Peter Schiff: We’ve Never Seen These Kinds of Prices Before

by | Jan 2, 2011 | Peter Schiff | 25 comments

Do you LOVE America?


    Peter Schiff joins CNBC on December 29, 2010 to discuss the US dollar, the price disconnect occurring in commodities markets, and inflation as the driving force:

    What’s driving commodities is inflation. It’s governments around the world, particularly the Federal Reserve, creating too much money and debasing the value of the dollar.

    As we speak the dollar is at an all-time record low against the Swiss Franc today, it’s at an all-time record low against the Australian dollar, you need $30 to buy an ounce of silver, you need $1400 to buy an ounce of gold, you almost need $14 to buy a bushel of soybeans. We’ve  never seen these prices.

    Oil – you need almost $92 to buy a barrel of oil. But you’re seeing these high commodity prices during a time when the economy is very weak.

    The economy is not going to strengthen, especially with rising inflation and ultimately rising interest rates. There are a lot of people that are jumping to the false conclusion that rising interest rates or rising commodity prices somehow indicate that the economy’s going to strengthen.

    It’s inflation. If the government creates money prices have to rise to compensate for the loss of value for our money. So what’s going to happen is people are going to buy a lot less stuff, but the stuff they buy is going to cost a lot more money.

    It really is very simple. The US government, with the assistance of the Federal Reserve, has chosen to inflate our money supply by trillions of dollars. There are many people out there suggesting that this money is locked up in the banks and it is not being lent. While we can agree that lending has been restricted, it is clear that the money is not sitting locked up inside of a bank vault somewhere – it has been put to work in global stock markets. The evidence can be seen in the significant rise in commodity prices, domestic equities and even Chinese stocks. The big banking houses that have access to easy money have been borrowing like crazy, and slamming that money into stocks (likely through the Plunge Protection Team aka The President’s Working Group on Financial Markets).

    There is absolutely no other reason for why stocks have been rising for the last couple of years. It certainly isn’t because our economy is growing or showing signs of recovery.

    Rising prices, as we have seen by yet another currency devaluation in Venezuela and rising stock markets like we saw in Zimbabwe, don’t always mean economic growth or recovery.

    Watch Peter Schiff on CNBC:


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      1. I’m still waiting on $100 days & more $1 increases.  Diesel is $3.28/gal.  Everybody uses it. 

      2. The trend is pretty clear, and the next few years alone are going to become quite painful for almost everyone in one way or another. Just drove about 200 miles today for a new job out of state (sitting in a motel room on wireless), and I have to say I’m glad to have my stick shift Honda Accord.

        There are some short-term solutions to energy supply in the US, particularly in terms of diesel/gasoline feedstocks. With the massive upsurge in Natural Gas development domestically, one potential avenue is through Gas to Liquids technology to produce primarily diesel/naphtha fractions. These liquid hydrocarbons also have the advantage of being sulfur free , and of superior quality.

      3. Comments…..Every time I go to the store, I have sticker shock..prices are rising and rising fast….sure hotdogs have not gone up much, but check out how much more hamburger or a pork chop or gasp..a steak will set you back.. milk, butter,  grains, paper products, name it.. My mantra it now and stock up…when toilet paper costs $10 a roll, you will smile every time you wipe if you have a lifetime supply which you paid less than a dollar a roll for…what is its shelf life…decades at least…same with soap, new toothbrushes  and a lot of other products.. if you have space to store things do it now.. For those of you who have not recently won the lottery, go by your local second hand/trift/salvage/resale stores as well as garage sales to find stuff you need or will need for a better price..
        On the same frame of thinking as Hermes, there is another ace we have up our sleeves in the USA concerning energy..we have the worlds largest coal reserves..They can be converted into liquid motor fuels as was done in South Africa during their fuel embargo..and as the Germans did during World War Two.. cost..not sure, but as imported oil becomes prohibitively expensive since the dollar will be falling in value, eventually coal to liquid fuels will look attractive on a cost basis..heck. I am not sure that coal to gasoline is not cost competitive now.. For other needs, coal can be turned into electric, into steam or can be used in a fireplace or woodstove to heat a home.. If you could find a steam engine, you could even use it directly as a fuel source for a car/bus/truck or train…

      4. I appreciate Mickey and Hermes know of ways to find energy sources.  Too bad our gov’t doesn’t care-a crisis is what they crave.  I fear this too will be used by them to get more power.  They create a problem, then offer us a solution that costs us more of our rights and freedoms.  It’s how power hungry people operate and it seems foreign to those with decency and common sense. 
        If you know about these energy alternatives, I hope you can find a way to make them work for your own rig. 

