Friday , October 18 2019
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Articles by Schiff Gold

Peter Schiff: The Fed Will Try Again But It’s Not Going to Work

23 hours ago

“In case the people in this room didn’t know, the financial crisis of 2008, which I had been forecasting for some time, and the Great Recession that ensued, was caused predominantly by the Federal Reserve.”This was the opening line of Peter Schiff’s talk at the Las Vegas MoneyShow.The Fed managed to “rescue” the economy after the financial crisis, but in the process, it created an even bigger bubble than the one that popped in ’08. This bubble is about to burst and the Fed will try to repeat the process. The difference is this time it won’t work, as Peter explains.[embedded content]The Fed facilitated the 2008 crash by pushing rates artificially low in the wake of the bursting of the dot-com bubble. In the runup to the financial crisis, most people didn’t realize we were in a bubble.

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More Cause for Concern: Retail Sales Tank

1 day ago

We have yet another reason to be concerned about the direction of the US economy.Earlier this month, we reported that the ISM index of national factory activity for September came in under 50 for the second month in a row. This indicates that manufacturing is contracting. The September ISM nonmanufacturing index wasn’t a whole lot better. It charted at 52.6%, down from August’s reading of 56.4%. It was the lowest reading in three years. The mainstream pundits warned that the disappointing service sector data could boost recession fears as this is the largest component of the US economy.Yesterday we got the retail numbers for September and they were equally bleak.Retail sales fell for the first time in seven months, dripping 0.3%. Analysts had expected sales to increase by 0.3%, The

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Is the National Debt Really Just Money We Owe to Ourselves?

2 days ago

The national debt continues to spiral upward. It increased by another $1.2 trillion in fiscal year 2019. But Paul Krugman says it’s not that big of a deal. He downplayed the national debt in a tweet, claiming emphatically that “DEBT IS MONEY WE OWE TO OURSELVES.”This encapsulates a common Keynesian argument. Debt can’t really burden future generations. In the aggregate, Americans won’t be any worse off. Paying the national debt merely shifts dollars from one American to another. While future taxpayers will be out some money, the American bondholders who receive the interest payments will end up with more money. When all is said and done, it’s a wash.Never mind the fact that foreigners hold about 39% of the US debt, and the last time I checked, foreigners aren’t Americans.And never mind

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Are Americans Close to Maxing Out Their Credit Cards?

2 days ago

Consumers continued to pile on debt in August, according to the latest data released by the Federal Reserve. But credit card debt fell slightly, raising a troubling question: are consumers close to maxing out the plastic?Total consumer credit grew by another $17.9 billion in August. That represents an annualized increase of 5.2% and pushes total consumer indebtedness to a new record of $4.14 trillion (seasonally adjusted).The Fed consumer debt figures include credit card debt, student loans and auto loans, but do not factor in mortgage debt.Despite the overall rise in consumer debt, revolving credit balances fell by $23.3 billion, a 2.2% decrease. Analysts expected a pullback in revolving credit after credit card balances saw their biggest increase since November 2017 in July. This pace

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Gold: An Anchor of Trust

3 days ago

Central banks globally added a net 57.3 tons of gold in August, continuing a gold-buying spree that’s been going on for months. Countries like Russia and China are seeking to minimize exposure to the US dollar and undermine the ability of the US to weaponize the greenback as a foreign policy tool. But there are even more fundamental reasons central banks hold gold, as outlined by De Nederlandsche Bank (DNB), the central bank of the Netherlands.The DNB holds more than 600 pounds of gold, according to its website. The bank calls the yellow metal its “ultimate reserve asset.”A bar of gold always retains its value, crisis or no crisis. This creates a sense of security. A central bank’s gold stock is therefore regarded as a symbol of solidity.”The DNB calls its gold holdings “an anchor of

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Fed Set to Launch “Massive” Bond-Buying Program — In Other Words QE

3 days ago

The Federal Reserve is set to begin what a article called a “massive” bond-buying program.Jerome Powell announced the program last Tuesday and the central bank released more details about the plan on Friday. The Federal Reserve will buy $60 billion in short-term Treasury bills each month. According to a statement, the purchases will continue, “at least into the second quarter of next year.” That would amount to around $400 billion worth of Treasurys added to the Fed’s balance sheet. But the balance sheet will likely expand more than that. The Fed also plans to use interest it earns off its portfolio to buy more Treasurys. And as they mature, it will take that money and buy more bonds, thus pumping up the balance sheet.Powell insists this is not quantitative easing. During his speech

