Speaker 1but there are two more races too close to call, but the Democrats have a slight lead in both. And if they win them both and they flip nine seats, that will be the second most ever. The only election that would have seen a greater number of seats flip was 1958. And that's when the Democrats flipped 13. So this is a very significant race. We rarely see this kind of repudiation of the party in power. And so you have to ask yourself why.
Speaker 2Hey, what's going on, everybody? Welcome back to the Land Development Podcast. I am your host, Ryan Glick. Well, we have a bonus episode for you today. With the midterm elections happening yesterday, we have a bonus episode for you today. We have a bonus episode for you today. I wanted to have Peter Schiff back on the show to talk to us about what happened in the midterms. We get into what it means for the economy. We talk about interest rates. We talk about housing and development. So overall, we get into quite a bit related to the economy and related to the midterm election results. For those of you who are not familiar with Peter, Peter is the chief economist and global strategist at Europac.com, chairman of SchiffGold.com, founder of SchiffSovereign.com, host of Schiff Radio, and a best-selling author. With that said, let's go ahead and get into my conversation with Peter Schiff. Hey, Peter, thanks for joining the show. Oh, my pleasure. Thanks for inviting me on. Yeah, so we are recording this the morning of Wednesday, November 4th, the day after the midterms. And let me pull up this graphic here just really quick. I think everybody's been looking at some variety of this graphic since last night, some of the election results. But basically, the Democrats won the House and the Senate and picked up several governor's seats. Did any of this surprise you at all?
Speaker 1No. I mean, I had been predicting this almost since the beginning, since the election in 2024. I was saying that the Republicans were going to lose the midterms badly because I knew that the problems that Trump inherited from Biden would get worse during his first two years. And that's exactly what happened. In fact, the biggest issue on voters' mind was the cost of living. And I knew that his policies were inflationary and that inflation would become a bigger problem under Trump than it was in the waning years of Biden. And in fact, inflation, as measured by the CPI, is going to go up. Prices will rise more during Trump's first two years than they did during Biden's last two years. So the problem he promised to solve got worse. And I knew that that was going to harm him at the polls. But of course, I thought the worst thing was his constant bragging about how great the economy was, that it was a boom, that it was the hottest economy in the world, when objectively it was weaker than it was under Biden by any of the measures you want to use. And Americans were struggling with financial hardship and they were being told they didn't know how good they had it. I didn't like that. They don't like that. That's, you know, that's why Trump won in 2016. That's why he won again in 2024, because he told the truth about how bad the economy was. The year that he lost, 2020, that's when he was lying, claiming a bad economy was good. And so that put the Republicans in a bad position. And of course, the war just made it even worse. But, you know, your graphic was a little old. As of right now, the Republicans, the Democrats have picked up 50, have 54 seats. They have seven, a net gain of seven. But there are two more races too close to call. But the Democrats have a slight lead in both. And if they win them both and they flip nine seats, that will be the second most ever, the only election that would have seen a greater number of seats, flip was 1958. And so you have to ask yourself why and what does this portend for 2028? And of course, what would have happened had some of the radical left-wing candidates who lost? What if instead of nominating Marxists, the Democrats would have gone for a more centrist candidate? It would have been an even bigger blood bath. So, you know, once again, you know, the Democrats were their own worst enemies, but the Republicans were their own worst enemies. But the Republicans inflicted more self-harm than the Democrats. And that's why you had the result that we did.
Speaker 2So I think it was last week you had said that America was about to vote for socialism. Do you think that's what happened yesterday?
Speaker 1Well, yeah. I mean, I mean, in many cases, you know, the candidates were pretty socialistic and they voted for them. But, you know, more than a vote for socialism, it was a vote against Trump. And, you know, Trump wants to claim, well, the reason that the Republicans lost was because he wasn't on the ballot. If he was on the ballot, they may have lost by an even wider margin. This was a referendum on Trump. That's it. And the Trump economy. And this is a thumbs down. And I've been saying that the whole time you've had all these Republican cheerleaders, you know, doing nothing but kissing Trump's ass and talking about how great everything is. I've been saying the opposite. And, you know, and the elections verify my assessment.
Speaker 2Do you think that tune is going to change? I feel like I've seen some of those same people who were continuing to do that and almost gaslight the American people have continued to do that. I feel like since these results have come out and they haven't necessarily taken the ownership over what actually caused this, like you talked about with inflation and and the economy and everything, do you think that tune is going to change?
