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

* Friday the 13 was an unlucky day on Wall Street * The Dow was down over 200 points - the second back to back decline of over 1% since August * What was happening in August? Everybody was convinced the Fed was going to raise rates in September * Now, everybody is just as convinced that the Fed will raise rates in December * Once again, as I predicted a week ago, the market sold off * We are down over 650 points on the week * Nasdaq is down today even more - 1-1/2% * The carnage was once again led by the retailers * Bad earnings out of Macy's Nordstrom's Walmart and others set the scene for new share price lows * I have been warning about this all year, based on inventory numbers * All the evidence is flashing recession * The Fed has been saying that they are data dependent - open your eyes and look at the data! * This data is consistent with the beginning of a recession * Yes, unemployment is low, but unemployment is always low when recessions begin * I think the Fed knows they are not going to raise rates * The Fed minutes are coming out next week and we'll get an insight into the deliberation between the members * All Janet Yellen said was that an interest rate hike was a "live possibility" - The market did the rest. * They took the word "possibility" and assumed that it was a probability * Let's look at the economic data that came in today: * First, October Producer Prices - they were looking for a rise of .2, because last month, they actually fell by .5 * We didn't get .2; we got -.4 * As of last month, year over year producer prices have declined 1.1% * Now they are down 1.6% on the year * This is going the opposite direction of the Fed's goal of 2% inflation * The worst number was retail sales: * They were looking for a rise of .3, which is still not a big rise - but we got an increase of just .1 * To add insult to injury, they had adjusted last month's forecast to zero * Also x auto, they were looking for a gain of .4 and instead got a gain of .2 * These numbers will subtract from Q3 and Q4 GDP * We also got September inventory numbers: * The consensus was a rise of .1, but instead we rose .3 * This rise was not a result of an increase of sales, it is because sales are not keeping up with inventories * The inventory to sales ratio rose to 1.48 fro 1.47 * The last time we had this number was during the financial crisis * I have been pointing out that these inventory numbers have been padding the GDP for the last several quarters * This has been ignored on Wall Street * This means future GDP will plunge as companies need to liquidate inventories and not replenish them * Not only that, they will be liquidating their workforce * The heavy layoffs may not happen this year - more likely they will come in January and February * The odds are that the Fed is not going to raise rates in December and the odds against a rate hike as the market continues to sink, with more and more bad economic news * This bad news about retail sales was unexpected by the market as evidenced by the sharp drop in share prices * Is the Fed going to raise rates just as the economy is turning down? Not a chance. * If they do, imagine how much worse the economy will be * The question is: When is the Fed going to come clean and admit that they are not going to raise rates and will their excuse be and will the markets buy it? 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

14 Nov 201518min

* When I recorded my last video blog, I mentioned how positively the market reacted to jobs report, which could signal the Fed to raise rates * I said there might be a delayed reaction and, in fact it did * Four days into this trading week we are down more than 450 points * Also, I did an interview on CNBC.com where I said I felt the retail markets would have a a tough time this Christmas * That was translated into headlines that I stated that consumers would have a horrible Christmas, which was not my point * So far, my prediction about the retail space is bearing out, bad earnings reports from Macy's Walmart, Men's Wearhouse, and its subsidiary, Joseph A. Bank, Nordstrom and Neiman Marcus * The data that the Fed depends on is getting worse and worse * If the Fed raises rates in December, it will prove that they have not been data dependent, they were delaying * Copper a six-month low today, oil prices are down, gold hit a new low inter-day but rallied back and the dollar finished broadly lower for the day * Based on these market prices, the Fed will have another excuse to delay rate hikes, again * What will stop the stock market from falling? The only thing that will stop it is if the Fed takes a rate hike off the table * I recently wrote a commentary where I reference the shadow rate * Tightening actually began about 18 months ago when the Fed started tapering * The Fed's monetary policy is not just about rates, it is also about easing and foreward guidance * When the Fed began tapering they were tightening * When they began talking about raising rates that was the equivalent of tightening, because the markets braced for the hikes * That's why the economy is rolling over, that's why the stock market is rolling over * Given how weak this recovery has been and the enormity of the stimulus required, if the Fed removes all stimulus it will result in a worse than normal reaction in this over-valued stock market compared to previous tightening cycles * More evidence of the weakening economy is the number of millennials still living with their parents is at a record high * I posted a Bloomberg article on my Facebook page about the number of young women living at home is the highest in 70b years * Bloomberg prefaces the article by stating that this is not a sign of a weak economy, but clearly it is * This also affects housing: * Couples are delaying buying "starter homes" which delays or prevents them from saving up for a down payment on their dream house * I also wanted to discuss the Fox Business Republican Debate * I believe Rand Paul was actually the winner of that debate * Paul stood out, and made some good points, which allowed him to move forward in the polls * Paul is drawing a contrast, as he made the point that the real threat to the U.S. is not a military threat from the outside, but the self-inflicted threat of a weak economy * Our debt is a bigger enemy than ISIS * Paul also avoided jumping on the immigration bandwagon. Immigration is not the problem. If we turn off the welfare magnet, then the only people who come to America will be the people who want to work * The country would benefit from that, because it will keep labor costs down and boost productivity * The anti-immigrant voice of the Republican party will be vilified as racist in the general 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

