The Peter Schiff Show Podcast

* I recorded my last podcast on the afternoon of April 19, and I wanted to announce that later that evening, my first daughter was born - we named her Lilyan Ruth after both of our maternal grandmothers - so we now have Lilyan Ruth Schiff, she was 7 lbs 2 oz. of pure cuteness!

* If you just looked at the close of the gold and silver market, you wouldn't know that much went on, gold closed up under $5 - silver was up about .04, but you wouldn't know that earlier in the morning gold was up better than $25, we did trade back above $1270

* Silver made a new high for the year - silver was up about 75¢ early in the morning, in fact I think it made its peak during the Draghi press conference

* We were above $1760 and then, just around 9am or so, there was a huge seller in the gold and the silver market and the whole complex went negative and we managed to close slightly positive on the day, but we had a huge sell-off intra-day following a big rally

* That doesn't mean the top is in - I think it's interesting; we just got a huge correction out of the way and the price went up - we flushed out a big seller and now that seller is out of the market and this market is still going a lot higher

* I put an article on my Facebook page about how gold stocks are way up this year, and they are way up this year, but the article basically said, "Don't buy", because gold is going to sell off.

* I'm seeing a log of mainstream articles now about why you should not jump on this bandwagon, how dangerous the gold market is

* And all this is just music to my ears.  If you are bullish on gold, this is exactly what you want.  You want everybody to be skeptical.

* You want this wall of worry, that gold and silver are going to climb, and we're going to climb with it while everybody else is worried about the crash, because they still don't get it.

* They're still talking about how the Fed is going to raise rates, and how that's bad for gold

* It's not bad for gold - it all depends on how the Fed raises rates

* If the Fed raises rates Paul Volker style, really jacks them up there, yeah, that will be bad for gold

* But they're not going to do that.  If they raise rates, slowly, which is the only way they can do that if they even raise them, they will be slower than Greenspan was

* When Greenspan raised rates, that was great for gold, because he was very slow

* Well, Yellen is going to be even slower

* So if gold did well under Greenspan, it will do even better under Yellen hikes, if we even get hikes

* If we even get hikes.  We could get cuts, QE4, negative rates

* If the Fed raises rates a little bit, that's bullish for gold; if they don't raise rates at all, even more bullish for gold, or they cut rates, and gold goes ballistic

* Either way, gold stocks are going up

* Meanwhile Wall Street is looking at amazement at the rally and it wouldn't dawn on them to participate

* The mainstream investment world is not on board.  The train has left - there's nobody on it

* Eventually they're going to buy, just like they piled in to the gold trade when it was 17-18-1900, that's when the big firms started finally noticing it

* Eventually they are going to realize... I think it is going to take Yellen admitting the economy is weak, of the Fed actually cutting rates, but by then the prices are going to be much higher than they are now and we keep getting bad economic news

* But I want to talk first about the Draghi press conference

* Mario Draghi of the ECB, leaving interest rates unchanged, and continuing their QE program

* The euro initially rallied, even during the Q&A, but then at the end, the euro turned around with the gold market, and the euro ended up unchanged

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I recorded my last podcast on the afternoon of April 19, and I wanted to announce that later that evening, my first daughter was born - we named her Lilyan Ruth after both of our maternal grandmothers - so we now have Lilyan Ruth Schiff, she was 7 lbs 2 oz. of pure cuteness!

If you just looked at the close of the gold and silver market, you wouldn't know that much went on, gold closed up under $5 - silver was up about .04, but you wouldn't know that earlier in the morning gold was up better than $25, we did trade back above $1270

Silver made a new high for the year - silver was up about 75¢ early in the morning, in fact I think it made its peak during the Draghi press conference

We were above $1760 and then, just around 9am or so, there was a huge seller in the gold and the silver market and the whole complex went negative and we managed to close slightly positive on the day, but we had a huge sell-off intra-day following a big rally

That doesn't mean the top is in - I think it's interesting; we just got a huge correction out of the way and the price went up - we flushed out a big seller and now that seller is out of the market and this market is still going a lot higher

I put an article on my Facebook page about how gold stocks are way up this year, and they are way up this year, but the article basically said, "Don't buy", because gold is going to sell off.

I'm seeing a log of mainstream articles now about why you should not jump on this bandwagon, how dangerous the gold market is

And all this is just music to my ears.  If you are bullish on gold, this is exactly what you want.  You want everybody to be skeptical.

