Bitcoin Tops $100K on Expected Government Bailout - Ep 997

* This is my 200th  podcast and I looked back to the date of the first one and it was just over 2 years ago, September 2014 * I began this podcast shortly after I ended the Peter Schiff Radio Show * I hope everybody is enjoying these podcasts and if you like what you're listening to, help turn on other people to the same information * Statements early this morning by Richmond Fed President Jeffrey Lacker certainly sent tremors through the precious metals markets * Gold tumbled over $40/oz; closing $1268 and change * This is the first time we've actually been below $1300 in the last few months * Silver down just over a buck; 17.78 * It wasn't that long ago that we'd gotten above $20 * It was even worse for gold and silver mining stocks; this was the worse day of the year for those stocks * The markets closed right near the lows of the day * There was a big sell-off right after those statements came out and there was no reprieve * The dollar was stronger on the day, although not against the euro * There were some rumors that the European Central Bank may begin to taper its QE program * That held the euro steady against the dollar * The weak currencies were the yen and the pound which was "pounded" again to about a new 35-year low * On concerns that we might have a hard Brexit rather than a soft Brexit * This is more a matter of the yen and pound weakness today than dollar strength * The bond market was weaker on the day, closing near the lows * The Dow, though, only off about 85 points * If the markets really believe that a rate hike is coming, which is clearly what the metals traders seem to believe * I think the stock market should be even weaker * Although probably what's helping the stock market is the strength in the financials * Because as I have said before, people actually believe that higher interest rates are good for the financials * So the fear of higher rates actually lifted the financials, which helped support the market * But people who think the Fed is going to raise rates, and that higher rates are good for the financials * They're wrong twice, because the Fed's probably not going to raise rates and if they did, it would be horrible for financials * They might get lucky, though because they'd be wrong on the rate hike and would not then lose as much had the Fed actually raised rates * I want to go over the Lacker's statement that started all the turmoil: What did this guy say that caused everybody to jump to the conclusion that the Fed's about to hike rates? * The probability of a rate hike had been rising; it didn't just start today, but the probability did notch up a bit * They're now looking at a 60% chance of a December rate hike, but there's a 25% chance now of a November rate hike * The November meeting is one week before the election why would people think the Fed would take a chance on an adverse market reaction to a rate hike a week before the election? * Our Sponsors: * Check out Avocado Green Mattress: https://avocadogreenmattress.com * Check out Boll & Branch: https://boilandbranch.com/SCHIFF * Check out Fast Growing Trees and use my code GOLD for a great deal: https://www.fast-growing-trees.com Privacy & Opt-Out: https://redcircle.com/privacy

5 Okt 201635min

* It looks like the U.S. stock market is going to close out the 3rd quarter on a positive note * The catalyst for the rally today is the big rally in Deutsche Bank; shares are up better than 14% * They were in danger of going below $10 yesterday * There were nervous about maintaining accounts with Deutsche Bank * People were re-living memories of Lehman Brothers all over again * I think the Obama Administration was beginning to get concerned * The Dow was off about 200 points on the close yesterday * When worries about contagion spilling over from European banks into U.S. Banks * It wasn't good with these Wells Fargo Congressional hearings * I am going to chime in on that later in today's podcast * I think the Obama administration was getting nervous about precipitating another financial crisis before the election * I think they gave a nudge to the Department of Justice which had been talking about a $14 billion fine on Deutsche Bank * The rumors this morning are that they are nearing a settlement with Deutsche Bank for a much lower number; maybe around $5.5 billion * Which is below the amount that Deutsche Bank had set aside to settle this * So from $14 billion down to about $5.5 billion - this is causing a big rally in the shares of Deutsche Bank and in fact that is returning confidence to the entire sector * I don't think that this means that the European banks or the American banks, for that matter, are out of the woods * I still think there are a lot of problems in the financials, because as I said in a previous podcast,"They're damned if the Fed raises and they're damned if they don't" *  Negative rates are bad for the banks but rate hikes are also bad for the banks, based on their balance sheets * I think there are still a lot of problems percolating beneath the surface for the financials * As far as the Obama Administration is concerned, the key is to get everything through the next election without a crisis * So I think that having the Department of Justice settle with Deutsche Bank for a much smaller number... * You know that $14 billion fine was very close to what the Europeans were looking to fine Apple * But I think the Department of Justice is more concerned about elections than the symbolism regarding Apple's fine * So coming to an agreeable solution with Deutsche Bank that was lower than the markets had feared serves the Administration's purpose right now * So that's where the rally is coming from today and of course the traders like to paint the tape a little bit going into the end of the quarter * It's not just the markets that had a strong quarter - crude oil ended the day about $49 * We have some kind of agreement among OPEC nations for production cuts * And while that might be good for oil stocks, it's not going to be good for the U.S. consumer, who is already struggling * In fact we did get a mixed bag on economic numbers out today * The disappointing number was consumer spending, which for the month of August was flat; the anticipation was for an increase of .2% * Personal income did manage to meet expectations with a .2% increase * But that was about half the increase we got in the prior month * Spending went down from +.4 (which was upwardly revised from the original +.3) to flat * Higher energy prices, gas prices at the pump are simply going to eat into that consumer spending number * Our Sponsors: * Check out Avocado Green Mattress: https://avocadogreenmattress.com * Check out Boll & Branch: https://boilandbranch.com/SCHIFF * Check out Fast Growing Trees and use my code GOLD for a great deal: https://www.fast-growing-trees.com Privacy & Opt-Out: https://redcircle.com/privacy