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Peter Schiff: Trump and the Fed Are Reading Off the Same Script

4 days ago

Stocks took off on Friday on several big news items – most significantly President Trump’s announcement that the US and China have worked out phase one of a trade deal. In his podcast, Peter broke down the news. He also made an interesting observation: Trump and the Federal Reserve seem to be reading off the same script. [embedded content]The consumer sentiment number for September came out Friday higher than expected.  As Peter noted, this index is regarded as very important.It measures whether or not the consumer is confident enough to go deeper into debt and keep buying stuff that he can’t afford. And assuming the consumer is so confident then everything is great because the spending continues and the GDP continues. But of course, if you look back historically, the consumer is never

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CBO Estimates FY2019 Federal Budget Deficit Was Just A Hair Under $1 Trillion

4 days ago

The budget deficit for fiscal year 2019 came in just a hair under $1 trillion according to the Congressional Budget Office estimate.Even if it does come in under the trillion-dollar mark, it would still rank as biggest deficit since 2012. The budget shortfall has only eclipsed $1 trillion four times, all during the aftermath of the 2008 financial crisis.According to the CBO estimate, the deficit will come in at $984 billion. That amounts to 4.7 percent of GDP, the highest percentage since 2012. It would be the fourth consecutive year in which the deficit increased as a percentage of GDP. The debt-to-GDP ratio is estimated to have increased a hefty 26 percent over last year.The Treasury Department will release its official numbers later this month.The CBO called the federal government’s

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Fun on Friday: The Opposite Game

7 days ago

When I was a kid, we used to play the opposite game. Everything you said had to be the opposite of what you meant. For example, if you were hungry, you’d say, “I’m not hungry.” Or if you really liked the song on the radio, you’d say, “This song sucks.”Well, politicians play the opposite game pretty much all the time.If a politician tells you something is black, it’s almost certainly white. And if she tells you that a policy is going to really help you out, you’re about to get royally screwed.Now, you may say I’m being a bit too cynical. And I would agree — if we were playing the opposite game.George Orwell perfectly captured the spirit of the political opposite game.War is peace. Freedom is slavery. Ignorance is strength.”The government in Orwell’s dystopian world used this kind of

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J. Powell’s Word-Salad: SchiffGold Friday Gold Wrap Oct. 11, 2019

7 days ago

Everybody is talking about the possibility of a trade deal.Well, maybe not everybody. In this episode of the Friday Gold Wrap, host Mike Maharrey rehashes his standard trade war observations and then moves on to bigger news – Jerome Powell’s announcement that the Fed is resuming QE. Of course, Powell didn’t exactly say that. In fact, he tried to say the opposite in a statement that Mike describes as “word salad.” In this episode, Mike breaks down what’s going on with the Fed and why it matters a lot more than the possibility of a trade deal. He also covers some important gold-specific news that came out this week.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

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Central Bank Gold-Buying Ramps Up Again

8 days ago

The central bank gold-buying spree shows no signs of letting up. In fact, it ramped up again in August after ebbing slightly in July, according to the latest data released by the World Gold Council.After a relatively modest net increase of 13.9 tons in July, central banks globally took in a net 57.3 tons of gold in August. Gold purchases of a ton or greater amounted to 62.1 tons. Gross sales came in at 4.8 tons.The World Gold Council bases its data on information submitted to the International Monetary Fund.Four central banks accounted for the bulk of the buying in August.Turkey added the most gold to its reserves, accumulating 41.8 tons of the yellow metal.Russia added another 11.3 tons to its hoard. Russia has been the number one gold-buying central bank this year and it has paid off

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The Plight of the Unicorn: The Bubble Bursts

8 days ago

The unicorns are dying.Markets seemed to really wake up to the plight of the unicorn when WeWork aborted its much-anticipated IPO, but the air started coming out of the unicorn bubble long before WeWork’s IPO demise.Unicorns are privately held companies valued over $1 billion. Companies like Lyft, Chewie, Uber and WeWork were the darlings of WallStreet. Their IPOs were much-anticipated by investors. They are also the poster children for easy-money induced market mania, and their IPOs were crucial for maintaining the bubble.In an article published on CNBC,  former Nasdaq CEO Robert Greifeld compared the unicorn implosion with the popping of the dot-com bubble.WeWork’s aborted IPO may come to mark the end of the current “unicorn” bubble the way the scuttled merger between Yahoo and eBay

