My Joe Rogan Experience – Ep 592

* Markets on roller coaster ride final two trading days of this week * Bad news parade marches on in April * The players are still clinging to fantasy of U.S. economic recovery * Dollar finished down substantially on the week - April was the first down month in 10 months * Dollar has seen its highs and is heading lower * Gold back below 1200 * Oil prices added to gains closed above $59 - moving opposite to the dollar * Friday - March Personal Income & Spending flat below expectations * Personal Spending also lower than expected; .4% gain * Savings dropped from 5.7 to 5.3 - the lowest savings rate of the year * April PMI Manufacturing Index - dropped more than expected to 54.1 even as weather warms * ISM Manufacturing expected to rise to 52 - remained flat * Employment Index dropped two points - the first drop in 2 years * March Construction Spending fell by .6 missing expectations * Atlanta Fed correctly forecasted Q1 GDP at .2, forecasting Q2 at .8 * Article on Zero Hedge: Goldman Sachs warning Europe about severe "Lowflation" * Article in Bloomberg: Chinese can't "kick" savings habit * Blames problem on "not enough government" * The reason America is in so much trouble is that we don't save * Once the Chinese have built up a cushion, then they will spend * When our phony economy bursts, it will be apparent that we did not save enough and had too much debt * America gives capitalism a bad name - we preach it but do not practice it * We rely on a giant government-run ponzi scheme of socialized savings * We are telling the Chinese they have too much free market capitalism * We have been indulging our present and sacrificing our future * The Chinese will be rewarded for their prudence * The most ironic thing about the Bloomberg article is that they suggest Chinese would be better off under Communism 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 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 Maj 201529min

* Government's first look at Q1 GDP * There was a lot of optimism around Q1 with expectations above 3% * Actual GDP was 1/5 of expectations at.2% * The rest of the story of Q1 GDP: * The deflator this time was negative - meaning that prices dropped by .1% * The last time the deflator was negative was 2009 Q2; still in the Great Recession * The previous occurrence of a negative deflator was in 1949 * I believe the true rate of inflation is higher than -.1% * Inventory build continued into Q1 - businesses continue to believe the myth of the recovery * Inventory to sales ratio are the highest they have been since the Great Recession * They are still blaming poor economic performance on the weather. It is always cold in the winter; why is bad weather always a surprise? * The Fed just released their official statement on interest rate policy * They removed language from statement indicating it is unlikely that rates will rise * Continuing give the illusion that they are progressing toward a point when they will raise interest rates * The Fed went out of its way to dismiss all the bad economic news we got in Q1 * The dollar just had its biggest 2-day decline in 6 years * The Fed came out and put a smiley face on the whole thing and the dollar recovered somewhat * The Fed is never going to confess that they are worried; that's not their job * What evidence is there that things will improve in Q2? * Cheap gas windfall is over; oil prices have risen every week in the past month * Early April economic data is negative * An economy based on spending is a bubble; production grows an economy * Consumers have lots of debt, but they don't have good jobs * Decline in the dollar signals that the markets are already sensing this * The Fed feels that economic growth will recover in Q2 & Q3 * They also said they need to see additional strength in the labor market * Business are making foolish decisions because they believe the Fed * As the economy disappoints, the labor market will continue to deteriorate * The Fed can't raise interest rates and they are headed ror QE4 * We need more and more stimulus because we've built up a resistance * The real crisis will be a dollar crisis * When the economy heads south and the Fed has to do QE 4, the Fed will lose a lot of credibility * Janet Yellen will not be able to deliver on her promise to shrink the balance sheet by the end of the decade 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 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 Maj 201523min

* The Keynesian myth of mandating prosperity actually hurts the lower middle class and the working poor * Something for nothing is appealing to voters, so politicians make empty promises that are good politics but bad economics * A Seattle-based company called Gravity Payments has instituted a minimum salary of $70,000/yr * This has given him great publicity, but how will this work in his company? * Lower paying jobs will have to be eliminated, because they don't represent enough productivity to justify a raise that doubles the employee's cost * Higher salaried workers are not hurt because they keep their job and perhaps get a raise for picking up the extra duties formerly handled by lower-salaried workers * The most recent political gimmick in the State of Connecticut is a tax masquerading as a minimum wage law * The Democratic State Legislature have proposed a law that will fine companies of 500 or more employees $1/hr for any worker who is paid under $15/hr * How will this work in the State of Connecticut? * Right away, business just over 500 employees will pare down to fall under the new regulation, so jobs will be lost * In reality, this is just a tax increase on the people who can least afford it * For employees who are currently working at the minimum wage, a $1 fine is cheaper than a raise from the current $9.15 rate to $15/hr, if they do not eliminate that person's job * This is essentially another employment tax that will result in higher prices across the board * Neither the employee nor the employer benefits * For employees who are working above the current minimum of $9.15/hr a raise would cost the employer more than the $1 fine * According to minimum wage law, it is illegal to cut the worker's pay - the only option is to cut the worker * The penalty does not apply to higher paid workers; it only applies to jobs between the current minimum wage and the new minimum wage * It will be cheaper to pay the tax than to raise wages, but there will be less money to to toward employees because a large percentage of the workers' wages are going toward a tax * The reality of this new law, championed for the "little guy" is that the working poor will pay a higher marginal state income tax than the richest hedge fund managers in the state * Will the voters be able to figure it out elected officials are going after the working poor? * This tax will also raise the cost of living, wich also affects the poor more directly * Packaging a tax to pass off as minimm wage is fraud * 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 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

