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Michael Maharrey

Articles by Michael Maharrey

Job Openings Hit Record High as Unemployment Persists

6 days ago

America’s labor market is a mess and riddled with incongruency.On the one hand, businesses can’t find workers. Help wanted signs hang in windows across the country. A McDonald’s franchisee in Tampa is offering bonuses just for showing up for an interview.Meanwhile, unemployment just ticked up to 6.1%.In what kind of world does this make sense?Only in a world where the government pays big money for people to stay at home.WolfStreet summed it up perfectly. We have a “screwed up” labor market.In the midst of widespread unemployment, there are a record number of job openings. According to the most recent Bureau of Labor Statistics report, job openings jumped to 8.12 million in March (seasonally adjusted). That’s the highest number of available jobs since the BLS began tracking job openings

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Janet Yellen’s Flip-Flop and What She’s Really Telling Us

13 days ago

Treasury Secretary Janet Yellen sent markets into a tizzy on Tuesday when she said interest rates may have to rise to keep the economy from overheating with all the government stimulus. But later in the day, she walked those comments back, claiming inflation isn’t going to be a problem and insisting that she wasn’t suggesting or predicting rate hikes.Yellen’s flipflop is telling. Even if inflation is an issue (and it is), there isn’t a darn thing the Federal Reserve can do about it.Yellen made her first comments during an event hosted by magazine. She warned that all of the government spending coming down the pike could cause the economy to “overheat.” That’s code for “it could cause price inflation to surge.”It may be that interest rates will have to rise somewhat to make sure that

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Jerome Powell: Same Old Song and Dance

19 days ago

The Federal Reserve wrapped up its April meeting yesterday. Again, there were no changes in actual policy, leaving everybody to try to parse out meaning from the FOMC’s statement and Jerome Powell’s post-meeting press conference.When you boil it all down, it was pretty much the same song and dance from  Federal Reserve Chairman Jerome Powell.In a tweet, Peter Schiff said these FOMC statements have been stripped of any real news value.Everyone knows what the Fed is going to say, as it’s clear the Fed isn’t willing to risk a negative surprise. So like the Oscars and the NBA Finals, the ratings have plummeted.”With nothing substantive in the official FOMC statement, everybody is left trying to read meaning between the lines of Powell’s post-meeting presser. As Peter put it in a recent

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US Government Debt Problem Even Worse Than Advertised

29 days ago

Through the first six months of fiscal 2021, the US government ran a record $1.7 trillion budget deficit. And there is no end in sight to the borrowing and spending. Just last month, the national debt eclipsed $28 trillion for the first time. But it’s even worse than that.A lot worse.When you include unfunded liabilities such as Social Security and Medicare, that actual US debt stands at $123.11 trillion, according to the Financial State of the Union 2021 published by Truth in Accounting.In order to pay off all of Uncle Sam’s liabilities, every taxpayer in the US would have to write a check for $796,000.I don’t know about you, but I don’t have it.The federal government has $5.95 trillion in assets and $129.06 trillion in liabilities. If it were a private company, the US government

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Fun on Friday: Why Not Both?

April 16, 2021

The other day a friend of mine asked me, tacos or burritos?My response: why not both?I think saying that annoyed him. He wanted me to pick one. Just one doggone it!We are very much a “pick one” kind of society. Everybody expects you to take a side on everything. Food, sports, entertainment, investing — and especially politics. (My choice there is usually “none.”)Oh, and if you choose poorly, they will want to argue about it. A lot.I will grant you that there is a time and a place to choose sides. But do we have to pick one or the other on ?I don’t think so.I’m just not wired that way, to be honest. I like diversity. I like options. And I enjoy availing myself to a many as possible. So, if I can, I’ll take tacos and burritos. Or maybe tacos today and burritos tomorrow. I feel no

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Jerome Powell Admits Federal Budget “Unsustainable” But Assumes We Can Fix It Later

April 15, 2021

Through the first six months of fiscal 2021, the US government ran a record $1.7 trillion budget deficit. Federal Reserve Chairman Jerome Powell said this is sustainable – for now.During a webinar sponsored by the Economic Club of Washington DC, Powell said the economy can handle the current debt load. But he did warn that the long-term trajectory of the US budget is unsustainable. The US federal budget is on an unsustainable path, meaning simply that the debt is growing meaningfully faster than the economy. And that’s by definition unsustainable over time. It’s a differnt thing to say the current level of the debt is unsustainable. It’s not. The current level of debt is very sustainable. And there’s no question of our ability to service and issue that debt for the foreseeable

