Wednesday , October 27 2021
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Articles by Schiff Gold

Central Banking Is Rooted in Socialism

2 days ago

As Ron Paul pointed out, the recent brouhaha at the Federal Reserve when information came out revealing several central bank officials making multiple multimillion-dollar stock trades in 2020 even as the Fed was putting its big fat thumb on the economic scales was a minor thing compared to the bigger scandal – the everyday operation of the Fed.The Fed engages in price-fixing. And it fixes one of the most important prices in the economy – the price of money. Peter Schiff said this always ends in a disaster.Whenever the government interferes in the free market to fix prices, it creates problems — shortages, surpluses. It’s always a mistake. And this is an even bigger mistake because money is a very important price. It’s one half of every transaction. And we’ve gotten it wrong thanks to

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Price Analysis: Gold Diverges from Bonds as Critical Test Looms at $1800

2 days ago

The analysis last month showed that selling exhaustion may be near in the gold market. Since then, gold continues to be range-bound between $1750 and $1800 running up against both solid resistance and support. Meanwhile, silver has shown a mini-breakout.The $1800 level for gold is in play this week and could open the door for a big move if it gets through it soon.More importantly, gold and bonds have shown a strong divergence in October which is a very bullish sign.Finally, the gold miners have made a strong move up but hit against solid resistance this week ($33 on the GDX). Is the recent action in the GDX a short-covering rally or the start of the next big move up? Obviously, no one knows for sure, but more indicators are starting to turn bullish.Resistance and SupportAfter the

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Comex Countdown: Quiet Before the Storm?

3 days ago

Both gold and silver are seeing quieter activity in Comex contracts. This is not atypical for October and November which are slow months in the lead up to December.This analysis focuses on gold and silver physical delivery on the Comex. See the article What is the Comex for more detail.Silver: Recent Delivery MonthSilver is wrapping up a minor month and also heading into a minor month. October has seen the least delivery volume since before the Reddit squeeze in February with this month just above 2,000 but below the October delivery of 2,185.This lower activity persists despite the strong drainage seen in the Comex vaults over the last month. Perhaps this explains the mid-month activity showing a lot of strength.When the delivery month starts after First Notice, typically the number

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Feds Run Second-Biggest Budget Deficit in History; Spending Up from 2020 Record

5 days ago

The federal budget deficit for fiscal 2021 came in at $2.77 trillion. It was the second-largest deficit in US history, coming in behind last year’s $3.13 trillion shortfall. Despite falling shy of the deficit record, Uncle Sam spent even more money in 2021 than it did during the depths of the 2020 coronavirus recession.The US government managed to run yet another massive deficit during fiscal 2021 despite increased tax receipts as the economy began to recover after last year’s COVID-19 lockdowns. Government receipts were up 14.4% in the last fiscal year, coming in at $4.05 trillion. That compares with $3.42 trillion in revenue the previous year.Meanwhile, federal spending was up 4.2%. Uncle Sam blew through $6.82 trillion over the last 12 months, compared with $6.55 trillion in fiscal

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Ask Mike Anything: SchiffGold Friday Gold Wrap Oct. 22, 2021

6 days ago

In this episode of the Friday Gold Wrap podcast, host Mike Maharrey answers listener questions. Some of the topics covered include bitcoin, fractional reserve banking, the silver/gold ratio, gold as a safe haven, precious metals in a crisis, and more. 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 Also Listen on SoundCloud[embedded content]SchiffGold · Ask Mike Anything: SchiffGold Friday Gold Wrap 10 22 21SHOW NOTESSchiffGold on

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What’s the Difference Between Naturally and Artificially Low Interest Rates?

6 days ago

We know that the Federal Reserve pushes interest rates artificially low by manipulating the federal funds rate (the target interest rate that commercial banks borrow and lend their excess reserves to each other) and using monetary policy maneuvers such as quantitative easing. But could we have low interest rates without Fed intervention? In this clip, Peter Schiff explains the difference between artificially and naturally low interest rates and how the Fed messes up the economy with its intervention.[embedded content]If the Fed wasn’t involved in interest rates at all and manipulating the market, under what circumstances would rates be low?Simply put, supply and demand would determine rates.Interest rates are the price of borrowing money. So, what is the supply of loanable funds?

