The Peter Schiff Show Podcast

Schiffbooks.com Letusdissagree.com Mene.com Dow Up From Last Week's Trade Deal Woes The Dow Jones closed out the week with 3 plus days in a row, culminating in today's 337 point jump, back above 28,000 - the Dow settling in at 28,015.06.  Remember, when I recorded my podcast on Tuesday, we had just finished 3 consecutive down days in a row, and that's been reversed.  The catalyst for the decline, prior to my last podcast was negative news on trade.  In particular, the news that Donald Trump, at a press conference, let the cat out of the bag and said, "As far as I'm concerned, it would be better if we waited until after the election to have a trade deal with China. And, of course, the markets were expecting a trade deal any day and all of a sudden Trump is saying, "Hey, I think it's better to wait until after the election." - which is a year from now. Of course, it's not a lock that Trump is going to win a second term. Nonetheless, that was a negative for the market. Positive Trade News Equals New Dow Highs Well, what happened, was, on Monday morning, pretty much before they even rang the bell, the White House was already doing damage control and walking that back because all of a sudden I started reading these headlines, "White House Says Trade Talks Going Well". Of course, that means nothing. But you have a lot of traders now who are keying in on these press releases. As soon as they see any positive news, they just buy. As long as positive trade news makes the market go up, whenever they see the positive trade news, they're going to buy. Will We Ever Have a Fact to Sell On? The reason that all of this news makes people want to buy stocks is because everybody believes that when we do get a deal, the stock market's going to soar. So everybody wants to be in so they can sell that rally. Of course, I've been saying since the beginning that I think it would be a "buy the rumor, sell the fact", which is why we're probably never going to have a fact to sell.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.comPrivacy & Opt-Out: https://redcircle.com/privacy

What Phase One? When the Phase One trade deal was first announced, it was October 11, I think was the date. And before that date, nobody ever heard, "Phase One". It was always, "trade deal, trade deal".  There was never any talk of Phase One.  Then all of a sudden Trump comes out and says, "We've completed Phase One! The Phase One deal is done. We have concluded negotiations, we have come to a deal. We have this great Phase One deal; it's already done. It's in the bag. We've agreed to it in principle, all we need is the formalities of putting it on paper. We're going to have a big signing ceremony, and it's all going to be done." Oh, and by the way, Trump said, "This is the greatest deal ever for American farmers. They have never had a deal this great; go out and buy some more tractors; I don't even know if we can fill this order, it's so big - it's the biggest order in the history of agriculture!"  It's a good thing farmers didn't go out and buy new equipment based on Trump's phony promises. Sending the Dow Up - Buy the Rumor! But in any event Marc Faber asked Wilbur Ross, "Do you regret this?" Do you think Trump should not have come out and said this?" And he said, "No, we don't regret it."  Of course, why should he regret it? The Dow rose by 1600 points following that comment! That comment sparked all sorts of more comments; the deal is imminent any day, any week or they're going to sign it here... "Buy the rumor, buy the rumor, buy the rumor!" And they pushed the market.  The Dow went through 28,000 on all that B.S. So why should Wilbur Ross regret that, when the comments worked? Bidding the Spoos Higher I said a long, time ago: "Trump is not talking to the Chinese. He's not negotiating, because if he was, he's the worst negotiator ever. He ought to read, "The Art of the Deal". What he is saying makes no sense, if you're trying to negotiate. The only way Trump's statements make any sense is if they're really designed to boost the stock market. He's not talking to the Chinese; he's talking to the algo's. He's talking to the traders. He's trying to bid the spoos higher.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.comPrivacy & Opt-Out: https://redcircle.com/privacy