Speaker 1Not immediately. We'll see what happens to Trump's popularity within the Republican Party. Does Trump, even though he's not popular with the electorate in general, within the Republican Party itself, there are still a large group of MAGA loyalists that, you know, really control the party. So a lot of the Republicans are going to be worried about, you know, crossing Donald Trump and getting primaried, getting kicked out. But also the Republicans have got to be cognizant of how many of their fellow Republicans lost their seats because of their support of Donald Trump. So it's going to all turn on whether Republicans believe that it's in their best interest to support Trump or to attack him. And at some point between now and the 2028 elections, I think a lot of his supporters are going to jump ship and recognize that they don't want to go down with it. In 2028, because I think you're going to have a lot more losses in 2028 because the economy is going to get worse over the next couple of years. Inflation is going to get worse. And so it's all going to be about who's to blame. And I think it's the party that has the White House that generally gets the blame if things are bad and gets the credit if things are good. So, of course, you know, the Republicans are going to campaign against the Democratic Congress and say it's their fault. Everything was wrong. It's their fault. It's their fault. It was great and they ruined it. But I think the Democratic message, you know, will likely resonate better that it's Trump's fault. And so I think the Democrats are going to gain seats in Congress, maybe even get the 60, you know, seats in the Senate needed to bust a filibuster and and get the White House. And and the president could be very far to the left. So it's where, you know, investors, everybody is underestimating how how big the threat is right now for 2028.
Speaker 2So, I mean, with on that note, with the the Democrats, you know, obviously controlling the House and the Senate at this point going forward, is anything going to change in the next two years as far as, you know, policy or government spending? Or do we pretty much see that as status quo the next couple of years?
Speaker 1Well, no, I think that you're going to see government spending even more. In fact, we might we might even eliminate the debt ceiling because that's something that the Democrats would love to do. And it's something that Donald Trump wanted to do. But the Republicans didn't do it. They raised the debt ceiling, but they didn't scrap it. But Trump was saying we should get rid of it. So I'm sure the Democrats would love to get rid of it. So that might happen. And I think we're going to have an even more reckless budget Asked by the. democratic congress then the big beautiful bill passed by the republicans which was a horrible bill that trump should have vetoed but he didn't uh and despite his threats to be mr veto i think he's going to taco out you know i don't i i don't think he's going to veto uh anything so i i think it's going to be worse yeah i feel like
Speaker 2he said that initially after a lot of the results were coming out and then i just saw a quote from him i don't know if it was this morning where he said that he's going to work with the democrats you know so he's kind of already flipped his tune from from what he said last night yeah um one thing i saw that i guess surprised me a little bit i don't know if this surprised you but out in california they voted against the billionaire tax that was on the the ballot and it was by a pretty wide margin and i i kind of expected it to be closer or maybe go the other way but they they uh voted against that does that surprise you at
Speaker 1all well not necessarily i mean i would have thought it would have been a little bit closer than that but i think that while a lot of the people in california want to tax the billionaires they want it to happen on a national level because they were worried and rightly so that if they imposed it on a state level that all the billionaires would leave and so not only would the tax be self-defeating because the people who you were going to tax were going to be gone but that would be a big negative for the state because if the billionaires leave they take their money and their jobs with them and you know the billionaires still pay a lot of taxes and you know if they ended up getting nothing uh something is better than nothing and so i think that that was reasonable i think that california didn't want to chase all the billionaires out of their state um and i think that's going to be the same issue with every state um that tries to impose a wealth tax so i think the only way it would happen would be a national tax where there's no escape but that would be unconstitutional fortunately the states can do it but they won't because of the implications but the federal government can't they'd have to amend the constitution in order to have a wealth tax and i don't think there's enough support uh to get that done well
Speaker 2and a lot of those people i mean over the last few years from california have gone to the state of texas and other states and then we saw that yesterday the state of texas has the first democratic governor in 30 years and they also flipped i believe a senate seat to a uh a democrat as well so there's a lot of changes
