The Peter Schiff Show Podcast

* So far the month of February is just 4 trading days old, and already the U.S. dollar index is down just over 3 percent * We closed January at 99.6 and we closed at 96.5 * Gold, going the other way, now up about $13 today, closing above $1,155; the price of gold is up almost 3.5% in the first 4 days of February * That shows you that most of the move in gold is the result of the dollar going down * This move is just getting started * The markets are just beginning to price in the fact that the Fed is not going to raise rates in March * They are pricing 3, rather than 4 rate hikes this year, and that's the only thing that is not driving the markets * A more realistic look what the Fed is likely to do is to not raise rates, but cut them below zero * Despite that we're seing all this momentum in the dollar and in gold * Gold stocks are just soaring, many of these names have been up 5-10% each day in February * None of this is attracting the attention of Wall Street * A guest on CNBC today alluded to short covering as the reason for gold going up * He commented on how lousy the fundamentals are for these stocks * The fundamentals have never been lousy * They have appeared lousy because there was so much belief that the dollar would continue to rise because the U.S. is having a genuine recovery and the Fed will continue to raise rates * The media and Wall Street are still very biased; I was on CNBC Asia last night debating an American guest who touted the strength of the economy based on the strong jobs market, how household balance sheets are better than ever and real incomes are rising * The only reason homeowners have better balance sheets is because they no longer have a house; home ownership is at a 50 year low * While gas prices are lower, rents, healthcare and most other costs are going up * It was an example of how the public ignores all the bad economic news and assumes that the economy is great * Another writer for CNBC.com attributes gold's rise to low inflation * He actually said that my explanation about the economy slowing with inflation did not make sense, because in his mind, high inflation is a result of a strong economy * This is exactly backwards. Strong, productive economies keep prices low * Weak economies that lack production end up having higher prices, and those weak economies produce budget deficits and the central banks have to print money, causing inflation * The actual definition of inflation is an expansion of the money supply; higher prices are a result of the fact that the currency then buys less * The government wants people to be confused about inflation and where it comes from because they are the source of the problem * By blurring the meaning of inflation, it is easier to shift the blame for economic problems on everything else but monetary policy * CNBC highlighted my call on gold, but omitted all the correct calls I have made, especially 3 recent market predictions: * One: if the Fed raises rates, the stock market is going to tank * Why did I say that the market was going to tank? The conventional wisdom that if the Fed is raising rates, the economy must be stronger - I said if the Fed raises rates it will be doing it into a weak economy. In fact, it probably happened in a recession * Two: I said that there is no historical precedence for this monetary policy because we have been at zero interest rates for 7 years, so the effect of higher rates on the economy appears to have more effect because they have been talking about tightening for years * I also said that if the Fed raised rates, gold prices would rise; it was unanimous that gold would collapse.  Gold is up more than $100 since the initial knee-jerk sellof Remember that I recorded a video blog where I specifically said, if the Fed raises rates, and there's a knee-jerk reaction sending gold lower, that will be a great buying opportunity and that was the exact low

* It was another tough day in the stock market today; the Dow Jones finished down 295 points, NASDAQ fared even worse, down 103 points, that's about 2.25% * These 100-point moves are coming quite often now; in the NASDAQ, the transports were hardest ...

