The Peter Schiff Show Podcast

The Fed Slashes Interest Rates for 3rd Time As expected, the Federal Reserve cut interest rates today.  This is the third rate cut of this cycle.  We're now down to 1.5%. But of course, what everybody has to remember is a year ago, when the Fed was hiking interest rates, the forecast from the Fed was that they were going to continue to hike rates.  They were supposed to have another 3 or 4 rate hikes in 2019.  And, of course, a year ago, as the Fed was hiking rates, they were still shrinking their balance sheet and they were going to continue to shrink it. They were talking about auto-pilot. They were going to continue to do $50 billion/month of quantitative tightening.  And they said this with a straight face.  And everybody believed them. Not a Surprise to Me Of course, everybody except me and maybe a few other people out there in the financial media. But I was telling anybody who would listen - which was not that many people in the mainstream, but certainly the people who listen to my podcasts, that none of this was going to happen. I said that the Fed was going to have to stop hiking rates, and that they would be cutting rates in 2019, and that not only were they going to stop quantitative tightening, that they were going to have to go back to quantitative easing. And that's exactly where we are. A Distinction without a Difference Although, Jerome Powell went out of his way - I think the first thing that he said when he made his prepared remarks - was to reassure everybody that what the Fed was doing now, with its repo program was not quantitative easing. He drew a distinction between what the Fed was doing when it was doing QE and what it is doing now when it is not doing QE.  The main distinction had to do with the maturities of the debt that the Fed was buying.  He said that when they were doing QE, they were buying longer term government bonds, but that now, they're buying shorter term government bonds and so therefore it's not QE. But this is really a distinction without a difference. 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

31 Loka 201947min

I am Back! I am back! I know a lot of people have been upset that I haven't been able to do a podcast in almost 2 weeks. The reason I've been absent… I just haven't been feeling well.  I've been coughing a lot and and haven't been up for doing a podcast - I'm doing one today, though.  I'm still a little bit sick… but I figure it's been long enough, so I have to talk a little bit about what's on my mind. Dollar Index Trending Lower First of all, there hasn't been that much activity, I guess, in the markets over this time period. The U.S. dollar has generally been weaker.  It has been trending down.  It hasn't really broken down yet, but it is going lower.  In fact, the dollar index closed today near 97.69. so that is lower than it had been.  Remember, a few weeks ago, the dollar index was above 99. So the dollar is trending lower. Interest Rates Up - Bond Prices Down Interest rates are actually moving higher.  Bond prices are going down.  The yield on the 30-year U.S. Treasury now is at 2.26, and I think this is significant because it really shows the problems that are building in the economy because the dollar is weakening and interest rates are rising. That is going to mean higher consumer prices, it's going to mean higher borrowing costs; now of course, the Federal Reserve is doing everything it can to artificially suppress interest rates. One of the stories that I've read several times over the last couple of weeks is how the Federal Reserve is having to do more repurchase agreements; having to increase the size of the amount of Treasuries they're buying in the market. I didn't see that in today's balance sheet numbers; the balance sheet was up only about 2 billion over the prior week.  But I have a feeling that the number is going to be much, much higher than that when we get it a week from today. 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

25 Loka 201953min

Don’t miss my upcoming appearances: The Dallas Money Show October 13-14 and the New Orleans Investment Conference, Nov. 1-4 Dow jumps 300 points U.S. stocks finished out the week on a strong note; in fact we broke a 3-week losing streak. This was the first time in 4 weeks that the major averages finished higher on the week. When I recorded my podcast earlier in the week, the week was off to a rough start. But we had a turnaround.  In fact, today the Dow Jones was up 319 points on the day - about a 1.2% gain. The NASDAQ was up even more; 106 points, that's 1.34%.  The Russell 2000, even better, up 1.8%.  The Dow Transports were the stars of the day.  They were up 2.23% - 224 points.  Look at stocks like Apple, rising almost 3% to a new all-time record high. Rumors and News Driving the Market There was a lot of news driving the market today. Initially, we got rumors of some type of Brexit deal that potentially was imminent. Of course, there have been all sorts of rumors that have never panned out regarding a Brexit deal. But this morning, there was a rumor that really was causing a lot of buying in the European markets and that spilled over into the U.S. futures, which helped the U.S. market.  And of course there was a lot of brewing optimism over some kind of impending trade deal with China, although that news didn't come out until very close to the close. U.S. Consumer Sentiment Climbs to 3-Month High in October But, earlier in the day, we got the Consumer Sentiment number for October, and the markets are already higher by the time we got this release, which comes out at 10am; the market opens at 9:30. The prior month was 93.2, and the consensus was for a slight drop in consumer sentiment to 92.  After all, there are a lot of reasons for consumers to be less optimistic now than they were back then. But the consumer… surprise - ended up being more optimistic. The number came out at 96 and that sent the price of stocks much higher. 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 Loka 201936min

