In a recent episode of Impact Theory, host Tom Bilyeu sat down with economist and gold advocate Peter Schiff for a two-hour masterclass on the hidden cracks in America’s financial foundation. 

With gold breaking $4,200 and silver surpassing $53, Schiff explains why these price surges are far more than a market trend—they’re a global warning sign.

He argues that the U.S. dollar’s dominance is coming to an end, debt and inflation are spiraling out of control, and policymakers are ignoring the lessons of history.

Watch the full conversation or read our breakdown of Schiff's main points below, where Schiff unpacks the origins of America’s monetary crisis, the collapse of real wages, and why he believes the next financial shock will be far worse than 2008.

Gold at $4,200: The Canary in the Coal Mine

Peter Schiff opens the conversation by pointing out a simple but ominous fact: gold just crossed $4,200 per ounce—up nearly 60% this year. To him, that’s not a sign of prosperity but a “canary in the coal mine” for the U.S. dollar and the broader economy.

He recalls how even Alan Greenspan once used gold as a real-time measure of monetary policy. When gold rose, it meant rates were too low and policy was too loose. Today, Schiff argues, the Federal Reserve has ignored that signal entirely—cutting rates despite gold’s surge—and is accelerating toward what he calls a “monetary crisis of historic proportions.”

“If Greenspan were still Fed chairman,” Schiff says, “he’d see this price and know rates are too low. But instead of tightening, the Fed’s doubling down. The world is losing confidence in the dollar.”

According to Schiff, the rally in gold and silver reflects foreign central banks dumping U.S. dollars and diversifying into gold as trust in America’s fiscal discipline evaporates. The result, he warns, will be a collapse of the dollar’s global reserve status—a privilege the U.S. has depended on for half a century.

From Bretton Woods to the Dollar Standard—and the Slow-Motion Default

Schiff then takes a historical detour to explain how we got here. Under the Coinage Act of 1792, the dollar was legally defined as a weight of gold or silver—“the dollar was gold,” as Schiff puts it. 

That tie lasted until the 1930s, when President Roosevelt confiscated private gold holdings, devalued the dollar, and outlawed gold ownership in order to finance New Deal stimulus.

The international link to gold survived, however, through Bretton Woods (1944), which pegged foreign currencies to the dollar and the dollar to gold at $35 an ounce. 

But by the late 1960s, U.S. spending on Vietnam, welfare programs, and the space race had outpaced the country’s gold reserves. Nations like France and Germany began redeeming dollars for bullion, and America’s gold stockpile started to vanish.

“Nixon had two choices,” Schiff explains. “Cut spending and act responsibly—or default. He defaulted.”

In 1971, President Nixon “temporarily” suspended gold convertibility, effectively taking the world off the gold standard. Schiff calls that the turning point of modern inflation, when the U.S. began printing wealth without restraint. 

In the 1970s, the dollar lost two-thirds of its value against major currencies—and over 95% of its value against gold. Oil prices soared from $3 to $40 a barrel, and for the first time, families needed two incomes just to stay afloat.

Related: Diversify Your Savings with Physical Gold (Free Guide) 

The Illusion of Prosperity and the Real Cost of Inflation

The conversation shifts to the decline of real wages and the hollowing out of America’s middle class. Schiff argues that while nominal paychecks rose, purchasing power plummeted—forcing more households into dual-income survival mode.

He blames decades of inflationary monetary policy and the government’s deliberate redefinition of inflation itself:

“Inflation isn’t prices going up—it’s the money supply expanding. The government changed the definition so they could blame greedy corporations or Putin instead of themselves.”

According to Schiff, real inflation is at least double what the government’s Consumer Price Index (CPI) reports. The understated numbers mask the erosion of savings and purchasing power while allowing Washington to justify endless stimulus and deficit spending.

A World Moving Away from the Dollar

Foreign nations, Schiff warns, have finally learned the lesson. Central banks from China to India are actively diversifying reserves into gold, not dollars. For decades, the world sent America its goods and savings in exchange for paper promises. Now, that cycle is breaking.

“We’ve been ripping them off,” Schiff says bluntly. “They gave us real products, and we gave them paper. That’s over.”

As countries repatriate capital and sell U.S. bonds, Schiff predicts a sharp decline in the dollar and a corresponding spike in import prices and interest rates. Once faith in Treasuries breaks, the government’s borrowing model collapses, triggering inflation far worse than the 1970s.

