In this episode, Joe Rogan and I talk about the Occupy Wall Street protests and the lessons we learned about economics from them. We also talk about what it's like to be a free market capitalist, and why government intervention in the economy is a bad idea. And we talk about why the left should be directed at their regulations and their taxes and their subsidies, not at all the things that the government does to stifle economic growth and deny opportunities to people who want to work hard and get a better life. And we discuss the best way to deal with the problems that the left is trying to solve, which is to take your money and redistribute it to the people who earned it and give it to somebody who didn't earn it, but didn't work hard enough to give it back to somebody else who did earn it and didn't didn't have enough to do something about it, and that's not a good enough answer to the problems we're all trying to fix. I hope you enjoy this episode and that you enjoy it and that it makes you think about how important it is to use your money to solve the problems you're struggling with, not just to complain about them, but to actually try to solve them, so that you can improve your life and improve your situation. You don't have to wait for someone else to do it for you. You can do it yourself. - Peter Schiff, the author of the book "The Biggest scam in the world" and the host of the popular show on the show "The Little People's Guide to Money" joins us to talk about economics and economics and why it's not only works, but why you should be doing it. the best you can do what you're doing it the best, not what you should do it the most you can actually do and how you should actually do it, not how it s better than anyone else can not just complain about it why it s good to have a job you do it and what it s a good thing how to get better at doing it and how to make money, not having a better job the benefits of having a good life, not better than other people s who are better than you have it why you don t have enough money etc, etc all of this is a good idea, right? listen to the full episode, listen and tweet us what you like it!
00:01:01.000Well, I went down there with a sign that said, I am the 1%, let's talk.
00:01:06.000And I went into Zuccotti Park, and the only reason I stopped, the long one, the long version is just under two hours, which is on my YouTube channel now.
00:01:16.000But the only reason we stopped is because we ran out of batteries.
00:01:23.000But I could have kept talking, and we were losing the light.
00:01:26.000You can see by the end, it's getting darker.
00:01:28.000Just watching them get frustrated with you, but not having the words nor the knowledge to compete with what you were saying was very entertaining.
00:01:36.000Agree with you or disagree with you, it was just hilarious watching someone so completely outmatched, or a group of people so completely outmatched, trying to debate economics with you and trying to understand the way business works.
00:01:47.000Except they didn't even realize they were outmatched.
00:02:11.000And I still get emails, even now, at least, I don't think a week goes by where somebody from somewhere in the world doesn't send me an email about that.
00:02:20.000And I know another website, I forget the name of it, reposted it about a year ago, and they got a couple of million views on it, just posting it again.
00:02:28.000So a lot of people have watched it, and I get comments from people saying, this is what changed me.
00:02:50.000It's good to see people that are so involved in something that they'll go and they'll protest, they'll hang out in the park, but they really can't articulate their feelings or their thoughts in a well-reasoned debate.
00:03:03.000They really don't have the facts, but yet they're dedicating their entire life to protesting something.
00:03:08.000It's really interesting that people will spend so much energy and effort on something that they're really not even educated in.
00:03:13.000Yeah, and it's a lot easier just to talk about something just emotionally instead of actually taking the time to learn about economics and to understand the source of the problems because anybody could just blame it on some rich person who's hoarding money and discriminating against them.
00:03:41.000Have the government come in and redistribute the wealth, which is another word for steal.
00:03:46.000Take money from somebody who earned it and give it to somebody who didn't.
00:03:50.000But if you actually take a little bit of time and use your head instead of your heart, your feelings, you'll learn that the source of the problems is government interference in the economy.
00:04:04.000And that the protests should be directed at government, at their regulations and their subsidies and their taxes and all the things that government does to stifle economic growth and deny opportunities to people.
00:04:17.000I think it would be a really funny documentary if you could do like a documentary on the last occupier.
00:04:24.000Like the last person to occupy Wall Street, because they had to be like stragglers, right?
00:04:29.000Eventually, it must have gotten to the point where there was like 30 people left, 20 people left, then one guy, no, fuck these people, man!
00:04:36.000Well, you know, they started occupying different areas, right?
00:04:39.000Because it caught on, and it was all over the world.
00:04:41.000They were occupying here and occupying there.
00:04:44.000And they were setting up camps, right?
00:06:51.000I mean, the way you get rich is not by hoarding.
00:06:54.000The way you get rich is by trying to figure out what problems people have that you can solve, right?
00:06:59.000Whether it's inventing something that makes their lives better or providing a service that makes their lives better because the customers are in charge, individuals.
00:07:08.000That's what's going to allocate wealth.
00:07:11.000If somebody is better than somebody else at satisfying the desires that people have, right?
00:07:18.000If I can come up with something that you like, that you want to buy, that's cheaper and better than what somebody else has come up with, then you're going to buy from me.
00:07:26.000And so the person who ends up with the most money is the person who's satisfied the most desires, the most needs, in the most efficient way possible.
00:07:37.000I mean, it's great to have charity, and I'm all for private charity, but if you look at the wealthiest men in history, even though they've been incredible philanthropists and they've given away a lot of money, they helped a lot more people amassing their fortunes than gifting away wealth.
00:07:52.000It was the businesses that they created, the products that they invented, the services that they provided, and the employment, right, that was all a function of their creating their wealth.
00:08:04.000That's what did a lot more to help society than simply giving away some of the money that they earned.
00:08:09.000Have you ever had a debate with a democratic socialist?
00:08:12.000Well, I mean, most Democrats are socialists.
00:08:15.000They just don't know it, or they don't want to admit it.
00:08:17.000And a lot of people don't even understand what socialism is, because, you know, you'll have the left, they'll always consider somebody, like even Donald Trump, they'll say, oh, he's a fascist, right?
00:08:26.000They don't even realize that fascism is...
00:09:59.000So do you think that people are frustrated with the current system and so they see someone like Bernie Sanders come along that offers this radical change of pace.
00:10:06.000He's saying, you know, we need to end income inequality and redistribute wealth and all these different things and it just sparks an emotional reaction in people that they know that the current system, the way it's in place, especially the way it was under Obama, they didn't like how things were,
00:10:22.000they didn't like how things were under Bush.
00:10:24.000They think we need someone who's not a career politician or someone who has got a radical new approach Oh, look at this Bernie Sanders guy.
00:11:58.000But unfortunately, now Trump is part of the establishment, and now all of a sudden the fake economic numbers are legit.
00:12:06.000Now every time there's an unemployment number out, he tweets about how it's the lowest it's ever been.
00:12:10.000So I think that when We get this next recession, which is going to happen while Trump is president during this first term, which I think will be the only term.
00:12:56.000More government stimulus than any other recovery.
00:13:01.000And I don't think we actually recovered.
00:13:03.000I think the government simply injected a bunch of cheap money into the economy and exacerbated the real problems, but reflated the bubbles in the stock market and the housing market.
00:13:14.000But, you know, everybody talks about how the economy is doing so great, but it's really not much better than it was under Obama, if it's any better at all.
00:13:21.000GDP growth for Trump's first year in office last year was 2.3%.
00:14:16.000The left and even the Fed is going to be able to blame it on Trump because Trump has come in and claimed credit for this great economy that he believes we have, and he's claimed credit for the records in the stock market.
00:14:29.000But he's basically put his name on a bubble.
00:14:31.000And when it pops, it's going to be hard for him to try to blame the next recession on Obama when he's already said, hey, this is my economy.
00:15:38.000If you make government smaller, that's great.
00:15:41.000Then you can cut taxes, because now government doesn't need as much money, and you can relieve the taxpayer of the burden of paying for it, and that's great.
00:15:49.000But if you just cut taxes, but you don't cut government spending, and of course what the Trump administration did was even worse.
00:16:01.000And so spending is more, but they reduce their tax revenue.
00:16:05.000So the deficits are just exploding out of control.
00:16:08.000And those deficits are going to do more damage to the economy than the tax cuts were benefit, except you get the benefit first, maybe for the first year, and then you start to deal with the pain after that.
00:16:19.000And so I think that's going to set in, you know, long before the end of Trump's term.
00:16:23.000So you think that this is what is causing the economy to be in a really, at least to look like it's in a really healthy state right now?
00:17:37.000Well, remember, again, the unemployment rate is mainly down because so many people that are unemployed are no longer counted as part of the statistics.
00:17:45.000So, you know, that's if you look at the labor force participation rate near a record low, I mean, certainly for men, it's the lowest it's been in the history of the republic.
00:17:54.000But – and look at the workers to population.
00:17:57.000So fewer and fewer people are actually working, and more and more of the people who aren't working are not included in the unemployment statistics.
00:18:05.000So if you backed all those people in, right, able-bodied people who don't have jobs but should be working, then the unemployment rate is much, much higher.
00:18:13.000So that doesn't really paint a good picture.
00:18:16.000And then you look at the fact that so many Americans are unqualified.
00:18:20.000There's a lot of jobs out there that go unfilled because American workers aren't qualified to fill those positions because, you know, we take a lot of our kids and we keep them in high school until they're 18, 19 years old.
00:18:34.000Many of these kids should drop out of high school and learn a trade.
00:18:38.000I mean, a lot of people, you know, they don't have the aptitude for, you know, academics.
