As author of the recent books understanding socialism and understanding marxism and in west for we cross to peter schiff he is chief global strategist at europe a civic Asset Management right gentlemen crosswalk rules in effect that means you can jump in anytime you want and i always appreciate it ok lets go to new york richard you know when you looking at the news about the economy looking at a lot of macro numbers and sometimes i think its very quite confusing and where the economy is going particularly when we look at unemployment permanent unemployment and jobs that are permanently lost here but the more i look at it and you gentlemen are preeminent experts here i dont i dont really think its that you are an l. Im really quite taken with this k. A recovery the rich got richer and the poor got or is that an oversimplification richard go ahead not at all i think weve already seen that now quote quite some time that lee. East to north 3 on 4 decades of growing inequality both of wealth and income and instead of that being understood as having contributed to this combination pandemic and crash were living through instead of that being understood we see the crash having made it worse the growth of the wealthy at the very top having outstripped everything we could have imagined at the same time that now over 60000000 americans have had to file for one or another kind of state or federal Unemployment Compensation assistance this is a system that is spinning out of control in terms of extremes of wealth inequality and income inequality and theres nothing on the horizon that suggests that thats going to change and so i think that is becoming a permanent quality of this economy and in a society that used to in the 20th century pretend that it was a vast middle class that capitalism was a tide that lifted all boats i dont think this is politically already a logically sustainable. Peter the same question to you because if we look at the Consumption Patterns of the top 10 percent during the worst of the pen demick a lot down their consumption went down Something Like 15 percent but the class that serves them their income went down more than 30 percent thats according to some reports here so i mean and we do know that it just pays those stories of the billionaires stories how theyve really done well out of all of this year it is that it can to a Cable Company because we do have this growing and maybe permanent underclass go ahead you are well you know i dont even care what letter you want to try to use to describe it my problem is with the word recovery because i dont think weve recovered at all sure there has been a recovery in the stock market in that the market recovered what it lost in the early days of coded and yes i mean this recession that were currently in began with a very substantial collapse and yes theres been a bit of a bounce off of that collapse but were still in a recession and so i dont know if 3 covering 2 being in a less severe recession then we were in at one point really qualifies as a recovery and i dont think weve seen the lows i think were going to relapsed i think were actually going to go down and theres a good chance that the stock market might make new lows as well but regardless of what happens with that bubble in the short run the reality is that main streets pain has actually been wall street again its precisely because the economy remains so weak and whats really at the root cause of the weakness is not capitalism its the failure to have capitalism its the Federal Reserve that is monetizing massive government debts that are only inflating asset bubbles but at the same time it is depriving the real economy of the research. Or so that it actually needs to grow and build a Real Recovery that would in fact lift all boats instead were settling for a fake recovery because thats the easiest one to create because in order to have a Real Recovery were going to have to have some short term pain in order to make that possible because what has to recover is not consumption but production we need more savings we need more Capital Investment and to and to enable lat we actually need higher Interest Rates not lower Interest Rates and we need a Smaller Government not a larger government so everything that we have done since the pandemic began is actually weakening the economy and were compound ing all of the stakes that we made before the pandemic if you remember we were already slipping along before anybody heard of covert 19 and 4th quarter 2018 thats when the wheels started coming off the bus thats when the fed did the about face and started cutting rates thats when they really started to move from quantitative tightening back a quantitative easing now in march of 2020 right dose trends excel aerated we went right back to 0 and we went we skipped q. E. 4 and went right to q e infinity but all these policies are simply blowing more air into a big bubble analysts same time theyre depriving the real economy of the air that it needs to grow if it if i go back to it when all of these mistakes and i cant simply agree with much much when you present but much of those mistakes have benefited the same people the richest people that weve ever known in the history of humanity those mistakes ok yes i agree you know what a lot of assets we agree we agree but im to focus you know richard here is that but because these mistakes have benefited these people why should they do anything about it i mean they made out i mean theres no ones going to let me go to richard if theyre still getting. These mistakes going. I think the use of the word mistake and it always amazes me. Its a mistake over and over again year after year peter is quite right i agree but these mistakes being systematic the repeated over and over again are not dealt with adequately by suggesting that if only those mistakes werent made we would have some nice functioning capitalism