'American Nightmare' | West On Brink Of Next Financial Crash | Peter Schiff x Harry Cole

Added: 2026-05-20

[00:00:00]Especially the United States is in a lot worse shape than it was leading up to the 2008 financial crisis. So, uh, and this is just the beginning. All these debt chickens are coming home to roost.

[00:00:10]>> So, the American dream is still alive, but it's going to be painful in the short term.

[00:00:14]>> No. Well, it for a lot of people, it's a nightmare at this point.

[00:00:18]>> Uh, because the government has has gotten in the way of the American dream.

[00:00:22]Socialism is great until you run out of other people's money, right? That's the problem.

[00:00:31]Now, we live in strange times. Markets are up. Silicon Valley says an AI revolution is about to, well, revolutionize our world. And the Wall Street Masters of the Universe insists the economy is fundamentally robust despite recent headwinds, not least from Iran. But step outside the financial world and there's a very, very different story. Millions of people across the United States and the wider West are struggling to pay their bills, buy a home, or simply keep their heads above water. Prices are up a lot. Debt is exploding. Governments are printing money that there's no tomorrow. And some fear an economic reckoning is long overdue. While the markets raise higher and higher, driven largely by the magnificent seven tech giants and feverish optimism around AI, critics warn the foundations of the global economy are cracked. They see red lights flashing right across the dashboard, unsustainable debt, convoluted financial engineering, stagnant living standards, and a looming threat of a jobs apocalypse. So, who's right? Are the optimist blind or the doomongers crying wolf? Joining me today is one of the most outspoken voices in the world of global finance, a man who famously warned of the 2008 financial crash that many of us still haven't really recovered from. Peter Schiff, welcome to Harry Cole Saves the West. you famously called it right in 2008. What does 2028 look like?

[00:01:51]>> Well, I think the world is in uh well, especially the United States is in a lot worse shape than it was leading up to the 2008 financial crisis. So, I think the crisis that we're heading for is going to be a lot worse than than that one.

[00:02:04]>> You talk about the we live in a fake economy. What for for our viewers and readers, what do you what what does that mean?

[00:02:11]>> Well, the US does for sure. I mean we because we have a standard of living that is completely based on on debt on trade deficits on on on consumer debt government debt. We live well beyond our means and the rest of the world makes that possible uh by providing us with goods that we didn't produce and that we we can't afford. Uh and everybody is relying on government promises that can never be kept. You've got so many people that want to get paid interest and principal on government bonds that want to get paid uh social security and Medicare and government pensions and the money's just not there. And so the whole thing is a fantasy. Uh when the bills come due, they can't be paid and all the government can do is create inflation.

[00:02:55]They could print money and give everybody worthless money. And and that is basically where we're headed. And I think that's why you're seeing this acceleration in inflation and and long-term bond yields. I think this is going to be a much bigger uh deal than what happened during the 1970s when you had something similar and this is going to end a lot worse.

[00:03:17]>> Is that why you know just we know we know that prices are going up. We know that gas is going up. But it does somehow feel this time that the underlying issues are far worse. Is that is that why in your view?

[00:03:28]>> Well, they are far worse. And it's not just gas. I mean, look at food prices, but it's also not just food and gas.

[00:03:33]It's pretty much everything.

[00:03:35]>> Prices are rising and they're going to rise a lot faster in the in the future than they are right now.

[00:03:40]>> Uh, and I think the same thing with interest rates, long-term interest rates are going to keep rising. Look, you know, our yields, our 30-year yield is at a 19-year high. uh the the 30-year yield in Japan is at a 29-year high, but yields are moving up uh in the UK, in Germany, in Australia.

[00:04:00]>> Uh and this is just the beginning. All these debt chickens are coming home to roost.

[00:04:04]>> What do you I if you were to put a timeline on on this reckoning, how long have we got before things start to get very worrying?