00:18:42.000There's no point in just being in high school.
00:18:44.000A lot of times they're glorified daycare centers.
00:19:41.000But the question is, how does it deflate?
00:19:43.000And then what do you propose as the solution?
00:19:45.000See, the problem that Trump already made was when he first got elected, he should not have changed His perspective.
00:19:53.000He shouldn't have said, hey, everything is great.
00:19:55.000Now, he's planning on running his next campaign as Keep America Great.
00:19:59.000When Trump ran for office, he said America was an economic wasteland, that it was a disaster.
00:20:05.000He's been president for a little over a year.
00:20:07.000All of a sudden, it's the greatest economy in the history of the country.
00:20:10.000Which is not even close to being true.
00:20:12.000But if he's going to try to run for reelection on, I've already made America great and now we just want to keep it great, that's not going to resonate.
00:20:20.000So what he should have done from day one is leveled with the American public.
00:20:24.000Again, this is how bad the problem is and this is what it's going to take to solve it.
00:20:29.000Because there's a lot of, you know, pain, short-term pain that we're going to need to go through in order to come to the other side, in order to get rid of all these problems.
00:20:39.000Like right now, look at the trade, right?
00:20:41.000Trump is making a big deal about the trade deficits and he's launching tariffs.
00:20:46.000He's going to have this trade war that he's convinced that we could win.
00:21:40.000And so if Trump is simply going to erect tariffs, all that's going to do is tax the American public, because the American public has to pay the tariffs whenever they buy imported products.
00:21:50.000So this is not going to turn the economy around.
00:22:11.000The reason we have an income tax today is because the populist politicians of the day told the American voter, if we can tax the rich with an income tax, Then we can get rid of tariffs that the average person is paying.
00:22:27.000So the average person understood that tariffs cost them money.
00:22:31.000And the politicians said, let's get rid of these tariffs and let's just tax the rich.
00:22:35.000And the income tax that was originally proposed really was a tax on the very rich.
00:22:40.000I mean, even doctors and lawyers didn't pay it.
00:22:42.000I mean, you had to be super rich before you pay the tax.
00:22:46.000And then it was like, you know, 1% to 4%.
00:22:50.000And it wasn't taken from your paycheck.
00:22:52.000I mean, first of all, if you got a paycheck, you didn't pay the tax.
00:22:55.000But we didn't have withholding until 1943. That was part of the victory tax to pay for the Second World War.
00:23:01.000But Americans were told, let's tax the rich and you won't have to pay tariffs anymore.
00:23:08.000Well, the minute the government got the nose under the tent, all of a sudden now the income tax affects everybody.
00:23:15.000People pay a lot more in income taxes today than they used to pay in tariffs.
00:23:19.000But now, now the president wants to bring the tariffs back on top of the income tax.
00:23:25.000I mean, if Trump wants to repeal the income tax and get rid of it entirely, and then have some tariffs, I'd be okay with that.
00:23:31.000But you can't do that unless you dramatically shrink the size of government, which is the most important thing that Trump needs to do, but what he's not doing.
00:23:39.000He has to make the military smaller, not bigger.
00:23:42.000I mean, he's talking about a Space Force.
00:23:44.000I mean, we can't even afford the Air Force, Navy, Marines that we got now.
00:23:47.000We don't have enough money for a Space Force, but we have to cut everything.
00:24:22.000So when you say let the bubble crash, like what would that entail?
00:24:27.000Well, basically, look, the problem – the basic problems with the US economy, and this is because of monetary policy, fiscal policy, is we don't save anything, right?
00:24:35.000And because we don't save enough, we don't invest enough, we don't produce enough, we don't make enough real things, right?
00:24:40.000I mean when Trump wants to say that foreigners are taking advantage of us by running these huge trade surpluses, he's got it backwards.
00:25:51.000But what we should do instead of having a crisis imposed on us Globally, with a crisis in the dollar and a crisis in our bond market, we should do it ourselves.
00:26:01.000We should set these forces in motion ourselves.
00:26:04.000So what we have to do is shrink government, right?
00:26:06.000We have to cut a lot of government spending, get rid of a lot of government agencies and departments to get government out of the way so we can lower taxes legitimately.
00:26:15.000And then we have to allow the Federal Reserve to let the market set interest rates.
00:26:18.000Interest rates have to be much higher than they are now, right?
00:26:21.000Because that's going to encourage people to save.
00:26:23.000If interest rates are high, you'll put your money in the bank to earn that high rate of interest.
00:26:27.000When money goes into a bank, it can get loaned out to businesses.
00:26:30.000Right now all that money is going to government or it's in the corporate bond market.
00:26:53.000You buy something if you have the money to pay for it.
00:26:56.000You don't just put it on a credit card.
00:26:58.000And if credit card interest rates went up and if credit was contracted so that credit card companies were not giving out as much credit, they're giving out a lot of credit now because the government is misdirecting it.
00:27:09.000But if we slow down our consumption, we increase our savings and investment, then the economy can actually grow.
00:27:15.000But if interest rates go up, Asset prices have to come down.
00:27:19.000The stock market has to come down a lot.
00:27:21.000Real estate prices have to come down a lot.
00:27:23.000Now, that means people are going to lose money.
00:27:25.000They're not going to be happy about that.
00:27:26.000Yeah, this sounds counterintuitive to everything that I've always heard about how to boost up the economy.
00:27:30.000The idea would be that spending and people buying things is great for the economy.
00:28:00.000If you just try to create demand without the supply, it's just inflation.
00:28:03.000It's weird, too, that we keep hearing things about Chinese telecommunications companies like Huawei in particular.
00:28:10.000They're always telling you to not buy their stuff.
00:28:12.000There was something in the paper today about Huawei.
00:28:16.000It was about, I think, another country saying no to these.
00:28:22.000I guess Huawei in particular is the third largest cell phone manufacturer in the world, and they have a close tie with the communist government.
00:28:30.000They believe there might be some shenanigans going on with their electronics.
00:29:16.000But, you know, whenever they talk, look, they're talking about the auto tariffs, and they say it's national security, as if somehow my buying a foreign car is somehow jeopardizing national security.
00:29:40.000Look, again, he's going after the symptom.
00:29:43.000Trade deficits are the consequence of a problem.
00:29:46.000Most politicians ignore the trade deficits, right?
00:29:49.000At least Donald Trump is putting them on the spotlight and saying, look, this is a problem.
00:29:54.000It is a problem, but not for the reason that Trump believes.
00:29:56.000In the short run, in the here and now, the trade deficits benefit America because Because the world is subsidizing our standard of living.
00:30:05.000We're getting to buy things that we otherwise wouldn't be able to have.
00:30:08.000I mean, without these trade deficits, we wouldn't have all these consumer goods on all these shelves.
00:30:12.000I mean, people would not be able to buy stuff.
00:30:13.000Prices would be much higher if we had to make stuff ourselves.
00:30:17.000By having the Chinese make it, you know, it's a lot cheaper.
00:30:21.000Plus, you know, it's great for our environment because, you know, we don't have to pollute our own air because the factories are over there.
00:30:28.000So he's right that it's a problem, but in that...
00:30:31.000It's a reflection of the fact that the economy is inefficient, and that's what needs to be addressed.
00:30:38.000It's like, you know, we have cancer, but you just can't put Band-Aids on the blemishes or something to cover it up.
00:30:43.000You got to actually get to the source of those blemishes, which is the Federal Reserve and their bad monetary policy and our government policy, our fiscal policy, our regulatory policy.
00:30:54.000We need to have that type of change, and then the trade deficits will go away.
00:30:59.000But if we simply try to Put tariffs on.
00:31:02.000It's just going to make our own problems worse.
00:31:03.000All that's going to do is make prices higher.
00:31:06.000It's just going to mean that Americans are going to have to spend more money buying stuff.
00:31:09.000And it also actually undermines a lot of American businesses that export into countries that are retaliating.
00:31:15.000And also, a lot of U.S. businesses import components, and then they assemble the components here, but now those imported parts are going to be more expensive, and so their net exports are more expensive, and so they become less efficient.
00:31:27.000The people that are supporting Trump, the people that are happy with the way things are going, have said that him lowering taxes for corporations encourages growth, and it gets more jobs, and there's more economic activity.
00:31:44.000If we eliminate taxes, yeah, that'd be great.
00:31:47.000I mean, the lower taxes are, the better it's going to be, but not if you borrow the money to pay for the tax cuts.
00:31:52.000So the idea is if the government now has to go into the market and borrow money that it no longer collects in taxes, that's going to have an impact on the economy.
00:32:03.000That's going to further deplete our savings pool.
00:32:06.000That's going to put real upward pressure on interest rates, and obviously the Fed is trying to counteract that.
00:32:12.000But, you know, what They did with the tax code, though.
00:37:17.000You know, you wouldn't think it would be, but all of a sudden, all these big guys down there in Puerto Rico, they'll probably say something again because obviously they watch your podcast, but a couple of really big guys were calling me out saying that I'm insulting Puerto Rican women,
00:37:33.000like, you know, I'm calling them whores or something because I said that they want to date guys with jobs.
00:37:37.000Well, doesn't every woman want to date a guy with a job?
00:40:14.000But I mean, but all this, I mean, it was almost part of the whole political correctness thing of it, like, or the Me Too, like, you can't say something.
