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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.

 …click on the above link to read the rest of the article…

Peter Schiff: The Party Is Over

Peter Schiff: The Party Is Over

As Peter Schiff put it in his podcast, if the first trading day of the fourth quarter was a sign of things to come, bulls on Wall Street are in for a rough end to the year. In fact, Peter said the party is over and you don’t want to be the last one to leave. 

The Dow was down 343.7 points and the Nasdaq shed 90 on a day that started out all sunshine and roses.

For a couple of days, the economic news wasn’t quite as bad as it could have been, or maybe some of the numbers actually were a little better or beat the numbers, and I think there was some idea that, hey, maybe the economy is not as bad as some people had feared, but then reality reared its ugly head at 10 a.m. when we got the ISM Manufacturing numbers.”

US manufacturing dove to a 10-year low. The ISM index of national factory activity dropped 1.3 points to 47.8 in September. That was the lowest number since June 2009 – as the US economy was emerging from the Great Recession. A reading below 50 signals manufacturing is contracting. The weak September number follows on the heels of a 49.1 print in August. Analysts had expected a bounce-back to 50.

Yet Donald Trump wants us to believe we have the greatest economy ever. How do we have the greatest economy ever when we have one of the worst manufacturing economies ever? Especially when it was manufacturing that was supposed to ‘Make America Great Again.’”

Instead, we’re back where we were during the Great Recession. Peter said the only thing this economy really has going for it is massive deficit spending.

 …click on the above link to read the rest of the article…

Greenspan: Rising Gold Price Shows Investors Want Hard Assets That Will Increase in Value

Greenspan: Rising Gold Price Shows Investors Want Hard Assets That Will Increase in Value

During a CNBC interview, former Federal Reserve Chairman Alan Greenspan said gold prices are surging because investors are looking for hard assets that they know will have value in 20 or 30 years. 

Gold is up more than 21% on the year and is trading at levels not seen since 2013.

During the interview, Greenspan focused on an interesting fundamental he thinks is driving both the bond and gold markets — the aging population. He said there has been a shift in time preferences as people recognize they will likely live longer and they will need to finance those longer lives. This, he says, is increasing the demand for hard assets like gold.

One of the reasons that the gold price is rising as fast as it is … that’s telling us essentially that people are hard resources which they know are going to have a value 20 years from now, or 30 years from now as they age, and they want to make sure they have the resources to keep themselves in place. That is a clearly fundamental force that is driving this.”

Historically, gold has served as an inflation hedge and a wealth preserver. It makes sense that investors concerned about maintaining their savings well into the future would turn to gold. This is especially true given the likelihood of increasing inflation as the Federal Reserve continues to try to prop up the economy with low interest rates and quantitative easing.

Peter Schiff has said that eventually, the world will drown in an ocean of inflation.

 …click on the above link to read the rest of the article…

Peter Schiff: This Is the Beginning of a Much Bigger Crisis (Video)

Peter Schiff: This Is the Beginning of a Much Bigger Crisis (Video)

Wall Street has been on a roller coaster ride over the last few months. If you listen to the pundits on the financial networks, you’ll hear the word “volatile” used over and over again. That word certainly seems to describe the current state of US stock markets and in a broader sense the economy. But during a recent interview on RT News with Rick Sanchez, Peter Schiff said it’s not that the economy is volatile. It’s actually a bubble. And we are on the verge of a bigger crisis than the one we went through in 2008.

It’s not a volatile economy, it’s a bubble economy. Thanks to the Federal Reserve, they inflated an even bigger bubble, on purpose, than the one they inflated by accident that popped in 2008. And so the economy is in much worse shape structurally today then it was before it fell apart the last time. So, this is the beginning of a much greater crisis, of a much greater recession than the one that we experienced back in 2008.”

Sanchez asked Peter what exactly the Federal Reserve did wrong. Peter said, basically, everything.

But the biggest things they did wrong were lowering interest rates down to zero, practically, and leaving them there for pretty much the entirety of the Obama presidency. And then they’ve barely raised them. They’re still at 2%, which is very low. They also did all the quantitative easing where they printed a bunch of money and bought US government bonds and mortgage bonds. That enabled the housing bubble to reflate, and that enabled the US government to go much deeper into debt. So, the government didn’t cut spending, which is what we needed. They increased spending. But it also enabled corporations to lever up and buy stocks.

…click on the above link to read the rest of the article…

The Federal Reserve: Public Enemy Number One

The Federal Reserve: Public Enemy Number One

When currency was backed by gold, a central bank’s main function was to maintain the value of the issued currency in terms of gold.  For example, if a central bank created too much money against the gold reserves in the banking system, an increasing number of people would begin to exchange their currency for gold.  To combat this, a central bank would be forced to raise interest rates and decrease the money supply.  The higher interest rates would incentivize people to exchange gold for larger savings on deposit that earn interest.  Banking reserves – gold – would return to the banking system and the economy would return to balance.  The prime reason for insisting on defining currency in terms of a precious metal was to provide a self-correcting braking mechanism to the creation of money.  As expressed by the great Wilhelm Röpke:

If in the production of goods the most important pedal is the accelerator, in the production of money it is the brake.  To insure that this brake works automatically and independently of the whims of government and the pressure of parties and groups seeking “easy money” has been one of the main functions of the gold standard.  That the liberal should prefer the automatic brake of gold to the whims of government in its role of trustee of a managed currency is understandable.”[1]

The US dollar was backed by gold as recently as 1971.  Any central bank in the world could present the Federal Reserve $35 and receive 1-ounce of gold in exchange.  However, on August 15, 1971 – blaming it on the “gnomes of Zurich” – President Nixon “temporarily” broke the dollar’s last link with gold.  Nixon closed the “gold window” and reneged on the promise to exchange an ounce of gold for $35.  Since then, the system of credit in the US has been under the Fed’s complete control.

…click on the above link to read the rest of the article…

Peter Schiff: We’re Ripe for a 1987-Style Crash (Video)

Peter Schiff: We’re Ripe for a 1987-Style Crash (Video)

Stock markets have settled down after an awful couple of weeks earlier this month.  On Feb. 5, the Dow Jones suffered its largest-ever drop in terms of points. It was down 1,600 at one point and ultimately lost 1,175.21 points, a 4.6% drop that day. At one point during that week, the Dow was off 10% in correction territory. But everything is calm now and most of the mainstream is once again feeling bullish and optimistic.

Peter Schiff spoke at the Vancouver Resource Investment Conference 2018 last month before the market tanked. But his message remains relevant in the aftermath of the plunge and the subsequent recovery because the dynamics in the market remain pretty much the same. Conditions are still ripe for a 1987-style market crash.

Investors have not been this optimistic…since 1987. They are even more optimistic than they were at the height of the technology bubble, the dot-com bubble, the new era. Of course, 1987 didn’t end well, right? We had a stock market crash, and there’s a lot about what’s happening today that reminds me about what was happening in ’87.”

Highlights from the Speech

“The economy has not improved under Trump. We don’t have a booming economy. I mean, Trump keeps telling us we have a booming economy, but nothing is booming.”

“When Donald Trump was a candidate for president, he said that the unemployment numbers were phony. They were fake. They were a fraud. They were a con. He said the real unemployment rate is 30%, 40%. Now, every time there is an unemployment number that comes out, he’s tweeting about how great it is we have this record low unemployment and we should all give him credit for it.”

…click on the above link to read the rest of the article…

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