“Hawks Are Extinct”: Peter Schiff Warns Fed Can’t Stop the Debt Crisis

Wall Street is pushing toward record highs, but the bond market is flashing a severe warning. Peter Schiff, CEO and Chief Global Strategist of Euro Pacific Asset Management, joins Jeremy Szafron, Senior Anchor of Kitco News, to break down the massive disconnect between equities and the 30-year Treasury.

Following the swearing-in of new Federal Reserve Chair Kevin Warsh and recent warnings from Bill Dudley, Schiff argues that "hawks are extinct" at the central bank and the 2% inflation target is now a pipe dream. Schiff details his timeline for a sovereign debt crisis, warning that the U.S. national debt will hit $50 trillion before the end of the presidential term, and explains why inflation could be worse under a second Trump administration than under Biden.

Schiff also provides a critical update for physical metals investors. He breaks down why silver's recent run to $125 was just the first stop, where the AI tech bubble wealth will actually go when it evaporates into "money heaven," and shares an exclusive update on the future of tokenized gold (tGold) as a medium of exchange.

Recorded May 26 2026

Follow Jeremy Szafron on X: @JeremySzafron (https://x.com/JeremySzafron) 
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Follow Peter Schiff on X: @PeterSchiff (https://x.com/PeterSchiff)

Timestamps:
00:00 MARKETS DIVERGE
00:53 BOND MARKET WARNING
02:18 REAL RATES & GOLD
02:56 DEBT MANAGEMENT STRESS
04:06 FED CREDIBILITY TEST
06:10 INFLATION UNDER TRUMP
07:51 CENTRAL BANKS BUY GOLD
09:26 NO SOFT LANDING
12:20 WAR, OIL & YIELDS
13:11 FISCAL RESPONSIBILITY DEAD
15:55 SILVER BREAKOUT
17:55 RETAIL DEMAND RETURNS
21:19 BUYING THE PULLBACK
24:32 AI "MONEY HEAVEN"
26:00 AI BUBBLE FALLOUT
26:38 MINERS BUBBLE NEXT
27:43 M&A WAVE BEGINS
28:50 WHY JUNIORS WIN
30:33 VALUATIONS STILL CHEAP
32:00 IS IT TOO LATE?
33:39 PRICE CONTROLS PLAYBOOK
36:03 CAPITAL CONTROLS RISK
38:10 ENDGAME SIGNALS
41:00 PORTFOLIO ALLOCATION
43:09 GOLD AS CASH
45:01 TOKENIZED GOLD (tGOLD)
47:15 GRESHAM'S LAW & BITCOIN

#PeterSchiff #USDebt #Silver #Gold #FederalReserve #KitcoNews 
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The videos are not intended to provide trading advice, and the views expressed do not necessarily reflect those of Kitco Metals Inc. Kitco News, its anchors, producers, and reporters are not responsible in any way for the performance or actions of any sponsor, advertiser or affiliate of Kitco News. In no event will Kitco and its employees be held liable for any indirect, special, incidental, or consequential damages arising out of the use of the content in this video.

Transcript

SPEAKER_00 0:00

Kitco News in Focus with Jeremy Saffron.

SPEAKER_02 0:03

Welcome back up, Jeremy Saffron. Okay, Wall Street is pushing towards new record highs this morning, but the bond market is not buying it. Equities are trading on U.S. Iran peace hopes, but the 30-year Treasury is above 5%, a near post-2007 high, and the 10-year is holding near 450. Meanwhile, gold around 4,500, silver 76, and we just got consumer confidence. Two-thirds of Americans say they're cutting back on spending because of rising prices. University of Michigan sentiment hit record lows last week. And we have a new Fed chair. Kevin Walsh was sworn in on Friday, and traders are now starting to cut a rate hike, not a cut. We've got a lot to get into today here, joining us to cut through the rumors and the noise. The macro reality man himself. We've got Peter Schiff on the show, CEO, chief global strategist of Euro Pacific Asset Management. Good to see you.

SPEAKER_03 0:53

Jeremy, thanks for having me on. Nice to see you.

SPEAKER_02 0:56

Hey, we got uh, I mean, it's an interesting market, right? We had a holiday Monday. This morning stocks are rallying uh on Iran. Peace hopes, bonds are not going along for the ride. Uh 30-year, like I said, above five, 10 year near 450. Gold still holding around, you know, 4,500, even with this pullback. I mean, what is the bond market seeing right now that equity traders are completely walking past?

SPEAKER_03 1:20

Well, I think the bond traders are kind of walking past it too, maybe not as blindly as the equity traders, because I think if the bond investors really perceived the gravity of the threat, yields would already be a lot higher than they are right now. I still think that the U.S. government is getting off cheap being able to borrow money at for 30 years at just 5%. You know, you could go look back at what the U.S. government was paying to borrow money in the 80s and the 90s, let alone the 70s, and it was paying a lot more than that. But we were a lot uh better credit risk back then because we had a lot less debt, and therefore, you know, we didn't have to print nearly as much money to uh service it. So I I I think at least the bond market is starting to pay attention, but I think yields are going a lot higher on the longer end in particular, and eventually the stock market is gonna notice that, and you're gonna start to see some weakness there. And then I think gold is gonna break out of this consolidation because investors have been focusing on the nominal increase in yields as if somehow that is a negative for gold. It's not. Nominal interest rates are irrelevant, it's real interest rates that count. And I think real interest rates are falling, uh, even on the long end, because inflation is accelerating a lot more than yields are rising. Meanwhile, the Fed has stayed pat. The Fed hasn't hiked rates, and that amounts to a rate cut. And all of this is bullish for gold.