00:40:24.000Anything that you say is going to be spun, like, this is against women, because I'm stating something that's very obvious.
00:40:47.000I think what they're doing is they're striking a chord and a few malcontents go along with it, but you read those things and you think, like, wow, there's some validity to this because it's in, you know, X publication.
00:41:05.000Yeah, and everybody wants to act like you can't say something that's offensive to anybody.
00:41:10.000Like, if somebody gets offended, then, you know, like, you know, this, what was this, you know, this, one of these contestants, I read this story, but one of the contestants on The Bachelorette, Apparently, on his Instagram page, he liked some jokes that,
00:41:28.000you know, maybe off-color, a little bit offensive jokes, that right-wing, somebody on the right had posted on their Instagram page.
00:41:45.000I mean, almost all the jokes offend somebody.
00:41:48.000But now you can't even have a sense of humor.
00:41:51.000Everything has to be, you know, you can't offend anybody, which you don't have a right not to be offended.
00:41:57.000That's the whole part of freedom of speech.
00:41:59.000People are going to say things and do things that you might be offended by, and you just got to deal with it.
00:42:05.000You can't be looking like, you know, I got to have a law against that, or But these offense merchants, these people that get offended, that's their currency.
00:43:03.000But it's all – look, it's this whole mentality that people have now about not being offended is about feeling that they have a right to something or not being entitled.
00:43:12.000Are people confusing a privilege with a right?
00:43:44.000When people try to pretend that a privilege or a group privilege and try to give that the status of a right, I know you talked about it on your podcast.
00:43:54.000We had the Supreme Court ruling recently regarding the gay couple that wanted a wedding cake.
00:44:01.000And they sued because the baker wouldn't make a wedding cake with a couple of guys on the top and decorate it in a way that it was obviously for a gay wedding.
00:44:15.000There's a lot of misunderstanding about that, and I read something recently that not only did they not do that, but they weren't making custom cakes.
00:44:23.000So they didn't make custom cakes for weddings.
00:44:26.000So when the gay couple came in and said they wanted a custom cake, they said, no, we don't make that.
00:44:34.000They would have sold them a cake they already had, but they didn't have one with two dudes holding hands.
00:44:39.000Well, the bigger problem is, first of all, They – it's not like you have this gay couple that just went into a bakery and then they were denied the ability to buy a cake.
00:44:50.000They probably went to 100 bakeries to find the one that wouldn't bake them a cake.
00:45:01.000And of course, you know, if you're a baker, right, I don't know what the margins are on wedding cakes, but wedding cakes are probably like the holy grail of cakes, right?
00:45:09.000I mean, if you're sitting there in the small bakery shop, you're waiting for somebody to call for a wedding cake, because those are the biggest cakes you could make, very expensive cakes.
00:45:18.000So everybody wants to do a wedding cake.
00:45:20.000Nobody cares whether there's two guys or a guy and a girl on the top of it.
00:45:24.000You just want to make the money that you're going to get from baking a wedding cake.
00:46:34.000Let's say there's an anti-Semite baker, right?
00:46:38.000If I go in there and the guy says, you know, oh, I don't want to bake cake for Jews, fine.
00:46:44.000You know, because let's assume that he knows I'm Jewish, he hates Jews, and he spits in the cake.
00:46:49.000I mean, I'd like to know, like right up front, that this guy who's about to bake my cake hates Jews.
00:46:55.000So then I'll go and buy my cake from somebody who doesn't hate Jews because I don't want to worry about what I'm going to be putting in my mouth.
00:47:01.000I mean, why would you want to even force somebody to bake a cake for you that you've got to eat?
00:50:20.000I could go to a white boss and I could say, I'm sorry, I don't want to take the job because I want to work for someone black.
00:50:26.000You can't sue me for not taking the job.
00:50:29.000Actively seeking out a black boss, which is the difference between that and being approached by a bunch of white people and saying, no, I hate white people.
00:52:03.000I believe people have a right to discriminate because the bigger problem is when the government becomes the thought police because the minute you make it illegal to discriminate, now you have to get into people's minds, right?
00:52:14.000If somebody doesn't promote somebody or fire somebody and they happen to be black or a woman or too old or handicapped.
00:55:59.000Sorry, I'd like to do it, but I can't.
00:56:02.000And if that boss needs extra workers, he has to go bring on a part-time worker.
00:56:07.000So now, let's say if I want to get an extra 10 hours work, I got to find another job someplace else where I can work part-time where the time and a half...
00:56:24.000How common is this, though, that people are denying people extra work even though they need it because they don't want to pay the time in half?
00:56:32.000I mean that's where moonlighting came from.
00:56:34.000That's the whole – I mean obviously people – you're going to have people that work for two employers – And then other people working, and they're going back and forth between the same companies.
00:56:43.000So what you're saying is it's weird if someone has to work extra hours, why are you paying them double the money?
00:57:19.000Well, different states could have different rules, and federally they have different rules over what constitutes – how much pay do you have to earn before the overtime rules apply?
00:57:28.000Also, isn't it pretty arbitrary, like this decision that's 40 hours a week?
00:57:37.000But all of this should be – Free for discussion.
00:57:41.000It's interesting because you have the liberals believe that, hey, two people should be able to have a relationship without the government interfering.
00:57:54.000It's none of the government's business who you're sleeping with.
00:57:58.000Well, why don't they have the same – believe in the same freedom when it comes to economic relationships?
00:58:04.000If an employee and an employer are having a relationship, why doesn't the government just butt out and let the employer and the employee negotiate the relationship and the terms of the relationship that they think is best for them?
00:58:16.000Because there are a lot of workers that, oh, I don't need the overtime, but maybe there's another benefit that I would prefer to have that I could get, but I can't because some government laws are requiring things that I don't want.
00:58:34.000I mean, the minimum wage is probably the dumbest law.
00:58:36.000I think we talked about that on the last podcast, but it's probably the dumbest law that you can come up with because All it does is hurt the very people that you are intending to help.
00:58:49.000You're hurting the least skilled people.
00:58:52.000You're preventing people from getting jobs in the first place.
00:58:55.000And you're creating extra incentives for employers to eliminate jobs, to try to use capital instead of labor, to try to outsource.
00:59:05.000I mean, nobody is going to hire somebody If they're losing money, right?
00:59:09.000People have a certain amount of productivity that they can bring to the table.
00:59:14.000And when an employer makes a decision on who to hire, they have to hire somebody that brings them at least enough productivity to cover the wages.
00:59:23.000And so what happens is when you have a minimum wage, let's say the minimum wage is $8 an hour.
00:59:49.000Well, I mean, if I only have $5 an hour worth of skills and I can't get a job to improve my skills, I'm stuck in unemployment forever.
00:59:58.000I mean, the worst thing you can do to a guy with minimal skills is prevent them from getting a job because it's the job that's going to enable them to increase their skills so they can earn more money in the future.
01:00:09.000I know what you're saying, but the idea is that if you have a minimum amount that you allow people to pay, then at least the people that are working for that company will have a real income where they can pay their bills and feed themselves.
01:00:20.000And that this company, because they have all the power, they have all the money, and a poor worker who's stepping into the market for the first time or just hasn't been able to acquire job skills that would allow them to make much more money per hour, that they would be taken advantage of by this larger corporation.
01:00:38.000Well, you know, the corporations don't have all the power because they're not the only employer.
01:00:43.000I mean, all employers compete with one another for labor, and they bid up wages.
01:00:48.000I mean, you can't pay people less than the market value of their labor because somebody else will hire them.
01:00:56.000So you could talk about, oh, wouldn't it be great if everybody could earn more money?
01:01:01.000Has there ever been a proven example of this where they've had no minimum wage and it's been a financial boom?
01:03:16.000A lot of kids, you know, they're 16, 17, 18, 19, 20. I mean, people live with their parents still.
01:03:21.000The most important thing is getting a job so you can acquire the skills to get a better job, to move up the ladder in an organization, to enhance your value to employers in general.
01:03:52.000I mean there's a lot of people that don't think it out.
01:03:54.000They think with their mind or their heart rather.
01:03:57.000And they don't even get – the origin of the minimum wage was racism.
01:04:02.000I mean the first minimum wage is here.
01:04:03.000It was designed to keep employers from hiring the Chinese or from hiring blacks because they – that's where the minimum wage came from, to try to prevent employers from hiring certain people.
01:04:15.000So they said, well, let's have a minimum wage and that will reduce hiring of people who have less skills.
01:04:20.000And so – and the labor unions, the biggest supporters of the minimum wage are the labor unions.
01:04:26.000And none of the labor unions' workers earn the minimum wage.
01:04:30.000So you might think why are they – do they so care about the minimum wage if they don't – if they get paid a lot higher than the minimum wage?
01:04:35.000And it's because you always have a competition between skilled laborers.
01:04:41.000So let's say a businessman has the option of hiring a skilled person to do something, and let's say the skilled person is going to charge $20 an hour, or an unskilled person.
01:04:53.000And let's say I can hire three unskilled people for $5 an hour, and that equals 15. Well, hey, I'd rather hire the unskilled worker.
01:05:01.000I can pay $3, $5 an hour to do the same job of one skilled worker.
