The Peter Schiff Show Podcast

Trump Jumps to Tweet on Mediocre Jobs Numbers This morning the Labor Department released the July Non Farm Payroll numbers and Donald Trump tweeted,"Excellent Jobs Numbers just released - and I have only just begun." Many job stifling regulations continue to fall. Movement back to USA!" What is excellent about these numbers?  If you look at the household survey reveals that we created 393,000 part time jobs during the month, and we lost 54,000 full time jobs. Candidate Trump complained about these types of numbers. He talked about the proliferation of part time jobs and the loss of full time jobs on the campaign trail, yet now, it's "excellent news!". Small Rise in Manufacturing Jobs Although the report was not a disaster, it was not greater than many we've seen under the Obama Administration. The expectation was for a gain of 178,000 and we beat it. We came out with 209,000, which is really not a lot of jobs.  Given the size of the American economy, creating 200,000  jobs in a month is really not a lot of jobs.  But exceeding this rather low bar gives rise to over-exuberant headlines over a strong jobs report.  In fact they did revise last month's gain of 222,000 up to 231,000 and this month's was better than estimates. The unemployment rate did tick back down to 4.3; remember it jumped up to 4.4 and now it's back down to 4.3.  We did gain 16,000 in manufacturing jobs and they did revise upward last month's gain from 1,000 to 12,000, so that is somewhat good news, although as a percentage of the overall jobs, it is small. What's the Real Unemployment Rate? The Labor force participation rate did ratchet up one tenth, back to 62.9; still very low.  Wages rose .3% meeting expectations,  and most numbers remained status quo. It's not a disaster of a report but it is not spectacular.  We had plenty similar reports under Obama, which were previously labeled "fraud".  The unemployment rate is low, and candidate Trump was saying, "The real unemployment rate is closer to 49%". What's the real unemployment rate now? Are the Numbers B.S.? The question is, "Was candidate Donald Trump being honest? Did he really believe the numbers were phony or was he just saying that?" Or, was he being dishonest as a candidate and is he being honest as a president? Was he and honest candidate or was he being dishonest? Does he realize that these numbers are B.S. yet embracing them anyway to feather his own nest, when the economy is behaving exactly as it did when Obama was President. Counting Jobs Twice If you look at the jobs, about 40% of the jobs created were in leisure and hospitality, which was the #1 category, and then healthcare and education. We have record numbers of people now tending bar and waiting tables, although these are probably part time workers being counted multiple times as Obamacare drove away full time employment.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

Trump Takes Credit for Dow Jones 22K We have an all-time high in the Dow Jones today, closing above 22K for the first time ever. Donald Trump did not tweet about this today, although yesterday he did put out a tweet that the market was about to hit 22,ooo; of course he is claiming credit for it. In fact he pointed out in his tweet that when he was elected, the Dow was 18,000 and not it is 4,000 points higher and of course he is claiming credit for it.  He says the media is ignoring it. They are reporting on the record highs, but believe me, when the Dow starts falling the media is going to pay a lot more attention to the declines than they do to  the rises, especially when the Dow starts falling the media is going to pay a lot more attention to the declines because Trump has already branded this market with his moniker. Bad Economic News Did not Dampen Stock Market Donald Trump did put out a tweet in which he was bragging about wages rising.  I don't know what Donald Trump is looking at - we got the personal income and spending numbers yesterday, and June income was flat.  They were looking for a gain of .4 and instead they got a flat number. That was the weakest number for personal income growth since November - the month Donald Trump won the election. He's talking about the wage gains, where are they? They don't show up in personal income, and most people's income is comprised of wages.This weak economic news didn't stop the stock market from making new highs today.  Of course, Apple was the main reason - it had almost a 5% gain.  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

