Dialogue with renowned gold bull Peter Schiff: "Bitcoin no longer has the advantage over gold."

Original Title: “Peter Schiff: Why Gold is Superior to Bitcoin!”

Author: Bankless

Translator: zhouzhou, BlockBeats

Editor’s Note: This episode of the podcast discusses Peter Schiff's views on Bitcoin. Schiff is a well-known gold advocate who has long believed that gold is the true currency, while Bitcoin does not possess this attribute. The popularity of Bitcoin is due to its appeal as an emerging technology attracting investors, but its value lacks a real foundation and may ultimately be replaced. While cryptocurrencies may outperform gold in certain aspects, they should not be regarded as true currency. At the same time, Schiff emphasizes that Bitcoin should not be subject to strict government regulation, as he believes individuals have the right to use their own funds, even for risky investments.

In this episode, several core issues are primarily discussed:

1. Why does Schiff consider Bitcoin a "scam"?
2. What is the relative value of gold compared to Bitcoin?
3. What are the current trends in the stock market?
4. What does Schiff see as true value investing?

TL;DR

• Gold's monetary status: Gold is the most powerful currency in history, and its practicality and scarcity make it a long-term store of value.
• Bitcoin's flaws: He believes Bitcoin lacks intrinsic value and cannot be compared to gold; although it has certain technological advantages, it may collapse in the future.
• The combination of the internet and gold: Schiff believes that the internet and blockchain technology can enhance the liquidity of gold but will not change its fundamental value.
• The Federal Reserve and economic outlook: Schiff advocates for the abolition of the Federal Reserve and warns of a potential economic crisis, urging investors to shift part of their wealth into gold.
• Wealth growth advice: He suggests accumulating wealth through entrepreneurship and prudent investing, emphasizing the importance of gold and other traditional assets.

The following is the original dialogue (for readability, the original content has been edited and condensed):

Ryan: Today, we are not exploring the frontier but returning to the world of gold. Bankless has invited Peter Schiff as a guest, who has been parodied in the crypto industry as someone who is perpetually bearish on Bitcoin.

David: Peter's love for gold may be even stronger than Michael Saylor's love for Bitcoin.

Ryan: Peter is a financial commentator and economist with outspoken views on many issues, such as the global economy, flaws in financial markets, government policies, and the shortcomings of fiat currency systems. However, Peter is firmly bullish on gold and skeptical about cryptocurrencies. We share some common ground with Peter Schiff on issues like the value of hard currency and the devaluation of fiat currency, but we have significant disagreements on Bitcoin and cryptocurrencies.

We talked about the comparison between Bitcoin and gold, but also touched on his views on U.S. fiscal policy, such as whether the Federal Reserve should be abolished and what he would do if he were president, among other interesting questions. The question I was most concerned about in this episode was actually asking David—how does Peter store his gold?

Peter Schiff: Yes, gold is real money. For those like me who are concerned about fiat currency, central banks, inflation, and debt issues, if they are looking for a true store of value that can also serve as a medium of exchange and unit of account, there is no need to reinvent the wheel; gold fits the bill perfectly.

“Gold is the real money”

About Money

Ryan: How do you define money?

Peter Schiff: I refer to the classic definition that money is the most marketable commodity. Looking back at history to understand the origins of money, we did not always have money. Before money existed, humans traded through barter, but this method was very inconvenient because it required a perfect match of needs between both parties. Eventually, people discovered that they could select a commodity that everyone was willing to accept as a medium of exchange, even if they did not need that commodity themselves; they could use it to obtain other things they wanted.

People began to accept a commodity not because they needed it themselves, but because they knew others might need it. This is the invention process of money. However, to become money, a commodity must possess many characteristics, which also excludes most commodities from being viable money. For centuries, many different commodities have been tried as money, but ultimately, the most successful has been gold.

Gold possesses portability, divisibility, durability, and non-corrosiveness—these are all essential characteristics of money. Bitcoin attempts to replicate the monetary characteristics of gold, but they miss the most important point, which is the intrinsic value of the commodity itself—money must be a tangible commodity that has its own value.

