Friday , July 30 2021
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Articles by Schiff Gold

Money Supply July 2021: Growth Rate Sees Massive Drop

2 days ago

M2 Money Supply is measured by the Federal Reserve to calculate the amount of Money in the financial system. The Fed defines M2 as: Seasonally adjusted M2 is constructed by summing savings deposits (before May 2020), small-denomination time deposits, and retail MMFs, each seasonally adjusted separately, and adding this result to seasonally adjusted M1.Historically, the term inflation was defined as an expansion of the money supply that generally led to higher prices. Therefore increases in M2 is the measure of inflation. Increases in M2 will not directly align to increases in CPI for many reasons. This can be due to productivity gains, increase in population, and also modifications to how CPI is calculated. While the latest CPI generally understates a rise in prices by design, the CPI

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India Gold Market Shows Signs of Life as COVID Second Wave Eases

2 days ago

India ranks as the second-largest gold-consuming country in the world, second only behind China, but demand has languished for the last couple of years. The pandemic crushed demand, particularly for gold jewelry, but record-high gold prices in rupee terms and government policy put a drag on the gold market even before COVID-19. There were signs of a turnaround late last year and it continued through the first quarter of 2021. The most recent wave of COVID-19 stalled the gold Indian gold market’s recovery, but it appears to be regaining steam.Retail gold sales in India rebounded late last month as the COVID-19 surge eased and Indian states began relaxing lockdown measures in mid-June. As a result, retail gold demand improved particularly in the final two weeks of the month.According to

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Fiat Money, Deception and Lies

3 days ago

Inflation continues to run rampant, eroding our purchasing power even as policymakers continue to tell us there’s nothing to worry about. The US government continues to run up unfathomable levels of debt. We continue to endure a repeating cycle of booms and busts as Fed and US government policies blow up bubbles that inevitably pop.It’s easy to get caught up in the news of the day and look at these issues in isolation, but there is one factor that ties them all together – fiat money. As economist Thorsten Polleit put it, “Basically everything bears their fingerprints: the economic and financial system, politics—even people’s cultural norms, values, and morals will not escape the broader consequences of fiat currencies.”Now and then, it pays to take a step back to get a broader

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Russia Goes to War With Inflation

3 days ago

While the Federal Reserve continues to downplay inflation in the US, insisting that it is “transitory,” the Bank of Russia has gone to war with rising prices. Bank of Russia Governor Elvira Nabiullina says she sees “persistent factors” to inflation, and on Friday, the Russian Central bank hiked interest rates by 100 basis points to 6.5%.In a statement, the Bank of Russia said, “The contribution of persistent factors to inflation increased due to faster growth of demand compared to output expansion capacity.”The word “transitory” was nowhere to be found in the Bank of Russia statement.Taking into account high inflation expectations, this has significantly shifted the balance of risks towards pro-inflationary ones and may cause inflation to deviate upwards from the target for a longer

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Peter Schiff: The Mainstream Pundits Are the Real Stopped Clocks

4 days ago

Mainstream pundits sometimes accuse Peter Schiff of being a “stopped clock.” They admit he’s right occasionally, but only by virtue of sticking to the same narrative, talking about the malinvestments and misallocations in the economy and warning about an impending crisis. In this clip from his podcast, Peter said it’s the mainstream regulars on financial networks like CNBC who are the real stopped clocks. Peter said you can never count on mainstream “financial experts” to warn you about an impending crisis.It is never going to happen. That is impossible. They do not understand the problems that underlie the economy. They don’t understand the damage that is being done by Fed policy. In fact, these guys believe everything the Fed says.”[embedded content]In the leadup to the 2008

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If Inflation Is “Transitory” Why Is This Happening?

4 days ago

Federal Reserve Chairman Jerome Powell continues to insist the surge of rising prices is “transitory. But if this is true, why are inflation projections for 2022 rapidly rising? It seems the markets aren’t buying the transitory theme.As prices continue to skyrocket, Americans paying more and getting less. Nevertheless, Powell stuck to his guns during his most recent trip to Capitol Hill. Transitory is his story, and he’s sticking to it! Powell conceded inflation “has increased notably and will likely remain elevated in coming months before moderating.” But he continued to insist we’re really only seeing significant price pressures from a few sectors such as the auto industry and they will abate.Meanwhile, inflation forecasts for next year keep creeping higher. As Deutsche Bank credit

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Fun on Friday: With Friends Like This…

