The Surge in Gold and Silver: A Symptom of U.S. Policy Failures 
October 4, 2025
gold

Peter Schiff, a renowned economist and global strategist at Euro Pacific Asset Management, discussed the surging prices of gold and silver, the implications of U.S. fiscal and monetary policy, and the shifting dynamics of global finance. Schiff, a long-time advocate for precious metals, provided a sobering analysis of the U.S. economy, the dollar's weakening reserve status, and the growing role of gold in a world losing confidence in American financial systems. 

The Surge in Gold and Silver: A Symptom of U.S. Policy Failures 

Gold prices have soared past $3,800 per ounce, approaching $4,000, while silver is nearing $50, close to its historical double top. According to Schiff, these record-breaking prices reflect a profound loss of confidence in U.S. fiscal and monetary policies. He attributes the rally to central banks globally divesting from U.S. dollars and treasuries in favor of gold, signaling a lack of trust in the Federal Reserve’s independence and the U.S. government’s ability to manage its ballooning deficits. 

Schiff highlighted a significant shift in Wall Street’s perspective, noting that Morgan Stanley recently adjusted its traditional 60-40 portfolio (60% stocks, 40% bonds) to include 20% gold, a move unprecedented in his 40-year career. This adjustment, he argues, reflects growing recognition of inflation risks and a sell signal on bonds. Gold and silver stocks have outperformed tech stocks this year, doubling in value and emerging as the best-performing assets in the U.S. market. Schiff sees this as the beginning of a broader trend, with major financial institutions likely to follow suit in recommending gold allocations. 

The implications are stark for the U.S. economy, which relies heavily on global demand for dollars and treasuries. As central banks and investors shift to gold, Schiff predicts higher consumer prices, rising interest rates, and a declining standard of living for Americans. This shift underscores a critical vulnerability: the U.S.’s dependence on foreign investment in its debt is unraveling, with profound consequences for the average household. 

Central Banks and the Dollar’s Decline: A Global Monetary Reorganization 

Schiff emphasized that central banks are accelerating gold purchases as they divest from dollars, a trend driven by geopolitical and economic risks. He pointed to the Biden administration’s sanctions on Russia as a wake-up call for other nations, highlighting the risk of holding dollars that could be frozen or devalued at the U.S. government’s discretion. Additionally, President Trump’s push for aggressive Federal Reserve rate cuts and the potential politicization of the Fed further erode confidence in the dollar’s stability. 

This global shift, Schiff argues, is forcing a reorganization of the monetary system. While central banks are likely to hold physical gold in their vaults, Schiff sees a role for tokenized gold in facilitating transactions for individuals and institutions. Tokenized gold, backed by physical bullion and transferable via blockchain, offers a more efficient way to exchange value without physically moving gold. Unlike cryptocurrencies like Bitcoin, which Schiff dismisses as a “digital Ponzi scheme” lacking intrinsic value, tokenized gold retains the store-of-value properties of physical gold while enhancing transactional ease. This innovation could carve out a niche in the evolving financial landscape, even as Schiff remains skeptical of most cryptocurrency use cases. 

Retail Investors and the End of Dollar Hegemony 

While institutional investors are beginning to recognize the dollar’s weakening position, Schiff notes that retail investors are typically slow to react. However, he predicts that as gold and silver prices continue to climb—potentially reaching $4,000 or $5,000 for gold and $60 or $70 for silver—retail interest will surge. He anticipates that stockbrokers may start pitching gold stocks to clients as early as next year, a development that would mark a significant shift in retail investment behavior. 

Schiff’s outlook for silver is particularly bullish, projecting prices could reach $200 within three to five years. Unlike gold, which has been driven by central bank buying, silver’s rally is likely to gain momentum from retail investors, often referred to as “the poor man’s gold.” Despite lackluster sales at his company, Schiff Gold, over the past two years, Schiff expects a retail-driven surge as precious metals gain broader attention. 

Bitcoin’s Vulnerability in an Inflation Crisis 

Schiff sharply criticized Bitcoin, noting its significant underperformance compared to gold, which has outpaced it by approximately 50%. Priced in gold, Bitcoin has fallen by over 20% in a month and is down 18% from its 2021 peak, despite hype from Bitcoin ETFs, leveraged buying by figures like Michael Saylor, and a crypto-friendly Trump administration. Schiff argues that Bitcoin’s marketing as “digital gold” fails to hold up when measured against actual gold, which he considers the true benchmark for non-fiat assets. 