While Bitcoin has these characteristics, it lacks the actual value behind it, making it difficult to serve as a true store of value because it has nothing to store. From this perspective, Bitcoin shares many similarities with fiat currency. Legal tender is usually backed by actual assets, which is also the foundation for the earliest monetary systems: currency is guaranteed by real assets (like gold) because no one wants to accept just a piece of paper. However, since paper currency is backed by gold, it is essentially a warehouse receipt for gold. People are willing to accept paper currency because they know they can exchange it for gold at the warehouse. Paper currency is essentially an IOU, a proof of ownership of gold.

Later, the government invented a way to create fiat currency that no longer had any actual assets backing it. The government designates fiat currency as legal tender, and people begin to use it and pay taxes with it, which is like a tribute to the government. However, the true value of fiat currency does not solely rely on government decree but is based on confidence and trust. People must believe that this currency will continue to be widely accepted in the future, just as it is now. In fact, it is this trust system that gives fiat currency its value. The government has, to some extent, propelled the formation of this belief, making people believe that currency has value. However, many governments have also caused currency devaluation by losing public trust, rendering it worthless.

Thus, Bitcoin is similar to fiat currency in that both derive their value from trust. In contrast, the value of gold comes not only from trust but also from actual demand. Gold is not only used to make jewelry but is also widely used in electronics, dentistry, and aerospace. In fact, gold could have even more potential uses, but its price is too high. Gold can actually perform better than many other metals for the tasks they undertake. However, due to its extreme scarcity, people will only use it when necessary.

However, Bitcoin lacks the necessary practical uses; it is merely a token, and people buy it because they hope someone will take it off their hands at a higher price in the future. There are thousands of similar tokens, and more can be created indefinitely in the future. They may have different names and may even be superior in some aspects, such as being cheaper or faster. In fact, some cryptocurrencies have technically surpassed Bitcoin. But for me, none of these have value. The future of blockchain should be supported by real money.

Just as fiat currency is backed by actual funds, theoretically, there could also be a cryptocurrency backed by real money. You can tokenize gold, but the token itself is not gold; it represents ownership of gold. Digitally, I can transfer ownership of gold to you quickly and at almost no cost, which is more efficient than transferring Bitcoin. The key difference is that when I transfer ownership of gold, I give you a tangible asset, whereas when I transfer Bitcoin, I give you nothing; I merely give you an expectation that it can be resold at a higher price in the future, which is the fundamental difference.

Many people call Bitcoin "digital gold," but that is as absurd as calling a picture of a hamburger "digital food." You cannot survive on "digital food." Similarly, the value of gold lies in its physical properties; only physical gold can be used to make jewelry or conduct electricity. "Digital gold" cannot replace these actual uses.

Some things can be digitized, such as music and books; we can listen to digital music and read e-books without needing a physical presence. But things like food and gold, which rely on physical properties, cannot be digitized.

Ryan: Why has gold become the endpoint in the evolution of money, and why won't a superior currency surpass gold in the future?

Peter Schiff: For centuries, gold has been the best form of money; nothing is better than it. Of course, you can use other things as money; it doesn't have to be gold. If people are willing to use other commodities as money, I have no objection. But other commodities cannot do it; in prison, cigarettes are money, but not all prisoners smoke.

Bitcoin has no practical use and is not an evolution of money; rather, it is a regression. Historically, alchemists tried to create gold, and Bitcoin is just a modern version of that attempt, referred to as "fool's gold." Its essence has not changed due to blockchain; it is merely an old scam packaged in a new way—a pyramid or Ponzi scheme.

I admit that Bitcoin, as a Ponzi scheme or pyramid scheme, may be one of the most successful in history and may last for a while, but it may have already peaked. The price of Bitcoin has fallen more than 30% from its peak three years ago (measured in gold). Despite a lot of hype, such as El Salvador adopting Bitcoin as legal tender, Michael Saylor's advocacy, various ETFs, NFTs, Super Bowl ads, Wall Street's entry, and even the Republican National Convention, Bitcoin has not reached a new high. This indicates that a lot of money has been sold off Bitcoin in the past few years, and those selling are clearly smarter than those buying.

