The Peter Schiff Show Podcast

Summary: President Trump actually delivered on his promise of the largest tax cut in American history, and he delivered it on time.  Trump may have presented a plan with built-in bargaining positions, or he might even intend to pass a tax bill that will "starve the beast". The interesting thing is that the President is applying this 15% tax rate to pass-through entities, such as LLC's, which will encourage most businesses to shift into a different business model to take advantage of the low tax rate. In other words, people currently at a 43.4% rate will pay 15%. This is going to cause two things to happen that will hurt the economy and a lot of people in the middle class: a big increase in consumer prices and inflation. Will Republicans vote against the biggest tax cut ever based on the fact that it adds to the debt? Ultimately, a resulting fiscal crisis might force Republicans to vote to cut spending.

* Donald Trump was right. He actually lived up to expectations, in fact, he might have exceeded them

* When it comes to the magnitude of the tax cut that he proposed - on schedule

* On Wednesday, today, Donald Trump unveiled his idea for what could well be the biggest tax cut in American history

* Ordinarily, I would be all in favor of the biggest tax cut in American history, if it were accompanied by the biggest spending cuts in American history

* Government costs what it spends - you have to pay for government, one way or another

* So if you're going to have big government and you're going to spend all kinds of money, the most efficient way to raise the money is through taxation

* And of course the most efficient form of taxation would be a consumption tax, sales tax, tariffs

* Not an income tax

* An income tax is the worst way to raise revenue

* An even worse way to raise revenue is by going into debt

* Borrowing money and then printing money will cause prices to rise, eventually interest rates to rise

* And ultimately will result in enormous tax hikes

* To repay all the money that you borrowed

* What Donald Trump is doing, is he is offering an enormous tax cut, but no spending cuts

* And what they are saying is that the tax cuts will pay for themselves because there will be so much extra growth

* That the government will make up for the difference based on more people working and more people having higher incomes and even though the tax rates are lower, the net payments will be higher

* None of this is true

* These tax cuts are so enormous that there is no way that the economic growth can make up the difference

* Even if we get the higher economic growth

* One of the bigger issues that people are not talking about is the impact of higher interest rates

* Which will certainly be a result of much larger deficits and even faster economic growth


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Summary: President Trump actually delivered on his promise of the largest tax cut in American history, and he delivered it on time.  Trump may have presented a plan with built-in bargaining positions, or he might even intend to pass a tax bill that will "starve the beast". The interesting thing is that the President is applying this 15% tax rate to pass-through entities, such as LLC's, which will encourage most businesses to shift into a different business model to take advantage of the low tax rate. In other words, people currently at a 43.4% rate will pay 15%. This is going to cause two things to happen that will hurt the economy and a lot of people in the middle class: a big increase in consumer prices and inflation. Will Republicans vote against the biggest tax cut ever based on the fact that it adds to the debt? Ultimately, a resulting fiscal crisis might force Republicans to vote to cut spending.

* Donald Trump was right. He actually lived up to expectations, in fact, he might have exceeded them

* When it comes to the magnitude of the tax cut that he proposed - on schedule

* On Wednesday, today, Donald Trump unveiled his idea for what could well be the biggest tax cut in American history

* Ordinarily, I would be all in favor of the biggest tax cut in American history, if it were accompanied by the biggest spending cuts in American history

* Government costs what it spends - you have to pay for government, one way or another

* So if you're going to have big government and you're going to spend all kinds of money, the most efficient way to raise the money is through taxation

* And of course the most efficient form of taxation would be a consumption tax, sales tax, tariffs

* Not an income tax

* An income tax is the worst way to raise revenue

* An even worse way to raise revenue is by going into debt

* Borrowing money and then printing money will cause prices to rise, eventually interest rates to rise

* And ultimately will result in enormous tax hikes

* To repay all the money that you borrowed

* What Donald Trump is doing, is he is offering an enormous tax cut, but no spending cuts

* And what they are saying is that the tax cuts will pay for themselves because there will be so much extra growth

* That the government will make up for the difference based on more people working and more people having higher incomes and even though the tax rates are lower, the net payments will be higher

* None of this is true

* These tax cuts are so enormous that there is no way that the economic growth can make up the difference

* Even if we get the higher economic growth

* One of the bigger issues that people are not talking about is the impact of higher interest rates

* Which will certainly be a result of much larger deficits and even faster economic growth

Summary: Government spending creates the greatest drag on the U.S. economy.  Cutting taxes, even the "biggest tax cut ever" cannot stimulate the economy alone.  So if you're fed up with paying taxes, if you think you are over-taxed,  and you are, it's because the government is spending too much money. The only real way to get relief is to dramatically cut government spending.  No one want's to do that, however, because the people who benefit from government spending, vote, and none of the politicians are willing to lose their votes to ease the burden of everybody else.

