On Friday’s episode of the Peter Schiff Show, Peter walks through the latest market action and what it reveals about inflation, monetary policy, and the real economy. He highlights the ongoing strength in gold, warns that Bitcoin is in a stealth bear market, applauds mainstream institutions finally acknowledging gold as an inflation hedge, and sounds the alarm about politicizing the Fed and relying on tariffs instead of rebuilding production and savings.
He opens by noting the momentum in precious metals and how portfolio managers may be reacting to quarter-end optics:
[Precious metals] had another spectacular week this week. We haven’t quite finished the month yet. We got a couple more days next week to finish out the month of September and the third quarter. In fact, I expect Monday and Tuesday to be strong days to finish out the quarter. I think a lot of portfolio managers are going to be scrambling to add some gold and silver and mining stocks to their portfolios just to window dress them up a bit for the quarter because they’ve been so strong.
Peter uses those market moves to challenge official claims that inflation is under control, arguing that real world asset prices are a better guide than press releases or political speeches:
Gold was at a record and now it keeps setting new records, but this would not be happening if inflation were well contained. If we really were headed back to 2% in two years, like the Fed claims, if inflation hadn’t been beaten into submission the way Donald Trump claims, every time he gives a speech now, whether it’s at the UN or whether it’s at a Charlie Kirk’s funeral, he talks about how inflation is dead and buried, how we’ve got the hottest economy in the world, it’s the greatest economy in the world, and we’ve got no inflation. Well, if we really had no inflation, gold would not be doing this.
Institutional recognition of gold as a portfolio component is finally showing up, and Peter welcomes it while noting what it says about inflation expectations and bond market vulnerability:
Morgan Stanley came out and said, our portfolio is 60-20-20, 60% stocks, 20% bonds, and 20% gold. Unbelievable! Now, it’s about time. And the reason that Morgan Stanley is doing this is they’re saying that we need an inflation hedge. And since stocks can also be viewed as an inflation hedge, although not all stocks are the same in that respect, but bonds are clearly the biggest victims of inflation, right? If you own bonds, inflation kills you. There is no hedge.
Peter then turns to the constitutional and institutional risks of politicizing central banking. He warns that removing Fed independence would set a precedent far beyond any single administration and would make monetary policy even more politicized and destructive:
If the Fed is independent, he can’t. But if they rule that an independent Fed is unconstitutional and the Fed must be beholden to an elected official, and that is the president, then the Supreme Court is going to validate the firing, but not only validate this firing, but any other firing motivated by whatever reason the president wants and not just this president, but any future president. Even though I’ve criticized them pretty much the whole time they were in office, they’re right on this point. A Fed controlled by the president is even worse than a Fed independently controlled by the chair and the board.
Finally, Peter puts the recent trade policy rhetoric in context by explaining why tariffs alone cannot rebuild U.S. production when the economy lacks savings and capital investment. He argues that low interest rates and the dollar’s reserve status encouraged consumption of foreign-made goods, and that you cannot simply impose tariffs and expect production to reappear overnight:
