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Fake Jobs, Fake Assets, Fake Victory — Nothing in This Economy Is Real
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You make no friends in the pits and you take no prisoners. One minute you’re up half a million in soybeans and the next boom, your kids don’t go to college and they’ve repossessed your vent. Are you with me? >> The revolution starts now. >> George, >> we have to pass the bill so that you can uh find out what is in it. >> TURN THOSE MACHINES back on. >> You are about to enter the Peter Shift show. >> SHOW ME THE MONEY. >> IF we lose freedom here, there’s no
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place to escape to. This is the last stand on earth. >> The Peterhip Show is on. >> I don’t know when they decided that they wanted to make a virtue out of selfishness. >> Your money, your stories, your freedom. The Peter Shift Show. Well, some of you some of you may have been expecting the uh shift gold Friday market rap today as I indicated last week, but I didn’t have time to do any regular podcast this week. This is the first one I’m doing. So, this is it. But I am going to cover
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gold and silver during this podcast. So, don’t worry if that’s what you care about. It’s coming. But first, I want to talk about the jobs report. We get the jobs report typically the first Friday of every month. This time it’s the second Friday because I think the first Friday was uh May 1st and this is the 8th. But we got the April jobs numbers. And once again, we got a beat. Now, surprisingly, we didn’t get much of a downward revision to the prior month. In fact, the prior month was actually
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revised up a bit um from 178,000 to 185,000, but I think the month before that was revised down. So, the net revisions were a a negative, but not a big negative. But the expectation for the April jobs number was 63,000 jobs. That’s a low bar. That’s not a lot of jobs, especially for an economy the size of the United States. And we actually ended up creating 115,000 jobs. And the range of expectations was pretty large. It went from zero unchanged to 150,000. So, you know, we came out, you know, towards the
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upper end, not quite, but above, you know, midway would have been like 75,000 jobs. So, we were closer to the high end than the low end. But that is the story that’s getting told. It’s another beat. The numbers beat. This economy is strong. It’s stronger than we thought. Look, more jobs uh than expected were created even if we didn’t expect a lot of jobs because 115,000 jobs is nothing to brag about. This is not a good number. But of course, it’s not even an honest number. The whole thing is a lie. And I’ll, you
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know, start to unpack that after I go through some more of the numbers here from the official report. The official unemployment rate held steady at 4.3%. Uh, private payrolls increased 123,000. Um, so that was actually more than total, which means government payrolls must have declined a bit, which is actually some good news. But the problem is most of the jobs that were created, even though they’re not officially government jobs, they’re kind of like government jobs. they’re in healthcare
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and education and um and so these are government jobs. I mean obviously in many cases if if it’s a public school they’re they’re government jobs you know uh but you know a lot of these healthcare jobs relate to government spending on healthcare and that was you know the the majority of the jobs or the biggest categories were uh healthcare and education. We actually lost jobs even officially in information technology and manufacturing and information technology. There were a lot of jobs. I forget the number but a lot
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of big tech companies uh were laying off a lot of people. Now, a lot of this is attributed to AI doing their work and so, you know, they’re they’re able to reduce the headcount, but the jobs that are being lost in manufacturing and in technology and information are higher paying jobs than the ones that are being added in healthcare, education, and then of course you always got leisure and hospitality is always a big a big number there. But we lost 2,000 manufacturing jobs. the um labor force participation rate slipped
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to 61 8%. That is a low number. That that’s that’s that’s the lowest rate in what about four years? Let me I I posted something about that on on X this morning. Let me see. I’m just going to scroll uh look at my own posts so I can see what I what I what what what I wrote there because I forget when the last time the labor force participation was that low. October 2021. Um so I mean that’s bad news that that more and more people are leaving the labor force. That is the main reason
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that the unemployment rate is so low. Remember you have to be in the labor force to be considered unemployed. Clearly, if you’re not in a labor force, you don’t have a job. But that doesn’t render you officially unemployed. And so, that is the real secret to our low unemployment rate is that so many unemployed people don’t count. Plus, of course, we also count undermployed people, people working part-time who want to work full-time. Even if you just work an hour a day driving an Uber, uh
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you’re not unemployed anymore. Even if you spend the rest of the week looking for an actual job, you’re not counted. I mean, there’s so many ways now for people to pick up a little money on, you know, you could drive, you know, on in their spare time uh through these the these apps uh that it’s very hard for somebody to be truly unemployed even though they are unemployed. Average hourly earnings up less than expected, 3.6% uh year-over-year. Prices are up a lot more than 3.6%. 6%
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year-over-year. Uh so real real wages are down. Now the CPI may have a year-over-year price increase of pretty similar to that, but we know the CPI doesn’t really capture what’s going on in in prices. Prices are up a lot more than 3.6% year-over-year. So real wages are falling. And that is more indication of how weak this labor market is because workers are not able to negotiate real pay raises. They’re having to accept real declines in their wages because they don’t have the leverage to get
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better jobs. But where you want to see the true weakness is to look beyond the uh establishment survey and look at the household survey because every week or every month rather when we get these jobs numbers you get two looks at it. You get the establishment and then you get the household. I mean, they’re they’re they’re both looking at the same data and in some cases they’re coming to complete opposite conclusions. First of all, oh, before I even get to the household, even in the establishment
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survey, it it acknowledges that of the 115,000 jobs that were created supposedly in April, 391,000 jobs came from the birth death model. That’s like three times the number of jobs that were actually created. Which means if they didn’t have a birth death model, we would have lost a couple hundred thousand jobs. And maybe we did lose a couple hundred thousand jobs in April because the birth death model jobs are not real. They’re guesses. And what we know from prior guesses is that they
