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World News See other World News Articles Title: Peter Schiff Breaks Down The Inflation Tax Via SchiffGold.com, Peter Schiff recently appeared on the Matt Walsh podcast. During the interview, he broke down exactly how the Federal Reserve and the US government team up to hit you with an inflation tax. Matt said upfront that culture and social issues are more in his wheelhouse than economics. But like pretty much everybody, he sees prices rising with his own two eyes. He said he went shopping with his wife recently and “had one heart attack after another looking at how expensive everything was.” Peter said, “You ain’t seen nothing yet.” Prices are just starting to go up. So, they’re going to go a lot higher. And I think Peter said the real question is why didn’t this happen sooner? Why weren’t prices moving up faster over the last few years? The Federal Reserve has been creating a lot of inflation. That’s been their monetary policy. That’s how they responded to the busting of the dot-com bubble, and then the housing bubble, and then COVID – they just printed a lot of money.” As Peter pointed out, money creation itself is inflation. Rising prices are a symptom. The more money there is, the more expensive everything is, because each unit of money is diminished as the quantity of money is increased. So, as you have more dollars, each dollar is worth less and now you need more of them to buy stuff.” Peter said the reason we didn’t see spiking prices early on was a lot of those dollars ended up going into financial assets. That was the way they were kind of entering into the economy and the way the Fed was administering this monetary policy. And so, you saw big increases in stock prices or real estate prices. All of those price gains were being fueled by inflation. But now, you’re finally starting to see that inflation now showing up in the consumer goods prices.” This is particularly a problem in the wake of the COVID-19 pandemic. What COVID did was it reduced the supply of goods, because a lot of people who used to work stopped working, and so they were no longer helping to produce goods and services that we all buy, because they weren’t working anymore. So, the economy, not only in the US but around the world, became less productive, so that we weren’t making as much stuff. The proper response for the Fed would have been to withdraw money from the economy — take money away so that the money supply was going down with the supply of goods and services, and that would have kind of kept prices in check. But instead, the Fed did the opposite. The Fed decided to print a bunch of money and mail it out to the people who were no longer working.” In fact, a lot of people got more money not working than they earned at their job. But they weren’t producing anything. So, we decreased the supply of goods and services to buy while simultaneously increasing the amount of money in circulation to buy them. So, it’s a perfect storm for prices. And the government is going to throw fuel on the fire with this infrastructure program and all this other economic stimulus that is really just inflation because it’s all paid for by the Fed printing money.” Peter reminds us that every time the government spends money, it’s a tax – whether it raises taxes or not. Whether they want to acknowledge it as a tax or not, the cost of government is what it spends, not what it collects in taxes — what it spends. So, every dollar of federal spending has to be paid for. And the way you pay for the spending that is financed when the Fed prints money to buy government debt – we pay for that with higher prices. So, what you’re experiencing every time you go and buy something, and the price is much higher than what you remember, that increase is really a tax. That is what all the government spending is costing you. It’s costing those higher prices. And since government spending is going to go way up from here, the inflation tax to pay for it is also going to go way up.” So, what is the path out? Well, we have to cut government spending, and then the Fed won’t be printing as much money to finance all the debt.” But of course, there is no indication that will happen any time soon. We’re going to keep printing money. We’re going to keep borrowing and spending money. And so, we’re going to keep paying for all that through inflation, which means the price of everything we buy is going to go up.” In this interview, Peter also talked about the future trajectory of the economy, and he delves into Bitcoin.even the acceleration is going to pick up, so, you’re going to see bigger gains.” Peter said the real question is why didn’t this happen sooner? Why weren’t prices moving up faster over the last few years? The Federal Reserve has been creating a lot of inflation. That’s been their monetary policy. That’s how they responded to the busting of the dot-com bubble, and then the housing bubble, and then COVID – they just printed a lot of money.” As Peter pointed out, money creation itself is inflation. Rising prices are a symptom. The more money there is, the more expensive everything is, because each unit of money is diminished as the quantity of money is increased. So, as you have more dollars, each dollar is worth less and now you need more of them to buy stuff.” Peter said the reason we didn’t see spiking prices early on was a lot of those dollars ended up going into financial