* First it was the ECB, and then it was the Bank of Japan, cutting interest rates overnight to -.1% * That is the first time in this 20-year experiment of cheap money - I think they've been at zero, but they've never gone negative until just now * One of the most ironic aspects of the move is that Kuroda, just 8 days ago told the Japanese Parliament that the Bank of Japan was not seriously considering negative interest rates, yet in a span of a week, they went from not considering it, to actually doing it! * In fact, what Kuroda said is that, not only have they moved rates to negative, they may make them even more negative in the future, so no who knows how much more negative they will go * He also hinted that they might expand their asset purchase program, their own Quantitative Easing * That was enough to send global stock market rising, in fact, here in the U.S. the Dow Jones finished up almost 400 points - 396 points - the NASDAQ was up better than 100 points * Obviously this is still a big down month, but not the worse January ever * As I said from the beginning, 2 out of 3 ain't bad, but it won't work * The Fed is going to have to join the rate-cutting party * Right now the Fed is the lone hold-out among central banks and that is still helping the dollar * The dollar was very strong today against the yen and also against the euro - the dollar index now almost back up to 100 * The QE currencies got clobbered * The economic data in the U.S. is not good. We got the first estimate of Q4 GDP * When the year began, everybody was looking for Q4 to be around 2 - 2.5% * As all the horrible economic news poured in throughout the quarter, expectations gradually reduced so that by yesterday, the consensus for Q4 was just .9% * We managed to come in below that at .7% * I have been saying that by the time we get the final revision of this GDP number, we could be below zero.  It doesn't take much to take an initial estimate of .7 to below zero and we still have more data on Q4 coming out, that will bear on this, and I think the data will be bad news * The only way the government could manufacture a GDP of .7 was to pretend that the inflation rate was just .8, and of course, the Fed supposedly have this 2% target and they need to raise rates to get to 2% * That means nominal GDP is only going up 1.5%, which means if the inflation rate is actually higher than 1.5%, then we are in a contraction * In fact, I've pointed this out many times before, if we had an honest look at inflation in the GDP, I think it would reveal that the economy has been in recession for almost the entire recovery, which makes more sense to me, because this recovery feels a lot like a recession * It's not like any other recovery we've ever experienced, and maybe that's because it's not a recovery - it's a recession * I think the recession is going to get a whole lot worse, because of what's going on * The way the media has been spinning this all day, even though they have reported that the GDP is .7, they are reporting that for the entire year, GDP grew by 2.4% for 2015. * Just Google it yourself: any article on the U.S. economy and GDP states that the economy grew by 2.4% in 2015 * That's not true! The actual growth rate is 1.8% * If the economy grew by 1.8%, why is the media spinning the story at 2.4%? * Here's what's going on: if you just measure the increase in GDP from December 31, 2014 through December 31 2015, the increase is 1.8%.  That is how to measure the GDP.  It grew 1.8%. * The government doesn't want to admit that because 1.8% is a pretty low number, the lowest it's been in 3 years, and why would the Fed wait for the lowest annual growth rate in 3 years to finally raise rates, in fact why did they wait for a quarter when it was only .7? * The last time we had a quarter this low, it was in a double-seasonally adjusted Q1, when we were buried under snow

* As I said in my last podcast, when the the Federal Reserve issued its press release yesterday at 2:00pm, Janet Yellen did not give the markets they were hoping for; in a way, it was almost as if she threw them an anchor instead, because the Dow Jones...

* The Mario Draghi "No-Limits"-inspired rally from Thursday and Friday of last week ended on Monday with the Dow Jones down just over 200 points; the NASDAQ was down about 75 points, so an even bigger percentage drop * But today the market reversed; the Dow actually recouped 100% of what it lost, it rose 282 points by the close * A lot of volatility in the oil markets; down yesterday and up above $30/barrel today * The bigger action today was in gold, up another $12 or so, the highest price for gold since the first week in November, last year * Gold stocks had a big up day today, but they still have to rise about 8% to get back to where they were when gold was the price it is today * Some of the battered down currencies in the commodities space had a good rally; the Canadian dollar and the Aussie dollar * I think what the markets are preparing for is some type of statement from the Fed tomorrow; they began their 2-day meeting today and they will release a statement - there's no press conference * People are looking for the Federal Reserve to acknowledge some type of change in the economy and therefore soften their stance on their 2016 rate increase projection * The last time we heard from Janet Yellen, the Fed was on track for 4 rate hikes in 2016, and since then, no one has said anything to contradict that, despite what has happened in the U.S. and global markets * Perhaps this recent market rally will give Janet Yellen a reason not to show her hand * Of course, if she disappoints the markets and continues to pretend everything is great, this market's going down hard and all the gains will be surrendered * Maybe she'll try to walk a middle ground by acknowledging the problems in China and in the oil market and say that the Fed is monitoring the situation in case there us unexpected spillover to the U.S. economy which is still otherwise in great shape * She may save face by suggesting that if these outside influences somehow wash up on our shores, and they effect employment and inflation, maybe it will adjust its policy *  I'm not sure if that will be enough for the market; if the market sells off, the Fed is going to have to come back and quickly release more dovish rhetoric * I read an article on Monday's Wall Street Journal and I posted it on my Facebook pageand it really was the equivalent of, This Time It's Different * The headline was, "Recession Signals are Flashing Red" - they've been flashing red for a long time and the WSJ has been ignoring it * The article says that, despite all the bad economic events and data that in the past have led to recession, that this time it's different * The article tells us why we don't have to worry this time, while acknowledging the bad data and events, they say we can rest easy because we have this really strong labor market, and in prior recessions the labor market wasn't as strong * Therefore, since the labor is so strong, we can ignore all the other signals that seem to be flashing recession * I have said many times on this podcast, there is no strong labor market; it exists only in the eyes of statisticians who simply look at a rate of 5% and ignore how we got there * They want to ignore the millions of people who have left the weak labor market and millions more who have settled for part time jobs * So the weak labor market is consistent with all the other data that the WSJ is acknowledging, but tells us to ignore * If we counted all the people outside of the labor market who are discouraged as unemployed, and we also counted all the underemployed people, and the unemployment rate was over 10%, then the WSJ would have to say, "Well, it's a recession!" * How can a recession wait for the government to decide how it wants to measure the labor market? * It is what it is, regardless how the government wants to spin it * If we honestly assess the situation,