28 Apr 201524min

* S&P and the NASDAQ made new record highs * Stock market continues to ignore all the bad news about the economy * Bad news is not being ignored in the foreign exchange markets * Negative economic news is buoying the stock market because it removes fear of interest rate hikes * Weak economy means more cheap money which means higher stock prices * Oil prices hitting highest prices of the year * Gold is back above the 1200 level * April PMI Manufacturing Flash Index at 54.2 biggest miss ever * New Home Sales tumbled by 11.1% - biggest drop since July of 2013 * March Durable Goods slight bump based on military aircraft, but less transportation, the index unexpectedly declined .2% * Durable good orders, less defense and transportation dropped for the 7th consecutive month * April Service Sector PMI missed lowest expectations at 57.8 - the biggest miss ever * Dallas Fed Manufacturing Survey - recorded significant drop at -16; biggest losing streak ever * There will be a delayed reaction from the market to first quarter's bad economic news on top of this quarter's economic news * A Boston Fed official is considering retaining "balance sheet tools", i.e. QE * In other words, the Fed is considering not having an exit strategy - because it can't exit * We have done all sorts of crazy things that we never would have done but for zero percent interest rates and QE * A market that was built for 0% interest rates can't handle 2% interest rates * The product of all this stimulus will be big increases in prices, and the Central Banks are setting the stage for higher inflation * Declining Swiss consumer prices are described as "dangerous" * Currently, the Swiss consumers are enjoying lower prices and do not need a government "cure" * The law of supply and demand is so simple that only an economist would fail to understand it * Keynesians will spin ever-conflicting news to support their theory * Fitch has downgraded Japanese government debt to A- because or the Japan's deteriorating fiscal condition * Based on that logic, why is the U.S. AAA? * There is a general fear of downgrading U.S. debt, based on fines levied against the S&P * The real problem will be the collapse of the dollar, which means the debt will be repaid in dollars without purchasing power 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 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

27 Apr 201520min

* Markets have been volatile but economic data still looking bad * Chicago Fed National Activity Index: contrary to expectations, came in at -.42 in addition a downward correction for last week to a 2-year low * Weekly Redbook Same Store Sales Survey down to lowest annual increase in 4 years with a dramatic rate of decline in recent months * Implausible excuses, such as the weather or the timing of Easter, attempt to mask the fact that the economy is just weak * Oil prices moved above $57, forming a sizable W-bottom * Canadian dollar up about 5% * Canadian inflation, especially food prices up * This signals the end of rate-cutting cycle in Canada * Central banks around the world are going to have to dial back on their cheap money policies * The "Threat of Deflation" will be in the rear view mirror * Central banks may like high prices, but consumers don't * President of the Federal Reserve Bank of Boston Eric Rosengren stated our 2% inflation goal is "too low" * He thinks higher inflation allows for more growth, and allows interest rates to remain low * Cheap money does not create economic growth and doesn't create employment - it undermines both * Cheap money applied to a slower economy creates a vicious cycle * A weakening dollar will put upward pressure on already rising consumer prices * The Fed is hinting at a higher inflation goal * The problem is we can't do anything about our inflation because our debt is out of control * Fiscally solvent countries are able to raise rates and still service their debt * All the U.S. can do is "talk tough" * If they had a "Hall of Economists" in Disneyland, the Keynesians would have to be in Fantasyland * Paul Krugman's Keynesian experiment is blowing up the U.S. economy * Everybody will figure it out before Paul Krugman does 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 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