Those who succeeded may have bought Bitcoin early, knowing it would be hyped, but to cash out their wealth, they ultimately have to sell Bitcoin, turning "paper wealth" into "real wealth." That is exactly what is happening now.

I feel sorry for those who bought Bitcoin in recent years; they will suffer heavy losses. These people have become the "bag holders" in the pyramid scheme, allowing those who entered early to profit. Bitcoin has not created any real wealth; it has merely transferred wealth from buyers to sellers. Moreover, this is a zero-sum game because, in addition to the transfer between buying and selling, there are miner fees and the costs associated with the hype around Bitcoin. Like a casino, the take is huge, and in the end, even some "winners" may turn into losers.

Ryan: Some argue that gold has a 10,000-year history, while Bitcoin has only existed for 15 years, with a market cap of $1.2 trillion, accounting for about 15% of gold; isn't that a success?

Peter Schiff: You just proved my point; Bitcoin has only existed for 15 years. Talk to me in 1,000 years and see if it still exists.

Ryan: If Bitcoin is used for payment in network transactions, can it also be considered a medium of exchange, similar to the commodity properties of gold?

Peter Schiff: Yes, I can send you my Bitcoin, but that largely depends on the future existence of the Bitcoin market, which may not exist in the future.

Ryan: That does seem a bit circular, and there are other blockchains that can do the same with their tokens, like Ethereum, so this is not unique to Bitcoin.

Peter Schiff: Indeed, gold has unique properties that other metals cannot replicate, which is why it is widely used. If other metals can perform similar tasks but do not do so as well as gold, people will choose other metals because gold is too expensive. However, Bitcoin lacks this uniqueness; by analogy, would you still use Spyglass when searching? I don't even remember the names of early search engines. I primarily use ChatGPT now instead of Google.

Ryan: I agree with your point; I've started using ChatGPT to handle many things instead of Google.

Peter Schiff: Right, are you still using MySpace? Facebook replaced it, then Instagram came along, and TikTok is here now; there are always better things emerging.

To think that Bitcoin, invented by Satoshi, will forever be the greatest cryptocurrency and will not be improved upon is completely absurd. Anything invented by humans can be improved. Gold, on the other hand, is not a human invention; it is a natural occurrence. It originates from supernova explosions and has existed since the beginning of time.

About Value Storage

Ryan: Do you think Bitcoin could potentially become a store of value like gold?

Peter Schiff: In fact, tokenized gold operates better on other blockchains because the fees on those blockchains are much lower than Bitcoin's. Therefore, I don't necessarily need the Ethereum blockchain to support gold tokens; I can choose other more competitive blockchains. While the blockchain itself has its value, the value of these native tokens is questionable.

Ryan: Do you think Bitcoin's value is above zero?

Peter Schiff: Indeed, while Bitcoin may have some value, it should not be worth $60,000. For example, I once created an Ordinal and placed it on the Bitcoin blockchain. When I initially sold it, I included a signed original print with it. This way, you not only have a physical item but can also hang it on the wall; this item is very scarce because I only made 100 and never made more.

Ryan: You mentioned that the value of fiat currency comes from people's trust; isn't the value of all currencies based on trust?

Peter Schiff: No, because you don't need to "believe" in a tangible commodity like gold. The value of gold comes from its widespread demand in practical applications; its value is almost indisputable, which is its "floor" value. The market value of gold is about $1 trillion to $1.2 trillion.

Bitcoin supporters often say that 10% of gold's market cap comes from its metallic properties, while the rest comes from its role as money. But in reality, almost no one uses gold as money except for central banks. People store gold because of its actual future demand, not its monetary properties. We continually discover new uses for gold, and today's demand is far higher than at any time in the past.

