The Fed’s Medicine Makes the Economy Sicker – Ep 556

A Huge Risk-On Day The markets rallied all over the world.  Everything was up. All the foreign markets - European markets, Asian markets, rallied.  It was a huge risk-on day. Stocks went up and bonds got clobbered. Yields rose on government bonds, the 10-yr. out to the 30-yr. Insurance Rates Going Up There will be a lot of pressure on insurance companies to pay claims for both recent hurricanes and where's that money coming from? It's got to come from the markets.  It is just not sitting there in a piggy bank. It is invested in stocks and bonds, so if they are going to pay claims, you would think that is a negative for the financial market as the insurance companies have to liquidate some of their portfolios, but not today! Big Move Down for Gold Risk-on, so you get rid of your safe assets, although I don't know why anyone would consider Treasuries safe, but everybody sold treasuries and bought U.S. stocks. They sold gold.  Gold was down $19 today. This is the biggest one day move I've seen in a while.  In fact, this $19 down move - gold has been moving up steadily to $1350 last week. I don't think I have ever seen a $19 up day. Gold's Steady Climb Gold's been going up slowly.  $5, $7, $3; maybe there was one $10 day, I think, but it has been a very slow, steady climb on a wall of worry.  And now, all of a sudden, we have a day where everybody is excited because the hurricane didn't do as much damage as it could have, and they all buy stocks. They dump gold and it goes down $19 in one day. Gold had been climbing before the hurricanes came around. and I don't think any of that gain was necessarily the result of the hurricanes.  Had none of these hurricanes happened, gold could have been exactly where it was before today.  Gold was rallying anyway. Our Sponsors: * Check out Aeropress and use my code GOLD for a great deal: https://aeropress.com * Check out Boll & Branch: https://boilandbranch.com/SCHIFF * Check out Boll & Branch: https://boilandbranch.com/SCHIFF * Check out Infinite Epigenetics: https://infiniteepigenetics.com/GOLD * Check out Justin Wine and use my code SCHIFF20 for a great deal: https://www.justinwine.com Privacy & Opt-Out: https://redcircle.com/privacy

12 Syys 201740min

Trump said Government was Too Stupid When Donald Trump was originally elected President, I was out there warning, that budget deficits under the Trump Presidency are going to be huge.  Donald Trump never ran as a fiscal conservative or a Libertarian.  He didn't say government was too big, he just said it was too stupid. He promised just to be smarter. He didn't say he would make government smaller, only that he would make it more efficient. He would do a better job of using big government than politicians who have held the office before him. Trump Promised More Spending So it was my feeling that a Trump Presidency was going to result in increasing the budget deficits that would be necessary to finance a bigger government.  Also, Donald Trump never promised to cut government spending; cut entitlements.  In fact, he promised the opposite.  He promised not to touch entitlements, to allow them to continue to expand. He promised to spend more money on the military, more money on our vets, more money on infrastructure, more money to build a wall.  So I knew all of this would result in bigger deficits. "Gentlemen's Agreement" to Raise the Debt Ceiling But now, my suspicions have been confirmed. Now we have news that Donald Trump has basically made a "gentlemen's agreement" with Chuck Schumer to repeal the debt ceiling completely. There has been some debate again about raising the debt ceiling, we have this charade every year or so, where everybody pretends that they might not raise the ceiling and they raise it anyway.  We had a similar political theater going on until Donald Trump cut a deal with the Democrats to extend the last suspension of the debt ceiling for another 90 days. That's when we found out that they had also been working on this deal to eliminate the ceiling altogether. Never Really Paying Off Bills In recent years, the political spin has always been that lifting the debt ceiling is the politically, fiscally responsible thing to do.  That America always pays her bills, and because we always pay our bills, we have to raise the debt ceiling. Ironically, they have it backwards.  The reason they have to raise the debt ceiling is because America never pays her bills. If we paid our bills, we wouldn't have any debt. Debt Ceiling was a Brake on Government Spending What government wants to do is to continue to not pay the bills; to continue to borrow the money so that we can pretend to pay the bills.  And the obstacle to increase debt is the debt ceiling. Of course, we always raise that ceiling every time we approach it, but the fact that the ceiling is there, must provide some type of brake on government spending. Our Sponsors: * Check out Aeropress and use my code GOLD for a great deal: https://aeropress.com * Check out Boll & Branch: https://boilandbranch.com/SCHIFF * Check out Boll & Branch: https://boilandbranch.com/SCHIFF * Check out Infinite Epigenetics: https://infiniteepigenetics.com/GOLD * Check out Justin Wine and use my code SCHIFF20 for a great deal: https://www.justinwine.com Privacy & Opt-Out: https://redcircle.com/privacy

