Young and Profiting with Hala Taha (Entrepreneurship, Sales, Marketing)
Peter Schiff: How Smart Entrepreneurs and Investors Preserve Wealth During Financial Crises | Finance | E346
Mon, 14 Apr 2025
Peter Schiff made a name for himself in finance by challenging mainstream views on wealth and the economy. In 2011, he attended the Occupy Wall Street protests with a sign that read, “I am the 1%,” challenging the movement’s perception of wealth inequality. A vocal critic of inflation and government spending, Peter accurately predicted the 2008 financial crisis. He also strongly advocates investing in real assets like gold, as opposed to Crypto. In this episode, Peter breaks down the real causes of inflation and income inequality, explains why Bitcoin isn’t a safe investment and shares the best strategies to protect your wealth from inflation. In this episode, Hala and Peter will discuss: (00:00) Introduction (01:17) The Real Cause of Wealth Inequality (07:35) Capitalism and the Value of Entrepreneurs (13:34) Why Higher Taxes on the Rich Hurt Investment (17:26) How Government Spending Fuels Inflation (26:57) Why Gold Is the Ultimate Store of Wealth (32:30) Investing in Business for Long-Term Wealth (40:24) The Truth About Bitcoin’s Value (48:26) Why Investing in Crypto Is a Financial Mistake (59:51) Preparing for the Inevitable Economic Crash (01:08:02) Protecting Your Business in a Recession Peter Schiff is an investment broker, financial commentator, author, and the founder of Euro Pacific Asset Management. Known for accurately predicting the 2008 financial crisis, he strongly advocates for gold as both a store of value and protection against inflation. Peter also hosts The Peter Schiff Show podcast and has authored bestselling books, including Crash Proof and The Real Crash. A well-known critic of Bitcoin, he has called it a "Ponzi scheme." Sponsored By: RobinHood - Receive your 3% boost on annual IRA contributions, sign up at robinhood.com/gold Indeed - Get a $75 sponsored job credit at indeed.com/profiting Shopify - Sign up for a one-dollar-per-month trial period at youngandprofiting.co/shopify Microsoft Teams - Stop paying for tools. Get everything you need, for free at aka.ms/profiting Mercury - Streamline your banking and finances in one place. Learn more at mercury.com/profiting Open Phone - Streamline and scale your customer communications with OpenPhone. Get 20% off your first 6 months at openphone.com/profiting LinkedIn Marketing Solutions - Get a $100 credit on your next campaign at linkedin.com/profiting Bilt Rewards - Start paying rent through Bilt and take advantage of your Neighborhood Benefits™ by going to joinbilt.com/PROFITING. Airbnb - Find yourself a co-host at airbnb.com/host Resources Mentioned: Peter’s Book, The Real Crash: bit.ly/Real-Crash Peter’s Podcast, The Peter Schiff Show Podcast: bit.ly/PeterSchiffShow Euro Pacific Capital Website: europac.com Active Deals - youngandprofiting.com/deals Key YAP Links Reviews - ratethispodcast.com/yap Youtube - youtube.com/c/YoungandProfiting LinkedIn - linkedin.com/in/htaha/ Instagram - instagram.com/yapwithhala/ Social + Podcast Services: yapmedia.com Transcripts - youngandprofiting.com/episodes-new Entrepreneurship, Entrepreneurship Podcast, Business, Business Podcast, Self Improvement, Self-Improvement, Personal Development, Starting a Business, Strategy, Investing, Sales, Selling, Psychology, Productivity, Entrepreneurs, AI, Artificial Intelligence, Technology, Marketing, Negotiation, Money, Finance, Side Hustle, Mental Health, Career, Leadership, Mindset, Health, Growth Mindset, Personal Finance, Scalability, Financial Freedom, Risk Management, Financial Planning, Business Coaching, Finance Podcast, Saving.
Chapter 1: What is the main topic of this episode?
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There's going to be a day of reckoning. Inflation is going to get worse over the next several years. The problem isn't the wealthy people in the free market. It's the wealthy people in government. There's always going to be income inequality. But the beauty of capitalism is even the poor people can be rich.
Why do you invest in gold?
Gold is money. You want to invest in productive assets. And the most lucrative asset you can invest in is your own business. It's very difficult to be a successful entrepreneur, but it's very important. And if you succeed, you deserve all the money that you make. And the more money you make, the more people you've helped. In order to really make America great again, there's going to be a
Yeah, fam, welcome back to the show. My guest today is Peter Schiff. He's a businessman, investment broker, author, and financial commentator. He's the CEO and chief global strategist of Euro Pacific Capital. And he is also the host of the very popular Peter Schiff podcast. In this episode, we're going to talk about the 1%, why they aren't so bad, and why capitalism really fuels the economy.