7 days ago

With friends like this, who needs enemies?Amanda Douglas, 27, stole gold and silver coins, along with other items from her friend’s home, including gold bars, 150 earrings, guns, ammunition, and a container holding a dog’s ashes. Yes. You read that correctly. Amanda stole her friend’s pet’s ashes. Nice girl.Amanda pleaded guilty to the burglary, along with another crime.According to a report by a Texas TV station, the gold and silver coins alone were valued at over $30,000. At least Amanda understands the value of gold and silver, if not friendship.According to police, Amanda helped her friend get ready for a doctor’s appointment. When the friend was gone, Amanda reentered the home and called her husband. The duo then pilfered the friend’s house.Police got information that Amanda was

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Political Theater: SchiffGold Friday Gold Wrap July 23, 2021

7 days ago

Pop some popcorn. It’s time for some political theater. Congress is gearing up for another debt ceiling fight. In this episode of the Friday Gold Wrap podcast, host Mike Maharey gives you a preview of the next big Washington DC blockbuster production, complete with some debt ceiling history and an explanation as to why we shouldn’t need one. Maharrey also covers retail sales, inflation and the latest movement in the gold market.The SchiffGold Friday Gold Wrap podcast combines a succinct summary of the week’s precious metals news coupled with thoughtful analysis. You can subscribe to the podcast on iTunes and Stitcher.Tune in to the Friday Gold Wrap each week for a recap of the week’s economic and political news as it relates to gold and silver, along with some insightful

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Peter Schiff: The Markets Are Afraid of the Wrong Thing

8 days ago

The markets have been jittery lately. The mainstream remains concerned about inflation – more specifically that the Fed is going to tighten monetary policy sooner rather than later to fight rising prices. But in his podcast, Peter Schiff makes the case that the markets are afraid of the wrong thing. They shouldn’t be worried about the Fed fighting inflation. They should be worried that it won’t.There was a big global selloff in stocks earlier this week. The Dow was down nearly 900 points at its low. The mainstream blamed the big selloff on COVID fears. But Peter said he wasn’t so sure. After all, it’s not like anything really changed over the weekend. The delta variant of COVID-19 was just as much a problem on Friday as it was on Monday. Peter said he thought the coronavirus was a

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China’s Gold Market Continues to Recover

10 days ago

Chinese gold imports have nearly returned to pre-pandemic levels and the world’s biggest gold market continues to recover.According to the latest data reported by the World Gold Council, China imported 67.6 tons of gold in May. That was 65 tons higher than May 2020 and only three tons lower than May 2019, before the coronavirus pandemic gripped the country.Last spring, China gave the green light for the import of 150 tons of gold. The report notes that China’s returning appetite for gold could potentially “support global prices.” called the size of the expected Chinese gold imports a “dramatic return to the global bullion market.”China ranks as the world’s number one gold consumer, but imports plunged during the coronavirus pandemic as local demand for the yellow metal dried up. In

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Peter Schiff: The Fed’s Real Power – The Power to Destroy

10 days ago

PBS Frontline recently released a documentary titled “The Power of the Fed.” Peter Schiff watched it and offered his analysis of the show on his podcast. He said the documentary missed the real power of the Fed — the power to destroy. [embedded content]Peter said his expectations for the production were pretty low.As low as I set the bar, I didn’t set it low enough. Because they didn’t even meet my low expectations.”A lot of people said the documentary exposed the Fed, but Peter said he didn’t think it exposed it at all. He said it felt more like a propaganda piece than it did a genuine investigatory documentary.The documentary didn’t so much expose the Fed as a bad actor or that it’s responsible for our economic problems. The point seemed to be that the central bank uses its power

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Government Debt Looking as Sketchy as a Payday Loan

12 days ago

The US government continues to borrow and spend at a torrid pace, running massive deficits month after month.The US national debt currently stands at nearly $28.5 trillion. That doesn’t account for the trillions of unfunded liabilities. And there is no end to the spending in sight. There are trillions of dollars in new spending programs coming down the pike.The debt phenomenon isn’t limited to the US. Countries all over the world are following the same path. The world is awash with government bonds as countries borrow more and more in a vain effort to keep up with their spending.Economist Malachy McDermott likens the international bond market to a payday loan scheme. Needless to say, it’s not something anybody would advise getting caught up in.If there is one thing every honest

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Peter Schiff: The Fed Bets the Farm on Transitory Inflation