Obamacare Repeal Charade Over The whole charade surrounding the repeal of Obamacare is finally over. The most recent attempt, labeled "Skinny Repeal" was a big fat lie.  They weren't really repealing anything, leaving the essence of Obamacare and accelerating Obamacare's death spiral. If Congress had repealed the employer mandates and the individual penalties but left everything else the same, then the number of healthy people making the irrational decision not to buy insurance would skyrocket and the sick people who would still be buying, would be facing higher and higher premiums and costing insurance companies bigger and bigger losses to be subsidized by the taxpayer. Let the Democrats Own the Disaster Many Republicans are upset with John McCain, for being one of the 3 Republicans to join all the Democrats in opposing the bill.  I think McCain did the GOP a favor. This bill, if passed, would have let the Democrats off the hook. They would have not owned Obamacare, and they would be responsible for its failure. Now we all know Obamacare is still there, it is exactly the way it was passed, the bill President Obama championed and signed, the one that Nancy Pelosi said, "We have to pass it to see what is in it."  We passed it, we know what is in it (although most people do not understand what is in it) and it is a disaster. Late last year most people thought the Republicans were going to repeal it - everybody but me. I didn't think that they had the guts to do it.  I had this interview on Russia Today in mid-January, it's up on my YouTube Channel; the title is, "Peter Schiff Very Skeptical of Obamacare Repeal". If you watch that video you will see that I say, "I don't think they're going to repeal it." No Guts to Repeal Of course, everybody thought, "of course they are going to repeal it. They've been campaigning on it for years!" The President promised it.  Everybody who has run for office as a Republican says, "Elect me and I am going to get rid of Obamacare!". They voted to repeal it many times when Obama was still President. And, of course, every time they voted to repeal it, Obama vetoed it, which of course, the Republicans knew was going to happen. As it turns out, that was the only reason they had the guts to repeal it because they knew it wouldn't actually happen. I knew that the Republicans would have a tough time taking away the free lunch. I knew that a lot of them were promising to repeal but keep the ban on pre-existing conditions and I knew that was impossible. Pre-existing conditions is the very essence of Obamacare.  You can't repeal it and preserve it at the same time. The Stock Market Has Not Gotten the Message The stock market, however, still doesn't understand the significance.  It hit another record high again today. The Dow was up, it closed at a new high today. The NASDAQ and the S&P were down. The transports managed a slight bounce from yesterday's drubbing.  Transports were down around 300 points yesterday. Again, more cracks in the armor for the stock market.  Look at what happened to Starbucks today.  The latest victim of declining retail sales; it was down around 9% today.  They reduced their guidance based on a drop in sales, now I don't know if you can blame this on people buying their coffee on Amazon.  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

Summary: The Dow and the NASDAQ set new record highs today as the dollar sold off near the end of the day to close at yet another low for the year. Remember, the dollar index rallied 6% between the election and the Trump inauguration. It has now fallen more than 10% since inauguration. Many currencies are at two-year highs.  The Australian dollar is at a 2-year high, certain commodities are at a 2-year high, copper broke to a 2-year high; oil prices have been strong.  Oil was up about $.80 today after being up about $2 yesterday.  We're now above $48.50.  Getting close to $50/barrel again. Federal Reserve: "No Hike" One of the reasons for the strength in commodities is the weakness in the U.S. dollar. The catalyst for the weakness in the dollar today is the Federal Reserve, the FOMC, concluded their 2-day meeting today; their press release came out at 2.30pm ET and they announced that they did not decide to raise interest rates during this meeting. Nobody expected the Fed to raise interest rates, which is one of the reasons why they didn't. Balance Sheet Normalization? There was some anticipation that the Federal Reserve may be more specific concerning when it might start quantitative tightening or 'balance sheet normalization' as they call it. So people wanted to know when that would start, and by how much are they going to let their balance sheet to run down but the Fed did not allude to any specifics. All they said is that the process will begin relatively soon.  Now the last time they put out a statement, they said it would begin this year. Now they are saying it will begin 'Relatively soon'. Why didn't they leave it at "this year"? Because "this year" would be within the next six months. "Relatively Soon" leaves the statement comfortably vague enough to fit within the Fed's slippery parameters. Gold Hanging In There The markets didn't know what to do for the first half hour, but eventually the dollar broke, and gold finally popped up; it was up around $11-12.  It was about unchanged going into the announcement  and the knee-jerk reaction was a $2-3 selloff, then it came back to unchanged and then we had the rally.  Gold stocks had a pretty good day today; the GDX up about 2.5%; the junior minors doing a little bit better.  Yet these stocks have barely moved this year, but this is just getting started.      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