Speaker 1happening in texas and it almost they almost flipped florida i mean florida held on just barely but again that's because of how radical the the democrats are and they're not going to go to the state of texas and they're not going to go to the state of texas and they're not going to um but i don't know that that means that texans are going to be in a rush to impose a state income tax they've never had one before uh and so i don't know that you know they're gonna do that but but if they did uh you know that would be unfortunate for a lot of the people who move there they'd have to move someplace else if the primary reason they moved to texas was to get out of a high income tax that in california and then they vote in the same type of uh taxes in texas so it's like it's it may be getting smaller and smaller where you could go i mean i'm here in puerto rico so i you know i'm in the ultimate tax refuge in the united states and so i think more people are going to move here uh as a result of this election and especially the 2028 election because you know the democrats are going to try to put some higher taxes i think um in in in their budget um but they may be a lot higher you know in 2029 when they have uh um a democratic president but again i i think that trump will be too afraid to veto anything any bill that comes on his desk because i think the stakes will be very high because the veto could mean a government shutdown uh could mean you know a default on the national debt could you know could mean all kinds of things that he doesn't want to get blamed for plus if he vetoes the uh democratic bills and we have you know a recession or we have problems the democrats could say you see if trump had signed these bills you know we would have been in great shape but he he vetoed him and look what happened so i think in order to you know prevent the democrats from being able to have that you know political card um i think he just is going to sign it and say okay if this is what you want i mean i i i don't agree with it but the alternative is a government shutdown and i'm not going to do that so i'm going to sign this and you know you own the consequences you know
Speaker 2this episode of the land development podcast is brought to you by first continental for more than 30 years first continental has been a trusted financing partner for many of the nation's leading home builders and developers providing non-recourse lot acquisition and development loans in over 40 markets throughout the south southeast and mountain west during periods of changing market cycles first continental has proven to be a consistent and dependable lending partner one that stays committed instead of retreating when conditions shift unlike many private lenders and banks they offer genuinely non-recourse loans free of hidden provisions that could trigger personal guarantees this structure ensures true alignment and non-recourse loans for many of the nation's and shared success in delivering new home communities from application to payoff the process is straightforward efficient and designed to keep projects moving forward whether working with publicly traded or privately owned production builders first continental brings experience clarity and flexibility to every deal to learn more about how they can support your next community visit firstcontinental.com all right let's get back to the show yeah back uh i want to shift into something that uh you were on the show back in february and you talked about how you were expecting you know the market to push mortgage rates higher which has happened and now we're up above seven and a half percent what do you think is driving that and you know how much higher do you think mortgage rates are going to end up going and maybe i don't know if yesterday um impacts that all that at all or if that has no influence on where you think
Speaker 1they're going no and i think mortgage rates are rising for the same reason treasury rate yields are rising uh you know inflation is becoming a bigger problem and so borrowers need to compensate uh lenders for the loss of purchasing power to inflation um and so rates are going to keep rising um you know mortgage rates of seven and a half percent are still a relatively good deal you know they got as high as 18 percent in 1981 um and before the 2008 financial crisis you know they were typically above seven and a half percent so we're simply going back to normal right now when it comes to mortgage rates because what we had since the financial crisis was abnormal but the problem is we now have abnormally high real estate prices that real estate is more expensive than it's ever been including uh right before the 2008 financial crisis uh so real estate prices need to adjust back to normal mortgage rates which means much lower uh you know we haven't had rates in the last few years where we've had rates at seven and a half percent for 20 years but real estate prices have tripled over those 20 years so you know it's one it's it's one thing to finance a two hundred thousand dollar mortgage at seven and a half percent it's another thing to finance a six hundred thousand dollar mortgage at seven and a half percent people just can't afford it that's why home sales have completely craps collapsed because nobody could buy these prices and the sellers haven't capitulated yet to reality they're still holding on to the home market and they're still holding on to the home hope that their house is worth you know what they think it's worth it's not it's worth a lot less and that in and of itself is going to be a big problem because you're going to wipe out the home equity of the baby boom and you're also going to see a lot of defaults and the mortgage industry the mortgage lenders are already in worse shape than they were at the depths of the 2008 financial crisis because the unrealized mark to market losses on uh the book of mortgages there's about eight and a half trillion in fixed rate mortgages is two trillion dollars and that's going to get worse if mortgage rates hit eight and a half percent that's three trillion in losses they only lost about 500 billion uh during all of the years of the housing bust so this is much bigger because they're losing money on all the mortgages that haven't even defaulted once we start to get defaults the
Speaker 2losses are going to skyrocket even more so is that what you think is going to happen then for all homes that are way overpriced they're not willing to sell but they're sitting on low rates that eventually you know prices are going to have to come down of course for people to be able to buy these homes how do you think those prices come down are people going to be willing to do that well some will but even
