Thursday , May 19 2022
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Articles by Schiff Gold

A Very Average Jobs Report

12 days ago

According to the BLS, the economy added 428k jobs in April. This exactly matched the March number after it was revised down by 3k. The unemployment rate stayed flat at 3.6%. The Labor Force Participation rate dropped from 62.4% to 62.2%. YoY, this April is up 165k jobs compared to last April.Looking at the raw numbers, the MoM gain is nearly 300k but up only about 20k when compared to last year.Comparing the adjusted data to non-adjusted shows that this April saw the smallest adjustment down in 10 years (backline). The spike down in 2020 is tied into the massive job losses seen in early Covid lockdowns. The adjustment down was 800k in 2020 compared to only 580k this year.In fact, most years saw an adjustment down of around 800k in April. A similar adjustment for this April would have

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A New Paradigm: Interest Grows Even When Total Debt Shrinks

13 days ago

The Treasury reduced the total debt by $27B in April. This is not atypical since Tax Day falls in April. In April 2016 and 2018, the debt shrunk $78B and $21B respectively. April 2017 and 2019 were both flat due to a debt ceiling saga. 2020 and 2021 were exceptions because the tax deadline was extended.Unfortunately, even though the total debt shrunk, annualized interest actually increased by $7B between March and April! This is due to increased interest rates. The 25bps Fed hike in March is  starting to be felt. It will take 6 months to feel the initial effects in Bills, and the Fed raised rates another 50bps yesterday, with another 100bps planned by August.By the end of the year, the Treasury will be paying another $70B  on its short-term debt. Keep in mind, that the total debt was

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The Crossroads Is Looming! SchiffGold Friday Gold Wrap May 6, 2022

13 days ago

The Fed hiked rates 0.5% this week in an effort to stem the inflation tide. But the economy already looks shaky and the central bank has barely started this inflation fight. Friday Gold Wrap host Mike Maharrey breaks down the messaging that came out of the Fed meeting and concludes the central bank is getting closer and closer to a crossroads. What will the central bank do? And what will it mean for the economy?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 Apple Podcasts 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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Trade Deficit Explodes 22.3% MoM and 53.8% YoY

14 days ago

The March trade deficit came in at -$110B. This obliterated the February record trade deficit of $90B. As the chart below shows, the trade deficit has set a record in each of the last 4 months. It was creeping upwards from -$80B to -$90B before  in the latest month.The table below provides detail.Monthly Trade DeficitExports grew in both Goods (+7.3%) and Services (+1.8%)Imports grew faster in Goods (12%) but slower in Services (1.7%)The growth on Goods is such a big number (-$267B) that it more than doubled the total growth in ExportsOn a Net basis, the Goods Deficit surged 18.9% against only a 2% growth in the Services SurplusThe total deficit grew 22.3%The only number shrinking YoY is the Services Surplus – this is badLooking at Trailing Twelve Month:The Total Net Deficit reached a

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Student Loan Forgiveness: Who Pays?

15 days ago

Student loan forgiveness has been in the news lately. There are a number of different plans being floated, from blanket debt repudiation up to various amounts, to more limited income-based schemes. But nobody ever talks about a key question: who is going to pay for it?Well, you will.I think most Americans think Joe Biden or Congress can just wave some kind of magic wand and student loan debt will just disappear. Poof! No harm, no foul. In fact, I think a lot of people believe student loan forgiveness will stick it to the evil banks who lent out all of that money.But it doesn’t work that way.Most student loans are backed by the federal government. That means the taxpayer is on the hook. The “evil” lenders will still get their money. The only thing that would change is who foots the

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Has the Fed Already Pricked the Housing Bubble?

