The Peter Schiff Show Podcast

* We have some key primary elections coming up tomorrow and I want to take an opportunity to do a podcast on Donald Trump and the Trump phenomenon

* A lot of people are under the impression that I am endorsing Donald Trump because I have said some positive things about him and his campaign

* But I want to make it clear that I am not doing that

* I am not convinced that he is going to be a good President, although it's possible that he could

* I think there's no chance that Hillary Clinton would be a good President, that's clear

* Donald Trump is a wild card

* I do have a lot of problems with much of what Donald Trump says

* What is more telling is that he has so much support because he is tapping into a vein in the Republican Party, in fact, outside the Republican Party because he is getting Independents and Democrats to cross over and vote in Republican primaries because some people find his message so appealing

* The country is in much worse shape than the media or the Federal Reserve or Congress are leading people to believe

* Everybody keeps talking about the recovery, especially President Obama, but the people who are showing up for Trump at these rallies know there is no recovery

* In fact, the economy is in even worse shape than even Donald Trump recognizes, but at least he is talking about the enormity of the problems

* He's right - America isn't great. There are a lot of people who are in denial

* They say we don't have to make America great again, because it's still great

* No, it's not

* Based on any measure, the U.S. economy is far from its greatest

* Donald Trump recognizes that American has lost her greatness and he wants to restore it

* Voters want to make America great again and they believe Donald Trump can do it

* Donald Trump probably believes he can do it and that is part of the problem, because he can't make America great again

* Only free market capitalism can make America great again and I'm not sure Donald Trump understands this

* He believes America is in trouble because we're run by a bunch of idiots, by incompetent people who are in charge of the country - and he's right about that

* They are incompetent, but just changing the politicians, having more competent leaders is not going to make America great again

* If we have big government, it doesn't matter whether Donald Trump is in charge or the current crop of politicians

* There is no way to make big government work

* Smarter people at the helm won't steer this massive ship any straighter

* Donald Trump believes that because he's successful in business and he's built a high net worth that he can run the U.S. government and make it profitable for American citizens

* He thinks he can get in there and get rid of the waste, fraud and abuse and we're going to negotiate better trade deals and this is going to bring our jobs back, and America will be great again

* None of that is true

* We don't need better negotiators.  We don't need trade deals. We just need free trade

* The problem with trade deals is that they're not free - they're managed

* There are all sorts of nonsense in these agreements

* The fact that the U.S. has these huge trade deficits, and the fact that we're losing all our high-paying manufacturing jobs is not because we got outsmarted by the Chinese in negotiations

* Our trade deficits are a symptom of the problem - they are not the cause of the problem

* The reason we have deficits with everybody is not because we have bad trade deals

* It is because we have too much government

* Even if Donald Trump is the leader of that government, he's not going to make it work any better

* What he needs to do is to talk about how he is going to dismantle governme...

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We have some key primary elections coming up tomorrow and I want to take an opportunity to do a podcast on Donald Trump and the Trump phenomenon

A lot of people are under the impression that I am endorsing Donald Trump because I have said some positive things about him and his campaign

But I want to make it clear that I am not doing that

I am not convinced that he is going to be a good President, although it's possible that he could

I think there's no chance that Hillary Clinton would be a good President, that's clear

Donald Trump is a wild card

I do have a lot of problems with much of what Donald Trump says

What is more telling is that he has so much support because he is tapping into a vein in the Republican Party, in fact, outside the Republican Party because he is getting Independents and Democrats to cross over and vote in Republican primaries because some people find his message so appealing

The country is in much worse shape than the media or the Federal Reserve or Congress are leading people to believe

Everybody keeps talking about the recovery, especially President Obama, but the people who are showing up for Trump at these rallies know there is no recovery

In fact, the economy is in even worse shape than even Donald Trump recognizes, but at least he is talking about the enormity of the problems

He's right - America isn't great. There are a lot of people who are in denial

They say we don't have to make America great again, because it's still great

No, it's not

Based on any measure, the U.S. economy is far from its greatest

Donald Trump recognizes that American has lost her greatness and he wants to restore it

Voters want to make America great again and they believe Donald Trump can do it

Donald Trump probably believes he can do it and that is part of the problem, because he can't make America great again

Only free market capitalism can make America great again and I'm not sure Donald Trump understands this

He believes America is in trouble because we're run by a bunch of idiots, by incompetent people who are in charge of the country - and he's right about that

They are incompetent, but just changing the politicians, having more competent leaders is not going to make America great again

If we have big government, it doesn't matter whether Donald Trump is in charge or the current crop of politicians

There is no way to make big government work

Smarter people at the helm won't steer this massive ship any straighter

Donald Trump believes that because he's successful in business and he's built a high net worth that he can run the U.S. government and make it profitable for American citizens