Speaker 1let's say you know 10 of the homes for sale they slash their prices to make a sale because you know sometimes you need to sell you know somebody dies uh people get divorced people move uh people have financial problems they lose their jobs i mean houses have to get sold sometimes and then you have to drop your price to whoever the highest bidder is. And what happens is, even if a small percentage of sellers capitulate and drop the price, let's say from $600,000 to $400,000, then all the $600,000 houses that are similar are now worth $400,000, even if nobody has sold them. Because it's all based on comparable sales. What your house is worth is based on what your neighbor's house sold for. And so the home equity goes away, even if you're still holding onto your house. So this is going to happen. It is inevitable. Now, obviously, some of the people that have maybe 2% or 3%, 4% mortgages, even though their house may be underwater, they may stay there anyway. They may realize that, you know what, I got such a great deal on the mortgage, it's cheaper than paying rent. So even though I have no equity in this house, if I just walk away and rent something, it's actually going to cost me more money. But there are a lot of people who might have mortgage rates of 5% or 6%. They may think, screw it, even though current rates are higher, it's still not worth throwing money down a rat hole because I'm so upside down in this house. Especially if they own older homes that need repair. And why are you going to flush good money after bad? Why are you going to spend a bunch of money repairing your house when you're just doing a favor for the bank who owns it? So, you know, you're going to have people walking away from mortgages. You're going to have defaults. It's going to be, you know, a nightmare unless we have such massive inflation, unless the government gets out in front of this and says, you know what? We need to create so much inflation to prevent nominal real estate prices from falling. But of course, that just makes the affordability crisis that really decided this last election even worse because in order to stop real estate prices from falling, they're going to send the price of everything else soaring.
Speaker 2Yeah. Well, I saw one of your clips, I think it was yesterday, where you were talking about how the Fed has basically boxed itself in where, you know, it can't, you know, if it continues to raise rates, then the cost of our debt continues. To go up higher and higher, the interest on our debt and obviously lowering rates is going to impact inflation. What does the Fed do from here? What can the Fed even do at this point?
Speaker 1Well, their strategy right now is just to bluff, right? Rather than admitting that they're powerless to fight inflation because of the very trap that they're in, they speak loudly because they have no stick and they hope nobody realizes they have no stick. But the question is, how much longer will markets be fooled? By the BS. You know, at some point, the Fed is going to have to put some teeth to that bark and it can't. So, you know, they already didn't hike rates last week when they should have hiked rates. Let's see what happens in December because they're still posturing as if they're going to hike in December. But even if they do, it's only 25 basis points. That's too little too late to have a meaningful impact on slowing inflation because inflation is rising a lot faster, their hiking rates.
Speaker 2So what do you where do you think inflation goes then at this point? I think I'm not sure what it is currently. I think the last I was like three point seven percent or something or the CPI was.
Speaker 1Well, that's the year over year rate. Yeah. But so far during the first nine months of this year, the CPI is up by four percent. And, you know, it was only up by two point seven percent for all of twenty twenty five. And in fact, Biden's last two years were two point nine percent. In twenty twenty four. And I think three point four percent in twenty twenty three. Twenty twenty five is already worse than both of those years. But I think over the next three months, the CPI will keep rising so that by the end of the year, the calendar year, we'll see about a five percent increase in the CPI. And then next year could easily top seven percent. Seven percent was the highest calendar year under Biden in twenty twenty one. And then I think twenty twenty four. Twenty twenty eight will be even worse than that. So while Biden would have had four years of falling inflation. Trump is going to have four years of rising inflation. So as bad as the Democrats were positioned in twenty twenty four on the inflation issue, the Republicans are going to be positioned even worse in twenty twenty eight.
Speaker 2So you talked about rates being increased. So even if the Fed increases rates, how does that impact loans? A lot of people listening to this show take out loans to do development projects and building projects and everything. And I'm just wondering what that future looks like for them as they're thinking about future projects.
Speaker 1I mean, I think the home building industry is in a lot of trouble. I mean, in fact, you could already see in a lot of markets new homes are being offered at prices lower than existing homes. Which is something that really never happens, because why would you buy a home if you don't have to buy a used home and pay more than to get a brand new home? I mean, you wouldn't buy a used car, you know, unless it's some collector's item or something and, you know, and pay more than a brand new one. You know, the brand new one has a warranty that you're not going to have as many mechanical issues. Same thing with an existing home. You buy a home that's 20 years old. A lot of stuff's going to start going wrong as soon as you sign the deed, you know, and it's going to cost you a lot more money in maintenance.