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Fun on Friday: Nice “Work” If You Can Get It

April 9, 2021

Unemployment is at 6%. Tens of thousands of people apply for unemployment every week (744,000 last week alone). The US government is spending trillions of dollars to “stimulate” the economy. But restaurants in northeast Florida can’t find enough workers to open every day.Does this sound a nutty to you as it does to me?And yet, this is absolutely true! There’s a worker shortage here on Florida’s First Coast.I live close to Amelia Island. The good news is that tourist season has arrived and the tourists have returned in droves. (Unfortunately, tourist season doesn’t mean it’s OK to shoot them.) I can tell you this based on the traffic. The bad news is if you plan on vacationing on Amelia Island, you might want to bring a cooler of food. Or make sure you rent a place with a kitchen.

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The Mainstream Is Wrong About Rising Bond Yields and Gold

April 6, 2021

Prices are going up. The Federal Reserve is printing money at an unprecedented rate. The US government continues to borrow and spend at a torrid pace. As Peter Schiff put it in a recent podcast, we’re adrift in a sea of inflation. Gold is supposed to be an inflation hedge. So, why isn’t the price of gold climbing right now?In a nutshell, rising bond yields have created significant headwinds for gold. And the mainstream is reading rising yields and their relationship to gold all wrong. It really comes down to expectations. Most people in the mainstream view rising yields as an inflation signal, and they expect the Federal Reserve to respond to this inflationary pressure in a conventional way. They expect the Fed to tighten monetary policy, raise interest rates and shrink its balance

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Fun on Friday: April Fools!

April 2, 2021

So, this week was April Fools’ day. I’ve never really been into practical jokes, but I did post something on Facebook to mark the day.“Taxation is the price we pay for a civilized society.”Amusingly, a few people actually took me seriously. They don’t know me very well!So, where did the tradition of April Fools’ Day come from? Like a lot of traditions, nobody really knows.Some people attribute it to in . In the story, a fox tricks a vain rooster on Syn March bigan thritty dayes and two. Some people have taken this to mean March 32, which would be April 1. But there are other details in the story that cast doubt on this.Some historians think April Fools’ Day might be related to a Roman holiday called Hilaria (Latin for joyful). Followers of the cult of Cybele celebrated the festival at

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Fun on Friday: Chasing a Pot of Gold

March 19, 2021

We just celebrated St. Patrick Day and that got me thinking about Leprechauns – specifically their pots of gold. I mean, what is a Leprechaun anyway? And how in the heck did they get gold? I’d like to have a pot of gold. Maybe I could get some tips from them.Now you would think with a name like Maharrey I would be up on my Irish lore. But alas, not so much. Fortunately, we have Google.As it turns out, Leprechauns are cobblers. Yes, shoe-makers. This doesn’t seem like a particularly good way to get wealthy — unless of course, they’re making Nike or Reebok shoes.At any rate, the Leprechaun myths trace back to the 8th century. As one version of the story goes, water spirits known as ‘luchorpán’ merged with a household fairy. ‘Luchorpán’ literally means “small body.” Other researchers say

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What’s In This Stimulus Bill 3.0? And Who’s Going to Pay for It?

March 11, 2021

On Wednesday, the House gave final approval to coronavirus stimulus bill 3.0. For those keeping score at home, that brings total stimulus spending approved during the pandemic to $5 trillion.So, what exactly is all of this money going to be spent on? And who is going to pay for it?The House passed the so-called American Rescue Plan by a 220-to-211 vote pretty much along party lines. In fact, not one Republican voted for the bill. They said it was too porky. Apparently, only Republican pork is acceptable to the GOP. But I digress.The stimulus was sold on the direct payment to Americans. Yes. You’re going to get a check. (Or more likely a direct deposit.) Individuals making less than $75,000 per year and married couples making less than $150,000 per year will get the full $1,400 per

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Government Stimulus Is Blowing Up a Massive Economic Bubble

March 10, 2021

We’re told we’re on the road to economic recovery. The $1.9 trillion stimulus is all we need to get us over the hump. But the truth is, Americans started spending like they were over the hump months ago. In fact, American consumers high on stimulus have been on a spending spree since last summer. The Federal Reserve printed money. Uncle Sam handed it out. American consumers spent it on imported goods.This isn’t the formula for a genuine economy. It’s the formula for a giant bubble.During the Great Recession, consumers cut spending. This is what you generally expect during an economic downturn. The economy contracts, people lose jobs, money gets tight and consumers spend less. You can see this in the numbers. Spending on durable goods plunged by 19% from the peak in October 2007 to the

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Fun on Friday: Would You Steal From This Dude?