Unpopular Solutions and Political Cowardice

When Tom Bilyeu asks what could stop the crisis, Schiff doesn’t sugarcoat it. The responsible path—spending cuts, higher rates, and allowing unproductive companies to fail—is politically impossible.

“Given the choice between the right thing and the easy thing,” he says, “politicians always choose wrong.”

Instead, he expects Washington to repeat the same mistakes: more stimulus, price controls, and even foreign-exchange restrictions to trap dollars inside the country. But none of it, Schiff argues, will fix the “bleeding wound” of debt and overconsumption.

The Coming Collapse and the Case for Gold

For Schiff, the U.S. is facing a triple crisis—currency, debt, and sovereignty. Without its reserve currency privilege, America can no longer consume more than it produces or borrow more than it saves. The result, he predicts, will be an economic implosion “far greater than 2008.”

His advice is simple and consistent: own gold and silver. He notes that since he began recommending gold in the late 1990s at under $300 an ounce, it has outperformed the stock market. The metal’s current rally, he says, marks the beginning of a generational bull run—one likely to last the rest of the decade.

“Don’t think gold is expensive,” Schiff warns. “It’s cheap compared to where it’s going. This is just the beginning.”

Bitcoin, Trump, and the Future of American Power

After dissecting gold’s meteoric rise in the first hour, Peter Schiff and Tom Bilyeu turned their attention to the other end of the sound-money spectrum — Bitcoin — sparking one of the liveliest exchanges of the interview.

Schiff vs. Bitcoin: “Digital Cigarettes and False Value”

Bilyeu opened by acknowledging the cultural divide between generations who view gold as a timeless store of value and younger investors who see Bitcoin as the new digital gold. Schiff, however, rejected the notion entirely.

“The price of gold isn’t driven by manufacturing demand,” Schiff said. “It’s driven by people using it as a store of wealth — and that wealth is real. Bitcoin, on the other hand, has a price but no value.”

He argued that recent Bitcoin booms were largely fueled by speculative ETF inflows from mainstream investors — not hardcore crypto believers — and predicted that once those investors flee, the crash will be catastrophic.

“Bitcoin doesn’t have to go to zero,” Schiff warned. “If it goes from $110,000 to $10,000, that’s a 90% collapse. That’s trillions in fake wealth wiped out.”

Schiff also pointed to what he called the “liquidity trap” of Bitcoin — that many holders have borrowed heavily against their crypto, and when margin calls hit, mass selling could turn a correction into an implosion.

Related: Gold vs Bitcoin - Trusted Safe Haven Assets?

The Great Debate: What Gives Money Value?

Bilyeu countered with a philosophical defense of Bitcoin as a “proof of work” innovation — a digital representation of human effort that can be freely transferred across borders.

“Money has always been a psychological construct,” Bilyeu argued. “It can be shells, beads, paper, or Bitcoin. What matters is shared belief.”

Schiff fired back that unlike gold, Bitcoin has no tangible use or industrial application. He compared it to “a digital cigarette” — something you can’t smoke, touch, or use — and warned that its value is sustained only by belief.

“You can fool some people all the time, but not forever,” Schiff said. “When the crash comes, we’ll see how many still believe Bitcoin is money.”

Both men agreed that Bitcoin isn’t replacing gold anytime soon — but Bilyeu predicted that younger generations’ comfort with digital assets means crypto is “not going away.” 

Schiff disagreed, suggesting Bitcoin will eventually be replaced by gold-backed stablecoins or tokenized bullion systems stored by trusted custodians like Brinks.

Related: Protect Your Retirement with Gold and Silver 

Trump’s Economic Blind Spot: “He Doesn’t Understand the Problem”

Shifting gears, Bilyeu asked Schiff about Donald Trump’s push for lower interest rates, even as debt soars past $38 trillion. Schiff’s response was blunt.

“Trump doesn’t understand that artificially low rates are the problem,” he said. “He wants cheap money so we can afford expensive homes — but the real solution is lower home prices.”

According to Schiff, Trump’s instinct to stimulate through rate cuts and spending only inflates new bubbles — particularly in housing and equities. The U.S., he warned, is already spending over $1.2 trillion per year on interest and could hit $2 trillion by next year, consuming 40% of tax revenue.

“You can’t fix a debt problem with more debt,” Schiff said. “The honest solution is to default — restructure what we owe instead of destroying the dollar through inflation.”

He compared America’s situation to a household facing bankruptcy: painful but necessary. Politicians, however, prefer “slow pain” through inflation because it’s politically easier to hide.