Speaker 2So what, you know, a fewer people, one thing I've been thinking about too is if fewer people can afford to buy a home and we're seeing more projects being done on kind of a build-to-rent model of more build-to-rent communities being built for people on the rental side, do you think that's where we're going to start seeing things go on the real estate side is more rental properties versus for sale units?
Speaker 1Well, yeah, I mean, certainly they're going to be developing more rentals. But we'll see. Even the cost of construction there has gone up with inflation, immigration policy, tariffs. And, you know, of course, if the Democrats come up with more legislation that's hostile to landlords and certainly on a state level, too, that will discourage our rental housing, particularly, you know, affordable rental housing. So I think the industry is in a lot of trouble. And, you know, what might happen to help suppress rents? Is a lot of people who can't sell their homes may rent them out instead. And so, you know, there could be a lot of rental on the market that might compete with new new constructions if people start renting out their homes. And in fact, people can start renting out rooms in their homes, you know, just taking on borders to get some extra extra cash flow.
Speaker 2Yeah. Where do you think we're headed with the market when we talk? You hear a lot of talk about an AI bubble and what could be happening there. Do you? Do you? Do you see that coming? And what could that potentially look like if there is a bubble?
Speaker 1Yeah. Well, you know, I think the rally, you know, the big rally that dials up twelve hundred points right now, you know, we had a big reversal because it was down about four hundred last night after, you know, the results were coming in. And so we've had a sixteen seven hundred point reversal. I think it's more technical in nature, probably some short covering. But there's there's no way that you can argue that the Democrats. Control in Congress is bullish for the economy or the stock market, unless you're just pinning it all on gridlock and thinking that, you know, preventing Trump from doing things or preventing Congress from doing things is going to be good. But, you know, the markets were excited to have the Republicans in control. I remember the big rally we got when the Republicans got the White House and Congress, and that was supposed to be good for the market. So how is it also good for the market when they lose Congress? Right. So you're always making excuses to try to justify a market rally. But it is definitely bearish as far as I'm concerned, especially when you look at the broader implications of the electoral map and the direction that the country is going politically. And and we're going to have, you know, complete Democratic control in a couple more years. It's going to be very hostile for the markets. It's going to be very hostile for, you know, the private sector, capitalism. So and interest rates are going to keep rising. Inflation is going to keep rising. The Democrats aren't going to solve the affordability problem. They will make the problem worse than the Republicans made it. So, yeah, I mean, I criticize the Republicans because they do bad things, but the Democrats do even worse things. Now, Trump has stretched that a bit. So in some cases, the Republicans are doing even worse things than the Democrats. But in aggregate, I still think that the Democrats are doing even worse things than the Democrats. I think the Democratic Party will be more reckless than the Republicans. And so this is not good news. Despite this rally, we'll see how long it lasts.
Speaker 2So do you think I mean, on the AI side of things, though, do you think that we're at this point where we have unrealistic, you know, growth in the market when it comes to some of these AI companies that have this in a lot of cases have this circular?
Speaker 1Yeah, look, I think I think the AI trade is a bit ahead of itself based on a lot of the optimism about the AI revolution and what it what it means for productivity, economic economic growth. I think in the long run, we'll get there. I think there's a lot of potential to really eliminate the need for a lot of human labor and to allow machines, whether it's just computers or robots, to do a lot of the work that humans have been doing and do it better, faster, cheaper. And so that's a good thing. But I think that there's going to be bottlenecks in capital markets, in the resource market, that we can't actually finance the build-out as rapidly as the markets are pricing in. And so it's going to proceed at a slower pace. And especially if we get more regulation to slow it down, which we may get from Congress. So yeah, I think there could be a much bigger shakeout. We've already had a pretty big pullback from the highs. But these things are going to happen. And I think that's a good thing. Some of these stocks have had a huge rally. Some of these stocks have 10x. So even if they're down 50%, 60%, they're still way up. And so I think there's still room in there for the market to
Speaker 2come in. What's the economic impact to that scenario? I know we've had many situations over the years where major innovations have come in and it's replaced certain jobs, but then there tends to be other jobs that come in. For this situation with AI, do you think this is the same thing as that? Or do you think this is different?