He thinks he can get in there and get rid of the waste, fraud and abuse and we're going to negotiate better trade deals and this is going to bring our jobs back, and America will be great again

None of that is true

We don't need better negotiators.  We don't need trade deals. We just need free trade

The problem with trade deals is that they're not free - they're managed

There are all sorts of nonsense in these agreements

The fact that the U.S. has these huge trade deficits, and the fact that we're losing all our high-paying manufacturing jobs is not because we got outsmarted by the Chinese in negotiations

Our trade deficits are a symptom of the problem - they are not the cause of the problem

The reason we have deficits with everybody is not because we have bad trade deals

It is because we have too much government

Even if Donald Trump is the leader of that government, he's not going to make it work any better

What he needs to do is to talk about how he is going to dismantle government

Not how he's going to make America great again, but how the American people will make America great again when they are free from government

If Trump is going to dismantle all the regulations and the spending and the taxes that are the source of our problem,

* Mario Draghi at the ECB fired his big bazooka today; people had anticipated that that would be the case

* In fact, it seems like he fired a bigger blast than people were expecting, he announced that he would reduce negative interest rates further

* They moved from -.3 to -.4 and he announced an expansion of their quantitative easing program from €60 billion per month to €80 billion, which means that their program is not larger than the Fed's; remember we were doing $85 billion a month before we tapered it down

* So what the ECB is doing is closer to $90 billion

* The problem for the market is that even though he fired a bigger blast than the markets had anticipated, after he fired it, he put that bazooka back in his holster

* What I mean by that, is at the end of his press conference, Draghi mention that he thought that this would probably be the last cut, that -40 is as low as the ECB is going to go

* Now maybe the market was just looking for an excuse to reverse, but the Euro, which had initially dropped sharply, about 1.5% down on the day, following the initial announcement, reversed and ended up falling about 2%, so it was a 3.5% reversal, and from what I've read, this is the biggest reversal, ever in the euro, from down to up

* In fact the dollar index went through 4 handles, at its highs this morning, the dollar index was at 98.5 and at its lows it was trading at around 95

* Many people think this is a failure for the ECB; they want a weaker euro, because they want more inflation

* I think the ECB is going to get more inflation, whether the euro weakens or strengthens against the dollar, because it's still going to weaken in real purchasing power

* Just as I mentioned in yesterday's podcast, referring to the Reserve Bank of New Zealand, Mario Draghi is saying that he doesn't have enough inflation, and interestingly enough, Draghi is going to get more inflation, and more than he's bargaining for

* He mentioned in his press conference that these things take time, because it will take time for inflation for develop because first we need the recovery to regain traction, as if inflation is a by-product of economic growth - it's not.

* It's a by-product of all the money printing

* It's just that right now, a lot of that money printing is in the financial assets

* But all this QE and negative interest rates are not going to get economic growth

* Now maybe the Eurozone economy will grow, but it's not because of QE, it's despite QE

* In fact, there would be more growth, if the ECB wasn't doing this, what they are doing is counter productive

* But ultimately they will succeed in getting more inflation, in fact they will get more than they bargained for

* I predict that prices in the Eurozone will not only hit the 2% target, it will exceed it, and that will mean the ECB is going to have to quickly withdraw that stimulus, they will have to raise rates much faster than they thought and much higher than they thought, but at least they'll do it

* We can't. that's the big difference.  Europe can afford higher rates, America cannot

* Europe is going to have the Bundesbank pressuring the ECB fight that inflation; there will be no such pressure on the Fed from the United States

* Normally, too, when the ECB eases, gold goes down and that was the knee-jerk reaction, as soon as the announcement came out, the price of gold dropped about $15, but it reversed very quickly and it ended up finishing up $19

* We're talking about a $35 intra day reversal, in fact, the low was below $1240, but ever since the price of gold closed above $1250, it has never closed below $1250

* This is the highest close of the year, it's the first time I've see gold close above $1270

* Gold stocks closed at their highs of the year,

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Mario Draghi at the ECB fired his big bazooka today; people had anticipated that that would be the case

In fact, it seems like he fired a bigger blast than people were expecting, he announced that he would reduce negative interest rates further

They moved from -.3 to -.4 and he announced an expansion of their quantitative easing program from €60 billion per month to €80 billion, which means that their program is not larger than the Fed's; remember we were doing $85 billion a month before we tapered it down

So what the ECB is doing is closer to $90 billion

The problem for the market is that even though he fired a bigger blast than the markets had anticipated, after he fired it, he put that bazooka back in his holster

What I mean by that, is at the end of his press conference, Draghi mention that he thought that this would probably be the last cut, that -40 is as low as the ECB is going to go