[00:04:13]>> Well, I think they already are for a lot of people, but I think it's going to get worse. I think right now, you know, you've got the war going on which is adding to the problems, but it's also creating a bit of a scapegoat or a reason for people to be complacent because people think that, well, the increase in prices, the increase in interest rates. It's just the war. The war might have been the catalyst for a big move that was going to happen anyway, >> but now you have a lot of false hope that all we have to do is end the war and all of our problems go away.

[00:04:47]>> That's not going to happen. And that may be one of the reasons that the war never ends because that means there's a never-ending scapegoat where they can always say, well, as soon as the war is over, uh, prices are going to come crashing down. The problem is if they end the war and prices don't come crashing down, then what are they going to say?

[00:05:05]>> How do we get into the into this mess?

[00:05:06]I' I've I've long thought that co certainly, you know, sped up basic financial ill literacy amongst amongst the public in the way that you know in Britain for for sure in parts of America and across Europe, you know, people were paid simply to stay at home. the scale of the sums involved were so staggering that actually when you start to talk in trillions and billions in debt, people kind of lose the public lose sight of what those figures really really mean.

[00:05:33]And actually people get very used to you know at the first sign of of gunfire or the first first issue the state stepping in there and a sort of socialized sort of health system or work system or or benefits you name it becomes the becomes the norm. Am I Did it go back further than just CO?

[00:05:53]>> Oh, yeah. I look, it's been building for a long time, but it accelerated because the government made even more promises during CO to take care of everybody, to replace everybody's income, to give everybody extra income even though they weren't working. Uh deficits really exploded uh during CO and the bigger problem is they never reigned them in after CO.

[00:06:15]uh you know all the increase of spending I has been sustained. Even the Trump administration, the Republican Congress refused to do anything to take back the big spending of the Biden era. They just added to it and made it worse.

[00:06:30]>> Do you see anyone anyone on the political pitch that's you know calling the calling the right tunes and does anyone have the political capital now in a world where the public expect this expect to have the tab picked up for them and for someone else to pay for it?

[00:06:43]takes take a very skilled politician to cut through that, isn't it?

[00:06:46]>> Well, look, we have one guy in Congress, Thomas Massie, in Kentucky, and he's the one guy Trump wants to get rid of. So, the only guy that was willing to stand up against the big deficits and the deficit spending and the undeclared wars and the tariffs, uh Trump got wants to get rid of that guy. We're there. The election is today and so maybe he succeeded.

[00:07:06]>> But when when when Massie goes, there goes any hope we had. Not that there was much with just one guy.

[00:07:13]But it shows you that what happened to Massie, it's a warning to anybody else.

[00:07:19]Do not try to uh get in the way of this.

[00:07:22]Do not try to do the right thing. Do not try to encourage any fiscal responsibility or we're going to get rid of you. Who's it? That's a really interesting point. Who's actually calling the shots here? It doesn't seem to me to be the politician. Certainly not the president. Possibly not the Treasury. But, you know, is it is it the Black Rocks of the world? Is it the tech giants? Who's actually in control? Who's keeping this bloody mary go round on?

[00:07:47]>> Well, I I think a lot of it is confidence that that's keeping it on. I mean, people But they're losing confidence. Why do you think the treasuries are going down?

[00:07:55]>> Yeah.

[00:07:56]>> Um, you know, pe people, you know, know that these are empty promises. They're never going to get fulfilled. So it it the the only thing too is that the problem has been building for so long without a crisis that there is some complacency that you know we can keep getting by. But I think at some point reality is going to set in the same way it did with the subprime mortgage market. You know all of a sudden the bottom dropped out of the market even though it should have been obvious for years before that that these mortgages were no good and they would ultimately collapse but people were in denial. And I think you have a similar sense of denial with sovereign credit, but at some point there's going to be a realization, you know, kind of like a wy coyote moment where you look down and you realize you're standing in air and then and then you fall. And so we're going to have something like that and uh you know then then there's a crisis, you know, and the the former secretary of the treasury, Hank Pollson, can see this coming too. That's why he said we should have an emergency break the glass plan to deal with this crisis. He didn't say we should do something to avert the crisis to try to prevent it from happening. He just resigned himself to the inevitability of the crisis because he knows we'll never do anything to to diffuse this bomb before it explodes.