Thus, the price of gold reflects its long-term value for future use, and no other commodity can exist as long as gold. This is also one of the reasons I believe gold's price is still relatively low. The current price of gold has almost no premium because it has not yet been widely used as money. I believe the world will re-monetize gold and return to the gold standard. Once that day comes, the price of gold will inevitably rise significantly.

Ryan: When discussing gold and its advantages, how do you suggest people actually hold gold? Should they store physical bars, purchase tokenized gold, or use financial instruments like gold ETFs? Which method is the best choice?

Peter Schiff: I have a platform called ShiftGold.com to address this issue. Shift Gold sells gold that is physically delivered, and you can store physical gold bars directly.

Ryan: You mean actual gold bars and coins?

Peter Schiff: Yes. Some coins must be minted by the government to be legally called "coins." A private mint can make gold into round objects, but unless it is legal tender, it cannot be called a "coin." For example, the U.S., Canada, and Australia have legal coins, but private mints can also produce round gold products; they just cannot call them coins, but rather "round gold." We sell gold bars, coins, and silver coins directly. I recommend that people hold physical gold and silver, especially if you are preparing for some apocalyptic scenario, like hyperinflation.

Ryan: But how much can one actually hold? For instance, if I want to buy $250,000 worth of coins, how much gold of that scale can be stored?

Peter Schiff: It can fit in a shoebox, and there will still be plenty of space left.

Ryan: Would you send $250,000 worth of gold to my house via a mail package?

Peter Schiff: Yes, and the packaging is very discreet; it won't say "there's gold inside." We have been selling gold at Shift Gold for over ten years without any incidents of loss or theft; gold always arrives safely. However, silver takes up a lot of space and is very heavy. For example, one customer purchased $300,000 worth of silver during the pandemic, which took up quite a bit of space. Gold, on the other hand, can easily fit into a shoebox, making storage more convenient. This is also one of the reasons gold is superior as money because it is easier to store than silver or other metals, not to mention copper; just imagine how much space you'd need to store copper.

Ryan: If I wanted to purchase $300,000 worth of gold, how can I ensure its safety?

Peter Schiff: You can hide it somewhere in your home, just don't forget where you put it. Or you can use a safe; just don't lose the password or the key. However, if you want a third party to store it, Shift Gold can arrange storage services in Switzerland, Dubai, or Singapore.

You can also choose Wall Street products, such as buying gold ETFs. However, in that case, you do not directly own gold; you own shares of a publicly traded company that holds gold, which is similar to how some people handle Bitcoin. Interestingly, the original selling point of Bitcoin was self-custody, with no third-party involvement, but now all the demand seems to come from third-party custody, which also charges storage fees.

Has the Bitcoin bubble finally burst?

Compared to Gold, Bitcoin's "Advantages Are Gone"

Ryan: Would you admit that Bitcoin or cryptocurrencies have advantages over gold in certain aspects, such as being easier to transfer on the internet?

Peter Schiff: Yes, but the problem is that Bitcoin is so easy to transfer because you are actually transferring nothing. When I send "nothing," it is certainly much easier than transferring "something."

Ryan: I think you might be too fixated on this "tangible" element, which seems less important to many listeners, especially the younger generation. We might think that "having substance and weight" is not that critical in the digitalized internet. Some might even see gold's physical characteristics in the real world as a negative factor, meaning it can be stolen.

Peter Schiff: No, that is precisely why it becomes money. Remember our initial discussion? It must be a commodity because Bitcoin could collapse at any time. The reason it hasn't collapsed yet is that there are currently more people wanting to buy Bitcoin than sell it; overall, there are enough buyers to maintain the market.

Ryan: Bitcoin is indeed a relatively new asset, but so is gold—you must have interested buyers to keep the entire market running. However, I admit that gold has an advantage in that it has thousands of years of history backing it.

Peter Schiff: Not just thousands of years of history; many industries actually need gold and have been purchasing it, which is a tangible, real-world demand.

