Recently, on the Anthony Pompliano podcast, Peter Schiff spoke about Bitcoin. The interview lasted approximately 51 minutes, during which the current economic crisis unleashed by the Coronavirus was discussed. They also discussed some future prospects for the dollar and Bitcoin, as well as gold.
Schiff is currently in Puerto Rico. He is known to be a gold maximalist. He is also a stockbroker currently working as President and owner of Euro Pacific Capital. On the other hand, Anthony Pompliano is one of the most faithful defenders of Bitcoin, and is the co-founder of Morgan Creek Digital
Schiff on Bitcoin and the EDF measures
For Peter Schiff, the Fed is currently trying to apply measures used in the 2008 Crisis, but on a larger scale. At that time the bubble occurred, the FED intervened and that prevented the recession from taking its natural course. That is a good thing.
According to Schiff, back then the U.S. tax authorities re-inflated the bubble and succeeded.
“Instead of a solution, we have a bubble and as soon as the air starts to come out of it, the EDF will desperately try to fill it.”
Other comments by Peter Schiff in this area were related to the possibility of hyperinflation after this crisis.
“Maybe there is hyperinflation, I used to think this was the worst case scenario but now I think it is the most likely case.”
Some of his other comments on the economy were also not encouraging: “What we will go through will be worse than what was experienced in 1930 with the Great Depression” According to him, the United States is heading for a devaluation of money because “the government continues to issue checks that will be useless if there is nothing to buy”
Are the measures taken the most appropriate? No, according to Peter Schiff
The Coronavirus has broken all the production chains in the world, so there will be fewer things to buy. Thus, Schiff is concerned that the government is printing more money.
“The government is creating more money, while there are fewer goods and services to buy, and that promotes inflation.”
Faced with this, Pompliano asked Schiff “If the government prints money today, what will happen in 5 years?” The response was quite blunt: “I think this is the final moment of the global domination of the dollar as a reserve currency” Thus, they introduced the topic of Bitcoin and gold, and the discussion on which would be the best alternative.
At this point in the podcast, Peter Schiff highlighted the role of gold right now. For him, the only solution is for the dollar to return to the gold standard.
What currency will take the place of global reserve if the dollar fails? Pompliano and Schiff discuss Bitcoin and gold
“No coin. The most logical thing is to go back to what worked before the dollar and that is goldSchiff replied. When the time came to talk about Bitcoin, the interviewee said that he does not see Bitcoin as a global reserve replacement option.
Given this, Pompliano He replied that he does not doubt the advantages of gold in the current environment of the monetary system. However, it ensures that Bitcoin will have better returns for the simple fact of being more volatile. Additionally, it is rarer and easier to use than gold.
Peter Schiff was quick to reply. “To me that sounds like a bubble. I don’t know how you’re so sure it won’t explode“He stressed.
Arguments for gold and to the detriment of Bitcoin
According to Schiff, gold has less increase in production per year than Bitcoin. It also has various sources of demand (jewelry, central banks, etc.).
Meanwhile, Bitcoin “it only has those who are interested in speculating on its price. Once nobody wants to do it, it will lose sense” However, Schiff did not deny the possibility that Bitcoin will make another rise to the top but it is very low according to him.
For his part, Pompliano defended Bitcoin’s volatility as one of his advantages, and Schiff partially agreed with it. The latter explained that this was only positive for those whose goal is to trade.
After this conversation, both experts came to some interesting conclusions. Firstly, Bitcoin has to shine in the next 18 to 24 months, or it will not have kept its promise.
Schiff expressed that Bitcoin cannot be defended with its development in the last 10 years, because “they are not enough to affirm anything” Likewise, he objected that Bitcoin has not really faced a financial crisis, and this would be his first time.
Then they agreed that gold will perform well in the next 2-3 years just as it did after the 2008 crisis. But when it comes to Bitcoin, Pompliano says it will perform well too, and Schiff estimates otherwise.
Regarding this, Schiff goes deeper saying that although Bitcoin does well in that time, it will not do it in the long term because it is a bubble. He even commented that for him it is a bubble that has already burst and will not reach new high price caps.
What do you think? Are you someone who thinks like Peter Schiff about Bitcoin, or do you stay on Pompliano’s side? Tell us in the comments.