[00:09:16]He's just thinking about what we should do after it explodes. And I just think by then it's too late. I mean, if the crisis happens, there is no break the glass uh plan, you know, to deal with it.

[00:09:29]>> You've been you've been accused of being Dr. Doom before. You've been mocked for your prediction before. How sure are you about this one?

[00:09:35]>> Oh, I'm 100% sure. I mean, the only thing you can't be sure about is the exact timing. So, if you said, "Hey, is this a problem for 2026, 2027, 2028?" I mean, it's a problem now, but I don't know when the crisis is going to expose that, you know, in a way that, you know, we saw in 2008 because I was warning about 2008 for years before it happened.

[00:09:59]I I didn't know exactly when. But after the subprime blow up in '07, I was pretty sure that it was happening soon because then, you know, something I had been predicting would happen finally happened and I I was pretty sure how the rest of it would play out. And I think you know the big move up in the price of gold over the last couple years even though we've had a pullback recently but the big breakout there uh the breakdown of the bond market >> uh these are signs that the confidence is being lost. And you know there's that old saying about how did you go broke slowly at first then all at once >> we're still in the slowly part but we're soon we're going to hit the all at once part and you know that and then then it's you know over. So we're looking at things that could trigger this this this this this crisis this moment. Um you know we we look at the sort of irony of the world economy right now in that the the AI giants are leading leading the sort of market surges but at the same time they themselves are saying there's going to be a massive you know cutting back of white collar and blue collar jobs in the coming years of people who replaced by you know placed by machines essentially. Um could that be the catalyst that pushes this over the edge?

[00:11:09]Well, I mean, that in and of itself is actually a good thing. The fact that we can free up labor and and and operate more efficiently so that those people could do something else, that that's that's progress. That that that's a good thing. So you don't think that >> there are a lot of bad things though and like if those people who lose their jobs because of AI, if they don't get other jobs, if what they end up doing is going on some government program where the government just gives them money and they don't work and they're not productive, that's a problem. You know, that could be highly inflationary.

[00:11:42]Um but but you know, but I'm not worried about technology. I'm worried about government. Technology has been our savior. One of the reasons that, you know, we're still functioning is we've had a lot of advances that have made us more productive and we've been able to afford all this extra government. Now, if we didn't have all this extra government, everybody's lives would be a lot better. People would have higher living standards, >> but the government has been able to get away with it by robbing us of that productivity. One of the biggest mistakes we've been making in the in the UK is a rapid expansion towards net zero towards green energy while leaving lots of people who've worked in in older industries, you know, in oil and gas and the like, you know, uh uh you know, without jobs, just as you say. Are you worried that exactly the same's happening here? Are we doing enough to AI proof the job market? It looks to me like we're not doing anything.

[00:12:33]>> Well, again, you know, companies don't exist to provide jobs. They exist to produce products and generate profits. I mean employment is a byproduct of that but we don't want jobs we want the stuff you know and if we can get the stuff without the jobs then we can save the labor for something else. So again it's not it's not about you know everything that improves our productivity that makes us more efficient eliminates jobs.

[00:12:58]You know, at one point half the population was working on a farm, >> but because farms became so productive with machines, now maybe only one out of a hundred people has to work on a farm.

[00:13:10]Well, that frees up the other 49 people to do something else. We still have plenty of food. We just don't need to devote half of our population to growing it, right? That's a good thing because now that that those people can do something else and now now we have a lot of other stuff in addition to food. Are you optimistic about I mean the future?

[00:13:28]I mean if you look at younger generations now, they don't seem to have a huge amount of buy into the system. Um you know they're electing people like Mandami in New York who kind of literally wants to tear it down and start again. Um you've got younger educated college voters who you know have been sold a pup on their degrees.

