Schiff is pro free trade. He points out how overregulation, overtaxation, and easy money is at the root cause of the USA's trade deficit.
The free market balances trade because an outflow of currency but equal the inflow of currency out of a region. If, for example, the US buys $300 million of goods from China, then China has an extra $300 million in their coffers. That $300 million means a higher purchasing power, higher wages, and greater profits, enabling the Chinese to buy extra goods, including goods from the USA. At the same time, that deficit of $300 million causes slight deflation. Lower demand in the USA but higher demand from China means that the Chinese will be able to buy more American goods. Thus, trade balances out.
However, in a market tampered by a central bank, like the Federal Reserve, the outflow of currency doesn't necessarily lead to an equal inflow of currency. When a central bank devalues its nation's currency, it prevents the natural process of deflation in a country with trade deficits. This prevents the trading partners of that said nation from having greater purchasing power, thereby destroying their ability to purchase the goods of that nation. This promotes ever greater trade deficits.
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