      5. If we are lucky perhaps we will have a realighnment of sorts>
        The idea being that much of the tool/tech/machinery we have now has become (A) too shodily made (B) too technical to work on and maintain (C)cost way too much in comparasion to its true value.
        If/when things go splat, things that are not useful and needed will not be made in such quantities as they currently are if at all. Manufacturers will once again have to make things that work…that last…that can be jerry rigged….at reasonable cost.
        Making cheap junk will be a ticket to bankruptcy like it was a few decades ago.
        People will once again be able to fix things,to make things that will do the job,people wont think Im so weird(maybe) just because I can rig up something to work using bailing wire and strange parts…most everyone will be able to do so,as they should be able to.
        People wont be so apt to waste their few hard-earned dollars on stuff they dont need or on things that arnt worth it,I can see some good coming out of a collapse type of scenario in the long term.
        Just maybe we could make the world a bit more self sufficient and frugal.Thanks!

      6. mickey the pirate said, “For those of you who have not recently won the lottery, go by your local second hand/trift/salvage/resale stores”

        In my area a lot of people might be listening to people who say that, those types of stores seem to have more customers per square foot than Walmart these days, talk about crowded.
        The parking lot is full of cars too, from expensive Cadillac SUVs to low dollar subcompacts.
        I drive by one often and stop in sometimes.
        Good deals are getting harder to come by, not as many tools are available either, if at all.

      7. Re the concerns about escalating oil prices, it’s hard not to be “paranoid” and see conspiracies afoot. Honda had a model called the Civic VX (’92 – ’95, I think) which (w/5 spd.) got approx. 50 mpg. Where are vehicles like that? Toyota had a working concept model, the Eco Spirit, which had fuel mileage (diesel ?) and got ~104 mpg. Where is it? Certainly not in production…and it was available in the early 2000’s.  Where is it?  Ford makes a 65 mpg  diesel in Europe, but won’t sell it here “because Americans don’t like diesel…”  Frankly, I’d like to know what the hell’s going on here.

        We are truly a Nation of Sheeple!

      8. I guess I really haven’t noticed any big increases in the cost of groceries… yet.
        The one thing I have taken notice of is Levi’s jeans. I buy several pairs every two years and the 2 year olds get rotated to work/garden pants. I always look in the Sunday paper ads for the nearest sale, usually Kohl’s, Sear’s or JC Penny’s has them on sale. Two years ago, all the stores sale price was $24.99 for a pair of 550’s, regular price $29.99-31.99. 
        The week before Christmas when all the sale ads came I looked, and the NEW sale price at the above mentioned stores is $32.99, with the regular price $40.99….same style (550), same size 36/32 for the past 20 years.

      9. I came across these two comments about solutions for the future that are positive for silver.

        The first one is in response to a person saying no one will accept your pre-1964 dime for a loaf of bread:

        “…no supermarkets will acept your silver dime for $2.10 value…

        Incorrect, sir! There are grocery stores in California, and more poping up around the country that now employ scales, calculators, and a computer (to get up-to-the-minute silver quotes) to do EXACTLY that….take silver for their goods!”

        “…in NY 30 different locations are taking silver coins.”

        Junk Silver Coins are being used in Grocery Stores video:

      10. The Power Elite’s ultimate goal is that nine-tenths of us die off.

        Prices are rising? Good for them. Bad for us.

        People who are broke, homeless and hungry will line up and beg succor from the Central State.  “Please, sir, a slice of bread, my child hasn’t eaten in four days.”

        The Old Money plus the Internet Billionaires plus the blue-stocking financial elite plus the Warfare Corporate-Security Group, plus their paid for political errand boys plus think tanks like CFR plus their media arm such as Washington Post and NYT.

        Probably not every single one of those several hundred thousand people intend a die off. But take the data to its ultimate conclusion. Mass die off, serfdom for useful slaves, and they need no longer be  covert about who really runs this country.