30 Sep 201631min

* I'm going to use today's podcast to offer my take on last night's Presidential Debates * Which certainly did not live up to all of the hype and expectation * But the airwaves today are filled with opinion makers proclaiming that Trump won or Hillary won * And of course, all of the people who think Trump won, these are the Trump supporters, Republicans - their guy won * And Hillary supporters are proclaiming that Hillary won * I'm going to give you a different take because, clearly, (and if you don't know this by now, if the choice is between Hillary Clinton or Donald Trump, I would choose Trump) * Yet despite the fact that I support Trump over Hillary, I think Trump really blew an opportunity with this debate * I know in some cases there were some low expectations with respect to Trump, and did he exceed those low expectations, I don't know * I expected more from Donald Trump; I was disappointed * I think he should have mopped the floor with Hillary Clinton * She gave him many opportunities, she teed it up for him over and over again * And he didn't even take a swing * In many cases, not only did he not try to hit the ball, he whiffed * I wish he had paid me to help him with debate prep because I would have told him exactly how to handle Hillary Clinton * I'll start off by giving one simple example, where he could have made lemonade out of lemons, but chose to hand Hillary and issue which I'm sure she will use against him * This had to do with his comment in an interview over 10 years ago that pregnancy is inconvenient for employers - which of course, it is * And Hillary Clinton said: "Donald Trump, you said that pregnancy was an inconvenience for employers" * Instead of owning and embracing that comment, he backed away from it and denied having said it * One of the big issues is that Hillary is a liar * If Hillary is a liar, don't tell lies, yourself * Trump has to be honest to exploit Hillary's lack of honesty * And of course, Hillary can easily make a commercials - she's got tons of money to produce commercials and run them - * Saying that he never said that pregnancy was inconvenient for employers and juxtapose that with a clip showing him saying that pregnancy is inconvenient for employers * This didn't have to happen * Trump should have owned this * First of all, one of the things that people liked about Trump is that he is not politically correct - he speaks his mind * Why not continue to speak your mind?  Why pretend that pregnancy is not inconvenient for employers * Just because some woman might be offended * I give women more credit than that * I think most women realize that pregnancy is inconvenient for employers * Even female employers! This is not a male/female thing * If you are a woman employer with female employees and one of them gets pregnant, it is inconvenient for you, too * For big business, major corporations, maybe you have plenty of other people to pick up the slack * But where pregnancy is really inconvenient for employers is with small business * Now Hillary claims she cares about small business * OK, if you care about small business, can't you admit when things are inconvenient? * Our Sponsors: * Check out Avocado Green Mattress: https://avocadogreenmattress.com * Check out Boll & Branch: https://boilandbranch.com/SCHIFF * Check out Fast Growing Trees and use my code GOLD for a great deal: https://www.fast-growing-trees.com Privacy & Opt-Out: https://redcircle.com/privacy

