Investors Don't Believe The Gold Rally

As gold nears a 7-year high, gold stocks continue to lag. Investors don't believe the gold rally, as they attribute it to temporary safe-haven buying. But geopolitical risk will remain elevated for years as Fed policy, the main driver of the rally, gets even more reckless.

Related trading instruments: 

Newmont Mining (NEM), Goldcorp (GG), Market Vectors Gold Miners ETF (GDX), Market Vectors Junior Gold Miners ETF (GDXJ), SPDR Gold Trust ETF (GLD)

Bitcoin & Gold Rallying

For those Bitcoin bugs excited about Bitcoin's 4 percent rally in 2020, think about this: Gold is also up by about the same percentage this year, only with significantly less downside risk.

If this is the best rally Bitcoin can muster, how will it ever hit 50,000, let alone 1 million?

Will Bitcoin End The Year With a Loss?

Earlier this year Ethereum, the number 2 crypto currency by market capitalization was up over 150 percent, and now it's down year-to-date. Ripple, the number 3 crypto currency, has also give up its earlier gains and is now down over 50 percent year-to-date. There are still plenty of trading days left in the year for Bitcoin to end 2019 with a loss!

The Fed Is Not Done Cutting Interest Rates

The Fed will supply interest rate cuts as soon as the market demands them. Read the complete article here: Peter Schiff: The Fed Is Not Done Cutting Until It Gets to Zero 

"No, they’re not done until they get to zero, and then we’ll see if they’re done or if they want to try to go negative … What the Fed has assured the markets is that under no circumstances will they raise rates. That no matter what the data is, the only decision that the Fed has to make is do rates stay the same or do they go down. And I think that’s the only reason that the stock market has rallied. It’s based on that ‘Powell Put,’ where the fear of a rate hike is no longer in the market. But I do think at some point next year, the economy will be weakening, or maybe we will get a sell-off in the stock market, and the only way for the Fed to try to prop the market back up would be to start doing more rate cuts. And they will supply them as soon as the market demands them.”

Schiff on Fox Business (Dec 11, 2019)

Video duration: 9:31

Powell resurrecting the high inflation Paul Volcker buried.

Central Banks Keep Accumulating Gold

Central banks added another net 41.8 tons of gold to their reserves in October, according to the latest data from the World Gold Council. Read the complete article here: Central Banks Keep Right on Buying Gold.

Jobs Data: A Trumped Up Jobs Report

This is just par for the course. This is the same type of numbers that we've been getting under Trump and that we've been getting under Obama. We're creating a bunch of part-time jobs, service sector jobs, low-paying jobs. Read the complete article here: A Trumped Up Jobs Report 

Actually 48,000 striking GM workers returned to work. So the net increase in new Mfg. jobs (factoring in last months downward revision) for Nov. was just 2,000. Calling this a blow-out is fake news!

Bitcoin, Stock Market and More

The highlights from this week's media appearances from Peter Schiff.

Peter was mentioned on CCN,  Peter Schiff Says ‘It’s Game Over for Bitcoin’ After Epic Pump and Dump; Crypto Twitter Laughs and also on U Today on the same topic, Peter Schiff on Bitcoin Price Drop: "Pump-and-Dumpers Are Losing Their Mojo". 

You can find the weekly gold podcast from Schiff Gold here: Inflation? What Inflation? Friday Gold Wrap Dec. 6, 2019.

Here's the most important tweets from Peter Schiff this week:

What the Powell Put was, was the Fed’s assurance that under no circumstances would it consider raising interest rates. And it doesn’t matter what happens to inflation. (with a link to the article: The Lurking Inflation Monster)

I don't know if this December can take out last year's. But it's possible, given that there's no reason for the stock market to up where it is. The only reason the stock market has gone up is because of the Federal Reserve.

Capitalism Is Failing In Hollywood

"It’s time for an economic revolution. Capitalism today is failing us, killing us, and robbing from our children’s future."

In response to Mark Ruffalo’s tweet:

Capitalism is failing in Hollywood. Some actors make millions while others struggle waiting tables to make ends meet. Let’s redistribute the wealth. Equal pay for all actors. All actor compensation should be paid directly to SAG. Then each member will be given their fair share.

Video: The Fed's Exit Plan is QE Infinity

Location: New Orleans Investment Conference

After a decade of promises about how QE (quantitative easing) and zero interest rates would solve the subprime housing debacle, now as the Federal Reserve is lowering interest rates again it's become clear that there is no exit plan. Or if there is, the plan is QE to infinity. 