SPEAKER_02 2:58

Yeah. Yeah. I mean, okay, so Scott Betsy, he's been described as the market's volatility manager, the best in put, as we know. I mean, the idea is he ships issuance to the front end, uses buybacks, calms the long bond. And on May 12th, he called the yield spike um transient. I mean, that word has a history at the Federal Reserve. I mean, uh is this sound debt management or is it a warning side that you know the long end no longer wants the paper at any rate that it can actually live with?

SPEAKER_03 3:27

Yeah, you think they would have retired transient from the vocabulary over there at the Fed and come up with a a different adjective to describe, to describe it. But uh the only thing that's transient is uh the rate at which rates are going up, because I think they're gonna go up a lot faster in the future. So I think uh uh the the new sec the new Fed Fed chair uh has uh a big problem on his hands, um, as does the Secretary of the Treasury. I think uh uh, you know, we're gonna be looking at a sovereign debt crisis and a US dollar crisis, I think, before the end of the Trump term. It's coming up.

SPEAKER_02 4:06

It's coming up. Um, okay, obviously bond market rejecting that peace rally, best since kind of running out of easy options. And now you just mentioned it, this new Fed chair at what may be the worst possible moment to start the job. I mean, uh just this morning, former Fed, New York Fed president Bill Dudley was on Bloomberg. He said, and I'm quoting here, we have been above the Fed's inflation target for more than five years. There's a risk that inflation expectations do finally become unanchored. He also said the case for cutting rates now is actually very, very weak. Okay, Kevin Walsh sworn in Friday, traders pricing an 8.5% chance of a July rate hike. One month ago, that number was under 1%. I mean, is Dudley finally catching up to where you've been? And does a hawkish Warsh actually help the Fed's credibility, or is it already too late?

SPEAKER_03 4:53

Well, first of all, I think Hawks are extinct at the Fed. So it's a question of the degrees of dovishness. Uh, there are no more hawks. And, you know, by the way, uh inflation expectations broke off their mooring uh a long time ago. I mean, when the Fed talks about we want to make sure that expectations remain anchored at 2%, I mean, those horses have left the Bart. I mean, if you look at the most recent uh numbers from the consumer, they're expecting inflation over the next 10 years to average about 4%. So those expectations are already double uh what uh the Fed's so-called target is. And I think even the consumer is is too optimistic. I think inflation is gonna be higher uh than that. And and I think in the bond market, expectations are drifting away. Uh, and they're gonna drift a lot further away because uh two percent at this point is a pipe dream. They're not gonna come close uh to two, they won't even come close to three. And again, these numbers aren't even accurate. These are the government's inflation numbers that by design uh maybe get half of the actual increase that consumers are experiencing when it comes to the cost of living. Uh so you know so it the inflation is a big, big problem. It's going to get much worse. Uh, you know, Donald Trump likes to pretend that the Biden inflation is gone. Uh, and first of all, it started under his term. Uh, the big increase in consumer prices started at the end of the Trump term and then continued into the Biden term. Uh, we would have seen the same type of inflation in 2021, 2022, even if Trump were re-elected. So, you know, not that I'm giving Biden, you know, a pass on this, I'm not, uh, but you have to attribute everything to the policies that began uh under COVID, uh, which happened on Trump's watch, uh, not not Biden's. But I think the Trump second term in its entirety is going to uh deliver a bigger increase in the cost of living than the Biden term. So it's gonna be a bigger problem, inflation, in Trump's second term than it was under Biden, uh especially in the last two years. I think that's where it's gonna be the worst. Under Biden, inflation was the worst during his first two years. But I think in Trump, it's gonna be the back end of his term, the last two years, where inflation is gonna be uh the worst, uh probably into the double digits.

SPEAKER_02 7:34

Wow. Uh and people are feeling that pinch now, as we know. I mean, the the the headlines are crazy. I mean, going back to the Fed, if if the real hawks are gone, is the credibility, I mean, what what what the hell does it mean now? Is credibility about fighting inflation or just preventing the treasury market from breaking at this point?

SPEAKER_03 7:52

Well, you know, I I think the credibility is going. That's why gold went up to 5,500. I mean, that big rally from 2,000 to over 5,000 was driven almost entirely by central banks. And the fact that central banks were buying is an indication of a loss of confidence in the US dollar, in the Fed, in the Treasury. Uh, retail investors, you know, the people you know that might you know go to Kitko or shift gold, you know, they weren't there. They weren't buying gold. Uh, they were selling. Uh, you know, in fact, if you look at the ETF investors, there were net outflows in 2024 and 2025. The whole time the price of gold was going up, uh, investors were selling. Uh, and and so that, you know, that the confidence was lost in the central banks. That the investing public, uh, I think was clueless. But I think that what's going to be the big story going forward is not just that central banks are going to continue to buy and accelerate their buying, but the retail public and institutions, I think, are going to become significant buyers in their own right uh as they really start to appreciate the risk to the US dollar. And also uh a lot of the crypto investors uh basically throw in the towel on that and realize they kind of got suckered into a into a pyramid Ponzi type scheme, and that Bitcoin isn't actually digital gold. And so you're gonna see uh a rush uh to get into the real thing.

