The Peter Schiff Show Podcast

* The month of January came to an end, and it didn't play out the way most people believed it would

* Remember when the year began, everybody was optimistic on the U.S. dollar

* Remember I said that it was the most crowded trade

* It was just like gold the year before

* Everybody was convinced that now that Trump was President we were going to have all this fiscal stimulus

* The Fed was going to be tightening rates more aggressively

* The dollar had no place else to go but up;

* Everybody started the year long the dollar

* I just read that this was the worst January for the dollar in almost 30 years!

* For all the fanfare and the hype about Dow 20,000

* The Dow was only up about .5% in the month of January

* You would think that it was much higher than that

* And of course, measured in any other currency, the Dow was down quite a bit

* In fact, if you just look at our mutual funds

* To just give you an example of what's going on overseas

* First of all, our Gold Fund up 12% in the month of January

* But my International Value Fund was up 6.5% in the month of January

* That fund is the #1 fund on Morningstar so far in 2017

* It was also the #1 fund in its category of 400 or so for all of 2016

* And it's already the #1 fund for 2017

* But if you look at the returns that are being achieved internationally

* Investing outside the dollar

* Investing in gold stocks

* That's where all the money is being made

* It's not being made in the U.S. Stock Market

* In other currencies, it's actually, it's only up in dollars

* But it's down in terms of just about every other currency

* So you wouldn't know that from listening to the pundits

* Everybody is so excited about what's going on

* Again this is probably how it all started when George Bush came in

* People were still initially enthusiastic about what was going to happen

* But the honeymoon didn't last long


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* The month of January came to an end, and it didn't play out the way most people believed it would

* Remember when the year began, everybody was optimistic on the U.S. dollar

* Remember I said that it was the most crowded trade

* It was just like gold the year before

* Everybody was convinced that now that Trump was President we were going to have all this fiscal stimulus

* The Fed was going to be tightening rates more aggressively

* The dollar had no place else to go but up;

* Everybody started the year long the dollar

* I just read that this was the worst January for the dollar in almost 30 years!

* For all the fanfare and the hype about Dow 20,000

* The Dow was only up about .5% in the month of January

* You would think that it was much higher than that

* And of course, measured in any other currency, the Dow was down quite a bit

* In fact, if you just look at our mutual funds

* To just give you an example of what's going on overseas

* First of all, our Gold Fund up 12% in the month of January

* But my International Value Fund was up 6.5% in the month of January

* That fund is the #1 fund on Morningstar so far in 2017

* It was also the #1 fund in its category of 400 or so for all of 2016

* And it's already the #1 fund for 2017

* But if you look at the returns that are being achieved internationally

* Investing outside the dollar

* Investing in gold stocks

* That's where all the money is being made

* It's not being made in the U.S. Stock Market

* In other currencies, it's actually, it's only up in dollars

* But it's down in terms of just about every other currency

* So you wouldn't know that from listening to the pundits

* Everybody is so excited about what's going on

* Again this is probably how it all started when George Bush came in

* People were still initially enthusiastic about what was going to happen

* But the honeymoon didn't last long

* Earlier this morning we got the first look at Q4 GDP

* As I suggested on the last podcast, in fact as I have been saying all along

* We did see a sharp decline from the Q3 3.5% GDP

* The consensus was for a 2.2% estimate for growth in Q4

* And we came in at 1.9%

* Quite a way below estimates and psychologically below the 2% number

* Part of the reason was a big drop in exports

* I talked about this last quarter

* One of the reasons we got that 3.5% jump in Q3 GDP

* Was the big surge in soybean exports, because of a drought overseas

* Which created a temporary increase for U.S. beans

* The rest of it was an inventory build, which I still think needs to be worked off

* In fact, I think we're going to work off a lot of it in the first quarter of this year

* That's the first estimate, and, who knows, they may downward revise it the next time they give us the numbers

* If you now take the first 3 quarters of GDP growth, and use the first estimate for Q4

* For the entire year of 2016 GDP grew at just 1.6%

* That is the lowest number since 2009, tied with 2011, at 1.6% also

* If you remember 2011 GDP growth was so weak that they launched QE3 for 2012

* So they ended QE2, the economy started rolling over

* And when they got that 1.6% GDP for the entire year

* The Fed very quickly came out and launched QE3 the following year to goose the GDP back up