You want this wall of worry, that gold and silver are going to climb, and we're going to climb with it while everybody else is worried about the crash, because they still don't get it.

They're still talking about how the Fed is going to raise rates, and how that's bad for gold

It's not bad for gold - it all depends on how the Fed raises rates

If the Fed raises rates Paul Volker style, really jacks them up there, yeah, that will be bad for gold

But they're not going to do that.  If they raise rates, slowly, which is the only way they can do that if they even raise them, they will be slower than Greenspan was

When Greenspan raised rates, that was great for gold, because he was very slow

Well, Yellen is going to be even slower

So if gold did well under Greenspan, it will do even better under Yellen hikes, if we even get hikes

If we even get hikes.  We could get cuts, QE4, negative rates

If the Fed raises rates a little bit, that's bullish for gold; if they don't raise rates at all, even more bullish for gold, or they cut rates, and gold goes ballistic

Either way, gold stocks are going up

Meanwhile Wall Street is looking at amazement at the rally and it wouldn't dawn on them to participate

The mainstream investment world is not on board.  The train has left - there's nobody on it

Eventually they're going to buy, just like they piled in to the gold trade when it was 17-18-1900, that's when the big firms started finally noticing it

Eventually they are going to realize... I think it is going to take Yellen admitting the economy is weak, of the Fed actually cutting rates, but by then the prices are going to be much higher than they are now and we keep getting bad economic news

But I want to talk first about the Draghi press conference

Mario Draghi of the ECB, leaving interest rates unchanged, and continuing their QE program

The euro initially rallied, even during the Q&A, but then at the end, the euro turned around with the gold market, and the euro ended up unchanged

Draghi made some interesting comments. One of them had to do with inflation

Draghi admitted that lower gas prices were helping European consumers, giving them more purchasing power

But in the same Q&A session, he said that inflation wasn't high enough, but he was confident that they would get it back ...

* Hi-Ho Silver! Seems to be the rallying cry for the day

* The last podcast I recorded I talked about the breakout in silver and I actually regretted the fact that I didn't get a chance to talk about silver during my CNBC interview

* On my last podcast I mentioned how strong silver had been looking and it held up extremely well in the gold selloff during the prior few days

* Sure enough, we had a big breakout again today

* Silver was above $17 earlier today, the first time it has been that high all year

* Gold is still well below the highs, it needs to rally about $30 to get back to its high for this move

* I mentioned on the last podcast that I though the strength in silver was a good leading indicator for both gold and silver

* And I talked about all the traders who have been shorting silver, that had been a popular trade when the gold and silver ratio was breaking down, I thought that it made no sense to short silver

* To me it was a much better trade to buy silver when it's as cheap as it's ever been relative to gold

* This is good constructive action, in fact, the gold stocks are at new highs for the year

* The GDX, as I speak, is up 4% on the day; it's above $23 - this is the high for the year

* The juniors, GDXJ, that index is up over 6% -  today! This is a new 52-week high

 

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Hi-Ho Silver! Seems to be the rallying cry for the day

The last podcast I recorded I talked about the breakout in silver and I actually regretted the fact that I didn't get a chance to talk about silver during my CNBC interview

On my last podcast I mentioned how strong silver had been looking and it held up extremely well in the gold selloff during the prior few days

Sure enough, we had a big breakout again today

Silver was above $17 earlier today, the first time it has been that high all year

Gold is still well below the highs, it needs to rally about $30 to get back to its high for this move

I mentioned on the last podcast that I though the strength in silver was a good leading indicator for both gold and silver

And I talked about all the traders who have been shorting silver, that had been a popular trade when the gold and silver ratio was breaking down, I thought that it made no sense to short silver

To me it was a much better trade to buy silver when it's as cheap as it's ever been relative to gold

This is good constructive action, in fact, the gold stocks are at new highs for the year

The GDX, as I speak, is up 4% on the day; it's above $23 - this is the high for the year

The juniors, GDXJ, that index is up over 6% -  today! This is a new 52-week high

* This is another week of bad economic data that most people have ignored

* The stock market was up this week; the Dow closed up 1.8% on the year

* I don't know if the Dow was rising in spite the bad news or because of it

* The bad news means the economy is weak and corporate earnings are not there, and there are high multiples