I just showed you my gold jewelry; it is a massive industry, and while many people online may have digital girlfriends, or you might send them digital gold, if you want to have a girlfriend in the real world, you would buy her real jewelry, which cannot be done with Bitcoin. The only reason people want Bitcoin is that the price is going up. When the price stops rising, everyone will want to get rid of it.

Ryan: Since we are discussing IOUs rather than tangible assets, isn't tokenized gold less ideal than actually holding gold? So how does the internet improve the way gold is held?

Peter Schiff: Paper currency initially made gold easier to use, especially in legal circulation. Directly delivering large gold bars is neither convenient nor easy for small transactions. Therefore, people invented smaller forms of currency, such as coins and silver coins.

Subsequently, private enterprises introduced the concept of paper currency, initially issued by goldsmiths as warehouse receipts or IOUs for gold. This is similar to receiving a ticket when you store your coat, proving that your coat has been stored. In this way, paper currency replaced physical gold, making it easier to circulate and transact.

The value of paper currency comes from gold; although paper currency itself has no intrinsic value, it becomes a superior form of currency because it is backed by gold. Economically, this is referred to as "currency substitutes."

The internet further improved this; now banks can use digital tokens instead of physical paper currency, and these tokens can exist on a blockchain (public or private) or not rely on a blockchain.

This makes gold as a medium of exchange more effective than ever, faster, more divisible, and cheaper. However, many people believe that blockchain technology has made gold obsolete, thinking that Bitcoin can replace gold, which is a misunderstanding. Even if Bitcoin disappears, gold will still exist and may continue to operate on the blockchain.

Ryan: However, even tokenized gold still requires trust that the issuer genuinely has enough gold to back it; you must trust that the entire legal system will protect your property rights, which is incomparable to actually owning and storing physical gold yourself.

Peter Schiff: Yes, that is why you should not hold all your gold in this way.

But you can store your gold with a very trustworthy third-party institution, which may also provide insurance against loss or theft, and there may be a reputable insurance company as a guarantee, and possibly even a reinsurer.

I understand one argument for Bitcoin is that if you self-custody Bitcoin rather than through an ETF, you don't need to rely on a third party. But even so, you still need to believe that the market will continue to accept Bitcoin. You must believe in the ongoing operation of this system, and I am not willing to do that. I would rather hold gold, even if I need to rely on a custodian to store it, than worry about whether Bitcoin will lose its value.

It mainly depends on market perception. Even if Bitcoin has some value, such as each token being worth $1,000, I am skeptical about its actual value. When I say "value," I mean actual value, not just market price. Market price reflects the amount buyers are willing to pay; if someone is willing to pay $58,000 for a Bitcoin, but its actual value is only $1,000, you could lose a lot of money. If you bought Bitcoin at $58,000 and it eventually drops to $1,000, it is almost equivalent to going to zero, and losing 99% of the remaining funds is almost negligible.

David: If the reason you value gold is its application in productive companies and its intrinsic demand, why not invest directly in those cash-flow-generating, dividend-paying, or income-producing companies instead of choosing to invest in gold?

Peter Schiff: I do invest in gold mining companies; I am very interested in gold stocks, believing they are very cheap relative to gold's historical valuation and have significant upside potential. However, the risks of these stocks are much greater than directly holding gold. The investment ratio of Wall Street in mining stocks is currently low, so I see this as a real opportunity, although there are risks.

I recommend investing in these stocks because I expect gold to rise significantly, which will drive up mining stocks. While gold may experience short-term pullbacks, the long-term trend remains upward. Compared to other assets, gold has greater return potential and relatively lower risk. Investing in gold mining stocks may yield higher returns than directly holding gold.

For Bitcoin investors, if you are looking for high returns, gold mining stocks may be a better choice. The best investment strategy is diversification; my Euro Pacific Gold Fund is managed by industry expert Adrian Day, who has extensive experience. If you have a discount brokerage account, consider investing in this fund. In short, if you feel uneasy about Bitcoin, gold mining stocks may be a more promising option.

