The Jordan B. Peterson Podcast – 353. The US Dollar Might Collapse | Peter Schiff

Intro

In this episode of “The Jordan B. Peterson Podcast,” Jordan Peterson interviews Peter Schiff, an American economist, financial broker, and author. They discuss the current state of inflation, the impact of government policies on the economy, the potential collapse of the US dollar, and the role of gold and cryptocurrencies as alternative investments.

Main Takeaways

The Impact of Inflation

• Inflation is a significant problem due to the fiscal predicament of major governments.
• Politicians prioritize their own interests and tend to cater to donors instead of doing what’s right for the country.
• Educating oneself on financial literacy and understanding the impact of inflation is crucial.

The Role of Gold

• Gold serves as a hedge against inflation and a way to protect savings and investments.
• Honest money, backed by gold, worked better when on a gold standard.
• Central banks and emerging market countries are buying more gold.

The Flaws in Measuring Inflation

• The consumer price index (CPI) is used to measure inflation, but its methodology has been engineered to mask the real degree of price increases.
• Politicians choose what goods to include in the CPI basket, leading to underestimating inflation.
• Housing prices and rents are not properly reflected in the CPI.

The US Dollar’s Status as Reserve Currency

• The US dollar’s status as the reserve currency is in jeopardy, and the loss of this status would have significant consequences.
• The US is the world’s biggest debtor nation and relies on other countries to supply goods without getting paid.
• China’s role as the biggest creditor and banker to the US is expected to change.

Gold and Cryptocurrencies as Alternatives

• Gold is a valuable commodity and an alternative to fiat currencies.
• Cryptocurrencies, like Bitcoin, replicate some qualities of gold but have their own limitations.
• Gold-backed cryptocurrencies face legal impediments and regulatory barriers.

Summary

Inflation and the Impact on Investments

Inflation is currently a significant problem due to the fiscal predicament of major governments. Politicians often prioritize their own interests and cater to donors instead of making decisions that benefit the country. It is crucial for individuals to educate themselves on financial literacy and understand the impact of inflation on savings and investments. Gold serves as a hedge against inflation and a way to protect wealth. Countries, including emerging markets, are increasing their gold reserves to diversify their holdings.

The Flaws in Measuring Inflation

The consumer price index (CPI), used to measure inflation, has a methodology that masks the real degree of price increases. Politicians have control over what goods are included in the CPI basket, leading to underestimating inflation. Housing prices and rents, which make up a significant portion of expenses, are not adequately reflected in the CPI. This flawed measurement affects how inflation is perceived and understood by the general population.

The Threat to the US Dollar’s Status

The US dollar’s status as the reserve currency is in jeopardy due to the country’s massive debt and reliance on other nations to supply goods without receiving payment. China, as the biggest creditor and banker to the US, is expected to change its role. The potential loss of the US dollar’s reserve currency status would have significant consequences for the global economy and the value of the dollar.

Gold and Cryptocurrencies as Alternatives

Gold is considered a valuable commodity and an alternative to fiat currencies. It has a long history as a store of value and cannot be created by any one country. Cryptocurrencies, like Bitcoin, have replicated some qualities of gold but face limitations and regulatory barriers. Gold-backed cryptocurrencies could potentially provide a digital representation of gold ownership. However, their widespread adoption and legal acceptance remain uncertain.

Conclusion

Understanding the impact of inflation and the potential collapse of the US dollar is crucial for making informed decisions about savings and investments. Gold serves as a hedge against inflation and a way to protect wealth in the long run. The flaws in measuring inflation highlight the need for independent sources of information. The US dollar’s status as the reserve currency is under threat, and the potential loss of this status would have significant consequences. Exploring alternatives such as gold and cryptocurrencies can provide individuals with options to diversify their holdings and protect against economic uncertainties.