SPEAKER_02 9:27

Yeah, we got to talk digital gold for a moment, but let me just try to kind of break this down for viewers who are newer to this conversation because I mean we just got our our consumer confidence, two-thirds of consumers cutting back on spending. University of Michigan is at a record low, and yet the trap, as I understand it, I mean, the Fed can't rate, raise rates aggressively because that crushes the cost of servicing. 38 trillion in debt, and uh the 30-year mortgage is already at 66.5, but it can't cut either without pouring fuel on the inflation and developing the dollar for you know further. So, I mean, is that the trap? And what is the only exit?

SPEAKER_03 10:04

Well, there is no exit. I mean, the Fed uh uh and Congress, I mean, it's not just the Fed, but uh but they put us in this situation where there is no way out uh because you have two doors. One is hyperinflation, and the other is uh depression, uh financial crisis, uh, you know, a complete collapse of the economy. Not that hyperinflation avoids that, it just uh maybe delays it a bit and it takes on an even worse form. Uh, but there is no graceful exit, there is no soft landing. Uh, you know, that's why nobody wants to deal with the problem. You know, uh a former Secretary of the Treasury, um, Hank Paulson, you know, recently came out and said that the U.S. needs to develop a break-the-glass kind of emergency plan to deal with uh the situation when uh foreigners no longer want to loan us money and they don't want to buy our bonds, uh, so we have to figure out an emergency plan. He didn't even talk about, hey, let's try to avert this crisis, let's get ahead of it, let's make some cuts to government spending so that we don't have to face this crisis. He just resigned himself to the fact that the crisis was inevitable, that the government would never do anything uh to prevent it or preempt it. And it was just, you know, let's brace for the impact of this crash. Uh, but the problem is I don't think there's a plan that is going to work. There, there, you know, the the we are gonna have to pay the piper, and it's a big bill because you know, we haven't paid it in decades. We keep uh kicking the can down the road. And, you know, you said $38 trillion. The national debt is now 39.3 or something like that. I mean, we're gonna hit 40 trillion in a matter of months. I think we're gonna hit 50 trillion before Trump finishes his term. And that's gonna be because the Fed is going to be back in QE mode, uh, monetizing a lot of this debt that the rest of the world no longer wants to finance. And that's where a lot of the inflation is going to come from. You know, right now uh they've got an excuse. They can blame it on the war with Iran, and obviously that's not helping. But I think the Iran war was more of a catalyst for the breakout in oil and the breakout in bond yields. That would have happened anyway. And if it wasn't Iran, it would have been something else. And a lot of people have uh a foolish uh view that as soon as the war is over, everything's gonna be great, oil's gonna come crashing down, bond yields are gonna come way down. I don't think that's gonna happen. I mean, you may have a little bit of a blip, uh, but then I think it's off to the races. I think oil's going a lot higher, and so are bond yields, even if the war ends, uh, which, you know, who knows if that's actually gonna happen anytime soon. But even if it does, uh, I think that these trends are gonna remain in place.

SPEAKER_02 13:13

Hey, you posted something interesting. I was taking a look at this morning about the defeat of Thomas Massey. You said the Republican Party exists in name only now. Uh, you know, we can put the politics kind of to the side. I mean, mechanically, tariffs or inflationary spending is not being cut, and the treasury still has to fund that massive growing deficit you were just talking about. I mean, walk me through what that math does to the timeline you're working with.

SPEAKER_03 13:37

Yeah, you know, I think getting uh Massey kicked out of Congress sends a the wrong message to our creditors because he was the lone voice for fiscal responsibility in the Republican Party. I mean, he was the sole vote against the big beautiful bill, which was a disaster as far as increasing government spending. You know, Republicans got elected criticizing the excess spending of Biden. Yet Massey was the only one that wanted to reduce that spending. All of the other Republicans voted to keep all of the Biden-era spending that they objected to and then add some more for good measure, making it worse. And so I think one of the main reasons they were able to get rid of Massey was because he voted against that bill. Oh, he's not a Republican. He he voted against this tax cut. It wasn't a tax cut. The big, beautiful bill was a tax increase because it made government bigger and more expensive. And you measure the cost of government by what it spends, not by what it collects in official taxes, because the difference is made up through inflation. And Thomas Massey didn't want to hit his constituents or the country with the massive inflation tax necessary to pay for the big, beautiful bill. But the message that it sends to our creditors is fiscal responsibility is dead and buried. Certainly the Democrats are not going to be fiscally responsible. They love big government. The more government spends, the better. The party of fiscal restraint was supposed to be the Republicans, but that's gone out the window. And so everybody can tell that we're never going to uh you know get our house in order. We're not going to prevent this uh fiscal uh collapse. We're just gonna keep on driving the train until we go over the edge of a cliff. And so people want to bail out. Central banks don't want to own our currency, they don't want to own our bonds, and soon nobody will want to own our currency or our bonds, even Americans. And you know, they'll be rushing to get rid of their dollars and getting into gold, getting into silver, getting into hard assets, or even other fiat currencies uh to avoid that inflation tax.

SPEAKER_02 15:57

Well, let's go over to silver for a second, because last time you were in this chair, I think it was at the end of February, silver was approaching $90. I mean, the CMA had just halted Glovex medals right at the first notice day. Uh, you told me you kind of had no idea if it was a coincidence or something more deliberate, but I mean, silver, it's 76 this morning. So let me ask you directly, I mean, did the did the silver squeeze fail? Did it get delayed? Did the paper market kind of suppress what is still a real physical market problem? Which one you think?