15 days ago

The Federal Reserve has raised rates once – a mere 25 basis points (with another hike on the table today). So, it’s just getting started, but has it already popped the housing bubble? It sure looks that way. The question is how long will it take for the air to really start coming out.As mortgage rates push up, mortgage applications continue to fall. As of last week, applications were down 17%, and at the lowest level since May 2020 when the economy was shut down for COVID, according to last week’s Mortgage Bankers Association’s weekly Purchase Index. The index has dropped 30% from peak demand in late 2020 and early 2021.Meanwhile, pending home sales in February dropped 4% and another 1.2% in March. It was the fifth consecutive month of sagging home sales.The average interest rate for

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Comex Results: May is Quiet, but June Looks Strong in Both Metals

15 days ago

This analysis focuses on gold and silver physical delivery on the Comex. See the article What is the Comex for more detail.As reported last week, Comex May’s open interest activity was looking weak in silver while gold showed a mixed picture. May has been weak so far, but June continues to look strong.Silver: Recent Delivery MonthSilver has begun May very weak. Assuming the remaining open interest of 2,942 contracts are all delivered, this would be the weakest month since September last year. It would be the second weakest major month since March 2020.The chart below shows that the day before First Position, the open interest for May was the lowest back to May 2020. One thing to note is that the drop into the close (difference between blue and green bars) was also relatively minor

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Central Banks Added Nearly 84 Tons of Gold to Reserves in Q1

16 days ago

Despite a number of big sales, global central bank gold demand remained brisk as net holdings increased by 83.8 tons in the first quarter of 2022.That more than doubled the 41.2-ton expansion of central bank gold reserves in the last quarter of 2021 but was 29% lower than the first quarter of last year.The World Gold Council called central bank gold demand “somewhat muted, but nonetheless positive” in a “turbulent quarter marked by geopolitical crises and surging inflation.”Egypt was the biggest buyer of gold in Q1, adding 44 tons to its reserves in February. Egypt has been adding gold to its stores from a domestic mine, but the WGC said evidence indicates not all of that 44 tons came from domestic sources.Turkey was another big buyer last quarter, adding 37 tons of gold to its

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Wages Are Up But You’re Worse Off

17 days ago

The Bureau of Economic Analysis released the Personal Income and Outlays data for March last week. Incomes and consumer spending were both up. The data had mainstream analysts crowing about a strong economy and good news for American consumers. But digging into the data reveals a very different picture. Incomes were up 0.5% month-on-month. That seems like a solid gain — until you factor in rising prices. According to the Personal Consumption Expenditure (PCE) index, prices were up 0.9% in March. That means real incomes were down 0.4%.Looking at the bigger picture, incomes were up, but not nearly as much as prices. Once again, we see price increases eating up income gains and then some. That means your standard of living is falling.The Federal Reserve loves the PCE. That’s because it is

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Peter Schiff: GDP and Stocks Down, Inflation Up; That Equals Recession

17 days ago

GDP contracted in Q1. The stock market has been tanking. The inflationary fire continues to burn. As Peter Schiff explained in his podcast, this all signals a recession. And yet the Federal Reserve is on track to raise interest rates. How is this going to work?Friday was a bad day for stocks, closing out a bad month for stocks, particularly for the NASDAQ. Peter called it the “tech wreck.”Peter was warning about the impact of rising interest rates and inflation on tech stocks before the year began. On Friday, the NASDAQ dropped 4.4% in a single day. On the month, the index was down 7.3%. It was the worst month for the NASDAQ since November 2008.The greatest recession since the Great Depression was just beginning and that’s the last time the NASDAQ had a month this bad.”But it’s even

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CFTC: Swaps Have Increased Gold Short Position by More than 1,300% since Nov 2015

18 days ago

GoldCurrent TrendsSince the peak on March 8, Managed Money has reduced its Net Long positions by 60k contracts or 43%. Despite massive selling, the gold price has actually held up fairly well. The last time Managed Money net longs dropped this low in February, gold was struggling at the $1800 level, versus the struggle at $1900 now.It’s hard to see clearly in the chart below, but Swap Net Shorts reached the highest level in two years on April 12 (more on this below).The chart below focuses on only Managed Money. It shows how closely the price of gold follows the activity of Managed Money. The chart shows how Hedge Funds have been dumping gold consistently for nearly two months.Weak Hands at WorkThe weekly chart makes this even more clear. Managed Money net longs have fallen in 7 of the

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Can the Fed Pull Off a Magic Trick?

