's sitting at eleven thousand, so I think it's not entirely fair. No, but" }, { "speaker": "host_of_schiff_radio", "time": "47:11", "start": 2830.94, "text": "see, that's because it crashed to three thousand from ten thousand in like a day. So just because it crashed and recovered, you know, you can't go back and say, \"Look, Bitcoin has tripled.\" Yes, but before it tripled, it went down seventy percent. So if you take out the crash and take out the recovery, it hasn't gone anywhere. In fact, Bitcoin, even after it got up to twenty thousand in two thousand and seventeen, after it crashed below four thousand, it then rallied back up Up to about fourteen thousand in twenty nineteen. It's not even back up to that level yet. Forget about getting back to the two thousand and seventeen high, it hasn't even gotten back to that two thousand and nineteen high. So, I, I, I see a series of lower highs. I think, I think the market has peaked out, and I think the more likely direction for Bitcoin is down, and I see nothing but hope and optimism out there, among, the Bitcoin ho-holders. I mean, this is a, a- A bear market that is falling a slope of hope, everybody expects a huge rally and it never materializes, and nobody has been shaken out, nobody is scared, everybody has complete conviction that they're right. to me, that's a very dangerous, market to be in on the long side." }, { "speaker": "stephan", "time": "48:29", "start": 2908.6, "text": "Okay. So look, let's, let's talk a little bit more about- The political risks, I, I think we have to acknowledge that with gold, a sixty-one-zero-two event occurred. And so, I guess in my mind, I'm trying to think through, well, let, let me understand from your view, what's the scenario then that you believe gold would re-emerge or reassert itself as money and the government wouldn't go back and stop it again?" }, { "speaker": "host_of_schiff_radio", "time": "48:56", "start": 2936.12, "text": "Well, the government doesn't want gold to be money, right? So they will resist it because gold takes the power of- Away from government, and puts it back with the people. Gold is a, i-is a discipline on, on, on government. I mean, that's why the US founding fathers put us on a gold standard. They didn't trust government, and rightly so. They didn't want to empower government with the ability to create paper money. They, they wanted the discipline of a gold standard and, and all the benefits that comes from limited government and sound money. The only reason- That I believe that gold is going to be remonetized is because I don't believe that there will be any other way for governments to reestablish faith In the monetary system once it's lost. So if you go back to the origin of the current monetary system, where everybody has fiat currency and it's all backed by dollars, and to a lesser extent, euros and yen and, you know, other currencies, Aussie dollars or a little bit, you know, Swiss francs. but the way all this started was before that happened. All the world's central banks, including the United States, everybody backed their currency with gold. Every central bank had gold to back up their currency. And after the Second World War was over, you know, in the Bretton Woods Agreement, the United States was the most powerful economy in the world. We had almost all the gold. we made everything. All the products were made in America. All the industries that are now in countries like Japan didn't exist. We made all the consumer electronics. We made all the automobiles. If you wanted anything that was any good, you had to buy it in America. And America was the world's biggest creditor nation. Everybody owed us money, right? Because we had wealth all around the world, so we were number one by far, and we had all the gold and the dollar, the Federal Reserve note was backed by gold. And so we got a deal with all the central banks, and we said, \"Look, Instead of backing your currency with gold, just back it with the dollar, because that's as good as gold. Because our currency is fully redeemable in gold, you have thirty-five dollars, whenever you want, just ask us and we'll give you an ounce of gold, right? So instead of backing your currency by gold, back it by the dollar. Now, why would they do that? Well, if you have gold, you're getting no interest on it and you have to store it. We'll store it for you at the Federal Reserve, we won't charge you anything. You could take those dollars and loan them to us in the form of US Treasuries, right? Risk free, and you can get a five or six percent rate of interest, which is better than getting no interest on your gold, so you can have the best of both worlds. You can back your currency by gold, but earn interest by, having US Treasury. So we kind of con the world into moving f- By going off the gold standard onto a dollar standard, but they still were on the gold standard, you know, because the dollar was backed by gold. So they were, it was, it was still, their currencies were still backed by gold only through the dollar. Well, once we got the world to sign on to this, we started to run deficits and we started to print more dollars than we actually had gold, and so we didn't have enough gold, to make good our IOUs. And when foreign creditors started to figure this out, they- They started coming back for their gold. Hey, here's my thirty-five dollars, give me the gold. And then we started losing our gold. And, and so rather than doing the honest thing, we defaulted. We basically said, \"You know what? We're not gonna give you any gold for your dollars. You know, you can hold on to the dollars if you want, but you're getting nothing for 'em. They're not backed by anything anymore.