The Peter Schiff Show Podcast

* I guess you could say a good jobs report is all in the eye of the beholder * And when it comes to President Trump's eyes, he is now beholding an excellent jobs report * Whereas a candidate, similar reports were described by Trump as phony, a hoax * I have a lot more sympathy for Candidate Trump than I do for President Trump * Now President Trump is trying to pretend that the jobs numbers that he used to be so critical of * Are now reflecting what a great job he is doing as President * When there's really no difference between the metrics of this job report and the ones we got under Obama * With probably one exception * And that is in the number we got is better than expected, though not as good as some had hoped, given the very strong ADP number we got earlier * We got a surge in manufacturing jobs there was also a bump in construction jobs * But I am very suspicious of the manufacturing jobs * I know a lot of American manufacturers are really trying to curry favor with Donald Trump early in his Presidency * And this could all be some Trump-related window dressing * This is a long trend of hemorrhaging manufacturing jobs * And I don't think this one blip necessarily means that trend has changed * I wouldn't get too excited; it is a good thing to be creating goods-producing jobs, manufacturing jobs * I'm not criticizing that * But the question is, is it sustainable, is it real, or is it simply some smoke and mirrors * Orchestrated selectively to make Trump look better early on * So certain companies can get what they want from Trump when it comes to tax reform, or other issues where these companies may have a vested interest * Let me go over the actual February Non-Farm Payroll numbers: * The consensus was 200,000 jobs; 227,000 was the number created in January * Most of that was prior to Trump becoming President, though subsequent to his election * So we did 227,000 jobs in January and they actually revised that up to 238,000 jobs * We did 235,000 in February, so actually slightly less, at least based on the initial estimate of jobs created in the prior month * Unemployment rate did fall slightly from 4.8% to 4.7% and labor force participation inched up from 62.9% to 63% as more Americans re-enter the labor force * Average hourly earnings, though, which were expected to rise .3% only rose .2% * But they did revise the prior month from .1% .2% * So I guess that was about a push * .2% is not much of an increase in wages, especially when prices are rising 2-3 times as fast * Remember January CPI was up .6 - triple the rate that wages are up * The average work week remained the same at 34.4% * As I said, what was a little bit different, though was the complexion of the jobs * We did create jobs in manufacturing, for a changeOur 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

* It looks like the Republicans on Capitol Hill, with the blessing of Donald Trump, are trying to repeal one big healthcare program and replace it with another big government entitlement * They're calling it TrumpCare * First they were calling it ObamaCare Lght, but now they're embracing the term, "TrumpCare" * Whatever it is, it is not going to work * It's just going to be another disaster wrapped up in a different package * But before I get into explaining this, I want to talk a little bit about the GDP numbers and the Atlanta Fed * In my last podcast, I mentioned that even though the Fed was getting closer to the point at which it was going to raise interest rates again * Even though it was talking tough on raising rates, the GDP estimates were collapsing * Well, they collapsed again today * Now the same Atlanta Fed that was at 1.8% for Q1 GDP is now at 1.3% as of today * When we began the month of February - * February 1st - they were looking for 3.4% GDP for the first quarter * If you go back and listen to my podcast, at the time I recorded it * I said, they're kidding. They've got to be crazy - there's no way we're going to get 3.4% * They're going to have to come down, and that's all they've done * And now we're at 1.3% and falling * Now maybe part of that is because we got the worst trade deficit today in 5 years * Although, I think the numbers were highly anticipated so I don't know why that would have come as a surprise * And we got Consumer Credit for December and it was a huge drop in the increase of credit card debt * Meaning that consumers took on a lot less credit card debt than Wall Street expected * Now that's a good thing * I don't like it when Americans go deeper into debt to buy stuff * You've got a bubble economy that's 7%, people buying stuff they can't afford 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

