December 26, 2025
Peter recently appeared on The Julia La Roche show, addressing a broad audience about why he sees trouble ahead for the U.S. economy and what that means for savers. He covers the loss of confidence in the dollar, the role of the Federal Reserve as buyer of last resort, the political danger of tariffs, and how investors can protect themselves with non-dollar assets like quality companies and precious metals.
He opens with a blunt assessment of America's economic trajectory and whom he's thinking of when he talks about policy fallout and portfolios:
Well, I mean, from the perspective of Americans and the majority of my clients are Americans. They're not all Americans, but I'd say, you know, certainly the majority are Americans. I assume most of your audience are Americans as well. And so the big picture from my perspective for America is actually pretty bleak, unfortunately. I mean, I think it's been rather bleak for a while and we've managed to kick the can down the road for more years than I anticipated a couple of decades ago.
He points to recent moves in precious metals as a signal that global confidence in the dollar is eroding and notes oddities in the bond market at the same time:
But I think now what's happening in the precious metals market, what's happening in gold, you know, it's happening in silver, gold now trading above forty three hundred, silver now above sixty six dollars. You know, it's more than doubled on the year. I think these are signs that confidence is finally being lost globally in the dollar. You don't see it as much in the bond market, although the long end of the yield curve hasn't done what a lot of people would have expected. Despite all the rate cuts, you know, we've had two rounds of seventy five base point rate cuts.
He warns that rising deficits and a lack of buyers for U.S. debt leave the Fed as the ultimate backstop - a return to quantitative easing that most thought was behind us:
And that's going to be very problematic because we have, you know, out of control deficit spending and a foreign central banks aren't buying our debt and American investors aren't buying our debt. Who's going to buy it ? That really leaves the Fed as the last man standing. And in fact, you know, one of the predictions I've made for a while was that the Fed would return to quantitative easing again. And they basically just effectively did that at the last FOMC meeting, announcing this 40 billion dollar ongoing purchase of Treasury securities.
He criticizes protectionist rhetoric and the idea that tariffs are a free source of revenue, pointing out the regressive reality of trade taxes and a historical irony about the income tax:
Plus, he believes in protectionism. He wants tariffs and he's under the delusion that the income from tariffs comes from foreigners, that we don't even have to pay those taxes, which is completely ridiculous. All of the tariff tax revenue is paid by Americans. In fact, you know, the only reason we have an income tax today is because people didn't want to pay tariffs and the government was able to sell the American public on the idea that if we have an income tax on the rich, we can eliminate it. They take tariffs on the middle class and the poor and they went for it.
He explains why gold behaves like a barometer for monetary confidence and how rising gold prices can feed a self-reinforcing flight out of dollars:
Well, the gold and the dollar compete and gold is really, again, like the canary in the monetary coal mine. And when you're seeing a big increase in the price of gold, it is indicating a loss of confidence in the dollar. That's why people are buying gold and they're forgoing the interest that they could otherwise earn on U.S. treasuries. And as the price of gold goes higher and higher, that results in even more confidence being lost in the dollar. And it becomes a self perpetuating spiral where more dollar holders want to convert them into gold.
He closes with practical advice: build a non-dollar portfolio of solid companies and metals to survive an inflationary depression that mixes weak growth with high inflation - a worse 1970s scenario in his view:
So the way around it is just to have a portfolio of non-dollar assets, you know, own good quality companies that you could buy at a low PE with a good dividend yield, own precious metals, you know, own these mighty stocks, you know, have a portfolio that will not only survive but thrive in an environment where you have a dollar crash. And, you know, the U.S. economy is in a massive recession with high inflation. I've called it an inflationary depression, which is really what we're going to be entering into. It's going to be an elongated period of time with an extreme weak economy that maybe moves in and out of recession but never really grows, but all the while has very high inflation.
This article was originally published on SchiffGold.com.