SPEAKER_03 16:26

Well, remember, after that, silver went on to top $125 an ounce after that interview. Yeah. Um, now, what's significant is not, oh, silver's fallen back to 76. What's significant is that we blew through 50. And, you know, that was really the overhead resistance dating back to the Hunt brothers in 2000, I mean 1980. And we couldn't even get to eight to we couldn't even get to 50 in 2011 when gold went above 2,000. Um, but then we blew through it, you know, like a hot knife through butter. And we, you know, we went way up to 125. So that was a massive breakout. It doesn't surprise me that we couldn't sustain that big a move in such a short period of time. But what should be impressive to anybody is that we never went back below 50. We never went anywhere near 50. We broke out and now we're consolidating really in the 70s. And we've had, you know, we almost got back up to 90 a week or two ago. Uh so I think this is a beautiful uh breakout and consolidation in the silver market. And this is gonna resolve itself with another big up move. Uh, and you know, so that $125 peak, that's not the peak for silver. That's just the first stop uh on a long road that I think is gonna see much, much higher prices for silver.

SPEAKER_02 17:57

Talk to me a little bit about the retail demand. I mean, you got into it briefly there. I remember that last interview we were also talking about that India SEBI rule, kind of up to 35% of $385 billion equity fund pool now going into silver and gold instruments. I mean, they moved to kind of domestic spot pricing as well on that one. That's been only live for nearly two months. I mean, are you seeing any capital show up in the physical market or is it still mostly going through paper?

SPEAKER_03 18:26

Well, I don't even think it's going through paper market either. I think uh there's just not a lot of demand. Now, things did pick up. I mean, if you look at my own experience with Shift Gold and our our sales there, uh 2024 and most of 2025 were pretty uh weak years for sales. I mean, the the the big year that we had was 2020. So when COVID broke out, there was a big uptick in in retail demand uh for gold and silver. So we saw that, and then it kind of fizzled out, and it finally started to come back earlier this year, late last year, early this year, when we saw the big moves up, uh, then we finally saw an uptick in retail demand, which also coincided with a short-term top, uh, which you know is not atypical of the way markets typically trade. But I think that even though demand has come off a bit, uh it's higher now than it was. And I think it's gonna continue. I think this correction has maybe scared a few people out of the market. And I think the media has uh, you know, highlighted uh the correction to try to convince people, oh, look at you know, look, gold's down $1,000. You know, look where silver, it's not a safe haven. You know, silver and gold, they were supposed to go up when we had a war, and instead they went down, which is true because they went up so much before the war. Uh and uh, you know, it was pretty obvious something was gonna happen with Iran uh in the months leading up to it. So I think gold uh and silver uh kind of rallied off uh of that. And then when it, you know, when the rumors became a fact, there was uh a tendency to sell, which is typical market behavior. But I I think I think you're gonna see a steady upturn in demand. As I said, private investors, both retail and institutional, I think uh the hedge funds, the pensions, the endowments, I think they're gonna start moving into gold. And a lot of that money is gonna come out of fixed income. Not so much out of the stock market, but out of the bond market. And even you saw it was about a year ago, I think it was Morgan Stanley that talked about tweaking the 60-40 uh portfolio to make it 60-20-20, where you cut your bond portfolio in half and you put the other half into gold. I think I think investors are gonna be looking for a safe haven, uh, for an inflation hedge. And and I and I do think we're we're gonna get a big decline in the stock market at some point. You know, we're at nosebleed valuations uh in a in a big AI uh tech bubble uh that's at some point going to burst. And when the money is is leaving, uh, where's it gonna go? Uh I think it's much more likely to go to gold uh than US dollars and certainly U.S. treasuries.

SPEAKER_02 21:21

You brought up an interesting one there, and it's important because most people, I mean, they try to not buy at the top, but a lot of people often, especially retail, often arrives a little late to the party. How do ordinary investors kind of avoid becoming that exit liquidity and in you know, silver spike or maybe a gold spike?

SPEAKER_03 21:37

Well, you know, if you bought, you know, $120 silver or $5,600 gold, I don't think you were necessarily late to the party because the party's not over. But sure, yeah, you should have bought. You didn't have to wait for those spikes to buy. And generally, when we have spikes like that, I tell people look, you know, you could buy, but you know, don't buy everything. I mean. I mean, keep m you know money aside so that if it comes down, you could buy more. And you know, I had been advising my clients for over 20 years to steadily buy gold and silver when they have extra money. And so, yes, you might be buying the highs sometimes, uh, but you're also buying the pullbacks. You know, I mean, I started uh getting people into gold under 300 and silver under $5. Uh, so when you look back at those buys, uh, you know, they were they were pretty good. And even if you bought the highs along the way, a lot of those highs look pretty low uh looking back from where we are right now. But, you know, the usually what motivates people to to move is something happening with the price. So if the price really starts to shoot up, people get afraid that maybe they're missing out on a bigger move and and they move quickly. And that's you know just how the markets work. And sometimes when the market is going down, that's when people should be buying more. But then people get too afraid that it's gonna keep falling. And so they did they don't buy, or worse, they sell, right? That's the worst that you could do is panic and get out. Uh, because these are long-term trends uh that are going to continue, I think, for a long, long time. You know, gold, uh, when you know the country started, you know, we're about to have our 250-year anniversary, although that's of the Declaration of Independence. But the first uh coinage act of 1792, uh, the gold was $20 an ounce, you know, and it stayed $20 an ounce up until 1934. Uh, and then it became $35 and it stayed there until about 1970. But ever since then, the dollar's been collapsing, and now you need $4,500 to buy an ounce of gold. Uh, the dollar's already lost 99% of its purchasing power. It's probably gonna lose another 99% from here. Uh, and so who knows, you know, to multiply gold by 100. That's where ultimately it's gonna go. Uh, the question is how much longer is it gonna take to get there? I think the dollar could lose the next 99% of its value a lot faster than it lost the first 99%. Yeah. Uh so you know, you you got you got to just keep on buying. But sure, yeah, you know, try to buy the pullbacks more than the than than than the rallies. Uh, but if it takes a rally to get some people off the fence, then that's fine. I have I'm confident that even if you bought the highs, uh, you're still gonna be glad that you did uh in a few years. But in the meantime, buy more, right? That's what pullbacks are for. They give you an opportunity uh to get a better deal and average your cost down.