8 Syys 201729min

Threats from Hurricane Irma and North Korea After a long holiday weekend the DJIA fell 234 points this Tuesday.  Finally we have some kind of negative reaction in the stock market to the bad news.  Over the weekend we got news that North Korea had successfully tested a hydrogen bomb, and now we know that Hurricane Irma, which is now listed as a category 5 hurricane, is one of the biggest, if not the biggest hurricane ever in the Caribbean. Anything Can Happen It looks like it is going to go right by Puerto Rico; for those who may be concerned about me, I am Connecticut now, so my family and I are not on the island, but we certainly have property there and we are also very concerned about our neighbors and the people of Puerto Rico. It is not likely to be a direct hit, but anything can happen.  It is projected to pass Puerto Rico Wednesday afternoon. Irma Threatens Caribbean Islands on Heels of Hurricane Harvey The people of the Virgin Islands are going to suffer a similar fate.  There are other Caribbean islands that will not be as fortunate; the hurricane is going to go right over them.  Who knows where it is going to go after that? There is a state of emergency in Miami, in the keys, from Key West all the way to Key Largo. It is a massive hurricane with lots of potential damage on the heels of Hurricane Harvey. We're Broke And you know what? We're broke. Harvey is almost a $200 billion price tag, and I don't know what Irma will be, because the government will have to bail out Puerto Rico and the U.S. Virgin Islands. There is no way the government can deny them relief - they are American citizens.  There was a lot of opposition to a Puerto Rican debt bailout but no one will be against giving money to Puerto Rico as a result of the hurricane. Hurricane Aid for Puerto Rico instead of a Bailout In fact, this could end up being a bonanza for Puerto Rico. They could end up getting a massive amount of aid all disguised as hurricane aid. They are talking now about power being out for 4-6 months in parts of the island because the government has so under-invested in the infrastructure - the government-owned power company.  Maybe Puerto Rico will get a bunch of money in order to re-build that infrastructure as part of the hurricane bail-out money. So money they could not get from Congress because of fiscal troubles may come through another channel. Our Sponsors: * Check out Aeropress and use my code GOLD for a great deal: https://aeropress.com * Check out Boll & Branch: https://boilandbranch.com/SCHIFF * Check out Boll & Branch: https://boilandbranch.com/SCHIFF * Check out Infinite Epigenetics: https://infiniteepigenetics.com/GOLD * Check out Justin Wine and use my code SCHIFF20 for a great deal: https://www.justinwine.com Privacy & Opt-Out: https://redcircle.com/privacy