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ETF Gold Holdings Hit All-Time Record High

9 days ago

ETF gold holding reached all-time highs in September.Globally, gold-backed ETFs added 75.2 tons of metal to their holdings last month, according to the most recent data released by the World Gold Council. That brought total gold holdings to 2,808 tons, eclipsing the previous record set back in 2012 when the price of gold was near $1,700 per ounce. Global ETF gold holdings have grown by 368 tons on the year, a 13.4% increase.Funds in every region saw inflows of gold in September.North American funds led the way, adding 62.1 tons of the yellow metal. Low-cost gold-backed ETFs in the US have charted positive flows for 15 of the past 16 months. These funds have increased their collective holdings by 51% so far this year, according to the WGC.European-listed funds brought in 7.7 tons of gold

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Peter Schiff: The Fed Is Lying to Say This Is Not QE

9 days ago

Yesterday, Jerome Powell announced that the Fed will soon launch another round of quantitative easing. Except he insisted it will not be doing quantitative easing.This is not QE. In no sense is this QE.”What the Fed will be doing, according to Powell, is expanding its balance sheet. Powell said details of the process will be explained in the following days, but it will involve the purchase of Treasurys.This sounds an awful lot like QE, as Peter Schiff emphasized in his podcast.[embedded content]There’s an old saying that never believe something until it’s been officially denied. And Jerome Powell went out of his way today in his statement and in the Q&A that followed to emphatically say the Fed is not doing QE …  Except in every sense its QE because it’s exactly QE. There’s also an old

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China’s Most Recent Gold-Buying Spree Tops 100 Tons

10 days ago

China has accumulated more than 100 tons of gold since it resumed buying the yellow metal last December in a quest to diversify its reserves away from the US dollar.The People’s Bank of China added another 5.9 tons of gold to its hoard in September, according to data on its website reported by . It was the 10th straight month of gold-buying for the Chinese central bank and it added to the 99.8 tons accumulated during the prior nine months. Oversea-Chinese Banking Corp. economist Howie Lee told Bloomberg he expects the Chinese to keep buying gold as the country continues to gain prominence on the world stage.Given strained relations with the US, China needs a hedge against its large holdings of the dollar, and gold serves that function. As China becomes a superpower in its own right, I

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The Founders Warned Us About Central Banking

10 days ago

The Federal Reserve just lowered interest rates for the second time this year and announced more quantitative easing by injecting even more US dollars into the market. The days of cheap money will soon come to an end, and I fear that many people won’t realize what’s happening until the rug is pulled out from under them.As economist Henry Hazlitt wrote, the practices of the Fed distort the real-world market indicators of cost, future prices, investments and production. A recent study from the National Association for Business Economics showed that 72% of economists now predict that a recession will occur between 2020 and the end of 2021. Some have even warned that the US is on the brink of the biggest bubble in world history — not just a correction of a business cycle or another

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Peter Schiff: Spiraling Toward Recession

11 days ago

Last week, we got bad news in the manufacturing sector. The ISM index of national factory activity dropped to a 10-year low. It was the second straight month the number was below 50, which indicates a contraction in manufacturing. That news sent stock markets into a tailspin. This was followed up by a very week service sector report the following day.In his most recent podcast, Peter Schiff said the service sector is about to follow manufacturing into recession. He also talked about the recent employment numbers and explained how the Fed is acting like a Soviet Politburo.[embedded content]The ISM nonmanufacturing index came in at 52.6% for September, down from August’s reading of 56.4%. The data was much weaker than expected. The consensus forecasts projected a reading of 55.5%. It was

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Rising Investor Interest in Silver

11 days ago

Interest in silver investment has increased significantly in recent months. According to a report commissioned by the Silver Institute and put together by Metals Focus, silver investment has increased across a range of available instruments including physical metal, exchange-traded products (ETP) and in the futures markets.Increased market volatility, a return to easy-money policies by central banks, geopolitical uncertainty and deteriorating economic conditions have spurred investment in safe-haven assets including silver. The silver price began the year at $15.44 per ounce. As of the end of September, the white metal was up 11%. Silver posted a yearly high of $19.30 on Sept. 4, a level not seen since 2016.Physical demand for silver rose by 30% year-on-year through the first half of

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Fun on Friday: What’s in Your Basement?

