Every Treasury Bond Buyer Became a Seller! -Peter Schiff

Peter Schiff used his latest Labor Day weekend podcast to argue that the United States bond market has entered a long bear market with no natural buyers left.

For SilverTrade readers the message is simple.
When treasuries lose their last private bid the Federal Reserve becomes the buyer of last resort and that path runs through inflation gold and silver.

Schiff opened with a line that sets the entire hour. “This is a major bear market in bonds and that bear market has a long way to run.”

He followed it immediately. “We don’t have any major lenders anymore. Everybody that was buying treasuries is now selling them and we’ve got more treasuries to sell than ever before.”

The 10 year yield had reached 4.81 percent and the 30 year 5.28 percent the highest levels since 2007. Japan has already cut its Treasury holdings from 1.3 trillion dollars to 1.1 trillion. In Schiff’s telling that is not a one off. It is the new pattern.

Former buyers have flipped to sellers while Washington must still finance enormous deficits.
“The Fed is gonna end up buying all the treasuries that nobody else wants and the only way they can do that is to create inflation.”

That is the core of the gold & silver case. Monetizing the debt does not make the paper whole. It devalues the dollar against scarce metals.

Schiff spent the first half of the show tearing apart the August jobs report that official Washington called a boom. The headline print was 162000 against a 55000 consensus. He called the bar artificially low and the number itself suspect. The birth death model supplied 74000 of those jobs 45 percent of the total on the assumption that new businesses were hiring.

More than a third of the rest were waiters and bartenders. Add education and healthcare and you reach about 70 percent of the gain.
“These are not the jobs that we need. If we wanna reduce our trade deficits we need productive jobs. We can’t export waiter and bartenders.”

Real wages he said are falling once you use honest inflation rather than the official 3.1 percent year over year wage figure. JOLTS openings fell. ADP private payrolls missed. Last month was already revised.

Schiff’s verdict: “it’s not really a beat it’s a miss.”

He also mocked the market’s ritual reaction. “The market reacts to these numbers like Moses just brought them down on tablets.”

Kevin Hassett called it a boom. Schiff asked why an economy in the middle of a boom would leave the president’s economic approval at record lows. Compare current GDP trade jobs and income data with the handoff from the prior administration and “by most of those measures the economy is weaker now than it was then.”

His punchline: “It’s more like a bust than a boom.”

Then came the political pressure campaign. President Trump said America deserves the lowest interest rates in the world and threatened to terminate all trade with surplus countries if the Fed refuses to cut.

Schiff called the credit claim backwards. “We’ve never been a worse credit risk than we are right now.”

The country is the world’s largest debtor with a 40 trillion dollar national debt and chronic deficits. Switzerland has low rates because it is a good credit. The United States used to be one when it was a creditor nation with small government high savings and in the real good old days a gold standard and no income tax.

“The US is far more likely to repay its debts in inflated dollars now than it was 50 years ago.” That is not default in the legal sense. It is default through the printing press.

Schiff also said the trade ultimatum is empty and economically suicidal. Ban trade and the government collects zero tariff revenue while stores empty. “The economy would collapse.” He noted the irony of threatening the Fed with a policy that would itself destroy growth. He expects no follow through.

Even so the threat itself advertises how little room remains between fiscal needs and market reality.Other data points from the week fit the same frame. The July trade deficit widened to 88.6 billion dollars the largest since March 2025. Diesel printed a record above 5.80 dollars.

Schiff described a personal shipment that cost him 162 percent of the tariff once FedEx added its fee a small illustration of how protectionism leaks into consumer prices. Comments from Fed official Waller sent gold back above 4400 dollars.

For gold & silver investors the sequence is what matters. Private buyers of Treasuries are stepping back. Yields are already at 2007 highs. Officials want lower rates anyway because the interest bill and the entitlement bill cannot be paid from receipts alone.

The residual buyer is the central bank. Central bank buying of unwanted government paper is inflation. Inflation is why gold is already responding and why silver historically catches up with more torque once the monetary nature of the move is obvious.

Schiff closed the opening argument the way he started it. Traders have not priced the last buyer problem. “The traders still haven’t figured that out. They’re going to figure it out.”

When they do the bid that leaves the bond market does not vanish. It looks for something that cannot be printed. That is the market SilverTrade was built to cover.