Don’t miss my upcoming appearances: The Dallas Money Show October 13-14 and the New Orleans Investment Conference, Nov. 1-4 Another Weak Day in the Equity Market We had another weak day in the equity market, so the 4th quarter is starting off on a particularly sour note. The Dow, down 314 points today. Technically speaking, closing right near the lows: down 1.2%. NASDAQ had a much worse day, down 132 points - that's 1.67%.  Russell 2000, similarly beat up: 1.7%, down 25 points.  The Transports really took it on the chin. They down 1.85%. 185 points down on the Transports. The money losing stocks, the recent IPO's continue to get beat up. The real debacle du jour was Smile Direct. That one was down another 15% today: down $2 - it closed at $11.34 right off the new low of $11.20.  Remember, this stock came public less than 2 weeks ago and it was $23 a share.  The highest it actually traded was $21.10. Now we're down better than 50% from the IPO. Fed: QE but not QE But I really don't want to spend a lot of time talking about the markets today.  In fact, I only want to talk about one thing, and that's the Fed and the return to Quantitative Easing . I wasn't even going to do a podcast today; Yom Kippur starts in a couple of hours so I was just going to skip it. In fact, I wasn't even going to do one tomorrow - I was probably going to wait until Thursday. But then I was watching this press conference with Jerome Powell where basically the Fed came out and said they were doing QE, except they said they weren't doing QE. "Increasing Securities Holdings to Maintain an Appropriate Level of Reserves" There's an old saying: "Never believe something until it's been officially denied. Jerome Powell went out of his way today in his statement and in the Q and A that followed to emphatically say that the Fed is not doing QE. This is an exact quote from Powell: "This is not QE.  In no sense is this QE."  Except, in every sense it's QE, because it's exactly QE.  There's also an old saying," If it walks like a duck, it looks like a duck and it quacks like a duck, it's a duck." Well, this looks like QE, it smells like QE, it quacks like QE, it walks like it… it is QE! What is the difference between QE and what the Fed is now doing? I wish someone would really ask that question.  In his prepared remarks, this is what Powell said: “As we indicated in our March statement on balance sheet normalization, at some point, we will begin increasing our securities holdings to maintain an appropriate level of reserves,” he said. “That time is now upon us.” Already? In March they said that "at some point"?  Did anybody back then think "some point" meant "NOW"? 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

9 Loka 201927min

Don’t miss my upcoming appearances: The Dallas Money Show October 13-14 and the New Orleans Investment Conference, Nov. 1-4 The Weakest First Two Days of Any Quarter Since 2008 Before I get into what happened with today's nonfarm payroll number and the 372.68 rally in the Dow that it helped spark, I want to back and talk about what happened on Wednesday and Thursday, which were the 2 days following my Tuesday podcast, from the first day of the 4th quarter of the year. On Wednesday, the market sold off sharply, in fact at one point we were down better than 600 points on the day. We managed to close down just under 500 - 494 points.  At that point, the first 2 days of the 4th quarter of 2019 were the weakest first 2 days of any quarter - not just a 4th quarter - but of any quarter going all the way back to 2008, which was the year the market imploded because of the '08 financial crisis. Weakness in Private Sector Jobs One of the data points that came out on Wednesday that may have been a contributing factor - but probably not - was the ADP employment number, which is an early look at the official numbers that came out today.  This is just the private sector, which is certainly weaker than the government sector, and I'm going to get into that when I discuss today's numbers later in the podcast. But, the estimate was for 152,000 jobs created in the private sector and we only got 135,000.  But, not only that, there was a downward revision to the prior month, from 195,000 to 157,000.  So, this was additional evidence of economic weakness that was weighing on the market. IPO's Cancelled Due to Insufficient Investor Demand Also, again we had the follow over from what I had pointed out on my podcast not only on Tuesday, but on Friday the prior week regarding the weakness in the newly publicly traded companies - money losing companies - the fact that some of these companies had to cancel their IPO's due to insufficient investor demand. All of that was weighing on the market and helped produce that sharp decline. ISM Non-Manufacturing Down A Lot - Not Just a Little Bit And when we got into the market on Thursday, the market had opened initially a little bit higher.  But then as soon as we got the ISM non-manufacturing number (remember, we had gotten a very weak manufacturing number and was part of the reason we had the big decline earlier in the weak) but now we got the ISM non-manufacturing number and this number was forecast to come in at 55.5.  This would have been a reduction in the 56.4 that we had for August.  But instead of going down a little bit, the number went down a lot - all the way down to 52.6. 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

