 The stock market staging its best start to a new year in decades. Let's bring in Peter Schiff, CEO of Euro-Pacific Capital. All right, Peter, what do you make of the first couple of weeks of the new year in the stock market? We've only had one down day in U.S. stocks so far this year. Yeah, investors are oblivious. You know, they're really whistling past the mother of all graveyards. You mentioned this is the best start since 2006. And of course, people who were buying stocks in 2006 had no idea of the magnitude of the financial crisis that would hit the market in 2008. Well, the same people are even more clueless today because the crisis that we're heading for is going to be much, much bigger, much worse than the one in 2008. So, stock market, you know, buyers are oblivious. Look at what's happening in the bond market. Look at what's happening to the dollar. Look at what's happening to oil prices, to gold prices. These are the signs that people should be paying attention to, but they're not. They're too fixated on these meaningless highs in the Dow Jones. Well, yeah, bond yields surged this week and they have been for quite some time. People are worried about that. What do you make of this report that perhaps China will halt the purchases of U.S. treasuries? Well, I think it's about time. And I think it's not just halting the purchase. Remember, we count on the Chinese to roll over the debt as it matures. And so if they don't buy anymore, that means they're going to let their treasury bond holdings mature where are we going to get the money to repay the Chinese? We don't have that money. We have to get it from the Federal Reserve. But according to the Fed, they're not buying treasuries either. And if the Chinese stopped buying, why would anybody else buy? So you said people are worried about rising interest rates. No, they're not. If they were worried, they'd be selling stocks. Rates are going way up and people are oblivious to what that means because we have more debt than ever before in this country. You know, we had a crisis in 2008 because we had too much debt. Now we have much more. So the economy is in much worse shape. It is very vulnerable to a backup in interest rates. The whole justification for the stock market bubble is based on the fact that rates are low. But what if they're not low anymore? And of course, if interest rates go up, the government can't afford to pay interest on the national debt, which is exploding. Corporations can't afford to pay interest on their debt. Individuals can't afford to pay interest. The states can't afford to pay interest. I mean, nobody can afford interest rates if they go up. But it's hard to imagine a crash in the stock market anytime soon. We've just had tax cuts, you know, going into corporate America. We have companies raising guidance, companies giving out $1,000 bonuses to their employees. So how do you grapple with a potential crash in the stock market with these forces in the background? Well, Bush cut taxes. He cut taxes on corporations. He slashed the tax on corporate dividends. That didn't stop the market from going down. And you know, these tax cuts add to the deficit. But the problem for individuals is even though they're going to get a tax cut, they're going to spend that money on gas. They're going to spend it on food. They're going to spend it on insurance. So they're not going to have any money left over to buy anything extra. They're just going to pay more for life's necessities. Meanwhile, a lot of corporations aren't going to bend it from these tax cuts because they're not going to have any profits. Their costs are going to go up so much that their profits are going to be eradicated. And it doesn't matter if you have a lower income tax. If you have no income, that's subject to tax. So I think people are overestimating the benefit of the economy to the tax cuts. And they're ignoring the drag on the economy of rising interest rates, which also means rising payments under- Why would they have no income? Corporations? Because they start losing money. Their interest costs go up on their debt. Their raw material costs go up. Their wages and costs have gone up. So companies are going to see a lot of their profits go away. And their sales are going to go down. When their customers are spending all their money on higher mortgage payments because their adjustable rate mortgage reset, or they're spending it on gasoline or insurance, sales are going to be weak. So the economy is a lot weaker than people think. And they're being blindsided by all this hype. Donald Trump was right when he was a candidate. It's a big, fat, ugly bubble. And now it's a lot bigger, fatter and uglier than it was back then. Well, some analysts are saying that come July, that's when the Fed will reserve, will actually begin to shrink its balance sheet. Does a pullback in the stock market potentially coincide with an event like that? Well, if the Fed actually follows through with that threat, and I would consider it a threat, because if the Fed actually does that, that will simply exacerbate the