20 days ago

Breaking Down the Balance SheetFor the second month in a row, the Fed held true to its word and kept the balance sheet relatively flat. In aggregate, the balance sheet expanded by only $2B, though it did reach an all-time high mid-month. The drop to close out the month came as a result of $15B in MBS rolling off in the latest week.The Fed is preparing to launch Quantitative Tightening (QT) in May with a monthly reduction of $95B. Given that the previous QT lasted 20 months and $750B before the market cracked, it seems highly improbable the Fed will make it even 12 months into this QT cycle.The recent sell-off in the bond market has occurred just on the promise of higher rates and QT. If the Fed actually follows through, it must be hoping that magic can keep the markets levitating.As

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“The Economy Is Strong!” and Other Myths and Rumors: SchiffGold Friday Gold Wrap April 29

20 days ago

Jerome Powell and other policymakers at the Fed keep telling us they can raise interest rates and slay the inflation dragon because the economy is strong. But these central bankers have a long history of being wrong. And as host Mike Maharrey explains in this episode of the Friday Gold Wrap podcast, the recent GDP numbers undercut this latest Fed narrative. He also talks about a startling confession from the IMF director and Q1 gold demand.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 Apple Podcasts 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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Silver News: 2021 Silver Demand Explosion and Technical Innovations

21 days ago

Total global silver demand reached its highest level since 2015 last year, surging 19% to 1.05 billion ounces (Boz). There were increases in every key silver demand category. It was the first time since 1997 that all key sectors rose together.This is one of several silver-related stories in the latest edition of  published by the Silver Institute.Silver demand for industrial applications rose 9% to 508.2 million ounces (Moz) last year, despite logistical challenges relating to COVID-19. Aiding this demand was strong consumer electronics sales from people continuing to work at home, 5G infrastructure investment, inventory-build along the supply pipeline, and rising silver consumption in the green economy, mainly for solar power applications.Silver investors pushed demand for the white

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Gold Demand Surges in First Quarter

21 days ago

Gold demand surged to kick off the year, up 34% year-on-year in the first quarter of 2022.Total demand came in at 1,234 tons in Q1. That was the highest quarterly demand since Q4 2018, according to the World Gold Council’s Gold Demand Trends report. Demand in the first quarter of this year was 19% above the 5-year average.According to the WGC, surging inflation and the Russian invasion of Ukraine were key factors driving demand.The price of gold was up 8% in Q1.Gold inflows into ETFs charted their strongest quarterly number since the third quarter of 2020. Safe-haven demand fueled the 269-ton increase in ETF gold holdings. This more than reversed the 174-ton outflow from gold-backed funds in 2021.Demand for gold coins and gold bars came in at 282 tons. That was 20% down from a very

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Money Supply Growth Rate Continues to Decelerate

22 days ago

According to the seasonally adjusted data, M2 expanded by $59B in March. While the money supply is expanding, this is the slowest increase since June of 2021. It’s also almost $200B less than the $238B expansion last March.The economy and stock market are accustomed to a rapidly expanding money supply. The current decrease in growth could be responsible for the recent challenges in the stock market; however, the deceleration will likely .A look at non-seasonally adjusted money supply shows a larger growth rate this past March than the chart above; however, it’s still more than $400B less than the $571B from last March.The table below shows that M2 is decelerating quite a bit at 3.3% in the latest month. This is far below the 6-month and 12-month averages (7.9% and 9.9%

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Peter Schiff: The Fed’s Ego Is the Only Thing Bigger Than This Bubble

22 days ago

The Fed insists it can tighten monetary policy and tackle inflation without hurting the economy. Federal Reserve Chairman Jerome Powell and other central bankers claim the economy is strong enough to handle higher interest rates. Peter Schiff said this is just another in a long line of arrogant miscalculations by the Fed. As the central bank begins to raise rates and gets set to shrink its balance sheet, some analysts worry that the Fed will make a mistake and tighten too much. But Peter said the Fed already made the mistake.It’s not about the Fed might make a mistake. They’ve already made nothing but mistakes. The Fed has never done anything right. And because they made so many mistakes in the past, they’ve already doomed us in the future. It’s not about the mistakes they may make.

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Price Analysis: Will $1900 Hold?