* According to Goldman Sachs, the odds of a Fed rate hike coming up at the March meeting, which is less than 2 weeks away is now 95% * It was 90% before Yellen spoke, that was looking at the Fed Fund futures, in fact the probability of a rate hike had been rising all week based on speeches of a number of Fed officials * Everyone indicating that a rate hike was coming soon * Nobody actually said how soon * But they kept talking about why raising interest rates would be appropriate * Why they didn't want to wait too long * But of course they always reiterate that they want to proceed slowly * And of course, that they are data dependent * Meaning that in order to deliver these rate hikes that they claim would be appropriate * They will be slowly applied over some abstract period of time and * The economy has to evolve according to their expectations * Which probably is not going to happen * But nonetheless, when Janet Yellen spoke, this was the last opportunity that a Fed official had to kind of dial back those expectations * If Yellen didn't like the fact that the markets were 90% sure of a March rate hike * She had the opportunity to dial that back in her rhetoric * And she did not * She allowed the markets to continue to price in a rate hike in the March meeting * And that is why, now, the odds went from 90% to 95%, which is virtually a lock * Which means that barring any huge drop in the stock market between now and the March meeting * That hike's probably going to come * Because I think that the reason the Fed feels confident to raise rates is that the Dow is at 21,000! * Just like it felt confident to raise interest rates the first time in December of 2015 because the markets were giving a false signal that rate hikes were OK * And, of course after the rates were hiked, the market thought about it again, and it dumped * And then we had the worst January in the history of Janaries * And the Fed waited until the following December to raise rates againOur 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

* Last night, following tradition, President Trump delivered his first State of the Union Address * Although people are saying that it's not technically a true State of the Union Address * We'll have to wait another year for that; that he has been President for too short a period * So it's just an address before the Joint Session of Congress * But whatever you call it, apparently the president's address was well received * Even some of the President's critics are giving him credit, although not all of his critics are being so kind to the President * On the other hand, I was not impressed at all by what President Trump said * If his main goal was not to offend anybody * To get a positive reaction from the political classes, the media and Wall Street * Then I guess he gave a great address * But if you were looking for the President to actually indicate that true change is coming * That America might actually be great again * That President Trump might actually be a different type of President than his predecessors * You got no indication that that was going to be the case * In fact, Trump gave me every indication that his administration would be more of the same * Donald Trump wants to make America great againOur 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

* Yesterday it looked like the Dow's winning streak may have come to an end * We were up 10 days in a row, which was the biggest winning streak since 1987 * The Dow was down 50-60 points for the entire day * It opened down and it stayed down until the very last hour, it started to rally * In the last 15 minutes it managed to eke out a positive close * To extend the winning streak to 11 consecutive day * And of course, another record high for the DJIA * For those bitcoin fans out there, I know a lot of you have given me crap because the price of bitcoin has gone up and just this week it got back above 1200, getting close to the price of gold * Gold was up again this week, it got as high as $1260 * Remember on my last podcast I said we were building up a lot of resistance around $1240 * And I thought we would take it out and then we would see a little bit of a jump * That's exactly what we did * We closed at $1259.60 * An observation, though: gold stocks were down in general on Friday; they were also down on Thursday * In fact, they had a sell-off at the end of the day * I think the last 2% rise in the price of gold - we've had about a 4% drop in gold stocks * Gold stocks rose early on, and they did a very good job of forecasting this gold rally * So, the question is, are the gold stocks now accurately forecasting a sell-off, a profit-taking or a correction? * That's possible, and if that is the case, I think that is a great buying opportunity because I don't think the correction will be very long-lived, or that deep *  And I do expect much, much higher prices later in the year * But it's also possible that this skepticism on the part of gold traders * Obviously if gold traders have been selling gold stocks these last several days, they thought that the price of gold was topping out * So far, they've been wrong, because gold prices continue to rise despite the fact that gold has been falling for over a week * Maybe they're not wrong; maybe they are just early * Maybe they're just getting out early and a big gold drop is coming - we'll see * But it's also possible that this is just a healthy degree of skepticism * That gold is climbing this wall of worry and in fact gold stock traders are now so worried that they've been selling their gold stocks even as gold keeps risingOur 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 Dow finished with yet another gain today * We closed at 20,775.60 * I've been told that this is the longest consecutive winning streak for the Dow Jones since 1987 * Of course, we all remember how that streak came to a crashing end in October with the 1987 stock market crash * We'll see if the market has better luck this time around * We got the FOMC minutes released earlier today * I think they were interpreted as being hawkish; remember, this is all on a relative scale, they're all doves now * It is simply degrees of dovishness, there are no actual hawks on the FOMC or on any central bank * The question is, "Who is more dovish and how dovish can you be?" * But there were some statements that caused the markets to think, "Hey, maybe a rate hike is coming." * Because I think the members said it would be appropriate to raise rates sometime soon * What is sometime soon? * Is that March, or is that April, May or June? * That's still soon, in the scheme of things * If you look at how slowly the Fed has been moving * Glacial speed, when it comes to raising rates * Soon can certainly be a few months from now * It doesn't necessarily mean that it is going to be March * They could have said March - "It might be appropriate to raise rates in March" * They didn't say March - they just said soon * Nobody really knows what soon is * They did comment that they thought the markets might interpret gradual rate increases as meaning only 1 or 2 rate hikes a year * And they were troubled by that, because maybe by saying that, by gradual, they mean 3 a year * Not 1 or 2 * I heard some people saying, * "Maybe the Fed is not going to go slowly." * Even if they do 3 - we're still talking very gradual rate hikes, especially if you put it in context of how low rates are right now and how high inflation is already * I keep hearing these comments from Fed officials * They're doing interviews and they're saying, "Yes, we're making progress; we're moving slowly toward our goal of 2% inflation." * 2% inflation!  They left that in the dust *  The last number we got in January showed a year over year increase of 2.5% * So why are they saying they're making progress toward getting to 2% when they've already zoomed past it * They're looking at it now in the rear view mirrorOur 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

