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Peter Schiff: If They Were Smart, They Wouldn’t Be in the Stock Market
Peter Schiff: If They Were Smart, They Wouldn’t Be in the Stock Market
Peter Schiff hit a number of subjects in his most recent podcast, including bitcoin, the stock market, wealth inequality, the Fed and the voting age. He also said we should be thankful for capitalism.
Stock markets hit record highs again this week. Some of it was due to more optimism about a trade deal. Peter said he underestimated the impact of QE4on the markets.
I mean, I knew QE4 was coming. I was 100% sure of that. I knew the Fed was going to cut rates, and they’ve been doing that. I just kind of underestimated how much upward pressure it was going to put on the US stock market. I actually thought that the dollar would be falling as a result of the Fed surprising everybody by doing exactly what I expected, which was cutting rates and going back to QE. Well, they did exactly what I expected, except the dollar hasn’t gone down. But I just think I want to add ‘yet.’ The dollar hasn’t gone down – yet. Because it is going to go down and when it falls, it’s going to drop like a stone. And I don’t think that’s going to be a positive for the US stock market or the US bond market, and we’re going to see a much bigger move up in the price of gold.
Peter said a lot of people who are making money in the US stock market think they’re smart, but they’re not.
If they were smart, they wouldn’t be in the stock market. Or if they’re in it, they’re simply in it as a momentum trader that say, look, I know this is BS, but hey, they’re a bunch of idiots buying stocks, so I’m going to buy stocks now so I can sell to these idiots, and I’m going to get out the door before they realize the market has turned.”
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Peter Schiff: When Is the Market Going to Wake Up to this Con?
Peter Schiff: When Is the Market Going to Wake Up to this Con?
As expected, the Federal Reserve cut interest rates another 25 basis points on Wednesday.
The mainstream read the post FOMC meeting comments to be relatively hawkish, saying Powell and Company seemed to indicate that future rate cutting is on pause.
Peter Schiff opened up his podcast reminding us that just one year ago, the Fed was raising rates and telling us it would continue to do so through 2019. It also claimed that quantitative tightening was on “autopilot.”
And they said this with a straight face. And everybody believed them.”
At the time, Peter was saying it wasn’t going to happen. He said the central bank would start cutting rates and relaunch QE. And here we are.
The central bank removed the phrase saying it was committed to “act as appropriate to sustain the expansion” from its forward guidance. This was widely viewed as a more hawkish stance. The Fed replaced that language, instead saying, “The Committee will continue to monitor the implications of incoming information for the economic outlook as it assesses the appropriate path of the target range for the federal funds rate.” Powell was more emphatic during his press conference, saying bank officials “see the current stance of monetary policy as likely to remain appropriate.”
Of course, Powell again claimed that the Fed is not engaged in quantitative easing despite the repo operations and bond-buying program. He tried to draw a distinction between QE and today’s operations by pointing out that the central bank is buying short-term bonds today while it bought longer-term debt during QE.
This is really a distinction without a difference. I mean, who cares what the maturity of the bonds are?”
…click on the above link to read the rest of the article…
Peter Schiff: Trump and the Fed Are Reading Off the Same Script
Peter Schiff: Trump and the Fed Are Reading Off the Same Script
Stocks took off on Friday on several big news items – most significantly President Trump’s announcement that the US and China have worked out phase one of a trade deal. In his podcast, Peter broke down the news. He also made an interesting observation: Trump and the Federal Reserve seem to be reading off the same script.
The consumer sentiment number for September came out Friday higher than expected. As Peter noted, this index is regarded as very important.
It measures whether or not the consumer is confident enough to go deeper into debt and keep buying stuff that he can’t afford. And assuming the consumer is so confident then everything is great because the spending continues and the GDP continues. But of course, if you look back historically, the consumer is never smart enough to be pessimistic when he should. He’s always very optimistic just before a major economic decline.”
Also on Friday, the Federal Reserve Bank of New York came out with its non-quantitative easing quantitative easing plan. The bank said it would buy $60 billion in short-term Treasuries each month.
Of course, don’t confuse this with quantitative easing when the Fed was buying $85 billion a month of Treasuries, because this is no way quantitative easing except, of course, that’s exactly what it is.”
The Fed also reiterated that it plans to use all of the interest it earns off its portfolio to buy more Treasuries. And as the bonds mature, it will take that money and buy more Treasuries, thus pumping up the balance sheet. Peter says this proves that Ben Bernanke was either lying or incompetent when he told Congress back in 2009 that the central bank was not monetizing the debt.