01:05:06.000But now if the skilled worker could lobby for a $7 minimum wage, now if I have to hire three unskilled people, it costs $21.
01:06:01.000No, actually, you know, I found this out as I'm traveling now.
01:06:05.000You know, I still have an American passport.
01:06:07.000But when I mention what country I'm from and I look where you live, I always have to select Puerto Rico as a country.
01:06:13.000Even though it's part of America, it's still considered its own country, even though you still are American citizens when you live there and you travel on a U.S. passport.
01:06:23.000It's listed as a separate country from the United States.
01:06:27.000Yeah, I was just going to read her name from a tweet.
01:06:29.000Alexandria Ocasio-Cortez, 28 years old.
01:06:33.000Yeah, well, she beat a 10-term incumbent.
01:06:46.000But the thing is, people, I think, in that community are just voting out of frustration.
01:06:52.000In fact, I looked at her commercial, and it's a very powerful commercial, kind of like about – Women like me are not supposed to run for office.
01:07:02.000I mean, that's all a bunch of nonsense, but it's a story that I think resonated with a lot of people, like, hey, let's stick it to the man, right?
01:09:47.000And where's the money going to come from to pay for it?
01:09:49.000They're going to have to take the money from the private sector that would have created efficient jobs, and they're going to give it to the government to create inefficient jobs.
01:11:11.000The banking system benefited by making riskless loans that the taxpayer was on the hook for.
01:11:16.000But the byproduct of all this cheap money being funneled at the colleges was that the colleges kept raising their tuition higher and higher and higher.
01:11:23.000And then the politicians kept increasing the amount of loans they would subsidize.
01:11:27.000And so all of this is the fault of government.
01:11:30.000The government created the problem that they're now complaining about.
01:11:33.000But the students don't understand that that's why college is so expensive.
01:12:50.000The government was able to bail out investors last time with quantitative easing and TARP and all that.
01:12:56.000But the next time, investors are not going to get bailed out.
01:12:59.000They're going to go down for the count.
01:13:01.000Because if they try, and I believe they will try, to reflate the bubbles again by printing even more money, doing another round of quantitative easing, It's going to destroy the dollar.
01:13:11.000So they're not going to reflate the bubble in stocks.
01:13:14.000They're going to prick the bubble in the dollar.
01:13:16.000And so when the dollar loses value and prices go up and you have stagflation, you have a combination of a recession and inflation at the same time.
01:13:26.000And then, of course, what is the Fed going to do in that circumstance?
01:13:30.000Because their playbook is if you have recession, you ease.
01:13:43.000And the Federal Reserve came out and they said that all the banks passed.
01:13:48.000You know, well, what a shocker, right?
01:13:49.000The Fed came up with a test that everybody passed.
01:13:51.000But if you look at the assumptions that they made about the economy, under the worst case scenario that they assumed...
01:14:01.000Interest rates, 10-year rates, go no higher than 3%.
01:14:04.000They don't go down, they just don't go up.
01:14:07.000And they assume that inflation stays below 2% under the worst-case scenario, and they assume that the Fed is able to lower interest rates to zero again to stimulate the economy.
01:14:18.000Now, I mean, what happens if inflation doesn't go down?
01:14:31.000Because what happens if we have a recession?
01:14:33.000Where the Fed can't stimulate because they have to fight inflation?
01:14:37.000Or what happens if we have a recession and the government has to raise taxes during the recession because the budget deficit is exploding and they don't have the money to pay the interest on the debt?
01:14:48.000Well, I think that the politics are going to come into play and that the Fed is going to err on allowing inflation to run out of control.
01:14:59.000They're going to do what they can to try to prop up the economy and they're going to sacrifice the dollar.
01:15:04.000They're going to say, well, inflation is the lesser of the two evils.
01:15:08.000But it's actually going to end up being the greater evil.
01:15:11.000And remember, when Nixon imposed wage and price controls, which was a very misguided effort, it's kind of like what Trump is doing with tariffs, trying to cure the trade deficit.
01:15:21.000Rising prices are the result of inflation.
01:15:51.000We talked about Gold Money on your show before, and so many people – this just shows you how many people listen to this podcast.
01:15:59.000So many people tried to open up accounts at Gold Money because of our conversation that the regulators actually shut them down.
01:16:06.000They actually stopped them from onboarding new customers because there was too many people coming onto the platform.
01:16:13.000And the reason, look, this is the system that we're in now because when you have a gold money account, right, it's not like just buying gold.
01:16:20.000You have gold that you can actually transact in.
01:16:25.000I can take my gold and I can send it to anybody I want anywhere in the world who has an account for free.
01:16:36.000There's gold stored in a Brinks vault, and they have vaults all around the world, but I can transfer my ownership of that gold to you or anybody else.
01:16:44.000But because I can do that, now all of a sudden the regulations are there because they're worried about terrorists, they're worried about money laundering, and so everybody who has an account, there has to be a lot of scrutiny.
01:16:56.000About those accounts and those transactions, just like it was a bank.
01:17:02.000I got a lot of emails from people who were frustrated.
01:17:04.000They tried to open up accounts, and they didn't realize that it was the regulators.
01:17:08.000They get mad at gold money because they're not opening up their account or approving their account, but it's the regulations that are the cog in the machine.
01:17:16.000But the good news is I think they've satisfied the regulators recently.
01:17:21.000They've come up with some new systems.
01:17:22.000So the process is a lot more efficient now.
01:19:35.000That necklace back from you at any point in time in the future, two years from now, five years from now, ten years from now, at whatever the gold value of the necklace is.
01:19:44.000So let's say gold goes up by 30% from the time you buy the necklace.
01:19:48.000You can actually sell it back to Monet for more than you paid for it.
01:19:52.000Whereas if, you know, if you have used jewelry that you buy at a department store, what's it worth on the secondhand market?
01:19:57.000You know, 10 cents on the dollar, right?
01:20:24.000But the point is that people need to protect themselves from the inflation that's coming because that is where we're headed.
01:20:32.000The government is going to continue to print money to try to prop everything up, to try to delay the day of reckoning for as long as they can.
01:20:40.000And we've had a rally in the dollar recently because people think, oh, the trade war is good for the dollar.
01:21:23.000And so people have to find a way to protect themselves.
01:21:26.000And the average guy, I mean, gold is the easiest way to do that.
01:21:29.000And with the gold money account, you could do it very inexpensively.
01:21:33.000Of course, if you want to buy bigger amounts of gold, if someone wants to put $50,000, $100,000 worth of gold, I wouldn't spend it on jewelry.
01:22:01.000The markup on jewelry is higher because we had to pay to make the jewelry.
01:22:04.000It's more expensive to make a gold necklace or a gold bracelet or a gold ring than to make a gold coin.
01:22:10.000So you wouldn't want to have all your gold in jewelry.
01:22:14.000But to the extent that you're going to buy jewelry anyway, you might as well buy real gold because now you actually have some savings that has value in addition to having something you can wear.
01:22:24.000I mean, I don't get a lot of value day-to-day by having gold in a safe.
01:22:31.000I mean, so then now you're getting an extra benefit from the fact that you have gold because now you get to enjoy it on a daily basis if you're wearing it.
01:22:41.000And obviously, too, if you don't have that much money, if someone's not going to buy any gold, if someone has a couple thousand dollars, they were going to spend it on jewelry?
01:22:49.000All right, we'll spend it on gold jewelry, because at least you still have the money.
01:22:52.000At least 80% of what you spent, you still have.
01:22:55.000Well, it makes sense to me, and I don't know much about gold.
01:23:00.000But it's weird that gold is one of those things that's universally been thought of as valuable, like forever.
01:23:38.000I mean, so there are a lot of uses for it because gold has properties that other metals don't have that gives it value, not just its physical beauty, but also the things that you can do with it.
01:23:48.000You can do things with gold that you can't do with other metals.
01:24:30.000And it does have a lot of gold's properties that helped it succeed as money, but it doesn't have any of gold's physical properties that gave it so much value in the first place.
01:24:42.000And so you can't separate the intrinsic value of money from money.
01:25:11.000Well, because the way they decide the winner is before the debate, they have a poll, and they ask everybody where they stand.
01:25:21.000And then after the debate, they ask them where they stand now to see if people change their opinion.
01:25:27.000And since everybody in there was a whole Bitcoin audience, and I had it confirmed to me from several sources that basically everybody was saying, hey, make sure you vote...
01:25:38.000This way before the debate so you can change your mind after the debate so that the pro-Bitcoin guy is going to win.
01:25:54.000Will Bitcoin replace the dollar or other fiat currencies in the future?
01:25:59.000But they wanted to propose it initially before the debate, get your thoughts, but they rigged it by having these people have contrary thoughts before the debate.
01:26:08.000So as if Bitcoin was evangelized to them, like, oh, now I get it.
01:26:13.000The idea is like a bunch of people were in this debate that didn't believe Bitcoin was the future.
01:26:19.000But now, after this hour debate, they were convinced by my opponent that it was the future.
01:26:25.000Because then, you know, when I read all the stories, and if you go online, you read the stories about the debate, it's always like Peter Schiff lost, Peter gets bested, Schiff loses.
01:26:33.000So it's almost like I got caught up in the Bitcoin propaganda.