        Most Americans who think they are Middle Class aren’t. That means owning your home free and clear, instead of being a debt surf to a bank. It means owning your personal transportation. It means autonomy at work. Most of all it means owning productive assets. Not being someone’s wage slave. It’s real wealth that draws the class lines, not what color collar you wear.

        The top 1 % of the population owns 43 % of the wealth. The bottom 80% owns 7 %.  Who is gonna feed the people who are alive only because of their government entitlements? How civil do you think our society will remain when millions of people who’ve never been hungry before are?

        It will never be the Goldman Sachs crowd going hungry or sleeping on a steam grate.

        Sources: Charles Hugh Smith, Rawles survivalblog and others. Yeah I know. Preaching to the choir.  The people who really need to see this site won’t.

      11. I think the food prices will increase at some point too.  How you will experience it will depend on a number of things.  For instance, the retailer or producer may “eat” some of the higher cost by taking lower profits for a while.  They don’t want to pass on the costs to you since until competitors do it or they will lose market share.  Also, larger chains may be picking and choosing which market regions will take on more of the costs this time around.  Sometimes, they don’t feel they can raise prices significantly unless they remodel the store at the same time.  Also, companies may be just putting less food in the packages.  The cost of a box of cocoapuffs is not going to increase the same percentage as the cost of commodities.  It is just added in with the cost of the other ingredients, plus the box, the shipping, the retailer’s markup, etc.  So while corn prices go up 50%, the box of puffs only goes up 5%.  I’ve noticed some things in the store are the same price, but you’re getting less stuff.  Or the bottled water has thinner plastic.  Hard to say how exactly we will all experience it.

      12. One way to save is to frow your own food supply. No doubt as the farm land in the midwest continues to become more expensive we will see more and more price increase for basic staples especially when farmers default on the loans they take out on their increasing land expense. Start growing your gardens now.

        To your survival

      13. The other day I am talking to a friend at my gym; he was complaining about how expensive everything has gotten.  I told him that things are really not more ‘expensive’, but that the dollar is just worth less.  He didn’t understand, therefore I gave him a short lesson in currency values.  I explained that as we print more money, the value of each dollar goes down and we need more of those dollars to buy the same goods.  I am not sure if he actually understood what I was saying, but he will!

      14. Comments…..@ mickey the pirate,
        On the same frame of thinking as Hermes, there is another ace we have up our sleeves in the USA concerning energy..we have the worlds largest coal reserves..They can be converted into liquid motor fuels as was done in South Africa during their fuel embargo..and as the Germans did during World War Two.. cost..not sure, but as imported oil becomes prohibitively expensive since the dollar will be falling in value, eventually coal to liquid fuels will look attractive on a cost basis..heck. I am not sure that coal to gasoline is not cost competitive now..
            We all need tio understand.  Just because another strategy might be smart doesn’t mean tha oil companies will do it.  they have a reason for keeping things the way they are–it’s greed, pure and simple.  Why would they want a vehicle that gets better mileage, and uses less of what they sell??  They don’t, that’s why nothing will ever change to any great degree.  We have enough coal in this country to last for at least a hundred years.  Would it not make sense to use this to process, and make a fuel to use in cars?? Absolutely, but you will never see it, becaus the elites don’t want to upset their apple cart.  it’s that simple.


        That grass fed half beef in the freezer is looking real good right now…but, what about next year??


        Mickey…I buy nothing but Charmin since I started stocking/did get at Walmart?? now lots of stores have the same price….best price I can find…24 double rolls …$10

      17. Jack C,

        Here is a little story I tell to people who are money clueless:


        There once was a man who made a very nice wage. He was paid two dollars per day as a skilled worker. The year was 1930.

        One day, the man told his wife, “I am going to dedicated a full weeks pay to my first two great grandsons born after January 1st 2011.”

        Since they were doing well, his wife seemed to thing that would be fine. So, on the next friday, he went and cashed his check. It was 10 dollars. He asked for it in silver dollars and was given 10 silver dollar coins.

        The next week he worked and on friday, cashed his check. It was 10 dollars again. He requested 10 one dollar coins. The bank, however, was out of them. So, they gave him 10 freshly printed, crisp one dollar bills. He really wanted coints. But, he thought, “Hey! A dollar is a dollar, right?”