We're going to be talking about real assets, what that means, and the difference between Bitcoin, the dollar, gold, how we should think about and be investing in each of those. And we're also going to talk about the potential recession that's about to hit in the upcoming year with this new presidency. So I can't wait for you guys to hear this. I was really blown away by all of Peter's knowledge.
This is one of my favorite episodes about the economy and finance that we've had in a really long time. So without further delay, this is my super insightful conversation with Peter Schiff. Peter, welcome to Young and Profiting Podcast.
Mahalo. Thanks for inviting me on. I'm happy to be here.
Yeah, I'm excited to talk about the economy, to talk about investing. And to kick it off, I really wanted to get your POV related to some general topics, the things that you talk a lot about. And the first place I wanted to start was income inequalities. And income inequality has been a super hot topic in America for over a decade now.
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Chapter 2: What is the real cause of wealth inequality?
I mean, if you want to see it, I eventually, a few years ago, I just put a copy of it on my YouTube channel. And even there, I've got over 5 million views. I put it up a few years ago. But it's a great video. I think it's about two hours if you have the time. And it did make a big impact because I still get emails now. I mean, every week, at least I get one from somebody, usually young people who
let me know how influential this was. It opened their eyes to a lot of things that they didn't understand. Now, getting to your income inequality question, I mean, first of all, there's always going to be income inequality. In a free market, in capitalism, people are not equal. I mean, they're equal under the law, right? That is a tenant of
government, that everybody is equal under the eyes of the law. But we're all not equal in our abilities, in our intelligence, in our drive, in our goals. And so there are going to be people that are more successful than other people. And so they're going to be wealthier. I mean, that's just what you're going to have.
But under capitalism, the beauty of capitalism is even the poor people can be rich. relative to how they would be in another system. And in fact, the poorest people in America today live better than the richest people did hundreds of years ago. If you look at all of the things that capitalism has produced that have increased the quality of life,
Hundreds of years ago, if you wanted to listen to music, you had to be wealthy enough to afford to have a live band play for you. You couldn't just go on the internet and listen to stuff. So a lot of things that you had to be rich to have, now everybody has them. I mean, I remember when the first cell phone came out, I didn't even want to buy one because I couldn't afford it.
I remember I went to a store and I saw this high def television in like a Best Buy or something. And I was probably maybe in my 30s early. I couldn't believe the picture how great it was, but I couldn't afford it. It was like $10,000, which was a lot of money back then. It's still a lot of money, but it was a lot more money in the 80s.
But the reason that everybody's got a television, a high-def television, the reason that even people on welfare have cell phones now is because capitalism made them more abundant and less expensive. But income inequality today... is actually higher than it's ever been. And the reason for that is because of the monetary policy that the Federal Reserve has pursued.
And as a result of that, we have an extreme income inequality that is not the natural byproduct of capitalism, and which is a problem. But the solution isn't for the government to try to redistribute the wealth. from the rich to the poor, that always backfires, and that will lead to even greater income inequality.
What we have to do is change the monetary policy that has enriched the few at the expense of the many. Because what the government has been doing is that they've been fueling inflation. They've been running huge deficits, printing a lot of money, creating a lot of inflation. The beneficiaries of that inflation
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Chapter 3: How do higher taxes on the rich impact investment?
So if I know that if I start a business and I do something good, I could get rich, well, then I'm going to do it. But if I don't have that incentive, then why should I take the risk? Why should I put in all the effort if I can't benefit from that? And so you can't look at somebody who's wealthy and think that, oh, they're a bad person, they're an evil person. They're not.
The people who have helped us the most, I mean, everybody, you know, you look, oh, I've got this iPhone that I really like. Well, you think you'd have an iPhone if Steve Jobs and his early investors couldn't make any money creating those products? The problem isn't the wealthy people in the free market. It's the wealthy people in government. It's people who get rich off of government.
Because that's the problem. Because government isn't about voluntary transactions. Government is about force. A businessman... can't take your money away from you. A businessman has to earn your money. He has to convince you to spend your money at his business as opposed to somebody else's. And he can only do that by offering you a better deal. Government takes your money by force.
Government says, You have to give me your money whether you like it or not. And so that's what people have to be afraid of, big government. Big government can harm you. A big business can't. All they can do is try to earn your money by providing you things that make your life better.
You're so right. It's the politicians and the government that get rich off our money. That's the bad thing because entrepreneurs, they're taking risks. They're creating jobs. They're making our standard of living so much better through innovation and technology and better health care and all these great things. And entrepreneurs really push the world forward.
So sticking on that topic of government taking our money and taxes, when it comes to the 1%ers, a lot of people complain that it's the middle class taking all the burden with the taxes. And even Warren Buffett once said that he gets taxed less than his secretary. So talk to us about that and what you think about that.