22 Apr 201520min

* Disney's theme parks are a monument to capitalism as it existed when Walt Disney envisioned Disneyland * The Hall of Presidents, however manages to honor presidents who supported big government over the free market * The choice of presidents demonstrates revisionist history that supports the liberal, big-government narrative * Whenever you expand government you contract liberty * The Dow ended the week down 279 points; NASDAQ down 75 * The search is on for excuses but the real issue is not global causes but U.S. economic performance * Housing Starts and Permits were way below estimates * Jobless claims were higher than expected * Leading Economic Indicators weaker than expected this month after last month's downward revision * Core CPI came in twice expectations, but described as "better than expected" * The dollar had a very weak week; Canadian dollar had strongest week in years, with a possible rally going forward * Weakness in Stock Market, continuing weak economic data makes June rate hike less and less likely in the minds of traders * The most prominent poster boy for the myth of the U.S. economic recovery, Paul Krugman, recently published an article claiming victory for U.S. Keynesian economic policy * Krugman claims U.S. is performing better than Europe due to Keynesian policies * Perception is not reality: the U.S. is not doing as well as Krugman would have us believe * Krugman references an article by Germany Finance Minister Wolfgang Shauble, criticizing him for rejecting macroeconomics * Macroeconomics IS B.S. and should be rejected * Krugman infers that Europe's woes are the result of rejecting Keynesianism * Shauble warns against going for the "quick fix" of Keynesian policies * Germany understands that austerity, rather than debt, is the answer * Krugman believes we should continue to create bubbles through stimulus and debt * It will be interesting to see what Krugman says when the U.S. economy slips back to recession as Europe grows * Europe's approach was not perfect, but it is better than the politically expedient solution championed by Krugman 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 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

19 Apr 201528min

* Dollar usually drops on bad news but rallies because traders automatically buy on the dip * Bad news is dismissed because the first quarter "doesn't count" * This puts greater pressure on the last 3 quarters to make up for the first quarter and still show growth * Expectations of a bump similar to last year are based on non-repeatable conditions - Obamacare and inventory build * Inventory to sales ratio is the highest it has been since 2009 * What is the basis for dismissal of the bad news in Q1? * Data confirms that the consumer is already broke * Consumers will be hit with rising oil prices * Traders who are loading up on the dollar are ignoring all the evidence that they are wrong * The wake-up call will be like the sub-prime mortgage crisis * The same thing will happen in the Foreign Exchange Markets when they realize the story is not about a recovery but about another round of QE * Changing trend coming in the dollar * Changing trend in the oil market * Changing trend in the gold market * If we don't get a recovery in the summer how is the Fed going to raise rates in Q4? * Election year 2016 will likely see no rate hikes * Retail Sales missed Wall Street expectations with a bounce of only .9 * March Small Business Optimism fell to lowest level in 9 months * Hiring Plans dropped to lowest level in 6 months * Business Inventories for February rose to .3 based on weak wholesale sales * Inventory to Sales Ratio holding at 1.36 (highest since July of 2009) * My radio broadcasts from a year ago predicted that the data was not reflecting reality * April Empire State Manufacturing Index missed expectations at -1.9, near a 2-year low * Employment down * Hours worked down * New orders down to 3-year lows * Prices paid went up * March Industrial Production dropped .6, missing expectations - 4th consecutive month below estimate * This news can't be blamed on April showers * Those who have been betting on the recovery are about to realize they made the wrong bet 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 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 Apr 201518min

* Markets continue to rally worldwide * Record highs overseas - much more action in Asia * Markets riding a sea of liquidity * Gold had an interesting week, closing at 1207 * The dollar had one of its best weeks in months * In terms of other currencies gold was at a 2-year high * This means that the euphoria about the dollar is not universally shared * Commodities in general were up - crude oil was up - holding above 50 * This is a good indication of a solid bottom on the price of gold * Traders continuing to make bullish dollar bets in the face of bad economic data * Traders are willing to throw out the first quarter - regardless the excuse * The bounceback from Q1 2014 was due to reasons that will not be repeated * Obamacare created a huge rush to sign up * There was a big inventory build anticipating future sales * Bets for a 2015 Q2-3 rebound are based on optimism for consumer spending * February Revolving Credit tumbled by $3.7 billion * Non-Revolving Credit surged $19.2 billion - mostly student loans * Consumers are cash poor, yet Wall Street believes they will start buying when the temperature rises * Government under-reporting student loan defaults due to forbearances * Wednesday release of FOMC minutes encouraged the dollar speculators because there were discussions about higher interest rates in June * Currency traders still haven't figured out the the Fed's comments are all theater * They are playing the game based on FedSpeak until it falls apart * A drastic turn in the FOREX markets will take a lot of people down with it * February Wholesale Trade declined again after January reported biggest decline in 6 years * This marks the first 3-month decline since 2008 financial crisis * Inventories rose slightly because of decline in sales * Inventory to Sales Ratio at 1.29 - highest since 2008 financial crisis * 2014 GDP increase was due to rush to build inventory in anticipation of recovery * Bottom line: economic data shows that a second-quarter bounce in the GDP is just wishful thinking * Ben Bernanke's new book titled "The Courage to Act" belongs in the fiction section * Let historians justify his role in history - it is far to early to claim success * This is the same guy who was blind-sided by the 2008 financial crisis * He claimed courageous decisions in the face of critics, while actually putting politics and the banks ahead of the country * His book may be coming out on eve of next economic fire that he set 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 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

11 Apr 201521min