01:26:55.000Look, you know, I feel badly in that—well, first of all, some of them got very rich, so I don't feel bad for these guys that got rich, that put a few thousand dollars in and now have millions of dollars.
01:27:07.000I mean, obviously, I missed out on that myself, right?
01:27:10.000I mean, that—I mean— There's a lot of bubbles that I missed out on.
01:27:14.000I didn't make anything on the dot-com bubble.
01:28:13.000Yeah, but, you know, so, I mean, I don't feel badly that, you know, some of these guys lucked into having a lot of money or, you know, it's luck or they took a shot and it paid off, right?
01:28:21.000They got in and, you know, and the market exploded and they have an opportunity to cash out on a profit.
01:28:27.000But a lot of them are not cashing out.
01:28:28.000They're going to – I think they're going to go down with the ship.
01:28:30.000But – When you say that, you think it's going down.
01:28:40.000And the last time I did your show, I mean, a lot of people are, you know, what Peter Schiff got wrong on Joe Rogan about Bitcoin.
01:28:47.000I mean, everybody thinks I don't understand it, and that's why I don't believe in it.
01:28:50.000It's because I do understand it that I don't believe it.
01:28:53.000The people who think it's going to work, they may understand the technology, but they don't understand money.
01:28:59.000And so – but when I talk to these people, to me, it's very much like a cult.
01:29:05.000I mean they believe so strongly in this.
01:29:10.000They're so caught up in the hype and the hysteria and maybe they're blinded by the money they think they're going to make when these things are a million dollars apiece or wherever they believe they're going.
01:29:20.000Yeah, that's what they think it's going to.
01:29:22.000They think it's going to go a million dollars.
01:30:20.000There's so many other currencies out there.
01:30:22.000And it's only scarce because it's coded to be scarce.
01:30:26.000Gold is scarce because it really is scarce.
01:30:28.000Bitcoin is scarce because they decided to make it scarce, but it's not scarce in that there's nothing that any other cryptocurrency can't do that Bitcoin is doing.
01:30:38.000But they're looking at it as an alternative not to gold, but to the currency that we currently use.
01:30:43.000Well, they look at it as an alternative to both, I think, a lot of them.
01:30:47.000Although some people think it's maybe a complement of gold, but it doesn't have any actual value.
01:30:51.000And that's where I get into a lot of arguments with these crypto guys, because they say, well, gold doesn't have any actual value either, which is laughable, because of course gold has actual value.
01:31:00.000There are lots of things that I can do with gold, and that shows that it has value.
01:31:05.000There's nothing that I can do with Bitcoin other than give it to somebody else.
01:31:08.000I mean, that's the whole purpose of it, is to give it to somebody else and Right, but our whole economy is kind of screwy.
01:31:12.000It's entirely possible that it could shift over to a crypto coin-based economy.
01:32:01.000The dollar I spent would be recorded on some government computer.
01:32:05.000And that's something that I don't want.
01:32:07.000And I think libertarians certainly don't want that, which is one way cryptocurrencies could backfire is if the governments end up monopolizing cryptocurrency and issue cryptocurrency alongside or instead of the paper currencies that they issue now.
01:32:24.000Part of the biggest damage that's ultimately going to come from it is when the cryptocurrencies collapse and people lose a lot of money, which is going to happen.
01:32:33.000The government's going to be able to say, you see, we told you the free enterprise capitalism is no good.
01:32:37.000I mean, look what happens when you trust...
01:32:39.000You know, Bitcoin, it's going to help make the dollar and the euro and the yen look good by comparison.
01:32:47.000Even though these are fatally fraud currencies, they're still going to look better than the cryptocurrencies, the people who have lost a lot of money.
01:32:54.000See, right now, people, there are a lot of people that like Bitcoin because they bought it real cheap.
01:32:58.000And even though it's gone down, you know, 70% from its high, it got up to 20,000, and now it's about 6,400.
01:33:05.000There's a lot of people that bought it and still have big profits.
01:33:08.000But what about the people that bought it at $20,000, $18,000, $15,000, $10,000?
01:33:14.000And if it keeps falling and it goes down to $1,000 or lower where I think it's going, you have a lot of people that have lost a lot of money.
01:33:21.000And so that's going to create a lot of problems.
01:33:24.000And I think the government's going to come in with all sorts of new rules and new regulations on transactions to try to protect us from ourselves.
01:33:32.000And again, it's just going to, you know, try to make government look good and the free market look bad.
01:33:37.000People get caught up in frenzies all the time.
01:33:40.000It doesn't mean that the free market needs to be shut down just because every once in a while people get greedy and get nuts.
01:33:46.000And it's not a reason to expand the power of government because government will do much more damage to an economy than small bubbles will do when you have a boom and a bust because you have a mania.
01:33:59.000Do you think that there's any cryptocurrencies that are compelling?
01:34:02.000Is there any one other than Bitcoin that you go, well, this one has a different set of parameters, a different set of rules?
01:34:08.000No, because to me, you just can't have a digital token that you just create.
01:34:17.000That's going to have – going to be a store of value.
01:34:19.000I mean money has to be a store of value.
01:34:22.000It has to be a medium of deferred payment.
01:34:24.000So what that means is I have to be able to take my money and save it for a year, five years, ten years.
01:34:33.000I can't loan you a Bitcoin and you say I'll pay the Bitcoin back in ten years because none of us know what the Bitcoin is going to be worth.
01:34:39.000So how do you know what kind of interest rate to charge?
01:35:46.000It's hard for me to – I can't break up that bar.
01:35:48.000I can't just give you a small portion of it.
01:35:51.000But what gold money is doing is taking that old blacksmith concept and bringing it into the modern era because I can store my gold in a vault at Brinks through gold money.
01:36:46.000I mean, but people have been trusting third parties with gold for thousands of years.
01:36:50.000And, you know, you have reliable third parties that can hold on to something of real value because you have to have stability.
01:36:57.000I mean, that's the big problem that we have in the world today is we have no real money.
01:37:01.000We just have these fiat currencies that governments create out of thin air.
01:37:05.000And there's no real stability in the monetary system.
01:37:08.000If we had real money, if we were on a gold standard, which I believe we will be on again eventually, because that is the norm throughout history, is to be on a gold standard.
01:37:17.000All these experiments with fiat currency, they don't work.
01:37:20.000But we haven't been on a gold standard since, when, the 70s?
01:37:22.000Yeah, well, we went off it in 1971. Of course, we were on a pure gold standard in the 19th century and certainly the latter part of it.
01:37:32.000Do you think we're going to go back to that?
01:37:34.000I think so, because that's what works.
01:37:36.000I mean, what we have now works for government, but it doesn't work for the people.
01:38:05.000I mean, that is what created the middle class.
01:38:08.000The middle class was a byproduct of the economic growth that took place in America.
01:38:14.000I mean, we basically had tremendous economic growth.
01:38:19.000We absorbed tens of millions of immigrants that were coming from all over the world, and they weren't coming here for welfare and food stamps because they didn't exist.
01:38:55.000And I think, you know, we could have great growth again, you know, to the extent that we, you know, substantially diminish the size of government.
01:39:04.000But part of that would be to return to sound money.
01:39:08.000But the cult of personality, you know, it's one of those things – man, I don't know.
01:39:13.000This is such a fascinating conversation because I would love to have a person who's equally educated on this stuff that opposes your viewpoint.
01:39:23.000And I'd love to see – Yeah, well, there are certainly people that oppose my viewpoint.
01:39:35.000Oh, you know, before I forget, too, I forgot to bring this up because you mentioned it on the other podcast, and you're like, I wish somebody would come in and talk to me about it.
01:39:43.000I was like, yeah, I got to talk about it, which is the Act 2022 in Puerto Rico and whether or not Puerto Rico is in trouble because you have a bunch of rich people who are there who are not paying taxes.
01:39:55.000The reason why it was so difficult to rebuild the infrastructure post-Maria was that all you rich guys had come there and you soaked off the economy and that's why you're there because you weren't paying any taxes.
01:40:08.000Yeah, and so first of all, the tax breaks didn't start until 2012. So before that, what was going on and what changed?
01:40:17.000Well, if you were rich in Puerto Rico, you paid the same 30% tax as everybody else.
01:40:23.000Now, nobody in Puerto Rico has to pay federal income taxes.
01:40:26.000That is one of the big benefits that Puerto Rico has.
01:40:29.000You don't have to pay the federal income tax if you live there and you're working there on the money you earn.
01:40:34.000So if I had moved to Puerto Rico in 2010 or 2011, which I did not do, but had I moved there then, I would have had to pay the same high Puerto Rican income tax that everybody else in Puerto Rico is paying.
01:40:47.000But what enticed a lot of people to move to Puerto Rico was the fact that they reduced the taxes.
01:41:07.000I can give myself a dividend that's tax-free, but the corporations are required to pay out a certain amount of taxable salary to the owners.
01:42:28.000The people who have moved there, myself included, we donated a lot of money to the relief efforts.
01:42:33.000I mean, as soon as that hurricane was over, a lot of the Act 2022 people, which is what they'd be called because they went there to participate, they were raising money, they were helping out.
01:42:44.000I mean, so there's a lot of charity that came to Puerto Rico that a lot of these people, they wouldn't have thought of it if they didn't already live there.