* On Friday, President Donald Trump said that he would be unveiling on Wednesday of next week, a massive tax cut

* In fact, he actually went out on a limb and stated that it is going to be the biggest tax cut ever

* Now, I'm really not sure why Donald Trump feels he has to keep promising something and then failing to deliver; that's been a problem

* You don't want to over-promise and under-deliver

* I understand as a candidate you want to do that; you want to promise anything to get elected

* But somebody ought to tell Donald Trump that the election is over and he won

* He's President, and he doesn't have to come out and just say things

* What I think is that he should say nothing about tax reform until he actually releases a plan

* That way he can over-deliver

* Don't promise anything - "I'm working on it." - and don't put up a deadline for Wednesday

* What if it doesn't happen?

* What if there is no tax cut on Wednesday

* What if it's not the biggest the biggest tax cut ever

* Why make those promises?

* Maybe his is going to release a massive tax cut on Wednesday and maybe it will be the biggest ever

* I'm not going to take credit away from the President; I'm just saying, "Why not just wait until Wednesday?"

* Just in case something goes wrong

* Maybe this time there actually is a vote

* But the problem, is if you cry wolf to often, then eventually no one's going to believe you

* There's really no reason to go out and make the promise; just deliver the massive tax cut on Wednesday and everything will be fine

* But I guess he can't resist jumping the gun

* But the crazy part about this, first of all, how is it going to be the biggest tax cut ever?

* It's hard to believe that, when we have the most debt ever

* An enormous 20 trillion National Debt, that the President understands,

* He pointed out how big the debt was when he campaigned

* How can we afford the biggest tax cut ever unless we're also going to talk about the biggest government spending cut ever?


Our Sponsors:
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Summary: Government spending creates the greatest drag on the U.S. economy.  Cutting taxes, even the "biggest tax cut ever" cannot stimulate the economy alone.  So if you're fed up with paying taxes, if you think you are over-taxed,  and you are, it's because the government is spending too much money. The only real way to get relief is to dramatically cut government spending.  No one want's to do that, however, because the people who benefit from government spending, vote, and none of the politicians are willing to lose their votes to ease the burden of everybody else.

* On Friday, President Donald Trump said that he would be unveiling on Wednesday of next week, a massive tax cut

* In fact, he actually went out on a limb and stated that it is going to be the biggest tax cut ever

* Now, I'm really not sure why Donald Trump feels he has to keep promising something and then failing to deliver; that's been a problem

* You don't want to over-promise and under-deliver

* I understand as a candidate you want to do that; you want to promise anything to get elected

* But somebody ought to tell Donald Trump that the election is over and he won

* He's President, and he doesn't have to come out and just say things

* What I think is that he should say nothing about tax reform until he actually releases a plan

* That way he can over-deliver

* Don't promise anything - "I'm working on it." - and don't put up a deadline for Wednesday

* What if it doesn't happen?

* What if there is no tax cut on Wednesday

* What if it's not the biggest the biggest tax cut ever

* Why make those promises?

* Maybe his is going to release a massive tax cut on Wednesday and maybe it will be the biggest ever

* I'm not going to take credit away from the President; I'm just saying, "Why not just wait until Wednesday?"

* Just in case something goes wrong

* Maybe this time there actually is a vote

* But the problem, is if you cry wolf to often, then eventually no one's going to believe you

* There's really no reason to go out and make the promise; just deliver the massive tax cut on Wednesday and everything will be fine

* But I guess he can't resist jumping the gun

* But the crazy part about this, first of all, how is it going to be the biggest tax cut ever?

* It's hard to believe that, when we have the most debt ever

* An enormous 20 trillion National Debt, that the President understands,

* He pointed out how big the debt was when he campaigned

* How can we afford the biggest tax cut ever unless we're also going to talk about the biggest government spending cut ever?