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Peter Schiff: Why the Fed Won’t Be Able to Rescue the Economy the Next Time Around
Peter Schiff: Why the Fed Won’t Be Able to Rescue the Economy the Next Time Around
Peter Schiff has been saying that the Federal Reserve is going to take interest rates back to zero and launch another round of quantitative easing in order to reinflate the bubble economy after the next crash. The central bank successfully pulled this off after the 2008 crisis. By dropping rates to zero and holding them there for nearly a decade, and running three rounds of QE, the Fed has reinflated the real estate bubble, blown up a bond bubble and pumped up the stock market. But Peter said it’s not going to work the next time around. Instead, Fed monetary policy will tank the dollar and lead to an inflationary recession.
So, why can’t the Fed pull off another rescue? Peter explained why he thinks it’s not possible during an interview on the Tom Woods Show.
Peter admitted he didn’t think the Fed could rescue the economy in 2008.
I underestimated the ability of the Fed to get away with quantitative easing and for the world to basically accept this and to enable this.”
So today, we have even bigger bubbles than we did in 2006-2007.
The question is — the Fed did it before, can it do it again? Peter said he wouldn’t bet on it.
I would not want to bet that is possible given the enormity of the problem now.”
Peter said you just have to consider the sheer amount of intervention that would be necessary to reinflate the bubbles once they pop the next time.
…click on the above link to read the rest of the article…
Peter Schiff: Negative Interest Rates Are Boneheaded
Peter Schiff: Negative Interest Rates Are Boneheaded
Donald Trump has been badgering Federal Reserve Chairman Jerome Powell for months, begging for lower interest rates. Yesterday, he took things to another level, saying that the “boneheads” at the Fed need to push rates into negative territory.
In his podcast, Peter Schiff said negative interest rates are boneheaded.
Trump used a pair of tweets to push for negative interest rates.
The Federal Reserve should get our interest rates down to ZERO, or less, and we should then start to refinance our debt. INTEREST COST COULD BE BROUGHT WAY DOWN, while at the same time substantially lengthening the term. We have the great currency, power, and balance sheet………The USA should always be paying the the lowest rate. No Inflation! It is only the naïveté of Jay Powell and the Federal Reserve that doesn’t allow us to do what other countries are already doing. A once in a lifetime opportunity that we are missing because of ‘Boneheads.’
Peter said he can’t think a more boneheaded thing to do than to push interest rates negative.
Trump is basically saying negative rates would allow the federal government to refinance its debt. It could roll over short-term debt into longer termed bonds and lock up the low rates. But as Peter pointed out, interest rates are already near historic lows.
If President Trump actually cared about refinancing the national debt and lengthening the maturity of the debt – the duration – and locking in these low interest rates, lock them in! They’re already super low.”
Peter said if the Fed did cut rates to zero or lower, he thinks yields on long-term bonds would actually start to go up because the market would begin factoring in higher inflation.
…click on the above link to read the rest of the article…
Peter Schiff: The Fed is ‘Unable to Delay’ a Recession Any Longer
PETER SCHIFF: THE FED IS ‘UNABLE TO DELAY’ A RECESSION ANY LONGER
According to Peter Schiff, the chief global strategist at Euro Pacific Capital, it was a “huge mistake” for the Federal Reserve to cut interest rates last month. Schiff says there is no way for the Federal Reserve to stops the United States from going into a recession.
“They never should have taken rates to zero in 2008 and held them there for 7 years,”the veteran economic analyst told RT. “Zero interest rates and quantitative easing have created problems in our economy that will take generations to fix. However, the healing will never get underway if the Fed goes right back to zero (which is where they are headed).”
According to Schiff, it’s impossible to build a viable economy on the back of artificially low interest rates. “All it accomplishes it to push up asset prices, creating bubbles and malinvestments that hurt the economy. Relying on low interest rates for growth makes it certain that recessions will ensue when monetary policy tightens,” he added.
Runaway government debt and the Trump tariffs provided the final push to tip us back toward an inevitable recession, Schiff said. He added: “the Fed is not causing the recession; they are just unable to delay it any longer.” Unfortunately, if interest rates are “allowed” to rise organically to levels that reflect a healthy economy, the interest payments on government debt will sink the government and that’s exactly why President Donald Trump is desperate for artificially low interest rates.
