The Peter Schiff Show Podcast

* Gold and silver prices continue to march higher

* Gold was up another $7 today; it closed at $1363.20 - that is the high for the year

* Silver was up .15 at $20.06

* Silver is now going up relative to the price of gold which is very for the precious metals complex

* Gold stocks are on fire; the XAU index, a gold stock index was up 3.27% today

* It's now up better than 135% on the year and well over 150% from the lows on the third week in January

* But do you think that any major players on Wall Street have recommended gold stocks?

* Do any of the big hedge funds have positions in gold?

* No! They are clueless

* What is happening, as I have said before, is that there is a picture, that's kind of blurry, but it's coming into focus, still not clear, but it's a game changer

* The perception is that we had this great recovery and that the Fed was going to be able to unwind its balance sheet, normalize interest rates and everything was going to be great

* So the whole investment world was preparing for higher rates, a stronger dollar and a stronger U.S. economy

* But what is the actual picture?

* The actual picture is an economic recovery that is over, if it ever even happened,

* The Fed is finished tightening and they're about to start a new easing campaign

* We're not done with QE; we're just getting started - QE3 is closer to the beginning than the end

* Rather than shrinking the balance sheet, it's about to explode

* This picture is getting clearer and now you see the markets re-pricing

* Gold is going up every day

* Gold stocks are going up

* The banks are getting crushed

* The European banks hit new lows again today

* FOMC minutes came out for June and what did the minutes reveal?

* The members were concerned about weakening employment number and they wanted more data before raising rates

* They wanted to make sure the weakening numbers were an aberration rather than a new trend

* Who didn't see that coming?

* Also they wanted to see what happened with the Brexit vote

* We knew about the Brexit vote all year - why did the Fed ever pretend that they would raise rates in June?

* Because they wanted the market to believe that a rate hike was possible because it validates the phony recovery

* So now the instead of raising rates, they spoke about raising them and they are going to cut rates by just talking about reducing them

* They can do a lot by adjusting their rhetoric before they actually cut rates

* They are already cutting by backtracking their rhetoric, because that's all they've got

* Teddy Roosevelt said, "Walk softly but carry a big stick."

* The Fed has to speak loudly because it has no stick


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Gold and silver prices continue to march higher

Gold was up another $7 today; it closed at $1363.20 - that is the high for the year

Silver was up .15 at $20.06

Silver is now going up relative to the price of gold which is very for the precious metals complex

Gold stocks are on fire; the XAU index, a gold stock index was up 3.27% today

It's now up better than 135% on the year and well over 150% from the lows on the third week in January

But do you think that any major players on Wall Street have recommended gold stocks?

Do any of the big hedge funds have positions in gold?

No! They are clueless

What is happening, as I have said before, is that there is a picture, that's kind of blurry, but it's coming into focus, still not clear, but it's a game changer

The perception is that we had this great recovery and that the Fed was going to be able to unwind its balance sheet, normalize interest rates and everything was going to be great

So the whole investment world was preparing for higher rates, a stronger dollar and a stronger U.S. economy

But what is the actual picture?

The actual picture is an economic recovery that is over, if it ever even happened,

The Fed is finished tightening and they're about to start a new easing campaign

We're not done with QE; we're just getting started - QE3 is closer to the beginning than the end

Rather than shrinking the balance sheet, it's about to explode

This picture is getting clearer and now you see the markets re-pricing

Gold is going up every day

Gold stocks are going up

The banks are getting crushed

The European banks hit new lows again today

FOMC minutes came out for June and what did the minutes reveal?

The members were concerned about weakening employment number and they wanted more data before raising rates

They wanted to make sure the weakening numbers were an aberration rather than a new trend

Who didn't see that coming?

Also they wanted to see what happened with the Brexit vote

We knew about the Brexit vote all year - why did the Fed ever pretend that they would raise rates in June?

Because they wanted the market to believe that a rate hike was possible because it validates the phony recovery

So now the instead of raising rates, they spoke about raising them and they are going to cut rates by just talking about reducing them

They can do a lot by adjusting their rhetoric before they actually cut rates

They are already cutting by backtracking their rhetoric, because that's all they've got

Teddy Roosevelt said, "Walk softly but carry a big stick."