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guess too high. The main reason we had the massive revisions during the Biden years was going back and looking at these birth death models and adjusting them to reality because the numbers were pure fantasy. And so it’s very likely that the April jobs that we got, the March jobs that we got, we didn’t get any of them. It’s very possible that at the end of the year and next year, they’re going to go back and say, you know what, none of these jobs were actually created because the birth death model was wrong. In
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fact, maybe instead of companies being born, they died. Maybe in reality that should be a negative number because it reflects the bias of the statisticians. If if they think the economy is great, after all, Donald Trump is out there saying we got the greatest economy in the history of the world. Well, if that’s true, we must be creating all these new companies. Even though the reality is a lot of companies are going out of business right now. And so I think that the birth death model is overestimating the birth of new
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companies and underestimating the death of existing companies. And you could take all these numbers with a grain of salt. They are all politically motivated. And remember, you know, Trump fired somebody, I forget what her name was, when the numbers came out bad. somebody lost their job. So, you know, there’s a lot of pressure not to have bad numbers if you want to keep your job, right? Uh so, who I don’t know why anybody pays attention to this stuff, but anyway. So, let me look at the household survey. So, according to the
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household survey in April, the actual number of jobs declined declined by 226,000. So, the establishment survey says we gained 115,000 jobs. That one gets all the headlines, but the other survey says we lost 226,000. No one really talks about that, but who’s to say which one is right. I mean, my money would be on the household survey. Just, you know, it it it just smells like a better number given what you observe. According to that survey, net jobs have now declined every month of 2026, every single month. So all the positive
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jobs numbers are actually negative. And the average decline per month, this is not the total for the four months, the average number of jobs that have gone away in each month is 343,000 jobs. That is a huge number according to the uh household household survey. So according to that survey, we now have the fewest number of workers in America since December 2024. Think about that. That was, you know, before Donald Trump, you know, he became president in January 2025. So we have had no increase in jobs in
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employment during the entirety of the Trump presidency according to the household survey. Now, the establishment survey looking at the supposed same labor market, according to that survey, um the number of employed people is at a new all-time record high. So, I mean, the how could that be? I mean, one of these surveys is wrong, uh and one is right. my money is on the household survey because all of the publicity and all the political attention is on the establishment survey which means that one is probably the wrong one. Also,
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what we learned from this sub uh survey is that in April the number of full-time jobs collapsed by 424,000. part-time jobs surged by 123,000. 120. Yeah. 123,000. So, that is a big deal. And it’s also a problem because full-time jobs pay a lot more than part-time jobs. They usually have benefits that part-time jobs don’t have. And in fact, a lot of the people that have those part-time jobs may be looking for a full-time job, but they’re not counted as unemployed anymore because they got a part-time job. So
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anyway, and the drop in full-time jobs, right, that we just got drag the total number of full-time workers again to the lowest since December 2024. So no net full-time jobs have been created since Trump’s been pres president. All of 2025 and four months of 2026 and not a single new full-time job has been created in supposedly the greatest economic boom in the history of the world. And according to Trump, before he was president, it was the worst economy ever. We were a dead economy. You know,
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we were cold as ice. Now we’re the hottest economy in the world. We’re the envy of the world. It’s the greatest economic turnaround in the history of the United States. Yet, we haven’t created any full-time jobs uh during this so-called boom. Obviously, this boom is in the imagination of of Donald Trump. That’s where it exists. Uh it doesn’t exist in reality. And again, Trump may not necessarily be imagining it. This is just Trump being Trump because whatever Trump is trying to
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sell, whatever product he’s got to sell is the greatest is the best. And so when he’s president, he’s constantly trying to sell us on himself because he needs popularity. He needs, you know, the poll numbers and and so he is constantly talking up the economy, exaggerating his successes, exaggerating the strength of the economy, just like he exaggerated, you know, uh the greatness of Trump stakes or whatever else uh he was uh promoting uh when he was in the private sector. And I think the same delusion
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that we get in the economy, the same thing is going to happen with the war. It’s going to be no different. And in fact, a lot of the peace talks that we’ve had this week. And now there’s, you know, peace plan that, you know, has been submitted to the Iranians. We’re waiting for them to get back, I guess. But there’s a lot of optimism uh that’s driving the markets. I’m going to talk about the markets on the other side of this uh of this break. Uh but also going to talk a little bit about about the war
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and how it’s likely to end. So stick around. We are coming right back. Small business owners are getting squeezed from every direction. Labor costs are rising, software subscriptions keep climbing, and margins keep getting thinner every quarter. Here is what most people miss. You’re probably paying for four or five different tools that don’t even talk to each other. One for project management, another for time tracking, another for invoicing. Each one takes a bite out of your bottom line every
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single month. And none of them gives you a clear picture of where your time and your money are actually going. That’s why I want to tell you about ODO. ODO is a fully integrated business suite, a single platform that handles project management, time sheets, invoicing, accounting, all of it, working together as one system to take the heavy lifting off your shoulders and let you focus on what matters. Think about what that actually means in practice. Your team logs their hours against a project.