* We had a very significant day in the currency and gold markets yesterday * We had some good follow through today that really buttresses the point that I want to make * We got some economic news that was released yesterday that would have been considered bullish for the dollar and bearish for gold * By most people, other than me, who trade currencies and who trade gold * But the fact that gold did not sell off or the dollar did not rally was very significant * The news was the CPI and Retail Sales * First of all, Retail Sales came out stronger than expected, they were looking for a gain of .1% and we got a gain of .4% * They actually revised the prior month's gain from +.6% to  +.1% * Now a lot of the gain in retail sales, though has to do with the fact that prices are higher * Retail sales are not adjusted for inflation * Prices are going up * Retail sales may be going up, particularly things like gasoline * It's not just the price of gas that's going up; everything is going up * The CPI came out at the same time as Retail Sales and that is the bigger number * We got a .6% rise in consumer prices * That's versus the expected .3% * Even the core - you take out food and energy - we were up .3% there versus an estimate of .2% * Year over year CPI 2.5% that's the official number * Obviously prices are going up a lot faster than that but according to the government they're going up at 2.5% * Even if you take out food and energy and just look at the core, year over year the change is 2.3% * Now remember the Fed is saying their target is 2% * When Janet Yellen testified this week she said that she's confident this week that we're going to hit her objective * Well, we've already surpassed her objectiveOur 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