Summary: My recent trip to Las Vegas for The Freedom Fest provided some interesting lessons.  My observations that we are paying more for less were illustrated by the theft of my luggage,  as there are no more luggage security checkers in baggage claim exits.  Also, for the first time, major Las Vegas hotels are charging from $15 - $18 for parking.  This is causing hotel valet workers to lose money, as customers are less likely to leave a generous tip (or any tip) if they are already paying quite a bit to park. So the Las Vegas experience is changing; we're getting less for more money.  Prices are going up and wages are going down. Taking Credit for Phony Statistics This is the real U.S. economy. Forget about all these phony U.S. statistics. The real world reflects the truth about the economy and why Donald Trump is President.  I wish candidate Trump would come back; I would rather see the President questioning phony government statistics instead of embracing them. I'd like to see the President talking about the stock market being a bubble rather than a bull market and claiming credit for the increase. Weakness in U.S. Dollar The big story is the continued weakness in the U.S. dollar, in fact this morning the dollar index hit a new low for the year. It's now back in positive territory as I am recording this podcast, but the low this morning was 93.64 on the dollar index.  Remember, the dollar index rose about 6% between the election of Donald Trump and the Inauguration, and the reason for the rally was the optimism for economic growth as a result of tax cuts, de-regulation, fiscal stimulus and a tighter Fed. Senate Backing Away From Repeal At the time, I argued that that was nonsense, and so far I am being vindicated.  We're six months into the Trump Presidency and nothing has happened. They haven't even been able to repeal Obamacare, nor are they going to.  The Senate already backed away from the version that I said would not work.  Trump did a press conference yesterday talking about Obamacare, assuring everybody that pre-existing ban is going to stay. The very essence of Obamacare is that insurance companies can't charge sick people more for insurance than they charge healthy people. That's the essence of Obamacare that doesn't work and that's what Donald Trump and many Republicans want to preserve. Preserving the Essence of Obamacare Of course, in order to achieve that goal, they had to have employer mandates and penalties.  These are the only things the Republicans want to get rid of. But they want to preserve the very essence of Obamacare and that's the mandates and penalties were designed to deliver. So now they have to come up with another way to deliver the promise of Obamacare. Currency Markets Get the Message The point is, the currency markets have figured this out.  The dollar has dumped better than 10% since the Inauguration, but the stock market has made new highs. The Dow Jones is at a new high today; the NASDAQ hit a new high yesterday, so it's a disconnect.  The initial rally in the stock market happened for the same reason the dollar rallied.  The currency traders have connected the dots. What's the problem with the stock traders?  Why are they oblivious? Dollar Weakness Spark Commodities The weakness in the dollar is also sparking a rally in multinationals, in commodities.  Look at the move today in Freeport-McMoRan a major copper producer; that stock is up better than 13%.  Oil prices are coming back up; oil is up better than a dollar today. Emerging markets are strong. Bullish Conditions for Emerging Markets I have been saying that a weak dollar is extremely bullish for commodities. Why?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

Summary: More weak economic data today sent the U.S. stock market to record highs; at least the Dow and the S&P hit new records. NASDAQ not quite, but very close.  The dollar hit a new low for the year.  The dollar index, settling in at 95.10, right on the low for the day.  That's down .63.  Some of the other currencies are strong. Aussie Dollar Strong The Aussie dollar was up about 1.3% on the day; one of the strongest of the currencies today. The Aussie dollar is very close to a 2-year high.  The Canadian dollar was very strong this week on the back of a rate increase by the Bank of Canada. But the dollar falling across the board. Foreign Stock Gain Foreign stocks did better than U.S stocks, given their tailwind from appreciating currencies.  Gold prices were up just over $11. Given the weakness in the dollar and the weak economic data, gold should be moving up a lot more than it is; I still think there is still a lot of short selling going on, but I smell the mother of all short squeezes coming.  Silver is up about .30; back up to $16. remember was a low as $15.10 earlier in the week. Dollar Index Weakening The dollar index index at 95.10, just down over 7% on the year. It ended last year just above 1.02. In fact, in January, hit almost 1.04, so we're down 8-1/2% since the January high, and the year is only half over. So I think there is a lot more momentum coming, especially in light of the economic data I'm about to get to. Retail Sales Disappoint The big report was the Retail Sales numbers, were supposed to bounce back from May's -.3, and they did manage to revise that to down only .1%;but instead of getting a .1% rebound we had another drop.  We had -.2% in June, so that is back-to back declines.  In fact that is 3 consecutive months of falling retail sales. The picture gets worse when you strip out car autos. Last month, we got -.3%. That was unrevised.  They were looking for June to be +.2% - instead we were down another .2%. And if you strip out gasoline, it's even worse than that. They were looking for +4% and we got -.1%.  So very very weak retail sales. This was supposed to be the quarter of the big bounce back! How are we going to bounce back in GDP without retail sales? Consumer Prices Weaker We also got consumer prices that actually came out weaker than expected. That is supposedly bad news, the way the Fed spins it, because the Fed's trying to get higher inflation, at least the way the CPI measures it. They were supposed to get an increase of .1% for consumer prices following last month's .1% decline and instead we came in unchanged. Year over year CPI, up 1.6% vs an estimate of 1.7%, and core, stripping out food and energy, they were looking for +.2%. instead we were up .1% Janet Yellen Wants More Inflation So when Janet Yellen testified before Congress earlier in the week, the only thing she expressed concern about is that inflation is not high enough.  She does not seem concerned at all about the weakness in the economy.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