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Those billable hours flow straight into a client invoice with one click. There are no spreadsheets to maintain, no numbers to chase, and no leakage between disconnected tools. You can see exactly where every task stands, who is working on what, what is profitable and what is not. That is not a feature for the sake of features. That is the kind of visibility a serious business needs to make sound decisions. And here’s the part that got my attention. The core apps are completely free. You can start
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using ODO project and ODO time sheets today without paying a dime. In an environment where every business expense deserves scrutiny, that is a hard offer to argue with. If you want to see what I’m talking about, go to odo.com/r/peter. That’s odo.com/r/peter. You can also book a free consulting session with an ODO expert for advice. The link is in the description and there is a QR code on your screen. odo.com/r/peter. Well, everything was up pretty much this week except for oil and uh and the
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dollar. Both fell. Oil fell a lot more than the dollar. Dollar just slipped a bit. But the news that was driving the markets other than the continuation of the AI bubble and I’ll talk about that a bit too today was uh the optimism of the war coming to an end. And we got a big rally earlier in the week when there was news uh from the president that the Iranians, you know, were likely to accept some peace plan that we had offered and um and and that the war was ending and everything was going to open up and
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everything was going to be great and we got a drop in oil prices and a rally in in the market. Now, first of all, given the fact that the stock markets are at new record highs, save the Dow, right? I’ll look at some of these numbers. So, the Dow was up66% on the week. It actually finished south of 50,000, but you know, still up 6% on the week. Uh, the S&P rose 2.5% on the week, hitting new record highs. NASDAQ up 4 and a.5% on the week, new record highs, and the Russell 2000 uh up 1.8% uh on the week, new new record highs for
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the NASDAQ. Obviously, the biggest drivers are the tech stocks, which are more heavily represented in the NASDAQ uh and then also to a lesser degree the S&P than in the Dow or the Russell 2000. But the markets were very strong. I think the markets have already priced in victory, that we won the war, but not just that we won it, because obviously if you’re just going to count up the number of uh, you know, planes that were destroyed and ships that were sunk and people that were killed, right? If
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you’re going to tally up all that stuff, right? Obviously, we were going to win the war if that’s how you’re keeping score, right? and and but the markets are looking beyond just the end of the war, but they’re looking for a collapse in oil prices, uh a drop in bond yields, everything’s back to normal, everything is great, and so I think the markets have already priced in the most optimistic of scenarios with respect to the war. So, we’re priced for perfection that we are
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not going to achieve. Who knows if the war is actually over? But even if it is over, we are not going to get the big drop in oil prices or bond yields that stock investors obviously think are coming. And in fact, oil did drop quite a bit, but it closed just below $95 a barrel. I mean, if the war is pretty much all over, you know, we’re still paying almost $100 a barrel for oil. And even if you look out, I don’t have all the charts in front of me, but if you look at a year or two later, you know,
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oil is not trading back in the in the upper 50s or lower 60s where it was before the war. We’re not going back down there. Doesn’t matter. Even if the war is over, which it may not be. And of course, even if it ends, who knows how long the peace is going to last. It could restart at any moment. I mean, a lot of people thought that Donald Trump was the peace president. He didn’t want to start wars. Well, now he’s started one. He may start another. He may resume this one. You you you who the hell
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knows, right? So, we don’t have uh any kind of peace uh dividend. I think we have a war premium that’s going to be built into the oil price for a long time. The bond market’s got another set of issues that I’m going to get to. Uh, which is why bond yields are going up regardless of the war. Stock investors haven’t clued into that yet. But stocks are an accident waiting to happen. There, you know, that doesn’t mean they’re going to go down tomorrow, but they’re going to go down. And
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there’s no question that the main driver is AI and AI spending. And it’s the AI spending that’s driving the GDP, right? Take that out and you know, you’re in a recession. Um, and we may be one anyway, just the numbers are already so low. And again, I’m not somebody who dismisses the significance of artificial intelligence. I mean, I think it is has more potential really than anything that I’ve seen. And I think it is going to be a major benefit long term. very transformative, very impactful
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to the world. And I think it’s something like even if you look at a lot of the science fiction movies that are two or 30 hund years in the future, I don’t even think they incorporate the potential that we’ve already discovered in artificial intelligence into the way they portray life two or 30 hund years from now. Uh, I think it could actually be a lot better than they think because of AI, but in the next several years, it’s not going to have as big an impact as a lot of the AI hypers
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uh would have investors believe. And regardless, the stocks that are considered these AI hyperscalers or whatever, whether they’re public or still private, they’re not worth anywhere near the market caps. They’re not going to be able to earn money off of the AI to the extent that they think they’re going to be able to. It’s going to evolve. It’s going to be far more competitive. Uh and so yes, we’re going to be able to utilize AI, but we’re going to utilize it in a way that is not going to enrich
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these companies to the degree to which people assume and based on the amount of money that they’re spending because, you know, other companies are going to come in and they wouldn’t have had to spend all that money yet they’re still going to be in a position to compete. I think this nuclear arms race to build out these data centers and buy all this equipment is a massive bubble. the same thing you had with the.com bubble and all the equipment that everybody was buying from Cisco systems.