Topics:

• Monetary Policy, QE
• Gold and Silver markets are positioned for the rally of our lifetimes

Update: Recession Warning, Bitcoin & Smaller Government

Recession Early Warning? 

Well, it looks like the rich are tightening their belts. According to a report at Yahoo Finance, spending by the rich has slowed over the last year. This could be an early warning of a recession. Spending by the top 10% of households by income makes up nearly half of overall consumption in the US. 

I Want Less Government 

A lot of people want the rich to pay more taxes so that government can be bigger. I want the rich and everyone else to pay less taxes so that the government can be smaller. Less taxes means more freedom and prosperity. Let's make government smaller so the economy can be bigger! 

Early Bitcoin Buyers 

Not everyone who got into #Bitcoin early is ahead. Many took flyers on Bitcoin with small amounts of money early on. After the huge rise, thinking they were smart instead of lucky, they added much larger sums at much higher prices. So now they are down overall or soon will be.

This Rally Is Fueled By A Weak Economy

This stock market rally is being driven by a weak economy. It's a weak economy that's more instrumental in driving the market higher because the weak economy keeps the Fed in play. It keeps quantitative easing in play. It keeps interest rates going down.

U.S. - China Trade Deal

When Trump first announced Phase One he said it was already a done deal. Now it's delayed until sometime next year, if it ever happens at all. Trump should just see if he can get a Phase 1A deal done, or at least pretend that he can. That should be good for 500 more Dow points!

QE4, Pot Stocks, IPOs

Even as QE4 has pushed stock indexes to new highs, despite a weakening economy and the absence of a trade deal, not all stocks have gone along for the ride. Pot stocks have been smoked, falling 70% -90%. Bubbles are popping, and it will not be contained to pot stocks and IPOs!

Press Round Up: Bitcoin, Marijuana Stocks, A Weakening Economy

Peter Schiff has been mentioned often in the press in the last few days. Here's a summary of the most relevant article:


Peter Schiff States That Bitcoin Has Less Utility Than Pot - in U TODAY

Marijuana Stock Crash Could Affect Bitcoin Price, Peter Schiff Suggests - in International Business Times

Peter Schiff: Recession So Bad Coming, US Doomed to Default on National Debt - in Money and Markets

On a recent podcast episode, Peter Schiff told investors that the U.S. Economy is getting sicker,

“The economy is getting sicker. And that’s what the central banks are doing when they cut rates and they print money — they’re actually making the underlying economy sicker, even though it doesn’t look sicker because they’re just measuring the spending that goes on and they’re ignoring the debt that’s behind it.”

Market Update: Gold, IPO Market, Bitcoin

The main reason Gold is not getting a bigger boost from QE4 is that traders expect the markets to react the way they did to QE3. But when the Fed did QE3, markets believed it was the last QE, and that the Federal Reserve had an exit strategy. But QE4 is open-ended and exit is impossible! 

Related articles: Serbia Joins Central Bank Gold-Buying Spree

IPO Market and Stock Market Bubbles 

If you think popping bubbles are going to be contained to the IPO market or to the pot stocks, no. All of the bubbles are going to pop, including the total bubble in the US stock market overall.

Bitcoin and Pot Stocks

Lots of Bitcoin bugs criticized my tweet warning that the bursting of the pot stock bubble could be a harbinger of doom for Bitcoin as well. I am not comparing Bitcoin to pot. You can smoke pot and get high. You can’t do anything with Bitcoin. The similarities are the bubbles!

Creating Demand For Gold

The new head of the European Central Bank (ECB) Christine Lagarde believes she can create jobs by destroying savings. But jobs come from savings. Jobs need capital, and capital investment is funded by savings. When you destroy savings you also destroy jobs! All Lagarde will create is demand for Gold!

Market Update, Wealth Tax & Bitcoin

Market Update: US Dollar Index, US Stocks & Gold 

The U.S. Dollar Index closed a down week on the lows, while 30-year Treasury yields closed an up week near their highs. The dollar and bonds falling in tandem is a good sign that the bubble has popped! This is bearish for stocks and very bullish for gold.

Bitcoin: Bearish Chart 

The Bitcoin chart looks horrible. Not only does the flag that followed the recent breakdown project a move to $6K, but we are close to completing the right shoulder of a head and shoulders top, with a $14K head, and neck line just below $8K, that projects a collapse to below $2K!