*  What are they doing now?  Not only is the Fed not preparing to launch another round of QE

* They are tightening monetary policy

* They're saying, "We're going to raise interest rates 3 times, even though GDP is as low as it has been for the entire "recovery'

* Even though the economy is decelerating, we are going to sedate it with rate hikes


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* Earlier this morning we got the first look at Q4 GDP

* As I suggested on the last podcast, in fact as I have been saying all along

* We did see a sharp decline from the Q3 3.5% GDP

* The consensus was for a 2.2% estimate for growth in Q4

* And we came in at 1.9%

* Quite a way below estimates and psychologically below the 2% number

* Part of the reason was a big drop in exports

* I talked about this last quarter

* One of the reasons we got that 3.5% jump in Q3 GDP

* Was the big surge in soybean exports, because of a drought overseas

* Which created a temporary increase for U.S. beans

* The rest of it was an inventory build, which I still think needs to be worked off

* In fact, I think we're going to work off a lot of it in the first quarter of this year

* That's the first estimate, and, who knows, they may downward revise it the next time they give us the numbers

* If you now take the first 3 quarters of GDP growth, and use the first estimate for Q4

* For the entire year of 2016 GDP grew at just 1.6%

* That is the lowest number since 2009, tied with 2011, at 1.6% also

* If you remember 2011 GDP growth was so weak that they launched QE3 for 2012

* So they ended QE2, the economy started rolling over

* And when they got that 1.6% GDP for the entire year

* The Fed very quickly came out and launched QE3 the following year to goose the GDP back up

*  What are they doing now?  Not only is the Fed not preparing to launch another round of QE

* They are tightening monetary policy

* They're saying, "We're going to raise interest rates 3 times, even though GDP is as low as it has been for the entire "recovery'

* Even though the economy is decelerating, we are going to sedate it with rate hikes

* This is my first day back in Puerto Rico

* I spent the last several days in Vancouver, BC at the Cambridge House Resource Investment Conference

* It was very well attended; twice the number of people

* I think it's a good sign that we're starting to see some interest now

* Remember it was exactly a year ago that we bottomed out in precious metals, we bottomed out in industrial metals and agriculture

* And we had a huge rally in the commodity complex over the last year; it's continuing this year

* And I think this is just the beginning of a huge new bull market in these sectors

* Speaking about bull markets, not only did the DJIA trade above 20,000

* Finally, today, after flirting with it for so long, we not only got above 20,000, but we closed above 20,000

* In fact, Donald Trump is so excited that the Dow is at 20,000

* That he actually tweeted out a comment

* He tweeted an AP press story which says, the DJIA trades over 20,000 for the first time, latest milestone in record-setting drive

* To which, Donald Trump President of the United States, tweets out," Great! Dow 20K"

* If the Dow had crossed 20,000 during the campaign,  he would have said, "Big Fat Ugly Bubble!

* Look out, this is a phony market, it's propped up, it's going to come down when interest rates go up

* This is going to get ugly, don't believe the Dow; he would have been criticizing the Dow

* Now, he loves it.

* It's great, this is huge, it's incredible

* He's taking credit for it, "I'm President, things are good!"  Right?

* It's a bubble

* If it was a big, fat ugly bubble when it was Barack Obama's bubble

* Now that it is Donald Trump's bubble, it is still a bubble

* If Donald Trump thinks the stock market no longer is a bubble, was he lying when he was campaigning?

* Was he calling it a bubble because it was politically expedient?

* I guess a bubble is in the eye of the beholder, right?

* Short and not-so-sweet.  Maybe that's how you would describe President Trump's inaugural speech

* Which, I think was the briefest since Jimmy Carter

* But now, Donald J. Trump is the 45th President of these United States

* I did in general like his speech; I agree with much of what Donald Trump had to say

* Talking about how bad things are in the U.S. economy

* Yes, there were some people who benefited

* People in Washington certainly benefited, certainly Washington has been booming, right?

