Gold Is The New Gold – Ep 588

* Here we go again; Janet Yellen was on Capitol Hill testifying about the banking system * Forget about all her comments about how solvent the banking industry is - of course it's not * The banking system is more vulnerable and more highly leveraged than before the bailout * I am focusing on what she did or did not say about the Fed's intentions to raise rates in December and how the markets reacted * Headlines following the testimony were about the probability that the Fed will raise rates in December * The December meeting will be a live meeting with a rate hike on the table * The official probability of a December rate hike rose from 50% to 60% * When the Fed did not raise rates in October they removed language referencing concerns about international markets * This was interpreted as a more hawkish stance on the part of the Fed * The global economy was used as an excuse, but the Fed had no intention of raising rates in October * In December when it doesn't raise rates, it'll use another excuse * The markets wants to believe that the Fed will rates, and as soon as Yellen's comments were released, the dollar soared and gold tanked * Let's look at what Janet Yellen actually said: first I am going to go to a Reuters story, Fed's Yellen sees possible December rate rise * That's all it takes, just the mention of a possibility makes everybody jump to the conclusion it is going to happen * Here's Yellen's quote directly from the artice: * "What the committee has been expecting is that the economy will continue to grow at a pace that is sufficient to generate further improvements in the labor market and to return inflation to our 2 percent target over the medium term," * "If the incoming information supports that expectation then our statement indicates that December would be a live possibility." * She is saying, if we get the improved data we're expecting * The labor market has been weakening and the last two jobs numbers have been quite weak * Yellen says it is possible if we get improvements we expect we will raise rates * Anything is possible... it is more probable that she is not going to raise rates in December * She actually says it's a long shot * She's been saying this all year and it has not meant anything * Reuters omitted from the article that Yellen followed up the above statement by reiterating that at this point, the Fed still has not made up its mind * Another story from CNBC:Janet Yellen: December rate hike a 'live possibility' * Here's a Yellen quote from this article: * "Now no decision has been made on that and, what it will depend on, is the [Federal Open Market Committee's] assessment at the time. That assessment will be informed by all of the data that we collect between now and then," * This implies that they intend to collect data from now until the December meeting and make their decision on that data * If the Fed does not know now, how different can the data be? * If nothing is going to change, why not make a decision? * Yellen's monetary policy is to pretend to raise rates and then not do it * If you actually listen to what she is saying, it is far more probable that she won't raise rates, because thus far, we have not seen an improvement in the data she is tracking * Even if the Fed sees improvements, they still might not raise rates * Here's the one thing that Yellen is not doing: she does nothing to alter the false perception that a rate hike is likely 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 Justin Wine and use my code SCHIFF20 for a great deal: https://www.justinwine.com Privacy & Opt-Out: https://redcircle.com/privacy