assets. That was the way they were kind of entering into the economy and the way the Fed was administering this monetary policy. And so, you saw big increases in stock prices or real estate prices. All of those price gains were being fueled by inflation. But now, you’re finally starting to see that inflation now showing up in the consumer goods prices.” This is particularly a problem in the wake of the COVID-19 pandemic. What COVID did was it reduced the supply of goods, because a lot of people who used to work stopped working, and so they were no longer helping to produce goods and services that we all buy, because they weren’t working anymore. So, the economy, not only in the US but around the world, became less productive, so that we weren’t making as much stuff. The proper response for the Fed would have been to withdraw money from the economy — take money away so that the money supply was going down with the supply of goods and services, and that would have kind of kept prices in check. But instead, the Fed did the opposite. The Fed decided to print a bunch of money and mail it out to the people who were no longer working.” In fact, a lot of people got more money not working than they earned at their job. But they weren’t producing anything. So, we decreased the supply of goods and services to buy while simultaneously increasing the amount of money in circulation to buy them. So, it’s a perfect storm for prices. And the government is going to throw fuel on the fire with this infrastructure program and all this other economic stimulus that is really just inflation because it’s all paid for by the Fed printing money.” Peter reminds us that every time the government spends money, it’s a tax – whether it raises taxes or not. Whether they want to acknowledge it as a tax or not, the cost of government is what it spends, not what it collects in taxes — what it spends. So, every dollar of federal spending has to be paid for. And the way you pay for the spending that is financed when the Fed prints money to buy government debt – we pay for that with higher prices. So, what you’re experiencing every time you go and buy something, and the price is much higher than what you remember, that increase is really a tax. That is what all the government spending is costing you. It’s costing those higher prices. And since government spending is going to go way up from here, the inflation tax to pay for it is also going to go way up.” So, what is the path out? Well, we have to cut government spending, and then the Fed won’t be printing as much money to finance all the debt.” But of course, there is no indication that will happen any time soon. We’re going to keep printing money. We’re going to keep borrowing and spending money. And so, we’re going to keep paying for all that through inflation, which means the price of everything we buy is going to go up.” In this interview, Peter also talked about the future trajectory of the economy, and he delves into Bitcoin. Post Comment Private Reply Ignore Thread Top • Page Up • Full Thread • Page Down • Bottom/Latest
#1. To: Horse (#0)
Peter has never liked crypto currency. He's been so successful with conventional finances he doesn't have any need to see the advantages of crypto. He doesn't recognize the utility value it does have in at least serving as a currency. Economies do NEED a currency to operate, as bartering is a very inefficient means of buying and selling (well trading as there is no definable buyer or seller in a barter economy). But he spent the first half of the interview explaining how the inflation tax is imposed by the government by pouring more dollars into the economy, and doesn't even address the advantage of decentralized crypto like bitcoin which, being decentralized, CANNOT be exploited by inflation that way as fiat dollars are. If he has a cognizant argument dealing with that advantage, I'm happy to hear him out, but I think for Peter, it's an emotional position he's taken against crypto and not a logical stance he took. That was evident enough when he begrudgingly set up a crypto wallet and had crypto in it, then lost the password and with it, access to the crypto funds. But losing the PW is no excuse for losing the funds as every wallet provides for a backup procedure even if your computer with the wallet gets totally destroyed. But Peter either didn't care enough to take that very basic safety procedure as he most certainly would have with a bag of gold coins. One day, I think he'll understand more about crypto to at least give it a fair evaluation.
Crypto currencies can never serve as a paper currency. What we need is Debt Cancellation and then a stable currency that increases at the same rate as GDP. When it comes, I will get rid of silver but not before. You can have crypto. The Truth of 911 Shall Set You Free From The Lie
I see crypto's decentralized element as the trump card that makes it superior. It's not possible to achieve decentralization with any paper fiat, and as history has shown us, even gold and silver are not up to that task as they facilitate & enable bankers. I see centralization of currency as the Achilles heel that has brought about so much abuse of monetary systems throughout history. And because crypto is software based, it can conform to needs that include growth of supply to match an enconomy's needs, all the while retaining it's decentralized element.
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