Government to Sedate the Economy with More Stimulus – Ep 638

* I was in Las Vegas for the Freedom Fest and following that I went to Vancouver for a one-day gold conference * One of the things I wanted to discuss was some discussion about me on the www.kitco.com website and I think it was prompted by my itnterview with kitco, which you can see on my YouTube Channel * Whenever there is a discussion about me an argument develops between those who want to believe I never get anything right and those with believe I get a lot of things right * I thought one part of the discussion was quite amusing * Of course, I never claim to be infallible; when you make a lot of projections they don't all turn out to be right * Nobody is 100% right on anything that they say * The key is, are you right more often than you are wrong * And when you're wrong, do you change your mind, when the facts change, which is something that I do * But people will always go back and focus on a quote from years ago and say, "Look here's a quote from Peter Schiff saying interest rates would go up, and Look! now they're down" * I did not expect the bond bubble to get this big * Who thought we'd have half of the sovereign debt trading for negative yields? * Very few people envisioned that, but it happened * For the last several years I have said nothing about higher interest rates * I do believe that when the bond bubble bursts rates will spike up * But I don't know when that is going to happen * If you've made enough forecasts, one can always find things that have not panned out * But these people overlook the overwhelming number of forecasts I've gotten right * One of the forecasts people used to make fun of me about was a forecast I made on a show called, "Southland Today" * I put that up on the internet years ago, it's a 2002 interview and if you watch that clip, you'll recognize that a lot of the things I said in that interview were used to form the introduction to the old, "Wall Street Unspun" the precursor to the Peter Schiff Show * The intro for that show included many quotes that were lifted from the "Southland Today" interview * During that interview, I said I thought the Dow would go down to 4000 * Of course a lot happened between 2002 and now * What did happen is that after I did that interview the market fell precipitously; the Dow did drop another 25-30% * The NASDAQ maybe even more * What happened between that interview and the market falling is that Alan Greenspan slashed interest rates down to 1%, and at the time of the interview I did not know he was going to do that * I thought Alan Greenspan would be smarter than that * If Alan Greenspan had not slashed interest rates, my forecast would have been correct * Once Greenspan lowered interest rates, of course, I changed my forecast and became bullish on the market when it was still quite a bit lower * 6yyj6e69 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

20 Juli 201637min

* I'm sitting with Josh Crumb, the co-founder of a company that was originally called BitGold but following the acquisition of James Turk's GoldMoney they rebranded their company as GoldMoney * I agree with that decision because I think GoldMoney is more descriptive of what they are really doing with gold, than is BitGold * But the reason we're sitting here today is because I was so impressed with their company after having lengthy conversations with the other co-founder, Roy Sebag, that I really agreed with Roy and I thought that the best thing for us to do was to join forces and to combine both companies to the mutual benefit of both investors and, more importantly customers of both my company SchiffGold, and GoldMoney * So we've agreed on a merger and we've formed a joint venture between the two companies * What I wanted to announce today is what this new joint venture means for current customers of my company, SchiffGold * One of the things customers might be thinking is: "Does this mean that my experience is going to change?" * GoldMoney (BitGold) is much more of an internet-based program where people are not interacting with live representatives * The answer to that question is no. * Nothing is going to change regarding the our customers' relationships with SchiffGold * In fact, what we're hoping to achieve is to bring some of that personal service to the current GoldMoney customers 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 Juli 201659min