5 Nov 201527min

* I am recording this podcast from New Orleans, where I am attending the Investment Conference * Today, I am going to talk predominantly is the FOMC statement that came out yesterday following the conclusion of their 2-day October meeting * It was largely expected that the Fed would not raise interest rates in October and that's exactly what happened * I predicted this a long time ago * What is amazing is that, as a result of this announcement, more people expect the Fed to raise rates in December * Going into this announcement, the dollar was on the defensive, silver was up about .50, gold was up $15.00 * It sure looked like people were expecting a more dovish tone from the Fed * After all, a lot of bad economic news has come out since the September meeting * When the Fed statement was released, there was no such change in language * This now leads people to believe that the statement was hawkish * They still don't understand the game: Nothing has changed. * the Fed has to pretend that a rate hike is right around the corner in order to pretend that the recovery is real * They can't admit that the economy is weak because they want to take credit for saving the economy * They have to keep pretending, and they have to keep making up excuses * Steve Leesman was asking why we need emergency rates when the emergency is over * The emergency is not over, as far as the Fed is concerned because there is no real recovery * If we had a legitimate recovery, of course the Fed could raise rates * Thus the game: they continue to talk as if they might raise rates, and the markets buy it * As soon as their statement came out, gold tanked, it ended up down about $10, silver gave up most of its gains, and the dollar was broadly higher * If you actually read the statement, there is nothing hawkish about it * It is basically the same as the September * The only thing that stands out is an absence of concern * The FOMC is not worried about all the bad news * "In determining whether it will be appropriate to raise the target range at its next meeting, the Committee will assess progress--both realized and expected--toward its objectives of maximum employment and 2 percent inflation. This assessment will take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial and international developments. The Committee anticipates that it will be appropriate to raise the target range for the federal funds rate when it has seen some further improvement in the labor market and is reasonably confident that inflation will move back to its 2 percent objective over the medium term. " * None of that is going to happen. The labor market is deteriorated - the labor force participation rate is still shrinking * These are metrics Janet Yellen needs to see improve * The Fed knows that these minutes will be misinterpreted * They want to preserve the illusion that a rate hike is possible so they can preserve the illusion that this is a legitimate recovery and not a gigantic bubble * But, what's going to happen when the Fed doesn't raise rates and ends up launching QE4 the Fed is going to have zero credibility * The U.S. economy is in worse shape now than it was leading into the 2008 financial crisis * Now everybody is talking about how important the jobs number will be - the Fed has not raised rates in 7 years. How can one jobs report make the difference? * Meanwhile we've had months of stronger jobs numbers and the Fed did not raise rates * I think the truth is the Fed has decided not to raise rates * But they still need to maintain the perception that they might raise rates and that'... 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 Justin Wine and use my code SCHIFF20 for a great deal: https://www.justinwine.com Privacy & Opt-Out: https://redcircle.com/privacy

29 Okt 201527min

* This is the first podcast I've been able to record since the death of my father, Irwin Schiff, who passed away on Friday * If you're interested in learning more about him and the circumstances surrounding his death, I would encourage you to read my commentary, "The Death of a Patriot" * There also links to many other articles written about him on my Facebook page * You can also find on my YouTube channel, my father's debate for the 1996 Libertarian Nomination for President * You can also find on the internet a video he created called, "The Secrets of a Tax Free Life" * He died in jail because of his political beliefs and for standing up for his Constitutional rights * While in prison, my father got insufficient medical care, he lost all his teeth, lost his eyesight and eventually died of cancer * In my father's case, even if he were wrong, the penalty should have been a civil case * My father was steadfast in his beliefs, and did not want to be released unless he won his appeals * The Dow was up more than 300 points today * The strength came from the ECB, as Draghi suggested that the ECB was considering expanding QE * The ECB is trying to talk the euro down * The ECB did not actually do anything, they just jaw-boned the markets with the idea of more QE * This was a euro story - the dollar was only up against the euro * The New Zealand dollar was up 1.3% against the U.S. dollar * Gold was up 2% in terms of euros * Silver was up .15 in dollars despite the big jump in the dollar index * This lays more foundation for the Fed not to raise rates * At some point, I think the Fed will another round of QE * The reason Draghi suggested QE was over fears that inflation is too low * It is running at .9%, but according the ECB, the holy grail is 1.9% * Draghi was asked why he is spending so much money to raise inflation when he earlier said that low inflation is good for purchasing power * How does the ECB think they can pinpoint inflation to exactly 1.9%? * Draghi's answer was that low inflation makes debt harder to repay * What Draghi is saying is that it doesn't reduce debt enough * Why is it good to transfer wealth from creditors to debtors? * He also said that with low inflation, real wages will rise * Why is this a problem? Because the government artificially boosted wages in the first place expecting inflation to mitigate their true effect in the economy * What's really too high is not so much wages as labor costs, due to government mandates * We want workers to have higher wages in a free market based on their productivity * All that is undermined in the ECB's quest to generate inflation * Draghi also questions the accuracy of is numbers * Central bankers are trying to prop up the stock market and the government * The real debt the central banks want to wipe out is government debt * This is not what central banks are supposed t do, they're supposed to be independent * Another reason the U.S. market might have been strong is because of all the weak economic data that came out * Housing was stronger than expected, but everything else was pretty weak * The Chicago Fed National Activity Index, which was -.41 came in at -.37 - back to back bad months * Also leading economic indicators experience their biggest drop in almost 3 years to -.2 * Last month was also revised down * Also the Kansas City Fed Manufacturing Index negative again 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 Justin Wine and use my code SCHIFF20 for a great deal: https://www.justinwine.com Privacy & Opt-Out: https://redcircle.com/privacy

22 Okt 201525min

* We finally got some economic news today, all of it bad * All of it "unexpected"... * Hope springs eternal on Wall Street * That's why the Federal Reserve can maintain its forecast of an interest rate hike before the end of the year * Although now a second Fed official has come out saying he doesn't think a rate hike will be appropriate this year * All this was forecasted by me; there was a method to their madness to maintain the theater that a rate hike is even possible * When is the Fed going to admit that their earlier forecast of a big recovery and liftoff is wrong? * CNBC finally admitted they do not want me on because I correctly predicted that the Fed would not raise rates * The same is true for Bloomberg * However,  the last time I was on Fox Business, that video on my YouTube Channel got over 80,000 views * That is probably more people who viewed the live show! * By the way, don't forget to like me on Facebook follow me on Twitter and and subscribe to my YouTube Channel * It's not going to be too much longer before more and more people will agree the Fed is not going to raise rates * If I am right and the Fed launches QE4, it will be hard for the conventional media to ignore me - I am not saying it will be impossible, though * These podcasts are developing a greater and greater audience, and you can help spread the word by sharing them, to get the word out * Let's get to the economic data, starting with the Weekly Mortgage Applications * This number was significant in the precipitous 27.6% drop in the composite index with purchased mortgages dropping 34% * Part of this was due to last week's big jump as mortgage applicants tried to get ahead of new government rules * But the drop is much bigger than the pop - this is a bad sign * The consensus forecast for the Producer Price Index was for month over month prices to drop .2% instead they dropped .5% * Year over year, down 1.1%; last month it was down .8% * This is bad news to the Fed, which is looking for higher inflation * The real negative news was the September Retail Sales Number * It was expected to be weak, up only .1 and that's what we got, but last month's .2 number was revised down to flat * Now we're up .1 from zero, meaning August and September Retail Sales missed expectations * This will pull numbers away from Q3 GDP * I think we will get Q3 GDP below 1% * It might be below zero, which will be the first half of a recession * We also got Business inventories, which were unchanged, but the inventory ot sales ration popped up to 1.37 - that ties the high for the move * This glut of product is bad news for the economy * The last 2 times we had inventory to sales ration this high, we were already in recession - 2001 and 2008 * The worst news was Walmart's bombshell announcement that profits are suffering due to labor costs * Their sales are suffering, too * 75% of the losses are due to higher wages and the balance came from lower sales * Walmart is the nation's biggest retailer and should benefit most from a stronger dollar and cheap gas * Walmart's stock was down 10% on the day, one of the worst days in the history of Walmart * YTD, it is down 33% from its highs - a super bear market for Walmart * The Left proclaims that Walmart is getting rich on the backs of the workers - a collapse in Walmart stock price is not good for workers because profits are what creates the jobs 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 Justin Wine and use my code SCHIFF20 for a great deal: https://www.justinwine.com Privacy & Opt-Out: https://redcircle.com/privacy

15 Okt 201524min

* The Dow Jones finished up almost 140 points - back over 17000 * The Dow has now rallied 1,000 points since its lows on Friday following the lower than expected Non-Farm Payroll number * The market originally sold off until traders realized that bad news is good news and they bought the dip * The buying intensified today following the release of the FOMC minutes from the last meeting * I predicted the markets would experience a rally based on the weak Non-Farm Payrol number * The U.S. market looks like it's standing still compared to the markets overseas * Now that so many traders are starting to connect the dots and realize that a rate hike is not around the corner we've seen a huge rally in overseas stocks, particularly in emerging markets * All currencies continue to gain against the dollar * Silver prices earlier in the week hit a 3-1/2 month high * Gold got back above 1150 * Oil prices are close to $50/barrel * All of this is happening because traders are beginning to pare back their rate hike bets * In light of today's release of the dovish September FOMC meeting minutes the trend will intensify * Why were people surprised by the dovish minutes? * If you read the minutes, the real reason the Fed did not raise rates is because inflation is too low * They also said they would risk credibility raising rates below 2% * Lose credibility with whom? * If they are afraid to raise rates with inflation below 2%, they why have they been bluffing that they are about to raise rates? * The official inflation number has been below 2% the entire time they have been talking about a rate hike * I have been saying that they will continue to pretend to raise rates, but they won't * I thought it was funny that Netflix raised their rates 11% - the Fed must have thought this was good news * The real reason the Fed won't rais rates is that they don't want to prick the bubbles * We have a bubble in the stock market * A bubble in the real estate market * A bubble in the bond market * Auto loans, student loans, consumer credit, art - you name it * The Fed doesn't want the government to deal with higher interest rates * Look at the headline in the Wall Street Journal about foreign central banks beginning to dump treasuries * Look at how many treasuries China has sold * This is the tip of a huge iceberg * How is the Fed going to end QE when it has to take the other side of the mother of all trades? * CNBC cited overseas problems washing up on our shore as the reason why the Fed won't be raising rates - these are not overseas problems * The problems started here - they're just coming back * The overseas markets were reacting to higher interest rates and a strong dollar * This game is going to end - the next time the dollar goes down, it's down for the count * Rather than having foreign central banks coming to its rescue, they are going to be joining in the dollar selloff just like everybody else * I wanted to comment on an Robert Wenzel's article in the Economic Policy Journal * Wenzel appears to be referring to me but does not mention my name * Here's the title of his piece, dated September 18, following the most recent Fed meeting: * "The Absurd Idea That The Fed is Not Going to Raise Rates" * Wenzel refers to "certain so-called Austrians out cheering that they were proven correct in their view that the Fed will not raise rates..." * Many people commented that he must be referring to Peter Schiff, but he denied this * Wenzel seems to believe I do not think the Fed should raise rates * I am not saying what I think the Fed should do, I'm saying what I think they will do 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 Justin Wine and use my code SCHIFF20 for a great deal: https://www.justinwine.com Privacy & Opt-Out: https://redcircle.com/privacy

9 Okt 201524min

* It is the first Friday of the month, and that means that this morning we got the September Non-Farm Payroll number * Anyone who has listened to my podcasts and video blogs knows that for months I have criticized these so-called strong jobs reports * I think what's going on is a transformation of the economy from full-time jobs to part-time jobs and that necessitates creating more jobs that you destroy, but the real story is beneath the surface * The report we got today was one of the weakest reports relative to expectations than we've had in years * This may be the final missing piece to the economic puzzle that shows that the economy is not as strong as everybody, including the Fed pretends it to be * And that the rate hikes expected to be around the corner are a distant blur on the horizon * Soon more will join me in recognizing the more QE is coming * Of course QE is not medicine; it is toxic * Let's get down to the tale of the tape with the jobs numbers * First, the bigger number is the August number, which was expected to be revised up, was revised down to 136,000 jobs * July was also revised down * The September number was expected to be 203,000 and actually came in at 142,000 * This is an average of 163,000 jobs for the last 3 months * Six of the last 8 jobs numbers have been revised downward * The August labor force participation rate was 62.6, which was the lowest of the "recovery" * The September rate dropped another .2 to 62.4, which is the lowest since 1977 * Another 579,000 left the labor force in September - now there are 94.6 million Americans not working * Average hourly earnings, expected to rise .2, remained flat * In fact, the average work week declined from 34.6 to 34.5 * If you remember, what has Janet Yellen stated as a requirement for a Fed rate hike? - An improvement in the labor market. * The labor market was singled out as a reason why rates remained at zero in September * While others speculated that rates might hike in October or December, I said the labor market is not going to improve, so the Fed will not raise rates * Janet Yellen is looking at labor force participation, which has declined to a new low * Yellen is also looking for an improvement in wages - that is going the other way * If you also look at the details of this jobs report, you'll see that jobs created are low-paying jobs and jobs lost are higher-paying jobs * For example, we lost jobs in wholesale trade, manufacturing and logging - those are good-paying blue collar jobs * We gained jobs in leisure and hospitality, education and healthcare, retail trade - and a lot of these jobs are temporary or part time * This is why there is not real recovery, why people can't save or buy houses * This weak jobs number is another excuse for the Fed not to raise rates * Some are pointing to this jobs number as proof of the Fed's wisdom in not raising rates in September * However, Yellen stated that rates would go up if the economy continues to improve as the Fed expects - but the economy is getting worse * I've always said that the Fed does not want to raise rates because it does not want to look foolish if it has to back down from a rate hike * We got more economic data today: factory orders wer down 1.7% worse than the expected number of -1.3% * Also, last month's number was revised down, making this the tenth month in a row that factory orders have been down, year over year * This only happens in a recession * Maybe we are in a recession * We don't have Q3 GDP numbers yet, but yesterday the Atlanta Fed reduced its Q3 estimate to .9 * The consensus on Wall Street and at the Fed is still 2.5 * I think that given this jobs number, 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 Justin Wine and use my code SCHIFF20 for a great deal: https://www.justinwine.com Privacy & Opt-Out: https://redcircle.com/privacy

3 Okt 201529min

* It's been over a week since I did my last podcast there's been a lot of economic news - almost all bad * The markets have been under pressure - we're back down near the mini-Black Monday lows, solidly in correction mode * The pressure on international markets has been greater * Yet the vast majority of economists expect the Fed to raise interest rates by December * This would really mean last minute - as the Fed's messaging hints at an interest rate hike by the end of the year * If you look at the Fed's reasons it listed were: * Weakness in overseas economies * Lack of inflation, as the Fed measures it * Increased improvement in the labor markets * Why would the Fed move if all these concerns still exist? * The answer is, it would not move * No one wants to connect the obvious dots * When the Fed refused to rule out an interest rate hike in October or December it might have been the worst thing for the markets because it is admitting it is considering kicking the economy when it is down * Initially I thought the Fed would indiciate a dovish hold, but they opted for a hawkish hold, which exacerbates the issues with the markets, as the hike is already priced in * International markets assume America can handle higher interest rates; but the Fed is still talking up the economy to send the message that the U.S. can handle higher rates, even though it can't * I discussed this at length in my recently released video of my address in Jackson Hole, Wyoming * I really want discuss in today's video two people who are in the news: Donald Trump and Carl Icahn * Trump was on 60 Minutes this week and Carl Icahn recently released a video called, 'Danger Ahead' * Trump's performance really hit the ball out of the park with his delivery, not that I agree with everything he said * The typical voter will buy his bill of goods * The interview was a commercial for Donald Trump in which he promises everything to everybody * The promises to cut taxes on everyone but the hated hedge fund managers * He promises to repeal and replace Obamacare with something even better and still insure everybody * He promises to save Social Security * He promises to grow the economy * To the average voter, who doesn't really understand economics, he sounds like he can pull it off * He sounds optimistic about what the country can be like if he is elected president * The economy will grow because jobs will come back from overseas * How is he going to do that? I don't know, but it doesn't matter * He says it in a way that people are going to believe it * Who will argue against it? * He is not singling out any one interest group that will suffer * His performance was brilliant, even though much if what he promises is impossible * His tax message resonates because currently the government uses high corporate taxes so that special interests groups can be given favors by Congress, and higher taxes are held over the heads of those who do not buy them off with votes * With lower corporate taxes, the politicians lose that leverage * Trump doesn't need these special interest votes because he's spending his own money * All Trump needs to do is get the nomination, then the Republican Party will support his Presidential Campaign * His campaign for the nomination has been largely fueled by publicity * He is running a better campaign in light of public perception * Trump is throwing light on the problems who the average guy really feel - even if he is pie and the sky * Carl Icahn is in the news because he could be Treasury Secretary i... 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 Justin Wine and use my code SCHIFF20 for a great deal: https://www.justinwine.com Privacy & Opt-Out: https://redcircle.com/privacy