Wealth Tax: Impact On Startup Capital 

If an unconstitutional wealth tax is passed, startup capital will be extremely hard to come by. What wealthy investor would want to put money into an illiquid private investment that is subject to annual appraisal and taxation, even if the investment itself never produces a gain? 

AOC Endorses Sanders 

AOC has endorsed Sanders for President. I guess Warren pretending to be a "capitalist to her bones" was too much for the unabashed socialist. If this propels Sanders to win the nomination, this is bad news for America, as he is left of Warren and even more likely to beat Trump!

The Federal Reserve Resumed QE

Don’t confuse this with quantitative easing (QE) when the Federal Reserve was buying $85 billion a month of Treasuries, because this is no way quantitative easing (QE) except, of course, that’s exactly what it is.

A Huge Bell Ringing On Wall Street

If investors are no longer willing to finance money-losing companies, if that type of speculative fervor has come to an end, this is a huge bell ringing on Wall Street.

Further reading: The Plight of the Unicorn: The Bubble Bursts 

"WeWork’s aborted IPO may come to mark the end of the current “unicorn” bubble the way the scuttled merger between Yahoo and eBay signaled the start of the dotcom crash in 2000. Having become CEO of Nasdaq in 2003, I saw up close the damage caused by the growth-over-profits philosophy in that earlier era, and WeWork’s spectacular fall – from the year’s most anticipated IPO to a company with a speculative-level credit rating that may run out of funds within a year – rings many bells.”

Stocks: Debacle Du Jour (Smile Direct SDC)

The money losing stocks, the recent IPO's continue to get beat up. The real debacle du jour was Smile Direct. That one was down another 15% today: down $2 - it closed at $11.34 right off the new low of $11.20. Remember, this stock came public less than 2 weeks ago and it was $23 a share.

The Federal Reserve Does Not Have Enough Ammunition

I don't really think there's enough ammunition left in the Fed's chamber to have a meaningful impact on the markets, and I think traders are overestimating the ability of the Federal Reserve to rescue the market the way it has rescued it in the past.

Related trading instruments: SPDR S&P 500 Index ETF (SPY), Nasdaq 100 Index ETF (QQQ)

A Banana Republic Without Bananas

The Federal Reserve is expanding its balance sheet, creating money out of thin air to buy government debt and other debt to artificially suppress interest rates. That’s what banana republics do. America is doing the same thing except we don’t have the bananas.

The U.S. Dollar Will Collapse

Peter Schiff was recently on RT.com. Here is the complete video interview.

Covered topics: new world order, tariffs, trade war, trade deficit;

Peter Schiff expects the U.S. Dollar to lose its world reserve currency status. Peter expects the U.S. Dollar to collapse over time.

Video duration: 13m25s

Great Recession To Hit U.S. Economy

Peter Schiff was recently interviewed on Fox Business and he had a dire warning about the U.S. Economy and the prospects for a Trump reelection: 'Great Recession' to hit US, jeopardize Trump's reelection hopes: Peter Schiff

Ray Dalio agrees - the Federal Reserve is going to cut rates and go back to Quantitative Easing (QE) but it's not going to work. We're heading for stagflation.

Read the complete article here:

Ray Dalio Says Get Ready for a Paradigm Shift; Buy Gold!

Manufacturing Index Tumbles To Its Lowest Level in 6 Years

If we really have the strongest economy ever, especially if manufacturing is supposedly the engine leading the train, why did the June Richmond Fed Manufacturing Index not only miss exceptions, but tumble to its lowest level in over six years?

The Democrats Will Win in 2020

Donald Trump won the White House in 2016 by calling out the vast economic problems phony government statists covered up. His solution was less government and tax cuts. The Democrats will win in 2020 with the same message, but a different solution; more government and free stuff!

Bitcoin, Silver and Gold

Ironically those correctly worried about the failure of our fiat monetary system, who make the mistake of buying Bitcoin, will lose more purchasing power by the time the system fails than those not worried at all who do nothing. If only they were buying gold and silver instead!

Signs Of A Weak U.S. Economy

If the U.S. Economy is really the strongest in history, why is the service sector growing at its slowest pace in 2 years, factory orders near a 3-year low, and small business employment collapsing at its fastest pace in over 9 years?

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)