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Peter Schiff: Gold Is an Inflation Safe Haven, Not Bonds

7 days ago

Gold and bonds are both considered to be safe havens. But in a recent podcast, Peter explained why bonds are not a safe haven in an inflationary environment. In fact, bonds – including US Treasuries – are risk assets when inflation is running hot. If you want safety from inflation, you need to buy gold.Another gold rally fizzled this week when bond yields pushed up, sparked by rising oil prices. Peter said nothing happening in the bond market should have been a drag on gold and silver. Nevertheless, traders have consistently responded to rising yields or a steepening yield curve by selling gold and silver. The narrative is that rising rates are bearish for the metals — even though real rates remain negative. Peter said this makes no sense.Just because the rates are less negative

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Chinese Gold Demand Continues to Strengthen

8 days ago

Gold demand in China was up in September, as the country approaches a peak gold-buying season.Both gold withdrawals from the Shanghai Gold Exchange (SGE) in September and gold imports in August were up, a sign that the Chinese gold market continues to recover after it was hit hard by the coronavirus pandemic.China ranks as the world’s number one gold consumer.According to the World Gold Council, withdrawals from the SGE rose to 191 tons in September. That represents a 27% month-on-month increase. G0ld withdrawals were 63% higher than in September 2019, before coronavirus battered the Chinese economy.September is typically a strong month for wholesale gold demand in China as it leads up to an important holiday season. October is traditionally a big month for gold jewelry sales during

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Peter Schiff: The Debt Ceiling Is Really a Debt Floor

8 days ago

We have a temporary truce in the debt ceiling fight. On Thursday, President Biden signed a bill increasing the federal debt limit by $480 billion. But this isn’t an end to the debt ceiling fight. Congress just kicked the can down the road. The increase is only expected to keep the US government solvent until Dec. 3.As Peter Schiff explained in this clip from his podcast, the debt ceiling has turned into a debt floor.[embedded content]Janet Yellen has already announced the Treasury will continue “extraordinary measures” to prevent the accrual of debt. In a letter to Congress, Yellen called the small increase a “temporary reprieve” to a potential default.It is imperative that Congress act to increase or suspend the debt limit in a way that provides longer-term certainty that the

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Peter Schiff: Stock Up Now! Inflation Could Get Very Ugly

9 days ago

The price of pretty much everything is rising precipitously. The CPI for September came in above expectations with a month-on-month increase of 0.4%. Peter Schiff appeared on Unfiltered with Dan Bongino to talk about inflation in Joe Biden’s America. Peter said you should stock up now because things could get ugly really quickly.Bongino pointed out that while wages are rising, they aren’t rising as fast as prices. Wages have risen 4.6% while inflation has surged by 5.4% — according to government numbers. Peter said that is typically the trend.The price of labor never keeps up with the price of stuff.”[embedded content]Peter said the real problem is during and after COVID, a lot of Americans stopped working.Unfortunately, they didn’t reduce their spending because the government made the

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Gold and Silver Comex Vaults Both See 1% Fall in Total Inventory

11 days ago

Both physical gold and silver have been draining from Comex vaults this year. There was a 1% decline in stocks of both metals over the last month.This analysis focuses on gold and silver within the Comex/CME futures exchange. See the article What is the Comex? for more detail. The charts and tables below specifically analyze the physical stock data at the Comex to show the physical movement of metal into and out of Comex vaults.Current TrendsAnother 500,000 ounces of gold have left the Comex vaults since the start of September. The Comex has charted 7 out of 8 months with draining supplies of gold.Silver is a slightly different story. After the Reddit short squeeze, there was a large drain of silver from vaults earlier in the year. It took the Comex a few months to restock, adding

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Pick Your Poison: SchiffGold Friday Gold Wrap Oct. 15, 2021

12 days ago

Last week’s jobs numbers came in weaker than expected. September’s CPI came in hotter than expected. That puts the Federal Reserve between a rock and a hard place. Does it tighten monetary policy to fight inflation? Or does it keep stimulating to boost the economy? In this episode of the Friday Gold Wrap, host Mike Maharrey breaks down the data and says it’s about time for the central bank to pick its poison.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

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A More Accurate CPI: Up .97% MoM and 7.1% YoY