Speaker 1Well, look, it's obvious that the weak U.S. economy has had, you know, been firing on one cylinder. And that's been the AI capex, you know, expenditure. That's what's keeping the GDP positive. You take that out and you're in recession. And so if we have a big slowdown in that investment, that could tip the economy into recession officially. And that's going to have implications for the economy. For Fed policy, for fiscal policy, all of which is inflationary. And all of which should be exerting upward pressure on bond yields.
Speaker 2One thing you hear a lot about is, you know, just people in general concerned about if AI does start taking, you know, jobs and things like that, or doing things, you know, better than humans can in certain spots, like what's the purpose of people going to be? Or what does that look like for the economy if there's a lot of people who aren't working? You've heard some people talk about universal basic income, you know, paying people for their jobs. And I think that's a lot of people who are concerned about people to not do anything, basically. Do you think that's where we go? Or do you think AI is not truly, it's going to do things in a lot of situations that people are doing, but there will still be work for, you know, humans to actually work on?
Speaker 1Yeah, well, look, there's always going to be work for humans to do. If we ever get to a point where there's no work for humans to do, well, then we're in, you know, the economic promised land. That means that we have everything we need, and we don't have to do any work to get it. So, you know, the reason that you have poverty is because people don't earn enough to, you know, buy the food that they need or pay for the shelter that they need. So it's really a scarcity of goods that determines poverty. But to the extent that there is no scarcity, there's complete abundance of everything. If we have so much stuff that nobody needs to do anything, that nobody needs to work, that's not a problem. You know, that's the solution to the problem. That means we're just a species of leisure. We don't have to do anything. Now, some people might think that, well, you know, that destroys a lot of, you know, what makes, you know, life interesting, that you have goals and you're driven and you have purpose and you achieve things. And but, you know, I mean, people might be freed up. I mean, there are a lot of things that people do or that they would do, but they can't do it because they have to make a living. And what they want to do is not necessarily what they end up doing. And so, you know, I mean, there's a lot of things that people do, and so I think that if you have the freedom to do what you want to do, not what you have to do, that's going to be a positive. There are a lot of people who hate their jobs, who wish they didn't have a job. I mean, the reason that we say, you know, thank God it's Friday is because people look forward to the weekend. They don't look forward to Monday. People want to retire because they can stop working. So if, you know, if we never have to start working, if we're just retired from the day that we're born. So, you know, I think overall, you know, it will be a net positive. But I think it's going to take a long time, you know, generations for this to play out. I don't think it just happens, you know, abruptly, you know, over the next few years. What I'm hoping for over the next few years is some major advancements in medicine to keep me alive long enough to experience this because I'm 63. I think my kids are looking good. My mom might have a tougher time. She's 85. My dad already missed the window because he passed away. But yeah, I mean, I think the sooner we could come up with these medical breakthroughs to figure out why we're aging the way we are and to slow it down or to stop it, or better yet, reverse it, you know, I'd like to, I'd like to be younger, but we'll see. We'll see what AI could do.
Speaker 2Yeah. I got a couple of things I want to ask you on the land development, housing side of things, just to get your perspective on, you know, just in general here, I, you know, cause we have, it's a land development show. So we've got a lot of developers who listen in, but you know, if you were running a development company and you're thinking about where the economy is sitting right now, where interest rates are, where inflation is, you know, what kind of things would you be thinking about over the next 12 months with your company?
Speaker 1Well, I mean, what's happening, I think is what I've been positioning, for many, many years. Um, you know, I've been warning about the consequences of reckless deficit spending and money printing for years. And for those years, we've been able to kick the can down the road and to really delay the catastrophic consequences that I I've warned about for, for years, but there's a limit to how long we can get away with it. And I think the fact that the numbers are just exploding exponentially right now, uh, means that, we can't get away with it much longer. It's just mathematically impossible. The numbers are now too big and compounding too rapidly. Uh, you know, we're, we're paying 1.4 trillion a year in interest on the national debt. The only government line item in the budget that's bigger as social security at 1.7. And that's, you know, about to run out of money too, in a couple of years. Uh, but, but, uh, interest on the national debt is going to surpass social security next year. We're going to, I think we'll hit 2 trillion, uh, but that's not going to be the end of it. It's not going to stop there. It's just going to keep on getting up, going higher every single year. Uh, interest on the debt is going to be a bigger and bigger expense because the debt itself keeps getting bigger right now. We're adding $3 trillion a year. That's the pace we're on. Uh, and as all of the debt matures that was issued three years ago, five years ago, 10 years ago, as all that debt matures and needs to be three or 400 basis points higher than, you know, the old coupons, then that causes the interest payments to soar. So this is on autopilot up into the stratosphere. So we can be paying 3 trillion, $4 trillion a year in interest. I mean, pretty soon we'll be paying more money in interest on the debt than the government collects in taxes. Now, obviously we can't even get to that point. We have to have a crisis before because the markets are not going to allow us to borrow that much money. I mean, it's already been ridiculous, you know, uh, but it's not going to get to this level of absurdity, uh, that we can convince the market to loan us more money than we collect in tax. I mean, to a loan us so much money that just paying the interest exceeds our total tax revenue. You know, imagine trying to, trying to get a mortgage from a bank and the monthly mortgage payments exceed your monthly income. It's like, who's going to be
Speaker 2dumb enough to make that change? So if somebody sitting on a bunch of cash right now, you know, where should they be thinking about putting some of that cash?