27 Sep 201634min

* Aliens didn't invade the Earth, and the Federal Reserve didn't raise interest rates * If you remember, I was pegging the probability of each at roughly the same * True to form, the Federal Reserve did pretty much exactly what I thought they were going to do and not raise interest rates * Now I thought they might have tried to lower expectations for the probability in the markets of a December rate hike * Even though they didn't say that, that was the effect of their announcement * If you look at the dot plots, for example, the FOMC members were looking for rates to be lower for longer * Surely, if you look at the reaction to the market, the market does not appear to be worried about a rate hike coming in either November or December, even though the Fed still maintains the narrative that the possibility still exists * The Fed reiterated that the case for a rate hike had increased * But, they chose not to raise rates despite their narrative * Their reason was that they wanted to see more data * This is exactly what I said after Yellen's statement at Jackson Hole * The media interpreted her statement as a signal that a September rate hike was likely * What did I say? * I said the Fed didn't say anything about hiking * They were speaking about the case for a hike * I described it as a scale from, say 0 - 10 * If the case were a 3 and then it became a 4, the case had strengthened * But if the Fed needs 10, and we're only at 4, they're not going to hike * They never came clean about their scale, they simply said that the case for a hike had increased * That doesn't mean they were going to raise rates, and that's exactly what happened * It's interesting that in all of the prepared remarks and in the following press conference * Janet Yellen never once admitted that the economy is weakening * In fact, she continues to pretend that everything is great * Ironically, one of the questions in the Q&A had to do with Donald Trump's position that the Fed is not raising interest rates for political reasons * Which, of course is exactly why they're not raising them * If they raise interest rates, everything would collapse, and so would Hillary Clinton's election prospects Our Sponsors: * Check out Avocado Green Mattress: https://avocadogreenmattress.com * Check out Boll & Branch: https://boilandbranch.com/SCHIFF * Check out Fast Growing Trees and use my code GOLD for a great deal: https://www.fast-growing-trees.com Privacy & Opt-Out: https://redcircle.com/privacy

21 Sep 201627min

* This morning the Federal Open Market Committee began its 2-day meeting, where they're supposedly going to discuss raising interest rates for the second time * We're going to get the official announcement of their decision on Wednesday * Most likely there will be no surprise, that they won't raise interest rates * But it will be the statement at the press conference that follows; that's typically where you can get more market-moving insights * I said they're supposedly going to be discussing whether or not they are going to raise rates, but you would think that if they were going to raise rates, they'd know it before the meeting started * But I don't think they're going to discuss whether or not they're going to raise rates; I think they know they're not going to raise rates * What they're going to discuss is the bind they're in * It's like they're damned if they do and they're damned if they don't * On the one hand, market expectations went way up for a while, on a September rate hike * Based on Janet Yellen's Jackson Hole speech, where she said, "The case for a rate hike had strengthened." * Then later that day, another Fed official reiterated that there was nothing in Janet Yellen's speech that would rule out a rate hike in either September or December or both! * Based on that, market expectations ramped up * Of course, the Fed also claims to be data dependent, and the data over the past month has been lousy * Even though the Fed has not gone out of its way to recognize the bad data, probably for political reasons * The data has been bad, so the case for a rate hike has weakened, although Janet Yellen herself has not uttered those words * You've had some other Fed officials come out and pay lip service to that effect more recently because the market started to fall so the doves came flying to the rescue to save the market * But here's the conundrum: if they don't raise rates, which I think is the more likely option, then the Fed will have cried wolf again * If they do raise rates, it belies Janet Yellen's "Data Dependent" credo * In reality, they should be raising rates regardless of the data, because rates are too low * These low rate are creating a problem * It doesn't matter whether the economy is weak or strong, rates need to go up * In fact, I would argue that the economy is weak because rates are so low * Rates have to go up before we can have a real recovery * Of course, before we can have a real recovery, we have to prick this bubble and end the phony recovery * To have real economic growth, we're going to have to have a crash first * If we want the gain, we have to endure the pain * But nobody wants the pain so we never get any gain * If the Fed were to raise rates despite the data, it looks like they're not data dependent * If they don't raise rates without acknowledging that the data is weak * If they continue to pretend that the economy is fine, and continue to hint at future rate hikes * The Fed loses more credibility * That is what they are more likely to do: why would they take a chance on raising rates on Wednesday * Knowing A) How weak the data is, and  B) knowing that it is possible that the markets could tank as a result of that hike * That's the last thing they want, because, then what are they going to do? * How are they going to reverse the decline? Cut rates? * Clearly the Fed wants to punt again and delay the decision to December * This will mean that they barked again but they didn't bite * That's what they're talking about: "How do we thread this needle? How to we make the perfect statement that will still pretend the recovery is on track and still justify n... Our Sponsors: * Check out Avocado Green Mattress: https://avocadogreenmattress.com * Check out Boll & Branch: https://boilandbranch.com/SCHIFF * Check out Fast Growing Trees and use my code GOLD for a great deal: https://www.fast-growing-trees.com Privacy & Opt-Out: https://redcircle.com/privacy