* The U.S. stock market ended the week with a 2-day rally, in fact the Dow Jones closed better than 200 points today, to about 1690 *  NASDAQ, even stronger, up 119, closing at almost back up to 4600 * The rally actually began early yesterday morni...

* The bear market in global stocks continues, and I believe we're in a bear market in the U.S. * Technically the major averages are not quite down 20%, although some of the averages are * Transports were down 30% from their highs * The Russell 20...

*  The Dow  Jones ended another down week on a down note, dropping 390 points * The NASDAQ was down 126 points *  This is the worst January in the history of the stock market the Dow is off about 13% from its highs, the NASDAQ about 15%, firmly in correction territory * We are probably in a bear market right now, because ultimately these indexes will be down 20% * Some indexes are already firmly in the bear camp; the transportation average is down about 27.5%; the Russel 2000 is down aboutr 23% * Many sectors are in a bear market - the auto market, retailers, financials * Home builders not quite in bear market territory yet but they are at 4-year lows * Beneath the sectors there are many individual stocks that are down 30 - 80% - GoPro now down 82% from last year as a highly touted IPO * Yesterday we had about a 200 point rally because the Fed's Dudley, who saved the market in October of 2014 by hinting of QE4 causing the market to take off * This time, Bullard came out and did say something dovish, but not dovish enough, and did not want to say  there was something wrong with the economy, so he simply stated that oil prices were too low and inflation might not rise quickly enough, so the Fed should hike more slowly * Today, another Fed governor came out, William Dudley and contradicted Bullard, strongly optimistic, saying the market is going to grow above trend in 2016 and he said that some of the negative economic data that has come out recently (which may qualify as the understatement of the decade) should be ignored, in the context of a strong labor market * In other words, no matter what other negative data is out there, in the markets or in the economy, as long as we're still creating 200,000-300,000 mostly low-paying, part time jobs monthly, everything is fine * If everything is fine, and there are so many people with jobs, why are retail sales plunging?  Why are corporate earnings plunging? * Assuming all these jobs really exist, they won't for long because if sales and earnings are collapsing, what are companies going to do with their work force? * Walmart announced today they are closing about 150 stores in the U.S., laying off about 10,000 people * I have saying for a while I expected retailers to announce significant layoffs, but I think it is going to be across the board * Everything that was built on the Fed's bubble is imploding; all the phony wealth that was the result of QE is disappearing rapidly * It's amazing that the Federal Reserve believes in the wealth effect on the way up, but somehow it is oblivious to it on the way down * I think it is going to work even stronger in reverse; the amount of spending from cut backs will produce a reverse effect even larger than the one they tried to create with QE and zero percent interest rates * How could Bullard, in the face of all this negative economic data say that since the Fed raised rates, his outlook on the economy has not diminished at all? * It's so ridiculous that he must not believe it - he is trying to pretend that everything is good * The whole rate hike was about instilling confidence * Based on the data, they should not have hiked rates * Now, as the markets are imploding and the data is getting worse, Dudley is out there saying everything is great * How much longer can he get away with saying that? * Pretty soon, he is not going to have that much credibility * That's what is going on with the Fed, in fact JP Morgan today pushed back their estimate for the first rate hike in 2016 from March to June * That's how is started last year; everybody was looking for a rate hike, in March, then June then September, then they finally got it in December and now people are already dialing back estimates of the next rate hike * The next one ain't happening because we are already in a recession * I am talking about a statistical recession that the government will have to acknowledge

