Peter Schiff recently appeared on the Jay Martin Show. During the interview, explains how the private sector can ultimately lead the world back to a gold standard.
Early in the discussion, Peter talks about investing, saying people need to be in something besides cash.
“People have to go somewhere. I think you just can’t be in cash because all of these governments are just printing too much money. The inflation problem is worldwide. And it’s because all of these central banks made the same mistake.”
The world’s central banks basically followed the lead of the Federal Reserve.
“We kind of corrupted the monetary policy of the whole world.”
As the US cut rates to zero, other major central banks did the same. In fact, some implemented negative interest rate policies to get their rates below America’s.
But Peter said the dollar’s status as the world reserve currency won’t last forever.
“I think the world is going to reject the dollar. It’s already happening.”
Peter said when the dollar falls from its peak, Americans will face a rapidly declining standard of living.
“America’s ability to live beyond its means is a function of the dollar’s reserve status. Because we can print dollars and use those dollars that we print to buy goods and services — mainly goods that we didn’t produce.”
So, what will replace the dollar?
“There is no question that gold is going to re-emerge as the monetary unit of choice for the world. It’s not an accident that gold was money for 5,000 years. It’s been money for so long because it works.”
But Peter said he doesn’t think a new gold standard will be imposed by governments.
“I think that the free market is going to reject the dollar and other currencies because they’re a flawed form of money because they are no longer a store of value.”
Peter pointed out that other private entities have undercut government monopolies in the past. For instance, FedEx and UPS managed to crack the US Post Office monopoly on parcel delivery.
And with the advancement of technology, it’s now possible to easily transact business in gold. Blockchain technology makes it possible to tokenize gold and easily transfer it from one party to another.
“Bitcoin guys are like, ‘Oh, see, blockchain is the death of gold.’ No, it’s going to lead to the rebirth of gold. Because bitcoin is what we don’t need. Gold is what gives the digital currency its value.”
Jay brought up the point that a gold standard facilitated through the blockchain would still depend on third parties for payment processing and gold storage. But Peter argued that we’ve always depended on third parties. That’s not a problem in a competitive free market. The problems arise when that third party is a government.
“We’ve always been trusting third parties and it’s worked. The only time it doesn’t work is when the third party is a government. That’s when they screwed us.”
Peter said he thinks the private sector will lead the world back to a gold standard because there ultimately is a demand for sound money.
“The government has a monopoly on money and we’re being overcharged through inflation to use government money. So, the private sector comes up with an alternative.”
During this interview, Peter and Jay also talk about inflation, jobs, the FTX collapse, stocks, investing, and more.