30 Sep 201526min

* Tuesday's podcast was titled, "Will She or Won't She?" referring to whether or not Janet Yellen would announce an interest rate hike for the first time in almost 7 years * Today we got the official answer: "No." * For the 54th consecutive time, the Fed has left interest rates unchanged at zero * What is even more amazing, in the Q&A immediately following the announcement, Janet Yellen admitted that she could not rule out the possibility that interest rates would stay at zero forever * A reporter asked her if the Fed may be trapped at zero forever * Among the excuses the Fed used was problems in overseas markets, which opens up a grab bag of excuses for the Fed conveniently explain why it is not going to raise rates * I said from the beginning the Fed has no intention of raising rates * They also mention that these problems may spill over into the U.S. economy * She also mentioned additional problems in the labor force: wages, people re-entering the workforce and more full-time jobs * That is not going to improve in the next three months, yet the Fed is still pretending that it could raise rates in October or December * Yellen is also no ruling out that the Fed could keep interest rates at zero forever, so who cares about what she won't rule out? * Janet Yellen answered the reporter's question by saying, " We don't think we are going to be in that situation, however I can't rule it out." * So the fact that she is not ruling out an October or December rate hike means nothing, because she also can't rule out zero interest rates forever * What else does this tell you? * She is concerned that rates will be at zero for a long time * Janet Yellen believes that the Fed could actually keep interest rates forever * They won't even stay at zero for the end of this decade because ther is going to be a currency crisis that forces the Fed to raise rates * The only reason the Fed has maintained the illusion of control for so long is that the market is believing them * When They figure what the Fed is really doing, then it is over with * Then the dollar will tank, creating upward pressure on inflation * They will have to raise rates; market will not give them a choice * Janet Yellen does not know this * Another reporter asked her if the Fed will adjust their policy if inflation gets to inflation sooner than anticipated * Yellen went out of her way to state that 2% is the target, but not the ceiling * I think the Fed does not have a ceiling, but the market does * Another interesting discussion was regarding the balance sheet * The Fed can't start shrinking the balance sheet until they raise rates * Yellen admitted that since rates are still at zero, they are pushing back the time when the Fed will begin shrinking the balance sheet * If the Fed never raises rates, then it can never shrink its balance sheet * The Fed may never raise rates on its own volition: I know eventually they will have to raise rates * And then it will be a complete catastrophe * But everybody is still pretending everything is great, maybe the Fed will raise rates in October of December * Here's another interesting development: the market was up all day but it sold off down 65 points. A pretty big reversal. * Ultimately the Fed will have to officially take rate hikes off the table * What kind of bad news will they need to do that? * We got bad news today: Housing Starts were significantly below estimates and the prior month was revised down * Bloomberg Consumer Comfort Index had its second lowest week in a year * The worst number that came out was Philly Fed - was expected to come in at +6, but actually came in at -6 * The biggest miss in 4 years 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 Justin Wine and use my code SCHIFF20 for a great deal: https://www.justinwine.com Privacy & Opt-Out: https://redcircle.com/privacy

18 Sep 201523min