SPEAKER_02 24:33

Hey, speaking of uh pullbacks, Michael Burry, uh kind of big short style warning on NVIDIA this week. Conditions for an aggressive fall, the strongest in that stock's history, consumer concentration at 64% of accounts receivable. Uh AI tokenized tokenized maxing is what he's saying, quota-driven kind of overconsumption, he says that can't last. So here's the question for you uh to answer kind of carefully. I mean, you've said that that when that speculative bubble unwinds, most of the money doesn't rotate to gold. It kind of goes into money heaven or it evaporates. If if the AI trade unwinds violently, does that capital come into hard assets and into miners, or does it go to money heaven too?

SPEAKER_03 25:15

Well, most of it goes to money heaven because you know the only money that comes out is matched by the money that comes in. Uh, and so you have to have buyers in order for the sellers to have anything to invest. Uh and so, yeah, I mean, a lot of the money just disappears. That's the problem. And that's why, you know, it's dangerous to play in these uh manias or pyramid type Ponzi investments, because you never know when the music's gonna stop. And if you get out in time, uh you can walk away with a lot of winnings. Uh, but if you overstay the party, uh your paper profits uh turn into huge actual losses, as you know, you can't actually get the money out. Some people can get their money out, but only if it's a few. If a lot of people try to get their money out, then it's impossible. Because when a lot of people want to get out, it's because nobody else wants to get in. And then you just have a huge collapse in the price. But obviously, some money is going to come out. The question is, where's that money gonna go? Uh, and you know, I think some of it is gonna go into precious metals, uh, you know. Uh, but a lot of the people that got into the AI bubble might not necessarily be the precious metals type. A lot of a lot of us uh gold bugs aren't even involved in this. Um, but uh they may be looking for the next hot thing if they haven't learned their lesson. Uh, but you know, eventually, I'm sure that a lot of the people that got into the AI bubble will eventually be in gold and silver mining stocks because there's no doubt in my mind that eventually that will be a bubble too. Uh, but I don't we're we're nowhere near there. Uh but but it will be. At some point, the their investors will get carried away based on uh the enormous uh profits that that happened in the past, and that enthusiasm will end up creating a bubble, probably in the most riskiest uh stocks. And you know, at some point I expect, just like companies you know put dot-com on their name during the dot-com bubble, and now you know, people became crypto companies or then became AI companies. At some point, uh a lot of companies are gonna become gold mining companies, gold mining exploration companies. And they'll put they'll put the word gold in their name, and it'll it'll it'll it'll create uh you know uh investors wanting to buy the stock. So that's gonna happen eventually. Hopefully, I'm smart enough to sell everything I've got at that point.

SPEAKER_02 27:43

You'll be out first. Uh okay, let's pivot over to the miners, just firstly, because you I remember your specific call at Juniors was that you know the big producers need reserves that they haven't been investing in exploration in a in a few buyouts would re-rate the whole sector. I mean, I I remember we got this Equinoxis Orla merger, but is MA starting to move here? Where are you thinking we're at in this mining cyclical?

SPEAKER_03 28:06

It's starting. You know, we've had, I think, two or three of the stocks in our portfolio. You know, we manage separately managed accounts at Euro Pacific Asset Management, and I also have the Euro Pacific Gold Fund, EPGIX is the no-load symbol. And we've had a few of our names bought out in recent months. And I think that's gonna continue because I don't know what these gold mining companies are gonna do with all this cash uh that they're earning. They're not gonna just pay it all out in dividends, they're not gonna use it all to buy back their own stock. I think they need to uh invest in developing more reserves to mine in the future. You know, they're mining the reserves now, uh, but what happens when they run out? Uh so they need to be looking to replace what they mine. And for my money, just going in and buying these uh junior companies that have you know a lot in the pipeline, they just don't have the resources themselves to develop what they already have. I think that's a much smarter, less risky play for the bigger companies than just investing in pure uh exploration and development, uh, which is a lot riskier because you have no idea what you're ultimately gonna find if you're gonna find anything. So I think you're gonna see a lot of these uh buyouts, which is why, you know, my our fund is about a third in these juniors. And you know, that's been a drag on performance in the last couple of years. But I think ultimately that's gonna be what causes us to have substantial outperformance, because I think all these stocks are gonna get bought out for big premiums, even if the price of gold doesn't go up. That's the beauty of this. If gold just stays around four to five thousand dollars an ounce, that is, you know, a perfect level for these mining companies to make a fortune, uh, assuming their costs don't explode. If their costs stay about where they are or just go up, you know, normally, they're gonna make a lot of money. And I think they're still gonna use that money uh to buy the juniors. So the junior mining stocks could go up dramatically, even if the price of gold doesn't go anywhere. Uh so I think there's there's a lot more upside there than there is a downside.