Well, he doesn't get taxed less than his secretary. But I mean, one thing about Warren Buffett is he worked for free, right? Warren Buffett didn't take a salary because he owns so much stock in Berkshire Hathaway. He was earning his money on dividends. That was his choice. But Berkshire Hathaway, the corporation, paid a corporate income tax before Warren Buffett got his dividend.
And so when Warren Buffett said, hey, I earned less than my secretary, that's because he wasn't counting the taxes that he paid on the corporate level before he got his personal dividend. So when you add it together, he did pay a higher tax than his secretary. But people like to use those soundbites as if we need to tax the rich more. The rich are already paying a lot of taxes.
They pay the majority of the taxes. But the problem with higher taxes on the rich, and I'm talking about, you know, not somebody that makes 200, 300, 400,000 a year. You're talking about people that are making 10 million, 20, 50 million a year, you know, making a lot of money. What do you think rich people do with their money? Most of it is invested. it's not spent.
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Chapter 4: Why is government spending a fuel for inflation?
Because if you lose money, the government doesn't share in the losses. They just want a big chunk of the profits. And so that's not a good partner to have. So it's counterproductive to say, hey, just let's raise the taxes on the rich. But I do think that in America today, the middle class pays a tax rate that much too high. It's not just the income tax that they're paying.
It's the payroll tax, the Social Security and Medicare tax. And a lot of people don't realize this. They think they just pay their half. They just think they pay half of the Social Security tax and the employer pays the rest. No, the employer doesn't pay any of it. The employer just collects it from the worker. So everybody is paid a little bit less.
so that their employer can send social security payments to the government. All the social security money comes from the worker. That's why if you're self-employed, if you're driving an Uber and you're an independent contractor, you pay a 15% self-employment tax. But everybody is paying that.
They don't realize it because they don't see it out of their paycheck because the employer already factored that in into the wage. The wage would be higher without that obligation. So everybody is overtaxed, I think. But the reason for that is that we have a huge government that's spending much too much money. And so the way to lower everybody's taxes is to cut government spending substantially.
But right now we have a huge budget deficit, which means technically we're not even taxed enough. Given how much government we have, we're not paying enough taxes to finance it. And the way we end up paying for that government is through inflation because inflation is really a tax.
And the way the inflation tax comes into existence is let's say the government collects a dollar in taxes, but they spend a dollar fifty. Where do they get that 50 cents? They didn't get it in taxes. So they have to create it. The Fed creates it or they can borrow it. But now the borrowing is financed by the Fed mostly.
So the government creates that extra 50 cents and they spend it in the circulation. And now the people that get that money go out and spend it. And that bids up prices. And so the increase in price is the tax. So instead of the government taking your money honestly, they take it dishonestly through inflation by taking your purchasing power.
So when people are complaining that inflation is too high, it's taxes that are too high. And it's government spending because that's the real tax. It's how much government spends. So that's why even when Donald Trump, when he claimed that he had this big tax cut when he was president, there was no tax cut because government spending went up every year that Trump was president.
And it's the amount that government spends that is the actual tax. That is the burden that government puts on the economy. And all those resources need to be paid for by the public, either through direct taxation or sales taxes or income taxes, social security taxes, or they're going to be paid for by inflation. And recently, more and more of our government is being paid for by inflation.
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Chapter 5: Why is gold considered the ultimate store of wealth?
We had faster economic growth in the 19th century than we did in the 20th century or now in the 21st when we had no income tax. But the reason we were able to exist without an income tax is because the government was tiny. The government hardly did anything. So it didn't spend very much money. So it didn't need a lot of taxes. And so it could afford to raise that revenue through tariffs.
But today, the government is so big that it's impossible to get the amount of money that they need through indirect taxes like tariffs. And so that's why they need the income tax because they take that money right out of your paycheck. You never get a chance to see it. Before you even get it, the government has it, right? Same thing with the payroll tax.
So without those type of taxes, the government couldn't be this big. But those taxes are very economically destructive and they destroy individual liberty. I mean, I think it's horrible that people have to even keep track of how much money they earn. My grandfather, my father's father came to this country As an immigrant, he had no money, didn't speak any English, and he never became wealthy.
He was a middle class guy, but he was self-employed. He had a carpentry business. He employed a few other carpenters. You know, he worked his whole life, but he never kept track of what he earned. He had a little business. He paid his workers. Whatever money was left over was what he had. But he didn't write it down because there was no taxes to pay. You paid your bills and that was that.
You didn't have to have accountants. You didn't have to have lawyers. You just earned money and you spent. That's a free country. Today, you have to tell the government everything you do. They want to know everything, all the money you earn, everything you bought. So we have a lot less freedom today than we did before we had an income tax.
Do you feel like this new department led by Elon Musk is going to change anything? Doge, I think it's called.