* Today we got the Non-Farm Payroll report for the month of June * Remember the last 2 reports were quite weak and everybody was hoping for a rebound in June to prove that April and May were a fluke and not a new trend * In fact the Fed talked about that in their last FOMC meeting minutes * The consensus was for 180,000 jobs to be created and the range went from a low of 130,000 to as high as 235,000 * The consensus average of that range was 180,000 * The actual number came in at 287,000, over 100,000 jobs above the consensus * Now we did revise down the really bad number from May, and made it even worse * Initially that number was 38,000 jobs and now we know it was just 11,000 jobs * So about 70% of the jobs disappeared * I have a good feeling that the reason June's number is so high is that it's just wrong, and we'll see what kind of revision we get to it next month * Remember, a good chunk of these numbers are jobs that the government assumes were created without evidence, based on the birth-death model * I would suggest that far fewer businesses are actually being formed than the government believes * In fact, its possible that more business are shutting down than are hiring * Given the economy and the minimum wage, those business that are starting up are hiring fewer people than start-up historically hire * I think these guesstimates are wildly optimistic and skewing all the numbers * Unemployment rate, which was 4.7 last month and expected to notch up to 4.8, instead notched up higher to 4.9 * Private payrolls which were expected to rise by $170,000 jumped by $265,000 * But last month they revised a $25,000 gain to a $6,000 loss * Why did unemployment move up? Because the labor force participation rate notched up from 62.6 to 62.7 * Obviously not all the people who re-joined the labor force could find jobs * Average hourly earnings were expected to rise by .2% * Again they disappointed; they rose by just .1% * Overall, a mixed picture, but the headline number, the 287,000 vs 180,000 consensus * That's normally the number the market trades off * And that is exactly what happened - as soon as the report came out we had a big jump in the dollar index and we had a big selloff in Gold * Gold started out largely unchanged, went down about $22 on the news * Silver sold off, it was down about 40-50 cents * That was the knee-jerk reaction: strong dollar, weak gold, weak silver * Why? * A strong jobs number means the Fed is more likely to raise rates, right? * Rate hike is coming, good for the dollar, bad for gold * But what did I say on Wednesday's podcast? * I said that it didn't matter what the jobs number was * That gold was not going to go down, and if it was a weak number, I expected a big rally in gold * But I also said that a strong number would not hurt gold * Earlier in the year, a strong number would crush gold * I said that what's going on, and based on the latest FOMC minutes, I don't care what the jobs number is * The Fed is not going to raise rates * Jobs have nothing to do with it, Jobs are the excuse * The Fed can't raise rates now because of the fragility in the banking system, all the things that were revealed by Brexit * The market is sensing that and that's why within the first hour gold reversed all of its losses and finished the day up about $5.60 at $1365.40 * The highest close of the year on a day when we had a huge beat in the Non-Farm Payrolls * Silver had an even more impressive reversal; it rallied over $1 * Stocks really broke out; the GDX was up over 30% today to close at $30.54 * Not quite the highest close of the year 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 Juli 201624min

* Gold and silver prices continue to march higher * Gold was up another $7 today; it closed at $1363.20 - that is the high for the year * Silver was up .15 at $20.06 * Silver is now going up relative to the price of gold which is very for the precious metals complex * Gold stocks are on fire; the XAU index, a gold stock index was up 3.27% today * It's now up better than 135% on the year and well over 150% from the lows on the third week in January * But do you think that any major players on Wall Street have recommended gold stocks? * Do any of the big hedge funds have positions in gold? * No! They are clueless * What is happening, as I have said before, is that there is a picture, that's kind of blurry, but it's coming into focus, still not clear, but it's a game changer * The perception is that we had this great recovery and that the Fed was going to be able to unwind its balance sheet, normalize interest rates and everything was going to be great * So the whole investment world was preparing for higher rates, a stronger dollar and a stronger U.S. economy * But what is the actual picture? * The actual picture is an economic recovery that is over, if it ever even happened, * The Fed is finished tightening and they're about to start a new easing campaign * We're not done with QE; we're just getting started - QE3 is closer to the beginning than the end * Rather than shrinking the balance sheet, it's about to explode * This picture is getting clearer and now you see the markets re-pricing * Gold is going up every day * Gold stocks are going up * The banks are getting crushed * The European banks hit new lows again today * FOMC minutes came out for June and what did the minutes reveal? * The members were concerned about weakening employment number and they wanted more data before raising rates * They wanted to make sure the weakening numbers were an aberration rather than a new trend * Who didn't see that coming? * Also they wanted to see what happened with the Brexit vote * We knew about the Brexit vote all year - why did the Fed ever pretend that they would raise rates in June? * Because they wanted the market to believe that a rate hike was possible because it validates the phony recovery * So now the instead of raising rates, they spoke about raising them and they are going to cut rates by just talking about reducing them * They can do a lot by adjusting their rhetoric before they actually cut rates * They are already cutting by backtracking their rhetoric, because that's all they've got * Teddy Roosevelt said, "Walk softly but carry a big stick." * The Fed has to speak loudly because it has no stick 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