        Time progressed and 81 years passed. The old man died in 1990 and when the will was read, there were two bags that were to be given to the trustee of his estate to distribute when the time came. So, in 2011, after the grandsons were born, twins, the trustee was faithful and executed the job with which he was entrusted.

        To the first great grandson born after 1/1/11 he gave the bag of silver dollars numbering 10. To his second great granson born after 1/1/11 he gave an evelope containing one dollar bills number 10.

        Who got the best deal? Of course it was the grandson that got the silver dollars. The grandson that got the 10 one dollar bills had 10 dollars even in todays dollars. A dollar is a dollar, right? Uh, no. The grandson  that got the silver dollars had the equivalent of (today) $300 in today’s dollars.

        Why the difference? Where did the value go? Grandpa worked just as hard for the silver dollars as he did the dollar bills so they should be worth the same, shouldn’t they?

        Why is it that when grandpa made those dollars, each dollar would buy about 20 loaves of bread, but today, the dollar bills won’t even buy a loaf of bread but the silver dollar will buy about 20 loaves of bread.

        COULD THERE BE A SCAM GOING ON HERE???!!! You betcha.

        I’ll tell you where the value went. The federal reserve and your government STOLE IT FROM THE GRANDSON! They stole 95% of the value. If grandpa had stored his fortune in one hundred dollar bills, 95% of his fortune would have been raped and pillaged by the federal reserve theives and the federal government theives.

        There is nothing more dangerous to freedom, civilization, peace and fortunes than a government hell bent on stealing from you. Government is evil. Government is dishonest. They are doing it right before our eyes because, as they say, 95% of the useless eaters don’t have a clue about anything except their American Idle, their football/basketball/baseball games, and their video games.

        The sheople are truly useless eaters. The term used to disgust me. But, I have begun to realize its an apt term for most of our society today. Honestly, it makes me want to cry. 95% of the people you know could not survive without government intervention. …and it is about to be cut off. I’m going to love to see it. I’m going to hate to see it. Damn this government and this system for what they have done to us! …to them. Even they, themselves, are mostly stupid about it. They are just lucky enough to have a leg up to shield themselves from it.

        January 2nd, 2011 at 10:10 pm

        What’s going on here??

        I just heard Ford/Mazda (and mine is 7 years old) just invested 500,000,000,000..yes, billion, in a motor plant… India (or China!!
        Our legislature and government have sort of shot ourselves in the foot???

        January 3rd, 2011 at 12:17 am

        I saved this to read to my husband …..
        the annual income of the 12,ooo (yes, thousand) richest households is greater than that of the poorest 24,000,000 (yep, million)Americans.

      20. Hi 11 Brav, your post about expensive Levi’s makes me laugh a bit. In Australia, Levi’s have been over AUS$100 for years. Even now with the favourable exchange rate (AUS & US dollars about equal), they’re about AUS$120 STARTING price (they go up in price from there).

      21. Comments…..levi’s are no longer made in usa. matter of fact, very few things are made in usa…

      22. NetRanger
        January 3rd, 2011 at 6:08 pm

        Your story is brilliant. Thank you. Unfortunately most of my relatives and friends are sheeple. I am printing your story out to give them.

        If they don’t wake up soon someday I might have to pull the YOYO on them. You’re On Your Own.

        Supplies are nice to have. Skills are even more important. But the first essential is the survival attitude. If it hasn’t killed me right off, not only will I survive but I will prevail.

        If someone shows up at my door with no supplies or skills saying they thought I was crazy until an hour ago and when’s dinner it’s YOYO time.

      23. Comments…..  @ anon6.8
             I  love the “You’re on you’re own” comment.  I think I’m going to get a t-shirt made up with the  “It’s YO-YO Time”,  in big letters, and the fine print underneath.  That  phrase is almost as good as sh__ happens.
            Nice job.

      24. I have a web site where I give advise on penny stocks and stocks under five dollars. I have many years of experience with these type of stocks . If their is anyone that is interested in these type of stocks you can check out my web site by just clicking my name. I would like to comment about the current budget problems. what many folks fail to realize is that the problems with the federal budget are not new. The difference between today and five years ago is the spending problems are much worse now. As far as the budget problems of the 50 states go along with local governments. This is equally a equally serious situation. I believe that their is only one way out of this thing. And that is large cuts in all programs across the board along with increases in taxes across the board.

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