14 days ago

So, what do you have in your basement?My house in Kentucky is built on a concrete slab. And right now I’m in Florida. Here we call a basement an in-ground pool. So, I can’t really answer that question. But my grandfather had a basement. It was full of junk.I’m guessing that’s probably the norm. When my grandfather passed away and I cleaned out his basement, I found unused furniture, musty boxes full of unread books and unworn clothes, well-worn tools, and globbed up paint cans. There were a few cool old keepsakes from his days in the Army down there, but by-and-large you wouldn’t call Gramps’ basement a treasure-trove.As I said, I think this is probably pretty typical. Unless you’re a commie. Then your basement is full of gold.No joke. They found 13.5 tons of gold in the basement of

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The Word of the Day Is Volatility: SchiffGold Friday Gold Wrap Oct. 4, 2019

14 days ago

It was a bumpy ride in the markets this week. Right now, volatility is the name of the game – in both stocks and precious metals. People are getting nervous out there with some pretty grim economic data this week stirring up recession fears. Meanwhile, the US government just keeps spending money it doesn’t have. Host Mike Maharrey talks about all of this and more in this week’s episode of the Friday Gold Wrap podcast.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.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

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Fiscal Malfeasance: US National Debt Increased $1.2 Trillion in FY2019

15 days ago

The US national debt increased by $1.2 trillion in fiscal 2019, which ended Sept. 30. This follows on the heels of a $1.27 trillion increase in the national debt in fiscal 2018.The gross national debt currently comes in at a staggering $22.7 trillion and climbing.To put this into perspective, when President Trump took office in January 2017, the debt stood at $19.95 trillion. Last February, the national debt topped $22 trillion. That represented a $2.06 trillion increase in the debt in just over two years. The borrowing pace continues to accelerate, with the Treasury set to borrow over three-quarters of a trillion more in just six months. (If you’re wondering how the debt can grow by a larger number than the annual deficit, economist Mark Brandly explains here.)According to analysis by

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Dow Jones and S&P 500 Off to Worst Start for a Quarter Since the Great Recession

15 days ago

During his podcast earlier this week, Peter Schiff said “the party is over” in the stock market. As if on cue, the Dow Jones is off to the worst start in a quarter since the 2008 financial crisis.The Dow plunged 494.4 points on Wednesday, a 1.86% decline. Combined with Tuesday’s 343.7 point drop, the Dow is down more than 3% in two days. The 800-plus point slide is the worst start to a quarter since the last three months of 2008. In the fourth quarter of that year, the Dow fell 19.4%.Q4 2008 was the worst quarter for the Dow since the Great Depression. Peter noted in a tweet that even the beginning of Q4 2008 didn’t start this badly. And he asked a very poignant question:Given that the Fed is out of ammo, how will it keep the house of cards from toppling this time?”Earlier in the day,

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Peter Schiff: The Party Is Over

16 days ago

As Peter Schiff put it in his podcast, if the first trading day of the fourth quarter was a sign of things to come, bulls on Wall Street are in for a rough end to the year. In fact, Peter said the party is over and you don’t want to be the last one to leave. [embedded content]The Dow was down 343.7 points and the Nasdaq shed 90 on a day that started out all sunshine and roses.For a couple of days, the economic news wasn’t quite as bad as it could have been, or maybe some of the numbers actually were a little better or beat the numbers, and I think there was some idea that, hey, maybe the economy is not as bad as some people had feared, but then reality reared its ugly head at 10 a.m. when we got the ISM Manufacturing numbers.”US manufacturing dove to a 10-year low. The ISM index of

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The World Is Awash in Easy Money

16 days ago

The Federal Reserve isn’t the only central bank cutting interest rates. In fact, the world is awash in easy money.The Fed met market expectations during the September FOMC meeting and lowered interest rates another 25 basis points. It was the second cut of the year and pushed the interest rate down to the range of 1.75 – 2%. Meanwhile, the European Central Bank took a decidedly dovish turn over the summer. It has even hinted at another round of “shock and awe” stimulus.And it’s not just the big central banks slashing rates.Eleven emerging market central banks cut rates in September. That follows on the heels of 14 rate cuts by emerging market central banks in August. September was the eighth straight month of net cuts by emerging market bankers. according to a report.Emerging markets