01:42:50.000But by bringing a lot of wealthy people down there to Puerto Rico and they're there living it, They're more inclined to help out their neighbors than when they were still living in the U.S. So Puerto Rico has derived significant benefit from an influx of wealthy entrepreneurs.
01:43:07.000So this idea that you're taking advantage of them and that you moving in there and just exploiting that place by getting paid in low taxes and that it's a bad thing for the people that live there.
01:43:19.000No, it's a great thing for the people that live there because people are coming to the island bringing capital, bringing businesses, bringing employment opportunities, paying taxes that they never would have paid.
01:43:30.000Let me ask you, did you ever anticipate?
01:44:07.000And there are a lot of places that you can fly direct.
01:44:10.000To go to the West Coast, no, you've got to change planes.
01:44:13.000Now, would there be a way that all these people coming in, they could somehow or another fix the whole electrical system that they have there, their power grid?
01:44:36.000The socialists in Puerto Rico and, of course, the ones that we have in Washington because all their problems aren't self-inflicted.
01:44:42.000But we created a problem for Puerto Rico a number of ways, right?
01:44:47.000First of all, right, we have the minimum wage.
01:44:49.000That, you know, the average income in Puerto Rico is half of the poorest state in the United States, which I forget which is the poorest state.
01:45:24.000I mean, there's so many people that are working for the government.
01:45:28.000They're not productive, but they're draining resources from the Puerto Rican economy.
01:45:32.000I mean, part of it was a power company.
01:45:34.000I mean, it's a disaster, but the government is running everything there, and so everything is inefficient.
01:45:40.000And meanwhile, a lot of the productive people, people who want jobs, have left the island.
01:45:45.000Like if you think a high minimum wage is great, all the people who are leaving Puerto Rico to go to Florida are effectively, even though it's the same minimum wage, they're actually going to a state that has a much lower minimum wage relative to the medium wage because they can get jobs in Florida.
01:46:30.000If you loan money to a Puerto Rican company, right, if you loan money to a private business in Puerto Rico, you've got to pay taxes on whatever they pay you in interest.
01:46:38.000But if you loan money to the Puerto Rican government, the interest is tax-free.
01:46:42.000So America subsidized loaning money to the government in Puerto Rico, but not to the private sector.
01:46:49.000And so they made it very easy for Puerto Rican politicians to go into debt because all these muni bond funds all over the country needed Puerto Rican paper to increase the yield on their fund.
01:47:00.000So you have everybody wants Puerto Rican government bonds.
01:47:02.000So the Puerto Rican government is creating these bonds and they can now buy votes.
01:47:06.000They can promise all sorts of goodies to people who vote for them.
01:47:09.000They can overpay government workers, give them all sorts of holidays, lots of time off, and they can keep borrowing money.
01:47:15.000So they got deeper and deeper into debt because we created an incentive for them to do that.
01:47:21.000And now they have a debt crisis because all of a sudden Puerto Ricans bondholders realize that Puerto Rico is never going to pay back their money.
01:47:29.000And then the other thing that we did to them, and I talked about I think on the show, is the Jones Act, which, if you remember, Trump suspended it for like a week or two after Maria.
01:47:39.000But the Jones Act should be completely repealed, and especially if Donald Trump's going to be talking about Paris.
01:48:26.000But what this has done is this has dramatically increased the cost of living.
01:48:31.000So even though the average person in Puerto Rico earns half of what the average person in Kentucky earns, groceries in Puerto Rico are more expensive than groceries in Kentucky.
01:48:40.000So you have lower income but a higher cost of living.
01:49:01.000It's like it's a Latin American city on an island.
01:49:04.000It's not just like a remote little island.
01:49:06.000So it's a really nice place to be, and it's one of the only places that I think you can really live in the Caribbean and not feel like you're just on Gilligan's Island or not – but just like on vacation all the time.
01:49:17.000It's a real city with real stuff going on, and I've been there now long enough that – You know, I would go there, you know, even without the tax breaks, I like being there, right?
01:49:30.000Yeah, I mean, look, there's crime there in the big city in San Juan and certain areas, just like there are in New York, and just like all major U.S. cities, you've got crime problems, and again, there's a lot of reasons for that.
01:49:42.000Again, it has to do with government, it has to do with the drug laws and all the other things, although they've got miracle marijuana.
01:50:05.000So the Jones Act makes Puerto Rican hotels unable to compete on the low end with hotels in other Caribbean islands because – Everything is so expensive because of the Jones Act and because they have the U.S. minimum wage.
01:50:36.000And all the food that you eat, all the drinks, all the stuff is shipped in, and to bring it to Puerto Rico is a lot more expensive than to bring it to the Bahamas or bring it to Barbados or someplace else.
01:50:47.000So all these other Caribbean islands can get a lot of American tourists to go there for bargain vacations, but Puerto Rico can't compete on the low end.
01:50:57.000On the real high end, they can compete because people are not as concerned about the cost.
01:51:02.000But on the lower end, the budget traveler, a lot more people would be going to Puerto Rico if it wasn't for the Jones Act because the hotels would be able to cater to a lower price point because they could hire the chamber mage for less money.
01:51:17.000They could have lower prices at the restaurant.
01:51:20.000So this is really destroying the tourism industry.
01:51:25.000In Puerto Rico, which could be thriving but for the Jones Act, but also it is diminishing the standard of living of Puerto Ricans who are forced to pay higher prices.
01:51:36.000I mean, what happens is, let's say there's a big ship coming in from China with all sorts of goods, and it's headed for a U.S. port.
01:51:46.000If it could stop off at Puerto Rico, drop a few things off, and then continue on its destination, that would be great.
01:51:56.000What it has to do is it has to bring all the stuff that's going to Puerto Rico to the U.S., unload it, and then load it back on a U.S. flagship, and then send it back to Puerto Rico, which costs a fortune.
01:52:07.000And then the same thing with Puerto Rican exports.
01:52:09.000So the whole Puerto Rican international commerce is being limited.
01:52:36.000So, you know, Hawaii has to have all these Jones Act ships as well.
01:52:40.000So if something gets delivered to Hawaii, it has to get delivered to somewhere else first and then shipped to Hawaii, like to go to California first?
01:58:54.000It's a byproduct of freedom and capitalism.
01:58:57.000And since they moved in that direction, they have slowed down that progress.
01:59:01.000But the Swedish people have recognized that.
01:59:04.000And that's why the reforms that have been made over the last decade or two have been to turn back the clock, to move away from those socialist policies and to try to dismantle.
01:59:15.000Now, they haven't gone completely the other way, just like New Zealand.
02:00:07.000Is it a lack of education or a lack of understanding of economics?
02:00:12.000Like what is it about it that keeps, like when this woman who just won and she seems like a very nice person, when she talks about being a democratic socialist and everybody gets fired up, is it ignorance?
02:00:24.000Yeah, look, certainly it's a lack of understanding of economics.
02:00:55.000You just never… Socialists in particular, not necessarily liberals.
02:00:58.000Well, even people believing in big government because usually what happens is when you're a kid and when you're in high school, you've never had a job and all this stuff sounds great until you're out in the real world paying taxes.
02:01:10.000That's why it was a mistake to lower the voting age down to 18. I mean I don't even think 21. It should be higher.
02:01:17.000If you think about the original voting age when it was 21, 100 years ago, 150 years ago, think about a guy who was 21 back in, you know, 1850. Different person.
02:02:08.000No, they lowered it, right, because you could get drafted when you were 18. And they were saying, look, if you're going to draft, look, I don't believe in the draft.
02:02:15.000I would rather get rid of the draft and leave.
02:02:18.000I agree with you that 21 sounds better.
02:02:21.000I would say 25, because that's the age that your frontal cortex develops.
02:02:25.000But no, what's important about voting is not voting.
02:02:28.000Look, when I moved to Puerto Rico, I gave up my right to vote, right?
02:05:44.000It seems like there's more people that are thinking that liberals are mean now than ever before because of the way they're attacking things.
02:05:51.000Yeah, because liberals are now so intolerant, which is the craziest part.
02:05:54.000They like to pretend that they're so tolerant, but they're the most intolerant people out there.
02:05:58.000They're only tolerant if you agree with them.
02:06:44.000Like anybody who supports the Trump administration or is even a part of it, they're encouraging these people to get harassed at restaurants.
02:06:57.000I really like Trump as a candidate because he was saying a lot of the same things I was saying when he was a candidate.
02:07:03.000It's just that the minute he won— Well, about the phony economy and how we have to—the numbers are not right and we have to shrink government.
02:07:11.000So for you, economically, it made more sense than Hillary— Well, I mean, Hillary would be, I mean, certainly a disaster.
02:07:18.000But the irony of it is— Why would she be a disaster?
02:07:20.000Because she was just, you know, more big government.
02:07:22.000I mean, you know, and I think she would have, you know, continued the failed policies.
02:07:25.000But unfortunately, Trump has continued those policies as well.
02:07:29.000And he could end up being a bigger disaster if he is the catalyst to put a Bernie Sanders type into the White House in 2020. In response to him.
02:07:38.000In response to how much worse the economy gets, and he takes the blame for it.