Peter Schiff: A “Great Recession” Will Hit Jeopardizing Trump’s Reelection Efforts
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Peter Schiff Compares Trade War to “Battle at Little Bighorn”
Peter Schiff Compares Trade War to “Battle at Little Bighorn”
Political commentators are increasingly critical of U.S. trade policy, particularly tariffs and the trade war with China. Radio host Peter Schiff went so far as to compare U.S. trade policies to General Custer and the Battle of Little Bighorn. Meanwhile, some economic red flags seem to support their worries.
In today’s polarized political climate, there is one topic both the Left and the Right seem to agree on: the trade war with China is eventually going to hurt the average American.
Radio host Peter Schiff has been hammering on the economic dangers posed by tariffs for months. He even compared the resulting trade war with China to General Custer’s Last Stand.
“General George Custer met his doom charging into a battle he thought he could win against an opponent he did not understand. Based on [certain] views about the fast-emerging trade war with China, it looks to me that [the U.S.]…is charging into an economic version of Little Bighorn.
“By mistaking the real nature of international trade, the costs of tariffs, the effects of currency movements, and the supposed ease with which the United States could quickly re-establish itself as a low-cost manufacturer, [the U.S.] risks shredding the safety nets that have undergirded the U.S. economy for decades and plunging us into a war we are ill-equipped to fight.”
Those are strong words. But is Schiff’s Little Bighorn analogy accurate? Are these tariffs pushing the U.S. toward a disastrous economic “ambush” that could devastate America’s economy? Let’s look at some economic indicators to see what they point to.
Currency Manipulation
Marc Chandler, chief market strategist at Bannockburn, agrees that China’s recent currency devaluation is part of an escalating trade war: “This is another step in the currency war. This also makes trade more difficult.”
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Peter Schiff: Gold Is Not Going to Stop This Time
Peter Schiff: Gold Is Not Going to Stop This Time
Gold has continued to push upward. The latest catalyst was another escalation of the trade war. Gold briefly moved above $1,550 in dollar terms. But it has done even better in relation to other currencies. In fact, the yellow metal is at record highs in nearly every currency except the dollar.
Peter Schiff appeared on RT America on Aug. 26 to talk about it. He said he thinks gold is eventually going to make news highs in the dollar as well, and this time, it’s not going to stop going up.
Peter said he doesn’t necessarily think that recession fears, in and of themselves, are pushing gold higher.
They’re worried about what the central banks, and in particular the Federal Reserve, is going to do about the next recession. That’s why the price of gold is going up — because the Fed is going to be going back to zero; they’re going to be going back to quantitative easing and all of this is good for gold.”
Peter noted that gold has been making record highs in almost every currency except the dollar.
And I think ultimately, we’re going to make a high in the dollar, probably before too long. And you know, when the Fed did quantitative easing the first time, the reason that the gold rally stopped at $1,900 was because everybody believed that the Fed had an exit strategy and that they could reverse the process, normalize interest rates, unwind their balance sheet. When they realize that they were mistaken to believe that, that there is no exit strategy, that it’s basically QE forever, that the balance sheet is going to grow into perpetuity — gold’s not going to stop next time. It’s going to keep on going.”
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Peter Schiff: The World Will Drown in an Ocean of Inflation; Gold Is Going Ballistic
Peter Schiff: The World Will Drown in an Ocean of Inflation; Gold Is Going Ballistic
The gold market took a one-two punch on Tuesday as Trump made some concessions in the trade war and inflation numbers came in a bit higher than expected. Peter Schiff talked about it in his latest podcast, saying gold traders still don’t understand the gold rally.
Stock markets surged as gold and silver dropped after US trade representatives said they would delay some of the additional tariffs recently announced by President Trump. The Dow closed 372 points higher. Meanwhile, the price of gold dropped below $1,500 briefly before rallying back above that key number.
Gold actually began selling off before the trade war news when the Consumer Price Index number came in hotter than expected. Peter said he knew that would happen.
That is the way the lemmings trade, because according to the conventional wisdom, if inflation is higher, then the Fed will be less likely to cut rates. After all, they’re cutting rates because inflation is too low and if inflation comes in hotter, well, then there’s less of a reason for the Fed to cut rates. So paradoxically, higher inflation is seen as being bad for gold. And the reason I’m saying paradoxically is because gold is an inflation hedge. Normally, the more inflation the more you want to buy gold.”
Peter said investors are banking on the Fed fighting inflation, but they’re wrong.
There is no way the Fed is going to fight inflation. I don’t care how high it is … One of these days the traders have to realize that these numbers don’t matter. I mean, maybe they matter to the public who has to live with a rising cost of living. But they don’t matter to the Fed. The Fed is going to take rates back to zero no matter what these numbers are, because the economy is going into recession even as inflation rises.”
