Investors Are More Convinced That They Can't Lose Than At Any Prior Time ($VIX, $SPY, $VXX)

If you look at that the VIX is at all-time record lows so investors have never been this complacent about the US stock market ever and pretty much all of those measures that measure fear and confidence are at the highest readings they've ever been even though the US stock market is extremely expensive and it's only been this expensive during previous bubbles, near the peaks of previous bubbles. But what's different about this bubble is it’s bigger but people are even more confident now that it's not a bubble. You have less fear, less anxiety, investors are more convinced that they can't lose than at any prior time despite the fact that ww actually probably have more risk now than during any of the previous bubbles.

Stock Market: Optimism and Enthusiasm

Markets continue to move up day after day, it's almost like a melt up at this point of optimism and enthusiasm despite the enormity of the problems that everybody wants to sweep under the rug and you got a mountain of stuff already underneath it. I think the newest catalyst that is fueling the euphoria is the anticipation of these tax cuts that are coming. (SPDR S&P 500 Index ETF (SPY), iShares Russell 2000 Index ETF (IWM), Nasdaq 100 Index ETF (QQQ), SPDR Dow Jones Industrial Average ETF (DIA))

Fed Nonsense

The FOMC minutes indicate the Federal Reserve is worried that inflation will not be high enough. That is the last thing the Federal Reserve should be worried about! (SPDR Gold Trust ETF (GLD), iShares Silver ETF (SLV))

The Fed Will Not Be Able To Save The Stock Market

The Federal Reserve won't be able to rescue investors during the next stock market crash, like they did in the years following the 2000 and 2008 crashes. They were successful in reflating yet another bubble but I think this bubble will be the similar fate as the prior two. The difference is, the third time is not going to be the charm - it's going to be three strikes you're out. Let's say the Dow goes to 30,000, if it gets cut in half, that's 15,000 - that's still a low lower than it is right now. (SPDR Dow Jones Industrial Average ETF (DIA), SPDR S&P 500 Index ETF (SPY), Nasdaq 100 Index ETF (QQQ))

Renewed Weakness In The US Dollar

Gold is still hanging out below 1300 and the renewed weakness in the US Dollar, I think part of the renewed weakness in the US Dollar has to do with the idea that maybe all these tax cuts aren't going to pass that this Republican plan or the Trump plan that was outlined it's gonna have a hard time getting through Congress.

Stock Market: Optimism and Euphoria

Markets continue to move up day after day, it's almost like a melt up at this point of optimism and enthusiasm despite the enormity of the problems that everybody wants to sweep under the rug and  you got a mountain of stuff already underneath it. I think the newest catalyst that is fueling the euphoria is the anticipation of these tax cuts that are coming. (SPDR S&P 500 Index ETF (SPY), iShares Russell 2000 Index ETF (IWM), Nasdaq 100 Index ETF (QQQ), SPDR Dow Jones Industrial Average ETF (DIA))

US Dollar Recent Strength Is Just Noise

I don't think anything's really gonna happen there (the vote in Spain with Catalonia voting to separate from Spain) I mean pretty much everybody the EU is saying if these guys leave we're not gonna recognize them. Spain is saying that they don't recognize the validity of the election...so I doubt anything's gonna happen there but I guess all this uncertainty weighing on the Euro and that helped prop up the US Dollar which has continued to rise ever since the supposed bullish comments by Janet Yellen about hiking rates and shrinking the balance sheet. So now we're back up to about 93.50 on the US Dollar Index, gold back down about $1280 or so but I think the fundamentals are still there for the weak dollar I think this is all a bunch of noise.

International Stocks Beating U.S. Stocks

US stock markets were overshadowed by international markets thanks in large part to the weakness in the US dollar. The US Dollar did recover some of its losses in this closing week of the quarter. I believe again a bit of a dead cat bounce as I think the dollar is probably going to have its weakest quarter of the year in the fourth quarter.

Related trading instruments: Dax 30 Index, EuroStoxx 50 Index, Nikkei 225, FTSE 100 Index, HSI Index, Kospi Index;

Trump Tweets About The Record Highs In The Stock Market

Donald Trump was tweeting about the record highs in the stock market earlier this morning. Of course when we were having record highs under Obama it was a bubble and it didn't matter but now that it's his bubble it's now a bull market and it simply shows what a great job he's doing as President.

