Crypto is all the rage. Everywhere you turn, it seems like there’s always a “next big thing” when it comes to cryptocurrencies or blockchain. The fact that it is so new means there are a lot of opportunities and potential rewards for those who invest early. It also means there’s a lot of risk.
The downside of putting money into crypto doesn’t seem to be as widely circulated as the benefits. That’s why I wanted to bring in financial expert and economist, Peter Schiff to help educate us on the risks associated with crypto and other matters related to dollars and investment.
This interview will explain why Peter thinks Bitcoin probably won’t take off anymore. He also discusses why dollars are valuable and why the US COVID policy is economically harmful. Lastly, he shares what we can do to prepare ourselves for financial struggles such as the dollar crash and so much more.
I’m excited to share this conversation with you, and I think you’ll find it valuable no matter where you stand on the topic. And now, please help me welcome the one and only, Peter Schiff to The School of Greatness!
Peter Schiff is one of the few unbiased investment advisors to have correctly called the current bear market before it began and position his clients accordingly. As a result of his accurate forecasts on the U.S. stock market, economy, real estate, the mortgage meltdown, credit crunch, subprime debacle, commodities, gold, and the dollar, he is becoming increasingly more renowned.
Peter began his investment career as a financial consultant with Shearson Lehman Brothers after earning a degree in finance and accounting from U.C. Berkeley in 1987. As a financial professional for over twenty years, he is also the owner of Euro Pacific Asset Management and chief economist and global strategist for Euro Pacific Capital, a division of Alliance Global Partners. He is also Chairman of SchiffGold, a precious metals dealer based in Manhattan.
He has been quoted in many of the nation’s leading newspapers, including The Wall Street Journal, Barron’s, Investor’s Business Daily, The Financial Times, The New York Times, The Los Angeles Times, The Washington Post, The Chicago Tribune, The Dallas Morning News, The Miami Herald, The San Francisco Chronicle, The Atlanta Journal-Constitution, The Arizona Republic, The Philadelphia Inquirer, and the Christian Science Monitor. He also appears regularly on CNBC, CNN, Fox News, and Bloomberg TV, where his thoughts on the economy, foreign affairs, and the overall political and economic climate are discussed. He also authored the best-selling books Crash Proof: How to Profit from the Coming Economic Collapse and The Little Book of Bull Moves in Bear Markets: How to Keep your Portfolio Up When the Market is Down, published by Wiley in the late 2000s.
An expert on money, economic theory, and international investing, Peter is a highly recommended broker by many leading financial newsletters and investment advisory services. He even served as an economic advisor to the 2008 Ron Paul presidential campaign.
His expertise and credentials make me more excited to learn what Peter can offer us in this interview. So without further ado, let’s get right into it!
Have you ever thought of investing in cryptocurrencies before? If so, I’m sure you’ve seen the massive rises in value that some coins have had over the past couple of years. A good example is Bitcoin, which many believe will be the future decentralized bank. As an investment advisor and financial expert for decades, Peter thinks this is not the case.
“The truth is the real success of Bitcoin rests on more people buying it. If you own it, you need to get many of your friends or colleagues to buy it because that’s the only way its prices go up. Bitcoin is not an asset like real estate where you can collect rent, stocks where you could collect a dividend or bonds where you get paid interest. … It’s not like a commodity where you actually can use it for something, like oil to generate power. … It’s not like gold, where you could make jewelry out of it or conduct electricity with it or use it in all sorts of industrial applications like other metals.” – Peter Schiff
This is precisely the reason why Peter doesn’t believe in cryptocurrency. It’s not backed by anything other than people buying it, which undermines its value. People will only purchase if they know others will buy too, which creates a massive bubble that can burst at any given moment. He believes that it’s just the same thing that happened during the .com bubble or the internet bubble period in the late 1990s, where many invested in internet-based startups filled with speculations that they’d be profitable soon. In the end, many of these companies failed, and the .com bubble burst, creating a massive economic crisis all around. That’s why he advises other investors to get out as soon as they can.
“It’s just a hype machine. … If Bitcoin will still be here in the next 20 to 50 years, it only means more people are gonna lose money. That’s because when more people pile into it, this means the bubble gets bigger and bigger. Then, there are a lot more losses when it pops.” – Peter Schiff
With this in mind, it might be safe to say that cryptocurrency may not be a suitable investment for everyone. Even though it has gained massive popularity over the past couple of years, it’s still a very volatile market where the price of coins can sometimes go down as well as up. For this reason, it’s best to be careful with your money and make sure you know what you’re doing before investing in it. You might end up losing all your earnings if things don’t work out the way they should.