13 Nov 201535min

* Friday, November 6, 2015 * Earlier today the government released the Non-Farm Payroll Report for the month of October * I was told that this was the most import Non-Farm Payroll report ever * They were looking for 190,000 jobs and we created 271,000 jobs * Everybody now has jumped to the conclusion that a December rate hike is a lock * There is nothing in this jobs report that indicates that * The reason everybody believes that the Fed is like to raise rates is because Janet Yellen testified before Congress earlier in the week * This is what the Fed Chair said about interest rates: * If we get further improvements in the labor market and we make progress at achieving the Fed's inflation goal of 2% in the medium term * How much improvement and what kind? We don't know, because thus far, no improvements have been enough to prompt a rate hike * Yellen said that if we got those improvements, then a rate hike in December would be a "live possibility" * This does not mean it will actually happen - it means it is possible * She did not even use the word probable * I don't think the Fed is going to raise rates in December * We have one more "most important" jobs report between now and December and this month's numbers may be revised down, as others have * From my perspective, if the Fed does not know that they will raise rates by now, they will not decide on the spur of the moment after a jobs report * Even with positive economic news, the Fed still does not have to raise rates; they can come up with another excuse, real or unreal * What happens if the stock market declines after a rate hike? what would the Fed do then? * "Extend and Pretend" is working like a charm for the Fed now * Getting back to today's job's report: * This is the strongest month of the year following the two weakest months of the year * Both of those months arrived with expectations of upward revisions, and they did not happen * The three month average is 187,000 jobs * The last three months have been slower than any prior three month period this year * Last year, the 3-month average was about 250,000+ jobs * So the job market is much slower this year than it was last year when the Fed was looking for "more improvements" before raising rates * The unemployment rate did decline, but so far no positive data on unemployment rates have prompted the Fed to raise rates * The Labor Force Participation Rate stayed at 62.4% which matches the low of this so-called recovery * So we are not seeing more people entering the labor force * This is not a sudden accelleration in the pace of job growth * Let's look at the quality of the jobs: * Most of the jobs, about 200,000 of the 271,000 jobs added are low-paying service sector jobs * In second place, at 45,000, is temporary help * Third place, at 44,000, is retail trade * The fourth largest category is leisure and hospitality * Manufacturing, mining, logging, transportation sectors lost jobs * Where it really gets bad is in the demographics: * All job gains went to people 55 and older * People under the age of 55 lost 35,000 jobs * If you look at the gender, men from 25 - 54 lost 119,000 jobs * What would explain this? * Older people can no longer afford to be retired, and are supplementing their retirement incomes * Some of the older people are taking better jobs because they are more experienced * Why are more women getting jobs? * Women who were previously homemakers also need to supplement their incomes * When you look at the demographic numbers, it is further proof that the Fed's explanation of the labor force participation rate is wrong 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

7 Nov 201523min

* 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 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 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 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

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 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

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 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 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 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

9 Okt 201524min