SPEAKER_02 30:17

Are you are you kind of witnessing smarter management too? I mean, you can remember the last cycle, people were overpaying for acquisitions, what have you? I mean, we have Adrian Day on, somebody that you work with. If if miners are obviously forced to use cash, doesn't that kind of limit how aggressive they can be? At what point do shareholders punish them for overpaying? We're not there yet.

SPEAKER_03 30:36

Yeah, well, look, I don't think you can really overpay right now because everything is still so cheap. Yeah, uh, there's still so much pessimism that's built into the market. You know, analysts have really not increased their forecasts for the long-term earnings of these companies because they still haven't accepted the fact that gold's not going back down to a thousand or fifteen hundred. I mean, in fact, the whole way up, uh, analysts expected the gold price to go down. They never understood. If you go back when gold first hit 2,000, the analysts were telling people to sell Newmont and sell Barrick because they thought there was no more upside left in the price of gold. Uh, yet, you know, we've more than doubled uh that level uh without a big rush into the mining sector. You haven't seen, you know, that hasn't happened. Yeah, there is a little bit, you know, earlier this year, and you know, when you started to see in the mainstream media, they started discussing gold and gold mining stocks. Uh, you know, that made me a bit nervous that we might have a correction, although actually hopeful because I got more people I want to get on board. Um, but yeah, I mean, we finally got uh some mainstream attention right at the peak. Uh, but I think this correction uh, you know, shook all that out. Uh, who knows when the mainstream financial media is going to be focusing on gold stocks again? They may have to double or triple from here before that happens.

SPEAKER_02 32:01

Yeah, well, that was my question because I mean, you know, a lot of viewers, I put it out on X, a lot of viewers are kind of asking, you know, they say, okay, I'm the person who kind of missed that 2025 run. I know you're saying we still have room to go, but they're watching gold at, you know, 4,500 miners are still at multi-year highs and they feel like they're late. I mean, is the entry point today actually better or worse than it was six months ago? And what's your kind of honest answer to somebody watching right now with, say, 50 grand? I mean, where do they throw this?

SPEAKER_03 32:28

Well, look, if you've never bought any of the miners, I think this pullback that we've had from the highs is a great entry point. Uh, would it have been entered better to get in uh a couple of years ago? Sure. But, you know, a lot of these stocks are still trading for lower than they were uh back at the 2011 peak. And at that peak, gold topped out at 2,000. So you're more than double that, especially the juniors. I mean, these stocks are still a fraction of what they were trading at back then. Um, and even some of the mid-tier and bigger companies are cheaper today than they were back then. So, you know, you're not paying up. If you're buying mining stocks right now, you're still getting a good deal. In fact, in many respects, they're cheaper now than they were when they were half the price. Because when they were half the price, gold was a lot less than half the current price, especially silver. You know, and silver, you know, silver was just languishing in the $20, $30 range for years. Now it's $70 to $80. Uh that that's a big move. Sure, the silver stocks have gone up, but not as much as they should have, given how much the price of silver has gone up.

SPEAKER_02 33:37

And room to go. Um, okay. Miners, talk to MA where the money's going. Now, I want to kind of make the end game concrete because this is where I think viewers most need to understand right now. I mean, uh, you know, you you've made the case that the price controls come before capital controls. The governments don't stop causing inflation. They're trying to cover up the symptoms, as we mentioned. I mean, Trump has already floated capping credit card rates at 10%. We have oil near 95, the biggest inflation surge since 2023, and this Fed chair who may be hiking into a weakening economy. I mean, walk me through the sequence. Uh, price controls first, then what? How does this actually unfold?

SPEAKER_03 34:15

Well, you know, there one of the main reasons that the government has worked so hard to redefine inflation from an expansion of the money supply and and credit to rising prices is so the government can blame inflation on whoever's raising the prices, as opposed to prices going up as a result of a co as a consequence of the inflation that preceded the price increases. And and so once the government succeeds in confusing the public as to what inflation is, if they convince the public that inflation is rising prices, then all they have to do is stop prices from rising and they'll stop inflation. And the way they do that is with price controls. Uh, but the problem is price controls do not work. Just like you know, if I put a band-aid on a skin cancer, just because I can't see it doesn't mean it's not there and it's not spreading and doing more damage. So when you control prices, what you create are shortages, uh and and that leads to black markets where the prices are even higher than they were in the legal market before you uh put in the price controls. And also companies will try to find a way around the price controls uh with brand new products that are not subject to those price controls uh so that they can charge a much higher price. Uh so it never works. It didn't work when Richard Nixon tried it, uh, and it's not gonna work if Trump tries it. Um and yes, you know, they're obviously gonna go in that direction because that's the only thing that they can do. They're not gonna admit the truth. Uh, so they're going to perpetuate the lie by focusing on the consequences of the inflation that they create, not the actual cause. And not only do I think they'll have price controls, they might have exchange controls. They may make it harder for you to turn US dollars into a foreign currency or maybe even a precious metal. We'll see. Uh, but as things get bad, the government is going to take more uh draconian actions to try to you know keep everything from collapsing uh or slow down the rate. That that's why you want to act now. You know, don't wait till everybody is panicking to get rid of the dollar, and then the government makes it harder and more expensive to do it. You know, beat the herd, you know. Uh you know, put your financial house in order now. So when everybody else is panicking, you could just sit back because you're already properly positioned.