March 5, 2021

Do you know what’s pretty ballsy? Stealing from a professional wrestler.Yeah, I know pro wrestling is fake. (No, really, it is.) But that doesn’t change the fact that pro wrestlers are big, strong athletes.In fact, before he went into fake wrestling, Kurt Angle was a real wrestler and won an Olympic gold medal in the sport. And that brings us to a WWE fan with sticky fingers and apparently not too much common sense.When Angle started in WWE, he used his gold medal as a prop. Yes. The real gold medal. One night, our sticky-fingered fan pilfered a bag that had the medal inside while Angle was signing autographs. Fortunately for our intrepid thief, Angle didn’t see it happen. I suspect if he had, things would not have gone well for the aforementioned fan.On the other hand, Angle was

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The Fed Will Need More than Words to Keep the Bubble Inflated

March 4, 2021

Bond yields spiked. The stock market threw a tantrum. analyst Dhara Ranasinghe called it “a tussle over borrowing costs.”The Fed won round 1, thanks to a little help from the Aussies. But even the mainstream seems to have noticed that this wrestling match isn’t over and the Fed may be forced to take real action soon. As Ranasinghe put it, “Round Two, and perhaps even Round Three, are inevitable, and they may require policy action rather than just words.”By policy action, they mean upping quantitative easing – exactly as Peter Schiff has predicted.The bond market got clobbered on Friday. As prices fell, the yield on the 10-year Treasury pushed as high as 1.61% and the 30-year hit 2.4%. These rates aren’t high by historical standards, but Peter said it was one of the biggest interday

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US National Debt Quietly Eclipses $28 Trillion

March 3, 2021

On March 1, the US national debt eclipsed $28 trillion with no end to the borrowing and spending in sight.It was just last fall that the debt surged above $27 trillion for the first time. In less than five months, Uncle Sam added another $1 trillion to its debt load. And there’s barely been a peep from the mainstream media.To put the growth of the national debt into perspective, the debt was at $19.95 trillion when President Trump took office in January 2017. It topped $22 trillion in February 2019.  That represented a $2.06 trillion increase in the debt in just over two years. By November 2019, the debt had eclipsed $23 trillion. That was before the coronavirus pandemic put borrowing and spending on hyperdrive. Less than 18 months later, the US government has blown the debt up by

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Fun on Friday: Never Read the Comments

February 26, 2021

When I first started writing professionally, one of my mentors offered me some sage advice – never read the comments.I’ve not been particularly successful in following that advice much to my sanity’s consternation. Because I’ll tell you what – the comment section can be a brutal place.Now, to be honest, most comments are innocuous. And some are downright helpful. I’ve been able to correct errors and learn new things thanks to some of my commenters. And of course, some folks just want to say I’ve done a good job. That’s nice. And it’s good for the ego.But some comments fall into the category of “what in the heck am I supposed to do with this?”For instance, about a year ago, a guy showed up in the comment section of an episode of the SchiffGold Friday Gold Wrap podcast to tell me he

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Kansas Bill Would Make Gold and Silver Legal Tender in the State

February 21, 2021

A bill introduced in the Kansas House would recognize gold and silver specie as legal tender and repeal all taxes levied on it. The legislation would pave the way for Kansans to use gold and silver in everyday transactions, a foundational step for the people to undermine the Federal Reserve’s monopoly on money.The Federal Reserve is the engine that drives the most powerful government in the history of the world. Ron Paul popularized the slogan “End the Fed,” but Congress is nowhere near abolishing the central bank.  It can’t even come up with the will to audit the Fed.Even though state action can’t end the Fed, there are steps states can take that will undermine the Federal Reserve’s monopoly on money. By passing laws that encourage and incentivize the use of gold and silver in daily

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Fun on Friday: Probably Not the Best Place to Store Your Gold

February 19, 2021

If you are a longtime follower of SchiffGold news, you may recall that back in 2016, a piano tuner in Shropshire England discovered 13 pounds of gold stashed inside a piano. At the time, I said the story should be filed under the category of “worst places to store your gold.” I haven’t changed my mind on that, by the way.Anyway, this week, there was a story about this find that updates some of the details.Bishops Castle Community College received the piano as a donation in the summer of 2016 and sent the instrument over to Martin Backhouse for maintenance and tuning the following year. When he opened it up, he spotted some odd pouches stacked neatly under the keyboard. When he slit open the stitching on one of the pouches, he found gold coins. All told, there were 913 gold sovereigns