Alternatives for GenZ

Ryan: Considering that millennials and Gen Z are more inclined to use digital technology and cryptocurrencies rather than traditional gold, are you worried this will affect the future of gold as a store of value?

Peter Schiff: I am not worried. First, I believe that over time, young people will mature and understand the value of gold. As they accumulate wealth and face economic realities, they may realize the reliability of gold as a store of value. Additionally, while young people are interested in digital currencies, Bitcoin does not have real intrinsic value backing it, unlike gold, which has historically been a stable store of value. Moreover, as inflationary pressures increase and fiat currencies devalue, the true value of gold will become even more apparent.

The current popularity of Bitcoin is because it is a new, trendy technology, but this craze may diminish over time. Ultimately, investors will return to those assets that have stood the test of time.

Even if young people do not wear gold jewelry, their phones or other electronic devices contain gold, and they may not realize they actually own gold. I believe the demographic trend works in my favor because all these young people will gradually grow older, and as they age, they will become wiser and learn from their mistakes. So, while these twenty-somethings may be enthusiastic about Bitcoin now, by the time they are in their forties, they will turn to gold.

Everyone thinks they know more when they are young, but in reality, they are quite naive and do not understand the true principles. But these things come and go; there is nothing new. As I said, this is just a repackaged scam, and every attempt will collapse; no matter how you repackage it, the essence remains the same.

Ryan: If technological advancements enable us to find cheaper materials to replace gold, and the price of gold rises tenfold, could this prompt us to seek alternatives or reduce our use of gold?

Peter Schiff: Don't forget that the prices of other metals are also rising, and the unique properties of gold are difficult to replace in many industrial applications. Even if other metals are found, they may not have the stability and reliability of gold. The price of gold would need to rise to very high levels to have a substantial impact on these applications.

Ryan: Do you think the free market should determine the outcomes of these currency experiments, or should the government declare Bitcoin and cryptocurrencies illegal to prevent them from becoming Ponzi schemes?

Peter Schiff: I believe people have the right to freely manage their money, including taking losses or gambling. I support this freedom and would not support banning sports betting, blackjack, or poker. However, if someone loses money due to false advertising, I believe they have the right to seek legal recourse, especially against the financial media that promotes Bitcoin; ultimately, many may seek compensation due to these false promises.

While I oppose the current anti-money laundering regulations (AML), believing they infringe on privacy and could lead to authoritarianism, my opposition to these rules is not limited to Bitcoin. I do not believe Bitcoin is a security, but there may be changes in the future. Some tokens do meet the definition of securities, including the government's Howey test standards.

Regulation of Bitcoin is increasing, undermining its original advantages. Initially, Bitcoin allowed for anonymous transactions, decentralization, self-custody, and low transaction costs. But now, these advantages are no longer as apparent.

When Bitcoin rose to $1,000 in 2017, I began to pay attention to it, but ultimately did not purchase it because I believed the potential for Bitcoin to rise had disappeared. Even if it could rise to $200,000, the risk of it potentially collapsing is not attractive to me. I would rather invest in gold mining stocks, which have greater upside potential.

About Wealth and Investment

Ryan: I want to return to the foundational question we both agree on: should we abolish the Federal Reserve? If so, why?

Peter Schiff: It depends on what we replace it with. If we abolish the Federal Reserve and do not introduce any alternative institutions, returning to the system before the Federal Reserve was established, I fully support it. Before the Federal Reserve was established, we had many regional banks that were privately owned and issued paper currency backed by gold. At that time, no single bank was granted privileges beyond others; it was entirely free market competition. If we can return to the system before the Federal Reserve was established, we should absolutely abolish it. The problem is that if we abolish the Federal Reserve and directly hand the printing press to Congress, allowing them to print money themselves, the situation could be worse.

Ryan: If you were president, what would your economic policy be?

Peter Schiff: My goal would be to repeal existing policies. I once ran for the Senate, of course, without winning. But I said at the time that my goal was not to create anything new but to repeal everything. Because every time I repeal a law, I restore a portion of the freedom that was taken away by that law.

