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

* It wasn't a Black Monday of the 1987 variety, but it was one for the record books * The Dow was down opened downjust over 1,000 points - the biggest intra-day point drop ever * When the market opened down that low, bargain hunters came in for a spectacular rally * Bringing the Dow almost back into positive territory before surrendering those gains and ending the day down 588 points, another 3.5% drop, closing at 15,871 * Taking out the 16,000 handle just a few days after taking out the 17,000 handle * All of these drops are being blamed by the media on China * The Dow Jones is down about 11% year to date * After today's drop, the Chinese market was down less than 1% * This is not all about falling Chinese stocks * It's the Fed - Everybody believes the Fed is going to end the party * As we got closer to September, the stock market was already going down * I've said all along that the Fed was bluffing - it is a game of chicken * Finally, today, Barclay's is predicting a Fed rate hike in March of 2016 * I think the Fed will launch QE4 before we get to a rate hike in March 2016, which is an election year * The media wants to blame the correction on China, as if there are no domestic problems to worry about * China should be blaming it on us - we're the ones who got the world hooked on zero percent interest rates * The fantasy was that we could raise rates without an impact on the economy * The falling stock market is going to have an impact on the real economy * The economy is weak and getting weaker * This correction will turn into a full-fledged bear market unless we get some official statement from the Fed that they will not raise rates * That may come later this week in Jackson Hole * I am going to be in Jackson Hole at an anti-Fed conference * Here's an example of how ridiculous the "Blame China" rhetoric is: * Maria Bartoromo was talking about the market decline with respect to the China currency devaluation * She actually said that by devaluing the Yuan, Chinese made products will be more competitive against American-made products * America does not produce products that compete with Chinese products! * She's grasping at straws to connect the stock market correction with the Chinese Yuan devaluation * Right now it is positive for America if we can purchase Chinese products more cheaply because we're buying them anyway * Eventually, however, Chinese products will get more expensive when the yuan goes up * She's just trying to fit the narrative because that's what makes everybody feel comfortable * That's why I am not on CNBC and CNN - they realize my comments do not support their editorial policy * I am not talking about Armageddon for the markets - I am talking about the Fed saving the day * I don't think the market is going to crash, but I believe it will go down until the Fed cries "Uncle" and prop up the equities markets with another round of QE * The Federal Reserve did not solve our problems in 2008 - they interrupted the crisis with QE and zero percent interest rates * That crisis would have solved the problem but we kicked the can down the road and we finally caught up to that can * We are resuming the financial crisis that the Fed interrupted from a much deeper hole * Had the Fed raised rates two years ago, we would have been in recession sooner * They should have allowed the markets to solve the problems they caused * Now we have more debt than ever before * I have also been talking about the developments in the foreign exchange markets * The dollar has been strong because rate hikes were expected * The strong dollar has weakened commodities, 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