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Peter Schiff On Today’s Sell Off: The Fed Is “Lying”, Rates Are Going Back To 0%, Gold Is Going To $2,000
Peter Schiff On Today’s Sell Off: The Fed Is “Lying”, Rates Are Going Back To 0%, Gold Is Going To $2,000
On a day where it looks as though the Fed’s bullshit “magic potion” may finally be wearing off on the stock market, Peter Schiff joined Chris Irons on the Quoth the Raven Podcast to speak about today’s market move: what it means, whether it can continue and how he would position himself going forward.
Schiff began by talking about the trade war between China and the United States escalating. He talked about why he believes the US dollar was weakening on Monday and why he believes the dollar will continue to weaken for the foreseeable future.
“We’ve been in a recession,” Schiff says.
“The election of Trump just delayed the inevitable for a little,” he continued.
“My thinking is the market was going down regardless of the cut they got,” he said, talking about last week’s rate cut.
“You can’t say the dollar is strong when it’s lost $30 against gold in one trading day. Gold tells you we have a weak dollar.“
He continued, talking about Jerome Powell’s press conference last week:
“Powell contradicted himself several times, which is something that you do when you’re lying. The Fed is not telling the truth.”
Schiff predicts that interest rates are going back to 0% and that the Fed will start QE yet again.
“Powell’s trying to pretend it’s because of concerns about the overseas economy. It is really the US economy that is driving the Fed. That’s why this is just the first step on the road back to zero. And you know, it was a mistake when the Fed went back to zero the last time; it’s going to be an even bigger mistake when they do it next time. And they’re also going to go back to quantitative easing.
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Peter Schiff: If You Understood What This Means, You Would Be Buying Gold as Fast as You Can
Peter Schiff: If You Understood What This Means, You Would Be Buying Gold as Fast as You Can
Gold has risen to six-year highs in recent weeks as the Federal Reserve has pivoted back toward an easy-money monetary policy. Markets widely anticipate a Federal Reserve interest rate cut this week and the economy appears to be slowing.
Peter Schiff recently appeared on RT Boom Bust to explain why he believes this is the beginning of a much bigger long-term rise in the price of gold. And it’s not just because the Fed is cutting rates.
In fact, they are going to cut rates next week and this is going to be the first step on the road back to zero. And the Fed is also going to return to quantitative easing. But we just found out that Donald Trump is cutting a deal with a Democrats to basically throw out any progress Republicans made back in 2011, thanks to efforts of the Tea Party, to at least try to rein in the increase in government spending. So, they’re throwing caution to the wind. We are going to see deficits going through the roof over the next several years, and that’s even without the recession, which I believe is coming and which is going to make them much, much worse.”
Consider that in the midst of what is supposed to be a strong economy, we’re already seeing record-setting deficits. As Peter pointed out, bigger deficits mean more money-printing and that means more inflation.
All of this is very bullish for gold … If you understood what all of this means, you would be buying gold as fast as you can.”
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Peter Schiff: The Fed Is Going to Stimulate Inflation, Not the Economy (Video)
Peter Schiff: The Fed Is Going to Stimulate Inflation, Not the Economy (Video)
In December, Peter Schiff predicted that the Federal Reserve was about to hike rates for the last time and that the next step would be rate cuts. Yesterday, Jerome Powell made comments widely interpreted to signal the rising likelihood of a rate cut. The Fed chair dropped the word “patient” from his vocabulary, saying the central bank would respond as “as appropriate” to the perceived economic impacts of tariffs and other economic data.
Peter appeared on Fox Business Countdown to the Closing Bell with Liz Claman to talk about what’s next up for the Fed and how it will impact the economy.
I don’t think that Powell would even open the door to the possibility of a rate cut if he wasn’t prepared to walk through it.”
Peter said the reason he knew the Fed would end the hiking cycle in December was because the stock market was tanking and he knew the only way the central bank could stop the carnage was to take the rate hikes off the table.
Well, now it’s falling again, and so now all they’ve got left in their quiver is to actually cut rates.”
Claman pointed out that the stock market was popping at the mere suggestion of a rate cut.
“Exactly!” Peter said. “But I think people are wrong if they think it’s going to work again.”
The Fed was able to inflate an enormous bubble with QE one, two and three, and keeping rates at zero for as long as they did. But the next time, it’s not going to work.”
Peter reiterated a point that he made during his podcast last week, noting that bond traders are anticipating a recession. They are betting that the Fed will cut rates during the downturn.