SPEAKER_02 36:52

Yeah, it's uh some people will write me and say, hey, it's an extreme forecast for the U.S., right? Critics would say open capital markets are the foundation of the dollar system. What would force Washington to cross that line?

SPEAKER_03 37:06

Well, I mean, a crisis. Yeah. I mean, they're not gonna do this until they have to. And it's not that they have to, it's just that from their perspective, it's better than the alternative. Uh but you know, when you get a run on the dollar and and and people are just trying to get rid of their dollars as soon as they get their hands on them, uh, what is the government gonna do? If money is fleeing the country, you know, how are they gonna stop that? You know, uh, and capital controls are the easier way to do it. I mean, the harder way to do that is say, okay, we need to slash government spending, we need to let interest rates go way up, we need to let stocks crash and real estate crash, and we need to let banks fail. Uh, but you know, they're they're not gonna want to do that. And so they're gonna think all this other stuff is not as bad as that, even though at the end of the day it's gonna end up being worse, right? Everything that the government does to postpone the pain just makes it worse. Even if it happens later, it it happens, it happens bigger.

SPEAKER_02 38:09

I was gonna ask you, I mean, you know, September, well, 2008, there was a date, right? I mean, September 15th, layman, the money markets froze, everyone kind of knows it. In the sovereign debt crisis you're describing, I'm curious what the equivalent moment is. I mean, what's that specific event that people will look back on and say that's when it started?

SPEAKER_03 38:28

Well, I mean, I I think it already started, you know, with the big accumulation of gold. As I said, that's why gold is at these levels. Um, also, it started when, you know, the Fed started the rate cutting campaign back in 2024. And the long yield went up. It it didn't go down. And and so bond yields are now at a 19-year high uh despite the Fed's efforts to suppress them. So I think you know, we've already seen a breakdown in the bond market, a breakout in the gold market. The dollar topped out, um, it hasn't you know collapsed yet, but you know, it did have a pretty weak year in 2025. Got a little bit of a bounce from the war, but not much of a bounce, actually. Uh and so I think that at some point, if you see a big drop in the dollar and the bond market at the same time, where uh forex traders are not fooled by nominal rate hikes, they sell the dollar anyway, and gold going up, right? Those three things happening together, the dollar and bonds down, meaning and yields rising and the price of gold rising. That's probably a pretty good sign that we're we're we're we're in the end game here. Uh but you know what will cause it to just you know drop like a rock, what will the catalyst be for that revelation? I don't know. You know, it's like uh you know the the emperor's new clothes. Yeah. It's pretty obvious that the emperor is naked, but nobody reacts to it until one little kid doesn't see the the clothes I think it's pretty obvious the U.S. government is broke and can never repay its debt, but nobody seems to care. But at some point, something is going to happen. That's the equivalent of of that kid in the emperor's new clothes. And then all of a sudden it's gonna matter, right? They say it never matters until it matters, but then when it does matter, you know, it's too late. And so it's gonna happen. We're gonna have that, you know, that wild e coyote. That's another analogy, the wild e coyote moment where we're we're we already went off the cliff, but we haven't looked down yet, and we don't realize that we're standing on nothing. Uh but once we realize that there's nothing beneath our feet, we're gonna we're in, we're in for a big fall.

SPEAKER_02 40:55

Yeah, the the musical chairs analogy too. I like that. So, Peter, I mean, we're Kitco News. So a lot of investors watching this already own gold, they own silver, they own some miners, you know, they've they've heard the warnings, they believe it. Uh, what they need now is kind of positioning. So build the portfolio for me. New money coming in today. Give me kind of percentages, physical gold, silver, miners, foreign equities. Do you do cash, tokenized gold? I mean, how do you really actually allocate it? You know?