* Last night I watched President Obama deliver the State of the Union Speech and probably the only good thing about the speech is that it was his last one * It will probably go down in history as the most clueless State of the Union Address ever * All he talked about was how great the economy is - how he created all these jobs * He even had the chutzpah to take credit for reducing the budget deficit! * President Obama will have doubled the national debt during his presidency * He added more debt than every president from George Washington to George Bush, combined, yet he's taking credit for reducing the deficit * At least when George Bush gave his final State of the Union Address he acknowledged problems brewing in the economy * He acknowledged concerns being addressed by the American people and validated them * He talked about the stimulus plan he had, which I did not agree with, but at least he knew the economy was in some trouble * Although he acknowledged that economic growth was slowing and that housing was down, he didn't come close to preparing Americans for what was about to unfold by the middle of the year * In fact, when the President delivered that State of the Union Address, the economy was already in recession, although the government had not acknowledged it yet * He had no idea how precarious the state of the economy was, we were on the precipice of  a big cliff and he was still optimistic, long term, but cautious given the slowdown in the economy and he wanted to come up with some kind of stimulus to mitigate the slowdown * He did not foresee or warn about the severity of the problem, but at least he acknowledged some problem * In contrast, rather than at least acknowledging weakness in the economy, President Obama claims victory over the Great Recession, that he restored economic health and vitality * The few problems in the economy are beyond his control because the economy is changing * What we do need is more government money for education, to train people for this new economy, we need a higher minimum wage, we need higher taxes on the rich, but other than that everything is great * President Obama's State of the Union Address is on the order of magnitude more clueless that George W. Bush's last SOTU on the eve of the Great Recession * We are now on the eve of a collapse even greater, yet President Obama is saying everything is awesome * What President Obama did is to lecture the American people as to why they have nothing to be concerned about - basically saying that anyone who says that the economy is in decline is peddling fiction. * Obviously the people who don't recognize the decline in our economy are in denial, or have a political agenda * What the President said is, "If you think the economy is headed in the wrong direction, if you think America is in decline, you're wrong, it's just that the economy is changing * Remember, you voted for me and I promised change * It's changing because it's getting worse, that's the change * President Obama points to technology as the problem in the economy - a transition that only makes you feel like you're falling behind even though you're not * The technological revolution did not begin with the election of President Obama * It has been no more transformative, even less so, than the industrial revolution * Machines put a lot more people out of work than computers but we saw an expanding labor force, but women left the labor force, because their husbands started making more money * Real wages were rising * The industrial revolution took place in a free market economy * The technological revolution is taking place in a government controlled economy * The reason so many people are suffering is not because so many technology is changing * What's changing is the size of government * We used to be a free market and now we're not * The reason for so much poverty and decline,