02:07:43.000So this is all predicated on your initial view that the economy is going to crash inside the next three years.
02:07:49.000If it doesn't, and it does really well, it stays in this state that it's – is it doing well now?
02:07:57.000It's no different than it was when Obama was president.
02:08:01.000There's just some more optimism that things are going to change.
02:08:03.000Well, when you were talking about this before it happened, and I remember you going on these different talk shows saying, this is going to crash, and people weren't listening to you.
02:08:11.000And they were like, oh, Peter Schiff doesn't know what he's talking about.
02:08:13.000And then it did crash, and then they listened to you.
02:08:17.000You're the only one that's saying it's going to crash again.
02:08:19.000Well, they never really listened to me.
02:08:22.000Well, they had to because you were right.
02:08:24.000Well, here's the irony of it all, because leading up to the 2008 financial crisis, and if you go to my YouTube channel, you can see my introductory video is a little montage that I actually shot as part of my Senate campaign when I ran for Senate in 2010. But it's a bunch of people mocking me,
02:08:44.000and then a lot of the shows that I went on where they said, hey, you were right.
02:08:50.000I was on television a lot on Fox, CNBC, CNN, Bloomberg, probably once a week for three or four years I was on something.
02:08:57.000And then I used to get – the Washington Post used to call me, the New York Times.
02:09:02.000People – magazine articles were written about me.
02:09:04.000When I was this lone kind of crazy guy talking about a housing bubble, talking about a financial crisis that was coming – They at least, you know, gave me a platform to air my views, even though they mocked them and laughed at them.
02:09:44.000Well, I think that at this point, people just think, look, you know, I've been saying, talking about this problem for so long.
02:09:51.000They look, he doesn't know what he's talking about.
02:09:53.000They forget that I was warning about the problems in the housing market for four or five years.
02:09:57.000You know, as the prices kept going up, you know, it's not like the things that I see happen immediately.
02:10:03.000But I think, you know, at this point, maybe in the past they thought maybe there was a chance I could be right, even though it was a slim chance.
02:10:09.000Now they probably think it's impossible that I could be right, so why even give me any airtime?
02:10:14.000So, I mean, I come on shows like yours and people actually get to hear the truth.
02:10:17.000But if you go back to what I was actually predicting...
02:10:21.0002008, that financial crisis was the beginning of the end, not the end.
02:10:27.000What I was predicting, and I wrote a book about it, Crash Proof, had a profit from the coming economic collapse that came out in February of 2007. I said we have this huge bubble.
02:10:36.000We have this housing bubble that the Federal Reserve created, right?
02:10:43.000And in fact, after the financial crisis happened, Congress had a...
02:10:48.000A hearing to try to determine why we had a financial crisis.
02:10:51.000And I tried my best to get invited to testify and they refused to let me be there because they didn't have anybody there that predicted it because they wanted to basically come to a conclusion that they had already arrived at was that it was caused by a lack of regulation and we need more government, right?
02:11:06.000So they didn't want me there to say it was caused by government and we needed less government.
02:11:10.000Although, by the way, I have testified at Congress twice since then.
02:11:13.000And both of my testimonies are on YouTube.
02:11:52.000I have a lot more people who listen to my podcast than I did back then.
02:11:57.000But the point that I wanted to make about the crisis is I wrote back then that we had this bubble and we were going to have this crash.
02:12:04.000But the economic crisis was not going to be that.
02:12:08.000It was that the collapse that I saw coming in 08 was the beginning.
02:12:14.000I said that we have this disease that the Fed has created and it's manifested itself in this housing bubble and it's going to pop and we're going to have the worst recession since the Great Depression.
02:12:24.000We're going to have double digit unemployment.
02:12:25.000We're going to have trillion dollar deficits.
02:12:28.000But I said, that's not what's going to kill us.
02:12:30.000I said, we're not going to die of that disease.
02:12:34.000I said, what's going to kill us is the government's cure.
02:12:37.000They're going to print so much money, they're going to try to reflate these bubbles, and that's going to cause a dollar crisis and a bond crisis, and that was what was going to destroy the economy.
02:13:10.000The bubbles now are bigger than the ones that popped in 08. And what's the difference between bubbles and an actual functioning economy that's sustainable?
02:13:19.000If it's doing well right now, you agree it's doing well right now?
02:15:32.000Yes, and then the wealth came down, and I talked about that for years.
02:15:36.000Well, we have even faker prosperity now, but it's even less prosperous.
02:15:41.000Even fewer people are feeling the benefits than before.
02:15:45.000So the real economy is getting sicker and sicker as it takes more and more air to inflate the bubble, because in order to keep the bubbles from popping, the government and the central bank has to keep misdirecting resources out of the real economy to sustain the bubbles.
02:16:35.000Well, but they teach them all this Keynesian nonsense.
02:16:39.000And that's why all the big economists in academia, on Wall Street and government, they're all a bunch of idiots when it comes to economics.
02:19:57.000And finally, you know, we had to do something about it at the end of the 70s because when Nixon came in and Ford came in, they just continued the same policies.
02:20:07.000They were, you know, very liberal Republicans, Rockefeller Republicans.
02:20:11.000And we didn't do anything about inflation until Reagan came in and Volcker was there.
02:20:16.000And so how did they stop the inflation from running out of control?
02:20:19.000Volcker jacked interest rates up to 20 percent.
02:21:08.000The national debt was financed with long-term bonds, like 10-year, 30-year bonds.
02:21:15.000So when interest rates went up to 20%, that didn't affect the majority of the debt that was out there.
02:21:22.000That only increased the cost to the government of the new debt that came out, right, the new borrowing.
02:21:28.000But today, the $21 trillion national debt is predominantly Treasury bills, stuff that matures in a year or less.
02:21:37.000And so if interest rates had to go up to, let's say, 10%, the government would have to pay 10% within a few years on the entire national debt.
02:21:45.000So where would the government get all that money?
02:21:49.000The government, corporations have never been this levered up.
02:21:52.000Individuals have never been this levered up.
02:21:54.000They didn't have adjustable rate mortgages back then.
02:21:56.000Now you still have a lot of people that have arms, where their mortgage debt would go up.
02:22:02.000At this point, the Fed can't really fight inflation because it doesn't have the tools because we have so much debt.
02:22:09.000If they raised interest rates to fight that inflation, the collapse would be so much worse than 2008. All the banks that they bailed out would fail again, but they couldn't bail them out a second time because they can't bail them out and fight inflation at the same time because you can't ease and tighten simultaneously.
02:23:32.000I mean, this is going to be ugly when it hits the fan.
02:23:35.000And, you know, it's dangerous to do this in a backdrop where so many people are inclined To vote for socialists, because that's going to be the type of economic environment where socialism can thrive, because socialists always want to look for a scapegoat.
02:24:55.000Go look at the debate I did with Art Laffer in 2006 when he said everything was great and, you know, there's no recession coming.
02:25:03.000And then he bet me a penny and welched on it.
02:25:05.000I mean, if you can't even – Yeah, he bet me a penny that everything was great and there was nothing to worry about and we weren't going to have a major decline.
02:25:59.000I mean, so what he's got to do is basically he's got to come clean now and tell the truth about how screwed up this country is after years of big government and after years of a central bank that has inflated bubble after bubble and say, look, this is what we need to do.
02:26:58.000But the idea is that you're paying into it now.
02:27:00.000If you're a 30-year-old person paying into it now, there's strong odds you're not going to get it when you're 65. But you're not paying into anything.
02:27:06.000I mean, Social Security is a Ponzi scheme.
02:27:08.000It's not a legitimately funded retirement program.
02:27:10.000It's not like your Social Security money is putting a real trust fund somewhere and invested, and when you retire, you're going to get payments out of this trust fund.
02:27:19.000No, your money is going to the people that are spending it right now.
02:27:22.000And so when it first started, Social Security started a long time ago, the first woman that got a check was Ima Fuller or something was her name.
02:27:48.000I mean the employee pays the whole thing.
02:27:49.000It doesn't matter if it's considered the employer.
02:27:52.000But it didn't – self-employed people weren't even included.
02:27:56.000I think we didn't include the self-employed until like the 50s.
02:27:59.000Because the government figured if you're smart enough to run your own business, well, then you're smart enough to save for your own retirement.
02:28:05.000But the government tried to say, look, some Americans are not smart enough to save, which I think was a mistake because the government didn't save anything.
02:28:11.000Because what the government did is the minute they got the money, they spent it.
02:28:15.000But before they spend it, they write themselves an IOU and they call it a trust fund.
02:28:19.000See, what happens is the government collects the Social Security money.
02:28:24.000And then they spend the money on the current employees.
02:28:28.000But what they don't spend, they put into the so-called trust fund.
02:28:32.000But then they borrow it right out and they write themselves an IOU called the government bond.
02:28:36.000But if the government owns its own bond, that's not an asset.
02:28:40.000Because they keep saying, oh, the trust funds are going to be solvent.
02:29:38.000They tried to make it sound like legitimate insurance, but it was never legitimate insurance because that would have actually been unconstitutional.
02:29:44.000The reason that the Supreme Court said Social Security was constitutional was because it wasn't legitimate.
02:29:50.000They said it was just like any other welfare program.