The Fed has to speak loudly because it has no stick

* I wish everybody a happy July 4th weekend; U.S. markets will be closed

* It's unfortunate that we can't really celebrate all the traditions that we're supposed to be honoring were lost generations ago

* The values our founding fathers risked their lives for have all been lost

* I wanted to comment on what is going on in the markets particularly today

* Today was the capper on the week

* You had silver prices up about a dollar an ounce

* Gold closed up about $19, so gold closed above $1340

* Maybe by the time the market opens on Tuesday silver will be over $20/ounce

* Who knows, maybe gold will be over $1400?

* This is a powerful rally - gold finished at three year highs today

* GDX was up about 5% on the day

* The stock market didn't do that much today, but the real story, other than the gold market is in the bond market

* U.S. Treasury yield plunging again - these are the lowest yields ever

* Certainly below the crash lows

* The yield on the 10-year treasury is below 1.5%

* The yield on the 10-year treasury is 2.24%

* So yields are plunging, bond prices are surging

* What is going on?

* The answer is money printing; Quantitative Easing

* The most recent catalyst being the Brexit vote, which scared the hell out of everybody because of the collapse, particularly of the European banks

* Now the central bankers are rushing to the rescue all around the world


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I wish everybody a happy July 4th weekend; U.S. markets will be closed

It's unfortunate that we can't really celebrate all the traditions that we're supposed to be honoring were lost generations ago

The values our founding fathers risked their lives for have all been lost

I wanted to comment on what is going on in the markets particularly today

Today was the capper on the week

You had silver prices up about a dollar an ounce

Gold closed up about $19, so gold closed above $1340

Maybe by the time the market opens on Tuesday silver will be over $20/ounce

Who knows, maybe gold will be over $1400?

This is a powerful rally - gold finished at three year highs today

GDX was up about 5% on the day

The stock market didn't do that much today, but the real story, other than the gold market is in the bond market

U.S. Treasury yield plunging again - these are the lowest yields ever

Certainly below the crash lows

The yield on the 10-year treasury is below 1.5%

The yield on the 10-year treasury is 2.24%

So yields are plunging, bond prices are surging

What is going on?

The answer is money printing; Quantitative Easing

The most recent catalyst being the Brexit vote, which scared the hell out of everybody because of the collapse, particularly of the European banks

Now the central bankers are rushing to the rescue all around the world

* It was Turnaround Tuesday in the global financial markets as stocks are recovering from 2 days of carnage following the surprise Brexit vote in the U.K.

* The Dow was up almost 270 points today, NASDAQ up about 97

* But really the markets got beaten up the last couple days

* The smallest bounce was from the banks, which have been beaten up the most

* So they had the biggest drop and the smallest bounce

* Which really shows you how weak that sector is

* It couldn't even manage much of a dead cat bounce

* In fact, the carnage in, particularly the European banks is much bigger than it was during the financial crisis of '08

* This really shows you how much more levered up the banking system must be, thanks to all these years of QE and negative interest rates

* And of course, how much farther behind can the American banks be from their European cousins?

* U.S bank stocks, too, were hitting 52-week lows yesterday

* I still think there's a lot of carnage coming

* Some banks may be in a position where they are going to have to raise equity, which means they'll have to sell stock

* Clearly the market is not going to like that

* But again, everybody is blaming this on all the uncertainty surrounding Brexit

* To me, if we had a healthy financial system, if the markets were sound, and prices were based on fundamentals

* Would it really make that much of a difference if the UK were in the EU or not?

* What is being revealed here is the fragility of the whole system that is being propped up artificially by the banks

* By cheap money, low interest rates - everybody is speculating

* And everybody is assuming that the powers that be, whether it is the politicians, the governments or the central banks have everything under control

* It's a big put out there and nothing can go wrong

* And then when something does go wrong, then people get nervous

* The wake up and say, "Wait a minute! Maybe it's not as safe as we thought!"


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It was Turnaround Tuesday in the global financial markets as stocks are recovering from 2 days of carnage following the surprise Brexit vote in the U.K.