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Um, you know, it was all just a bubble. Now, yes, the internet was not a bubble. It was very transformative. I believe AI can be more transformative than the internet. But that doesn’t mean that there’s not a bubble in the stocks just like there was a bubble in stocks. Most of them went to zero. Yes, you could point to Amazon as a big success that came out of that, but you know, I mean, it was touchandgo for a while. I mean, initially Amazon was just a bookstore. And if Amazon was still a bookstore, it
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probably would have gone out of business. I mean Jeff Bezos did a f fantastic job in transforming Bezos to build the company that that he built. You know, recently, you know, I was on X, you know, Bernie Sanders was like all upset that Jeff Bezos was laying off some Amazon workers. I forget how many workers were being laid off. I mean, 10,000, 50, whatever. I mean, it doesn’t make a difference. Amazon has one and a half million workers, right? So, they’re going to lay off somebody. But Bernie
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Sanders was critical of Jeff Bezos for the layoffs. And he said, “How, you know, how dare Jeff Bezos buy a yacht, buy a penthouse, and spend all this money while he’s laying off workers, right? This is horrible capitalist laying off workers while you’re, you know, buying yachts for yourself.” Well, first of all, sh he’s laying off some workers, but net he’s employing one and a half million people. Why don’t you give him credit for the jobs he still provides rather than the few that he has
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to cut back on in order to keep the business viable? I mean, all businessmen have to keep their costs down to stay competitive, to stay in business. and the people they lay off help make sure that the other people don’t lose their jobs, right? Because if a businessman takes his eye off the ball and doesn’t trim the fat out of the payroll and becomes at a competitive disadvantage, the business could fail and everybody could lose their jobs. So, you get rid of the workers that you don’t need. And
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if you don’t need them, why waste their labor? free them up to do something else. Yes, it’s a little disruptive to somebody who gets made redundant at one job and now they’ve got to figure out where they can go where their labor is actually contributing because if the employer decides that your your labor is not needed, uh then why waste it? Your labor is a scarce resource. Put it to use someplace else. the entrepreneur is doing what he’s supposed to do by laying off workers that he does not need that
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are not net contributors to the bottom line because they’re not helping to keep prices down and quality up and so they can go someplace else where their labor will add value rather than subtract it. But the point I was making with Bernie Sanders is while you’re criticizing Jeff Bezos buying himself a yacht because he’s laying off some workers, how many workers does Bernie Sanders employ? I mean, he doesn’t employ any. I mean, he gets workers on staff, you know, because he’s a senator, but he doesn’t employ
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those workers. We employ those workers. We pay for them, the taxpayers. He hasn’t started any businesses. He hasn’t created any private sector jobs. So lay off a Jeff Bezos. Created more jobs than probably anybody in the whole country. He’s earned that yacht. Don’t begrudge Jeff Bezos or any entrepreneur who has delivered so much value to the extent that you make enough money that you can spend hundreds of million dollars on a yacht. You will have delivered an extreme amount of value to society so
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that you are able to earn enough money to buy that yacht. And in general, billionaires have contributed so much more to society than the billions that they that they have. Uh because it it’s always a small percentage of the cumulative gains that all of their customers because in order to become a billionaire, you have to have a lot of customers and you have to make a lot of customers lives better and and their lives collectively are improved more than your life. But yes, you get rewarded and thank God because
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those big rewards are why people work. You know how hard this guy worked, you know, for the first 10, 20 years. I mean, he worked like a madman. I mean, the guy lived in, you know, in in in in the office and, you know, he sacrificed a lot and under consumed and that’s the case with all successful people. They sacrifice, they take risks, they put it all on a line, uh, and they need to get a reward. And you got guys, socialists that don’t understand how capitalism works, uh, just trying to vilify these
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guys and pointing to the jobs that are cut and ignoring all the jobs that are lost. And that’s how when they say, “Oh, these guys, you know, they’re not paying their fair share of taxes. What’s their fair share? Maybe they pay more taxes than the than a thousand people combined.” I mean, the people who aren’t paying their fair share are on welfare. They’re on food stamps. You you never see a a politician say, “Hey, the people on welfare, the people on food stamps,
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you guys aren’t paying your fair share of taxes cuz they’re not.” Because they’re basically paying nothing. Why don’t they get off their asses and go get a job? Right? We we never criticize the people living off the system. We never say they’re not doing enough when they’re doing nothing. We focus on the guys that are doing the most, that are paying the most, that work the hardest, and then say, “Hey, you guys aren’t contributing enough. You guys aren’t
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paying your fair share.” You’re right. They’re not paying their fair share. They’re paying way more than their fair share. If we want to make the billionaires and the billion pay their fair share, we got to give them a tax cut, not a tax hike. You hear that, man, Dammy? Anyway, we got another commercial break. I’m going to keep going over these numbers and I’m going to talk about the debt. the debt and all the the efforts to dismiss the significance of the debt after this break. Look, most