7 Juli 201632min

* I wish everybody a happy July 4th weekend; U.S. markets will be closed * It's unfortunate that we can't really celebrate all the traditions that we're supposed to be honoring were lost generations ago * The values our founding fathers risked their lives for have all been lost * I wanted to comment on what is going on in the markets particularly today * Today was the capper on the week * You had silver prices up about a dollar an ounce * Gold closed up about $19, so gold closed above $1340 * Maybe by the time the market opens on Tuesday silver will be over $20/ounce * Who knows, maybe gold will be over $1400? * This is a powerful rally - gold finished at three year highs today * GDX was up about 5% on the day * The stock market didn't do that much today, but the real story, other than the gold market is in the bond market * U.S. Treasury yield plunging again - these are the lowest yields ever * Certainly below the crash lows * The yield on the 10-year treasury is below 1.5% * The yield on the 10-year treasury is 2.24% * So yields are plunging, bond prices are surging * What is going on? * The answer is money printing; Quantitative Easing * The most recent catalyst being the Brexit vote, which scared the hell out of everybody because of the collapse, particularly of the European banks * Now the central bankers are rushing to the rescue all around the world 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

1 Juli 201626min

* It was Turnaround Tuesday in the global financial markets as stocks are recovering from 2 days of carnage following the surprise Brexit vote in the U.K. * The Dow was up almost 270 points today, NASDAQ up about 97 * But really the markets got beaten up the last couple days * The smallest bounce was from the banks, which have been beaten up the most * So they had the biggest drop and the smallest bounce * Which really shows you how weak that sector is * It couldn't even manage much of a dead cat bounce * In fact, the carnage in, particularly the European banks is much bigger than it was during the financial crisis of '08 * This really shows you how much more levered up the banking system must be, thanks to all these years of QE and negative interest rates * And of course, how much farther behind can the American banks be from their European cousins? * U.S bank stocks, too, were hitting 52-week lows yesterday * I still think there's a lot of carnage coming * Some banks may be in a position where they are going to have to raise equity, which means they'll have to sell stock * Clearly the market is not going to like that * But again, everybody is blaming this on all the uncertainty surrounding Brexit * To me, if we had a healthy financial system, if the markets were sound, and prices were based on fundamentals * Would it really make that much of a difference if the UK were in the EU or not? * What is being revealed here is the fragility of the whole system that is being propped up artificially by the banks * By cheap money, low interest rates - everybody is speculating * And everybody is assuming that the powers that be, whether it is the politicians, the governments or the central banks have everything under control * It's a big put out there and nothing can go wrong * And then when something does go wrong, then people get nervous * The wake up and say, "Wait a minute! Maybe it's not as safe as we thought!" 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 Juni 201633min

* The British actually voted to leave the EU and it wasn't even that close * I think by midnight last night EDT it was obvious that Leave was going to beat Remain * I think it ended up 52% voting to Brexit and 48% voting to remain * Of course, the markets were taken by surprise, in fact, we had a rally in to the close on Thursday as everybody was so confident that the polls would be right, and the online casinos would be right and that it was pretty much a sure thing that the British would vote to remain * All of the experts, the economists and the political elites around the world, including President Obama had lectured the British as to why the smart thing is to stay in the EU and how dangerous it would be, economic Armageddon - if they voted to leave * Of course this may have been reverse psychology * Especially when you've been sold a bill of goods over and over again, with cost of living rising and standard of living going down * The may be reaching for straws in the same manner as the Americans are voting for Donald Trump or Bernie Sanders * The straw that they had was Brexit * I think the markets are overreacting to the implications of the U.K. leaving the EU * After all, think of all the countries that aren't in the EU * Why aren't we all members? * Why doesn't the U.S. join? * They can't even get Switzerland to join the EU and it's located smack in the middle of Europe * One of the reasons why Switzerland is so prosperous is that it had the good sense not to join the EU * I think the markets believed their own hype * For so long, we've been talking about how awful it would be if the British actually voted to leave that when they did so, it was a self-fulfilling prophecy * Everybody is in this for a quick trade * A lot of traders are all levered up and do the minute this thing happened everybody hit the same sell button * This is just about traders having to reverse their bets * Look at what happened in the flight to safety - the dollar was way up against the pound * The pound really got "pounded" - it had its biggest down day in history * It was pounded even harder relative to gold - the price of gold in terms of the British pound rose above 1000 pounds per ounce last night * Gold was the strongest monetary asset of the day, but #2 was the yen * At one point I saw the yen was up 5% against the dollar, which meant it was up about 15% against the pound * Now why is everybody buying the yen, why are they buying the dollar? * People say it's a safe haven - not really. * Does anyone think that the Japanese economy is a bastion of safety? * Why would anybody worried about Europe buy the dollar? * Think about the irony of this: people are so worried about Britain leaving the EU that they're selling the pound to buy the Swiss franc - a country that never entered the Eurozone * It's not about safety.  It's about risk-on and risk-off * What is risk-on? That is when you buy risky assets like stocks * How does the leveraged speculative community fund a risk-on trade? they go to the funding currencies where you can borrow cheaply * The most popular funding currency is the Japanese yen because they pay you to borrow in yen * So it's real cheap, you can lever up, and to a lesser extent the dollar is a funding currency - we've had very low interest rates, especially relative to our rate of inflation 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