that would look again lift all boats it seems to me that the people at the top have figured out that if and when they can they can make more money if that drowns the economy and in that downturn they can turn back to their advantage as well using Monetary Policy to insulate the stocks upon which the bulk of their wealth depends this is a this statement so often repeated that the word mistake starts to lose its meaning this is the way capitalism slayers out it might be nice to imagine that it would function some other way but thats a utopian imagery of a stateless capitalism that probably never existed but in the last 100 years smar sure has disappeared as this state has become a major lever so the gross and concentration of wealth with or without the merger is between the state and the biggest chap in the lists which is happening more and more as we see i think this is the real capitalism we have to live with and not the imaginary one that peter likes to suggest i read it i mean the middle im in the middle of it both between being and when you said you agree with peter i think you agree with both peter and youre going to go to the other peter here mycenae what you used the word count was many get that its you know i think its very problematic because it doesnt seem to be benefiting the whole lot of people because they know nonetheless here i would agree with peter our guest here in the sense that im tired of socialism. For the very very rich and then everybody else gets the crumbs in the countless the economy go ahead well 1st of all dont confuse what america has now with capitalism i mean whats left of capitalism have been destroyed by socialism so its the socialism that has crept into the system that is responsible for the problems in this mass disparity in wealth but also you assume that this is going to end well for the rich i assure you its not these asset bubbles are temporary a lot of this wealth only exists on paper people are not actually spending that money its just on an on a brokerage account statement what is coming is a major collapse in the value of the dollar the inflation is ultimately going to result in the cost of living rising much faster than the paper value of peoples assets so believe me the rich are going to get theirs too everybody in america is going to be impoverished to a degree by these failed policies its not just of course the middle class theyre just going to suffer the most but in the end the rich are going to suffer too but the real solution for everybody is a return to capitalism what we need is sound own money and independent fed that no longer artificially manipulates insta Interest Rates to prop up asset prices and to subsidize government deficit spending we need much higher Interest Rates that will result in a big decline in spending from government and consumers will have more savings will have more capital or Capital Investment we need a lot less regulation as well as cuts to Government Spending so we can have a more vibrant economy instead of the sick economy we have now that is on life support that is temporarily benefiting people who own the assets that benefit from the inflation that the fed is creating but ultimately that inflation is going to rise result in an increase in the cost of living for everybody and we are headed for a dollar crisis and clearly the rich own more dollars in any. But we all play they have the most to lose when the value of the dollars theyre holding completely implodes ok im certain i think we have one thing all 3 of us have been coming to a crisis that is on her rights but richard how can how can you save money how can you invest money if you dont have a job i mean its very simple here. Yeah i mean im mazed a little bit by this and were going to have high Interest Rates were going to really crunch down on the economy you mention in passing that consumers will have to save more they dont have anything left to save from thats why this level of savings of the great mass of americans is virtually 0 or negative already theyve been suffering for so long theres nothing left to crunch down on them which is already happening now it is a recipe for much more turmoil and chaos in this society then we are already then were already seeing i agree with peter that this is going to end very badly and its going to diesel late the bubble at the stock market alongside of Everything Else but for me this is the end of an empire for the 1st time in my adult life i dont see a way out i dont see a solution emerging i used to it my ear that way capitalism over it changed the Great Depression and all the other afflictions that it has imposed on the people around it but i dont hassle isnt it in a hose those inflexions government did not listen it honestly out of your weight and it struck me as one remarkable thing so blaines socialism for the ills of capitalism is an extraordinary move at a time like this when the socialist movement is coming back from a period of historic weakness precisely at the time that the growth and equality what went into that as unesco show as an adventure a lot and well they need all the service. Undermining the structure of the it was on me look youre talking about is that social workers are going to have to jump in here were going to go to a heartbreaking you know one especially one where the recovery say we are. Its going to be hard to reclaim freedom and were going to have to work at it but as people recognize from examples like sheens young. What. It all systems need to. I hope people will start fighting men saying we wont tolerate systems. Streets in our homes that cant possibly track what were doing. Is youll be via reflection of reality. In a world transformed. What will make you feel safe. Isolation community. Are you going the right way or are you being so. Direct. What is true what is faith. In the world corrupted you need to descend. To join us in the depths. Or