\" And so then the dollar crashed really. I mean, it went down about seventy percent against the Deutsche Mark, the yen, the Swiss franc." }, { "speaker": "host_of_schiff_radio", "time": "52:56", "start": 3176.09, "text": "Everything got more expensive because the dollar lost a lot of value. Oil went up tenfold during the seventies. But then the, you know, with Reagan came in, Volker came in, and, you know, the dollar stabilized, even though it was no longer backed by anything, it kinda got stable, and we were paying very high interest rates, we had the highest interest rates in the world, and so the ba-- the dollar kinda found a bottom, and so the world stayed on that system, and, you know, it's been on it ever since, but now we're at a You can't get any interest anymore on your dollars, the interest rates are zero. we're the world's biggest debtor nation, we have the world's biggest trade deficits, you know, we're, we're a shadow of what we used to be, and now with COVID, you know, we're running three, four trillion dollar deficits, QE infinity, I think that the dollar is gonna crash, and it will no longer be an acceptable reserve. to back up other currencies, and as people lose confidence in the dollar, they're also gonna lose confidence in other fiat currencies. Now Once the confidence is lost in a fiat currency, how do you restore it? You know, what, what, what's happened in like various, let's say, South American countries is they'll eventually peg it to the dollar. Like if your currency is losing all this value, all right, we're gonna peg it to the dollar and this is going to-- this is gonna stabilize it. But when the dollar crashes and people start losing confidence in the whole system, the only thing that I think will instill confidence Would be to go back to gold, to be able to tell the public, \"Hey, our currency has value now because it's tied to gold, and the gold is going to bring back the stability that you don't have.\" And so I think it's-- the government isn't gonna want to go back to a gold standard, I think it's gonna be the only thing that will work to stabilize the value of their currency. You know, once you destroy the value of the dollar that's backing it up, and you say, \"Well, what's backing the euro? What's backing the yen? Well, nothing.\" Alright, well, why, why should I hold on to it?" }, { "speaker": "stephan", "time": "55:04", "start": 3304.07, "text": "So even if we grant that, what's to stop the same political centralization occurring in the future? I mean, there was, there was the sixty-one or two in the past. Governments have devalued, they have, you know, seized people's gold and then devalued it. What's to stop anything like that just happening again? Are we not just doomed to, go through this cycle? Why is this time any different? And don't we need a technological solution to the political problems of government?" }, { "speaker": "host_of_schiff_radio", "time": "55:32", "start": 3331.7, "text": "Well, I mean, I don't, I don't see how Bitcoin would solve those problems. I think it creates a whole different set of problems. you know, i-are governments gonna start confiscating gold again? I don't know. I mean, if they're gonna confiscate gold, then, you know, they can confiscate other forms of property, they can confiscate stocks, they can confiscate bonds, they can confiscate real estate. I mean, gold is actually harder to confiscate than those other assets because it's harder to find it. You know, the government knows exactly where your stocks are, you know, it can find your real estate, I mean, you can't hide it, but, you know, they don't know where your gold is, so I think it's harder, and, and, and even if some governments do, they all won't. so look, you know, w-we've had corrupt governments in the past, I think the only difference is they have more technology now, but then so do we, the public has more technology too. look, I, you know, I What's worked in the past will work in the future. Gold has worked in the past, even though governments have found ways to get around it over time. Every time there was a monetary crash, they could reset by returning to sound money. And I, you know, I think it's gonna happen again. And, you know, will the cycle repeat? Sure. Even if we go back on a gold standard sometime in the next ten years, who's to say fifty or a hundred years from now we won't