SPEAKER_03 41:20

Yeah, well, I still think that you know, you want to have a lot of money in productive assets, uh, income generating assets. I like a lot of the foreign stocks and the emerging markets. I think there's a lot of good investment value there uh that is gonna do well regardless of what happens to gold, silver. You know, I think that you want to have these stocks in your portfolio. I think the yields are good by and large. If you're gonna get five, six, seven, eight percent dividend yields on these operating companies and still have the liquidity of a publicly traded stock and the professional management. I think there's a lot of value there. You know, and so we have strategies, uh, separately managed accounts, mutual funds that are you know focused there. Uh, but I still think that you know, the mining stocks represent probably one of the best asymmetric uh bets you can make as far as how much these stocks can go up if I'm right. I mean, if I'm wrong, I mean, worst case they all go bankrupt, which I think would be an extreme uh and very unlikely scenario. So I don't think you're gonna lose all of your money if you invest in quality gold companies. You could lose a lot of it if I'm completely wrong, uh, but you won't lose it all. On the other hand, could you make five, 10, 20 times your money? I think so. I think that kind of upside is there. Uh, and so I think that the asymmetric outcome there means you want to have more money than you might normally have. You know, whether you want to put you know 20% of your portfolio, 15%. I've I had more than half my portfolio in mining stocks and you know, it and uh you know, before the big move up. Uh so uh I've been adding to my non-mining stocks to kind of bring it down, but it's well, you know, well above that based on the move that we've had. Um, but I've always said people should have at least five to ten percent in physical gold and silver. Uh and that, you know, that could include uh ETFs, tokenized gold, uh, and coins, you know, bars that you have, but that's kind of like a minimum level. And I look at gold and silver not as an alternative really to stocks. You know, that's the mistake that Warren Buffett always made when people would say, you know, what do you think about gold? And he would always compare it to stocks, and he would say, Well, gold just sits there, it doesn't do anything, it doesn't generate any income. And I agree, you don't want to look at gold the way you look at stocks. I look at gold the way I look at cash. It's if I don't want to buy stocks right now because I think they're too expensive, or they may pull back and And I want to just have some dry powder, where do I keep it? And that's you know what Warren Buffett didn't think about. Because I know if you put it to him that way, he would he would see the advantage of gold. Uh, because if if you don't want to be in stocks and you want to have a lot of cash, and Buffett has a lot of cash now at Berkshire Hathaway, why isn't that cash in gold? You know, because there you're not giving up the income of a productive investment. You're just giving up interest that you earn on cash. And right now, the interest that you earn on cash is not enough to cover the purchasing power that you lose by staying in cash. So I think that gold is better than owning dollars or even euros or yen or pounds or whatever currency alternative is out there. Your liquidity should be mostly in gold. Uh, and you can do that by owning the physical gold or, you know, the ETFs or the tokens. You know, I'm doing something with that too through T-Gold, which is my project at ShiftGold, T-Gold.com, which will ultimately give you the ability to withdraw your gold in the form of a token. But in the meantime, what I want to do with T-Gold is allow people to use their gold, even without tokenizing it, as a medium of exchange so that you can send and receive gold into your account and use the gold the way you would use dollars or euros or your debit card or whatever, so you can start transacting. Because as inflation really starts to accelerate and you start to see prices rising at a much faster level, when you're talking, it's not 2% a year, it's 2% a month, maybe 2% a week. And at some point, maybe 2% a day, who knows? But when you start to see that kind of price increases, it makes it very difficult to deal in the currency. So you need to get out so you have something more stable, especially if you're a businessman and you're selling goods that need to be replaced, you got to be very careful. If you sell them for a currency that's collapsing, uh, you know, you could actually lose money on the sale because you won't be able to buy back what you sold. But if you accept payment in gold and real money, then you don't have that problem. And so this is going to uh evolve over time as inflation gets worse and worse.

SPEAKER_02 46:25

Yeah. You haven't heard, I haven't actually heard you publicly talk too much about T-gold since since I had you on in February. Where are you with that right now? Uh some good movement? I mean, we're certainly seeing what Tether is doing.

SPEAKER_03 46:36

Yeah, well, I mean, so far, T-gold, you you could just buy gold and silver in any amount, right? Somebody could buy 50 bucks worth, 100 bucks worth, and have it in their account and you could trade it. But we don't have the approvals yet for it to be used, you know, as as money, you know, like a PayPal or something like that. Right. And I haven't decided I there's a good chance I'm gonna launch my own token. I'm still talking with different people, but I want to be able to let people, even if it's not my own token, they can still withdraw it tether, tether gold is a viable token you could withdraw uh instead of physical gold, and you could just load it up on a wallet. But all this stuff is gonna come. But the the what's important to me now is not helping people spend their gold because you don't want to spend your gold yet. You want to spend your dollars, you want to spend your euros, you want to save your gold until the the merchants demand that to be paid in gold. Because Gresham's law is you want is the the the the bad money chases out the good money. So you get rid of your bad money and you hoard your good money. Uh, and and and that's gold. So right now, people are willing to take paper, so paying paper. As long as people are dumb enough to take paper, then pay in it. Um but that you know they're there at some point they're not gonna want it anymore. And and that's where, too, the tokenized gold is is going to do what Bitcoin can't do and what stable coins can't do. I mean, stable coins that are backed by US dollars, they can function as a medium of exchange, but they don't function as a store of value. Bitcoin doesn't function as anything, it's it's not a good medium of exchange, and it doesn't have any value to store. Gold does both. Gold in its tokenized form is a great medium of exchange and a store of value at the same time. It's the perfect money for the internet age. It does everything that Bitcoin promises, but can't. So that that's the direction we're headed.

SPEAKER_02 48:33

And as you mentioned, sitting here around 4,500, quite stable, having seen those lows. Uh, all right, Peter Schiff, CEO and chief global strategist of Euro Pacific Asset Management, Europac.com, also Euro Pacific Gold Fund Ticker, EPG IS.

SPEAKER_03 48:48

T-Gold has its own website too, tgold.com. You just go right there.

SPEAKER_02 48:52

Yeah, yeah, I mean, interesting. We're gonna get you on, uh, see how this all steps back. The next time we'll get you on, we need to break down that tokenized industry. It's a it's a fascinating one. A lot of people nervous, as you can imagine, and and others curious to know more. So thanks, Peter. Appreciate your unvarnished take. Thanks for coming back. Oh, my pleasure. Now we want to hear from you. Bond market at post-2007 levels, a new Fed share facing a possible rate hike in a stagflationary environment. Gold holding above 4,500 and what should be the most risk-on morning of the month. Now, does the disconnect between the what bonds are saying and what Wall Street is pricing change how your position for the rest of 2026? Drop it in the comments. We read them all. And if you want to stay ahead of Macro Forces driving gold, silver, the global economy, not just headlines, but the mechanics, make sure you're subscribed right here. I'm Jeremy Saffron. Thanks for watching Kitco News.

SPEAKER_00 49:45

Kitco News in Focus with Jeremy Saffron.

SPEAKER_01 49:49

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