* Today Janet Yellen was up on Capitol Hill, it was the first of her 2-day testimony * She was before the U.S. Senate today; tomorrow she will be testifying before the House of Representatives * She talks about monetary policy; we have a bunch of Senators and Congressmen who engage in political grandstanding * To me, a lot of the people asking Janet Yellen questions are really just trying to speak for sound bites for the media, trying to score brownie points for their constituents *  One senator had to make some comment about global warming - do you think global warming is one of the things the Fed considers when it sets monetary policy? * Elizabeth Warren is trying to get Janet Yellen to criticize the Trump administration's efforts to pull back Dodd-Frank * Because she believes it was the bank that caused the financial crisis * She doesn't lay any of the blame at the foot of Congress or the Federal Reserve or the artificially low interest rates * She thinks it was just Wall Street greed that blew up Wall Street and that the reason we haven't had another financial crisis was because of the great legislation Dodd-Frank * And that somehow, if any bit of that is rolled back,  it's going to unleash another wave of rampant Wall Street speculation and blow up the economy all over again * Probably one of the dumbest comments from one of the senators is why we need more minorities on the Federal Reserve * The senator commented to Janet Yellen that we needed more African Americans on the Fed because they represent a significant percentage of the population, of the work force, and they need some representation at the Fed * I'm thinking, "What is this guy talking about?" * Do you have to be black to conduct monetary policy on behalf of other blacks? * Does that mean that only whites can conduct monetary policy for whites? * What is black monetary policy?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 will be in Orlando tomorrow for the Money Show * I will be there Wednesday and Thursday returning Friday * I have several speaking events, a couple of workshops * If you're in the Orlando area, come by, it's free to register online * You can pick up your badge on site * We'll have a booth in the exhibit all, you can come by and meet some EuroPac employees * We look forward to seeing clients and listeners * Last week I spoke about President Trump and his weak dollar policy * He thinks the dollar is too low, the euro is too low, the yen is too low, the Chinese yuan is too low *  Over the weekend Germany's finance minister came out and agreed with President Trump * He agrees that the euro is too low * We know that the Bundesbank does not approve of the easy money policies, the QE, the negative interest rates that Draghi and the ECB have force upon them * I believe that rising German opposition as well as rising inflation both in Germany and throughout the European union will ultimately force the ECB to abandon their monetary policy * Maybe even at the same time that the Federal Reserve is finally admitting that they're about to ease again * We got the jobs numbers on Friday, I did a video blog about it * To me, the numbers seem troubling for the Fed because even though we created better than 200,000 jobs the number of people who rejoined the workforce, who now want jobs jumped dramatically * So you have a lot of people looking for jobs; the jobs aren't there * So the unemployment rate is going to come up * There will be wage pressures, and that is going to push the Fed in an easing direction * In fact, we got some numbers that came out today on Consumer Credit * Credit card debt grew by the smallest amount since 2013, which is a good thing * We don't want consumers taking on credit, it's bad economically to borrow money to consume * I really made that point in my book, "How an Economy Grows and Why it Crashes" * If you haven't read it, pick up a copy at schiffbooks.com * The point is, it's good that consumers are taking on less debt * Of course, if you're a retailer, and you're depending on those indebted consumers to go deeper into debt to buy your stuff, that's a bad signOur 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

* Yesterday we got the first jobs report of the year and the way Wall Street and the media seem to be spinning it: * "It was a good report!" * It was good news because the headline number beat expectations: * We created 227,000 jobs in January vs the 175,000 that had been expected * Of course it was an improvement on the 157,000 jobs which was a disappointing report in December * But once again, if you look beneath the headline number, you'll find that there are a lot more problems to this report than the media is reporting * First of all, as always, the lion's share of these jobs are lower-paying service sector jobs * They're in retail trade, leisure and hospitality * So we're not creating the types of jobs that will Make America Great Again * In fact, if you look at the higher paying jobs - manufacturing, mining logging * These jobs are barely adding workers, if not losing workers * But the bigger story here has to do with what's happening to labor force participation, wages and unemployment * The official U3 Unemployment rate went up from 4.7% to 4.8% * The more revealing U6 number, which I think paints a more accurate picture of the true state of the labor market * That went up from 9.2% to 9.4% * Even Donald Trump, when he was campaigning, said that that number was far more accurate than Obama's official numbers * Why did the unemployment rate go up so much, considering that we had 227,00 jobs created? *  The reason was that we had over 700,000 workers re-enter the labor force * This goes against the trend that has dominated the entirety of the Obama administration * Where we saw a mass exodus of workers leaving the labor force * In fact, the labor force participation rate went up in January from 62.7% to 62.9% * First of all, why did so many Americans decide to re-enter the labor force in January? * Maybe there are 2 possible explanations and maybe they're both accurate: * One might have to do with all the optimism surrounding the Donald Trump Presidency * Remember, Donald Trump campaigned that he was going to be the greatest jobs President * And it's possible that a lot of people believe that this is going to happen * So they are re-entering the labor force to land one of these great jobs that President Trump will be delivering * You have to enter the labor force in order to apply for one of these jobs * Another reason is that the people who have been "sitting out" of labor force participation * Maybe circumstances are finally catching up with them, maybe they're running out of money * Maybe the cost of living has risen to the point that they have to, by necessity, find a jobOur 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