12 days ago

After hotter than expected CPI data came out for the sixth time this year, Federal Reserve Chairman Jerome Powell spent two days on Capitol Hill trying to convince everybody that there’s no problem. As Peter Schiff put in in a recent podcast, the Fed is betting the farm on “transitory” inflation. It’s really got no other choice.Powell made every effort to sound reassuring and let everybody know there was nothing to worry about during his two days of congressional testimony.And he did it with a straight face, which was not an easy task considering the BS that he was required to constantly put out in order to put lipstick on this pig of an economy. And not even so much the economy that’s the pig, but the monetary policy that Powell himself has been administering.”[embedded content]Powell

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Comex Delivery Countdown: Mid-July Update

14 days ago

This analysis focuses on gold and silver data provided by the Comex/CME Group. See the article What is the Comex for more detail.Silver: Recent Delivery MonthFirst Position Day is when contracts must post 100% margin to stand for delivery. Once delivery begins, contracts can settle in cash, or more contracts can be opened and stand for immediate delivery (usually a sign of strong physical demand). Figure 1 below shows the last 24 months of silver delivery data when compared to First Position and the day before First Position. As can be seen, Open Interest falls significantly between the two days. This can be seen more clearly in Figure 4 below, the Open Interest countdown chart.Silver is wrapping up a major delivery month that was on pace to potentially break records. However,

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Fun on Friday: The Story of the Mormon Island Gold Rush

14 days ago

Falling lake levels due to drought in California have revealed the ruins of an old gold mining town. The story behind Mormon Island is pretty interesting.Early in March 1848, W. Sidney, S. Willis, and Wilford Hudson set off from their fort to hunt deer. When they stopped along the south fork of the American River, they found gold.This was just two months into the California gold rush.Sidney, Willis and Hudson were members of the Mormon Battalion. That’s an interesting story in and of itself. The Mormon Batallion was the only military unit made up solely of people from one religion. It was formed during the Mexican-American War. The volunteer unit made a grueling 2,000-plus mile march from Council Bluffs, Iowa, to San Diego, California. Their cross-country slog opened up a southern

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The Story Is All They’ve Got! SchiffGold Friday Gold Wrap Podcast July 16, 2021

14 days ago

Consumer price index data came in hotter than expected. Again. The producer price index data also came in well above projections. But Fed Chair Jerome Powell continues to stick to his “inflation is transitory” story. On this episode of the Friday Gold Wrap, host Mike Maharry digs into the inflation data and highlights Powell’s comments on Capitol Hill. He concludes the story is really all they’ve got.The SchiffGold Friday Gold Wrap podcast combines a succinct summary of the week’s precious metals news coupled with thoughtful analysis. You can subscribe to the podcast on iTunes and Stitcher.Tune in to the Friday Gold Wrap each week for a recap of the week’s economic and political news as it relates to gold and silver, along with some insightful commentary.LISTEN[embedded content]You Can

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Peter Schiff: The Transitory Inflation Ruse

15 days ago

The markets were looking for signs that the transitory inflation period was coming to an end. They didn’t get it when the June CPI number came in much hotter than expected. In his podcast, Peter Schiff talked about the latest price data and said it reveals the dirty little secret – all of this talk about transitory inflation is a ruse. Even worse,  despite what the markets seem to think, there’s nothing the Federal Reserve can do about it.The producer price index (PPI) numbers that came out Wednesday didn’t do anything to ease inflation concerns. Producer prices charted the largest gain in over 10 years. Year on year, the PPI surged 7.3%. That was the biggest year-on-year rise since November 2010 and followed a 6.6% advance in May. Month on month, PPI was up a full 1% against

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US Government Spending Sure Isn’t Transitory

16 days ago

The mainstream narrative is that the Fed will soon admit that inflation isn’t transitory. At that point, it will raise interest rates and taper its bond-buying program to fight rising prices. But this narrative ignores the elephant in the room – the ever-increasing national debt.In June, the US government ran another big deficit of $174.16 billion, continuing the trend of overspending and massive budget shortfalls.With three months remaining in fiscal 2021, the budget deficit stands at a staggering $2.24 trillion, according to June Monthly Treasury Statement.Despite the fact that the economy has opened back up, the US government continues to run massive budget deficits month after month after month.Uncle Sam spent $623 billion in June, a 4.3% increase over May’s outlays. That’s over