* Because they've been sucking all the wealth out of the rest of the country

* So the bureaucrats and certain segments of the population have benefited

* From central planning and central banking and the cheap money and the bubbles

* But Donald Trump hit the nail on the head

* When he talked about all the factories like tombstones littering the landscape

* How our wealth has been sucked out

* The Middle Class has been hollowed out and the country is hurting

* All this is true, and I like the fact that he says we're going to take back the government for the people

* Take it away from the elites, take it away from the bureaucrats and bring the power back to the people

* All that is great.

* The question is, What exactly does Donald Trump mean by that?

* Does he mean, get the government off the people's backs?

* Does he mean unshackle us from government

* Get rid of all the regulations, get rid of all the taxes and government spending

* Get rid of all the bubble blowing

* Let's have sound money and higher interest rates

* Let's have a real economy so that individual Americans can pull themselves up out of the ditch on their own?

* That we can roll up our sleeves and work our way out of this gigantic hole that the government placed us in

* And if it's going to be free enterprise, limited government and freedom?

* Of that's what he means by "Taking back the government for the people"

* Then, that's great

* But what if he doesn't mean that?

* What if he means a Trumpian "New Deal"?

* What if he's talking about government proactively doing things to "help" the middle class

* Like big spending on infrastructure, where the government employs the people directly

* And creates jobs, like they did during the Great Depression?


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* Short and not-so-sweet.  Maybe that's how you would describe President Trump's inaugural speech

* Which, I think was the briefest since Jimmy Carter

* But now, Donald J. Trump is the 45th President of these United States

* I did in general like his speech; I agree with much of what Donald Trump had to say

* Talking about how bad things are in the U.S. economy

* Yes, there were some people who benefited

* People in Washington certainly benefited, certainly Washington has been booming, right?

* Because they've been sucking all the wealth out of the rest of the country

* So the bureaucrats and certain segments of the population have benefited

* From central planning and central banking and the cheap money and the bubbles

* But Donald Trump hit the nail on the head

* When he talked about all the factories like tombstones littering the landscape

* How our wealth has been sucked out

* The Middle Class has been hollowed out and the country is hurting

* All this is true, and I like the fact that he says we're going to take back the government for the people

* Take it away from the elites, take it away from the bureaucrats and bring the power back to the people

* All that is great.

* The question is, What exactly does Donald Trump mean by that?

* Does he mean, get the government off the people's backs?

* Does he mean unshackle us from government

* Get rid of all the regulations, get rid of all the taxes and government spending

* Get rid of all the bubble blowing

* Let's have sound money and higher interest rates

* Let's have a real economy so that individual Americans can pull themselves up out of the ditch on their own?

* That we can roll up our sleeves and work our way out of this gigantic hole that the government placed us in

* And if it's going to be free enterprise, limited government and freedom?

* Of that's what he means by "Taking back the government for the people"

* Then, that's great

* But what if he doesn't mean that?

* What if he means a Trumpian "New Deal"?

* What if he's talking about government proactively doing things to "help" the middle class

* Like big spending on infrastructure, where the government employs the people directly

* And creates jobs, like they did during the Great Depression?

* As I said on a prior podcast, this could be the first Presidential Honeymoon to end before the marriage officially begins

* Donald Trump will not be sworn in until Friday

* Yet the Honeymoon already appears to be over for the Trump Trade

* The dollar continues to decline again today; gold continues to rise

* Confounding the experts who, at the beginning of the year, predicted the opposite

* Gold up again today about $14 it was up $4-5 yesterday, on the Martin Luther King holiday

*  We're now at about $1217 for the price of gold

* We're still below where we were the day Trump won

* But this is the highest we've been in about 6 weeks, maybe more

* It's certainly the highest for the year

* Dollar down across the board; dollar index at the low for the year

* Still up from Trump's victory but down quite a bit from the highs

* Of course, other currencies, even though the dollar index is down 2%

* You've got currencies like the Australian dollar up 4.5%

* So that currency has pretty much recovered everything that it lost based on the Trump victory

* Gold, although it hasn't recovered everything, it's still up almost 6% so far year to date