Summary: There are market indicators of a major top as illustrated by the Blue Apron IPO, as it represents the failure of a very weak company attempting to raise money my means of an IPO when the market may have lost its steam. The stock is trading at $7.14, down from its initial $10/share offering. Wall Street has lost control of this IPO. A smaller bank actually issued a price target of $2/share. The point is that they brought the IPO to the market and they could not keep the air in the bubble. SnapChat, another Wall Street darling, went public at $17 not too long ago and although it had a big pop initially up to $29, now trades at about half that price. The point is that this process is coming unglued. The inability of Wall Street to maintain the air in these bubble stocks is an indication that we're nearing the end of this bull market. The Yellen Put May Have Expired The only way the Fed might be about to extend the bubble market is by changing its tune. As I said in my last podcast, I don't know if that Yellen put is still there. It may have expired with the election of Donald Trump.  We know that the Fed wanted to prop the market up during the Obama Presidency; that was clearly their goal. But, especially since Trump has wrapped his presidency in the market's recent upswing, the Fed's willingness to risk credibility may be waning. The Fed may have a greater tolerance for lower stock prices. The Fed will, however step in if they see weakness in Wall Street spill over to Main Street. Commodities and Emerging Markets Commodities are looking good, despite the recent dip in oil, gold and silver. Base metal stocks are rising, emerging markets are continuing to pick up, especially those markets that are big exporters of commodities. So, beneath the surface we are starting to see a rotation into these commodity-sensitive, inflation-sensitive sectors. Golden Opportunity in Silver Meanwhile the headlines are still all about the drop gold and silver.  I recorded a video blog on Monday morning; silver was down almost to $15. It has just bounced off that low as I recorded the video. At SchiffGold, we were able to organize a great deal from one of our suppliers on silver.  The ratio of the price of gold to the price of silver was near 80:1, which is about as cheap as silver is going to get, relative to gold.  Historically, it is a great buying opportunity.  We were able to lock up this deal where we have a limited quantity of junk silver bags we're offering to our clients at $1.25 over the spot price of silver. Sometimes these bags are scarce.      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

Summary: There wasn't much of a market reaction to this Nonfarm Payroll report; the dollar index was only up .2% on the day. It closed up flat on the week. The Canadian dollar closed at a 10-month high against the dollar. Also bond prices continue to fall; this is a bad week if you own bonds, worldwide.  Yields are rising across the board.  The trend looks like we are about to break down in the bond market and break out in yield. Gold Market I think it is the weakness in bonds and the backup in yields that is one reason the gold market has been acting as weak as it has. There is still a false perception that rising interest rates are bad for gold. That, coupled with the fact that the dollar has been falling recently and gold has not been rising (meaning gold prices are falling in terms of other currencies) is causing a breakdown in the charts, resulting in selling. Even North Korea's recent successful ICBM testing did not cause gold to catch a bid. Silver Dropped Early last night, around the opening of the Japanese stock market, there was a bit of a flash crash in silver. Silver prices dropped abruptly by about fifty cents an ounce within a second.  The market quickly recovered but then re-tested those lows. Silver was down over .40 today in the U.S. market. It didn't open down that soft, but it traded lower all day. The price of silver hit a new 52-week low. Gold Stocks Signalling a Reversal I have been talking about the relative strength of  the gold miners in the face of this correction and once again, the GDX, which is an index of gold stocks, was only down 1.3% on the day, which is not a big drop, considering the price of gold was down by 1% on the day and the price of silver was down close to 3% on the day. I think this is a good sign for a reversal. A Weaker Japanese Yen Another reason for the recent weakness in gold and silver prices has to do with the weakness in the Japanese yen. While the U.S dollar has been losing ground against other currencies, it has actually been gaining ground against the yen. I am not sure why, or for how long this relationship is going to hold, but there has been a very close correlation between the price of gold and silver and the exchange rate between the U.S dollar and the Japanese yen. Printing Yen to Prevent Interest Rates From Rising The yen was weak overnight particularly because of the global rise in yields above a level where the JGB has drawn a line in the sand. It is basically committed to printing an infinite amount of Japanese yen to keep buying those JGB's to prevent interest rates from rising. Why is the Bank of Japan determined to keep interest rates from rising? Because of the enormity of the Japanese government debt. If interest rates go up, there is not way to service that debt. The choice is default or runaway inflation, and they are choosing the latter. So, last night during all this selling in global bonds, including the JGB, there was massive intervention to support the bond market. That meant the printing of a lot of Yen. It is possible that this is the catalyst that drove down the price of silver and gold. Risk-On/Risk Off Trade One reason for the correlation between the yen and gold has to do with the risk-on/risk-off trade, where both the Japanese yen and gold are seen as the safe-haven assets.  Therefore, when investors want to take risk off, they buy gold and they buy the yen and that may be one of the reasons that the two have been moving together.  Once they start to move together and form a relationship, traders start to key off of it. So if they see weakness in the yen, they sell gold, and if they see strength in the yen they buy gold. Rising Interest Rates are Positive for Gold One of the reasons interest rates are rising in the world is because inflation is picking up. Higher inflation is positive for gold, it is the most bullish factor for gold.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