25 Aug 201523min

* What a week for global stock markets, but in particular, the U.S. stock market, which had its worst week in 4 years * The Dow Jones down better than 1,000 points - over 10% from its peak puts it in official correction territory * One-third of the stocks in the S&P 500 are already down 20% from their highs * The Dow lost more than half of the 1,000 points today - 530 points, which is the 9th biggest point decline ever * This is on top of the 350 points dropped on Thursday * Thursday we broke below some key technical levels so Friday's drop was inevitable * There could be a bigger one looming for Monday * This is reminiscent of the weekend before Black Monday back in 1987 * We are only about 300 points above the lows from October last year when St. Louis Fed President James Bullard saved the market and sent the Dow up 2,000 points * This time he is throwing the market an anchor * He still indicates the Fed is undecided * What data over the next couple of weeks could be that significant? * The Fed does not want to admit that they can't raise rates * When is the Fed going to blink? * Valuations are extremely high, and the Fed is about to go from supporting the market to leaning against it * The economy is decelerating * I think the market is going to surrender all the gains it has made since March of 2009 * None of those gains have been real - they did not come from increased production or a genuine increase in corporate earnings, it was all Fed engineering * The market has gained no ground since QE was suspended * If the market goes down on Monday, what is the Fed going to do? * The Fed needs an excuse not to raise rates * The drop is not because of China * The problem in China and in the emerging markets is caused by the perception that U.S. Fed is going to raise rates * The markets want to blame the market correction on China but that is not why our market had a correction * Emerging market currencies are taking the brunt of the selling by those who are expecting a Fed rate hike * The euro is very strong today, and the dollar index is declining * The euro is going to go on a big move, especially if the Fed caves * Gold is up $80 in the last 2 weeks * What happened to the theory that gold will collapse below 1000? * Two weeks ago hedge funds were for the first time net short gold * How is that trade working out for them now? * A lot of people are trapped short the euro and short gold * Now pro-dollar bets are pressing smaller currencies * This is the last throes of the dollar bull, based on the rate hikes that aren't going to happen * At the end of the 6 or 7 year journey, there can't be a rate hike * If the Fed actually raises rates, they lose credibility because they will have to immediately reverse course * If they do not raise rates, they can say caution is needed because of another dip in the recession * This way they don't have to admit that the policy was a failure * The only economic data that came out today was the August Manufacturing PMI number - expected to improve over last month * It dropped again to 52.9 - the lowest level since October 2013, and the biggest miss in 2 years * If the Fed is truly data dependent it would have already admitted that it can't raise rates * At the end of 2014, I predicted that 2015 would be a much weaker economy than forecasted * I was right about that * I thought by now the Fed would have admitted that the economy is too weak for a rate hike * But the Fed just keeps talking about a potential rate hike as though it were a real possibility * This is a very dangerous game 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 Aug 201527min

* Today the FOMC minutes were released at 2:00 today and this is the last look inside the head of the FOMC members before September * Now expectations are being pushed back to December * Gold and silver prices were up today in spite of expected hawkish Fed comments * We are at more than a one-month high in the gold price now above 1130 against a backdrop of extreme bearishness suggests we've seen the low in this cycle * Silver was down yesterday and recovered dramatically today which suggests an upward trend * There is no more upside in the "Fed is raising rates" trade * The Fed may not raise rates at all, or say they might not raise rates again * Is the Fed raising rates just so they can cut them? Raising rates will accelerate the recession * Whether the Fed raises rates or does not raise them, this may be the end of the dollar rally and the end of the gold and silver decline * The FOMC minutes do not indicate a plan for a rate hike in the future * The Fed does not want to admit we're not progressing in the direction the Fed wants; we're moving the other way. * Case in point: the Empire State Manufacturing Index came out on Monday * Last month, in July the Index was 3.86% - a low number * The consensus for August was a slight improvement to 4.75% * We actually got -14.92% * This is the lowest number since April of 2009 and the biggest miss since 2010 * The Fed is worried that there is not enough inflation * There's not enough growth and the job market is not there yet * If the Fed is further away from their goal than they have been in this ridiculous monetary experiment of zero percent interest rates and quantitative easing * Walmart earnings are down - blaming weak earnings on the strong dollar * How much weaker will their earnings be with a weak dollar? * Americans are spending more money on food - inflation that is not being measured * The Stock Market is still selling off, because a rate hike is not priced in, as it is in the currency markets * This would be the first Fed rate hike in a decelerating economy * This is not a normal period, so don't expect the stock market to behave normally * Now, people are now starting to figure out that the Fed's process is not so smooth * The stock market will trend down until the Fed comes clean and admits that it cannot raise rates * This is just a lag between QE3 AND QE4 * Anything that can go wrong, will go wrong and when it comes to this Fed and this monetary policy, Murphy is going to look like an optimist 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