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Dollar’s Share of Global Currency Reserves at 6-Year Low; Yuan’s Share Biggest Ever

17 days ago

The percentage of US dollars held as currency reserves globally dropped to the lowest level in nearly six years in the second quarter of 2019 according to the latest IMF data. Meanwhile, Chinese yuan made up the biggest percentage of reserves ever.The dollar’s shrinking share of global reserves comes as countries like Russia and China move toward de-dollarization in an effort to undermine the ability of the US to weaponize the dollar as a foreign policy tool. The global gold rush on the part of central banks is part of this movement. Reserves held in dollars globally totaled $6.79 trillion in the second quarter. That represented 61.63% of allocated reserves. This compares with $6.74 trillion, or 61.86%, in the first quarter of the year. It was the lowest percentage of dollars held as a

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Does the Fed Has the US Economy on Life Support?

17 days ago

The Fed did exactly what markets expected during the September FOMC meeting and lowered interest rates another 25 basis points. It was the second cut of the year and pushed the interest rate down to to the range of 1.75 – 2%.And yet we’re told that this is the economy is “great.”What gives? Economist Robert Murphy said things might not be so great. In fact, it appears the central bank has basically put the economy on life support.Despite the Fed’s short-lived effort to normalize rates in 2018, they remain historically low. And the central bank is already back to cutting. In a post published on the , Murphy said the Federal Reserve has effective “boxed itself in.”He used three charts to demonstrate his point.The first chart puts the current interest rate in historical context.As the

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Last Week in Review: Monday Sept. 30, 2019

18 days ago

Here is a summary of some of the significant economic data/news that came out last week.Third-quarter 2019 new orders for durable goods remain on track for a second annual decline.  August 2019 Real New Orders for Durable Goods showed a monthly gain of 0.2% [1.0% ex-Commercial Aircraft], but an annual decline of 4.9% [down by 2.1% (-2.1%) ex-Commercial Aircraft].The third estimate of second-quarter gross domestic product was unrevised at 2.0%. But growth was revised sharply lower for both gross domestic income and gross national product. Annualized real quarterly growth in  Q2 2019 GDI was revised down to 1.82%, from its initial estimate of 2.11%, versus 3.24% in Q1 reporting. GNP, which is GDP plus the balance of trade in factor income (interest and dividend payments) was revised down

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Most US States Drowning in Red Ink

18 days ago

The federal government continues to pile up debt at a staggering rate. In August alone, the US government added $450 billion to the national debt. But Uncle Sam isn’t the only one who doesn’t have enough money to pay his bills. Forty state governments are also drowning in red ink.Total state government debt now stands at $1.49 trillion with 40 states lacking sufficient funds to pay their bills according to Truth in Accounting’s (TIA) Financial State of the States report.At the end of the fiscal year (FY) 2018, 40 states did not have enough money to pay all of their bills. This means that to balance the budget – as is supposedly required by law in 49 states – elected officials have not included the true costs of the government in their budget calculations and have pushed costs onto

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Fun on Friday: Busted!

21 days ago

Did you hear about the Venezuelan nationals who got busted trying to smuggle $5 million worth of gold bars into the US through a Fort Lauderdale airport?True story.The duo had 230 pounds of gold stuffed into the nose of a private Cessna jet. Customs officials discovered a hidden compartment when they noticed some loose rivets on the nose and decided to take a closer look.See — this is why I don’t commit crimes — well, besides the ethical and moral implications. I would almost certainly get caught like these guys.I was always the kid who got caught. I mean, I’ll be honest, I was a pretty goody-goody kid. But whenever I try to pull a fast one, I got busted.Here’s an example. When I was a junior in high school, I faked a midterm grade. This was back in the day when teachers gave out paper

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Is the Glass Half-Empty or Half-Full? SchiffGold Friday Gold Wrap Sept. 27, 2019

21 days ago

Gold and silver are down this week. There was some more hopeful trade war news and stronger than expected economic data that drove markets this week. In this episode of the Friday Gold Wrap podcast, host Mike Maharrey covers it, plus some news that’s being mostly ignored. And he ponders a question: should we be looking at the economic glass as half-empty or half-full — and why?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.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

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