Now maybe the market was just looking for an excuse to reverse, but the Euro, which had initially dropped sharply, about 1.5% down on the day, following the initial announcement, reversed and ended up falling about 2%, so it was a 3.5% reversal, and from what I've read, this is the biggest reversal, ever in the euro, from down to up

In fact the dollar index went through 4 handles, at its highs this morning, the dollar index was at 98.5 and at its lows it was trading at around 95

Many people think this is a failure for the ECB; they want a weaker euro, because they want more inflation

I think the ECB is going to get more inflation, whether the euro weakens or strengthens against the dollar, because it's still going to weaken in real purchasing power

Just as I mentioned in yesterday's podcast, referring to the Reserve Bank of New Zealand, Mario Draghi is saying that he doesn't have enough inflation, and interestingly enough, Draghi is going to get more inflation, and more than he's bargaining for

He mentioned in his press conference that these things take time, because it will take time for inflation for develop because first we need the recovery to regain traction, as if inflation is a by-product of economic growth - it's not.

It's a by-product of all the money printing

It's just that right now, a lot of that money printing is in the financial assets

But all this QE and negative interest rates are not going to get economic growth

Now maybe the Eurozone economy will grow, but it's not because of QE, it's despite QE

In fact, there would be more growth, if the ECB wasn't doing this, what they are doing is counter productive

But ultimately they will succeed in getting more inflation, in fact they will get more than they bargained for

I predict that prices in the Eurozone will not only hit the 2% target, it will exceed it, and that will mean the ECB is going to have to quickly withdraw that stimulus, they will have to raise rates much faster than they thought and much higher than they thought, but at least they'll do it

We can't. that's the big difference.  Europe can afford higher rates, America cannot

Europe is going to have the Bundesbank pressuring the ECB fight that inflation; there will be no such pressure on the Fed from the United States

Normally, too, when the ECB eases, gold goes down and that was the knee-jerk reaction, as soon as the announcement came out, the price of gold dropped about $15, but it reversed very quickly and it ended up finishing up $19

We're talking about a $35 intra day reversal, in fact, the low was below $1240, but ever since the price of gold closed above $1250, it has never closed below $1250

This is the highest close of the year, it's the first time I've see gold close above $1270

Gold stocks closed at their highs of the year, the GDX index of gold miners was up 4.5% today closing at $20.38 - this is the first close above $20 all year

The key level for gold is going to be $1280

We've touched that level twice, once last week and once Monday morning

* So far it's been a pretty light week but what little economic data that has been released is bad, and all of it evidences the recession that nobody wants to acknowledge

* Let's start with the Consumer Credit numbers that came out on Monday.  Not only was the number extremely weak, but the revisions to the prior month were even weaker

* The initial report for the growth in consumer credit in December was $21.3 billion

* Now I don't think growth in consumer credit is good; I think it undermines long-term living standards

* The last thing you want to do is borrow money to consume, one of the points I really hammered home in my book, "How an Economy Grows and Why it Crashes"

* If you haven't bought that book, you should get a copy

* Be sure to pick the collector's edition because, in addition to being a really beautiful book, it has two entirely new chapters.  If you already have the original one, buy the collector's edition and give the original away to a friend.

* Consumers should not borrow to consume.  They should save to consume.

* Businesses should use our savings to invest in capital equipment to grow the economy

* When you consume savings, you undermine long-term economic growth and therefore future consumption is diminished

* The problem is we're living in a bubble, and in order to sustain this bubble economy, consumers have to keep spending

* In this economy, however in order to keep spending they have to keep borrowing because they're certainly not earning, and they don't have any savings

*  This has to blow up eventually but right now, it's all about keeping the music going

* Consumer credit was revised down from the originally reported $21.3 billion to just $6.4 billion of growth

* They were looking for January to grow by $16.5 billion, and of course, this also includes student loans, as well as credit cards

* Instead, we got an increase of just $10.5 billion

* Consumer credit growth imploded in December and January

* If there's all this job creation why aren't these newly-employed people spending money?

* This shows you the jobs are going to people who already have part-time jobs, and need to supplement hours and wages

* Also, we got the Small Business Optimism Index, which last month was 93.9, and there was an expectation that it would increase to 94.2, that small businesses would be a little more optimistic, yet it dropped a full point to 92.9 - the lowest level in 2 years

* If that is the case, why are they hiring people?

* The type of hiring that is going on is hiring part time workers to replace full-time workers

* Which brings me to the data that came out today: Wholesale Trade

* Inventories were expected to drop, but they increased by .3%

* And the inventory for December was revised from -.1 to unchanged

* The reason inventories spiked is because sales collapsed

* The inventory to sales ratio just hit a new high, at 1.35

* This is a 7-year high. The last time the inventory to sales ratio was this high was in April of 2009.  We were still knee-deep in the Great Recession

* If this recovery even exists, why isn't the merchandise being bought?