make the same mistake of, of going off it again? I mean, we, we probably will Probably not the last time this is going to happen. history tends to repeat, often, and, you know, the public never seems to get any smarter. They repeat the same mistake over and over again, just sometimes several generations go by and then the people making the mistakes never lived through, the, the earlier mistakes, and, you know, so they, you know, you don't learn the lessons of history, and so you're condemned to repeat them. but I think what the outcome that I'm betting on is a much higher Probability than what you're betting on that the world is just gonna jump from, paper money, to cryptocurrencies, and they're gonna choose Bitcoin as opposed to some other cryptocurrency." }, { "speaker": "stephan", "time": "57:46", "start": 3466.25, "text": "I see. So in your mind, does, does it make a difference then that Bitcoin has a technology called multi-signature? So for example, you could store your, the private keys which allow, which enable you to self-custody your Bitcoin. You can Store that across multiple jurisdictions, and this is in fact a technique used by many of the large Bitcoin custodians, and it can also be used by individuals also. So in your mind, does that present an additional tool in the toolset of the individual seeking to defend their value?" }, { "speaker": "host_of_schiff_radio", "time": "58:18", "start": 3498.38, "text": "Well, you-- def-defending your Bitcoin is different from defending the value of your Bitcoin. So you can have all sorts of security systems to make sure that nobody steals my Bitcoin or that- Right? But that doesn't mean that those bitcoins are gonna have any value, just that they're not gonna get stolen. And in fact, once they don't have any value, no one's gonna wanna steal them, so it's not even gonna matter. But, you know, the point that you're making about Bitcoin, but that's gonna be true of any other cryptocurrency that's using similar, you know, technology. Bitcoin isn't unique, it, it doesn't have a monopoly on anything. there's nothing proprietary about it. The only thing that Bitcoin has going for it is that It has more infrastructure built around it, more people recognize it, but it doesn't have any kind of guarantee that that first mover advantage means that it's going to, you know, maintain that advantage for the rest of time. You know, things have a tendency to change, and there's competition, and, and, and, and, and, and things evolve, and, and preferences, and tastes. I mean, I look at it more as a fad. I mean, for somebody to come out and say that, \"Hey, Bitcoin has had...\" has done really well the past ten years, and then to make an extrapolation on what it's gonna do in twenty years or fifty years or a hundred years, I think is ridiculous." }, { "speaker": "stephan", "time": "59:41", "start": 3581.43, "text": "I see. So I think, probably the main difference in our views there is that we see it like Bitcoin is just a growing network effect. So more and more people are using it, there are more exchanges, there are more merchants, there are-- and also there's a lot of development and tooling around Bitcoin that just simply isn't available in the altcoins. And if you were to look at, say, actual liquidity on the exchanges, it's something like, you know, a very, very high percentage of the volume done on the exchanges is with a Bitcoin pair as opposed to one of the altcoin pairs. And I think that's probably the main difference there, that we see this like, it's a growing monetary network effect, but the important part is kind of the scarcity meshed with the technology components that give it something additional, something that gold just couldn't replicate. You know," }, { "speaker": "host_of_schiff_radio", "time": "01:00:26", "start": 3626.2, "text": "people ask me, you know, hey, is, is, is there anything that could happen? Bitcoin, that would change my mind, and, and, and a lot of it is related to price, right? Well, at what price will you change your mind? And I always say, well, price doesn't have anything to do with it. I mean, if the price just goes up- all else being equal, I'm not gonna change my opinion. you know, I, I, if just because the bubble gets bigger doesn't mean that I, I no longer believe that it's a bubble. But the question I think is more important that I can ask you or you can ask yourself is, okay What do you have to see happen in Bitcoin for you to, give up on that view? For you to realize, you know what, it's not going to work out, right? It's not going to be what I thought it was gonna be. So what metrics are you potentially looking for where that would be your sell signal that says, \"You know what, what I thought was gonna happen is now not likely to happen, and so I'm gonna get out.\" Is there, is there- Is there any set of circumstances at this point, or have you thought about, you know, what is your, your plan B in case it doesn't work, other than just riding it to zero? Because I know some people have told me, \"Look, I'm never gonna sell, even if it goes to zero, I'm just gonna stick with it the whole way down.