12 days ago

The CPI data for September came in hotter than expected at 0.4%. That pushed the yearly gain to 5.4%. But an honest CPI calculation would come in even hotter.I am doing something different this month. In past reviews of the CPI, I typically take the BLS data and recalculate the values to get a more detailed number that is rounded to two decimal points instead of one. This methodology also allows me to show the impact of each component on the top-line number.The Fallacy of Owners Equivalent RentFor example, last month showed that much of the slowdown could probably be attributable to Delta slowdown like travel. For this month, sure, I could report that: “The latest seasonally adjusted month over month inflation rate was .41% (vs .3% expected), with a non-seasonally adjusted annual rate

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JP Morgan Chase CEO Worried About Higher Than Expected Inflation

13 days ago

With CPI data once again coming in hotter than expected, it’s getting harder and harder for the mainstream to swallow the “transitory inflation” narrative.And some people are starting to worry.During an earnings call, JPMorgan Chase CEO Jamie Dimon expressed concerns about higher than expected and persistent inflation ahead.Dimon told analysts and investors that year-over-year inflationary readings under 4% are “unlikely” over the next six months.We prepare for probabilities and eventualities. And one of those probabilities is that [inflation] might go higher than people think.”In fact, the yearly reading has been above 5% for five straight months, and if you annualized the inflation rate through the first three quarters, you come out with a 6% inflation rate.The mainstream narrative

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Peter Schiff: Non-Transitory, Worse Than Expected Inflation

13 days ago

September CPI came in above expectations. At this point, even the central bankers at the Federal Reserve are having a hard time sticking to the “transitory inflation” narrative.In his podcast, Peter Schiff talked about the CPI report. He said it reveals that we’re entering an inflation super-cycle and perhaps the markets are starting to figure this out.Peter called this the “government report card on inflation,” noting that it’s not particularly reliable because the government is grading itself.After all, the government is creating inflation through the Federal Reserve, and then the government is reporting that inflation to the public itself. So, it’s kind of like if kids were able to write up their own report cards, kind of grade themselves, and then present their self-grading to

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Ron Paul: This Is the Biggest Fed Scandal

14 days ago

There was a recent scandal at the Federal Reserve when information came out revealing that several central bank officials made multiple multimillion-dollar stock trades in 2020 even as the Fed was putting its big fat thumb on the economic scales. But as Ron Paul points out, there’s an even bigger scandal over at the Federal Reserve and it’s a matter of policy. The Fed’s manipulation of monetary policy and the broader economy impoverishes ordinary Americans, even as it enriches the elites, and facilitates government debt and deficits.Following revelations that Federal Reserve officials made trades in financial assets while the Fed was taking extraordinary efforts to “stimulate” the economy, Federal Reserve Chairman Jerome Powell ordered a review of the Fed’s ethics rules. While these

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American Consumers Continue to Run up Credit Card Debt

15 days ago

Consumer borrowing has slowed somewhat from the record level we saw in June, but Americans continue to pile on the debt.Consumer debt grew by $14.4 billion in August to $4.35 trillion, according to the latest data from the Federal Reserve. That represents a 4% increase.This follows on the heels of a 4.8% increase in July after a record 10.6% increase in June.The Federal Reserve consumer debt figures include credit card debt, student loans and auto loans, but do not factor in mortgage debt. When you include mortgages, Americans are buried under nearly $15 trillion in debt.Revolving credit, primarily made up of credit card debt rose by $1.4 billion, a 3.8% increase. Americans now owe more than $1 trillion in credit card debt for the first time since the beginning of the coronavirus

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Peter Schiff: This Is a Record We Don’t Want to Break

15 days ago

A surge of imported services drove the trade deficit to a new record in August. Peter Schiff appeared on NTD News to talk about the trade imbalance. He said it is not a sign of a strong economy and not the kind of records we want to be breaking.[embedded content]The August trade deficit came in at $73.25 billion, 4.2% higher than the July trade deficit of $70.3 billion. The August deficit set a new record edging out the previous high of $73.23 billion set in June.Imported goods came in at -$239.11 just below the June value of -$239.17. While the trade deficit in goods is negative, the US runs a services surplus, but it has been shrinking rapidly in recent months. In August, the services surplus plunged 7.7%.A lot of pundits say the increasing trade deficit is a good sign because it