demise of the stock market and the bond market and the economy. But it's my feeling that the Fed is going to back away from that. But it's still not going to be a get out of jail free card. I mean, I think the Fed is going to actually expand its balance sheet. I think they're going to surprise the markets with QE4, because I think interest rates are going to be rising so much that the Fed is going to panic. The Fed is going to try to halt the increase in interest rates because it knows it will usher in another financial crisis. And so the Fed is going to become the buyer of only resort. It's going to be buying up all the bonds that the Chinese don't want or that anybody else no longer wants. And so they can't shrink the balance sheet. They're going to have to expand it. They're going to have to expand it, you know, bigger than ever. What about the demise of the dollar so far this year? What's behind that move? And are people not paying enough attention to that? They're not paying enough attention. You know, when last year began, right, 2016 or 2017 rather, everybody was bullish on the dollar. I mean, except for me, but all the mainstream analysts, oh, the dollar has no place to go but up. And it had its biggest decline in 14 years. In fact, it was the first time the dollar was down in five years. The dollar had its worst year against the Chinese yuan in nine years. It's going to accelerate. I think the US dollar is going to hit an all-time record low against the yuan this year. Remember, a lot of hedge funds were shorting yuan and I was warning that those guys were going to get burned on those trades and they are if they're still in them. There's a lot more pain ahead. But this week dollar is just getting started. We have just begun a major long-term bear market in the dollar that is going to see the dollar hit all-time record lows across the board. That's going to send commodity prices higher. That's going to send oil. You know, oil is back above 60. It's above $64 a barrel today. We're headed to 80 to 100 this year. And I think by the time the dollar bear market is over, we're going to be $100 to $50, $200 a barrel, maybe higher in the price of oil. You know, that's not going to be a housing. $200 a barrel? Yes. You know, not this year, probably not next year, but before this dollar bear market ends, that's what Americans are going to be forced to pay if they want to actually buy any oil. But it's also going to be food prices that are going to go up, clothing prices, everything that we import is going to get more expensive. This is the beginning of a surge in inflation. You know, people thought that, oh, you know, we printed all this money, but look, you know, we didn't get any inflation. The money printing was the inflation. The result is going to be a big increase in consumer prices. It's just that there was a big lag between the creation of all the inflation and all the inflation showing up in consumer goods, because in the interim, it made a short-term stop in financial assets. So before the inflation is going to show up at the grocery store, right, or at the gas pump, it showed up in the stock market, in the bond market, in the real estate market, but ultimately it's going to go into consumer prices. Prices are going through the roof. And the Fed can't do anything about it. Peter, Bitcoin prices have come down from their highs in December. We're now at about $14,000 for Bitcoin. Is the Bitcoin hype fading? And where do we end the year at? Well, I don't know if it's fading or not. I mean, there's a good chance that the market has topped out. But then again, it may not. I mean, this bubble has gotten a lot bigger than I thought it would have gotten. And does that mean that it can't get bigger still? It could. I mean, could Bitcoin get back above $20,000 and go to $25,000 or $30,000? Yeah, I'm not going to say it's impossible. But I wouldn't encourage people to bet on it, because I do believe that no matter how high Bitcoin goes, it's ultimately going near zero. Whether it goes all the way to zero or just gets close enough, it's not going to matter. The losses are going to be enormous for people who are buying Bitcoin now. Even if they temporarily have some paper profits, the market is going to implode. And it goes with all these other cryptocurrencies too. I mean, it's not just Bitcoin. I mean, you've got bubbles going on in all these cryptos. And now you have these stocks. Look at Eastman Kodak, right? I mean, I forgot they even still had a stock. But all of a sudden, they say they're a blockchain company. They come out with Kodak coin, and the stock's up 400%. I mean, so people are just buying anything that has the word blockchain in it or crypto in it, just like they were jumping all over any stock to put a dot-com at the end of their name in the 1990s. Look, this is the same kind of irrational exuberance, but maybe more irrational than it was before. Irrational exuberance? That's a term we've heard before. All right. Peter Schiff, CEO of Euro-Pacific Capital. Thanks very much for joining us as always. My pleasure.