\" I mean, maybe that's your plan, but if it's not, is there something else that you're looking at that might cause you to say, \"Okay, I'm gonna, I'm gonna, you know, I'm" }, { "speaker": "stephan", "time": "01:01:58", "start": 3718.12, "text": "Yeah, it's an interesting question. I don't know that I have any specific kind of, metrics that I could give, but I would say if it appeared to me that, let's say, there was some- Irre, irre- you know, unpatchable flaw in the code that, you know, got discovered somehow, and it couldn't be rolled back, it couldn't be fixed, or if maybe, let's say the, you know, it, it went to extreme low price and then stayed there for, you know, ten years time. Well, of course, by then, I mean, but" }, { "speaker": "host_of_schiff_radio", "time": "01:02:30", "start": 3750.76, "text": "by then there's nothing left, right?" }, { "speaker": "stephan", "time": "01:02:32", "start": 3752.14, "text": "So, I mean, what would be an extreme low price? I'm not really sure. I, I guess, I don't Set number in my mind, in terms of, oh, if it goes below this number for this long, I, I, I'd sort of just assess more holistically, do I think somehow that I think longer term Bitcoin's decentralization won't win out and in some way that maybe it got overly centralized or captured in some way? but in my, in my mind, it seems more like it's going the other way, it's increasingly decentralizing. There's more people, like if we zoom out, obviously I think- We, we see, w-it moves in waves, and so I think we're, we're sort of entering that next wave. Well, so for me, I see it like that. Well, I" }, { "speaker": "host_of_schiff_radio", "time": "01:03:17", "start": 3797.83, "text": "think if it were still making new highs you could have an argument, but I think at this point, until Bitcoin actually makes a new high, right, above twenty thousand, it's, it's hard To get around the fact that twenty thousand may have been the ultimate high, right? 'Cause at this point, it's certainly possible that twenty thousand was the high price that we'll ever see in Bitcoin. That, that, that could be true. And, and you can't say that's not true until we, until we eclipse it. so at this point, it's possible, and I think you should have some type of strategy that might, acknowledge that that might be the case, so that you just don't hold on to it for the next ten years. And, you know, even though the price has collapsed, I mean, I think some of the traders that have gotten in, like let's say I mentioned Paul Tudor Jones, and I'm not really sure what price Tudor Jones paid for his Bitcoin. but I think he got it, you know, upwards, you know, around, let's say, around the ten thousand dollar, maybe a little less, I don't, you know. But he is a very, very good trader, and I think that's why he got into Bitcoin, because he sensed the trading opportunity, not because he had any kind of, you know, real long term commitment. He just thought he could make some money buying it. And I know that he's gonna have some kind of threshold where if the price drops He's out, right? And he's not gonna ride this thing down like you would wait ten years. He's gonna look for an opportunity and cut his losses. And I think there's gonna be some other people that are gonna do that, you know, once this thing, once this thing breaks. And, a-and, and then, you know, you get into a dynamic where you have a lot of people wanting to get out, you know, not, you know, you don't have all these new buyers wanting to get in, you got people that are in that are looking for a way out." }, { "speaker": "stephan", "time": "01:05:12", "start": 3912.05, "text": "We were having this conversation in, you know, twenty fifteen or twenty sixteen, and, you know, Mount Gox pr- bubble or whatever had gone to twelve hundred in, let's say, late twenty thirteen, and at this-- at that time, we could have been speaking, and the price would have been in the few hundred dollars, maybe four hundred dollars or something like that. Couldn't you say the same thing to me then, and I would then be saying, \"Oh, well, see, I think this is a longer term trend,\" which is kind" }, { "speaker": "host_of_schiff_radio", "time": "01:05:37", "start": 3937.44, "text": "of the same. I don't I mean, then, but then" }, { "speaker": "stephan", "time": "01:05:43", "start": 3943.05, "text": "if that was the case, it did go above that though. No, no, it went to twenty thousand. It did," }, { "speaker": "host_of_schiff_radio", "time": "01:05:46", "start": 3946.81, "text": "it did, right? Yes. But we don't know that it's gonna do it again. You're absolutely right, right? After it got to a thousand and crapped out to two, to two hundred, it looked like that might have been it. But I do remember that once it took out a thousand, and I was like, \"Crap, you know, this thing may really move.