5 Loka 201949min

Don’t miss my upcoming appearances: The Las Vegas Trading Conference, Oct. 4-5 The Dallas Money Show October 13-14 and the New Orleans Investment Conference, Nov. 1-4 First Day of Q4 2019 Today was the first trading day of the 4th quarter of 2019.  And if today's action was a harbinger of things to come, it is going to be one difficult quarter for the bulls on Wall Street. In fact, when they rang the opening bell this morning, everybody was happy, the stock market was up, the dollar was up, gold was down again.  In fact, gold has had a pretty big correction since my last podcast. When You Live in Glass White Houses… Yesterday, gold saw a $25 decline; again, with a stronger dollar and a stronger stock market.  For some reason, I think investors were a little bit more optimistic over the last few days after my last podcast Donald Trump talked about - or there were some rumors that he was thinking about maybe de-listing Chinese companies from U.S exchanges, making it illegal or something for Americans to invest in China - which I thought was a very dangerous road for the President to go down. Remember, when you live in glass White Houses, you don't want to throw stones. Chinese Still Big U.S. Investors The United States benefits from a lot of direct investment from overseas, particularly China.  Chinese invest a lot in U.S. businesses; they're big buyers of U.S real estate, and, of course, they're still big holders of U.S. Treasuries. If the United States says, "Well, Americans can't invest in China." what happens if the Chinese return the favor?  I think we have a lot more to lose than they do. I think the following day or maybe over the weekend the President kind of backtracked away from that trial balloon and they said, "No, we're not considering that." So probably that was good news and a relief for the market that that wasn't going to happen. 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 Loka 201952min

Check out my podcast, "What it Means to be an American", Episode 265 Earthquake Hits Puerto Rico Last night, I was lying in bed, I wasn't asleep yet; I just finished watching television; my wife and I were still awake, and next thing we know, the house starts shaking. And it kept on shaking.  I couldn't believe I was in an earthquake. This was a decent-sized earthquake - it was over 6.0 on the Richter scale. The earthquake occurred in the ocean, but not too far from Puerto Rico.  I think it rattled a lot of the islands here in the Caribbean. I haven't felt an earthquake since I lived in California. To be honest, I never even considered earthquakes here in Puerto Rico.  I knew about hurricanes, but I really didn't think we would be hit by an earthquake - and we did.  Fortunately, it didn't do any actual damage; in fact, I don't think anything in Puerto Rico was damaged.  Of course, the big risk when you get earthquakes in the ocean is tsunamis - but that didn't happen.  In the meantime, I've got a tropical storm overhead as I am recording this podcast.  Tropical Storm Karen has arrived in Puerto Rico later than expected.  It was supposed to come this morning but it didn't get here until this afternoon, although "Karen" doesn't sound particularly menacing, and it's living up to its name. It's really just a little rain, not too much wind; so that's not bad. Disaster in the Cryptocurrency Markets The real disaster is not here in Puerto Rico with earthquakes and tropical storms; it's the disaster that is unfolding in the cryptocurrency markets.  We are seeing some real carnage - a real bloodbath over there. I think this is just getting started, because we've finally really broken down on the Bitcoin chart, although the biggest declines today are in the alt coins. Bitcoin is down about 13% right now. But this about the high that Bitcoin is been in the last half hour. We're trading up around $8500.  We did get as low as $8000; I think we maybe ticked below it briefly.  That means from the nearly $14000 high that's a better than 40% drop in the price of Bitcoin from that peak, which, by any definition constitutes a bear market. 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

25 Syys 201943min

Don’t miss my upcoming appearances: The Las Vegas Trading Conference, Oct. 4-5 The Dallas Money Show October 13-14 and the New Orleans Investment Conference, Nov. 1-4 These two videos were referenced in today's podcast: How government programs drive up college tuitions Is a college degree worth the cost? You decide Fed Proving Me Right As I surmised, when I recorded my podcast on Wednesday, it seems pretty clear that the Federal Reserve has already returned to quantitative easing.  And that didn't take long, because they just ended QT (quantitative tightening) and they've already begun QE. - Although, the Fed is not going to admit that that's what they're doing. Apart from proving me right, which was one of my forecasts from the very beginning, even before the Fed was talking about ending QE, I said they could never end it before they even started it. Monetary Roach Motel I had forecast what the Fed was going to do before they did it. And when they announced quantitative easing, not only did I say it was a mistake, but I said the Fed was checking us into a monetary roach motel from which we could never check out.  It was the delusion that we could check out - the Fed was able to convince the markets that it was a temporary policy and that they would only be doing it in an emergency, then they would unwind the policy and shrink their balance sheet and the market believed them. QE Plus Zero Interest Rates Equals Bigger Problem I didn't believe them, and I was warning everybody that the Fed was either lying or didn't know what they were talking about or foolish, but the markets bought into this nonsense.  So, clearly, if the Fed were going to go back to quantitative easing, they would basically be admitting that the policy was a failure. Because the policy was intended to be temporary, not permanent. If they have to do it again, then it proves that it wasn't temporary.  Again, what I said, by doing quantitative easing in conjunction with lowering interest rates to zero, they were simply taking a debt problem and making it much bigger by encouraging even more debt. So once you load up with debt, once you encourage everybody to lever up, then you can't pull the rug out from under them. 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

21 Syys 201958min