Speaker 1Well, they could be buying gold and silver. I mean, gold is barely above 4,000. Silver is just back above 50. I think these are good entry points for people who don't have exposure to gold and silver. I think it's an opportunity for people who don't have enough exposure to add to what they have. They should, you know, contact shift gold. That's my company shift gold.com and you won't get ripped off. You won't get scammed. I mean, the problem is so many people, you know, promote these companies that overcharge customers by selling them on overpriced, phony, collectible coins or numismatic coins. I don't allow any of my guys to do that. So, you know, you get real bullion bars and coins at, you know, a very low price over our cost and a very low price over spot. So that's what you want to do. You don't you know, look to rearrange your portfolio. I think the U.S. markets are overpriced and in trouble. I think you have much better values internationally. You have to own companies that do well with inflation that provide good inflation hedges and reliable, increasing dividend income. And we have great portfolios that I think are designed specifically for a stagflationary environment in the U.S. And, you know, I think they will deliver incredible return returns relative to what would be available domestically. So, you know, go to Europe Pacific Asset Management, the website is europac.com and talk to my advisors about our strategies and see if they fit in your overall investment strategy. Or if you're a do-it-yourselfer, I've got five mutual funds. You can get the information on my funds on my website, but they're all available no load at every discount brokerage firm. And these funds are specifically designed for the economic environment that I predict is right around the corner.
Speaker 2Perfect. Well, I'll throw the links on the show notes page. So you guys listening, and if you look in the description, you'll see a link there. Last thing for you, Peter, before we wrap up, you've talked about it a little bit, I guess, earlier in the conversation, but what do you think 2027 looks like with everything we know right now? What do you think the next year looks like?
Speaker 1Yeah. Look, I think the war is probably still going to be going on. And I think inflation is going to be rising and the economy, you know, and the employment, you know, mark picture will be darkening. And we'll see if the Fed continues to maintain the pretense that it's going to fight inflation or if it has to fold and, you know, really show its cards, in which case we, you know, we really start to see weakness in the dollar and strength in gold and silver. You know, we'll see. You know, I think if the Fed punts on the December rate hike, it could start as early as then. But if they deliver another 25 basis points, it could start as early as then. And if they deliver another 25 basis points, and keep on bluffing that more is coming, it may take further into 2027 for investors to figure out that they've been conned.
Speaker 2Well, awesome. Peter, really appreciate you hopping on here and talking through some of this with me. And is Europack.com the best place for people to go?
Speaker 1Yeah, for if they want to, you know, work with us in asset management, if they want, you know, to hire me as their money manager, which I think would be a good idea. But also, you know, people should follow me on X Post there. I've got almost 1.8 million followers, so I'm starting to reach a broader audience. And so the more people that help me by reposting, the better. And listen to my podcast. I do generally two a week, sometimes more on shiftradio.com or on my YouTube channel. In fact, the YouTube channel is the best place if you want to, because I do the video as well. So if you want to see me and not just hear me, then, you know, subscribe to my YouTube channel and listen to the podcast there. Also available, you know, iTunes or Stitcher, any place, you know, Spotify, anywhere you can find podcasts, you'll find mine.
Speaker 2Awesome. Well, I'll put all that on the show notes page. So guys, check that out and definitely connect with Peter there. But Peter, thanks again. Appreciate it. All right. My pleasure. Thank you. Take care.
PodcastTranscript AI