Related trading instruments: SPDR S&P 500 Index ETF (SPY), Nasdaq 100 Index ETF (QQQ), iShares Russell 2000 Index ETF (IWM)

U.S. Markets: Who Will Replace The Fed’s Purchasing Power?

Peter Schiff recently left this unanswered question on his Twitter, "One big concern going forward is who will step up to replace the Fed’s purchasing power in the US Securities market?" 

This comes after last week’s announcement that the Federal Reserve will begin reducing its massive balance sheet. 

Trump Tax Plan: Highlights

Peter Schiff discussed the pros and cons of the Trump tax plan. Here are the highlights:

"President Trump announced some of  the details of his highly anticipated tax reform which is really not tax reform it's more of a tax cut masquerading as a reform."

"I would say the best part about it is the elimination of the estate tax."

Gold: Below 1,300 Will Likely Be A Buying Opportunity

Peter Schiff’s most recent commentary on gold:

"We are at 1290 on the price of gold, so we're right below where I thought the support was at 1300." 

"I'm not that worried that we're going all the way back down to 1200."

"I don't think we see a bigger pullback though given the fact that we're not getting a rise in the dollar and oil prices are now comfortably holding above $50 a barrel."

"Strong oil, a weak dollar, to me that means that gold prices are likely heading higher even though we're a little bit below that support, I think that people are gonna buy it, I do think that 1300 is maybe the new 1200 so anything under that I think is going to be looked at as a buying opportunity."

Related trading instruments: SPDR Gold Trust ETF (GLD), Market Vectors Gold Miners ETF (GDX), Market Vectors Junior Gold Miners ETF (GDXJ), Barrick Gold (ABX), NovaGold (NG), Newmont Mining (NEM)

The Federal Reserve Is In A Box

The Federal Reserve is in a box, they boxed themselves in because they've kept interest rates so low for so long, they've allowed so much debt to accumulate that now it's impossible to allow interest rates to rise. But they can't admit that so they have to pretend as if everything's gonna be fine, they're gonna be able to normalize interest rates, they're gonna be able to shrink their balance sheet. None of this is possible and it's only a question of time before traders and investors figure it out.

Markets: Yellen, US Dollar and Gold

The US Dollar got a bit of a bounce but very little in the way of upward trajectory despite the the supposed hawkishness and the way the markets are greeting what Janet Yellen said. 

So the US Dollar is already falling but it's not collapsing yet. I mean, it's falling but people are still not completely aware, there's just not enough bearishness yet in the US Dollar. Obviously if there was the price of gold (SPDR Gold Trust ETF (GLD)) would be taking off but we're not too far away from that point and when the US Dollar starts to fall next time there's gonna be nothing stopping it.

Bitcoin, Gold and The Madness Of The Crowds

In a recent podcast, Peter Schiff advised Bitcoin investors to read the book Extraordinary Popular Delusions and the Madness of Crowds and put gold and Bitcoin in an interesting historic perspective when he mentioned that in a few thousand years, Gold will still be money while bitcoin and the other crypto currencies will be just a blip in history:

"...gold will still be money who knows if anybody will even remember a Bitcoin or any of these crypto currencies that existed for a relative nanosecond in the history of time but I don't know I mean maybe they'll write a new chapter in that book popular delusions and the madness of crowds and by the way if you own some bitcoins get a copy of that  book and read it because it is very applicable to what's going on now."

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

Toys R Us Bankruptcy: Companies Saddled With Debt Can’t Respond to a Changing Marketplace

The air is rushing out of the retail bubble. It’s easy to finger-point at the internet and blame it for the black cloud enveloping the brick and mortar retail sector. But in truth, it’s not all Amazon’s fault. During a podcast last spring, Peter Schiff put his finger on a more fundamental problem. 

While online sales have increased significantly, they still don’t make up for the total decline in sales in brick-and-mortar stores. Peter believes the problems in the retail sector reveal disturbing economic truths about middle America. 

"Another reason people are shopping on the internet, other than just the convenience of not leaving your house when you’re doing your shopping, is the fact that the average American shopper is broke. They can barely afford to buy the stuff that they’re buying. In fact, most people are buying stuff that they can’t afford. They’re just buying anyway and they’re using a credit card…Retailing is a shrinking market because Americans’ pocketbooks are shrinking, their paychecks are shrinking.”