The Dow was up almost 270 points today, NASDAQ up about 97

But really the markets got beaten up the last couple days

The smallest bounce was from the banks, which have been beaten up the most

So they had the biggest drop and the smallest bounce

Which really shows you how weak that sector is

It couldn't even manage much of a dead cat bounce

In fact, the carnage in, particularly the European banks is much bigger than it was during the financial crisis of '08

This really shows you how much more levered up the banking system must be, thanks to all these years of QE and negative interest rates

And of course, how much farther behind can the American banks be from their European cousins?

U.S bank stocks, too, were hitting 52-week lows yesterday

I still think there's a lot of carnage coming

Some banks may be in a position where they are going to have to raise equity, which means they'll have to sell stock

Clearly the market is not going to like that

But again, everybody is blaming this on all the uncertainty surrounding Brexit

To me, if we had a healthy financial system, if the markets were sound, and prices were based on fundamentals

Would it really make that much of a difference if the UK were in the EU or not?

What is being revealed here is the fragility of the whole system that is being propped up artificially by the banks

By cheap money, low interest rates - everybody is speculating

And everybody is assuming that the powers that be, whether it is the politicians, the governments or the central banks have everything under control

It's a big put out there and nothing can go wrong

And then when something does go wrong, then people get nervous

The wake up and say, "Wait a minute! Maybe it's not as safe as we thought!"

* The British actually voted to leave the EU and it wasn't even that close

* I think by midnight last night EDT it was obvious that Leave was going to beat Remain

* I think it ended up 52% voting to Brexit and 48% voting to remain

* Of course, the markets were taken by surprise, in fact, we had a rally in to the close on Thursday as everybody was so confident that the polls would be right, and the online casinos would be right and that it was pretty much a sure thing that the British would vote to remain

* All of the experts, the economists and the political elites around the world, including President Obama had lectured the British as to why the smart thing is to stay in the EU and how dangerous it would be, economic Armageddon - if they voted to leave

* Of course this may have been reverse psychology

* Especially when you've been sold a bill of goods over and over again, with cost of living rising and standard of living going down

* The may be reaching for straws in the same manner as the Americans are voting for Donald Trump or Bernie Sanders

* The straw that they had was Brexit

* I think the markets are overreacting to the implications of the U.K. leaving the EU

* After all, think of all the countries that aren't in the EU

* Why aren't we all members?

* Why doesn't the U.S. join?

* They can't even get Switzerland to join the EU and it's located smack in the middle of Europe

* One of the reasons why Switzerland is so prosperous is that it had the good sense not to join the EU

* I think the markets believed their own hype

* For so long, we've been talking about how awful it would be if the British actually voted to leave that when they did so, it was a self-fulfilling prophecy

* Everybody is in this for a quick trade

* A lot of traders are all levered up and do the minute this thing happened everybody hit the same sell button

* This is just about traders having to reverse their bets

* Look at what happened in the flight to safety - the dollar was way up against the pound

* The pound really got "pounded" - it had its biggest down day in history

* It was pounded even harder relative to gold - the price of gold in terms of the British pound rose above 1000 pounds per ounce last night

* Gold was the strongest monetary asset of the day, but #2 was the yen

* At one point I saw the yen was up 5% against the dollar, which meant it was up about 15% against the pound

* Now why is everybody buying the yen, why are they buying the dollar?

* People say it's a safe haven - not really.

* Does anyone think that the Japanese economy is a bastion of safety?

* Why would anybody worried about Europe buy the dollar?

* Think about the irony of this: people are so worried about Britain leaving the EU that they're selling the pound to buy the Swiss franc - a country that never entered the Eurozone

* It's not about safety.  It's about risk-on and risk-off

* What is risk-on? That is when you buy risky assets like stocks

* How does the leveraged speculative community fund a risk-on trade? they go to the funding currencies where you can borrow cheaply

* The most popular funding currency is the Japanese yen because they pay you to borrow in yen

* So it's real cheap, you can lever up, and to a lesser extent the dollar is a funding currency - we've had very low interest rates, especially relative to our rate of inflation


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* I'm on vacation this week but I did take a little time out to little time out to listen to Janet Yellen's semi-annual "Humphrey-Hawkins" testimony - she testified first before the Senate, that was yesterday and today she was before the house