20 Aug 201520min

* On Friday we finally got the Non-Farm Payroll numbers for July * The consensus is that this reports indicates that an interest rate hike is inevitable * This is the rate hike that everybody has been expecting and this report see * The report is weak, relative to previous months, but slightly ahead of the consensus * It seems like we are going in the wrong direction * Labor Force Participation Rate is stagnant at the lowest in decades * Q2 GDP was much lower than expected * the Atlanta GDP Now Forecast for Q3 at 1% - a third of the official forecast * If the Fed was not willing to raise rates last year, when the economy grew at 5%, why would they raise rates now? * The Fed may have backed themselves into a corner where they have to raise rates * If so, Yellen has already prepared the market for a tiny raise * They recognize that the market is fragile * It would be a more credible move for the Fed to not raise rates at all * The market's reaction to the jobs data and the "certainty" that rates are going up * The dollar sold off somewhat * Gold rose slightly * Higher interest rages are expected to be bullish for the dollar - Why didn't the dollar rise? * The old adage, "Buy on the rumor, sell on the fact" * If the Fed raises rates in September, it will be the most highly anticipated rate hike ever * If the market buys on the anticipation of a rate hike, the actual rate hike will be the sell signal * The market is telling us it has gained all that it is going to gain from any future rate hike * The Fed will deliver much less in the way of rate hike than the market expects * The reaction in the stock market was more interesting - The market was down again * The longest losing streak in the Dow in about 4 years * The fact that the U.S stock market is still falling indicates whereas the currency markets may have factored in a rate hike, the equity markets have not * I have been hearing the refrain,"There is no reason to fear a rate hike!" * This is a very naive to look at the market because there is no historical precedent for interest rates to stay low for so long * These are not "normal" times * More importantly, the market only expects a rate hike if the economy get better * But now the data shows that the economy is continuing to slow down * The crowd that believes a rate hike will not harm the economy should reassess their thinking * Corporate earnings, already under pressure will be further weakened by an interest rate hike * The consumer is barely surviving with rates at zero * 2015 is probably going to be the weakest year of the entire so-called recovery * If the Fed really begins to raise interest rates, what is going to happen in 2016? * We will be in a bear market, the real estate market will drop and a recession will follow * The Fed's only medicine at that point will be QE * The truth is, the economy did not need the first round of QE and it nees QE4 even less * This is going to be the mother of all money drops and all the people who have been saying,"The Fed was right!" are taking a premature victory lap * Hopefully it will shock the Keynesians into abandoning central banking and central planning * And finally embracing a real market recovery based on free market principles * Those of us who have seen the writing on the wall will be rewarded in the investment front * For having the fortitude to maintain our positions and not throw in a winning hand 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

11 Aug 201524min

* One piece of positive economic news ISM Non-Manufacturing Index for July surged to 60.3 - highest number in 10 years * The ADP Employment Report came in at 185,000 jobs, well below the consensus * June Trade Deficit rose 7.1% - in line with expectations * June Layoffs rose to 105,696 biggest layoff number in 6 years * Consumer Comfort Index down to 40.3 second lowest number since November * The Atlanta Fed dropped a bombshell forecasting Q3 at just 1% * Given this slowdown, could we possibly have a rate hike? * The stock market has had 6 consecutive down days * The stocks with no earnings are doing the best * Very reminiscent of the dot com era * The "story stocks" are selling in 2015 * Companies that actually have earnings are experiencing the greatest pressure on their share price * Every time we have a dip in the stock market, the Fed always comes to the rescue * Why wait until the economy is slowing down to raise rates? * They can't do that this time, unless they want to abandon their rate hike rhetoric * They will have to take the rate hikes off the table * Janet Yellen continues to say rate hikes are data dependent * The data has been bad for quite a while * The economy is growing at the slowest pace of the entire "recovery" * All the Fed can do is go back to the drawing board with more QE, because they can't admit that it never worked * The money printing is just getting started * Not that it is going to work, but it is the only policy remedy the Fed has * Some stocks are really getting beaten up as earnings continue to disappoint * This topping pattern has got to worry the Fed * Any rate hike will accelerate the decline * We have a stock market bubble and raising rates will prick that bubble * Ben Bernanke created the stock market bubble thinking the "wealth effect" would cure the economy * Bernanke would not acknowledge that bubbles weaken the economy because it was not politically advantageous * The First Republican Debate was held tonight, so please follow me on Twitter for my comments * Donald Trump is far and away the leader in the polls and he is one of the few candidates who have been critical of the Fed * The only other candidate in the race who knows anything about the Fed is Rand Paul * Tomorrow could be a big day - the question is, if we get a bad jobs number, will we finally have a reaction in the currency markets?   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 Aug 201520min