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people know they need to lose weight. They’ve known it for years, but knowing something and actually doing something about it are two very different things. Here’s what I’ve noticed. A lot of people get stuck because the system makes it harder than it needs to be. The doctor’s office, the insurance runaround, the waiting, the cost. That’s where HIMS comes in. HIMS offers access to an affordable range of FDA approved GLP-1 medications that now includes the Wiggoi pill and the Wiggoi pen combined
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with diet and exercise. Clinical data shows you can lose up to 20% or more of your body weight. That’s the kind of result that actually changes how you feel and how you function. What makes HIMS different is the model. Everything happens online. You connect with a licensed provider. They determine if treatment’s right for you and if it is, the medication comes straight to your door. No insurance required. You also get 247 messaging with a care team. It’s actually a complete system, not just a
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prescription. Ready to reach your goals? Visit hymns.com/gold to get a personalized, affordable plan that gets you. That’s h.com/gold. Hims.com/gold. Weight loss by hymns is not available in all 50 states. Wiggoi is the registered trademark of Novon Nordisk as to get started and learn more including important safety information. with GOI clinical study information and restrictions, visit hymns.com. All right, so before the break, I went over the weekly gains in the stock market averages. Well, it wasn’t just
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stocks that were up. Precious metals had a very good week. Gold rose 3.4%. We closed just over 4700 in gold. Silver was the star, up 9.4%. Big move, double the NASDAQ on the week. Silver closed back above $80 an ounce. But, you know, it wasn’t just precious metals. I mean, industrial metals. Look at copper. Copper hitting a new all-time record high. I think it closed about $624 cents a pound. You know, copper is another way to pay AI and not be in a bubble because, you know, all this stuff needs copper, right? And and so copper’s
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going a lot higher. I mean, I think copper is going to trade where silver used to trade. Copper is going to be the new silver. Uh so, you know, I’m very bullish on copper. In fact, year to date, copper’s up over 30%. Think about that. 30%. Um silver’s up 11% year to date. That’s not bad cons even with the big drop in March. Gold’s up 9% so far this year. That actually beats the S&P which is up 8%. The Dow’s only up 2 and a half% so far this year. 4 months in 2 and 12% up
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on the Dow. Um the Nasdaq is beating gold and silver up 13%. Russell Russell 2000 actually up 14%. Who’ have thunk it? Russell 2000 beating the NASDAQ. But even though the Russell 2000 and the NASDAQ are beating gold and silver, it’s not by much. And I think risk adjusted, you’re taking a lot more risk in those stocks. For my money, I’d rather just be in gold and silver than in the NASDAQ. And of course, the NASDAQ’s going to collapse at some point, whereas gold and silver are still
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early in in bull markets. And of course, as I’ve mentioned many times, I really like the miners. I mean, I like both. Everybody should be buying physical gold and silver. I was pounding the table again last week saying bye bye bye. And of course this was a great week uh to have bought last week, but I would still encourage people to go uh to Shift Gold and buy. In fact, now you can go to the app store and download my app, the Shift Gold app, and you can buy through the app. You can also set up a T-old account
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and buy your gold and silver there. I think we’re going to have more updates ahead for gold and silver, but the mining stocks had good weeks. GDX up 8.8% and the GDXJ up 9 and a half%. So, the biggest winners on the week in the stock market as a group were the gold mining stocks. Year to date though, gold and silver mining stocks are not up much. GDX only up 10.3%. That’s barely more than the price of gold and less than the increase in the price of silver. And the GDXJ year to date is up just 11.2%.
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Barely more than the increase in in silver. These stocks are still very cheap. And for my money, if you want to be in the market, forget about these tech stocks. Yeah, they may keep going up, but they’re going to come crashing down. So, it’s a game of musical chairs, and who knows if you’re going to, you know, have a chair when the music stops, which means you’ve sold. But with the gold and silver stocks, you don’t have to worry about getting out because they’re not in a bubble. You can hold these stocks for
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the long run because they’re still super cheap in the short run. So that’s where you need to look look at these gold and silver stocks. Again, go to europac.com uh website to check out the information on our funds in particular the gold fund, the Europeacific gold fund. EPG uh FX uh you know EPGIX. Yeah, EPGIX is the no-load symbol for uh for the gold fund, which you could buy at any discount broker. Uh what else happened this week? Oil, as I said, went down quite a bit, down to 95 bucks, but
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still oil is high. Gas prices are high. They’re not coming down. The dollar also weakened, closing below 98 with a 97 handle. I think 97 84. So, the dollar now has lost all of its Iran war gains, which were nothing to write home about. To begin with, people were making a big deal. Oh, you see, we still have King Dollar. The dollar is still the safe haven. It barely rallied. Yes, it rallied, but it wasn’t the type of rally that we would have had in in days past when there was war in the Middle
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East. Uh and I think again the bottom is about to drop out of the dollar and that should coincide with a big move up in gold and silver and also maybe new new highs in oil even if the war uh continues to be at a standstill. And by the way, I I meant to mention this earlier, but just like with the economy, the war is going to be another Trump fantasy victory. Regardless of how big we lose, this is going to be framed as the greatest military victory in the history of warfare. Not just the United States,
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probably going all the way back, you know, in time to the Roman days, right? This is probably the greatest victory that any military genius has ever had. Right? And again, yes, we are going to kill more Iranians than they kill Americans, and we’re going to destroy more of their planes and sink more of their ships. But based on the objectives that we laid out, I think we will fail across the board. We are not going to change the regime. It’s the same regime. We could claim that it’s different