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The Federal Government Has No Constitutional Authority to Impose a Minimum Wage

February 18, 2021

Talk of hiking the minimum wage at the national level has ramped up in recent weeks. With the Democrats controlling the House and the Senate, and Joe Biden in the White House, it seems increasingly likely that we’ll soon see a federal $15 per hour minimum.In other words, it may soon be illegal to take a job that pays less than $15 an hour.Of course, this is a horrible policy. Wages shouldn’t be “regulated.” You must suspend basic laws of economics to think otherwise. I talked in-depth about the economic problems with minimum wage laws during my Feb. 12 Friday Gold Wrap Podcast.Beyond the economic problems with minimum wage policy, there are constitutional issues when the feds try to implement it. In fact, the feds have no constitutional authority to impose wage controls at all.Federal

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Fun on Friday: How to Sell a $69 Burger

February 12, 2021

In the Friday Gold Wrap podcast this morning, I talked about the minimum wage. Making a point about how raising prices lowers demand, I pointed out that McDonald’s wouldn’t sell many $15 hamburgers. But you know, there is a way Micky-Ds could make that work. Wrap those burgers in gold.A chef in England is doing just that and he’s selling them for far more than $15 a burger. Andrea Zagatti is getting £50 a pop for his creation at Mr. Z in London. That’s about $69 US.By the way, Mr. Z will deliver your sandwich – in a Mercedes. But you’re going to have to go to London.Now, to be fair, we’re not really talking about a hamburger here. Dubbed “The Millionaire” the sandwich features aged beef ribeye, chimichurri, chicharrones, buffalo ricotta, king oyster mushrooms, and edible 24 karat

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Reddit Raiders Eyeball Silver

January 29, 2021

If you’re following the markets at all, you know that the price of GameStop stock skyrocketed this week. As the story goes, it was primarily driven up by retail investors on platforms such as Robinhood, and pushed by social media posts, particularly on Reddit. Now, these so-called Reddit-Raiders have set their eyes on silver.The GameStop phenomenon not only caught a lot of people’s attention because the price skyrocketed over 400% in a matter of days. It also raised eyebrows because it cost some of the hedgefund big boys a lot of money. Melvin Capital in particular took huge losses when it had to close out its short positions on Tuesday. CNBC could not confirm exactly how much the fund lost, but reported that short-sellers overall have accumulated losses of more than $5 billion

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Bills Introduced in Mississippi and Tennessee Would Repeal Sales Tax on Gold and Silver

January 27, 2021

Bills introduced in the Mississippi House and the Tennessee Senate would repeal state sales taxes on precious metals bullion. This would not only relieve some of the tax burdens on investors in those states; it would also take a small step toward treating gold and silver as money instead of commodities. In Mississippi, Rep. Henry Zuber (R-Ocean Springs) and Rep. Brady Williamson (R-Oxford) introduced House Bill 375 (HB375) on Jan. 18. The proposed law would exempt gold, silver, platinum and palladium bullion from the state sales tax. To qualify for the exemption under the proposed law, bullion must “be refined and contain at least ninety percent (90%) gold, silver, platinum, or palladium or some combination of these metals, and the sales price of the item must fluctuate with and depend

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Nixon Closed the Gold Window and All I Got Was This Lousy National Debt

January 26, 2021

This year will mark the 50th anniversary of President Richard Nixon severing America – and the world – from its last tie to the gold standard. The rapid devaluing of the dollar is the most obvious result. But another consequence has been an enormous national debt that continues to grow at a staggering pace. Most people don’t realize it, but this is a direct and intentional result of the current fiat money system.In 1971, Nixon put the final nail in the coffin of the gold standard, but President Franklin D. Roosevelt put us on the path. On April 5, 1933, Roosevelt signed Executive Order 6102. It was touted as a measure to stop gold hoarding, but it was in reality, a massive gold confiscation scheme. The order required private citizens, partnerships, associations and corporations to turn

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Janet Yellen Talking Out of Both Sides of Her Mouth

January 21, 2021

During testimony before the Senate Finance Committee, Treasury Secretary-nominee Janet Yellen talked out of both sides of her mouth. She acknowledged that too much debt is problematic, but in the same sentence, insisted we need to “act big” to rescue the economy.Neither the president-elect, nor I, propose this relief package without an appreciation for the country’s debt burden. But right now, with interest rates at historic lows, the smartest thing we can do is act big.”This is a prime example of the old adage that you can ignore everything in a sentence that comes before the word “but.”The truth is, Yellen doesn’t care about the debt, and she, nor the newly installed Biden administration, will ever do anything to address it. The strategy is to spend, spend, spend, and continue to kick