* But of course, if the economy is weak, that takes the Fed out of the rate hiking game and I think puts it into the rate cutting - QE4 game

* So the market is caught between the opposing forces of cheap money and falling earnings on the back of a weak economy

* Gold was actually down on the week; it started off the week strong, then Thursday it got hit pretty good and today it recouped some of its losses

* But the standout was silver

*  Silver was up almost 6% on the week; this is a new high

* Silver closed at the highest close of the year

* In fact, silver was strong with gold on Monday and Tuesday and when gold sold off on Wednesday and Thursday, silver really held up

* That's a good sign for both gold and silver

* I was on CNBC.com this week and I meant to say something about silver

* They're not even talking about silver in the mainstream media so they're missing an even bigger move

* They're acknowledging that gold's going up but they're not even looking at silver

* I mentioned on an earlier podcast that a number of people are shorting silver and buying gold because they saw the breakout to new highs on the gold/silver ratio and they wanted to jump on that trad

* I thought that was the wrong thing to do

* To me, seeing new highs in that ratio in favor of silver made me want to buy silver, since it's as cheap as it's been relative to gold

* If you like gold, just buy it; don't short silver because you could turn a winning trade into a losing trade

 

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This is another week of bad economic data that most people have ignored

The stock market was up this week; the Dow closed up 1.8% on the year

I don't know if the Dow was rising in spite the bad news or because of it

The bad news means the economy is weak and corporate earnings are not there, and there are high multiples

But of course, if the economy is weak, that takes the Fed out of the rate hiking game and I think puts it into the rate cutting - QE4 game

So the market is caught between the opposing forces of cheap money and falling earnings on the back of a weak economy

Gold was actually down on the week; it started off the week strong, then Thursday it got hit pretty good and today it recouped some of its losses

But the standout was silver

 Silver was up almost 6% on the week; this is a new high

Silver closed at the highest close of the year

In fact, silver was strong with gold on Monday and Tuesday and when gold sold off on Wednesday and Thursday, silver really held up

That's a good sign for both gold and silver

I was on CNBC.com this week and I meant to say something about silver

They're not even talking about silver in the mainstream media so they're missing an even bigger move

They're acknowledging that gold's going up but they're not even looking at silver

I mentioned on an earlier podcast that a number of people are shorting silver and buying gold because they saw the breakout to new highs on the gold/silver ratio and they wanted to jump on that trad

I thought that was the wrong thing to do

To me, seeing new highs in that ratio in favor of silver made me want to buy silver, since it's as cheap as it's been relative to gold

If you like gold, just buy it; don't short silver because you could turn a winning trade into a losing trade

* The dollar index traded below 94 for a good part of the day, but it did manage to close up at 94 even, down just .20

* Gold was up another $19

* Silver really shined brightly today, up .54, just below $16/oz.

* Mining stocks, of course, were on fire; GDX was up just under 6% on the day, GDXJ up just under 7%

* This followed a spectacular day for the mining stocks on Friday

* In fact, even though gold itself was down a couple of bucks, we had a huge up day in the gold stocks

* Between  Friday and today, I think this is the biggest two back-to-back gains for gold stocks all year

* The catalyst was the Atlanta Fed Q1 GDP estimate downgrade all the way down to .1

* If you remember, from listening to my podcasts, the very first time the Atlanta Fed came out with its upward revision, with a lot of fanfare, to 2.7%, I said that that was all political and that they would have to walk that back all quarter long, and now they have eliminated the entire estimated gain

* A fair estimate might have been -.1, but President Obama is still saying we have the strongest advanced economy in the world

* I don't know what his definition of "strong" or "advanced" is, but we might have one of the weakest of the advanced economies

* It's just that nobody wants to accept that fact yet

* Here's where it really gets interesting: CNBC was very dismissive of the weak economic numbers

* They are characterizing the weak Q1 as similar to previous years' weak Q1, where the weather pushed back some economic activity to Q2, causing rebounds

* They said the same thing is going to happen this year.  No it's not.