6 Syys 201738min

Nonfarm Payroll Report Fails to Impress Today is the first Day of September; and since it is the first day of a new month, and it is a Friday, we got the nonfarm payroll report. The consensus forecast was about 180,000 jobs.  The number came in at 156,000, well below the consensus. To make it worse, they revised down the prior 2 months by about 20,000 jobs each. The unemployment rate notched up from its 16-year low.  When Donald Trump, the candidate called 5% unemployment the greatest hoax on the American people, well, it's got to be an even greater hoax, now that it is 4.4%. Donald Trump's Huge Reversal I just put up a video on my YouTube channel, Donald Trump's Huge Reversal. I juxtaposed a lot of clips of Candidate Trump with President Trump. Candidate Trump talked about how terrible the economy and how the numbers are so phony and now he is embracing those same numbers, and of course it is the same with the stock market, calling it a big, fat ugly bubble. The stock market today continued to strengthen throughout the week, including in the aftermath of this weaker than expected nonfarm payroll number. Some Silver Linings Labor force participation held steady at 62.9, still very low. Average hourly earnings, which happened to be up .3% last month, the biggest gain we've seen in a while, in August it was up ,1% ; vert meager increases in average hourly earnings.  A lot of that may have to do with the higher minimum wages - just talking about minimal amounts of money here.  The average work week actually ticked down from 34.5 hours  to 34.4 hours, so Americans working slightly more hours and getting barely more money. Is This The Beginning of a New Trend? This was a relatively weak report; there were 2 bright spots; there was that there was a decline in government workers and a better than expected increase in manufacturing. We did see an increase of 36,000 manufacturing jobs; a lot more than the expected 9,000. We do have a 2-month jump in manufacturing jobs. The question is, "Is this the beginning of a new trend?" Our Sponsors: * Check out Aeropress and use my code GOLD for a great deal: https://aeropress.com * Check out Boll & Branch: https://boilandbranch.com/SCHIFF * Check out Boll & Branch: https://boilandbranch.com/SCHIFF * Check out Infinite Epigenetics: https://infiniteepigenetics.com/GOLD * Check out Justin Wine and use my code SCHIFF20 for a great deal: https://www.justinwine.com Privacy & Opt-Out: https://redcircle.com/privacy

2 Syys 201736min

$1,300 Was a Coiled Spring Beneath the Market We've been flirting with that $1300 level all year; I've been talking about all the resistance that was up there and every time the price of gold got near $1300 it was met with a tremendous amounts of selling, there was a lot of supply.  But as I have been saying on this podcast, the demand was building. It was a coiled spring beneath the market. The channel was narrowing.  The distance between the $1300 resistance and the support kept getting narrower and narrower.  I thought it was only a matter of time before we exhausted that supply and broke through that psychological $1300 level. The Rally Held Firm All Day Gold is up about $18-19 on the day; we closed at about $1310.  Finally, I think, there were people who were worried it wouldn't hold that level, people were thinking that we would sell off so we wouldn't quite get a close above $1300, we'd just get a trade above $1300. But the rally held firm all day long.  We actually closed on the highs of the day. In fact, as I am recording this, the price of gold is taking another jump.  Maybe it is the missile North Korea fired that went through Japanese airspace.  We're tacking on another  $10-11; we're now trading above $13.20. The Dollar Is Now a Risk Asset The dollar continued its weakness.  It is one of the reasons that gold continues to be strong. The dollar index made new lows today, down around 92.20, and looking at the action so far in the early evening. The dollar is not benefitting at all from this flight to quality. We're seeing a big rise in the Japanese Yen, a big rise in the Swiss franc.  Those are the go-to currencies.  The dollar is now a risk asset. People don't buy the dollar when they're worried, they sell the dollar when they're worried. Even the Chinese Yuan - new high for the year. Gold Now Going Up in Terms of Everything Of course gold, now, is not only rising in terms of dollars, but finally rising in terms of everything. Gold is going up in yen terms, it's going up in Swiss franc terms, even though those currencies are rising as well.  This is a key factor, and I think now that we have cleared out that resistance, there are a lot of people who thought there is no upside in gold.  Well they're about to find out just how much upside there is. Our Sponsors: * Check out Aeropress and use my code GOLD for a great deal: https://aeropress.com * Check out Boll & Branch: https://boilandbranch.com/SCHIFF * Check out Boll & Branch: https://boilandbranch.com/SCHIFF * Check out Infinite Epigenetics: https://infiniteepigenetics.com/GOLD * Check out Justin Wine and use my code SCHIFF20 for a great deal: https://www.justinwine.com Privacy & Opt-Out: https://redcircle.com/privacy