…click on the above link to read the rest of the article…
Peter Schiff: The Uber IPO Fiasco and the Writing On the Wall
Peter Schiff: The Uber IPO Fiasco and the Writing On the Wall
Uber launched its IPO on Friday. It was less than ideal.
Meanwhile, the Federal Reserve is talking about how it wants to tweak its quantitative easing program when the next recession rolls around.
Peter Schiff talked about how these things relate — and the “writing on the wall” for the economy in his latest podcast.
Instead of buying some fixed amount of Treasurys and mortgage-backed securities, the central bankers have floated the idea of pegging a yield during the next economic downturn. For example, it would try to hold the interest rate on a one-year bond at, say, 1%. As Peter pointed out, this is essentially price-fixing.
They’re saying, ‘We don’t want the interest rate that is being determined in the market. We want to interfere in the market so that the interest rate is lower than the market would set.’”
The central bankers are basically admitting that this is not capitalism. They don’t want the free market discovering a rate because they don’t like the rate the market would choose. When you interfere with the market-clearing price – and an interest rate is simply the price of money – then you create surpluses or shortages. This is a basic supply and demand function.
As Peter said, this constant Federal Reserve suppression of rates is the source of our problems.
The reason the Fed constantly feels that it has to artificially suppress interest rates is because we have so much debt as a result of the artificial suppression of interest rates in the past.”
That’s the irony of the Fed suddenly running around warning about high levels of corporate debt. It’s a problem it created!
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Just Before The Great Recession, Mountains Of Unsold Goods Piled Up In U.S. Warehouses – And Now It Is Happening Again
Just Before The Great Recession, Mountains Of Unsold Goods Piled Up In U.S. Warehouses – And Now It Is Happening Again
When economic conditions initially begin to slow down, businesses continue to order goods like they normally would but those goods don’t sell as quickly as they previously did. As a result, inventory levels begin to rise, and that is precisely what is happening right now. In fact, the U.S. inventory to sales ratio has risen sharply for five months in a row. This is mirroring the pattern that we witnessed just prior to the financial crisis of 2008, and it is exactly what we would expect to see if a new recession was now beginning. In recent weeks, I have been sharing number after number that indicates that a serious economic slowdown is upon us, and many believe that what is coming will eventually be even worse than what we experienced in 2008.
And even though I write about this stuff every day, I was stunned by how rapidly inventory levels have been rising recently. The following numbers come from Peter Schiff’s website…
This comes on the heels of the largest gain in wholesale inventories in more than five years in December.
Inventories rose 7.7% from a year ago in January. Meanwhile, sales only rose by 2.7%. Overall, total inventories were $669.9 billion at the end of January, up 1.2% from the revised December level.
The increase in durable goods inventories at the wholesale level was even starker. These inventories were up 11.7% from January a year ago, and are up 17% from January two years ago, hitting $415 billion, the highest ever.
Businesses don’t like to have excess inventory, because carrying excess inventory is expensive and cuts into profits. So they try very hard to manage their inventories efficiently, but if the economy slows down unexpectedly that can catch them off guard…
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Peter Schiff: “The Real National Emergency Isn’t At The Border. It’s The National Debt!”
Peter Schiff: “The Real National Emergency Isn’t At The Border. It’s The National Debt!”
Peter Schiff, the CEO and chief global strategist of Euro Pacific Capital Inc. says that the real national emergency is not at the southern border. The real ticking time bomb is the national debt.
We are headed for a train wreck in this country because of the national debt and yet nobody seems concerned about it. In fact, many Americans have taken to emulating the federal government by getting themselves buried in massive amounts of debt as well, compounding the issue. According to Seeking Alpha‘s report by Schiff Gold, we should all we wary of the government’s overspending and desire to tax more to make up for it. Just because we haven’t suffered a crisis – YET- based on this debt doesn’t mean that one isn’t coming.
On Friday, President Donald Trump declared a national emergency so he could build a wall at the southern border. Based on that declaration, the president will reallocate $6.5 billion from other government programs to fund a border wall. But the problem isn’t that we don’t have a wall, says Schiff. The problem is we’ve already built a wall of debt.
“Of course, the real national emergency is not the lack of a wall, the failure to build a wall, but building up the national debt.” –Peter Schiff via Seeking Alpha
The United States debt surpassed the $22 trillion mark just last week and continues to rocket upward with no end in sight and this is just the very tip of the iceberg.
“This is just a funded portion of the debt. This is where the US government sells a bond and somebody owns that bond.
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