• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer

Fat Tail Daily

Investment Ideas From the Edge of the Bell Curve

  • Menu
    • Commodities
      • Resources and Mining
      • Copper
      • Gold
      • Iron Ore
      • Lithium
      • Silver
      • Graphite
      • Rare Earths
    • Technology
      • AI
      • Bitcoin
      • Cryptocurrency
      • Energy
      • Financial Technology
      • Bio Technology
    • Market Analysis
      • Latest ASX News
      • Dividend Shares
      • ETFs
      • Stocks and Bonds
    • Macro
      • Australian Economy
      • Central Banks
      • World Markets
    • Small Caps
    • More
      • Investment Guides
      • Premium Research
      • Editors
      • About
      • Contact Us
  • Latest
  • Fat Tail Series
  • About Us
Technology Bitcoin

Peter Schiff Is Right about the Fed, but Wrong about Bitcoin

Like 0

By Ryan Clarkson-Ledward, Friday, 30 October 2020

If you’ve ever heard of Peter Schiff, you probably won’t be surprised by what I’m about to tell you. It’s no secret that he is an avid critic of the state of monetary policy. A financial commentator and trader who has built his legacy on calling crashes and backing gold.

In today’s Money Morning…the doomsayer playbook…the digital alternative to gold…the opportunity coming from our landscape…and more…

If you’ve ever heard of Peter Schiff, you probably won’t be surprised by what I’m about to tell you.

It’s no secret that he is an avid critic of the state of monetary policy. A financial commentator and trader who has built his legacy on calling crashes and backing gold.

He is a quintessential bear investor.

Granted, he is far from the only one. There are plenty of big names who love to sing the praises of the precious yellow metal. Declaring it the only salvation from a rort financial system that is doomed to collapse.

Earlier this week, that is exactly what Schiff did…again.

In his own words:

‘The Federal Reserve has never been right.

‘Everything they have said about the efficacy of their policies, what their policies would create, and their ability to reverse them or unwind them, has been wrong. And it’s amazing how consistently wrong they have been.

‘We are headed for a US dollar crisis and a sovereign debt crisis.

‘The magnitude of this crisis will be unlike anything we’ve ever experienced. Because this is not just mortgages blowing up. This is the credit of the United States government. This is the risk-free asset becoming the most toxic asset on the planet.

‘And it’s not just US Treasuries that are going to collapse, but it’s the entire US-denominated bond market which is built on top the foundation of US Treasuries. So, Treasuries go — it all goes — corporate bonds, muni bonds, mortgages.

‘Any debt instrument that is denominated in US dollars is going to collapse.’

The doomsayer playbook

Now I’ll admit, Peter Schiff is certainly a polarising figure.

His way of looking at and portraying the financial system is pretty bleak. An insight that often diverges to the extreme from the mainstream. And for that reason, you’ll likely either love him or hate him.

Personally, I can get behind Schiff’s key ideology.

I agree that central bankers have lost control when it comes to monetary policy. Unable to learn from or even resolve the mistakes from the past.

Instead they are all walking down the road of low interest rates, QE, and more. A scenario that could see many developed economies follow in the footsteps of Japan. A low-growth, low-inflation hell that has proved seemingly inescapable.

It is a very real concern.

However, Schiff does take it to hysterical extremes at times. Which is somewhat to be expected, he is a commentator first and foremost after all.

Does that mean we’ll see a collapse in the US economy, or globally for that matter? Absolutely.

Booms and busts are an integral part of economics. It is naïve to think that we can avoid them.

As for how big and when it will occur though, the answer is far murkier.

History would suggest that we are due for a big collapse. Something the pandemic looked likely to create. But then the central bankers stepped in and inflated the bubble even more.

That’s why Schiff is so horrified. Because with each passing day he sees the eventual bust growing in magnitude. One that will wipe out the value of ‘money’ as we know it.

Therefore, as his logic goes, everyone should buy gold.

But gold isn’t the only way to invest outside of the current monetary system…

 

In this new report, Money Morning’s Ryan Dinse reveals why he is convinced that lithium is going to rebound in 2020. Get the FREE Report.

The digital alternative to gold

See, Schiff’s conclusion to his central banker teardown is only gold. As he puts it:

‘The world is going to return to gold-backed paper money.’

But I don’t agree with this. I don’t think a gold-backed currency — US-based or otherwise — is feasible in our modern world.