29 Elo 201724min

The Joe Rogan Experience Podcast I appeared the Joe Rogan Experience Podcast while on my trip this week to the West Coast. I first appeared on his show about 3 years ago, and since then the popularity of his podcast has really exploded. A couple of million have already listened to my most recent appearance.  I was on for 3 hours and I did almost all of the talking. Huge Reaction to Minimum Wage Discussion If you look at the YouTube video you'll see a tremendous amount of reactions, both positive and negative, which is a far greater reaction than the show usually gets. I could have set the record on thumbs down but I got more than 3 times the number of thumbs up. If you read the comments, many people are attacking me for being "mean" because I am against the minimum wage. Why Am I Against the Minimum Wage? This is the typical liberal reaction when they encounter someone who disagrees with the liberal agenda. They think I am out of touch, that I don't understand, I'm heartless, and they get so upset at me because they think I am a really bad guy. After all, only a really bad guy would want to exploit poor people by paying low wages. It would not dawn on them to think about why I am against the minimum wage. Against Government Mandated Unemployment I am not against people earning money; I am against mandated unemployment. I am against the government preventing people from acquiring the skills that would enable them to earn a lot more than the minimum wage in the future.  Liberals don't consider any consequences - it's all about how good they feel about themselves. "Who actually cares about the consequences of this law, just as long as I can feel morally superior to anyone who doesn't support the minimum wage law?" For Entry-Level Jobs that Provide Value to Employer I did explain that, but apparently it went right over their heads. I am trying to explain that the minimum wage law leads to more unemployment because it causes people with low skills to lose the opportunity to move up in the workforce through entry-level jobs that provide value for the employer. Our Sponsors: * Check out Aeropress and use my code GOLD for a great deal: https://aeropress.com * Check out Boll & Branch: https://boilandbranch.com/SCHIFF * Check out Boll & Branch: https://boilandbranch.com/SCHIFF * Check out Infinite Epigenetics: https://infiniteepigenetics.com/GOLD * Check out Justin Wine and use my code SCHIFF20 for a great deal: https://www.justinwine.com Privacy & Opt-Out: https://redcircle.com/privacy

26 Elo 201747min

Economic Ignorance I happened to watch a YouTube video Politicon 2017 Live Stream Schapiro vs Uygur and I want to address only the part of the discussion which was about taxes.  Ben Shapiro did a good job, but a much stronger case should be made about Uygur's statements which were economically ignorant. False Logic One of the points that Cenk Uygur made during the debate is that high taxes are good, that we have more prosperity with higher taxes, and lower taxes are bad for the economy. In his opinion, if the government takes money from the people who earn it and gives it to the people who don't earn it, everybody is going to be better off, including the people who are being taxed.  He cited the 1950's as an example of U.S. economic prosperity, concluding that because income tax rates were 91% America was wealthy. This false logic.  it is like eating a banana during a rainstorm and concluding that eating bananas causes rainfall. The '50's and '60's Marked the End of American Prosperity In fact the reason we were prosperous in the 1950's and 1960's is not because of high taxes during those decades, but how low they were taxed in the decades before that. Ben Shapiro's response to Uygur was that we won WWII and the rest of the world was decimated, which is true, but not an accurate response.  The 1950's didn't just occur spontaneously. Tax Rate Was Zero We were wealthy and a mighty power before WWII.  The standard of living in the '50's and '60s was a product of the 19th century, and the early 20th century when we had no taxes at all.  The reason we created such a strong middle class was because we had no taxes. After the end of the civil war, from 1870 - 1913, which was the introduction of the income tax, the income tax rate was zero. That's the time of the industrial revolution. That's when all the immigrants were coming to America - the 1880's the 1890's, the 1900's.  That's when all 4 of my grandparents came here. There were no taxes and massive economic growth when the tax rate was zero. Camel's Nose Under the Tent When they started the income tax in 1913, the top bracket was 7%. That's still very low,  Initially they wanted to cap it at 10% and the reason they didn't is the objection was that the cap would encourage lawmakers to raise it to 10%. Unfortunately, they didn't cap it, and of course this was the camel's nose under the tent and the minute you had an income tax, congress couldn't resist the temptation to raise it. Our Sponsors: * Check out Aeropress and use my code GOLD for a great deal: https://aeropress.com * Check out Boll & Branch: https://boilandbranch.com/SCHIFF * Check out Boll & Branch: https://boilandbranch.com/SCHIFF * Check out Infinite Epigenetics: https://infiniteepigenetics.com/GOLD * Check out Justin Wine and use my code SCHIFF20 for a great deal: https://www.justinwine.com Privacy & Opt-Out: https://redcircle.com/privacy