* Hi everybody, this is Peter Schiff and I am recording this on Friday, January 8, and Wall Street just finished the worst opening week to a new year in the history of the stock market * The Dow Jones was down another 1% on Friday to finish the week better than 1,000 points - it was a 6% decline on the week * Now there have been weeks that have been down more than 6% in the history of the stock market, in fact we had one about 4 years ago, but we've never had a week this bad in the first week of January * Now, the financial media is coming up with all sorts of excuses to blame this big decline on * On Monday, they were blaming the sell-off on the rumors that North Korea tested a hydrogen bomb * But for most of the week, they were blaming the sell-off of the U.S. stock market on the sell-off in China, despite the fact that China rallied on Friday and we sold off * The Chinese market was down about 10% on the week, despite the Friday rally * The U.S. stock market is not falling because of the Chinese stock market. The Chinese stock market and the U.S. stock market are falling for the same reason * It's not that one is causing the other, they're both going down and the reason they're falling is because the Federal Reserve raised interest rates in December and they are threatening to raise them at least 4 more times, according to the most recent minutes. * The belief that the Fed is going to keep raising rates is putting pressure on the Chinese currency, the Yuan, to decline along with a lot of other currencies that have already fallen substantially against the dollar, on the anticipation of higher interest rates * It's the weakness in the Chinese currency that is pulling down the Chinese market, but it's all because of the Fed - but that's the same reason we're going down * If you remember, all year I was saying that I didn't think the Fed was going to raise rates at all in 2015, and the reasons were: * I thought thee economy would not be able to handle it - the Fed always claimed that they were data dependent and I thought they were hiding behind that, but I though they could use the weak data, which had been coming all year, as cover for not raising rates - in fact, that was their cover until they backed themselves into a corner because they had promised to raise rates by the end of the year and a refusal to raise rates would be an admission that the economy was weaker than forecasted * I also said I didn't think the market could handle a rate hike.  It had stopped rising based on the absence of QE, but if the Fed actually increased rates, the air would come out of the bubble a lot faster * So with the economy going down and the stock market going down, I thought the next thing they would do is reduce rates back to zero and launch QE4 and would look like complete fools * So by not raising rates, they would look like a lesser fool by acknowledging that the economy needed additional stimulus * We may already be in a recession * The Atlanta Fed has already downgraded their forecast for 2015 Q4 to just .8% * I think by the time we get the first estimate on the 29th the month, we could actually have a negative number for the fourth quarter * If you look at all the data that's coming in, and I'll get to that in a minute, we can easily have a negative first quarter of 2016, and we're in recession * If the economy is in recession, and we are in or close to a bear market in stocks, and without the Fed, there's nothing to stop this market from falling, the Fed will have to come to the rescue of both the economy and the market with QE * But if you remember, a lot of analysts were very sanguine about the market's ability to handle a rate hike, but here we are, the Fed raised rates just a few weeks ago, and the Dow has dropped better than 1,100 points since the Fed raised rates. * The one thing that hasn't declined since the Fed raised rates is gold * Gold is up better than $40/oz.

* Well the Dow Jones got clobbered again today, down 252 points at the close * The NASDAQ down about 55 * The transports continue to get clobbered down another 146 points, decisively in bear market territory * CNBC blamed the entire decline on ji...

* The U.S. stock market opened the first trading day of 2016 with a bang, but not the type of bang the bulls were hoping for * The Dow was down 276 points-it was down as much as 450 points in the last hour of trading * In fact,we opened down 300 and change and we hung around the down 350 - 400, in fact down 276, at the close was about the best level of the day * The NASDAQ closed down around 104 *  The Dow Jones transports continues to get crushed - the weakest index on the day, down 156 points * We're now down more than 20% from last year's high, officially in bear market territory in the Dow Jones transportation - and don't blame this on weak oil prices because transports benefit from weak oil prices * This is all about weakness in the economy * A lot of the carnage was blamed on China because China was down 7% overnight, the worst first day of the year in the history of Chinese stocks * Supposedly the catalyst was a weaker than expected PMI in China - I don't believe for a second that the market was down 7% based on that report * First, there were two PMI's released, and one was slightly better than estimates and the one that was slightly below came in at 48.2 vs. expectation of 49 * I think the Chinese market would have gone down regardless of the PMI numbers * The irony of it is that our own recently-released Chicago PMI on New Year's Eve and our number was way worse than the Chinese number * We were expecting 50, an improvement from 48.7 - instead we went down to 42.9 * Bad economic news in China creates a terrible response, but bad economic news in the U.S. and no one even cares! * Why, because the Fed tells us everything is awesome and we can ignore all the evidence that the economy is far from awesome * Singapore reported a 5.7% increase in GDP for its 4th quarter, yet that number is being discounted * Yet no one wants to believe the good news from foreign governments, and no one believes bad news from the U.S. because the Fed's narrative is still out there * We got more bad economic news today: We got another PMI manufacturing number expected to be 52.8, it came in at 51.2 * Even worse was the December ISM number - last month was 48.6 - it was expected to improve to 49.2-  instead, it dropped to 48.2 * That's a bigger miss than China, yet no one here cared * Also, construction spending was a huge miss: the consensus was for a gain of .7; instead we lost .4 * It gets worse, because last month the gain was expected to be a full point * The numbers that came out today were so bad that the Atlanta Fed, who recently revised down its Q4 GDP forecast from 1.9 to 1.3 a week or so ago and today they went down to .7 * In my last podcast, I said that soon the Atlanta Fed is going to take their Q4 GDP estimate below 1 and that is just what they did * We have a lot more bad economic data that is going to come out between now and the end of the month when we get the first estimate of Q4 GDP and there's a pretty good chance that it will be negative, which is halfway to a recession * With a negative GDP in the 4th quarter, we have a better than 50/50 chance of having another negative GDP in the first quarter and that would put us officially in a recession * Just in time for the Fed to raise interest rates again - Not! * More people are coming to the same conclusion I have for a long time now, that the Fed had backed themselves into a corner and felt they had to raise rates regardless of the fact that the data didn't meet their criteria * I knew that if the Fed raised interest rates that they would regret it because they would have to reverse their direction based on the weak economy combined with a weak market *  Interestingly, there has only been one year ending in "5", going back to 1885 when the Dow Jones was down - that was in 2005 * There hasn't been a year prior to a presidential election where the market was down since 1939, during the Great Depression