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people because we killed the other people and now there are new people, but the new people are all the same regime as the old people. And again, I think it could be even more hardline than before. But I think the fact that the regime survived is a huge victory. And I said this when the war broke. I said all Iran has to do to win is survive and stick it out, right? They just need to go the distance, right? They they which you know, which it looks like they are going to do. Also, if our objective was to reduce
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Iran’s influence in the Gulf region, I think it backfired. I think they’re going to end up more influential than they were before. I think it’s America that’s going to see its influence in the Gulf diminished as a result of this war. I think our allies will be less aligned with us. uh we may have fewer bases uh in the Middle East. Uh and Iran’s influence may grow even though it has you know not as many uh you know ships or or or planes. Uh it may have more economic influence
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more influence over the strait more influence over oil. Uh I think China is going to be a big winner. Russia is going to be a big winner. Uh so I think that we are going to be in a worse position. Now with respect to nuclear threat, I don’t know to what extent that threat was ever real because I’ve been hearing the same thing for my entire life about how close Iran is to a nuclear weapon. Uh so we’ll never know I guess to the if that was true or if it was just like the Iraqi weapons of mass
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destruction. But I’m sure that we are going to say that the world was saved from a nuclear nightmare that Iran was probably weeks away from wiping out the entire planet and but for the efforts of Donald Trump, we’d all be dead right now or we’d all be mutants or something like that. But that’s how it’s going to be framed because, you know, Trump has to frame this as a win. Uh just like he has to frame the economy as a win. uh even though uh it’s we’re we’re going to end
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up in in a worse position than the one that we we started. Um but I want to get to the subject of bond yields because bond prices rose on the week but they didn’t rise much. The yield on the 10-year Treasury closed at 4.36 and the yield on the 30-year 4.95. I mean, the highest it got, I think, was maybe 4.54 or something like that before the news of peace broke out, right? So, the bond market has barely risen as a result of of this. And I think the expectation that we’re going to have uh falling long-term interest
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rates is wrong. I think that we’re getting ready for another big spike in interest rates. And the war is actually going to undermine our ability to sell US treasuries around the world and to get the world world to want US dollars. And the pro the inflation be created to service the debt and the spectre of actual default because the bigger the debt gets the higher the likelihood that we will default. We have defaulted before. We defaulted on our commitments to pay gold. Uh you know Federal Reserve notes were notes
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obligations to pay gold and we defaulted. We paid zero. We promised to pay 35 uh if you had $35, we promised to give you an ounce of gold. That was the commitment. We defaulted and we gave you no ounces of gold. You know, I mean, we devalued a couple of times and we said, you know what, we’ll give you now you need $42 to get an ounce of gold, right? We we tried a couple of devaluations, but then we said, “No, forget it. That’s not working. We’re giving you nothing. Total default.” So, when push comes to
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shove, right? The reason that we had to go off the gold standard is because politicians had a choice. It was either raise taxes, cut spending, or go off the gold standard. And that’s what they chose. Well, if we have a debt crisis, we have two choices. Raise taxes, cut spending, or default. Now, default has two ways. inflation, print a bunch of money, destroy the value of the currency, or just default, preserve the currency, and just don’t pay what you owe. But the thing is, defaults can be
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selective. They could be targeted. We could target defaults at foreign creditors. We could first default on people who can’t vote in our elections, right? So, the these risks are rising around the world. And that’s why I mentioned that Hank Pollson, uh, you know, who is instrumental in creating the problem that he’s now warning about, having been on the job as Treasury Secretary during, uh, the 2008 financial crisis and the bailouts, right? That that’s that really started the QE program that that that we’ve been
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operating. But now Hank Pollson is like, “Okay, we’re headed for some serious here. uh we need an emergency plan, break the glass plan now. And he’s not new to this, but but but bond king Jeff Gunlock uh recently is now warning again uh to get out of bonds uh to have short-term treasuries, right? Don’t don’t be fooled into thinking a 5% yield on a 30-year Treasury is a good deal. It’s not a good deal. He’s saying sell your long bonds and move into the short end. and he’s supposedly the king
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of bonds and he’s saying don’t buy bonds, right? Because of rising interest rates and he’s confident that because of rising inflation and the diminished appetite for debt, the Fed is not going to cut rates. And and maybe he’s right because they shouldn’t cut rates. They should be hiking rates. So just not cutting rates, not not hiking rates is effectively a cut. If if inflation goes up and the Fed does nothing, that counts as a cut, right? And but I think that gunlock could be wrong because there may be
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enough economic weakness to put pressure on the Fed to cut rates before the midterms, you know, in in hoping that that will do something to revive uh the the Republicans chances of not losing both the House and the Senate. uh which to me seems like a done deal at this point. But but now uh Gunlock is um is is also echoing the Hank Pollson warnings that we you know we have too much debt. You know what happened in the last week is now debt held by the public now exceeds the size of the economy. that excludes the debt held by the