Summary: Goldman Sachs is no longer recommending a long trade on the dollar. The dollar was previously regarded as a conviction trade, first over speculation over Fed rate hikes and then over Trump exuberance with the expectation of tax cuts, infrastructure spending and other moves that would continue to inflate the dollar bubble.  The dollar was the most crowded trade out there.  I believe, however that as we get close enough to the next recession, that we are going to get another big Keynesian stimulus of increased government spending and tax cuts, which will send the budget deficit through the roof and that will send the dollar through the floor.

* We've been having quite a bit of volatility in the U.S. stock market, with back-to-back triple-digit moves in opposite directions

* Yesterday, the Dow was up well over 100 points, closer to 200

* But today the Dow Jones was down better than 100 points

* Between the 2 days it was still positive, but we'll see what happens tomorrow

* We did get some worse than expected new after the bell on IBM; I'm seeing the stock down close to 5% in after hours trading

* That could set the tone for some weakness tomorrow

* Goldman Sachs helped set a weak tone today; they came out with earnings earlier in the day and their stock was down close to 5%

* What was more interesting about Goldman Sachs was not their missed earnings,

* But the fact that they are now throwing in the towel on their long-term recommendations to buy the dollar

* Of course, the dollar has been strong over the past few years

* Although really since March of last year the dollar has gone sideways

* It did make a marginal new high during the Trump mania, after the election

* But only against a few currencies, not against all currencies

* The dollar index today was down sharply; it closed at about 99.50

* The strongest currency today was the pound sterling; it was actually up about 3 full cents; a 2.25% move

* The dollar was also down today against the euro, against the yen

* It was up against some of the commodity currencies, which had been stronger during the year

* It looks to me that the dollar has topped out, and it looks that way to Goldman Sachs

* They are saying, "This is no longer our top recommendation, like a conviction trade"

* Why? because everybody assumed that the dollar was going to go up

* Because the Fed is hiking rates; we're getting all this economic stimulus, tax cuts, we're going to get infrastructure stimulus

* Whatever the reason, everybody was certain the dollar was going to go up

* Remember, I said it was the most crowded trade out there


Our Sponsors:
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Summary: Goldman Sachs is no longer recommending a long trade on the dollar. The dollar was previously regarded as a conviction trade, first over speculation over Fed rate hikes and then over Trump exuberance with the expectation of tax cuts, infrastructure spending and other moves that would continue to inflate the dollar bubble.  The dollar was the most crowded trade out there.  I believe, however that as we get close enough to the next recession, that we are going to get another big Keynesian stimulus of increased government spending and tax cuts, which will send the budget deficit through the roof and that will send the dollar through the floor.

* We've been having quite a bit of volatility in the U.S. stock market, with back-to-back triple-digit moves in opposite directions

* Yesterday, the Dow was up well over 100 points, closer to 200

* But today the Dow Jones was down better than 100 points

* Between the 2 days it was still positive, but we'll see what happens tomorrow

* We did get some worse than expected new after the bell on IBM; I'm seeing the stock down close to 5% in after hours trading

* That could set the tone for some weakness tomorrow

* Goldman Sachs helped set a weak tone today; they came out with earnings earlier in the day and their stock was down close to 5%

* What was more interesting about Goldman Sachs was not their missed earnings,

* But the fact that they are now throwing in the towel on their long-term recommendations to buy the dollar

* Of course, the dollar has been strong over the past few years

* Although really since March of last year the dollar has gone sideways

* It did make a marginal new high during the Trump mania, after the election

* But only against a few currencies, not against all currencies

* The dollar index today was down sharply; it closed at about 99.50

* The strongest currency today was the pound sterling; it was actually up about 3 full cents; a 2.25% move

* The dollar was also down today against the euro, against the yen

* It was up against some of the commodity currencies, which had been stronger during the year

* It looks to me that the dollar has topped out, and it looks that way to Goldman Sachs

* They are saying, "This is no longer our top recommendation, like a conviction trade"

* Why? because everybody assumed that the dollar was going to go up

* Because the Fed is hiking rates; we're getting all this economic stimulus, tax cuts, we're going to get infrastructure stimulus

* Whatever the reason, everybody was certain the dollar was going to go up

* Remember, I said it was the most crowded trade out there

Summary: Donald Trump's promises on healthcare and smaller government appear to be fading behind news of increased military spending, infrastructure spending and compromises on health care and tax reform.  This scenario looks far more like Jimmy Carter than Ronald Regan. We continue to get bad economic data, telegraphing that the air is already leaking out of the economic bubbles created over the last 8 years. This bad news may encourage the Fed to walk back their current interest rate hike schedule, which would, if implemented, put a match to growing recessionary trends.

