Financial guru Peter Schiff says everyone is being fooled by the mainstream media when it comes to the economic health of the United States. But Schiff says it is all a delusion and phony prosperity isn’t going to last.
A lot of seemingly positive economic data came out last week, but in his most recent podcast, Peter Schiff said it is just feeding into a delusional economic narrative that ignores the most fundamental storyline – debt. According to Seeking Alpha, Schiff says that this delusion built on debt is not going to last, and we should all be prepared.
The May jobs report came out Friday, sending another ripple of optimism through the investment world. Talking heads in the mainstream media were overly excited that the numbers appeared “good.” According to the Department of Labor, the US economy added 223,000 jobs in May. The unemployment number fell to an 18-year low of just 3.8%. Average hourly earnings rose by 8 cents. Average wage growth came in at 2.7% over the past year. Pundits and prognosticators on the major financial networks were giddy like schoolchildren at the news.
But all of that optimism masks a very serious problem, says Schiff. No one is taking into account the debt. Not just the national debt, but the debt of everyday Americans. Analysts were also excited about the personal income and spending data – particularly spending, which rose 0.6% in April. Meanwhile, income was up 0.3%. Schiff put this into some perspective saying:
Consumers are spending money twice as fast as they’re earning it for the month of April – six-tenths up on spending, three-tenths up on earnings. So, what does this tell you? People are tapping into already a pretty shallow savings pool, or they are running up more credit card debt to buy stuff. –Peter Schiff
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