I don't think there'll be a substantial change such that it makes a difference. I mean, it's not really a department. First, it was going to be a think tank, but now Donald Trump signed an order. So now he's kind of brought Doge into the White House. So the people that work for Doge are actually going to be government employees. So that's more money we're going to spend hiring these workers.
But I think their mission is going to be more trying to make our IT systems more more efficient up to date. That might save some money, but in the scheme of things, it's not going to be enough. I mean, we're not going to be eliminating government agencies and departments like Malay is doing down in Argentina. I mean, that's what we need. We need that type of reform.
But I don't think we're going to get it. I don't think we're desperate enough yet. The people aren't, it hasn't been bad enough. It took a long time for the Argentine people to be willing to swallow the bitter tasting medicine. Because in order to really make America great again, in order to go from a bubble economy to a real economy that would really benefit everybody,
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Chapter 6: What makes Bitcoin a risky investment?
And then that just means more inflation. But until we have substantive cuts, the inflation is not going to stop. But we also need higher interest rates. They're still too low and the Fed is cutting them. But if we get higher interest rates, well, that's a huge problem for the leverage in the economy.
And so they don't want to let interest rates go to where they need to be because of the short term pain that that will create. But that's what's needed. Now, the pain itself isn't what's needed. But unfortunately, it's necessary for us to get to where we need to be because it's higher interest rates that will encourage more savings.
And it's savings that will result in more capital investment, more economic growth, better jobs. All that stuff comes from savings and investment.
But we're not going to get that if people are spending all their money, if people are buying everything on credit cards and taking out student loans and all kinds of consumption-based loans that starve the economy of the investment capital it needs to have real economic growth.
Why do you think America should spend billions of dollars on defense for other countries than our old and sick people in America? I don't understand that logic.
We shouldn't really be doing either. And it's unfortunate that a lot of Americans can't afford to take care of themselves because they were overtaxed for so many years while they were working. That's the problem. The government creates that dependency. But the reason that we can actually get away with all this stuff is because the dollar is still the primary reserve currency.
The world wants our dollars, even though it cost us nothing to create them. And so we're able to finance these massive deficits. because of the unique status the dollar has. So we can create dollars out of thin air and use them to buy the goods that other people work hard to produce. And we get it basically for free. So that's really what's allowing us to continue to live beyond our means.
There's a point where we're not gonna be able to do that anymore. And the dollar will collapse. So we won't be able to import all these products and we won't be able to rely on foreign savings. I mean, right now the world loans us their savings. The world buys our debt. But when the world doesn't want to do that anymore, we're stuck.
Okay. Well, this is a good transition because you were just talking about how the dollar is really worth nothing. And something else that you always talk about is this concept of real assets. So first of all, talk to us about what a real asset is in your opinion.
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Chapter 7: How to prepare for an economic crash?
Well, a real asset, something tangible or even intangible assets sometimes could be real, intellectual property, things like that. But a real asset, generally, you're going to think about real estate. You're going to think about stocks that represent ownership in a business. And you can own your own business too. You don't have to own part of somebody else's business.
But if you're working for a living, you have a job and you're not going to start your own company, you're pretty much investing in somebody else's company as the
deal you know the best way to to get that type of equity but you own real things that the government can't print as opposed to just having paper like a bond if i just have a bond i've loaned somebody money they're going to pay me back that could be destroyed through inflation because you
If dollars lose value, I loan somebody $1,000 and they pay me back in five years, what's the $1,000 going to buy? I don't know. It may not buy very much. We have a lot of inflation. But if I take that $1,000 and buy a piece of property or into a piece of property or I buy shares of a company, if there's a lot of inflation, well, then the price of those assets would go up.
It's not like the price of the assets going up, the value of the money is going down, but now you need more of the money to buy, to buy the assets. So real assets can be a hedge against inflation. Whereas paper assets just get destroyed by inflation.
I feel like that's so helpful for us when we're thinking about like what we should actually be investing in tangible things, businesses via stocks, or even buying a business, right. Or investing in a business. Go ahead.
It's unfortunate because savings is still it should be a good thing to do. Putting money in a bank used to be not a bad place for your money. And then the banks could take your money and loan it out. They would make loans. That's how they paid you interest. Used back in the day before the government screwed it all up.
You would go to the bank and put your money in the bank and they'd pay you six, seven, eight percent interest on your savings account. And how did the bank get the money to pay you that interest? Well, they loaned it out to entrepreneurs who needed the money to start businesses. And then they charged them more. And then you got paid. And so people put their money in banks.
But the problem is now you put your money in a bank, they pay you nothing. There's like no interest on a bank deposit. Maybe you get quarter of 1%. But inflation is many, many times that. You're punished. If you put money in a bank, the government is punishing you. The government is taxing you. You're losing a value every year that you leave your money in the bank.
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Chapter 8: What strategies protect your business during a recession?
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