\" I mean, I actually predicted before it even I still didn't think it was any more legitimate than I thought, and what are the reasons that I didn't buy it? You know, and, and even after, you know, it was trading around that two, three hundred, four hundred dollar for a while, I remember looking at the chart back then and, and thinking that it could really, it could run. And I remember a friend of mine who was a hedge fund guy who told me he bought a bunch of it, and he ended up, crazy enough, he, I, I, he didn't even make money. I don't know how I was like, \"Shit, you know, that to me was like, you know, this guy, I mean, maybe, maybe, maybe this thing's gonna go up. I just couldn't get my hands, arms around buying something for two or three hundred dollars that I didn't wanna buy at ten or twenty bucks. I was like, I mean, I was gonna, you know, kill myself. I put some money into this, and, you know, and of course, to make it meaningful, I would have had to put real money into it. Like, I mean, what difference would and, and so I didn't do it, and obviously it would have been a good trade, but my, my gut feeling is, had I bought a bunch of it, I, I would have got out of it a long time ago. I mean, but, you know, there's no way to know for sure because I didn't do it. And I could always think of scenarios that might have happened, but, you know, I could have-- It's possible that I hadn't loaded up on it, my-- You know, my mind could be just as clouded. I mean, I was optimistic I didn't sell, and then they collapsed. You know, it's happened, you know, to everybody. You know, you, you, you know, you kind of lose sense of reality because you get blinded by the greed of the position that you've fallen in love with. So who's to say that, that couldn't have happened to me if I got into Bitcoin? I, you know, you don't know. but I stayed out of it, the whole time. And, I know there are other people that try to say, \"Oh, my judgment is clouded because I'm in the gold business.\" And, look yeah, I d- I am in the gold business. the money I make from Schiff Gold is a very, very small percentage of my annual income. So gold is a small part of what I do, even though a lot of people know me from gold, I am a money manager, and the, you know, over ninety percent of my income comes from fees on, managing accounts, managing separate accounts, managing mutual funds. That's most of my, my living. And, and so, you know, it- I, I, if I really believed that Bitcoin was the new gold, I would have no problem buying it personally, which I haven't done. I would have no problem telling other people to buy it. But I don't believe that. I, you know and, and even, even when it was cheaper, I do remember telling people, \"Look, I think the price of Bitcoin can go up, I just don't know how long it's gonna stay up, and eventually it's gonna crash.\" And so I don't, I don't advise people to get into a bubble, even if I think the bubble might get bigger. Now, if they wanna do that on their own, that's on them, right? So if somebody says, \"Yeah, Peter says it's not gonna work,\" but, \"Hey, I, there could be a lot" }, { "speaker": "host_of_schiff_radio", "time": "01:09:25", "start": 4165.3, "text": "In the meantime, they could do that, but at least they, they don't have me to blame. You know, I don't want someone coming back and saying, \"Peter, you told me to buy Bitcoin, and, and, and, you know, look at all the money I lost.\" So it's like, I didn't tell anyone to buy it. You know, you wanna buy it, you can buy it, but you better, you know, you better know when to sell it. You better have some kind of game plan, for when the music stops, you know, or" }, { "speaker": "stephan", "time": "01:09:55", "start": 4195.28, "text": "Talking earlier, Spencer, your son has some Bitcoin. Is it a demographic thing?" }, { "speaker": "host_of_schiff_radio", "time": "01:09:59", "start": 4199.53, "text": "Well, look, yeah, look, my son actually bought some Bitcoin on the way up before, but, you know, he's young now, he just turned eighteen, so he was younger in twenty seventeen, but he ended up opening up an account for Bitcoin. I guess a lot of the kids in his class, you know, in high school, were opening up, were doing it. And so Spencer bought some, I think, at around four, five thousand, six thousand, and he sold out at nineteen thousand. Now, he didn't have a lot of money in it, but, you know, he, he tripled his money, he made a decent trade, and he got out. And then he never bought any back until just recently when it got above ten thousand, I think he got in, you know, four or five hundred bucks worth at around ten thousand, right? He got in. And I think he bought some more recently, and, he tweeted about it on his Twitter account, and he's, you know, he's got over fifteen thousand followers, and I, of course, I helped him get those followers by, by pointing him out, but he puts out a lot of really good tweets. I mean, he gets a lot more likes a lot of times and shares on his tweets than I get on mine, and I've got, you know, two hundred eighty thousand followers, so he has a very, very good engagement rate. So I think when he made some positive tweets" }, { "speaker": "host_of_schiff_radio", "time": "01:11:12", "start": 4272.37, "text": "Making fun of me, hey, hey, your son's buying Bitcoin. So that's when I said, \"All right, you know, he just turned eighteen, you know, you really wanna rub it in, why don't you gift him some, Bitcoin as a birthday present?