25 Juni 201630min

* I'm on vacation this week but I did take a little time out to little time out to listen to Janet Yellen's semi-annual "Humphrey-Hawkins" testimony - she testified first before the Senate, that was yesterday and today she was before the house * It used to be a lot more interesting with Ron Paul was on the house banking committee and you could see Ron Paul asking questions to Ben Bernanke * I really would like to hear Rand Paul questioning Janet Yellen but unfortunately, we don't have that opportunity * Also, the big news, we are on the eve of the Brexit vote in the U.K.; it's going to be on Thursday * Polls of investor sentiment show the remain camp is firmly in the lead * Betting certainly shows that more money is on the remain, but more people are betting on leave * Probably, though the remain camp will carry the day; the forces of big government are very hard to overcome * Nowhere is big government better exemplified than in the case of the Federal Reserve, which is the combination of big government and central banking * Janet Yellen's testimony, I thought, was relatively boring, but I'm going to go over some of the more important tidbits * Yellen keeps referring to the recovery that appears to be on track and the rate hike is just around the corner * All this is nonsense - if the Fed were going to raise rates, they would have already done so * One senator or congressman asked Yellen about the box the Fed might be in because the rates are still so low, what tools does Yellen have to fight off the next recession * Yellen confidently replied that we have all the tools we've always had, which is true * They still have those tools; the problem is that these tools have never worked * They can't cut rates, much, they can print all the money they want, they can do QE4, it can be bigger than QE3, and  it probably will be * Even though Janet Yellen, in response to a direct question about negative interest rates, said that she didn't think the Fed would go there, well we'll see * When push comes to shove they may be more willing to go there than they are right now because they still want to pretend that the recovery is on track, so why even bring up negative rates when you're talking about raising rates * So I think once the conversation turns then negative rates may be a more serious consideration * One of the congressmen asked about Puerto Rico and Janet Yellen said, "No, there's nothing we can do, Puerto Rico is on it's own." * I wish the Fed would have had the same attitude about the mortgage market * The Federal Reserve has no problem buying up toxic mortgages but they wouldn't touch Puerto Rican sovereign debt with ta 10-foot pole * Which leads you to believe how risky that debt much be * I wish the Fed would do the same thing to the U.S. government - force the U.S. government to make those tough choices * In fact, there was a House member, today, who talked to Janet Yellen about the independent central banks and Janet Yellen bluffed, that if interest rates, and that was a problem for Congress, that Congress would have to deal with the problem * I don't believe her for a second * I believe on of the reasons, specifically that Janet Yellen doesn't want to raise rates is that she knows that will complicate the budget situation in Washington because the Federal Government can't afford to pay higher interest rates * If the Federal Reserve already bailed out the government by doing QE and buying all these bonds, why are they going to change course? * I don't believe for a second Janet Yellen's tough talk about how independent the Federal Reserve is and how if the situation warranted it, they would raise interest rates and Congress would have to deal with the consequences 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

23 Juni 201622min