The Rise of Socialism and the Decline of Capitalism

The conversation then veered into political territory as Bilyeu noted the growing appeal of socialist movements in the U.S., comparing it to the economic despair that fueled Occupy Wall Street and today’s populist politics. Schiff saw it as an inevitable symptom of democracy’s decay.

“The inherent flaw in democracy is that the majority votes to live at the expense of the productive minority,” Schiff said. “America became rich as a republic — not a democracy.”

He explained that the Founding Fathers intentionally designed a system to limit popular power through the Electoral College, appointed senators, and property-based voting — mechanisms intended to protect against “the tyranny of the majority.”

“The Constitution never mentions a right to vote,” Schiff noted. “Voting was a privilege. The goal wasn’t universal participation — it was good government.”

Schiff warned that when citizens realize they can vote themselves benefits, fiscal collapse becomes inevitable. Subsidies, welfare programs, and entitlement promises create a permanent voting bloc dependent on government handouts.

“Once the government buys your loyalty with checks and crutches,” Schiff said, “you’ll keep voting for whoever promises to keep them coming.”

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Capitalism, Greed, and Misunderstood Freedom

Bilyeu challenged Schiff on the idea of corporate accountability, citing examples like Monsanto and environmental scandals. Schiff defended “corporate greed” as a productive force when directed through free markets.

“Greed is what improves our lives,” he said. “When companies chase profit honestly, they make better, cheaper products. Fraud and theft are crimes — greed isn’t.”

He argued that consumer protection should come from free competition and legal enforcement, not bureaucratic control. “You can’t outlaw greed,” Schiff said. “You can only channel it toward productive ends.”

China’s Rise and America’s Decline

In the closing segment, Bilyeu brought up China and the Thucydides Trap — the historical pattern of conflict between rising and declining powers. Schiff didn’t dispute it.

“Trump is overplaying a weak hand,” Schiff said. “China is the creditor, producer, and saver. We’re the debtor, consumer, and spender.”

He predicted that as the dollar weakens, China will emerge as the dominant economic power of the 21st century, while the U.S. suffers a sovereign debt crisis similar to Britain’s post-World War decline.

“China makes real things. We print money,” Schiff said. “When the dollar crashes, Americans won’t be able to afford the imports that make our lifestyle possible.”

He noted that while China’s economy has its flaws, its industrial capacity and savings culture put it in a stronger long-term position than America’s debt-driven consumer economy.

“We’re Great Britain in 1900. They’re America in 1945,” he said. “It’s just history repeating itself.”

Related: Protect Your Savings with Physical Gold and Silver 

Government Control vs. Free Markets

Finally, Bilyeu asked about Trump’s proposal for the U.S. government to take ownership stakes in companies — from Intel to crypto ventures. Schiff called it a dangerous slide toward economic socialism.

“The government isn’t a hedge fund,” Schiff said. “It shouldn’t pick winners and losers. Every dollar politicians ‘invest’ is one taken from the private sector that would have allocated it better.”

He warned that if Trump’s interventions are accepted now, future presidents could use the same powers to fund ideological agendas — citing Alexandria Ocasio-Cortez as a hypothetical example.

“If you cheer Trump for directing capital, don’t be surprised when AOC does the same thing,” he said.

Schiff accused Trump of weaponizing tariffs, subsidies, and crypto policy for personal and family gain, arguing that the only real safeguard against corruption is limiting government power.

“You’ll never eliminate corruption,” Schiff concluded. “But if government can’t hand out favors, there’s nothing to bribe for.”

Prepare for the Reckoning

In his closing remarks, Schiff urged listeners to protect their savings from what he sees as the inevitable consequence of fiscal and monetary recklessness.

“Get out of bonds, get out of fiat,” he said. “Own real money — gold and silver. That’s your insurance policy.”

He invited viewers to follow his podcasts at ShiftRadio.com, subscribe on YouTube and X, and learn more about precious metals through ShiftGold.com or global investing via Euro Pacific Asset Management.

“When this crisis hits,” Schiff warned, “the government will blame capitalism. The truth is that capitalism isn’t the problem — it’s the only solution.”

Key Takeaways

• Schiff predicts a collapse of faith in fiat money and a return to hard assets like gold and silver.
• He warns of a 90% Bitcoin crash, calling it a speculative bubble fueled by leverage.
• He believes Trump’s low-rate policies will deepen the debt crisis, not fix it.
• Schiff sees the rise of socialism as a symptom of democratic decay and government dependence.
• China, he argues, is poised to overtake the U.S. as the world’s leading economy — unless America restores true capitalism.