* This year is different from last year

* First, let's talk about inventories: February and January Wholesale Trade Inventories have been revised down from +.3 to -.2

* Last year, companies were still building up inventories, believing in the recovery narrative, boosting GDP

* The inventory unwind that I have been talking about for the last year is just beginning

* It started in Q1 of this year, and this inventory sell-down is going to subtract from GDP

* Here's another factor: the weather

* The weather for the last two first quarters was very cold, pushing economic activity to Q2, helping Q2 to rebound

* That's not what happened this year.  The first quarter of this year was the warmest in over 120 years

* So obviously there was no economic activity pushed forward due to weather, if anything, the weather might have pulled some activity from Q2 to Q1

* As weak as Q1 was, it might have been weaker if cold weather had suspended some economic activity

* The third difference is the trade deficit, which is rapidly growing this year

* I think the growing trade deficit will continue to put a drag on Q2 GDP

* The inventory liquidation will continue to be a drag on Q2 GDP

* What that means is had the government properly seasonally adjusted Q1 for the unusually warm weather, I think Q1 GDP would be a lot lower

* Q1 will be a contraction, and we are going to fall from there

* If that is true, then we are in a recession

* I think this recession will be longer in duration that the preceding one

* The question is: What is the government going to do about it?

* There was a meeting today between President Obama, Joe Biden and Janet Yellen

* They have to figure out how to throw the economy a lifeline without admitting that it is drowning

* The first thing the Fed can do is signal that they are not going to raise rates - change their forward guidance

* By just not raising the rates, the specter of a hike remains

* The question is what story will they use in order to not damage Obama's recovery narrative and Hillary Clinton's campaign?

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The dollar index traded below 94 for a good part of the day, but it did manage to close up at 94 even, down just .20

Gold was up another $19

Silver really shined brightly today, up .54, just below $16/oz.

Mining stocks, of course, were on fire; GDX was up just under 6% on the day, GDXJ up just under 7%

This followed a spectacular day for the mining stocks on Friday

In fact, even though gold itself was down a couple of bucks, we had a huge up day in the gold stocks

Between  Friday and today, I think this is the biggest two back-to-back gains for gold stocks all year

The catalyst was the Atlanta Fed Q1 GDP estimate downgrade all the way down to .1

If you remember, from listening to my podcasts, the very first time the Atlanta Fed came out with its upward revision, with a lot of fanfare, to 2.7%, I said that that was all political and that they would have to walk that back all quarter long, and now they have eliminated the entire estimated gain

A fair estimate might have been -.1, but President Obama is still saying we have the strongest advanced economy in the world

I don't know what his definition of "strong" or "advanced" is, but we might have one of the weakest of the advanced economies

It's just that nobody wants to accept that fact yet

Here's where it really gets interesting: CNBC was very dismissive of the weak economic numbers

They are characterizing the weak Q1 as similar to previous years' weak Q1, where the weather pushed back some economic activity to Q2, causing rebounds

They said the same thing is going to happen this year.  No it's not.

This year is different from last year

First, let's talk about inventories: February and January Wholesale Trade Inventories have been revised down from +.3 to -.2

Last year, companies were still building up inventories, believing in the recovery narrative, boosting GDP

The inventory unwind that I have been talking about for the last year is just beginning

It started in Q1 of this year, and this inventory sell-down is going to subtract from GDP

Here's another factor: the weather

The weather for the last two first quarters was very cold, pushing economic activity to Q2, helping Q2 to rebound

That's not what happened this year.  The first quarter of this year was the warmest in over 120 years

So obviously there was no economic activity pushed forward due to weather, if anything, the weather might have pulled some activity from Q2 to Q1

As weak as Q1 was, it might have been weaker if cold weather had suspended some economic activity

The third difference is the trade deficit, which is rapidly growing this year

I think the growing trade deficit will continue to put a drag on Q2 GDP

The inventory liquidation will continue to be a drag on Q2 GDP

What that means is had the government properly seasonally adjusted Q1 for the unusually warm weather, I think Q1 GDP would be a lot lower

Q1 will be a contraction, and we are going to fall from there

If that is true, then we are in a recession

I think this recession will be longer in duration that the preceding one

The question is: What is the government going to do about it?

There was a meeting today between President Obama, Joe Biden and Janet Yellen

They have to figure out how to throw the economy a lifeline without admitting that it is drowning

The first thing the Fed can do is signal that they are not going to raise rates - change their forward guidance

By just not raising the rates, the specter of a hike remains

The question is what story will they use in order to not damage Obama's recovery narrative and Hillary Clinton's campaign?