\" So a few people did it, he, he ended up getting, I don't know, six, seven hundred, eight hundred dollars worth, I'm not sure how much Bitcoin people gave him, but people gave him some Bitcoin. But look, I think my son just thinks it's gonna go up, you know? I think that taking investment advice from eighteen-year-old Spencer Schiff is not as good as fifty, fifty-seven-year-old Peter Schiff. I got a little bit more experience, right, under my belt. I've seen fads come and go. I've made a lot of mistakes over my life. I've lost a lot of money doing dumb things, and I'm trying to help people avoid the mistakes that I made before I had the experience. and, and so, but sometimes you have to- Make the mistakes for yourself. Sometimes there's no better lesson than losing money yourself. And so as far as I'm concerned, this is gonna be a cheap lesson for Spencer to learn. He's gonna, he's gonna lose a little bit of money as a young man, and I think that's good. And I think a lot of the people out there who are gonna lose money in cryptocurrency, a lot of young people, a lot of teenagers or, you know, twenty-somethings It's better to lose money when you're in your twenties than when you're in your fifties, like me. I don't wanna lose any money anymore, I'm done losing money, right? Because, well, when am I gonna make it back? And I have a lot more money to lose. I could lose money in my twenties 'cause I didn't have much, I got a lot now, and so I gotta be more careful, about the money. And, and so, you know, when people say, \"Oh, the mill-millennials are buying it,\" yeah What they're doing. They're, you know, they're greedy and they're just buying it and they, you know, they don't know what they're doing and, and, and it gets reinforced, you know, by, you know, when you get into a bubble early on, you think you're so smart because you're making money. There's an old expression, don't inclu- don't confuse brains with a bull market. And a lot of people in crypto, they have a lot of money if they got in early, but they weren't smart, they were lucky" }, { "speaker": "host_of_schiff_radio", "time": "01:13:34", "start": 4414.76, "text": "but, you know, you confuse the two and you end up losing a lot of money." }, { "speaker": "stephan", "time": "01:13:39", "start": 4419.26, "text": "Well, I think you're right that we have to approach the world with some level of humility, and you're right that, you know, certainly there were people who weren't smart, they were just lucky. but, I, I guess- Yeah, so I guess it just turns on what do you think is the most important factor, whether it's the, you know, the, the overall kind of idea of- Digital scarcity versus kind of what you were saying, which is more like having some use other than monetary use. but I want to turn now a little bit more just to generally things that we probably agree on around, obviously you and I are both anti-central banking and so on, but I guess the challenge that we are faced in, or the challenge we face right now, is that Well, they're gonna, they're gonna do, it seems to me, they're gonna keep doing what they can to keep the party going. What do you see over the next, let's say, five to ten years in terms of central banking and what they're gonna try to do to maintain the system?" }, { "speaker": "host_of_schiff_radio", "time": "01:14:36", "start": 4476.82, "text": "Yeah, well, you know, it's already lasted a lot longer than I first thought. You know, when I was really starting to warn about this, leading up to the '08 financial crisis, I, I assumed that when that crisis hit, that- Something would have happened sooner than now, so they've already been able to kick the can down the road for a long, long time, and, and maybe they could have done it for a while longer until the road ran through COVID-19. And I think that this detour has probably really, really, shortened the amount of time that they-- we have. so I, I don't think that we can make it another ten years. That doesn't mean we can't, 'cause we did it, we made it these last ten years or more. But I, I just think the dollar is very close to a, a collapse, and I, I don't see how it can be stopped. And, and so I think the world is going to have to return to a gold standard. I, I don't know that the US will. I mean, maybe, I mean, if we do the right thing, we'll be the first to go back to a gold standard, but I have a feeling that we may be the last. because we're probably gonna hold on to the dollar standard as long as possible because we have derived the most benefit from it. but I think other nations are gonna jump ship or break ranks and start to save themselves, by just abandoning it and, and, and going to gold. so I just