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US Budget Deficit Analysis: June 2021

16 days ago

The US Budget Analysis shows the deficit or surplus of the US Federal Government. A deficit occurs when spending (outlays) is greater than income (receipts). When the US Budget is in deficit (which it has been for over 2 decades), it accounts for one of the two components of the Twin Deficits. The trade deficit accounts for the other component which was previously analyzed for May 2021. To cover the deficit, the government borrows money from the public (or from the Fed). The latest borrowing report was reviewed in the June debt analysis.TTM = Trailing Twelve MonthsUnderstanding the TrendsThe budget deficit for June 2021 was 174B which was up 32% over May but 20% below the TTM average of 218B. The massive deficits incurred last year and in March of 2021 were for one time COVID-19

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Gold and Silver Pricing Update: Mid July 2021

17 days ago

Many variables can drive the price of gold and silver. These include Fed meetings/speeches, inflation data, jobs numbers, risk appetite, etc. Some people speculate that the price is suppressed and manipulated by the banks and Fed. While coordinated suppression is not impossible, there are other more probable explanations for gold and silver price action. This price action manifests with changes in Open Interest in futures contracts traded on the Comex. See What is the Comex for more details.It could be argued that simply having future/paper trading of gold and silver can be considered price manipulation. Speculators can short and go long using leverage that represents a massive amount of physical metal. Obviously, this metal is not readily available and is traded as speculation only.

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Many Indians Depend on Gold to Stay Afloat During Pandemic

17 days ago

Gold has served as a lifeline for Indians pummeled by the economic storm caused by the government response to the coronavirus pandemic.The Indian government’s response to the first wave of COVID-19 ravaged the economy. As a result, many banks were reluctant to extend credit due to fear of defaults. In this tight lending environment, many Indians used their stashes of gold to secure loans. As Indians battle the second wave of COVID-19, many Indians have now turned to selling their gold outright in order to make ends meet.When coronavirus gripped the world, Paul Fernandes initially took out a loan using gold as collateral to pay for his children’s education after he lost his job on a cruise ship. Now he’s turned to selling gold jewelry to meet expenses. He told selling gold keeps him

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Transitory Inflation Turning Into an Inflationary Spiral

17 days ago

Consumer prices have been rising precipitously this year. If you annualize the Consumer Price Index through the first five months of 2021, you get a CPI increase of over 6%. Federal Reserve Chairman Jerome Powell continues to push the narrative that inflation is transitory, but not everybody buys into this storyline. On the Wolf Street Report, Financial Analyst Wolf Richter said Powell’s temporary inflation is turning into an “inflation spiral.” Richter said some measure of inflation will likely tick down in the months ahead, but to steal Powell’s term, the relief will be transitory and only serve to offer false hope before inflation starts rising again.The first bout of inflation always looks temporary. But during those first bouts of inflation, that’s when the triggers of persistent

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Stimulus Check Run Out; Americans Whip Out Their Credit Cards

18 days ago

What do you do when that stimulus money runs out? You whip out the credit card.Consumer debt was up 10% in May, according to the latest data from the Federal Reserve, and we saw a big jump in credit card balances for the first time since February 2020.Americans collectively now owe $4.28 trillion in consumer debt after a $35.3 billion increase in May.The Federal Reserve consumer debt figures include credit card debt, student loans and auto loans, but do not factor in mortgage debtRevolving credit, primarily made up of credit card debt rose by $9.2 billion in May, an 11.4% increase. Americans now owe $974.6 billion in credit card debt.Through the pandemic, Americans, by and large, kept their credit cards in their wallets and paid down balances. This is typical consumer behavior during

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Peter Schiff: The Fed Is Like the Boy Who Cried Wolf

18 days ago

There has been a growing sentiment in the markets that inflation isn’t transitory and the Fed is going to eventually have to tighten monetary policy to deal with it. The International Monetary Fund fed the narrative last week when Managing Director Kristalina Georgieva warned of a “sustained” inflation rise in the United States. This comes after a June Federal Reserve meeting that many perceived as a turn toward hawkishness. But in his podcast, Peter Schiff said the Fed is like the boy who cried wolf when it comes to fighting inflation and the markets are bracing for the wrong impact.There was a pivot to safe havens last week. Peter thinks this growing sense that the Fed is going to start tightening sooner rather than later drove it.If inflation is not transitory, if it’s sustained,