Related: Toys R Us

Jamie Dimon (J.P. Morgan): Bitcoin Is A Fraud

Jamie Dimon came out and said bitcoin is is a fraud so now I'm kind of in his camp although I don't agree with everything that Jamie Dimon said and I think that there are problems that Bitcoin has that he doesn't even understand. He just assumes that the government is gonna shut Bitcoin down and you know if it actually worked he would be right.

Russia and China Are Buying Gold

Russia and China are buying gold specifically to minimize their dependence on the US dollar. (SPDR Gold Trust ETF (GLD), Newmont Mining (NEM), Barrick Gold (ABX), Market Vector Russia ETF Trust (RSX), iShares FTSE/Xinhua China 25 Index ETF(FXI))

Federal Reserve: A Cosmetic Reduction In Its Balance Sheet

Even if the Federal Reserve does get away with a cosmetic reduction in its balance sheet, the total will be completely reversed by the first month of QE4. (SPDR Gold Trust ETF (GLD), SPDR S&P 500 Index ETF (SPY), Nasdaq 100 Index ETF (QQQ), iShares Russell 2000 Index ETF (IWM), SPDR Dow Jones Industrial Average ETF (DIA))

Eliminating The Debt Ceiling

Now they're talking about eliminating the debt ceiling.

Donald Trump has got some kind of gentlemen's agreement going on with the Democrats that, "Hey, let's just get rid of this debt ceiling so that we never have to deal with the fact that maybe it won't be lifted" because the politicians have succeeded in making irresponsibility look responsible because every time there's a threat not to raise the debt ceiling they label the people who don't want to raise it as reckless or irresponsible. They say,  "You have to raise it, America always pays its bills you can't play around with our faith and credit."

The irony of it is we never pay our bills. That's why we have all this debt, I we were paying our bills we wouldn't have to raise the debt ceiling.

Stock Market, Tax Reform

I think the catalyst for the rise in the stock market continues to be the enthusiasm that really started yesterday based on president Trump's announcement that he was close to a deal on tax cuts and that the deal is supposed to be announced sometime before the end of the month.

Now of course, I've seen this movie before. I mean Trump has come out and made a lot of statements about a deal being ready being on the table, gonna happen soon and of course so far every time he has touted this nothing has materialized. 

Yet the markets are not looking at the boy who cried wolf, now they actually believe the President, they think he's serious and one of the things that he's saying that maybe makes this more credible is that he's saying that he's working with the Democrats that if he can't get something done with the Republicans he's already working on a plan with the Democrats and so one way or another we're gonna get this major tax reform.

But of course it's not really going to be tax reform. It's going to be tax cuts based on what the President is saying. We're not going to reform the tax code, we're not going to have a major shift that is going to make the economy more productive. 

The  President has already said that the rich are not going to get a tax cut at all. They may even have a tax hike. So if you're not going to lower the top rate if you're not going to reduce the marginal rate of tax you're really not going to get any economic stimulus because that's where the growth comes from. Where you lower the marginal rate and you may have a situation where people actually work harder at lower tax rates and produce more taxable income.

Gold: Hurricane Related Sell-off Is A Buying Opportunity

The smart money is taking they the other side on this trade. They are buying the gold on this dip buying the gold stocks on this dip. (SPDR Gold Trust ETF (GLD), Market Vectors Gold Miners ETF (GDX), Market Vectors Junior Gold Miners ETF (GDXJ), Barrick Gold (ABX), Newmont Mining (NEM), Goldcorp (GG))

Foreign Stocks Are Outperforming US Stocks

At this point it's the people that are in the US market that are underperforming the people who are invested outside the US market. (iShares MSCI Emerging Markets Index ETF (EEM))

US Dollar: Worst Year Since 1985?

The US Dollar had a substantial rise based on the expectation that the Federal Reserve would be able to normalize interest rates and unwind its massive balance sheet plus a general belief that the Fed's experiment had actually succeeded and that the economy was in better shape as a result.

So the dollar kind of rode that rally and now I think it's starting to surrender those ill-gotten gains. The dollar is on pace for its worst year since 1985. We just finished the month of August, a down month for the US Dollar. It's been down six months in a row and so the weakness in the dollar is one of the reasons that the price of gold has 01:25 been rising.

