Markets: Gold, U.S. Dollar

Gold and the U.S. Dollar are over-reacting to June's jobs number that can easily be revised lower. 

The economy is slowing and job losses are typically the caboose not the engine of the recession train. The Federal Reserve will cut interest rates, it will not prevent recession, but it will boost inflation!

U.S. Economy Keeps Reflecting Weakness

The so-called strongest economy ever keeps setting records that reflect weakness. In addition to records in government spending and borrowing, the June Empire State Manufacturing Index just dropped by a record 26 points to -8.6, its 1st negative reading since Trump was elected.

The US Dollar Is Going To Go Through The fFoor

The US Dollar is going to go through the floor and that means the world needs an alternative to the US Dollar. The best alternative is gold.

Bitcoin: New Gold or Fool's Gold?

Peter Schiff debates Barry Silbert at 2019 SALT Conference. They discussed Bitcoin and crypto currencies versus gold.

Bitcoin Has No Intrinsic Value

Read Peter's latest commentary on crypto currencies and Bitcoin: Bitcoin [BTC] is a ‘speculative vehicle for gambling’, says broker Peter Schiff

Topics covered in the interview:

• Bitcoin has anything in common with gold
• Bitcoin is a “fool’s gold” 
• Bitcoin has no intrinsic value 
• Bitcoin is a Ponzi scheme

U.S. Economy: Auto Loan Delinquencies Are Nearing Peak Levels

Auto loan delinquencies are nearing peak levels we saw during the great recession.

"Auto loan delinquencies have surged to the highest level since 2011 and are approaching levels seen at their peak during the Great Recession. The percentage of outstanding auto loans in serious delinquency (90 days or more past due) jumped to 4.69% in the first quarter of 2019, according to the latest data from the New York Fed. At their peak during the recession, auto loan delinquencies hit 5.27%. The total amount of delinquent auto loans totals about $60 billion. In dollar terms, the amount of delinquent auto debt is already far above levels seen during the Great Recession." 

- in Schiff Gold

China is Dumping US Treasuries

"China sold off the highest level of US Treasuries in nearly two and a half years in the month of  March. Meanwhile, there are renewed fears the Chinese could implement its “nuclear options” and sell off even more US debt in retaliation for US trade war tariffs."

"China sold $20.45 billion in Treasuries in March. That was the biggest US debt dump by China since October 2016. After a four-month pause, the big March sell-off resumes a trend of Chinese Treasury divestment we saw in 2018. China shed nearly $50 billion in US Treasuries last year (...) The Chinese currently hold $1.121 Trillion in US debt. That’s the lowest level since May 2017."

- in Schiff Gold

Related trading instruments: 10- year U.S. Treasuries, iShares Barclays 20+ Year Treasury Bond ETF (TLT)

Thoughts On The Trade War

While it is true that the Chinese have illegally appropriated huge quantities of American intellectual property, I believe that we have received greater benefits in return. Without the cheap goods produced in China, prices may very well have been much higher for vast quantities of key products for U.S. consumers. And without Chinese purchases of U.S. debt, interest rates could have been much higher, making borrowing more expensive for both businesses and consumers. It’s hard to quantify just how important these benefits have been for an economy such as ours, which has been driven for decades by borrowing and spending.

Trade War: "You don't win a war by shooting your own troops!"

The idea that we have more weapons in the trade war because we can tariff more products is wrongheaded. Tariffs hurt the country that imposes them the most, not the other way around. You don't win a war by shooting your own troops!

Trump Realizes The Current American Economy Is Weak

Trump's longing for the good old days when America actually made things and ran trade surplus proves that Trump realizes the current American economy is weak. He just pretends that it's strong so he can take credit for it as he campaigns to win a second term.

Bitcoin Is A Ponzi Scheme

Read Peter's latest commentary on crypto currencies and Bitcoin: Bitcoin [BTC] is a ‘speculative vehicle for gambling’, says broker Peter Schiff

Topics covered in the interview:

• Bitcoin has anything in common with gold
• Bitcoin is a “fool’s gold” 
• Bitcoin has no intrinsic value 
• Bitcoin is a Ponzi scheme

Thoughts On The Trade War

I’ve been saying for a long time that even if we got a deal, it was going to be a ‘buy the rumor sell the fact.’ But I also said it was becoming obvious that Trump had so overpromised about a great deal that it was almost impossible to have a deal without disappointing the markets. So, I think Trump made a calculated decision that no deal is better than a deal that disappoints, especially since he had already goosed the market up to new highs so even if we sold off, Trump could say, ‘Well, this is some short-term pain. It’s necessary for the long-term gain.’ And it may be the catalyst that causes the Federal Reserve to cut interest rates and launch QE, which is what Trump wants.

- in Schiff Gold

"Long live the bear market. This bear market rally is dead. We are going a lot lower.” 
- in Schiff’s podcast

Uber's IPO

Normally, in a real environment where we had normal interest rates, where the Federal Reserve wasn't artificially suppressing them, I don't think money-losing companies like Uber (UBER) would be able to come public.

Gold Standard & NYC Subway Fares

Look how stable prices were before Nixon took us off the gold standard. Are NYC subway riders really better off with central bankers calling the shots instead?

The Only Chance Of Postponing A Recession

I think Trump knows the only chance he has of postponing the onset of this recession until beyond the 2020 election is to get the Federal Reserve to preemptively cut interest rates and launch QE4.

What set the low, what was the catalyst for this rally, was the Fed getting more dovish. It went from ‘we’re going to keep hiking rates’ to ‘we’re finished hiking rates.’ It went from ‘quantitative tightening is on autopilot’ to ‘quantitative tightening is going to end over the summer.’ And so that shift – where the Fed went from being hawkish to dovish – that started the rally. Well, this more recent shift, where the Fed changed expectations again and disappointed the markets by saying, ‘Hey, we’re not as dovish as you think. We’re not going to cut rates,’ that, I think, capped the market. And now, Trump coming in and taking away the prospects of this great trade deal, well, that’s like a one-two punch, and I think this bear market rally, like I said, is over and we’re going lower.”