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US Debt Analysis: June 2021

21 days ago

The US Government is on an unsustainable debt trajectory. Even though the Federal Reserve has acknowledged this fact, most mainstream figures consider it a distant problem or even not an issue at all. The argument highlights that debt fears have raged since the debt crossed $1T decades ago and no negative consequences have materialized. This analysis digs into the detail of the debt to show why the US Government is at much greater risk than even a few years ago.By downloading Cusip level data back to 2000, the analysis is both deep and wide. It starts with a trend analysis specifically focusing on the debt rollover by product. The most recent numbers show how the Treasury is managing the debt post-Covid. A deeper look into history demonstrates the changing debt makeup. The analysis

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Fun on Friday: Raise That Silver Cup!

21 days ago

On Wednesday night, I got to watch a bunch of guys skate around an ice rink with a silver cup hoisted over their heads. My beloved Tampa Bay Lightning won their second straight Stanley Cup championship with a 1-0 win over the Montreal Canadians.If it seems like we just did this – well – we did.Here’s a fun fact for you. The Lightning won the 2020 Stanley Cup just 282 days before earning their second. That’s 40 weeks. So, it’s theoretically possible that a child conceived on the day the Bolts won the 2020 Cup was born the day they won the 2021 Cup.If you know me at all, you know I’m a huge Lightning fan and have been since the day they came into the NHL. So, I’m pretty thrilled with back-to-back championships. It’s a pretty amazing accomplishment. I think the Stanley Cup is the hardest

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How Long Can They Keep This Thing Going? SchiffGold Friday Gold Wrap July 9, 2021

21 days ago

This week, the IMF undercut the Fed’s “transitory” inflation narrative, warning about the possibility of sustained inflation in the US. But the real question remains unanswered – what will the Fed do about it? In this episode of the Friday Gold Wrap podcast, host Mike Maharrey talks about the options on the table. None of them seem particularly good. That raises another question: how long can the politicians and central bankers keep this thing going?The SchiffGold Friday Gold Wrap podcast combines a succinct summary of the week’s precious metals news coupled with thoughtful analysis. You can subscribe to the podcast on iTunes and Stitcher.Tune in to the Friday Gold Wrap each week for a recap of the week’s economic and political news as it relates to gold and silver, along with some

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ETFs Add Over 40 Tons of Gold in Q2

22 days ago

Gold-backed ETFs globally added 40.7 tons of gold in the second quarter of 2021, reversing a trend of significant outflows in Q1.In 2020, gold-backed ETFs recorded record net inflows of gold. Funds added nearly 231 more tons in 2020 than they did during the previous record year (2009/646 tons). But with declines in the price of gold and investors pivoting to riskier investments as economies improve, gold flowed out of ETFs in the first quarter. That trend reversed in May.As gold prices rebounded throughout most of the second quarter, flows into gold ETFs followed suit. North American and European funds led the way adding a combined 43.8 tons of gold in Q2.Funds in Asia recorded small outflows of 1.6 tons in the quarter. Inflows of 2.3 tons in June were not enough to offset heavy losses

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IMF Chief Warns of “Sustained” Rise in US Inflation

22 days ago

Even with the CPI rising more than expected every month this year, Federal Reserve Chairman Jerome Powell continues to insist that inflation is “transitory.” But not everybody is buying Powell’s narrative. In a blog post published July 7, International Monetary Fund (IMF) Managing Director Kristalina Georgieva warned of a “sustained” inflation rise in the United States.But even if she’s right, will the Fed do anything about it?There is a risk of a more sustained rise in inflation or inflation expectations, which could potentially require an earlier-than-expected tightening of US monetary policy,” Georgieva wrote.During the June FOMC meeting, the Fed raised its CPI projection to 3.4%. That was a full percentage point higher than the March forecast, but the central bank continued to

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Comex Stock Update: July 2021

23 days ago

This analysis focuses on gold and silver within the Comex/CME futures exchange See the article What is the Comex? for more detail. It provides historical context and defines many of the terms used below.While it is exciting to track the countdown to First Notice to determine how many contracts will stand for delivery in a given month, the real movement of metal occurs in the stock report which shows metal entering and leaving the Comex system as well as ownership of physical metal. The charts and tables below analyze this data to track the change in trend that occurred with the Covid pandemic in early 2020 as noted in What is the Comex?.Understanding the TrendsSilverBelow shows the total amount of Eligible and Registered silver in the Comex system going back to early 2018. In July of

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