*  It is Good Friday today and most of the world's markets are closed, including the U.S. stock market

* I want to wish all my listeners happy Good Friday and Easter and to my Jewish listeners happy Passover

*  But let me get to the economic data that came out this morning because some of the government offices are open today

* I am starting with the Consumer Price Index, which is not bad from my perspective, but will be bad from Wall Street's perspective or the Fed's perspective

* Although bad is good, in that it will give the Fed cover to not raise rates

* Because the CPI actually dropped in March my 3 tenths of a percent

* It was unexpected; it was supposed to be flat

* And the Core number was supposed to be up .2 and it was down .1

* I think this is the weakest inflation number in a couple of years

* Of course, year over year, we're still above the Fed's 2% target

* Year over year, CPI headline up 2.4% and the core is up 2.0

* But the most recent number being down, may in fact give the Fed cover to walk back the market's expectations for 2 or 3 rate hikes coming later this year

* But I think the more relevant information is the extremely weak number we got on retail sales

* I was expecting a weak number

* I mentioned that in my last podcast, and we got a weak number

* But not only was it weak, but they revised the February number that was originally weak, much weaker

* The expectation was for a flat month of March for retail sales

* Versus the .1% gain that we eked out in February

* Now, the government came back and said, "No, the February number was actually a drop of .3%

* So instead of +.1% we dropped .3%

* And in March, instead of being flat, we were down another .2%

* So that means for the two months combined, we have a decline of .5% instead of an increase of .1%


Our Sponsors:
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Summary: Donald Trump's promises on healthcare and smaller government appear to be fading behind news of increased military spending, infrastructure spending and compromises on health care and tax reform.  This scenario looks far more like Jimmy Carter than Ronald Regan. We continue to get bad economic data, telegraphing that the air is already leaking out of the economic bubbles created over the last 8 years. This bad news may encourage the Fed to walk back their current interest rate hike schedule, which would, if implemented, put a match to growing recessionary trends.

*  It is Good Friday today and most of the world's markets are closed, including the U.S. stock market

* I want to wish all my listeners happy Good Friday and Easter and to my Jewish listeners happy Passover

*  But let me get to the economic data that came out this morning because some of the government offices are open today

* I am starting with the Consumer Price Index, which is not bad from my perspective, but will be bad from Wall Street's perspective or the Fed's perspective

* Although bad is good, in that it will give the Fed cover to not raise rates

* Because the CPI actually dropped in March my 3 tenths of a percent

* It was unexpected; it was supposed to be flat

* And the Core number was supposed to be up .2 and it was down .1

* I think this is the weakest inflation number in a couple of years

* Of course, year over year, we're still above the Fed's 2% target

* Year over year, CPI headline up 2.4% and the core is up 2.0

* But the most recent number being down, may in fact give the Fed cover to walk back the market's expectations for 2 or 3 rate hikes coming later this year

* But I think the more relevant information is the extremely weak number we got on retail sales

* I was expecting a weak number

* I mentioned that in my last podcast, and we got a weak number

* But not only was it weak, but they revised the February number that was originally weak, much weaker

* The expectation was for a flat month of March for retail sales

* Versus the .1% gain that we eked out in February

* Now, the government came back and said, "No, the February number was actually a drop of .3%

* So instead of +.1% we dropped .3%

* And in March, instead of being flat, we were down another .2%

* So that means for the two months combined, we have a decline of .5% instead of an increase of .1%

Summary:  President Trump's campaign promises are falling by the wayside one by one.  First the backfire on the replacement for Obamacare, and then, just as talk of tax reform heats up, the administration seems to be gazing toward the Democrats for a bi-partisan solution to tax reform.  No good can come from bi-partisanship.  When the Republicans and the Democrats are working together, that's when you really have to watch your pocketbook.  That's when the most damage gets done. The stock market initially rallied on the jobs number, but sold off by the end of the day; normally, you get a print this low the dollar index would tank and gold would take off. That didn't happen because the night before Donald Trump decided to Make America Great Again by bombing Syria.

