On Friday, Peter participated in a fascinating debate on the merits of gold and Bitcoin. Economics professor Nouriel Rabini joined Peter to debate Erik Voorhees and Anthony Scaramucci, two Bitcoin proponents. They cover a lot of ground in their 2+ hour debate, so be sure to watch the full video on Peter's YouTube channel.
Peter and Rabini actually start the debate with a disagreement over “Team Gold.” Rabini is optimistic about the US economy, but Peter explains that we are certainly not in a “soft landing”:
“I don’t think the economy is good at all. I think this is an illusion created by statistics. I think the reason Biden is the most unpopular president in modern history — the reason Harris is the most unpopular vice president — is because the economy is bad. … I think we are suffering from 20 years of monetary and fiscal policy mistakes. Inflation has pushed the cost of living up 30 to 40 percent in recent years. As a result, American families are struggling. They borrow. Consumer debt is at an all-time high.
Peter makes a dark prediction about the dollar. His time is limited:
“We benefit from the fact that other countries also suffer from the same monetary and fiscal policy mistakes, which push people to take refuge in the dollar. So I think the dollar remains overvalued relative to other fiat currencies. This loses value in terms of purchasing power. It is losing value in gold terms, but the fact that it is not losing value as much as the yen, euro or pound sterling is temporarily supporting the economy. But I think we are heading towards a dollar crisis and a sovereign debt crisis that will lead to a massive economic-financial crisis – far worse than anything we experienced in 2008.”
Although cryptocurrency technology may have other applications, Bitcoin is simply too cumbersome to use as currency:
“I don’t think anyone should move to Bitcoin. First of all, Bitcoin was created to be a digital currency, but it doesn't really work well as a digital currency. It is very slow. It is very expensive. There are many other cryptocurrencies that could do better, but the problem is that most of them are too volatile to be money, because money has to be a commodity. It should be the most liquid product.
Gold's value as a currency comes from its non-monetary uses, which Bitcoin lacks:
“Bitcoin cannot do what gold can do. It's no more digital gold than if I create an image of a hamburger on a computer screen: it's not digital food! It may look like food, but it has no substance, I can't eat it, and if I eat digital food I will starve! »
Peter actually agrees with Voorhees on the government's true motivation for oversight and control of financial institutions:
“The real objective is tax evasion. Governments impose very high taxes, so people don't want to pay them. Politicians can't say, “We need all these laws to make sure you pay these onerous taxes,” so they have to pretend and say, “Oh, it's to fight terrorism.” It's about stopping money launderers or drug traffickers. It's a small amount. Almost all of the banks' efforts are aimed at finding average citizens who are not filing all of their taxes correctly. That's why we have all these laws. They just make up these excuses to get the public to buy into them. »
The meteoric rise of Bitcoin is not necessarily a good sign. Peter thinks this is characteristic of a bubble:
“They say Bitcoin has outperformed gold over the last 10 years or so. Well, it surpassed everything, just like at one point, Beanie Babies surpassed everything. If you have a bubble in something and the price rises significantly, be sure that it can outperform everything until the bubble bursts! »
At the end of the debate, Peter offers a vision that even Bitcoiners can get behind. The technology and innovation behind cryptocurrency can benefit modern money via gold tokenization:
“I don’t believe in Bitcoin as digital gold. I just think it's the latest iteration of fool's gold. This is gold for digital nerds. If you really want to get out of fiat money, if you're worried about inflation and currency devaluation, and if you want to have a store of value other than just more traditional investments like buying stocks or 'buy real estate, then buy real gold. You don't have to reinvent the wheel. Gold still works, and I think the properties of gold will be improved by the Internet, blockchain or other technologies that will make gold even more liquid, even more divisible, even more portable and usable for the future.
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