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Peter Schiff Debates Two Socialists on the Debt Ceiling and the Economy

17 days ago

The fake debt ceiling fight rages on.Last week, the US Senate agreed to a small increase in the borrowing limit, but it only kicked the can down the road a couple of months. The $480 billion increase raises the debt limit to $28.9 trillion, but that’s only going to last until Dec. 3.Peter Schiff recently appeared on to debate economist Steve Keen and Professor Richard Wolf on the debt ceiling and more broadly the US economy.[embedded content]HIGHLIGHTS FROM THE DEBATE“The problem isn’t the debt ceiling. The problem is the debt. The problem is we keep raising the ceiling so we keep on piling on more debt.”“The debt is a huge problem. It doesn’t help capitalism. It interferes with capitalism because what happens is the government is taking resources away from the private sector and

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Peter Schiff: Stagflation Is Here!

17 days ago

We got the highly anticipated employment report on Friday. It came in far below expectations. But despite weak economic data, bond yields are rising, along with the price of just about everything. Meanwhile, a gold rally fizzled. Peter Schiff talked about it during his podcast, explaining just how badly the markets are misinterpreting the data. When you add up plunging bonds yields, strong oil, and weak economic data – that equals stagflation.According to the September Labor Department report, the US economy added 194,000 jobs last month. The projection was for around 500,000 new jobs.A big decline in government jobs helped drive overall job growth down. As Peter noted, that’s not necessarily a bad thing.The only way to pay government workers is through taxes. So, if government workers

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Another Big Jobs Miss: All But Two Categories Are Below The 12-Month Trend

19 days ago

For the second month in a row, the jobs numbers in September came in well below expectations.The Labor Department reported an increase of only 194,000 jobs, well below the estimated 500,000. The big miss was similar to August’s report.Despite the unemployment rate ticking down to 4.8% from 5.2% and an upward August revision of 131,000 jobs, this is the weakest jobs report since January.This next chart compares the current month with the trailing 12-month average. A few key takeaways:Government lost 123k jobsOnly Construction and Trade/Transportation/Utilities saw job growth above the TTM averageLeisure and Hospitality gained less than half the TTM averageThe table below gives a much more detailed breakdown of the numbers and the entire labor force. Some key takeaways:Leisure &

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A Lack of Self-Reflection: SchiffGold Friday Gold Wrap Oct. 8, 2021

19 days ago

Inflation continues to run hot. Even some of the folks over at the Fed are having a hard time peddling the “transitory” inflation narrative. But politicians and government officials lack the skill of self-reflection. As a result, they can’t clearly see the problem. In this episode of the Friday Gold Wrap, host Mike Maharrey looks at some of the latest inflation data and the Fed’s response to it. He also touches on the fake debt ceiling fight and breaks the September job report numbers.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

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Peter Schiff: This Is a Real Twilight Zone

20 days ago

Peter Schiff says we’re living in a financial twilight zone.Despite signs of persistent high inflation, gold continues to languish. Peter talked about what’s going in this bizarro economy during his podcast.Inflation continues to spiral upward. The August core personal consumption expenditures price index increased 0.3% for the month and was up 3.6% from a year ago. This measure excludes food and energy costs and is a favorite Federal Reserve metric. The index is at its highest level since 1991 and led Fed Chair Jerome Powell to call persistent inflation “frustrating.”Oil is close to $80 a barrel and climbing. Other energy costs are rising quickly.Many commodity prices are skyrocketing.The US is threatening to default if Congress can’t get the debt ceiling raised. Janet Yellen warned

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Surge in Imported Services Sends Trade Deficit to New Record

21 days ago

The US trade deficit surged to yet another new record in August as Americans are importing more and more services to go along with all of their imported goods.The August trade deficit came in at $73.25 billion, 4.2% higher than the July trade deficit of $70.3 billion. The August deficit set a new record edging out the previous high of $73.23 billion set in June.The new record was driven primarily by Services. The Services Surplus took another big fall, down -7.7% to $16.2B. It was the smallest Services Surplus since Dec 2011. The Services Surplus in June was $20.03BImported Goods came in at -$239.11 just below the June value of -$239.17. A larger increase in Goods Exported brought the Net Goods value down to -$89.41B vs June’s -$93.25B. Unfortunately, the increase in Goods Exported