Maybe they will blame it on the global economy, even though the U.S. is much weaker than many other economies

The Fed can't cut much - one cut and they're done, unless they want to venture into negative territory, which would be a disaster

They could re-launch QE, which I think there is a very good chance they're going to do

* Today is the Wisconsin Primary but Donald Trump has been getting a lot of flack in the media over the last couple of days about his comments about the U.S. economy, particularly in the financial media because Donald Trump has now predicted a "very massive recession" in the U.S.

* He didn't just say a recession, he's predicting a massive recession

* Most of the pundits on television don't see any recession at all - not even a mild one

* So here you have Donald Trump saying, not only is the recession going to be massive, it's going to be very massive

* The media is all over Trump: "What is he talking about? The economy is in great shape! He's peddling all kinds of fiction! We have this massive economic growth!"

* the President television today taking credit for this great economy with all these years of jobs

* Of course what the President doesn't admit to, is, it's not job creation - it's job destruction

* We're destroying full time jobs, the by-product of that destruction is that we create a bunch of part-time jobs that people don't really want but that's all they can get

* Yet the President is taking credit for that

* It's like setting a fire and taking credit for putting it out

* That's what the Federal Reserve did with the 2008 Financial Crisis

* Let's look at some of the economic news that came out over the past couple of days that resulted in the Atlanta Fed reducing its Q1 GDP estimate - yet again - to .4

* In last Friday's podcast I said that I thought they would be revising it down, and based on the numbers that just came out, they did

* One if the reasons the Atlanta Fed cited for the revision was yesterday's release of February Factory Orders

* They were expected to be down 1.6; instead it came out as -1.7, which was not that big a miss unless you consider the previous downward revision, which means it dropped from a lower level

* That took something out of the GDP numbers as did the very bad auto sales that I did mention in Friday's podcast

* Apparently the worse-than-expected trade deficit that came out today didn't even factor into their thinking, and I don't know why, because we were expecting $46.2 billion and instead we got $47.1 billion

* That's a pretty big miss, and they took January's estimate which was originally $45.7 billion and raised that to $46.2 billion

* We are still expecting the March number which will be factored into Q1 GDP, so I think the Atlanta Fed is still not low enough

* Remember, too, one of the things that's helping the Q1 GDP is that most of the country had an unseasonably warm winter, because bad weather is factored into the estimate

*


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Today is the Wisconsin Primary but Donald Trump has been getting a lot of flack in the media over the last couple of days about his comments about the U.S. economy, particularly in the financial media because Donald Trump has now predicted a "very massive recession" in the U.S.

He didn't just say a recession, he's predicting a massive recession

Most of the pundits on television don't see any recession at all - not even a mild one

So here you have Donald Trump saying, not only is the recession going to be massive, it's going to be very massive

The media is all over Trump: "What is he talking about? The economy is in great shape! He's peddling all kinds of fiction! We have this massive economic growth!"

the President television today taking credit for this great economy with all these years of jobs

Of course what the President doesn't admit to, is, it's not job creation - it's job destruction

We're destroying full time jobs, the by-product of that destruction is that we create a bunch of part-time jobs that people don't really want but that's all they can get

Yet the President is taking credit for that

It's like setting a fire and taking credit for putting it out

That's what the Federal Reserve did with the 2008 Financial Crisis

Let's look at some of the economic news that came out over the past couple of days that resulted in the Atlanta Fed reducing its Q1 GDP estimate - yet again - to .4

In last Friday's podcast I said that I thought they would be revising it down, and based on the numbers that just came out, they did

One if the reasons the Atlanta Fed cited for the revision was yesterday's release of February Factory Orders

They were expected to be down 1.6; instead it came out as -1.7, which was not that big a miss unless you consider the previous downward revision, which means it dropped from a lower level

That took something out of the GDP numbers as did the very bad auto sales that I did mention in Friday's podcast

Apparently the worse-than-expected trade deficit that came out today didn't even factor into their thinking, and I don't know why, because we were expecting $46.2 billion and instead we got $47.1 billion

That's a pretty big miss, and they took January's estimate which was originally $45.7 billion and raised that to $46.2 billion

We are still expecting the March number which will be factored into Q1 GDP, so I think the Atlanta Fed is still not low enough

Remember, too, one of the things that's helping the Q1 GDP is that most of the country had an unseasonably warm winter, because bad weather is factored into the estimate