[00:13:45]They can't find jobs. They can't buy a house. They can barely afford to rent in cities. Um you know they don't have much of a buy into this system. You seem quite optimistic.

[00:13:55]Well, I mean, I think there's a real crisis coming, if you want to call that optimistic, but about the future, and it's not necessarily a terrible thing.

[00:14:04]>> I mean, I'm I'm optimistic about the future of humanity. Um, I mean, you know, we keep on making progress despite the government obstacles in our path.

[00:14:14]And yes, we have a lot of setbacks along the road and we're about to go through one of them. uh you know because of you know decades of government profleacy.

[00:14:24]But these young people that you're talking about, yes, they've been sold a bill of goods by the government. They've been sold an overpriced education that isn't worth very much. Uh the government let them borrow a bunch of money to overpay for worthless degrees. That's the fault of government. It's not the fault of the market or capitalism.

[00:14:43]>> And the government has undermined economic growth uh with massive deficit spending and excess regulation.

[00:14:50]taxation. So the government has destroyed uh a lot of the future but capitalism is you know trying to overcome that. I mean AI artificial intelligence is not here because of government. It's here because of the free enterprise system. What's left of it was able to invent it and develop it >> and you know there will be tremendous productivity gains that will acrue uh from this innovation over time. But in the short run I think these debt chickens are coming home to roost. We're going to have a lot of inflation uh and it's going to be it's going to be some pain. A lot of people are going to get wiped out. uh real asset prices are going to collapse regardless of what happens to nominal prices because inflation is going to run away.

[00:15:35]>> So the American dream is still alive, but it's going to be painful in the short term.

[00:15:40]>> No. Well, it for a lot of people it's a nightmare at this point.

[00:15:43]>> Uh because the government has has got in the way of the American dream, you know.

[00:15:48]Uh >> but I mean it's not is it just government across across the world we're going to be, you know, the first generation to leave across the West.

[00:15:54]We're going to be the first generation certainly to leave uh the world poorer uh than than than our predecessors in terms of household wealth than and wages for for sure. Birth rates are declining.

[00:16:05]Not just government, is it?

[00:16:07]>> Well, no. Well, the problems are stemming from government, but you could say that we get the government that we deserve. I mean, that's the problem. you have all these democracies uh and and and the public wants all kinds of free stuff >> and instead of the the politicians letting the voters know that there is no free lunch, >> they're more than happy to pretend that there is because that's how they get their votes. You don't get somebody's vote by telling them no. You tell them yes, you can have all this stuff. Just vote for me.

[00:16:36]>> Yeah. I mean, >> so I want look at the United Kingdom for for example where where I'm from. you know, it's they're living in La La Land in the fact that, you know, the everinccreasing benefits bill. It's going to be330 billion pounds, nearly500 million a year uh this year. Plus, you've got a, you know, a sort of goldplated protected pension system that is increases beyond inflation and beyond wages as a bare minimum every year. By the end of this decade, you're going to be spending more than half of day-to-day spending uh on the health service. I mean, it's completely completely unsustainable. This isn't uniquely an American problem, is it? This is this is this is across the world. Yeah.

[00:17:16]>> Right there. Socialism is great until you run out of other people's money.

[00:17:20]Right. That's the problem. And, you know, we've run out of other people's money. So, now we're printing it. Uh but then you destroy the value of everybody's money. And people are going to learn the hard way uh that these government benefits really don't have any value because at the end of the day, you won't be able to buy anything with the money they give you. um you know and and I think this is going to be particularly harsh in the US because we've been living off the reserve currency status of the dollar >> and I think that status is in jeopardy and in fact is in the process of being lost and when it does there's a dollar crisis that's going to completely upend the US economy. Uh and you know we can't survive without that. It we're we our economy is built on the foundation of the dollar status because that's what enables the trade deficits. That's what enables the budget deficits.