Recorded November 26, 2019 The Radical Solution Should Be Free Market Capitalism The problem is, this coming crisis is going to be so bad, it's going to be so much worse than 2008 and you know it's all going to be blamed on capitalism. It's all going to be the left saying "We told you so!" "We cut taxes for the rich, we deregulated. Trump inherited a great economy from Obama and everything he inherited he squandered it with tax cuts for the rich." And things are going to be very tough. People will demand radical solutions. I wish the radical solution could be Free Market Capitalism, because we haven't had that in a long time - but everybody's convinced that that's all we've had. Even the people who supposedly defend capitalism think that it needs a makeover, that it needs to be re-done for the modern era. Get Government Out and Market Forces Back In We don't need to re-do capitalism. We just NEED capitalism. What we have to do is get all the socialism out of capitalism. It's giving it a bad name. We need to get government out of all this stuff so that market forces can get back in. How Old Is Too Young to Vote? I want to finish up the podcast talking about voting. So I read this article about a town, Brookline, that had approved a measure to lower the voting age down to 16. That's part of the Democrat platform. In addition to doing away with the Electoral College and making D.C. and Puerto Rico states, they want to lower the voting age to 16. I don't blame the Democrats for wanting the 16-year-olds to vote; almost all of them are going to vote Democrat, because, they're only 16 - what do you expect? In fact, the Democrats want 14-year-olds - 10-year-olds, 5-year-olds! The younger the better! Directly Pandering to Children for Votes They're not old enough to know any better. It's so much easier to fool these people.  But I can just imagine elections where the politicians have to directly pander to children in order to get their votes. Raise the Voting Age So I tweeted that this is a step in the wrong direction. We shouldn't be lowering the voting age, we should be increasing the voting age. The response was, "Oh, my God!  How could you want to do that?".  We've talked about that on this podcast before. The voting age up until the 26th Amendment in the early 7o's was 21.  The idea was, if you're old enough to fight for your country you're old enough to vote. No. That makes as much sense as saying that if you're too old to fight, you're too old to vote.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.comPrivacy & Opt-Out: https://redcircle.com/privacy

What a Shocker The phase one trade deal is not going to happen this year. What a shocker. If you remember, when Trump first surprised everybody and talked about a phase 1 deal. If you remember, it was never phases; it was one big comprehensive Deal. In fact early on, and I've said this before, the President scoffed at the idea that we would negotiate in stages. "That wasn't going to work, It's all or nothing, we need to get the big comprehensive deal. " Then all of a sudden he announces this phase 1 deal, and he say it's going to be the greatest deal, it's going to be great for farmers, the Chinese are going to buy 50 billion dollars worth of food; American farmers better buy some more equipment; we don't even know if they can fill this order, it's the biggest order anyone has ever had; it's the greatest achievement in the history of achievements - all this was supposedly a done deal. And then nothing happened. Phase One China Trade Deal Of course, Kudlow and other White House people would come out and,"Oh, the phase 1 deal is almost here - but now Reuters is saying it's not going to happen this year. Now, it's probably not going to happen next year either, I mean, maybe, because phase 1 - there's hardly anything involved in it, at least the way it is going to end up being. How About Phase 1a? But what I think the President should probably do is forget about phase 1. How about phase 1a? Let's break down phase 1 into a, b and c.  Let's at least do phase 1a.  First we could tease 1a, and then when we get phase 1a, if we ever get phase 1a well then we've got phase 1b to talk about! Surrender without Admitting Defeat Of course, none of this is going to matter, because none of the real stuff is going to be included in any of these phases. Whether it's 1,2,a,b…  Whatever it is, this is all a way for the President to try to save face and surrender in the trade war without actually admitting defeat.    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.comPrivacy & Opt-Out: https://redcircle.com/privacy

Markets Making More Milestones The Dow continued its weekly winning streak with another milestone, closing above 28,000 for the first time: 28,004.89 to be exact.  That's a gain of 222.93.  Now, I'm sure everybody is getting their "Dow 30,000!" hats ready, because obviously that's not too far off, now from 28,000.  But it's not just the Dow that is setting records and crossing milestones. The NASDAQ - another record high today - up 61.81, closing at 8,540.83.  That's the first time the NASDAQ has been above 8,500.  The S&P also making new highs, up 23.83 - 3120.46 is the close. This is the first time the S&P has been above 3100. Russell 2000 Sitting Out the Party The only major index really not enjoying the party, although it was up again today is the Russell 2000, still not quite near an all-time record high.  That index is at 1,596.  Again, the Russell is the one that most reflects the domestic economy, and it is the domestic economy that is in a lot of trouble. In fact, the Dow rose today, despite more weak economic data that was released during the day. Industrial Production: Weak Probably the weakest data point of them all was on industrial production. It was supposed to drop again after falling .4% in September, and they did revise the September drop to -.3% from -.4%.  But instead of a .4 drop in October, which was the consensus forecast, we dropped by .8.  So twice as large a decline. In fact, I think you have to go back to March of 2009 to see a larger decline than that in industrial production.  Capacity Utilization really contracted as well, from 77.5; it went all the way down to 76.7. Halfway to Recession And we also got more weak news on business inventories, which were revised lower.  And I think that, and industrial production and some other weak data points that had come out caused the Atlanta Fed to reduce its forecast for Q4 GDP all the way down to .3%. It was at 1%, and now it's at .3% which is close to zero. And in fact, it's very likely that we could end up with a negative print for Q4 GDP, which means we're halfway to recession.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.comPrivacy & Opt-Out: https://redcircle.com/privacy