a maybe in the shallows. Welcome back to crossfire. All things are considered im Peter Lavelle tree mind you were discussing whether there will be a k. Recovery. Ok richard let me go back to you in new york. A few years ago i met an indian businessmen very successful indian businessman and at the time indias economy was doing quite well again usually using these macro Macro Economic indicators ok g. D. P. Growth. Income number of people employed but at the same time theres like 200000000 people that live in stark poverty in india and i said to him i said is your indian model just to accept that youre going to have 200000000 people in stark carty because you see your economy is growing and as an investment target people are pouring money into it i mean is it because the Indian Economy says accepted its going to have an underclass so im asking you is this whats happening to america where you were going to have an underclass permanent under cattle class and if. It will the perception is that the will be enough political stability to maintain the status quo because it seems to me i agree with the last remarks you made in the 1st part of the the program is that you know i dont see a way out here go ahead richard. Yeah i think thats exactly whats happening i think were learning in a variety of ways to live with an enormous underclass i disagree with you that we didnt already have one i think are good but i think it we are now learning to live with a much larger one and you can see that in a variety of ways except in space flight what people claim of 200000 people dead from a pandemic that didnt have anything like that impact in many many other countries the United States has 4 and a half percent of the worlds people it has 25 percent of the cold cases and 25 percent of the deaths for a rich country thats a stupefying failure of management but its also the acceptance of guns the couple suffering in its population as if it were normal and ditto for the level of poverty Diddle Diddle for the level of discrimination dr Antony Funnell chief yesterday at the bloomberg equality senate explained how people of color in america have the lowest wealth the lowest income dalias. Cases of coal did and they are the frontline workers they are the ones that are suffering from hypertension diabetes obesity if you wanted a truth of everything the black lives Matter Movement wanted to suggest about systemic racism you could just listen to dr found chief in 15 minutes and you would get it and it is being accepted mainly by the government right now as official policy so instead doing absolutely nothing to undercut it i think we are becoming the society we used to see overseas enclaves of wealth new York San Francisco chicago and all of that and so rounded by a sea of really desperate poverty they have accepted that in india and they have. So our system is if not more despite the independence from Great Britain they have accepted it in brazil another case and boy you look at trump blow snarl and moldy and you can see that kind of right wing government which this is an acceptable range you know it and it will be say im going to follow politics very carefully and i watch snippets of the the republican and democratic conventions and i was appalled im simply appalled that 900 party has a pro active economic agenda presumed to presume to pursue in light of the. High unemployment. And the in the structural changes that are going through the economy i didnt see that from either party here and it goes back to my question to richard is there is this an exception acceptance that were just going to have a whole lot more poor people. Well you know were i disagree that weve even been having a growing economy i dont think we had any growth even before kovac and i think the g. D. P. Numbers were manufactured based on understating the true rate of inflation and so by understating inflation you can make it appear that a stagnating or shrinking economy is is actually growing its not you know the reason that americans dont have any savings is because the economy has been growing theyve been able to keep it together through debt theyve used debt to replace their income but why is that its because we dont have a vibrant economy because we dont have real increases in productivity thanks to Big Government and banks the Federal Reserve so were in this gigantic hall because we have banded capitalism and embraced a socialist form of government we have Government Central planning we have Central Planning on Interest Rates we have price fixing and market manipulation and we have an economy where were trying to i generate growth by printing money and giving it to people to spend and that. Its not going to work well i said the only way to get really good amik growth is to shrink government so that we can have a stronger more vibrant economy because we need more productivity to consume more we have to produce more and the government doesnt produce anything all it does is interfere with the productive efforts of the private sector you know the problem is though but peter bit the government it particularly in the last 2 years that particularly during this economic turndown they chose winners i mean you know so jeff bezos announced goal and all that theres a real socialist in america because youre the winner in all of this ok i mean i think you know these terms calculus and socialism dont really mean anything for me is that both it whos been out of it promote all of this the middle class is not the working class isnt the Big Tech Companies are in the banks are doing really well here are the banks that are doing well look at the device or imploding look at look at their prices look the Banking Sector is in a lot of trouble but look none of the bailouts should have happened or should have been a p. P. P. The whole thing was a disaster nobody should be getting a check from the government these extended