* Well, I am back on dry land, I was away for a week doing a cruise with the Real Estate Guys Summit at Sea

* One of the presenters was senior vice-president and chief economist of Fannie Mae Doug Duncan

* I thought my presentation would be a big contrast to his, I thought he would present the usual government unrealistic estimates, but

* I was very pleasantly surprised, as I listened to his presentation, I found I agreed with him

* And after a private conversation with him after his presentation, we had a great discussion and we didn't desagree on anything!

* He is very bearish on the housing market, very much against Fed policy

* He's against the minimum wage

* We had a long conversation and we really disagreed on nothing!

* I was quite surprised to find a government insider who showed such economic insights

* So it's just not Peter Schiff who sees these problems looming on the horizon

* In the bond market, in the real estate market

* The is a minority of government economists, just like I'm in the minority of Wall Street or investment economists

* But it's good to know that there are some good people working within the government

* But I wanted to get into topics of this podcast; a lot to talk about

* Let's start with the Non-Farm Payroll report

* The jobs report that came out on Friday is usually the most highly anticipated release of the month

* Everybody was enthusiastic about this report

* Earlier in the week we got the ADP number, the private sector number which is normally a precursor to the official government number

* and that number was way ahead of estimates, so there was a lot of enthusiasm that we would have a beat for the official government March number

* They were looking for 175,000 jobs which was going to be a reduction from the 235,000 jobs reported for the month of February

* The actual number of jobs that were created was not 175,000 but 98,000

* Big miss on the headline number

* In fact, they actually revised downward the previous month

* So they took that down from 235,000 to 219,000 and now we got 98,000 versus 175

* And the private payrolls were even worse; they were looking for 170,000 and we only got 89,000


Our Sponsors:
* Check out Fast Growing Trees and use my code GOLD for a great deal: https://www.fast-growing-trees.com
* Check out Plaud AI and use my code GOLD for a great deal: https://www.plaud.ai


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Summary:  President Trump's campaign promises are falling by the wayside one by one.  First the backfire on the replacement for Obamacare, and then, just as talk of tax reform heats up, the administration seems to be gazing toward the Democrats for a bi-partisan solution to tax reform.  No good can come from bi-partisanship.  When the Republicans and the Democrats are working together, that's when you really have to watch your pocketbook.  That's when the most damage gets done. The stock market initially rallied on the jobs number, but sold off by the end of the day; normally, you get a print this low the dollar index would tank and gold would take off. That didn't happen because the night before Donald Trump decided to Make America Great Again by bombing Syria.

* Well, I am back on dry land, I was away for a week doing a cruise with the Real Estate Guys Summit at Sea

* One of the presenters was senior vice-president and chief economist of Fannie Mae Doug Duncan

* I thought my presentation would be a big contrast to his, I thought he would present the usual government unrealistic estimates, but

* I was very pleasantly surprised, as I listened to his presentation, I found I agreed with him

* And after a private conversation with him after his presentation, we had a great discussion and we didn't desagree on anything!

* He is very bearish on the housing market, very much against Fed policy

* He's against the minimum wage

* We had a long conversation and we really disagreed on nothing!

* I was quite surprised to find a government insider who showed such economic insights

* So it's just not Peter Schiff who sees these problems looming on the horizon

* In the bond market, in the real estate market

* The is a minority of government economists, just like I'm in the minority of Wall Street or investment economists

* But it's good to know that there are some good people working within the government

* But I wanted to get into topics of this podcast; a lot to talk about

* Let's start with the Non-Farm Payroll report

* The jobs report that came out on Friday is usually the most highly anticipated release of the month

* Everybody was enthusiastic about this report

* Earlier in the week we got the ADP number, the private sector number which is normally a precursor to the official government number

* and that number was way ahead of estimates, so there was a lot of enthusiasm that we would have a beat for the official government March number

* They were looking for 175,000 jobs which was going to be a reduction from the 235,000 jobs reported for the month of February

* The actual number of jobs that were created was not 175,000 but 98,000

* Big miss on the headline number

* In fact, they actually revised downward the previous month

* So they took that down from 235,000 to 219,000 and now we got 98,000 versus 175

* And the private payrolls were even worse; they were looking for 170,000 and we only got 89,000