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government because you know we’ve we’ve been ignoring the debt you know that the government owes itself right so if you count all the debt right the whole 39.2 2 trillion of funded debt. And that’s just the funded debt, right? That’s that’s where the government has borrowed money and has to pay it back. The actual liabilities dwarf that if you count all the contingency liabilities uh like guaranteed, you know, loans that could default and um unfunded liabilities like social security and
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Medicare, you’re talking about north of 150 trillion of debt. I mean, we’re completely insolvent as a nation, right? Um, but the when they’re just looking at the debt held by the public, they assume that the the money the government owes itself doesn’t count. Okay, we’ll tell that to the people on social security. Cuz on the same time the government says we don’t have to worry about the money that we owe ourselves. They’re telling the people on social security, hey, you
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don’t have to worry about social security because we have this big trust fund. Well, that’s the debt that they’re not counting, right? So, you only don’t have to count the Social Security trust fund if you think the government’s not going to pay the Social Security benefits. But once you accept the fact that Social Security benefits are going to get paid, then you can’t ignore uh the bonds that the Social Security trust fund owns because they have to sell those bonds so the Social Security
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checks don’t bounce. So, the idea of not counting that debt really doesn’t is is ridiculous. So we were already the debt already exceeded total GDP a while while ago but now if you exclude all that debt it exceeds the GDP now in order to make the debt not look as bad as it is a lot of people are trying to talk about well you know let’s put it in perspective right because I I was listening to CNBC their senior economist Steve Leeman was criticizing Gunlock and um Pollson for you know making a
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mountain out of a molehill supposedly like hey this is really nothing to worry about it’s really not that much debt and you know a he contrasted it to the supposed assets of the United States which I’m going to get to in a minute but he also talked about our ability to service the debt he said you have to look at not the size of the debt but the coverage of the interest how How much income does the government have relative to service of debt? Yeah, we’ve got about five times the tax revenue. Uh the
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interest on the debt costs a little over a trillion and the government collects a little over 5 trillion. But that’s still a big number. But what’s important is the trajectory. Soon interest will be two trillion. So that’ll be what uh a third of tax revenue. What happens when interest on the debt is 3 trillion? That’s more than half of tax revenue. So, it’s unsustainable. We’re on a path where you can’t just say, “Hey, we can service the debt.” Because we really
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can’t. And also, the interest is not fixed. We have all this short-term debt. So, interest rates could go way up. The yields can move up to 6%, 7%, 8%. You know, the last time yields were really about this level, other than for a few moments in time, was in the late 1990s, like 1998. But we we got to 5% on the way down in 1998 because prior to that, rates were a lot higher. But because we had, you know, our first fiscal surplus under the Clinton years, uh, we were in much better shape economically in 1998 and we were
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rewarded with falling interest rates. People were ecstatic that long-term yields had come down to 5%. Now we’re seeing 5% moving in the other direction, but we’re in the worst possible fiscal position now relative to 1998. Well, while yields are rising, so we’re going a lot higher than 5%. Which means that in order to keep the net interest payments lower, the debt is going to keep being refunded. more and more long-term debt that matures is going to be rolled into T bills, making us more and more
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vulnerable to the shock of a spike in short-term interest rates when we get that break the glass moment that Hank Pollson is warning about where there’s a loss of demand for treasuries and then short-term interest rates skyrocket like they did in 1980 when they went up to 20%. Steve Leeman thinks we have no problem servicing our debt. What if we had to do it at 20%. What’s 20% of 50 trillion? What? 10 trillion dollars a year? We’re gonna come that’s twice our tax revenue. So we are this close to a
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complete crisis and Hank Pollson knows it. The problem is we break the glass. There’s there’s nothing there. There’s nothing to solve it. But getting back to the other idea that well, you know, we got all these assets. I don’t know when this popped up on the um national debt clock national debt.org go over there and there’s a gold bar a field USA treasury reserve 31.8 trillion that covers a good part part of the 39.2 2 trillion debt and they even have it per person debt per taxpayer or the asset is 85,000
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per taxpayer. Um although the debt I don’t know how the debt is debt per taxpayer is 357,000. It’s a lot more even though the total debt is not that much more. So, I’m not really sure how these numbers are being derived, but the reason that they showed up was to try to make the debt look less ominous. If you say, “Well, we got all these assets.” Well, first of all, the debt still exceeds the assets, so we’re still bankrupt. But the real debt, as I said earlier, is about 150 trillion. So, even if we had
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31.8 8 trillion in Treasury Reserve assets were massively bankrupt. The problem is we don’t have anywhere near that. This this is a lie. I don’t even know what they’re talking about there with these Treasury Reserve assets. I mean, we we have some assets, maybe a few trillion if you that the government has in liquid assets. We got about 1.2 trillion in gold. You know, not that we would sell that, but in theory we could. But we probably have a few trillion in other assets that are readily liquid.