[00:18:07]>> America, >> but without that, you know, everything implodes.

[00:18:10]>> Compared to somewhere like Britain though, America still does have a pretty strong estab manufacturing base and still has economic growth. You know, the the chance we'll be giving we'll be giving it give their left arm for >> our manufacturing base is pretty weak. I mean, we manufacture some things. Uh, but the vast majority of manufactured goods we import.

[00:18:31]>> Um, >> where is that coming from? you know, we we make aircrafts, right? So, we make, you know, big aircrafts and we make some big machine parts, but the consumer goods, the stuff that's in Walmart, you know, all that's imported, right? All that and the your household appliances and, you know, the stuff that consumers buy, you know, all that stuff, you know, we don't make any of that. We have we have to pretty much >> import it all. Most of our exports are energy and agriculture, right? The stuff that we pull out of the ground, right?

[00:19:01]Stuff that we grow. But the thing is, we don't, you know, we have a trade deficit in in food. We export a lot of food, but we import a lot of food, too. That's the that's the problem. We, you know, we're not even self-sufficient in food. I know you don't want to talk timelines and uh and such, but how long in your view is it sustainable for the world's largest military spender to be now spending more on debt interest than than it is on it on on on that number one military in the world? Same with the UK. We're now spending double our defense, our pretty meager defense budget as is, but we're still spending double. Throw in education as well. and it still wouldn't hit our debt.

[00:19:32]>> Yeah. Well, we're spending more on interest on the debt than we're spending on >> how long how long is that sustainable for?

[00:19:38]>> Look, I don't know. It's it's it's, you know, it's obviously not sustainable indefinitely.

[00:19:43]>> The question is when, you know, when does it collapse? I mean, Trump was saying he wants another 500 billion for the defense that, you know, which is 50% increase. I haven't heard much about that since he, you know, suggested it.

[00:19:56]But I know they're going to increase military spending because we're in this war. uh interest spending is on autopilot. That's going to keep on going up. Uh but yeah, at some point uh it's going to collapse, but a lot of it depends on when our creditors come to that conclusion and don't want to lend us more money because it's all about the willingness of the world to keep lending us money despite the fact that we're broke and can't afford to pay it back.

[00:20:25]The only way we could pay back our current investors, our current bond holders, is to get new bond holders, right? It's just a giant Ponzi scheme.

[00:20:33]But it's all based on faith and confidence. And once that goes, then the whole thing imploded, just like any Ponzi.

[00:20:40]>> Indeed. Final question. What should punters be doing now? Are we are we are we buying gold and silver or buying shotguns yet?

[00:20:47]>> Well, you should Well, you should have a shotgun. Uh but you don't need that many of them, I guess. So, you should mainly be buying gold and silver. And if you have gold and silver, you'll always have enough money to buy a shotgun if you need one.

[00:20:58]>> There we go. We'll put that we'll put that on a bumper sticker. Peter Sheriff, thank you very much for joining us. Both fascinating, terrifying. Uh but thank you. And with a little bit of sliver of optimism there, we might just we might just pull through. Yeah. Hope for the best, plan for the worst, you know, get go to shift gold to get your gold and silver. And we have great portfolios at Europacific Asset Management that we're, you know, building. You know, the emerging markets are going to emerge as big winners. uh there are a lot of companies and countries that are actually going to benefit from this changing of the world economic order. Uh countries that are you know kind of near the bottom are going to be rising to the top. Uh purchasing power is going to be transferred uh a lot of it from the west to the east. And the same thing with asset value. So if you're smart and you can see the direction uh that we're headed, you want to, you know, get there first. You know, go to where the puck is going to be. And it's pretty obvious to me where that is. and that th those are where my investments are and I would encourage people to uh to do the same thing.

[00:21:57]>> All right, we'll save the West by investing in the East. Peter Shiff, thank you very much for joining us.

[00:22:01]>> All right, take care.