* Let me begin my final podcast of 2015 by wishing all of my listeners a Happy New Year * It certainly wasn't a happy New Year's Eve Day on Wall Street * Normally the last day of the year is a positive one; you normally have a Santa Clause rally an...

* Recording this podcast on Monday afternoon; the stock market closed about an hour ago, and the stock market was up over 100 points today, but the more dramatic days happened on Thrusday and Friday * Despite the initial euphoric increase in the stock market that greeted the Fed's highly anticipated quarter-point rate hike on Wednesday the market tanked on Thursday and Friday, down over 600 points * The most significant part of the sell-offs is that on both days the markets closed on the lows for the day * The Fed is getting dangerously close to losing what remains of its credibility * The Credibility Bubble might be the first to deflate in this recession * The Fed has been saying that the economy would be strong enough for a rate hike by the end of the year, so if they did not raise rates in December it would have been an admission that they were wrong * The Fed raised rates even though the economic data showed that, based on their own criteria, they should not have done it * More and more people are questioning whether the Fed has made a policy mistake * Look at the data that came out since the rate hike: * On Friday we got the PMI Flash Services Index came out at 53.7 - last month it was 56.5 * The Kansas City Fed Manufacturing - last month was +1 and December was -8 * Today we got the Chicago Fed National Activity, expected to be +.15 for November, instead it came out at -.3 and they revised down the prior month to -.17 * With all the horrible economic data, horrible retail sales, horrible corporate earnings it is obvious that the U.S. economy is heading toward recession * As the economy slows and the Fed is forced to admit it was wrong, there goes it's credibility * This coming collapse is the culmination of decades of bad monetary policy * Where we really went off the rails was in the Greenspan era, which sent us off on this trajectory of loose money * Yellen admitted in her recent press conference that they will still roll over all the maturing bonds and re-investing all the interest on those bonds so the Fed's balance sheet will continue to grow * The bubble economy will blow up in her face, though, because the market will not be able to withstand a sustained correction and it will require unprecedented quantitative easing that will result in failure * I wanted to discuss on this podcast an Sunday eening article on CNBC, "The Peter Meter"  that really took me to task on my gold predictions * They did not look at any of my many accurate predictions; they focused on the ones that haven't worked out * They singled me out for criticism on an 2012 interview I did with them when gold was at $1,700 and I said it could go to $5,000.  I never put a time horizon on my prediction, but this was labled as one of the worst * Back in 2005 I did an interview with Mark Haynes when gold was still below 500 and it more than tripled from that price * You can see articles I wrote recommending gold back in 2003 when gold was even below 500. * It is true that I did not see the near 40% correction in the price of gold because I thought the market would see past the bubbles * CNBC claims my prediction to be among the least prescient ever made * Twice in the last 15 years the U.S. stock market lost more than half its value * Anybody who was on CNBC in 1999 and recommended the stock market, which was about every guest, made a worse prediction than that * Every guest on CNBC in 2007 and 2008 and recommended the stock market made a worse prediction * What about all the dot com stocks that went to zero? * Obviously, CNBC is singling my gold prediction out above these other significantly less prescient predictions * If you look at all the predictions on CNBC over the years, my predictions have been better than most. * The CNBC article also took me to task on my view that quantitative easing would not help the economy, but only create asset bubbles. That criticism will be proven wrong,

*  Yesterday, the Federal Reserve finally met market expectations and increased interest rates to .25% * Actually, the official rate was 0 - .25 and now, the official rate is .25 to .5 * The actual rate was always in the middle between zero and .25...