think you're gonna see more central banks just buy more gold, and, you know, it's, you're gonna see more, private investors moving money into gold, more of the hedge funds, but more importantly, pension funds, endowments, insurance companies. I mean, you really haven't seen, this wave. I think it's starting, you know, with the Warren Buffett, and, and there were a few guys that came in before Warren Buffett, but you're, you know, it's some of the Very smart people that are, you know, early on in this trend are, you know, getting into this. but, you know, I think this is gonna play out very, very quickly you know, probably especially after this next election, you know, starting twenty twenty-one, you know, w-we, we, we could really accelerate. I think you gotta look at the, the, the dollar. you know, we, we, we hit today, the dollar index was at a new low since I think April of twenty eighteen, but we're still, you know, at a level that isn't scary. The dollar index is ninety-two. I think we have a shot of getting down to around eighty even before the end of the year. but About seventy, and I think seventy one was the low from two thousand and eight. So once you really start to see, you know, record highs, you know, so with the, with the Aussie, I mean, you're, you know, you're gonna probably see the, the Australian dollar, you know, back above parity, you know, quite a bit above probably, you know, when you get the dollar index down around seventy, 'cause it got up, I remember the lat-- two thousand and eight, I think the Aussie dollar got up to about what, one ten-ish" }, { "speaker": "host_of_schiff_radio", "time": "01:17:48", "start": 4668.01, "text": "but I think once the dollar index moves into uncharted territory, once it makes new all-time record lows, then of course the trade-weighted dollar is gonna be, maybe even weaker, you know, 'cause the dollar index is just a, you know, a basket of currencies, there's a much broader, you know, look at it if you look at a trade-weighted dollar. but I think once we're in uncharted territory, you know, this thing could just implode. and, and, you know, I, w-where I think it's unfortunate is that a lot of people that are in Bitcoin, because they understand this, you know, they're gonna end up losing as much as not more, as the people who stayed in fiat. You know, they, they, they, they, they, they got, you know, off the Titanic, but they got on a lifeboat with a hole in it, so they're still going down, you know, when they, they had the opportunity to buy gold or silver and they didn't do it." }, { "speaker": "host_of_schiff_radio", "time": "01:18:40", "start": 4720.59, "text": "so, you know, there are people that tell me, \"Hey, Peter, you oughta hedge your bets and at least buy a little bit of Bitcoin just in case you're wrong.\" And look, I mean, there's some merit to that. I just am so sure that I'm right that I don't think I need to buy any Bitcoin, and I have so much gold and gold-related stocks that, you know, I'm gonna be fine even if Bitcoin does go way up, I'm still gonna be fine because gold's going up too. but I think it's more important And keep it in perspective, keep their wrists in perspective, and make sure that they're not only in Bitcoin, that make sure that you have enough gold and silver, that you'll be okay even if your Bitcoin goes" }, { "speaker": "stephan", "time": "01:19:19", "start": 4759.44, "text": "to zero. So I think for me, I see it just like we are likely to just see more of the same from central banks. So they are going to just keep, they're just gonna try to keep the party going for as long as they possibly can, and that just necessitates higher inflation. yes, I agree with that. But I think, yeah. but I think we, we can't, we won't necessarily see that straight away, you know? It might just be more, more of the same, it, but it might be more asset inflation, it might be more, you know, as people say, Japanification of the world." }, { "speaker": "host_of_schiff_radio", "time": "01:19:49", "start": 4789.9, "text": "Yeah, I mean, I agree with you in that they will try to keep the party going as long as they can, but the operative words there is as long as they can, because what I know is that they can't keep the party going indefinitely. The party is going to end, and it's probably That's how I'm, I'm basing my investment case on the fact that the party ends, and what is it like when it ends? Who are the winners and who are the losers, right? and, and, and I think that if you're holding, you know, real assets, if you're holding gold and silver, if you've, if you've got assets in the right countries, and we buy a lot of foreign stocks, in, in, in certain countries that I think are gonna end up as net winners after we have a global reset, right? After we real Exchange rates in a post US dollar, reserve monetary system, there's gonna be winners and losers. I just think initially the biggest loser is the US. Now, that may change in a couple of generations. I mean, maybe we'll take advantage of this and, and