The Gold Market Gold Continues to Move Higher

The gold market gold continues to move higher ever since breaking out about $1,300. The price of gold is now above $1340 so we've tacked out another 40 dollars. 

I don't think the shorts have covered yet. I think they're still holding and hoping I don't think we've had the long's getting too excited about this breakout above $1,300 it may need $1,400 we need to move up a whole new handle before we really get the big short covering. (SPDR Gold Trust ETF (GLD), Market Vectors Gold Miners ETF (GDX), Market Vectors Junior Gold Miners ETF (GDXJ))

Gold: $1,300 Is Now Support

Gold to me still looks pretty strong. We broke out above $1,300, we didn't have a huge surge but we held 1,300 and we didn't go back below it. We've held here all week and to me 1,300 is now the support right what used to be resistance is now support. Where is the next resistance? I would guess up around 1375-ish which I think was about the high last summer. (SPDR Gold Trust ETF (GLD), Market Vectors Gold Miners ETF (GDX), Market Vectors Junior Gold Miners ETF (GDXJ), Barrick Gold (ABX), Newmont Mining (NEM))

Video: Gold Outlook

Peter Schiff talks gold and precious metals.

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

I think now that we have cleared out that $1,300 resistance there are a lot of people that thought there was no upside in gold, well they're about to find out just how much upside there was.  I think of course even bigger moves are coming in the gold stocks. (Market Vectors Gold Miners ETF (GDX), Market Vectors Junior Gold Miners ETF (GDXJ), SPDR Gold Trust ETF (GLD), Newmont Mining (NEM), Goldcorp (GG), Barrick Gold (ABX))

Gold Goes Through 1,300 USD

We've been flirting with that $1,300 level all year, I've been talking about all the resistance that was up there and every time the price of gold got near $1,300 it was met with tremendous amounts of selling. There was a lot of supply but as I've been saying the demand was building, this was a coiled spring we continued to see more and more buying beneath the market and the channel was narrowing the distance between the $1,300 resistance and the support kept getting narrower and narrower and I said I was looking at it and I thought it was only a matter of time before we exhausted all that supply and broke through that $1,300 level,  both a psychological level and a level with a tremendous amount of selling. We finally did it!

Foreign Stocks Are Very Cheap Relative to US Stocks

If you want to invest in stocks do what I'm doing. Invest internationally, invest in foreign stocks. The valuation gap is enormous you've never had foreign stocks so cheap relative to two US stocks. (iShares MSCI Emerging Markets Index ETF (EEM), SPDR S&P 500 Index ETF (SPY), Nasdaq 100 Index ETF (QQQ))

Video: Copper versus Gold

Peter Schiff discusses investing in Copper versus investing in Gold.

The Big Story in the Market: Continued Weakness in the US Dollar

Let me get to what's been going on in in the market. The big story in the market is the continued weakness in the US dollar.

Remember the Dollar Index rose about 6% between the election of Donald Trump and the inauguration day. The reason for the rally was the optimism surrounding all the economic growth that we were going to get as a result of tax cuts, deregulation, all this stuff that was going to happen. 

 Of course all this was also going to result in a tighter Federal Reserve because we were now going to have fiscal stimulus and so we weren't going to need as much monetary stimulus. Now remember at the time I argued that that was nonsense and of course so far I'm being vindicated because here we are were six months into the Trump presidency and nothing has happened.

Video: An Interview With Peter Schiff

"When I started buying gold in 2001 it was under $300 an ounce, it rose as high as 1900 USD/ounce by 2011. I started buying oil when it was at $20 a barrel or less and went up to 150 dollars a barrel."

Gold: A Short Squeeze Is Coming

Given the weakness in the US Dollar and the weak economic data, Gold should be moving up a lot more than it is. I still think that there's still a lot of overhang there's still a lot of short selling going on but I smell the mother of all short squeezes coming. (SPDR Gold Trust ETF (GLD), Market Vectors Junior Gold Miners ETF (GDXJ), Market Vectors Gold Miners ETF (GDX))

Markets: Australian Dollar, Canadian Dollar, Foreign Stocks

The Australian dollar (AUD) is very close to a two-year high it's at more than a one-year high as is the Canadian dollar (CAD) which was very strong on the week on the back of a rate increase by the Bank of Canada but the US dollar fell across the board, obviously foreign stocks better than US stocks given the tailwind that they have from appreciating currencies.