18 Elo 201735min

Press Wants Freedom of Speech as Long as It Fits Their Agenda One of the few rights left to us in this country is the freedom of speech.  If we don't defend speech that we find offensive, someone else will find your speech offensive and move to silence you.  Political correctness, is evolving into the Thought Police via the mainstream media. In particular, President Trump's reaction to the events in Charlottesville is being portrayed as a defense of White Nationalists over Black Lives Matter. Nothing is President Trump's remarks supports this story.  President Trump, in the lobby of Trump Tower, was subjected to an inquisition by the Press, who intended to entrap the President and further their agenda to mischaracterize him and anyone who supports him. Disrespecting Donald Trump and the Office of the President I know very few members of the Press respect Donald Trump; this is clear.  But they need to respect the office of the Presidency.  Could you imagine members of the Press treating President Obama the way they are treating President Trump? Can you imagine the cries of racism? Of course, no member of the Press would dare show that type of disrespect to President Obama. Condemning Violence on Both Sides President Trump is refusing to denounce only the violence perpetrated  by the White Nationalists without also mentioning that the Black Lives Matter group, who assembled without a permit, also engaged in violence.  The Left is saying that President Trump has not denounced the White Nationalists enough. What the President said was that he was condemning the violence on both sides and that angered the left. They hold that the President should only condemn violence committed by the White Nationalists. That would be hypocritical. Background on the Event To give you a little background, the park, formerly named Robert E. Lee Park, was re-named Emancipation Park and the city was going to tear down the statue of Robert E. Lee that had presided over that park. So there was a local protest that the statue was coming down.  It was coming down regardless of local protests. A local group wanted to protest the fact that this was happening. This group eventually got a permit although it was initially rejected. So they engaged in a legal protest to exercise their First Amendment rights. The counter protesters, who came in from out to town did not have a permit landed first physical blow. Freedom of Speech is there for the Offensive Ideas Are the ideas that the White Nationalists offensive?  Yes.  But it doesn't matter, because that is Freedom of Speech. It is there because of the offensive statements.  See, nobody cares if you say something that makes everybody happy and doesn't offend anybody - you don't need freedom to do that.  The scenario that the left is trying to spin and the media is playing right into it is that America is afraid to go anywhere near anything that would draw the ire of the politically correct thought police. We have a very tenuous grasp on the right of freedom of speech, and there is no doubt in my mind that this right is going to go. Our Sponsors: * Check out Aeropress and use my code GOLD for a great deal: https://aeropress.com * Check out Boll & Branch: https://boilandbranch.com/SCHIFF * Check out Boll & Branch: https://boilandbranch.com/SCHIFF * Check out Infinite Epigenetics: https://infiniteepigenetics.com/GOLD * Check out Justin Wine and use my code SCHIFF20 for a great deal: https://www.justinwine.com Privacy & Opt-Out: https://redcircle.com/privacy

16 Elo 201753min