I would aim to minimize government as much as possible, abolishing those institutions and departments that should not have been established. I would work to restore the Constitution and its original principles—a very limited federal government with few and clearly defined powers. I want the government to operate within the framework of the Constitution.

At the same time, I would be honest with the American public about various social welfare programs, such as Social Security, Medicare, and Medicaid; we would eliminate these programs. The Social Security system is a government-run Ponzi scheme, making it worse than a Ponzi scheme in the private sector because people are forced to participate in this scheme, ultimately leading to more losses.

Of course, I would look for ways to help those who are struggling due to the Social Security system. Without Social Security, they might not be in such economic distress. If the government did not tax and promise Social Security, they might save for their retirement. Therefore, while we cannot immediately abolish Social Security, we can set standards and introduce new welfare programs, such as annuities, to ensure their livelihoods.

But for wealthy individuals, I do not want to determine whether they receive Social Security based on their income. Wealthy individuals, such as those with real estate and stock portfolios, should not receive Social Security because they have enough wealth to be self-sufficient.

I do not want to use poor people's money to subsidize the inheritance of the rich, nor do I intend to make the poor pay for the inheritance rights of the wealthy. We need to be honest with the public, abolish these welfare programs, and let the government exit the banking, education, and healthcare sectors. I want the free market to manage healthcare and education, just as the government does not participate in the technology sector. The technology sector has thrived due to the absence of government, while healthcare and education have suffered from government intervention.

Additionally, I would choose to default on the national debt because we cannot repay it. I would candidly tell creditors that we are bankrupt and cannot repay. Abolishing the Federal Reserve would lead to a significant rise in interest rates; assuming interest rates reach 10%, we cannot pay 10% annual interest on $35 trillion in debt.

I would tell creditors that they will not receive full pensions or 100 cents on the dollar because the American public does not have that much money. While there will be losses, continuing on the current path will lead to even greater losses. I would rather lose half the money than have the money remain the same but lose 90% of its purchasing power.

Therefore, whenever I see discussions about the debt ceiling, I find it laughable. Some say, "The U.S. will always pay its debts; we need to raise the debt ceiling." In reality, we need to raise the debt ceiling because we have never paid our debts and want to continue living without paying. The truly responsible approach is to maintain the current debt ceiling. The original purpose of setting a debt ceiling was to prevent the government from overissuing bonds, but Congress can raise the ceiling at will; this "ceiling" is merely nominal.

David: Let's talk about the stock market. Is the stock market currently overvalued, undervalued, or fairly priced?

Peter Schiff: The stock market is currently overvalued, but that does not mean it will crash significantly. Due to excessive money issuance, the nominal prices of the stock market may rise. If measured in gold, the real value of the stock market would significantly decrease. Over the past 23 years, the Dow Jones index has quadrupled, while gold has increased eightfold; measured in gold, the Dow Jones index has fallen by 50%. This trend may continue and accelerate.

I believe the market has a long way to fall, especially tech stocks, which may experience significant adjustments. While I am optimistic about the future of technology, the high valuations of tech stocks have already been priced in by the market. Currently, a lot of capital is concentrated in the so-called "Seven Giants of Tech," which is a crowded trade, and ultimately the market will be reshuffled.

The Federal Reserve will continue to print money, making the stock market appear higher, but this is merely a change in measurement and does not imply an increase in actual value. The value of gold remains stable, while the current economic functions are severely dysfunctional. The national savings rate is at a historic low, and consumer debt, credit card debt, corporate debt, and government debt are all at record highs, with the real estate market, especially commercial real estate, collapsing and the banking system facing debt issues.

We are experiencing the worst trade deficit in history, with trade deficits and national debt continuously climbing. The national debt is nearing $35.3 trillion, growing by over $3 trillion annually, and interest payments have become the third-largest expenditure in the federal budget. It is expected that in the next year or two, interest payments will surpass Social Security and Medicare, becoming the largest expenditure for the government. This situation is unsustainable, and we will face a collapse.