Economic Data Continues To Come Out Weaker Than Expected

Economic data continues to come out on balance weaker-than-expected. The Atlanta Fed today notching down its estimate for the second quarter GDP to 2.6 percent. This is the lowest the Atlanta Fed has been since they've been making forecasts on the second quarter. I assume that they're going to continue to ratchet that bar lower and lower as more economic data comes out.

Some People Are Trying to Keep the Price of Gold From Rising

Every time gold is about to breakout someone comes in and sells a tremendous amount of it all at one time. So, obviuosly there are some headwinds, some people are trying to keep the price of gold from rising for whatever reason but they will not be successful long term. Gold are going to rise as the US Dollar weakens. (Market Vectors Gold Miners ETF (GDX), Market Vectors Junior Gold Miners ETF (GDXJ), SPDR Gold Trust ETF (GLD), Newmont Mining (NEM), Barrick Gold (ABX), Goldcorp (GG))

The Euro Is Not My Favorite Currency

 The Euro is not my favorite currency. I do think that there are other currencies that are ultimately going to enjoy even bigger gains against the US Dollar than the Euro which means those other currencies will also be gaining against the Euro but you have so much short interest in the Euro so many people betting on the demise of the eurozone and look I still believe that the euro zone is going to fall apart it's just not going to fall apart as soon as a lot of people thought. 

Euro Currency: This Move Is Just Beginning

The US dollar we're now trading just below 1.1450, remember wasn't too long ago the euro was down around 1.05 or so and everybody was talking parity with the dollar, all the traders were short the euro and I was saying that the euro was bottoming, that the euro is going to rise and the rise is just now beginning and I think there's a lot more to this move, of course other currencies are also following the euro's lead.

The Euro Is Surging Against The US Dollar

The US dollar continued its decline, the dollar index falling to a fresh eight-month low. The dollar is being led lower by a surging euro. The euro is actually at a 12-month high against the US dollar. 

Draghi Sends Euro Higher, US Dollar Lower

The US Dollar was down sharply and broadly led lower by a rally in the euro currency. The catalyst for the euro rise were some statements by Mario Draghi early in the morning basically where he said that he thought the downward pressures on inflation were transitory so a somewhat hawkish stance on inflation and the markets took that to mean that QE will come to an end sooner rather than later.

Gold: Putting In A Significant Bottom

I think the significant thing though for the US Dollar and gold is that the dollar is in the process of putting in a very significant top and the flip side of that is that gold is in the process of putting in a significant bottom. I think the catalysts for breakdowns in the dollar and breakouts in gold is going to be some realization, some capitulation on the part of the markets, the Federal Reserve to square perception with reality because you know the economic surprise index is at the lowest that span since 2011. People have been looking forward to good news and they've been disappointed constantly. (SPDR Gold Trust ETF (GLD), iShares Silver ETF (SLV), Market Vectors Gold Miners ETF (GDX))

Gold: The Opposite of a Bubble

Gold, I think is getting ready again for a move in the opposite direction (higher) but you have the opposite of a bubble in gold. Certainly if you look at the United States, Americans are buying less gold now than they've done you know since the bull market began in 1999-2000. (SPDR Gold Trust ETF (GLD), Newmont Mining (NEM), Barrick Gold (ABX), Goldcorp (GG), Market Vectors Gold Miners ETF (GDX), Market Vectors Junior Gold Miners ETF (GDXJ))

When Markets Are As Extended, They Can Top On Anything

We had a bit of a turnaround Tuesday today all of the major US stock market averages were higher in the morning and we closed broadly lower on the day. In fact the Dow Jones Industrials Average (DJIA) did make a new all-time record high this morning before closing down about 60 points so though the decline in the Nasdaq was a little bit greater. We had a 0.82% decline in the Nasdaq, the Dow was only down by about 0.3%. The S&P 500 Index though had a bigger decline as it was down about 0.7%, so the broader averages took a bigger decline than did the Dow.

Now, I don't think the technical damage is extreme. Yes, we made new highs and close lower but it really wasn't an outside day, I mean we didn't close below Monday's lows for example which would have been an outside reversal but we'll see. You know, when markets are as extended as they are, of course, you know, they can top on anything.