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But the vast majority of $30 trillion in US government assets that guys like Steve Leeman want to say, “Hey, we don’t have to worry about the 39 trillion in debt because we got these assets.” These assets are meaningless when it comes to the debt because they’re not liquid and they don’t generate income. I mean, most of them you federal government owns a lot of land. A lot of land is is just non-incomerproducing vacant land. There’s nothing there. I mean, in theory, it could be sold, but
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for what? And how long would it take to actually sell it? Then you got some of the land are national parks, you know. Are we going to sell Yellowstone? Who are we going to sell it to? The Chinese? Who’s going to buy Yellowstone? What? Well, I I mean, and how long is it going to take? I mean, you can’t service your debt. Yeah, I guess Yellowstone collects some money when people come visit the park. I’m sure they lose money overall. I don’t know what they get. We got military bases. We’re going to sell
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those off. We going to sell off our our our aircraft carriers and our bombers. That’s that’s that’s probably some of that 30 trillion. There’s a lot of buildings, federal office buildings. I mean, are we going to sell those? I mean, roads, uh, some other infrastructure that the government owns, some mineral rights. I mean, I guess we could sell those off, but spectrum, right, when the government has has that. I mean, but these assets are not readily liquid. You know, student loans, that’s
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a big asset that the government claims it has. All these students that owe the US government money. Yeah. Right. The students aren’t going to pay. That’s a makeelieve asset, right? They’re going to default. Um, you know, then there’s government-owned enterprises like Fanny and Freddy, right? That are eventually going to go bankrupt, right? So, what the hell what the hell are they worth? But it is pure BS to try to say that we don’t have to worry about the $39 trillion in debt because we can sell off
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the national parks. You know, we could sell off Alaska wilderness. We could No, we can’t. And even if we sold all of that off at fire sale prices, we’d only pay off a fraction of the debt. And then what would we do? What would we do with the rest of it? Uh so this is a real crisis that the investment world I mean the you know the mainstream economists are trying to just sugarcoat it gloss over it looking for ways to justify it to say that the people who are worried about this debt you know they’re just
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fear-mongers they’re chicken littles they’re doomsayers and they may point to people like me who have been warned warning about the debt crisis for decades and thus far we haven’t had it which is true now a lot of the things that I warned would happen on the road to this death crisis have in fact happened and the reason the real economy is as weak as it is the reason that Americans are struggling the way they are the reason that Donald Trump is as unpopular as he is is because of the
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damage that has been done by this buildup of government debt and the size of government that the debt is enabling and the inflation that is being created to sustain it. That’s why things are so bad. That’s why people are struggling. So I was right to warn about the adverse consequences of continuing down this unsustainable path. the fact that we haven’t had the absolute crisis yet where, you know, we have that break the glass moment where, you know, bonds crash, the dollar crashes, and then we
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have a massive economic meltdown. Yeah, that hasn’t happened yet, but that is going to happen. That is inevitable. That’s why I’ve been warning for so long to try to do something to prevent it, to try to circumvent that by getting our fiscal house in order. But nobody wants to do that. And even Henry Pollson doesn’t even bother. He knows that any uh advice to try to get ahead of this will fall on deaf ears. That’s why he’s not saying we need an emergency plan now to prevent the crisis. No, he’s saying
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we need an emergency plan to deal with the crisis after it happens. Right? That is not the plan. Like, hey, we need an emergency plan to deal with the ship after it sinks. Well, if you know the ship is going to sink, I got a better emergency plan. Start plugging up the holes. How about if we stop the ship from sinking instead of trying to figure out what to do after it’s underwater? Right. That’s that’s the advice that we get from Hank Pollson. But at least he’s saying we should have an emergency plan.
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Most other people don’t even think we need an emergency plan because they don’t even see the emergency coming. Now, for me, one of the main reasons I’ve been warning about it isn’t because I thought I could actually do anything to stop it because no one really cares in power what I have to say. But what I’m really trying to do besides lay a foundation so that I can go back and not only just say I told you so, but use that track record to increase my credibility because all the people that
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didn’t see the crisis coming that caused the crisis are going to have BS solutions that’ll make everything worse. I want to be able to say, “Look, these guys don’t know what they’re talking about. They didn’t see this coming. They’re the reason it happened. I saw it from a mile away. I understand the problem. I know what to do about it. I know how to solve it. And so, and and other people, not just me, I’m not the only one. I’m not saying I’m the only person who can see this. I’m just one of
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the few people who sees it and who spends so much time warning about it uh that I’ve been able to build up uh some credibility, but it’s mainly investors. I’ve been trying to target people who get it either they got it on their own and they’re like, “Oh, there’s Peter Schiff. He thinks exactly like me. Oh, let me invest some money with his firm because my broker thinks I’m crazy. He thinks I’m a nut.” Well, I don’t think that because I’m just as nutty, right?
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So, there are those people who when they find me, it’s like, “Aha, right? This is the guy I’ve been looking for.” Uh, because he thinks like me. Then there’s a lot of other people who didn’t think like me until they started listening to my podcast, reading my books, and now they think like me. I’ve helped people go completely from one end of the political spectrum to the other, right? From being socialists to being free market capitalists and and now they’re investing with me because the investment
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strategies that we have are designed to protect us that I’m not waiting to break the glass in an emergency. I am preparing my clients at Europe Pacific Asset Management, my customers at Shift Gold. We’re prepared in advance. We’re not going to be scrambling breaking glass in an emergency because we’re already set. We’re already protected financially uh from it. In fact, not only do I think we’re going to avoid the losses that the majority of Americans are going to suffer, but we’re actually
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going to reap huge profits from having been properly positioned for the world the way it’s going to look on the other side of this crisis rather than the way it looks now. Anyway, that’s it for today’s podcast. Again, hope everybody enjoyed it. Give me the thumbs up on the YouTube channel. Subscribe if you’re not a current subscriber. If you happen to be listening on YouTube, uh, like the video, make a comment. If I have some time, uh, I will respond to it. Have a great weekend, everybody, and I’ll be
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back again next week.