Peter thinks that, aside from Americans and institutions buying into the hype of cryptocurrency, the country’s very own policies are also causing its economic downfall. For example is the U.S. current policy on COVID, which is just causing prices to rise, making everyone suffer.
“The government’s response to COVID was to shut the economy down, go into a lockdown, and get people to stay at home. If we do that, we need to stop spending money because we’re not earning and working, right? But the government does the opposite of that. They send us money despite not working. … Because we don’t create products and services, it’s not surprising that there’s a supply shortage, too. … This means that prices are gonna go up, and the value of the dollar drops. – Peter Schiff
As Peter explained, this could have been prevented if the government had decided to take the other turn and shrink the economy. By that, he means less economic activity, less production, and less money.
“The reason why we’re experiencing this decreasing value of the dollar is that we’re printing all this money. This increasing demand from excess money printing is what hurts our economy more. … Then add the fact that we have to buy stuff that people are making in other countries, which makes our trade deficits explode.” – Peter Schiff
So if you think about it, printing money is like injecting drugs into your body. You feel better temporarily, but in the long run, it’s awful for your health. From this, we can draw a lesson that when it comes to our expenses, it is not about how much money you’re holding in your hand. Instead, it’s more about how smartly you’re using them.
There are many ways we can make money and manage our finances well. However, it’s also important to know what we can and cannot do to improve our situation. In this part, Peter gives his wisdom on financial-related concerns and how we can respond to them in the best way possible.
The U.S. dollar is the only currency the government wants to receive as taxes. Aside from that, it is the unit we use to pay for everything — rent, grocery store, everything for sale. So, even though it’s intrinsically worthless, it’s very much functioning. Yet every year, the dollar loses value slowly through inflation. As mentioned earlier, as long as the government keeps on printing money, the dollar’s going to collapse. According to Peter, there are some ways to counter this, though.
“I encourage investors to invest in countries that have the most to gain from America’s loss. Own currencies that have the most upside potential against the dollar. Own assets and businesses that benefit from wealthier non-American customers. So I encourage them to get into foreign stocks, international investments, and avoid bonds at all costs since those are dollars, and you’re gonna get paid in the future, which might be of a lesser value.” – Peter Schiff
This is just one approach to take. At the end of the day, any source of personal financial ruin can be avoided by learning about what’s best for yourself and finding your way to becoming financially independent.
Aside from the dollar crash, another struggle every one of us might want to overcome is not having enough money. Who wouldn’t want to make more money, right? But for Peter, the answer isn’t something close to what any cryptocurrency can offer. That’s because Peter believes that the old-fashioned way of working hard and persevering still works as far as getting rich. It’s still about being prepared to fail, learning from mistakes, trying, and overcoming adversity.
“Success, in general, doesn’t come easy. It takes a lot of work [and] belief in yourself and in what you’re doing.” – Peter Schiff
He encourages everyone to work hard and take advantage of their opportunities, including learning from their mistakes and going after what they want despite being scared off because the road to success isn’t easy. This might also be why he isn’t a fan of cryptocurrencies as he sees people looking at it as an easy way out; they think it will make them wealthy overnight, and that is not the case.
Guys, there are so many ways to approach investing, even if you’re considering cryptocurrency. What’s important is not to lose sight of what you’re investing in, how much risk you are willing to take, and why you want the outcome. Also, just like Peter said, success isn’t necessarily about being smart financially — instead, it’s about work ethic and ability that leads to success.
All of what Peter shared with us today is only a tiny part of what he’s known for. So, if you want to learn more about his work, visit his website schiffradio.com. He creates content twice a week on average. Also, go and check out his YouTube channel for other cryptocurrency and investment advice. There’s undoubtedly something you can learn from him!
We all have different ways of investing and making money from what we do. Ultimately, it’s essential to pick a way that works for you to achieve financial freedom with ease! If you liked this episode, we would love it if you could tag @peterschiff and me, @lewishowes, on Instagram with what stood out most from today’s episode. Also, please consider giving 5-star ratings on Apple Podcasts because they help spread these messages even further!!
Whether you want to learn about cryptocurrency, stocks, or gold, Peter Schiff has something to share with every one of us! So join me for Episode 1,208 of The School of Greatness and start working toward financial independence!