* This is my 100th Podcast * This new format allows for timely analysis when is is most convenient for me and for you, the listener * Please share these podcasts, to get this valuable information out * My podcasts can be accessed on YouTube, on iTunes and other podcast sites and right here on my website * Also don't forget to check out my Twitter feed, because I comment much more frequently on daily economic news * Check out my post on Facebook about the CEO who established a $70,000 minimum salary for all his workers, and the latest news is that his policy is about to take the company down * Today a bombshell was dropped on the labor markets on Friday in the form of Employment Cost Index * Measures the cost to employers: wages and benefits * The expected increase was .6, but the actual number came in at just .2 for the quarter * This the weakest number since 1982, since they began keeping records * Janet Yellen has been saying that improvements in the labor market must precede a rate hike * This is understood to mean wages, labor participation rate and full time vs part time jobs * We're 0 for three, right now - all three are falling * As soon as this number came out, they dollar sold hard * But then, the dollar clawed its way back, and gold was down again - gold stocks got crushed - Why? * Jon Hilsenrath, the chief economics correspondent for The Wall Street Journal, came out with an article, speaking for the Fed, stating that the Fed does not need wage growth to hike rates * Really? The Fed is going out of its way to preserve the pretense that it can actually raise rates * They are seeking the psychological effect of rate hikes without the real world damage of actual rate hikes * If the Fed still believes it won't raise rates unless the labor market improves and they are taking wage hikes off the table, then what are they waiting for? * The other two remaining criteria are still down * Janet Yellen still says she's data dependent and all the data that she is depending on is negative * The stock market looks very toppy - it looks like it will roll over and when it does the Fed will bring in the cavalry in the form of stimulus * The Fed built the recovery on a stock market bubble and a real estate bubble * Ben Bernanke's goal for 7 years was to create a "wealth effect" on assets that are now at risk - they are not going to let them collapse * All of the data would argue for no rate hike in September * Janet Yellen is implying, by talking about rate hikes, that she believes that the economy is going to improve, when all signs indicate the opposite * Therefore traders are ignoring bad economic data because they trust that Janet Yellen believes the economy will improve soon * Don't pay any attention to the man behind the curtain, because Janet Yellen says the bad news is not real * We can all see the negative data, but no one wants to acknowledge it because Janet Yellen is not recognizing it publicly * They buy the dollar, they sell gold and there is a dichotomy between those who don't own gold and have no ability to deliver it and are selling gold to those who don't actually want it - they are gambling on the price of gold * The amount of gold being gambled is greater than ever before * Sales for those who want to hold gold are skyrocketing - the mints are running out of supply * We are running out of some of our silver * Schiff Gold * Our customers who buy gold and silver are not offering to sell - they are buying more * They are reacting to lower prices * On the other side of the coin, clients are reacting negatively to the high dollar weighing on the relative value of foreign stocks 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

4 Aug 201530min

* This morning we got the first look at Q2 GDP * Q1 had been reported most recently at -.2 * Everybody was looking for an upward revision due to the double seasonal adjustments * The revision brought Q1 into the black, but only by .6 * Q2 expectation was 2.9; instead it came in at 2.3 * I had mentioned that at best, Q2 GDP would be in the low 2's, which is what we have * After revisions, however, we could end up at below 2 for Q2 * Wall Street and the Fed were too optimistic about Q2 * Now previous GDP years have been revised, with the net effect of lowering U.S. GDP growth almost 1 percentage point for the past three years * After revisions, the average growth rate is 2% per year * 2015 Q1 & Q2 average GDP growth rate is just 1.45% * The worst first half of the "recovery" * What is the point of raising rates now, when the economy is at its weakest? * The Fed is still waiting to see improvements in the labor market * Unemployment is low * The Fed is waiting to see increases in wage growth and in labor force participation * It is unlikely that there will be more part-time workers finding full time jobs * The Fed is still putting on a show, pretending that a rate hike will be appropriats * This recovery is the weakest recovery in the modern era, since WWII * We have had the most Keynesian monetary stimulus ever * The Keynesians will not consider that their policies are an economic sedative * Even though this is the biggest economic ever, the Keynesians still want more * Redbook Year-Over-Year Same Store Sales rose by just 1% * Last year, the year-over-year growth was 3% * Pundits blame poor retail sales on "hot weather" * People aren't shopping because they aren't making enough money * The U.S. home ownership rate fell to a new low of 63.4% * The result of government efforts to increase home ownership is the the lowest rate since 1967 * Rental prices are at an all time record high * July Consumer Confidence plunged from 99.8 in June to 90.9 in July * As evidence continues to pour in that the U.S. economy is weaker than the government and the press report, the dollar remains high * Gold is not getting a rally from the economic news * Shorting of gold by speculators is a dangerous game, as there is no indication that the price of gold overvalued * It's not the traders who are buying gold. It's the strong, long-term holders that are doing all the buying 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

