Transcript of JBP Podcast titled ‘ECONOMIC STORMS ARE GATHERING’. In this episode, Dr. Jordan B. Peterson and economist Peter Schiff discuss the gold standard, the corruption and impending failure of the fiat system in the wake of inflation, why politicians are pushing inflation to astronomical new levels, and why they’re lying about it.
DR. JORDAN B. PETERSON: Hello, everyone. I’m speaking today with Peter Schiff, the economist and stockbroker who successfully predicted the 2008 housing crisis. Today, we will discuss the current market, hyperinflation, fiat currency, and the value of gold in times of instability. Looking forward to the conversation.
So thank you very much for talking to me today and to everyone who’s watching and listening. Thank you for your time and attention. That’s much appreciated.
So the first thing I guess I might ask is what do you think it is that the typical person who’s watching or listening should know on the financial front practically for their own protection and incremental wisdom that they don’t know? I mean, people aren’t taught even the basics of how to think financially in our education system, and so maybe you could walk through what you regard as the basics of financial literacy on the practical front.
WHAT YOU SHOULD KNOW ABOUT INFLATION
PETER SCHIFF: Well, there’s a lot there, but I think the most pertinent thing that people need to understand before they make any investments, really, particularly now, is inflation and the impact that inflation is going to have on the decisions that they make on their savings and their investment, because inflation is probably a bigger threat now than it’s ever been. And therefore, it’s an even bigger factor in determining everything that we do and ultimately what the rewards are going to be or the returns from your investments.
And the reason I think that inflation is a bigger problem now than it’s been in the past is because of the fiscal predicament that most of the major governments have put themselves in. And the fact that all politicians, unfortunately, and this is a fatal flaw in democracy, is that politicians first and foremost care about themselves and their own political career and their own re-election. That’s what they do for a living. They are career politicians. And so, like anybody else, they’re concerned about perpetuating their career.
And most people who are in politics, they really enjoy it. I mean, they like all the perks that come with it. You get a lot of respect. If you’re in the United States, you’re a congressman, you’re a senator. It’s a career that a lot of people would aspire to. And once you get there, once you get to Washington, and I’m sure this is true in every country in Europe and all around the world, you like it. You like the lifestyle. You like the prestige that comes with being a government official. So you want to stay there.
DECADES OF BOUGHT ELECTIONS
All right. Well, how do you stay in office? Well, you’ve got to keep getting elected. The United States, we get elections every two years, right? So politicians are very concerned about the polls. And they’re constantly got their finger in the air, seeing where the winds are blowing. And they don’t want to say anything or do anything that might jeopardize their re-election.
And, of course, one of the most important things that you need to get re-elected is you need a lot of money. You need to spend money on advertising, on television, which is expensive. And so you tend to cater to donors, whether it’s a corporation or a union, anyone that can provide a lot of money. You need to do things that are in their interest. And so what is usually sacrificed by these politicians is the national interest, doing what’s right for the country is secondary to doing what’s right for themselves.
And also, in order to be successful as a politician, you have to be a really good liar. And that’s probably why a lot of lawyers go into politics, because lawyers, you know, they’re paid to lie. I mean, you have to argue your client’s case, even if you know they’re wrong, right? And you have to put on a defense or whatever it is. And so lawyers are generally pretty good liars. And so they become politicians.
Because if you’re honest and you tell the truth, you’re not going to have a career in politics. You’re just not going to, even if you manage to get elected telling the truth, you’re not going to stay in office telling the truth. So you got to lie.
So here’s the situation. So you’ve had decades of politicians buying their re-election by promising voters something for nothing, because unfortunately, that’s what a lot of voters want. They want something from the government. So if you’re running for office, like I ran for office in 2010, once in Connecticut. But all I promised was more freedom. I’m going to leave you alone. I’m going to repeal government laws, regulations. I’m going to leave you free to do what you want. And I’m not going to interfere with you.
Some people like that message. But a lot of people, that’s not what they want. They don’t want to be free. They want to be taken care of. They want to know, what are you going to give me? What stuff am I going to get if I vote for you, right? What free stuff?
DR. JORDAN B. PETERSON: Yeah, well, that’s attractive in the short term, especially if you’re not paying attention, right? And lots of people don’t pay that much attention to political discourse. And so if you offer something tangible and immediate, that’s gripped short-term attention. And that can be an effective strategy. And so it’s this proclivity to gift in this manner that drives inflation. Do you want to define inflation for me?
PETER SCHIFF: Yeah, I will.
DR. JORDAN B. PETERSON: Do you know exactly what we’re talking about?
PETER SCHIFF: Yeah, I will. I’m getting there. And it’s even worse when it comes to trying to take away something. Like if you want to cut a program spending, that’s even worse. Because once a voter has something, nobody wants to take it away. In fact, even some of the politicians, let’s say Republicans in the United States that might have opposed certain government welfare-type programs when they started, once they’re in place, even those people won’t vote to take them away. That’s how dangerous it is.
So the situation is, you’ve had all these politicians who have promised so much stuff that the taxpayers can’t deliver. And of course, when politicians want to give voters something, they don’t want them to pay for it. So they want to spend money, but they don’t want to raise taxes. Because governments don’t have any money. They only have the money they take. They have to take money from the people in order to give money back to the people.
And so if the government’s taking your money, that you don’t like. So with paper money, which unfortunately we have now fiat currency, where governments don’t need gold, real money, they could just create paper money out of thin air. They could just manufacture it digitally, and there it is. That enables governments to spend without collecting taxes. They run these large deficits, and they’re able to print the difference and hand out that money. So they can give people money without also taking the money away.
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