Inflation: Peter Schiff lays it on the line


Last week we pointed out that “Prices are getting ever higher, and shortages are getting ever worse“.  Now Peter Schiff, who’s proved brutally accurate over a long period in analyzing inflation and predicting what’s coming, lays it on the line.  I highly recommend you watch his short (3¾-minute) conversation with Dan Bongino:  but if you don’t want to take the time, I’ve included a transcript of a few highlights.

Peter said, first of all, remember that inflation is a tax.

“So, when the Biden administration says they’re not taxing people that make less than $400,000, they’re hitting them with this huge inflation tax.”

So, how do you avoid it?

Peter said, “Stock up now!”

“Buy the things that you think you may need a year from now, two years from now. Buy it now. Especially the stuff that is nonperishable. Because in the future, stuff is going to be in even shorter supply than it is now, but prices are going to be much higher. So, why wait for the prices to go up? Just buy the stuff that you need now while it’s available and a lot less expensive than it’s going to be pretty soon.”

Bongino said we have plenty of historical examples that show us an inflation problem can get very ugly very quickly if we don’t get our arms around it. Just look at what happened in the Weimar Republic. Peter said it will get ugly, and there really is no way to get our arms around it.

“I think we’re going to reap the whirlwinds of the winds that we’ve been sowing. And you know, you have to go back to the 1970s to see inflation anywhere near this bad. The problem is we’re already at the point that we were at the latter part of the 1970s. We’re just getting started. So, we’re going to be looking at serious annual inflation rates in the double digits. And imagine how high the official rates would be if the government was actually measuring them accurately. Because we’re not keeping track of prices using the same CPI that we used back in the 1970s. What we’re doing now really understates the true degree to which prices are rising. And so Americans are feeling the pain of inflation to a much greater degree than it’s being reflected in the official numbers.”

There’s more at the link.

That’s it in a nutshell.  If you know you’re going to have to make major purchases in the next year or two (e.g. vehicles, appliances, home improvements, etc.), it’s probably worth buying them now, even on credit, provided you’re reasonably sure you’ll be able to repay that credit.  I’ve recently gone so far as to buy some extra consumables on my credit card, because I wanted to extend our preparations for emergencies but didn’t have enough cash on hand.  Frankly, with the mess our economy is in right now, I regard that as prudent forethought.

Yes, there are risks involved in that approach.  For example, if you know your car will need a new set of tires sometime in the next year or two, you might decide to buy them now, while they’re still affordable and relatively freely available.  However, what happens if you have a bad accident and your car is written off?  Its replacement (assuming you can afford a replacement!) may use tires of a different size, and/or may not need new ones in the short to medium term.  I guess that’s simply a risk one runs.  Furthermore, if tires become harder to find and more expensive, I daresay you’ll be able to sell those you have for enough money to get back what you spent on them, and perhaps a bit more.  There are pro’s and con’s to everything.  Sometimes, one has to make a choice and live with the consequences.

Remember, too, as Mr. Schiff reminds us (and as I’ve pointed out for years), that the inflation figures cited are so much twaddle.  The “official”, bureaucratically obfuscated numbers obscure the real inflation rate, as we’ve discussed many times in these pages, most recently just last week, where I repeated my rule of thumb:

To know the true rate of consumer inflation in the USA, take the official rate declared by the government and multiply it by 3½.  The result will be much closer to reality.

My informed guesstimate of the real rate of consumer inflation in the USA at this time is that it’s at least 15% annually, and probably trending towards 20%.  If you doubt that, go over your last year’s receipts for groceries and other consumables, and calculate the price increases for yourself.  (Remember, the official rate of inflation disregards food costs, and dangerously underestimates others.  That’s how the bureaucrats can keep it so low – but they can’t fool those who pay the bills.  Our wallets reveal the truth, whether they like it or not.)



  1. China joe will care about inflation when he can't afford ice cream and depends, jill can't afford batteries for her vibrator and hunter can't buy crack. Take ain't gonna happen because the biden crime family has plenty of money

  2. I would say that 20 percent is about right. I live on a fixed income—Social Security plus Teacher Retirement—which means I have to cut back here and cut back there. Not on coffee. Not on booze. Ok then, on food. I need to lose a few pounds anyway.

    1. Amazon has a nice looking 5 gallon still for $136, with a small thump barrel and a water bath cooling coil.

  3. Also don't forget the "Shrinkflation". I went out at lunch to pick up a few perishable necessities, and the only things that hadn't shrunk were the eggs, and the 12 oz sodas. Everything else was smaller, and in some cases the price had increased. So we get hit from two directions.

    You make a reference to the '70's and this brings back memories of that time, with shrinking packages, shortages of goods, generic items – "it's almost as good as the name brand", and double-digit inflation.

  4. I think (step back here) that it might be more accurate to say that inflation is taxlike in its primary effect. A tax filches value from one place and deposits it in another. With inflation, value dissipates from one place and does not seem to appear at another place. If I'm missing a major point here, well, that could happen.

Leave a comment

Your email address will not be published. Required fields are marked *