May 30, 2026
On Tuesday, Peter appeared on Kiko News to warn that markets and the public are underestimating how costly the United States' borrowing binge will become. He walks through bond market complacency, rising consumer inflation expectations, the danger that foreign creditors may stop funding the deficit, and how politics has dulled fiscal accountability. He also points to a technical breakout in sound money assets, and he cautions that price controls will only make a bad problem worse.
He opens by calling out complacency in the bond market and insists the government is borrowing on the cheap right now, which cannot last forever:
I think the bond traders are kind of walking past the two, maybe not as blindly as the equity traders, because I think if the bond investors really perceived the gravity of the threat, yields would already be a lot higher than they are right now. I still think that the U.S. government is getting off cheap, being able to borrow money for 30 years at just 5%. You know, you could go look back at what the U.S. government was paying to borrow money in the 80s and the 90s, let alone the 70s, and it was paying a lot more than that.
He then points to survey data showing consumers expect higher inflation, and argues that official targets do not reflect what savers and borrowers actually face:
If you look at the most recent numbers from the consumer, they're expecting inflation over the next 10 years to average about four percent. So those expectations are already double what the Fed's so-called target is. And I think even the consumer is too optimistic. I think inflation is going to be higher than that. And I think in the bond market, expectations are drifting away and they're going to drift a lot further away because a two percent at this point is a pipe dream.
Warnings from a former Treasury secretary show this is not mere academic worry, and he criticizes policymakers for preparing emergency plumbing instead of stopping the leak:
You know, a former secretary of the Treasury, Hank Paulson, you know, recently came out and said that the U.S. needs to develop a 'break the glass' kind of emergency plan to deal with the situation when foreigners no longer want to loan us money and they don't want to buy our bonds. So we have to figure out an emergency plan. He didn't even talk about, hey, let's try to avert this crisis. Let's get ahead of it. Let's make some cuts to government spending so that we don't have to face this crisis.
He frames the political dynamics as part of the problem, arguing that mainstream parties have abandoned fiscal restraint and that losing a single honest vote matters for investor confidence:
I think getting Massie kicked out of Congress sends the wrong message to our creditors because he was the lone voice for fiscal responsibility in the Republican Party. I mean, he was the sole vote against the big beautiful bill, which was a disaster as far as increasing government spending. You know, Republicans got elected criticizing the excess spending of Biden. Yet Massie was the only one that wanted to reduce that spending. All of the other Republicans voted to keep all of the Biden era spending that they objected to and then add some more for good measure, making it worse.
Finally, Peter warns that political misdefinition of inflation leads to the wrong remedies, and he rejects price controls as a cure for monetary disease rather than a means to fix it:
And so once the government succeeds in confusing the public as to what inflation is, if they convince the public that inflation is rising prices, then all they have to do is stop prices from rising and they'll stop inflation. And the way they do that is with price controls. But the problem is price controls do not work. Just like, you know, if I put a bandaid on a skin cancer just because I can't see it doesn't mean it's not there and it's not spreading and doing more damage.
This article was originally published on SchiffGold.com.