Episode 464: Job Headlines Still Mask the Real Story

Latest investment commentary from Peter Schiff.

Episode 464: Job Headlines Still Mask the Real Story

Is Deflation Good Or Bad?

Between 1800 and 1900 the U.S Consumer Prices Index (CPI) fell by 50 percent. So we had 100 years of "deflation." This includes the gilded age, the strongest period of economic growth in U.S. history. If falling consumer prices were good then, why does the Federal Reserve think they would be such a problem now?

Tesla (TSLA): Things Have Been Going Wrong For A Long Time

Peter Schiff was recently on RT.com discussing Tesla (TSLA) stock:

"Things have been going a lot wrong for a long time at Tesla when it comes to profitability. So, it's really not about one quarter it's about whether or not you're gonna make the leap of faith that Tesla is actually going to make a profitable company out of its business. Right now it's losing a lot of money and what has to happen to justify the current share price is that they have to make a profit but they have to do it at a large enough scale to justify this valuation and I think that's going to be a very difficult thing for Tesla."

GDP Data: Don't Rule Out A 2019 Recession

Inflation Numbers: Something Does Not Add Up!

The government wants us to believe that the annualized increase in the cost of living in Q1 2019 was just 0.9%. Yet the price of oil rose by an annualized rate of over 130% during that quarter! Either the price of everything else plunged, or something doesn't add up!

Bond Market, Gold & The Federal Reserve

The bond market and gold are rising, as the US Dollar falls, because the supposed collapse in the inflation rate in Q1 despite a 130% annualized rise in the price of oil, gives the Federal Reserve yet another excuse to remain patient on future interest rate hikes.

Interest Rate Cuts, Return to QE

If oil prices keep rising, maybe inflation will fall so much that the dreaded deflation risk will rear its ugly head. Then Trump may get his wish, as the Federal Reserve will have an excuse to cut interest rates and return to QE!

Don't Rule Out A 2019 Recession  

The near 17% drop in Q1 energy prices, despite a 33% surge in oil prices, resulted from the sharp fall in oil prices the previous quarter. This, plus one-off positive contributions from inventories and trade, will likely be reversed in Q2. Don't rule out a 2019 recession.

India Is Buying Gold

India has joined countries like Russia and China buying gold in an attempt to diversify reserves away from the US Dollar:

"The Reserve Bank of India has jumped on the gold bandwagon. Since December 2017, the Indian central bank has added 50.4 tons of gold to its reserves. India bought 8.2 tons of gold in January and February of this year and analysts project that pace to pick up. India’s gold reserves currently stand at a record high of almost 609 tons, according to data from the IMF."

Related trading tickers: SPDR Gold Trust ETF (GLD), Market Vectors Gold Miners ETF (GDX), Market Vectors Junior Gold Miners ETF (GDXJ)

Russia Continues Buying Gold

The Russians bought more gold last month as they continue to try to minimize exposure to the US Dollar.

"The Central Bank of Russia added another 18.7 tons of gold to its stash in March according to a press release last week. This boosts the country’s gold reserves to 2, 167.9 tons or 69,700,000 ounces. Gold now makes up about 18% of the Russian central bank’s reserves."
- in Schiff Gold

“Vladimir Putin’s quest to break Russia’s reliance on the US dollar has set off a literal gold rush.” 
- in Bloomberg

Related trading instruments: SPDR Gold Trust ETF (GLD), Market Vectors Gold Miners ETF (GDX), Market Vectors Junior Gold Miners ETF (GDXJ)

Crude Oil Will Put Pressure On The U.S. Economy

This is going to add additional downward pressure to the US Economy while putting upward pressure on the measured rates of inflation and maybe putting more pressure on the Federal Reserve to raise interest rates which is the last thing Donald Trump wants the Federal Reserve to do.

Gasoline Prices Are Going To Keep Rising

Look at the retail sales numbers we just got. The strongest part of it was gasoline because consumers are paying higher prices for gas. Gas prices are gonna continue to rise. 

Crude Oil Is Heading Higher

Crude Oil prices are heading higher says Peter Schiff.

Topics: Crude Oil market, Iran sanctions
Related trading tickers: Energy Select Sector SPDR ETF (XLE), United States Oil Fund LP ETF (USO)

The Banks Do Not Want The Return Of The Gold Standard

All the CEOs of the bailed out banks testifying before Congress don't want to end the Federal Reserve or return to a gold standard. Under a gold standard no future bank bailouts are possible. The Federal Reserve protects bankers from suffering the market consequences of their mistakes.

Printing Money Is Taxation In Another Form

“Printing money is merely taxation in another form. Rather than robbing citizens of their money, governments robs their money of its purchasing power.”

- Peter Schiff

Stock Market: The Trump Put

It's not just the Powell Put. The stock market also benefits from the Trump Put. Anytime the market falls Trump simply tweets something positive about a pending trade deal with China. Since Trump can't play this card if an actual deal is made, his incentive is not to make one!

Related trading tickers: SPDR S&P 500 Index ETF (SPY), Nasdaq 100 Index ETF (QQQ), SPDR Dow Jones Industrial Average ETF (DIA)

The Real Reason Why The Fed Cannot Raise Rates

The truth is they can't raise interest rates because we have too much debt we can't afford right a normal rate of interest. Because we have an abnormal amount of debt they can't shrink the balance sheet, the deficits are too high and if they did shrink the balance sheet it would put too much upward pressure on long-term interest and it would collapse the bubble.