23 days ago

The price analysis last month highlighted how gold was trying to carve out fragile support around $1900 and breakthrough resistance at $1950.Gold found a spark and broke through $1950, but has been unable to hold above it in the wake of “hawkish” Fed comments. Now, $1900 is being tested and should give clues to the next move. So far, it has held with only a slight dip into the $1800s before recovering. A hard bounce here would prove near-term bullish, but if the price breaks down below $1880 it could be a few more months until gold musters the strength to take on $2000 again.Nevertheless, $2000 will almost certainly fall once the market realizes the Fed is bluffing. After all, if they were to get rates to 3% by year-end, annualized interest on the $4T Treasury Bill balance would surge

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Ron Paul: Don’t Blame Putin or Greedy Corporations for Inflation; Blame Jerome Powell

23 days ago

Everybody and their brother is an expert on inflation now. And everybody thinks they can pinpoint the reason for rising prices. It’s Putin! Or maybe it’s greedy corporations. Or was it COVID?As Ron Paul explains, it was none of the above.The blame for this inflationary fire falls squarely on the shoulders of Federal Reserve Chairman Jerome Powell.The Biden administration and its allies continue to use Russian President Vladimir Putin as a convenient excuse for their economic failures. The most recent falsehood is that Russia’s invasion of Ukraine caused March’s 8.5 percent year-over-year increase in the Consumer Price Index (CPI).Prices were surging long before Russian troops entered Ukraine. Furthermore, Putin did not stop exporting food and gas; it was the Biden administration and

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Silver Demand Hit 6-Year High in 2021; Growth Expected to Continue Despite Headwinds

24 days ago

The Silver Institute has released its  report, providing an overview of what happened in the silver market in 2021 and looking ahead to this year.Even with geopolitical and economic headwinds, the report anticipates further growth in the silver market in 2022.Last year, the global silver market realized growth in every demand category, marking the first time all key sectors rose in tandem since 1997.Total global silver demand hit its highest level since 2015, surging 19% to 1.05 billion ounces (Boz) in 2021 and charted an all-time high for use in industrial applications, rising 9% to 508.2 million ounces (Moz).Sales of silver coins and silver bars leaped by 36% to 278.7 Moz, its highest level since 2015. Motivated by safe-haven and inflationary concerns, retail investors in North

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The Quick and Dirty on Inflation

24 days ago

The inflation freight train continues to barrel ahead. Not only are consumer prices at historically high levels; producer prices continue to run ahead of CPI, casting some doubt on the “peak inflation” narrative in the mainstream.Despite the fact that inflation has been running hot for over a year, the mainstream pundits, government officials and central bankers can’t seem to nail down what’s going on. First, they said printing trillions wouldn’t cause inflation. Then they called inflation transitory. They said it was the pandemic. They pointed their fingers at supply chains and “excess demand.” Now they’re blaming Putin.The problem is the mainstream won’t come to terms with the real underlying cause of rising prices. Mises Institute President Jeff Deist gives a quick and dirty

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Comex Countdown: Are Banks Forgetting Silver to Focus on Gold?

26 days ago

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 April which is a minor-month contract on the Comex. Delivery volume has dropped to the lowest levels in at least a year. The chart below shows that 1,343 contracts have stood for delivery with only 6 remaining in open interest.Part of the low delivery volume can be attributed to a smaller than average number of net new contracts. These are the contracts that open mid-month and stand for immediate delivery. Ignoring the anomaly in December where there was cash settlement for contracts, April had the smallest mid-month delivery since September of 2021.The chart below shows the cumulative direction of net new

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The Fed’s Conundrum: SchiffGold Friday Gold Wrap April 22, 2022

27 days ago

The Fed faces a real conundrum. Bond yields continue to rise. The only thing that can stop it is a central bank pivot back to rate cuts and quantitative easing. But the Fed needs to raise rates and shrink its balance sheet to fight inflation. In this episode of the Friday Gold Wrap podcast, host Mike Maharrey talks about the bond market and Fed’s conundrum. He also goes on a little rant about taxes. 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 Apple Podcasts 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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Peter Schiff: Real Incomes Collapsing at an Unprecedented Rate

28 days ago

Americans are earning more, but inflation is eating up their rising wages and then some.In his podcast, Peter Schiff talked about the unprecedented collapse in real incomes and how it will trickle down through the economy.Year-over-year, average hourly wages for production and nonsupervisory employees were up 6.7% in March. That sounds great – until you factor in inflation.With CPI at 8.5% (according to official government numbers), real wages for these workers have dropped nearly two percent. Their bigger paychecks aren’t even covering rising prices.Overall, wages are rising at around 4 to 5%. That means in aggregate, real wages are dropping even faster.Peter says it’s even worse than that.The wage numbers are real. Those are actual numbers because they’re easy to measure. There is no

