Peter Schiff insights were put forward in a recent interview with Gerald Celente.

Peter Schiff sets the stage by defining inflation as a stealth tax used by governments to fund spending instead of raising taxes.

“The tax we pay is inflation. Prices rise as a result of government money printing,” he said.

“Money is printed for financing deficit spending, but if you want to avoid tax, you have to avoid that which is taxed, which is US dollars and dollar-denominated financial assets,” said Peter Schiff

You need to invest abroad and get out of the US to invest in hard assets companies with plants and equipment on their balance sheet.

The tax we pay is inflation. Prices rise as a result of government money printing

PETER SCHIFF

Peter Schiff insights for sheltering wealth from inflation is to invest in resources, and companies selling price-inelastic products which people need. 

Peter Schiff recommends dividend-paying stocks in appreciating currencies and exposure to hard assets, commodities, and industrial materials.

“Agricultural commodities and precious metals are the commodities that will do very well in stagflation, which is what we have,” he said.

“We will be in a recession soon, but inflation will only worsen,” added Peter Schiff.

Peter Schiff insights regarding currencies and dollar trajectory were also put forward.

“All fiat currencies will lose value. All central banks are creating inflation,” he said.

He also thinks USD will lose value relative to other assets.

“All these currencies are going to lose value in real terms. People are going to see a loss of purchasing power,” he said,

“Best currency to own is real money, gold and silver will continue to gain and increase in purchasing power over time,” he added.

“All these currencies are going to lose value in real terms. People are going to see a loss of purchasing power”

RAY DALIO

He thinks it is prudent to invest in productive dividend-paying assets.

“So you can’t have everything in gold and silver, I think, longer-term, you’ll get better returns from productive assets,” he said.

He thinks the US economy is heading for a massive collapse, and US inflation is negative for dollar-denominated debt.

But US investors tend to believe the grass is greener on the other side of the hill.

Bond King Jeff Gundlach was recommending European assets before Russia invaded Ukraine.

But even before the Ukrainian war, we were not bullish on European assets or the euro, noting that the sovereign debt crisis of 2010 has not been fixed and has worsened with the 2020 pandemic lockdowns. That call has been bang on the money.

Twenty-first century is China’s century” – Peter Schiff

Could the Ukraine war, in Europe’s breadbasket and logistic hub for gas supplies to western European countries, be the final straw that breaks the camel’s back? The rise of right nationalist parties could threaten EU cohesion and even destabilize the euro.

The risk is that if the French elect a nationalist party Frexit could come next.

For non-Russian citizens, UK assets might be a better bet with its commonwealth links and nuclear deterrent, particularly if the continent becomes less stable.

So in these uncertain times, US assets remain attractive in the wake of the recent sell-off.

The US is self-sufficient in vast fields of fertile land it can feed itself, energy independent, human capital-rich, and is starting to bring industry onshore. Moreover, it is a nuclear power with more citizens and patriots armed than anywhere on the planet. So the US can close its borders, insulate itself from geopolitical and economic woes abroad and function independently.

But Peter Schiff insights concerning Russian sanctions is that these punitive measures could backfire on the US by weakening the USD as the reserve currency.

Peter Schiff sees the trio countries, China, Russia, and India, all having tremendous amounts of products and resources that can trade among themselves. They don’t need the rest of the world.

Moreover, he thinks South America, South East Asia, and Africa will want to trade with these countries.

“So, you have the US, UK, former commonwealth and western Europe will hold tight in this anti-Russian sanction world. But the rest of the world can do well,” he said.

“We (US) will be in a world of hurt if it pisses off its biggest bankers and suppliers,” he added.

“Twenty-first century is China’s century,” said Peter Schiff.

“We can’t afford peace, let alone war. We are broke. We have to borrow from our enemies to fight them” – Peter Schiff

China is already leading in hypersonic missile technology and is closing the gap with the US in AI.

“Economic freedom drives productivity and living standards. There is more economic freedom in China than in the US,” he said.

“Pendulum swinging in the wrong direction, we will continue to lose more of our economic freedom, our political freedom will be next,” he added.

Peter Schiff believes coming off the gold standard led to the demise of the productive economy and contributed to spiraling US twin deficits in the balance of payments and public spending.

He thinks the monetary and fiscal mistakes will lead to more inflation than in the 70s and that inflation would be 16% if CPI is measured using the same method in the 70s.

Peter Schiff insights into monetary tightening were also put forward

“If the Fed shrinks its balance sheet, bond prices are going to implode because that means the Fed is now competing with the US treasury. The treasury has to unload 2.5 trillion dollars of bonds this year. If the Fed unloads another 2T, you have got over 4.5T worth of low-yielding treasury looking for buyers,” he said.

“Pensions funds are unloading treasuries because they are running a deficit too. The bond market will collapse, yields will skyrocket, real estate and the stock market will collapse because thanks to the Fed everyone is loaded up with debt,” he added.

He sees a worse crisis than 2008 loan defaults and a currency crisis, and he believes affordable mortgages are the only thing keeping the property bubble afloat. If the mortgage rate goes up to 8%, which they were before the crisis, home prices will crash,” he said. “Commercial real estate is going to get decimated,” he added. He likes farmland. At some point, real estate could become an all-cash market.

The economy is more leverage post-pandemic and more interest-sensitive than in 2018, and he does not think the Fed can go to even 1% before everything crashes

That echoes our view that we will see the shortest Fed tightening cycle ever.

For those worried about WW3, you can breathe a sigh of relief.

“We can’t afford peace, let alone war. We are broke. We have to borrow from our enemies to fight them,” he said.

See the full interview here.