out, out of the ashes will arise, you know, a new America that will get to the top again. You know, look what happened to, Germany and Japan. I mean, we kicked the crap out of them in World War II. I mean, look at where these countries were and then- You know, look, you know, what happened twenty, thirty years, look what happened to West Germany, look what happened to Japan. so, you know, you can come back from, a really bad situation. So I think America's gonna be in a really bad situation, and hopefully we come back from it. But I think there's gonna be some immediate winners, and I, I just wanna make sure that, that I am aligned at least financially with the winners, so, so I win too." }, { "speaker": "stephan", "time": "01:21:32", "start": 4892.3, "text": "Well, look, I, I think those are probably the key points I was interested" }, { "speaker": "stephan", "time": "01:21:38", "start": 4898.59, "text": "You online, where can they find you?" }, { "speaker": "host_of_schiff_radio", "time": "01:21:40", "start": 4900.65, "text": "Well, you know, I'm, I'm on the internet, so if you just search my name, but my podcast, which I do my podcast, the Peter Schiff Show podcast, I generally do two episodes a week, although I've done fi- you know, five a week if things are really moving in the markets, if there's a lot of news, I tend to up the frequency of my podcasts. But I do at least two a week, sometimes three, and, you can listen to that at schiffradio dot com or on my YouTube channel, the Peter Schiff, Schiff Report. So I would suggest that you subscribe, on YouTube or, you know, go to iTunes or wherever you listen to your podcasts or my website and make sure that you're looking for my podcasts. And if you haven't heard them, you can go back and listen to all the archives, 'cause I've been saying stuff for a long time. And I encourage people able to listen to the older, podcast so they can see a lot of the things that I've, you know, that I forecast that have already come true. A lot of people like to focus on some of the things that haven't come true yet, but there's so many more things that have come true, and basically all the puzzle pieces are coming into place. And so you've got to understand, that I got so much right, for a reason. It's not just random luck, it's because I understand the final outcome and the things that are happening are just things that And they're all, you know, all these pieces are coming into play and eventually we'll get the entire picture, and then all the, all these predictions are gonna come true. But, you know, you can't wait for that to happen, 'cause by the time that's happened, it's too late to, to do anything to protect yourself or to profit from it. But my, you know, my website's, my, asset management company, Euro Pacific Asset Management, we do have quite a few accounts for people, you know, in Australia, New Zealand, that Yet, I'm working on that, but I can still manage portfolios, so if anybody's interested in having me managing an account for them, they can go to yourpacificfunds dot com and, and, and contact us, there. there are books that I've written, my most recent book is The Real Crash, America's Coming Bankruptcy: How to, How to Save Yourself and Your Country. You can get that book on, on Amazon. A number of the books that, that I've written are there. Some of them are even on my own site, Schiffbooks dot com, but most of them are just on Amazon. I haven't written one in a while. That book, I think, came out in twenty thirteen. But because most of the stuff I'm doing now, I'm just putting it out on my podcast, so I'm not putting it in a book, I'm just like" }, { "speaker": "stephan", "time": "01:24:21", "start": 5061.59, "text": "Well, look, thank you very much for joining me today, Peter." }, { "speaker": "host_of_schiff_radio", "time": "01:24:24", "start": 5064.23, "text": "Oh, it's my pleasure, and yeah, always like talking to Australians. You guys always call me Peter. Remember, I had an Australian girlfriend one time, you know, so that's why I got used to being called Peter." }, { "speaker": "stephan", "time": "01:24:36", "start": 5076.85, "text": "Thank you. Bye. Alright, take care. So I hope you enjoyed that discussion. For me, reflecting back, I think the main point of difference there is that Peter seems to believe that money needs some kind of non-monetary use, whereas I, and I think many Bitcoiners, believe it's more about what has the best monetary characteristics and what is just going to get adopted over time as people learn about what makes a better money. And some of those people will learn at a more conscious level and think- Through what makes a better money, but probably most of them will just adopt it because it just works, it just is the hard money, so that's probably the difference in our views there. In any case, let me know what you guys think, share the episode with your friends, and find the show notes at stephanilivera dot com slash two o eight. That's it from me, thanks, and I'll see you in the citadels." } ] }