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Americans Spending More, Getting Less and Borrowing More to Pay for It

29 days ago

American consumers are spending more, getting less, and borrowing more to fund this involuntary spending spree.Retail sales in March were 7% higher than they were in the stimulus-fueled March of 2021, but thanks to inflation, they didn’t get as much bang for their buck.Seasonally adjusted, retail sales were up 0.5% month-on-month in March at $677 billion.As put it, “Stimulus Miracle March 2021 was a very tough month to beat. But Americans did blow by it. What they didn’t do is blow by the now raging inflation.”Unsurprisingly, higher gasoline prices accounted for the bulk of that increase in retail sales as consumers pulled back in other areas. Online sales fell for the second straight month. It was the first back-to-back decline in online sales in over a year.Increasing retail sales

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The Surge in Gold Inventory Continues at Comex

29 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. The charts and tables below specifically analyze the physical stock/inventory data at the Comex to show the physical movement of metal into and out of Comex vaults.Current TrendsGoldAs noted last month, banks have been restocking gold at the fastest pace since 2020. The surge in inventory has continued with banks adding 1.1M ounces so far in March and 2.1M ounces since the report last month.As can be seen below, this has been evenly distributed between both Eligible and Pledged. In fact, the big add last week of 432k ounces came in as Pledged, which is a subcategory within Registered.SilverSilver continues to show a different trend than gold. Silver has

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Peter Schiff: The Risk of a Market Crash Keeps Growing

April 19, 2022

Bonds continued to get hammered. On Tuesday morning, the yield on the 10-year Treasury rose above 2.9%, and the yield on the 30-year is knocking on the door of 3%. Since bond yields rise as bond prices fall, this indicates a serious decline in the bond market. In his podcast, Peter Schiff said that at some point, the market is going to actually crash.A crash is coming. Because, if the bond market doesn’t crash, the stock market will. And if the bond market does crash, well then, the stock market is going to crash too. So, either way, at some point you’re going to get some kind of crash.”[embedded content]The last time bond yields were this high was in late 2018. The target Fed funds rate at that time was 2.25% to 2.5%.So, that was the highest the Fed was able to raise rates, and they

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Peter Schiff and Megyn Kelly: “Putin’s Price Hike” Is a False Narrative

April 17, 2022

The Consumer Price Index hit 8.5% on an annualized basis in March, the highest level since 1981. In an attempt to get ahead of what everybody knew would be bad news, the Biden administration started blaming Russia for the big CPI before the data even came out. White House press secretary Jen Psaki said, “We expect March CPI headline inflation to be extraordinarily elevated due to Putin’s price hike.” That mainstream media quickly picked up that mantra. Peter Schiff appeared on the Megyn Kelly show and explained why this is a false narrative.As Peter pointed out, we’ve been dealing with higher than expected inflation numbers for a long time.All of last year, all of 2021, long before Putin invaded Ukraine, prices kept going up month after month, more than expected, and the Fed kept

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Powell’s Price Hike: SchiffGold Friday Gold Wrap April 15, 2022

April 15, 2022

We got the CPI data for March this week. As expected, prices spiked significantly again last month. A lot of people in the mainstream are calling it “Putin’s price hike.” Friday Gold Wrap host Mike Maharrey says it would be more appropriate to call it Powell’s price hike. In this episode of the podcast, he digs into the CPI data and explains why the blame for high prices is largely misplaced and inflation probably hasn’t peaked.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 Apple Podcasts 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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More Inflation Pain: Producer Prices Chart Biggest Increase Ever

April 14, 2022

The mainstream seemed to take the March CPI data as good news. With core CPI coming in below expectations, the narrative is that we’ve probably hit peak inflation. But the producer price data that came out yesterday tells a different story.The Producer Price Index (PPI) was up 1.4% month-on-month. On an annual basis, producer prices rose 11.2%. Both numbers were higher than expected and set all-time records.Stripping out more volatile food and energy prices, the core PPI was up 0.9% from February. That was nearly double the 0.5% projection. It was the biggest monthly gain since January 2021 – when post-pandemic inflation really started to take off.Year-over-year, core PPI was up 7%.This does not scream “peak inflation.” In fact, it indicates consumer prices have a lot more potential to

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