21 Sep 201638min

* We got a lot of economic data released today, most of it bad, and most of it worse than expected * What I did not expect was that the market shrugged it off * Initially, there was a little reaction; gold jumped $3 but it never gained momentum and it rolled over to -$10 at the time of this recording * The dollar index, which had moved into negative territory immediately following the release, quickly recovered back to positive territory * It's still early in the day, as I'm recording, so this could change as some of this economic data has a chance to sink in * I noticed that the Atlanta Fed just reduced its Q3 GDP estimate from 3.3 to 3% * That' the second reduction in a row * This is the lowest estimate the Atlanta Fed has had in about 2 months, although it is still pretty high * Let's go over the data we got today: * Retail Sales was one of the more significant numbers; everybody looks to retail sales to judge the health of the consumer * Last month's number, relatively weak, it was flat, and they were looking for another flat month, but we were -.3% for August * It gets worse from there - less autos, they revised the prior month from -.3 to -.4 and in August they were looking for +.3, they got -.1 * Less autos and gasoline, we were down last month .1%; they were looking for +.4% and we're down another .1% Our Sponsors: * Check out Avocado Green Mattress: https://avocadogreenmattress.com * Check out Boll & Branch: https://boilandbranch.com/SCHIFF * Check out Fast Growing Trees and use my code GOLD for a great deal: https://www.fast-growing-trees.com Privacy & Opt-Out: https://redcircle.com/privacy

15 Sep 201627min

* Today was a day of damage control for the Federal Reserve * It almost seems like whenever they discuss the possibility of a rate hike, they're really launching a trial balloon * They want to gauge the possibility of a rate hike and then if the market kind of shrugs it off, or blesses the rate hike the way it did last year nearing December, if the market seems it's OK with a rate hike, then maybe they'd consider actually implementing one * But before they do it, they want to test the waters, they want to see how the market reacts to that possibility * Clearly, the near 400-point decline in the Dow on Friday showed that the market really wasn't very friendly to the possibility of a rate hike * Let alone the certainty of one * Just the mere possibility, however remote, really spooked the market * Today the Federal Reserve had a chance to dial it back * They had 3 Fed presidents speaking today, and not one of them talked about the possibility of a rate hike * Starting with an 8am talk this morning by Atlanta Fed President and CEO Dennis Lockhart * Now Dennis was specifically asked about a rate hike, and whether he thought the Fed would move in September or December * He specifically refused to comment * He said, "Financial markets seem to be very sensitive to the remarks of Fed speakers at the moment" * And so in light of market sensitivity, he refused to answer the question * Why not answer it? Don't you want to prepare the markets for a possible rate hike? * Well they don't want to say what they want to do, because they don't like the way the market is reacting * You'd better believe that if the markets reacted favorably to a rate hike, they would have stayed on script * Because of the the sell-off on Friday, and where futures opened before Lockhart's speech, the Dow was set to open up down 100 points or more * But once he spoke, all of a sudden, people were thinking, "Hey wait a minute, he didn't say anything about a possibility of a rate hike and he's worried about the markets' sensitivity * The only thing he said that could have been interpreted as a rate hike comment was when he mentioned the data over the past few weeks "warrants serious discussion of a policy rate increase" * The data over the past few weeks has all been bad * All he said is, it warrants discussion of a policy rate increase, but he didn't say that we should be in favor of an increase, or against an increase * He just said the data over the past few weeks warrants discussion * To me, what that means is, we should discuss not raising rates because all the data we've gotten recently is weak * It was the data we got a couple of months ago that supposedly let Janet Yellen conclude that the case for rate hike had strengthened * But really, what Lockhart is saying is, "We need to have a serious discussion about a rate increase." * Not that we have to discuss raising interest rates, but maybe we should discuss not raising interest rates because based on the data from just the past few weeks, one would argue against an increase * If he had said, "We need to discuss an increase", he wouldn't have predicated it with, "the data over the last few weeks" * That data, in and of itself, is not friendly to an increase * If he was in favor of a rate increase, he would not qualify it the data over the past few weeks * Also, just suggesting a discussion about a policy rate increase is not the same as actually increasing the interest rate * A discussion to increase rates could lead to no rate hike * Well, I assume they've been having discussions about raising rates for the last several years * What else do they discuss over there? Our Sponsors: * Check out Avocado Green Mattress: https://avocadogreenmattress.com * Check out Boll & Branch: https://boilandbranch.com/SCHIFF * Check out Fast Growing Trees and use my code GOLD for a great deal: https://www.fast-growing-trees.com Privacy & Opt-Out: https://redcircle.com/privacy