In a true inflation crisis, Schiff believes Bitcoin’s vulnerabilities will become more apparent. Speculative investors, drawn to Bitcoin ETFs and meme stocks, may abandon the cryptocurrency when faced with a broader market correction, leading to a potential collapse in its price. Schiff contrasts this with gold’s enduring value, which benefits from central bank and institutional buying without relying on speculative hype. 

Economic Collapse: Hardships for American Households 

Schiff warns that the dollar’s loss of reserve status, driven by central bank gold hoarding, will trigger severe economic consequences for American households. Rising consumer prices and interest rates will be the first signs of trouble, as a weaker dollar increases the cost of imports and diverts domestically produced goods to international markets. Trump’s tariffs exacerbate these pressures, further driving up prices. 

In a collapse scenario, Schiff foresees disruptions in food supply chains and banking access, as higher costs and interest rates strain household budgets. Everything from home loans to auto loans and credit card debt will become more expensive, squeezing consumers and reducing their purchasing power. Schiff also highlighted the risk of housing defaults, as rising interest rates and inflation make mortgage payments increasingly unaffordable. 

Inflation Under Trump: A Worsening Trend 

Despite promises to curb inflation, Schiff argues that inflationary pressures under Trump’s presidency will likely exceed those under Biden. While Biden’s first year saw inflation peak at 9.1%—a consequence of money printing during the COVID era under Trump—subsequent years saw a decline. In contrast, Schiff predicts that inflation under Trump will rise steadily, with the lowest levels in his first year and worsening thereafter due to aggressive monetary policies, including potential quantitative easing (QE). 

Schiff cited comments from Eric Trump suggesting a return to QE, which could further devalue the dollar and fuel inflation. These policies, combined with persistent deficits and a lack of fiscal responsibility, undermine the U.S.’s ability to repay its debts without resorting to debasement, further eroding confidence in the dollar. 

The Stock Market and Commodities: A Shifting Landscape 

Schiff views the U.S. stock market as significantly overvalued, with the Dow Jones Industrial Average worth only 12 ounces of gold today compared to 40 ounces in 2000—a 70% decline when adjusted for inflation. Despite nominal gains, stocks have lost real value over decades, a trend obscured by inflation-driven price increases. Schiff warns that a return to aggressive Fed policies, such as QE, could prop up nominal stock prices but further erode their value in gold terms. 

Beyond precious metals, Schiff is bullish on commodities, including energy (particularly uranium), industrial metals like copper, nickel, and zinc, and agricultural commodities. He sees these assets thriving in an inflationary environment, offering investors a hedge against the dollar’s decline. 

Schiff’s Advice for Investors 

For investors looking to navigate this challenging environment, Schiff recommends allocating a portion of their portfolios to physical gold and silver, which can be purchased through his company, Schiff Gold (schiffgold.com). He advises against high-markup collectibles, emphasizing the importance of buying at competitive prices from a trusted source. Additionally, Schiff’s asset management firm, Euro Pacific Asset Management (europac.com), offers tailored strategies for a declining dollar and stagflation, with impressive returns this year—45% for its global strategy and over 100% for its gold strategy. 

Schiff also encourages investors to stay informed through his social media presence, including his X account (@PeterSchiff) with 1.2 million followers and his YouTube channels, where he counters misinformation and provides insights on markets and commodities. 

Conclusion 

Peter Schiff’s analysis paints a grim picture of the U.S. economy, with the dollar’s declining reserve status, rising inflation, and eroding confidence in fiscal and monetary policies driving a historic shift toward gold. As central banks and institutions embrace precious metals, retail investors are poised to follow, potentially fueling further price surges in gold and silver. For American households, the consequences of this shift—higher prices, rising interest rates, and potential disruptions—underscore the urgency of preparing for a new economic reality. By investing in hard assets like gold, silver, and other commodities, Schiff argues that investors can protect their wealth in an era of uncertainty and declining dollar hegemony. 

You can watch the interview with Peter Schiff here:

Disclaimer: This article/interview is not a recommendation to buy or sell any shares, products, or services. Always conduct your own due diligence and consult with a financial advisor. 

 

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