02:30:16.000We need to make government as lean as possible because we're broke.
02:30:20.000Government is like – it's like if you're trying to run a marathon and you've got a 50-pound sack on your back, you're not going to run very fast.
02:30:27.000The secret is to take some of that weight out of the pack.
02:30:31.000So you think that limiting government and getting rid of all the spending is going to allow the economy to be more powerful?
02:30:39.000Yes, but initially, it's like if you're going to train somebody to come into your gym and they come in and they're real fat and they're out of weight, they're overweight, they have a lousy diet, right?
02:30:52.000And you say, okay, I've got a plan for you that's going to get you into shape.
02:31:16.000We are going to have to go through a recession, a very bad one, in order to reallocate resources to where they need to be, to let the free market reallocate them.
02:31:25.000So when the government gets out of the way and starts shrinking, a lot of people who are getting government checks are not going to get those checks.
02:31:33.000A lot of people who had government jobs are not going to have jobs.
02:31:36.000They're going to have to get productive jobs in the private sector.
02:31:39.000So there's going to be some transition there.
02:31:40.000We're going to also have to get rid of a lot of regulations that make it so difficult and expensive to hire people and train people.
02:31:49.000And again, as I said, we have to let interest rates go up so that people will save, so that entrepreneurs can get the capital they need to make the investments, to make the tools that their workers need to be more productive.
02:31:59.000But then we have to let asset prices fall.
02:32:02.000We have to stop trying to create this phony wealth effect.
02:32:05.000See, the central bank thinks what we need is to make the stock market go up, and then people will think they're rich and go out and spend money.
02:32:12.000Stock price appreciation is not supposed to be the source of wealth.
02:32:17.000It's companies becoming more valuable because they're earning more and producing more.
02:32:21.000That's supposed to make the price go up.
02:32:23.000They're trying to put the cart before the horse.
02:32:25.000They think that just making the stock market go up is going to make us richer.
02:32:28.000Okay, so in your opinion, deregulation, smaller business, all these things are going to help letting people know that we are fucked and that this whole the economy is doing great thing is a ruse.
02:32:40.000Yeah, and a lot of people who are not working have to start working.
02:33:48.000And so to the extent that we can have a machine do the work for us, That frees us up to do other things.
02:33:53.000So, you know, if we have autonomous cars and I don't have to drive anymore, you know, A, Trump won't have that problem being sued for overtime by his ex-driver because he won't need somebody to drive.
02:34:04.000But imagine if everybody had a self-driving car.
02:34:08.000Think of all the free time now that you have.
02:34:10.000You could work while you're in your car or you can watch a movie while you're in the car.
02:34:14.000I mean, you won't be dreading a long trip because you'll be able to be productive while you're in that car.
02:34:20.000And so there's a lot of things that will happen.
02:34:22.000Yes, we'll eliminate truck driver jobs, but we'll have safer streets and it'll be less expensive to transport goods.
02:34:29.000But that frees up that worker to do something else with their time now that they don't have to drive that truck.
02:34:36.000So the idea that universal basic income is the only solution to that isn't appealing to you because you think that they really – the real solution is not to give them free money.
02:34:45.000The real solution is for them to find something else to do.
02:34:48.000The appeal of universal basic income is almost like two wrongs make a right.
02:34:54.000I mean the problem is the welfare state discourages people from working.
02:34:58.000See, the highest marginal tax rate that anybody pays is going from welfare to work because not only do you pay the taxes on what you earn but you lose all the benefits because you now have a job.
02:35:10.000So welfare and the welfare state creates a huge incentive for people not to work.
02:35:16.000So at least the argument with universal income is, look, we're not going to take away your welfare if you get a job.
02:35:21.000So if you improve your lot in life, if you go out there and you become productive, we're not going to punish you by taking away your welfare.
02:35:29.000Well, the better answer is let's not punish you for working.
02:37:15.000I think that we spend more money than we need on the military.
02:37:18.000I think we could have a defensive military for a fraction of what we currently pay.
02:37:23.000But I think the federal government should be predominantly focused on external matters.
02:37:30.000To the extent that we're going to have public education or government spending money on the schools, let them do it on a state level or a local level.
02:37:36.000I mean, it should not be done at the federal level.
02:37:39.000You know, those are issues that can be, you know...
02:37:42.000Managed by states with state tax money.
02:37:44.000And, you know, what happens now is everybody sends all this money to the federal government and then they beg to get some of it back, right?
02:37:50.000They have state aid where you send money out and you try to get some of it back.
02:37:53.000Just don't send it to Washington in the first place.
02:37:56.000I mean, look at the five richest counties in America.
02:37:58.000They all surround Washington, D.C. It's all the lobby.
02:38:47.000The Constitution is not written in Chinese.
02:38:49.000You don't have to interpret it, but the government likes to talk about interpreting the Constitution because they want to ignore it.
02:38:55.000They want to do all sorts of things that are not authorized by the Constitution.
02:38:59.000The Constitution only authorizes a few powers to the federal government.
02:39:03.000They're enumerated there in the Constitution.
02:39:05.000And if the Constitution doesn't say the government can do it, it can't do it.
02:39:08.000And almost everything the government does today is unconstitutional, is doing stuff that it has no constant authority to do.
02:39:15.000And that's what we need a Supreme Court for.
02:39:17.000I mean, a lot of people don't like Congress, very low opinion of Congress.
02:39:21.000A lot of people don't necessarily like the president, but everybody loves the judiciary, right?
02:39:24.000We have three branches of government, the executive, the legislative, and the judiciary.
02:39:29.000And everybody likes the judiciary, but I think it's the judiciary that has sold us out the most because they have let the government get away with murder.
02:39:35.000They are not enforcing the law on the government and making the government abide by the law.
02:39:42.000I mean, the laws that apply to me and you aren't up for interpretation.
02:39:48.000But somehow, the laws that apply to the government, well, they can be interpreted, which means they can be ignored.
02:39:53.000They want to say, oh, the Constitution is a living, breathing document so that it can change with the times, is a way of saying it means nothing.
02:40:00.000So we need to reclaim the republic by actually enforcing the government to live by the Constitution.
02:40:07.000That's one of the things Trump can do, is say, look, we are going to restore constitutional government to this republic.
02:40:13.000We are going to make sure the government only does what it's authorized to do in the Constitution.
02:40:18.000And the smaller you make government, the freer you make people, right?
02:40:23.000I said earlier in the podcast about this whole idea about group privilege.
02:40:26.000The more privileges that you give groups, the fewer rights that you have for individuals.
02:40:31.000And the more government you have, the less free we are.
02:40:34.000So that's actually the real definition of freedom, is freedom from government.
02:40:39.000And so the smaller your government, the less they regulate your activity, and the less money they take from you, the more freedom you have.
02:40:46.000And the more free we are, the more freely we can interact with one another, the more prosperous we're going to be.
02:40:52.000Now, second step, what does a person like me do to stop or to mitigate the effects of this bubble that's going to crash?
02:40:59.000Well, I mean, the only thing you can do...
02:41:02.000Personally, because politically, there's really very little we can do.
02:41:04.000I mean, it's going to hit the fan, right?
02:41:06.000I mean, there's nothing we can do about that.
02:41:07.000I mean, because Trump's not going to call me down to the White House.
02:42:12.000What I am hoping is people like you and people like me, after it collapses, That if we can at least come out there with an alternative version of what happened.
02:42:22.000Like after the financial crisis happened and I was one of the few people saying it's not – it wasn't the banks.
02:42:35.000But the government got away with blaming capitalism and making government bigger.
02:42:39.000What we need to do and what you can do with your audience, which is much bigger than mine, Is when it hits the fan again to put the blame where it belongs on government and say government did this to us.
02:42:51.000It's not an accident that we have all this government and we have all these problems.
02:42:55.000And, you know, it's government interference in capitalism that's the problem, not capitalism itself.
02:43:00.000If the government stayed out, it would be working beautifully.
02:43:02.000So we don't want to throw the baby out with the bathwater.
02:43:08.000So what you can do with your, you know, soapbox is get people to understand the real source.
02:43:13.000Now, what you can do now, what your audience can do now to protect themselves so they don't go broke, and I think that to the extent that you don't go broke, you're in a better position to help the economy and help the country if you have resources.
02:43:27.000I said if a ship is going to sink and I can get you off the ship onto a lifeboat, then when the ship goes down, you might be able to help some of the people out of the water if you're not drowning yourself.
02:43:37.000So what you can do is protect your finances.
02:43:41.000If you've got a large portfolio, right, what I do with my own money and what I, you know, I advise people I manage money at Europe Pacific Asset Management, I'm a broker-dealer at Europe Pacific Capital, is I invest in countries that, you know, I think are in relatively better shape, whether it's Switzerland or Singapore,
02:44:28.000And as the dollar goes down – so if you went through the 1970s and you had your portfolio – because in the 1970s, the stock market went way down.
02:45:21.000There are a lot of companies that will try to, you know, bait and switch you into collectible coins, rare coins with these huge markups, 20%, 30%, 40% markups, sometimes 100% markups.
02:45:47.000I think the stocks that are going to go up the most, if you really want to potentially make a lot of money on this crisis, it'll be gold stocks.
02:45:55.000Gold bullion is not about getting rich.