31 Juli 201521min

* The Dow Jones had its worst week since January - closed the week at 17,568, down 518 points * Friday's drop alone accounted for 163 points * Capital One had a huge earnings miss and announced big layoffs * Big losses on bad debt * All the economic data from this year has been negative * There is no precedent for the Fed to raise rates when all economic indicators are down * Normally The Fed stimulates when the economy is down * The most interesting economic news on Friday was a leak from the Federal Reserve * Fed employees' internal projections are way below the Fed's public estimates * Projections go all the way out to 2020 and can only amount to guesses * The document is posted on my Facebook page * Real GDP: 2015: 2.31 way below the official forecast but still overly optimistic * Real GDP for 2016: 2.38 - 2017: 2.17 - 2018:1.76 - 2019:1.75 - 2020:1.74 * This shows an average of under 2% for the next 5 years * If the Fed believes its staff's estimates, why would they be talking about raising rates? * Inflation numbers are even more difficult to believe: * 2015: 1.15 - 2016: 1.54 - 2017:1.76 - 2018:1.89 - 2019: 1.92 - 2020: 1.94 * How can they possibly know? It looks like they just picked numbers somewhere below 2% * They even have the core PCE * 2015: 1.33 - 2016: 1.52 - 2017: 1.78 - 2018: 1.9 - 2019: 1.92 - 2020: 1.94 * Fed Funds Numbers: * 2015: .35%(implies one rate hike) - 2016: 1.26% - 2017: 2.12% - 2018: 2.8% - 2019: 3.1% - 202 : 3.34% * After 5 years of tightening rates would still be at historically low levels * This indicates how little confidence the Fed has in the economy * They predict the yield on the 10-year note to rise 2.63% in 2015 up to 4.2 in 5 years * One of the most ridiculous assumptions is unemployment: 2015: 5.34% - 2016: 5.24% - 2017: 5.18 - 2018: 5.15 - 2019: 5.15 - 2020: 5.16 * These are all just guesses. How do they know? * This shows by the Fed's own estimates that employment is not expected to improve * Th * The Fed expects the economy to grow even slower over the next 5 years than during the preceding 5 years * The Fed is either ignoring staff's numbers to paint a rosy picture or they don't trust their own staff * I think the market can't handle the truth and that may have been the reason for Friday'd drop in the Dow * The only thing that will stop the market from going down is some talk from Janet Yellen to dial back the rate hikes and to open the door to QE4 * Another number that came out on Friday which confirms the slowdown in the economy is the new home sales * The current rise in new home sales is primarily for those trying to beat the Fed * June's number was awful: 482,000 against an expectation of 550,000 * The last 2 month's estimates were revised down * The July plunge was the biggest number since November of 2014, and the biggest miss in a year * There is also an interesting statistic on new homes: prices are continuing to rise * It now requires 10 times your salary to buy a new home * In the 1950's it took 2 times a year's salary to buy a new home * All the government spending on "affordable housing" has managed to increase the cost of a home from twice a worker's salary to ten times a worker's salary * That is a 500% increase - that is far beyond failure * This also illustrates how much our standard of living has fallen * New York State passed a minimum wage of $15/hr, which applies to chains of over 30 restaurants * Because employers cannot be forced to pay wages higher than workers' productivity allows, employers will be forced to fire some employees and will seek automation to replace unskilled workers. 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

25 Juli 201540min