* It used to be a lot more interesting with Ron Paul was on the house banking committee and you could see Ron Paul asking questions to Ben Bernanke

* I really would like to hear Rand Paul questioning Janet Yellen but unfortunately, we don't have that opportunity

* Also, the big news, we are on the eve of the Brexit vote in the U.K.; it's going to be on Thursday

* Polls of investor sentiment show the remain camp is firmly in the lead

* Betting certainly shows that more money is on the remain, but more people are betting on leave

* Probably, though the remain camp will carry the day; the forces of big government are very hard to overcome

* Nowhere is big government better exemplified than in the case of the Federal Reserve, which is the combination of big government and central banking

* Janet Yellen's testimony, I thought, was relatively boring, but I'm going to go over some of the more important tidbits

* Yellen keeps referring to the recovery that appears to be on track and the rate hike is just around the corner

* All this is nonsense - if the Fed were going to raise rates, they would have already done so

* One senator or congressman asked Yellen about the box the Fed might be in because the rates are still so low, what tools does Yellen have to fight off the next recession

* Yellen confidently replied that we have all the tools we've always had, which is true

* They still have those tools; the problem is that these tools have never worked

* They can't cut rates, much, they can print all the money they want, they can do QE4, it can be bigger than QE3, and  it probably will be

* Even though Janet Yellen, in response to a direct question about negative interest rates, said that she didn't think the Fed would go there, well we'll see

* When push comes to shove they may be more willing to go there than they are right now because they still want to pretend that the recovery is on track, so why even bring up negative rates when you're talking about raising rates

* So I think once the conversation turns then negative rates may be a more serious consideration

* One of the congressmen asked about Puerto Rico and Janet Yellen said, "No, there's nothing we can do, Puerto Rico is on it's own."

* I wish the Fed would have had the same attitude about the mortgage market

* The Federal Reserve has no problem buying up toxic mortgages but they wouldn't touch Puerto Rican sovereign debt with ta 10-foot pole

* Which leads you to believe how risky that debt much be

* I wish the Fed would do the same thing to the U.S. government - force the U.S. government to make those tough choices

* In fact, there was a House member, today, who talked to Janet Yellen about the independent central banks and Janet Yellen bluffed, that if interest rates, and that was a problem for Congress, that Congress would have to deal with the problem

* I don't believe her for a second

* I believe on of the reasons, specifically that Janet Yellen doesn't want to raise rates is that she knows that will complicate the budget situation in Washington because the Federal Government can't afford to pay higher interest rates

* If the Federal Reserve already bailed out the government by doing QE and buying all these bonds, why are they going to change course?

* I don't believe for a second Janet Yellen's tough talk about how independent the Federal Reserve is and how if the situation warranted it, they would raise interest rates and Congress would have to deal with the consequences

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I'm on vacation this week but I did take a little time out to little time out to listen to Janet Yellen's semi-annual "Humphrey-Hawkins" testimony - she testified first before the Senate, that was yesterday and today she was before the house

It used to be a lot more interesting with Ron Paul was on the house banking committee and you could see Ron Paul asking questions to Ben Bernanke

I really would like to hear Rand Paul questioning Janet Yellen but unfortunately, we don't have that opportunity

Also, the big news, we are on the eve of the Brexit vote in the U.K.; it's going to be on Thursday

Polls of investor sentiment show the remain camp is firmly in the lead

Betting certainly shows that more money is on the remain, but more people are betting on leave

Probably, though the remain camp will carry the day; the forces of big government are very hard to overcome

Nowhere is big government better exemplified than in the case of the Federal Reserve, which is the combination of big government and central banking

Janet Yellen's testimony, I thought, was relatively boring, but I'm going to go over some of the more important tidbits

Yellen keeps referring to the recovery that appears to be on track and the rate hike is just around the corner

All this is nonsense - if the Fed were going to raise rates, they would have already done so

One senator or congressman asked Yellen about the box the Fed might be in because the rates are still so low, what tools does Yellen have to fight off the next recession

Yellen confidently replied that we have all the tools we've always had, which is true

They still have those tools; the problem is that these tools have never worked

They can't cut rates, much, they can print all the money they want, they can do QE4, it can be bigger than QE3, and  it probably will be

Even though Janet Yellen, in response to a direct question about negative interest rates, said that she didn't think the Fed would go there, well we'll see

When push comes to shove they may be more willing to go there than they are right now because they still want to pretend that the recovery is on track, so why even bring up negative rates when you're talking about raising rates

So I think once the conversation turns then negative rates may be a more serious consideration

One of the congressmen asked about Puerto Rico and Janet Yellen said, "No, there's nothing we can do, Puerto Rico is on it's own."