The trend of de-dollarization has begun, with BRIC countries and others reducing their dollar holdings and turning to gold. Retail investors lack confidence in gold, leading to net redemptions in gold ETFs. Therefore, gold is cheap now, while stocks are expensive, and the financial crisis will be more severe. The "real collapse" I mentioned in my 2013 book has not yet occurred, and now all signs indicate it is imminent and will be worse than it was ten years ago.

While I accurately predicted the collapse of the real estate market and the financial crisis, that was just the prologue. The real collapse has yet to come, and the problems now are more severe than ever, with larger debts and bubbles, and the chaos and crises facing the market will be more serious. I believe my strategy will ultimately profit me, and I hope to preserve this wealth; after all, I now live in Puerto Rico, where I can avoid federal income tax and capital gains tax.

Ryan: What principles do you follow for wealth growth?

Peter Schiff: The best way to grow wealth is to start a successful business. Although entrepreneurship is challenging, entrepreneurs play a key role in capitalism. They need to decide what everyone will do, provide tools, take risks, and hope to succeed. In contrast, employees receive salaries even if the company is not profitable, while entrepreneurs can only benefit when they make a profit. If a business loses money, the entrepreneur must cover the shortfall out of their own pocket, making entrepreneurship much more complex than working for someone else.

While starting a business may require mortgaging property or raising funds, successful entrepreneurs often earn more. As an employee, your income is limited because you are a cost to the business. Although positions like sales commissions can increase income based on performance, overall income remains limited. Successful business owners often receive higher returns after working hard in the early stages, and their working hours may decrease.

Additionally, it is crucial to choose an industry you love; you need to spend a lot of time in a field that interests you to truly enjoy your work. Dedicating yourself to overcoming difficulties and learning from mistakes will help you achieve your goals.

In terms of investment, make wise decisions, avoid blindly following trends, and be patient. Strategies like Warren Buffett's—investing in growth companies rather than metals—are reasonable under normal circumstances. However, the current stock market prices are too high, and Buffett is selling stocks rather than buying. I believe gold is very cheap right now; if Buffett thinks stock prices are too high, he should shift his funds into gold rather than dollars because gold can provide a better store of value and discount.

Ryan: Suppose you were to make a strong case for Bitcoin and cryptocurrencies, showcasing their most compelling advantages and prospects; how would you explain it?

Peter Schiff: The only strong argument is that there may be another wave of buying in the future. Nowadays, ETFs are pressuring the U.S. government to buy Bitcoin. If Trump is elected president again, could the government potentially buy Bitcoin?

Personally, I hope the government does not buy Bitcoin; we do not need to print more money to purchase it. But if certain situations arise, such as high inflation or a dollar crisis, people might turn to Bitcoin as a safe haven. Given Bitcoin's limited total supply, if funds flood into the market, the price could rise to $100,000, $200,000, or even $300,000. However, most long-term holders may not sell; they will hold on.

In contrast, I believe other assets with real foundational value have greater upside potential and lower collapse risk. While Bitcoin may experience a surge during inflation or a dollar crisis, I do not think investing in Bitcoin is worthwhile.

Moreover, why hasn't this situation occurred yet? When Bitcoin ETFs were launched, there were high expectations, but now the price of Bitcoin has limited growth and has dropped about 10% this year, while gold has risen 22%-23%. This indicates that market enthusiasm for Bitcoin may have cooled.

I am concerned about what might happen when ETF buyers turn into sellers. Many people invest in Bitcoin through ETFs purely speculating on price. When they start to sell, it could trigger a market collapse because there are not enough real buyers in the market to take on these Bitcoins. ETFs must be paid for in dollars, not Tether, which will exacerbate the risk of a Bitcoin market crash.

After a massive sell-off, the price of Bitcoin could drop to $10,000 or $5,000, and then there might be a rebound, but in the long run, it could drop again. The recent Bitcoin conference's extravagance reminds me of the peak of the real estate bubble, where the lavish scenes foreshadowed the bubble's burst. I believe Bitcoin's future may develop along these lines.