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European Central Bank Takes Bond Market Manipulation to the Next Level

January 20, 2021

Peter Schiff recently explained how the Federal Reserve has rigged the US Treasury market. Well, the European Central Bank has taken bond market manipulation to the next level.According to a report, the ECB is buying bonds to control the yield spread between debt issued by various EU countries. As a result of this central bank mechanization, the spread between the yields on German and Italian bonds has remained “remarkably stable” despite the Italian government teetering on the verge of collapse.In a nutshell, the ECB buys Italian bonds in order to create artificial demand and prop up the price. Since bond yields are the inverse of bond prices, the ECB can hold rates steady by keeping the price up, thus maintaining a stable spread between the Italian bonds and other European debt. Left

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US Government Runs Biggest December Deficit in History

January 14, 2021

The US government ran the biggest December budget deficit in history last month.The December budget shortfall came in at $143.6 billion. That compares with a $13.3 billion deficit in December 2019, according to the Monthly Treasury Statement. Spending continues to drive the ballooning budget deficits. Receipts were actually up 3% year-on-year in December, but outlays exploded by 40% year-on-year. Uncle Sam spent $490 billion in a single month. Just three months into fiscal 2021, the federal government has already blown through over $1.3 trillion.In the first quarter of fiscal 2021, the US government ran a deficit of over half-a-trillion dollars ($572.9 billion). In other words, in a mere three months, Uncle Sam has pushed the deficit over halfway to $1 trillion. Before last year, the

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Fun on Friday: Try Harder

January 8, 2021

The last time I wrote about gold smuggling, I was impressed by the pain a man was willing to endure in order to hide gold from authorities. He literally stuck gold bars up his rear — two pounds of gold.Ouch.But today I have a different kind of smuggling story. It is impressive not because of the smugglers’ dedication and ingenuity, but their sheer laziness.Generally, gold smugglers go to great lengths to hide their contraband – like sticking in their rectum.  There  less uncomfortable ways to smuggle gold. Officials say travelers returning to India often hide gold in chocolate boxes, purses, umbrellas and pens in an attempt to evade taxes.But three smugglers nabbed in O.R. Tambo International Airport in Johannesburg, South Africa, weren’t about to go to the trouble of hiding gold. They

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Three Records Broken in 2020 That Were Less Than Ideal

January 5, 2021

With the coronavirus pandemic serving as a backdrop, 2020 was a record-breaking year in many ways. And some of the economic records that fell were, shall we say, less than ideal. In fact, the impacts of these records will almost certainly ripple through the economy as we move into 2021.Here are three records that fell last year that didn’t get nearly as much attention as they should have.To begin with, the money supply grew at a record pace in 2020.As measured by the True Money Supply Measure (TMS), a formula developed by economists Murray Rothbard and Joseph Salerno, money supply growth broke records eight straight months leading into October and was just a hair away from record growth in October and November. Based on the more traditional M2 measure, money supply growth set a record

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Fun on Friday: Have You Made Your Pet’s New Year Resolution?

January 1, 2021

It’s time to bid a fond farewell to 2020. Good riddance and don’t let the door hit you in the butt on the way out!Of course, the New Year also means it’s time for — resolutions.Confession: I’ve never been good at resolutions. In fact, I refuse to make them. Why set yourself up for failure? But get this; now I’m not only supposed to make resolutions for myself. I have to make them for my pets!Ummm – no.The city of Jacksonville, Florida’s, Animal Care and Protective Services offered a list of resolutions you can make for your pet. They sound a lot like the resolutions I’m supposed to make for myself. They include regular exercise, a healthy diet, regular trips to the vet (for your pet, not for you) and learning new skills.You will note that most of these resolutions are for dogs. No

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The World Is Awash In Negative Yielding Debt

December 30, 2020

So far, the US has escaped negative interest rates as a matter of central bank policy. Back in May, many thought a Fed move to negative rates was a real possibility. Of course, much of the world has operated under negative rates as a matter of policy for years. The European Central Bank (ECB) launched negative rates in June 2014. The Bank of Japan (BOJ) introduced negative rates in January 2016. Both are still maintaining a negative rate policy today.While the Fed has resisted the temptation of a negative rate policy so far, that doesn’t mean Americans have escaped the reality of below-zero real rates. In fact, the world is awash in negative-yielding debt.Financial analyst Jim Grant’s newsletter, Almost Daily Grant (ADG), called it “a new benchmark in financial repression” noting that a

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