Why is Michael Bloomberg Actively Preparing to Enter the 2020 Presidential Race? I want to talk a little bit about Michael Bloomberg, entering the primary - and the reason that I think Michael Bloomberg is in. Bloomberg is now a Democrat, but he was a Republican.  He served as mayor of New York as a Republican for 2 terms. Then, I think he served a third term as an independent. But he was a Republican and now he's a Democrat. The reality is, he is a very middle of the road guy. He's a liberal Republican or a conservative Democrat. But conservative Democrats have not place in the modern Democrat party.  I think Bloomberg's motivation to throw his hat in the ring is the diminishing prospects of Joe Biden. Initially, everybody thought, "OK, Joe Biden's the guy." I think Michael Bloomberg was fine with a President Biden because it represented a continuation of the status quo and the status quo has been very good to Michael Bloomberg, do why wouldn't he want to continue that status quo? Socialists are Frankenstein's Monster Consuming the Democratic Party But with the rise of Elizabeth Warren and Bernie Sanders and the increasing likelihood that Warren could actually be the next President, I think that scares the hell out of Mike Bloomberg and I think it also scares the hell out of Mike Bloomberg's rich friends who are also Democrats. This is an example of Frankenstein and the monster. Baron Von Frankenstein created a monster and then Frankenstein's monster turned on its creator. And I think that's what these limousine liberals have done with the Democrat party. They have created this monster and now the monster is about to consume them. Rich Democrats Would Rather Re-Elect Trump Than Support Warren or Sanders I think what wealthy liberals are afraid to admit is, as much as they claim they don't like Donald Trump (and some of them don't like Donald Trump) they dislike Warren even more. A lot of these rich Democrats would rather see Trump re-elected than have Warren or Sanders elected. Now they don't want to come out and admit that, but they don't want to support a socialist. They're not that crazy - but they don't want the rest of the crazies in the Democratic party to know 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.comPrivacy & Opt-Out: https://redcircle.com/privacy

Better Luck Next Fall I just got back yesterday from the New Orleans Investment Conference, and I actually came to Connecticut for a few days; I really wanted to experience some of the fall foliage.  It's normally at its peak in the beginning of November. But, unfortunately we had a big storm here - a lot of rain, a lot of wind, and it knocked most of the leaves off of the trees.  So you know what they say about the best laid plans… hopefully I'll have better luck next fall. Stock Market High on Trade Rumors But as the leaves have been falling from the trees, stocks have been going the other direction.  Yesterday, all of the major stock market indexes hit new record highs. I think the catalyst, again, were rumors about a potential phase 1 trade deal. Of course, it really is ridiculous now.  What rallies the market is not the rumor of an actual trade deal but the rumors of a phony trade deal - a phase 1 deal which really isn't a deal at all. In fact, to the extent that anybody is even celebrating phase 1, what they really celebrating is that the trade war is over. That Donald Trump has basically surrendered without admitting that he has surrendered.  In fact a lot of the talk about what the Chinese even need to get the phase 1 deal is for all of the tariffs to be removed. Not just cancelling the future tariffs, but to take away all the tariffs that are already there, which, of course would be a relief for the American consumer, who, contrary to Donald Trump's claim, they're the ones who pay the tax - not the Chinese. Buy the Rumor, Sell the Fact… Again? But, basically, what the markets would really be celebrating, is if we went back to where we were before the trade war ever began. Of course, this is not a victory for the president if all the markets could hope for, is a return to the status quo, but again, once we get that deal - if we get that deal, it should be a "buy the rumor, sell the fact", especially since the fact is not going to live up to the height of the rumor.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.comPrivacy & Opt-Out: https://redcircle.com/privacy