Summary: One of the key differences between Americans and citizens of other countries is that in most nations of the world, individuals gradually won freedoms and privileges from a monarchy. In the U.S., however, we started with all of our rights.  Then, Americans created government by surrendering some of their power, empowering government.  These rights are spelled out in Article 1 Section 8 of the Constitution. Free Stuff Rather Than Freedom We have government not to give us stuff, but to secure our freedom. Americans today really don't want freedom.  They want free stuff. When the government gives you something they take away your choice; they tell you what you are going to get and how you are going to get it. When the government gives you something, however, they must take away from someone else, diminishing that person's freedom. Article 1, Section 8 of the Constitution The Constitution created a Federal Government.  Prior to the Constitution we were organized under the Articles of the Confederation. But the framers of the Constitution wanted the government to have a little more power.  All of the powers of the Federal Government are contained in Article 1, Section 8, and it's not a big section.  It has 18 enumerated powers. Government Powers vs. State Powers The Constitution is written in two ways: it grants powers to the Federal Government and it denies powers to the states. You know that by reading the 10th Amendment to the U.S. Constitution, The Bill of Rights ,which lays out how the Constitution is organized, and that the Federal Government has only the powers expressly granted. The states retain certain powers owned prior to the formation of the Federal government. So, if the Constitution did not specifically prohibit the states from doing something, they could do it. Ignoring the Constitution We know what the Constitution means because its writing is clear. Today they say the Constitution needs to be interpreted - that the Supreme Court is there to "interpret the Constitution". The Constitution is not written in Chinese - it is written in plain English.  The Constitution needs to be applied and enforced.  When people are talking about interpreting the Constitution they are really talking about ignoring the Constitution and to impart meaning that doesn't exist. The Federalist Papers If you look back at the Federalist Papers, at what the founders of the Constitution wrote about the meaning of the document, particularly James Madison, in Federalist Paper #45. If you don't know what the Federalist Papers are, or you've never read them, they are a collection of articles, written at the time the Constitution was being ratified, to generate understanding and support. The authors were James Madison, Alexander Hamilton and John Jay. Here is a quote from Madison, who was considered to be the "Father of the Constitution": The powers delegated by the proposed Constitution to the federal government, are few and defined. Those which are to remain in the State governments are numerous and indefinite. The former will be exercised principally on external objects, as war, peace,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

Summary Independence Day is a great American holiday, but it fills me with joy and sadness.  I love to commemorate what America was, and the whole idea of what made America different. Once we declared our independence in 1776 the people created a government.  We the people had all the power and we surrendered some of our power to form a limited government.  The government was a creation of the people and they ceded some power to the government. This was unique. As a result of this limited government, this uniquely American way of life, America prospered and created the wealthiest country in the history or the world. So we celebrate the beginning of this experiment in freedom and limited government. Benjamin Franklin famously responded to the question, "What have you given us, Mr. Franklin?": "A republic, if you can keep it." We have become what the founding fathers feared most, a democracy.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