13 Sep 201626min

* We had widespread selling in the markets today; it was real carnage across the board * Everything went down except the U.S. dollar * The Dow Jones was down 394  points - about 2% * That wasn't bad compared to what happened in other indices and other sectors * In fact, when it comes to the Dow Jones averages, the utilities were the weakest, they were down 3.7% * The NASDAQ was down 2-1/2%; the composite down 133 points * Various sectors were hit very hard; particularly the interest rate sensitive sectors; * Home builders got crushed * Emerging markets got obliterated * Gold stocks were down big - almost 6% on the day * That's on basically a .6% decline in the price of gold; gold was down only about $10 * Silver dropped about 50 cents * What's going on? It has just been 2 days when I did the last podcast * Gold was soaring, the dollar was tanking, the markets were going up * Why? * The economic data we got for August confirms that we have the weakest economy, maybe in 6 years * If you remember, what caused the markets to be concerned was the Janet Yellen/Jackson Hole statement that the case for a rate hike had strengthened based on the economic data that came out in June and July * Based on the data released since she made that speech, this is data about August, that case has now weakened considerably * The August data shows that the data that we got in June or July that might have been positive was a one-off event * Now we're back in weakening mode, and so, if the Fed really were really data dependent, according to Janet Yellen * Now the data is awful * So why would they hike rates? That's exactly what happened * The markets started to take those rate hikes off the table * I never thought they were on the table, but there were many people who bought into it * When they saw this horrible data, and they knew the Fed was data dependent, the markets reacted * Now, in the last couple of days, particularly today, people are now questioning whether or not the Fed is actually data dependent, and they're thinking they're going to raise interest rates, even if the data is bad * Now what would make them jump to such a conclusion? * We had several Fed officials, both yesterday and today, who continued to talk about the possibility of rate hikes and nobody has acknowledged the recently-released weakening economic data * I have said many times they don't want to acknowledged that data * That plays into Donald Trump's campaign * They'd be peddling fiction! * They don't want to talk about a weakening economy, so they have to ignore the data * But the fact that they are ignoring the data while continuing to talk about the possibility of rate hikes * That's got everybody scared * All these guys say is that there is a possibility of a rate hike * A possibility is not a probability * It's certainly not a certainty * But the markets are acting as if the Fed is about to raise rates, and that's why everybody is so scared * It's not just the Fed; yesterday in Draghi's press conference was asked about his plans when the QE program ends (it is scheduled to end Q1 of 2017) * He basically said he doesn't have any plans to do more QE Our Sponsors: * Check out Avocado Green Mattress: https://avocadogreenmattress.com * Check out Boll & Branch: https://boilandbranch.com/SCHIFF * Check out Fast Growing Trees and use my code GOLD for a great deal: https://www.fast-growing-trees.com Privacy & Opt-Out: https://redcircle.com/privacy

10 Sep 201633min