The logistics of it were a nightmare in the past, and they’d be even more of a nightmare today. I’m sure Schiff would argue that it is a far more appealing nightmare than total monetary disorder, though.

Which is true…if there weren’t other alternatives.

And this is where my view, and many others’, diverges heavily from Schiff’s. Because for those that understand Bitcoin [BTC], it is (on paper) a far better alternative. One that directly aligns with the same argument for gold-backed currency, just with a digital slant.

Famously though, Schiff is no believer of bitcoin. Or any cryptocurrency for that matter.

He, like many other gold bugs, can’t grasp the intangible value behind them.

Which to be fair, is understandable. Trying to wrap your head around how a blockchain works for the first time can be aneurysm-inducing. A complex system of cryptography, computer science, and hard logic.

It is totally alien to any monetary system to date.

But it does work, and it is constantly improving.

Everyday development on bitcoin and crypto continues. Systems that will, I believe, one day play a much more direct part in a global monetary system.

For that reason, just like gold, it is something that everyone should consider investing in. After all, bitcoin has been steadily closing the gap. With a market size that is roughly 2.4% of gold right now.

But, as the following chart shows, bitcoin’s price relative to gold is on the rise. With one bitcoin now worth roughly seven ounces of gold:


Port Phillip Publishing

Source: CoinGecko/CoinTelegraph

[Click to open in a new window]

So, whether Schiff is right or wrong, the crypto markets are stirring once more. A sign that perhaps another boom is on the horizon.

Whether that is because of central bank mismanagement or speculative hype, is in the eye of the beholder. In the long run though, I know which side of history I would lean toward. And I believe Schiff would too.

Just something to think about should the collapse come sooner than expected.

Regards,

Ryan Clarkson-Ledward Signature

Ryan Clarkson-Ledward,
Editor, Money Morning

All advice is general advice and has not taken into account your personal circumstances.

Please seek independent financial advice regarding your own situation, or if in doubt about the suitability of an investment.

Comments

Subscribe
Notify of
guest
guest
0 Comments
Inline Feedbacks
View all comments
Ryan Clarkson-Ledward

Ryan’s Premium Subscriptions

Publication logo
Fat Tail Investment Research

Latest Articles

  • Trump Sparks Rare Earth Rally
    By Murray Dawes

    Murray and Callum pointed out three lithium stocks last week that surged 5–12% this week. Now they look at copper and rare earths.

  • Copper Breaks Out: Are You Positioned?
    By James Cooper

    Last week, James Cooper wrote about the need to be on high alert for a copper breakout. This week, copper is breaking out… James lays out the game plan from here.

  • A radically innovative industry set to soar
    By Callum Newman

    Pretty soon we’re going to have flying transportation. It could cut car travel demand again. See below for my moonshot idea on this.

Primary Sidebar

Latest Articles

  • Trump Sparks Rare Earth Rally
  • Copper Breaks Out: Are You Positioned?
  • A radically innovative industry set to soar
  • Debt and declining demographics are a dangerous combination
  • Critical Metal Stocks: Following the Iron Ore Playbook

Footer

Fat Tail Daily Logo
YouTube
Facebook
x (formally twitter)
LinkedIn

About

Investment ideas from the edge of the bell curve.

Go beyond conventional investing strategies with unique ideas and actionable opportunities. Our expert editors deliver conviction-led insights to guide your financial journey.

Quick Links

Subscribe

About

FAQ

Terms and Conditions

Financial Services Guide

Privacy Policy

Get in Touch

Contact Us

Email: support@fattail.com.au

Phone: 1300 667 481

All advice is general in nature and has not taken into account your personal circumstances. Please seek independent financial advice regarding your own situation, or if in doubt about the suitability of an investment.

The value of any investment and the income derived from it can go down as well as up. Never invest more than you can afford to lose and keep in mind the ultimate risk is that you can lose whatever you’ve invested. While useful for detecting patterns, the past is not a guide to future performance. Some figures contained in our reports are forecasts and may not be a reliable indicator of future results. Any actual or potential gains in these reports may not include taxes, brokerage commissions, or associated fees.

Fat Tail Logo

Fat Tail Daily is brought to you by the team at Fat Tail Investment Research

Copyright © 2025 Fat Tail Daily | ACN: 117 765 009 / ABN: 33 117 765 009 / ASFL: 323 988