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Demand for Silver in Electronics Sector Projected to Surge

21 days ago

The demand for silver is expected to expand along with the continued growth in global connectivity.According to a report released by the Silver Institute, silver demand in electronics and electrical applications is projected to rise by 10% by 2025.This reflects an increase from 224 million ounces of silver used in the electronics sector in 2020 to 246 million ounces in 2025.With the highest electrical conductivity of all metals, silver is a component in almost all electronic devices we use daily. But silver isn’t just vital today; the next generation of technological advancements, especially those related to global connectivity expansion, will rely on the white metal’s inherent properties throughout the 21st century.”This does not include increased demand for silver in the solar energy

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Inflation Bites! Rising Prices Are Eating Up Personal Income Gains

21 days ago

Inflation bites!Personal income rose again in August, but once again rising prices ate up all the gains and then some. Economists and pundits talk about inflation as an academic exercise. They rarely reflect on the fact that rising prices have real impacts on real people.Personal income from all sources rose by 0.2% from July to August. This includes wages, stimulus payments, transfer payments (unemployment, Social Security benefits, etc.) along with income from other sources such as interest, dividends, and rental income, according to the latest data from the Bureau of Economic Analysis.But when you factor in inflation, “real” personal income fell by 0.2%. When factoring out government transfer payments, “real” personal income dropped 0.3% and fell below the pre-pandemic level in

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Central Banks Added Nearly 30 Tons of Gold to Holdings in August

22 days ago

Central banks continue to add gold to their reserves.  Global central bank reserves increased by a net 28.4 tons in August, according to data compiled by the World Gold Council.Gross central bank gold purchases came in at 30 tons.India led the way, adding another 12.9 tons of gold to its holdings. It was the third straight month of significant gold purchases by the Indian central bank.  Last August, there were reports that the Reserve Bank of India (RBI) was considering significantly raising its gold reserves. Former RBI Deputy Governor R Gandhi noted that the RBI’s gold holdings have been inching up over the last five years.In 1991, gold gave real support to the economy and it is an important element of the country’s reserves.”Uzbekistan added 8.7 tons of gold to its reserves in

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Peter Schiff: Government Serves Grade-A B.S. on Inflation

22 days ago

Both the Federal Reserve and the Biden administration continue to insist inflation is transitory. And they are also trying to shift the blame for rising prices so they avoid any responsibility. In this clip from his podcast, Peter Schiff explains why the government inflation narrative is Grade-A B.S.![embedded content]The Fed has finally acknowledged that inflation is running hotter than they’d expected. During the September FOMC meeting, the central bank raised its forecast, anticipating core inflation to increase 3.7% this year. That compares with a 3% projection in June. But the Fed and US government officials insist that rising prices are simply a function of supply chain issues and that it will be “transitory.”Meanwhile, they ignore the elephant in the room – the increasing money

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One Ring to Rule Us All: A Global Digital Fiat Currency

23 days ago

We’ve written extensively about the “war on cash.” In a nutshell, governments would love to do away with cash in order to better track and control their citizens. There have been numerous moves closer to a cashless society in recent years, from capping ATM withdrawals to doing away with large-denomination bills. Last year, China launched a digital yuan pilot program and the US has floated moving toward a digital dollar.We got a first-hand look at what happens when governments restrict access to cash when India plunged into a cash crisis after the country’s government enacted a policy of demonetization in November 2016.It’s bad enough that various countries are exploring ways to move toward cashlessness, but there’s an even worse scenario — a global digital currency.Economist Thorsten

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Hedge Funds Pile into Short Positions During September

24 days ago

The Commitment of Traders analysis last month showed a potentially bullish setup in both gold and silver. The washout of Managed Money Net Long contracts that occurred in early August appeared to be over and a rebound was underway. Unfortunately, it looks like there was another washout in September. As highlighted recently, it’s possible exhaustion may be near. However, if another washout occurs, it would probably drive Managed Money net positioning negative for the first time since Nov 2018.Below is a look at the details.Current TrendsManaged Money dropped to 30,861 in net long open interest. This is down from 46,844 in the previous week and from 81,677 on Aug 31. This week fell below the Aug 10th low of 35,403 but stayed just a touch above the Mar 9th low of 29,430. The price of gold

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