I wish the Fed would have had the same attitude about the mortgage market

The Federal Reserve has no problem buying up toxic mortgages but they wouldn't touch Puerto Rican sovereign debt with ta 10-foot pole

Which leads you to believe how risky that debt much be

I wish the Fed would do the same thing to the U.S. government - force the U.S. government to make those tough choices

In fact, there was a House member, today, who talked to Janet Yellen about the independent central banks and Janet Yellen bluffed, that if interest rates, and that was a problem for Congress, that Congress would have to deal with the problem

I don't believe her for a second

I believe on of the reasons, specifically that Janet Yellen doesn't want to raise rates is that she knows that will complicate the budget situation in Washington because the Federal Government can't afford to pay higher interest rates

If the Federal Reserve already bailed out the government by doing QE and buying all these bonds, why are they going to change course?

I don't believe for a second Janet Yellen's tough talk about how independent the Federal Reserve is and how if the situation warranted it, they would raise interest rates and Congress would have to deal with the consequences

There's no way the Fed is going to do that; she may have fooled some of the people on that sub-committee, but she didn't fool me

Of course, she always gets these questions about jobs, and how are you going to create jobs,

* Gold closed the week at the highest weekly close since January of 2015

* Not quite above the $1300 benchmark - I think we closed about $1298 - up about $20 on the day

* Intra-day yesterday, gold was well above $1300

* Until there was news that a British Member of Parliament was shot and that somehow revised hope for the "stay" vote in the Brexit referendum

* As if the price of gold is going up based on the outcome of that vote

* As far as I'm concerned next week's vote is a non-event for the gold market

* The conventional wisdom seems to believe that if Britain leaves, all hell is going to break loose in Europe

* I guess all this chaos is supposed to be bullish for gold

* If Britain votes to stay, the euro will go up and that might be bullish for gold, because a weak dollar is generally bullish for gold

* I think gold will go up regardless of the British vote

* The price of gold is not going up because of what's happening in Europe

* It's going up because of what's happening in the United States

*  More specifically at the Federal Reserve

* The Federal Reserve concluded its June meeting on Wednesday and Janet Yellen - surprise! did not raise interest rates

* If you remember, a few months ago, some minutes leaked to the public caused the public to think the Fed would raise rates in June for sure - maybe July, but probably June

* And gold tanked and the dollar rallied and I said, "I don't think so."

* There's nothing in these minutes that say the Fed is going to do anything

* It's the same old Open Mouth Operation

* If you read between the lines, they didn't commit to anything

* But she cried wolf and everybody came running, and

* Not only did the Fed not raise in June but they backtracked on their intentions to raise rates in the future

* They toned down their so-called dot plots for this year and next year

* Now, instead of announcing the first rate hike of the year, they actually pushed back expectations

* There were a lot of articles about the Fed losing credibility, the Fed surrendering

* This is what I have been forecasting

* None of this is a surprise to faithful listeners to this podcast

* Those who have been listening to the talking heads on the major media outlets expect the Fed to raise rates because they actually believe that the Fed's policies have worked and that we have a recovery

* They have not figured out that this is a bubble

* They never figure it out until after the bubble has burst

* If you go back and read the transcript of Janet Yellen's press conference, she's still talking about  a July rate hike

* If she had been honest, she would have said,"Why would we raise rates in July? We didn't raise them in June, what is going to change in a month?

* But she is still on script:  she said, "I guess it's not impossible that we could raise rates in July"

* So that's what it's come to:

* It's come to, "We're probably going to raise rates in June or July" and now we're at, "I guess it's not impossible"

* There a lot of things that are not impossible. It's not impossible that aliens are going to invade the Earth in July


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