New Highs in the Headlines We had record high closes today in the S&P 500, the NASDAQ composite; the Dow Jones not quite a new record but still up better than 300 points: 301.13 to be precise. Of course, all of the headlines, and President Trump - they're going to be claiming that the reason that we had these surging stock prices is because we had a stronger than expected jobs report.  We got the October nonfarm payroll that came out this morning and it was better than was expected. You had Larry Kudlow out there talking about how this is a fantastic jobs report.  It basically shows how we have this great economy; the greatest economy in the history of America, and that's the reason that the stock market is making record highs, because we have this great economy. Economic Data was a Mixed Bag Well, first of all, the jobs report is really not that great.  Sure, it was stronger than expected, but that's not why the stock market went up today. We had other economic data that came out that was weaker than expected, so it was an overall mixed bag. In fact, the Atlanta Fed came out today and downwardly revised their forecast for Q4 GDP from 1.5% down to 1.1%, and I think the New York Fed is actually below 1% in its forecast for fourth quarter GDP. So hardly the strongest economy in history, yet the markets and President Trump are certainly celebrating like the economy is strong. Nonfarm Payroll up from an Upwardly Revised Previous Month But let me get to the tale of the tape first in the jobs report, because we were looking for a weak number. So the bar was pretty low. The consensus was for 90,000 nonfarm payroll jobs, and one of the reasons was because of the striking GM workers, so they were going to be subtracted from the numbers.  So that was already baked into the cake. We ended up getting 128,000 jobs, so nicely above those diminished expectations.  But probably more significantly, they went back and upwardly revised the number they told us for the prior month, which was originally reported at +136,000.  Now the government claims it was +180,000.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.comPrivacy & Opt-Out: https://redcircle.com/privacy

The Fed Slashes Interest Rates for 3rd Time As expected, the Federal Reserve cut interest rates today.  This is the third rate cut of this cycle.  We're now down to 1.5%. But of course, what everybody has to remember is a year ago, when the Fed was hiking interest rates, the forecast from the Fed was that they were going to continue to hike rates.  They were supposed to have another 3 or 4 rate hikes in 2019.  And, of course, a year ago, as the Fed was hiking rates, they were still shrinking their balance sheet and they were going to continue to shrink it. They were talking about auto-pilot. They were going to continue to do $50 billion/month of quantitative tightening.  And they said this with a straight face.  And everybody believed them. Not a Surprise to Me Of course, everybody except me and maybe a few other people out there in the financial media. But I was telling anybody who would listen - which was not that many people in the mainstream, but certainly the people who listen to my podcasts, that none of this was going to happen. I said that the Fed was going to have to stop hiking rates, and that they would be cutting rates in 2019, and that not only were they going to stop quantitative tightening, that they were going to have to go back to quantitative easing. And that's exactly where we are. A Distinction without a Difference Although, Jerome Powell went out of his way - I think the first thing that he said when he made his prepared remarks - was to reassure everybody that what the Fed was doing now, with its repo program was not quantitative easing. He drew a distinction between what the Fed was doing when it was doing QE and what it is doing now when it is not doing QE.  The main distinction had to do with the maturities of the debt that the Fed was buying.  He said that when they were doing QE, they were buying longer term government bonds, but that now, they're buying shorter term government bonds and so therefore it's not QE. But this is really a distinction without a difference.          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.comPrivacy & Opt-Out: https://redcircle.com/privacy

I am Back! I am back! I know a lot of people have been upset that I haven't been able to do a podcast in almost 2 weeks. The reason I've been absent… I just haven't been feeling well.  I've been coughing a lot and and haven't been up for doing a podcast - I'm doing one today, though.  I'm still a little bit sick… but I figure it's been long enough, so I have to talk a little bit about what's on my mind. Dollar Index Trending Lower First of all, there hasn't been that much activity, I guess, in the markets over this time period. The U.S. dollar has generally been weaker.  It has been trending down.  It hasn't really broken down yet, but it is going lower.  In fact, the dollar index closed today near 97.69. so that is lower than it had been.  Remember, a few weeks ago, the dollar index was above 99. So the dollar is trending lower. Interest Rates Up - Bond Prices Down Interest rates are actually moving higher.  Bond prices are going down.  The yield on the 30-year U.S. Treasury now is at 2.26, and I think this is significant because it really shows the problems that are building in the economy because the dollar is weakening and interest rates are rising. That is going to mean higher consumer prices, it's going to mean higher borrowing costs; now of course, the Federal Reserve is doing everything it can to artificially suppress interest rates. One of the stories that I've read several times over the last couple of weeks is how the Federal Reserve is having to do more repurchase agreements; having to increase the size of the amount of Treasuries they're buying in the market. I didn't see that in today's balance sheet numbers; the balance sheet was up only about 2 billion over the prior week.  But I have a feeling that the number is going to be much, much higher than that when we get it a week from today.        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.comPrivacy & Opt-Out: https://redcircle.com/privacy