The World Is Preparing For A Post-US Dollar Economy

Peter Schiff spoke with the Shadow of Truth podcast last week. They had a friendly conversation about the Chinese yuan, the downfall of the US dollar, and the condition of Peter’s imprisoned father, Irwin. They also discussed the track records of the Federal Reserve Chairmen and how the price of gold can be used as a yardstick to judge the success of their monetary policies.

Alan Greenspan used to say that he could tell whether or not he was doing a good job by the price of gold. If the price of gold was lower than $400 an ounce, he was doing a good job, and if it was above, he was doing a bad job…

[So] Bernanke wants to discredit gold, because gold is discrediting the Fed. Gold prices going up is a vote of ‘no confidence’ in the fiat money that the Fed is creating. What is really a barbaric relic is the federal reserve note, the dollar, just a piece of paper backed by nothing. Gold is real money. It has a tradition of safety. Paper money has a tradition of failure.”

Highlights from the interview:

“The reason that home ownership rates are at the lowest level since 1967 is that houses are much too expensive for the average American to afford. The Fed’s monetary policy has propped up home prices, while suppressing wages. So real estate is now more unaffordable than it has ever been. The only way people can hope to get a house is with a government guaranteed mortgage, minimal down payment, and an artificially low interest rate. But I think the home ownership rate is going to keep falling as more and more people lose quality jobs and are settling for low-paying, part-time jobs. And rents keep rising. If your rent keeps rising, you have no way to save up for a down payment if you’re spending everything you earn renting your apartment. The rest of it goes to utilities or food or insurance. So American’s standard of living is going down. In 1950, the average new home cost about twice what the average American earns in a year. Today, the average new home costs about 10 times what the average American earns. That’s why it’s unaffordable…