* Silver's up better than 7% year to date

* Gold stocks, look at the GDX, up 12% so far this year

* That means that gold stocks by far is the top performing sector in 2017

* They were by far the top performing sector in 2016

* I actually think the out-performance in 2017 will be even greater than 2016

* The Dow, down again, at one point it was down close to 100

* Dow transports ended down over 100

* I think the Dow is basically flat on the year - slightly positive

* The NASDAQ was down 35 points; S&P down as well

* So U.S. stocks are barely moving

* Foreign stocks - some of these emerging markets are up huge, especially priced in U.S. dollars

* All the foreign markets, thus far in 2017 are beating the U.S. market

* Again, that is not what all the experts were expecting from the Trump Rally


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* As I said on a prior podcast, this could be the first Presidential Honeymoon to end before the marriage officially begins

* Donald Trump will not be sworn in until Friday

* Yet the Honeymoon already appears to be over for the Trump Trade

* The dollar continues to decline again today; gold continues to rise

* Confounding the experts who, at the beginning of the year, predicted the opposite

* Gold up again today about $14 it was up $4-5 yesterday, on the Martin Luther King holiday

*  We're now at about $1217 for the price of gold

* We're still below where we were the day Trump won

* But this is the highest we've been in about 6 weeks, maybe more

* It's certainly the highest for the year

* Dollar down across the board; dollar index at the low for the year

* Still up from Trump's victory but down quite a bit from the highs

* Of course, other currencies, even though the dollar index is down 2%

* You've got currencies like the Australian dollar up 4.5%

* So that currency has pretty much recovered everything that it lost based on the Trump victory

* Gold, although it hasn't recovered everything, it's still up almost 6% so far year to date

* Silver's up better than 7% year to date

* Gold stocks, look at the GDX, up 12% so far this year

* That means that gold stocks by far is the top performing sector in 2017

* They were by far the top performing sector in 2016

* I actually think the out-performance in 2017 will be even greater than 2016

* The Dow, down again, at one point it was down close to 100

* Dow transports ended down over 100

* I think the Dow is basically flat on the year - slightly positive

* The NASDAQ was down 35 points; S&P down as well

* So U.S. stocks are barely moving

* Foreign stocks - some of these emerging markets are up huge, especially priced in U.S. dollars

* All the foreign markets, thus far in 2017 are beating the U.S. market

* Again, that is not what all the experts were expecting from the Trump Rally

* It's Friday the 13th and it is a Friday before a 3-day holiday weekend

* Monday, of course is Martin Luther King Day

* The stock market will be closed in observance of the holiday

* Once again, I guess Friday the 13th was bad luck for those hoping for Dow 20,000

* In fact, the Dow finished the day Down, it was a slight decline for the Dow

* But not so for gold; gold was up again

* The Dollar was actually down again

* In fact, this year is already shaping up to be a mirror image of what everybody expected when the year began

* The Dow is up slightly, about a half a percent; the S&P is maybe up about 1-1/2 percent

* But look at the dollar; the dollar index is down 1%

* In terms of foreign currencies, the Dow is actually down

* The dollar index is mostly the euro

* If you take a look at some of the other currencies, the Canadian Dollar, for example, is up 2.5% so far in 2017

* The Australian dollar is up 4%

* These are some pretty big moves early in the year

* Remember, everybody was bullish on the dollar

* That was the trade, it was so crowded, everybody was in it

* Every strategist that I saw on financial news at the end of last year and early this year

* Was long the dollar, short the Aussie, short Canada, short the euro, short the yen

* Meanwhile, all these currencies are going up

* I think they're going a lot higher and I think the shorts are going to lose a lot of money

* Take a look at gold stocks

* Gold stocks are up about 10% so far in 2017 only 2 weeks into the year

* This is already a much stronger start for gold stocks than we had last year

* And of course, last year was a great year for gold stocks despite the fact that they sold off toward the end of the year

* Based on all the hype surrounding Donald Trump and all the great economic growth that we are going to get

* And how the Fed is going to be raising rates even faster and the dollar was going to be even stronger

* I knew all that was a bunch of nonsense

* People still believe it, but the markets are already showing it to be a false paradigm

* And most of the Wall Street strategists are going to once again miss out on these opportunities

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