* At some point this year, the lone remaining bright spot in this horrible economic landscape - the number of jobs being created - will turn down

* We got more disappointing corporate earnings news this week

* The reason the stock market is moving slightly up is because of the sentiment that the Fed will not raise rates in the near future

* It's not just the stock market - Oil is above $38/barrel

* Also some of the industrial metals have had huge spikes

* And of course, the dollar is going down against other currencies

* The Australian dollar hit an 8- month high

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So far it's been a pretty light week but what little economic data that has been released is bad, and all of it evidences the recession that nobody wants to acknowledge

Let's start with the Consumer Credit numbers that came out on Monday.  Not only was the number extremely weak, but the revisions to the prior month were even weaker

The initial report for the growth in consumer credit in December was $21.3 billion

Now I don't think growth in consumer credit is good; I think it undermines long-term living standards

The last thing you want to do is borrow money to consume, one of the points I really hammered home in my book, "How an Economy Grows and Why it Crashes"

If you haven't bought that book, you should get a copy

Be sure to pick the collector's edition because, in addition to being a really beautiful book, it has two entirely new chapters.  If you already have the original one, buy the collector's edition and give the original away to a friend.

Consumers should not borrow to consume.  They should save to consume.

Businesses should use our savings to invest in capital equipment to grow the economy

When you consume savings, you undermine long-term economic growth and therefore future consumption is diminished

The problem is we're living in a bubble, and in order to sustain this bubble economy, consumers have to keep spending

In this economy, however in order to keep spending they have to keep borrowing because they're certainly not earning, and they don't have any savings

 This has to blow up eventually but right now, it's all about keeping the music going

Consumer credit was revised down from the originally reported $21.3 billion to just $6.4 billion of growth

They were looking for January to grow by $16.5 billion, and of course, this also includes student loans, as well as credit cards

Instead, we got an increase of just $10.5 billion

Consumer credit growth imploded in December and January

If there's all this job creation why aren't these newly-employed people spending money?

This shows you the jobs are going to people who already have part-time jobs, and need to supplement hours and wages

Also, we got the Small Business Optimism Index, which last month was 93.9, and there was an expectation that it would increase to 94.2, that small businesses would be a little more optimistic, yet it dropped a full point to 92.9 - the lowest level in 2 years

If that is the case, why are they hiring people?

The type of hiring that is going on is hiring part time workers to replace full-time workers

Which brings me to the data that came out today: Wholesale Trade

Inventories were expected to drop, but they increased by .3%

And the inventory for December was revised from -.1 to unchanged

The reason inventories spiked is because sales collapsed

The inventory to sales ratio just hit a new high, at 1.35

This is a 7-year high. The last time the inventory to sales ratio was this high was in April of 2009.  We were still knee-deep in the Great Recession

If this recovery even exists, why isn't the merchandise being bought?

At some point this year, the lone remaining bright spot in this horrible economic landscape - the number of jobs being created - will turn down

We got more disappointing corporate earnings news this week

The reason the stock market is moving slightly up is because of the sentiment that the Fed will not raise rates in the near future

It's not just the stock market - Oil is above $38/barrel

Also some of the industrial metals have had huge spikes

And of course, the dollar is going down against other currencies

The Australian dollar hit an 8- month high

The Canadian dollar hit a 4-month high

The New Zealand dollar was also at an 8-month high until the Reserve Bank of New Zealand surprised the markets and cut interest rates from 2.5% to 2.25% and that sent the New Zealand dollar tanking from +1% to -1.5%

One of the reasons the Reserve Bank gave was that in...

* The media, the Federal Reserve and President Obama continue to ignore the overwhelming evidence out this week, in fact every week for the past couple of months that the U.S. economy has already slipped back into recession

* The last revision to Q4 GDP showed the economy grew by 1% for the quarter, but remember, the government never acknowledges a recession  until it's practically over

* The Great Recession started in December of 2007 but it wasn't until the fall of 2008 that the government finally went back and revised the numbers down to show when the recession actually began

* Halfway through the recession, the Federal Reserve and Wall Street didn't even have recession in their forecast despite the fact that we had been in one for more than 6 months

* What everybody is focusing on are the jobs numbers

* We got another non-farm payroll report yesterday and, again, low unemployment, 4.9% and more than 200,000 jobs created

* President Obama, as he peddles his fiction of economic recovery, focuses on the fact that the unemployment rate is  low, and we're creating all these jobs, proving that his policies are working

* He's trying to take credit for a recovery that doesn't exist.  Let's look behind the numbers of yesterday's better than expected jobs report

* First of all the headline number: how many jobs were created? The consensus was 190,000 and we got 242,000 - a big beat

* Not only that, last month's number up to 172,000

* The unemployment rate held steady at 4.9%, still below the psychologically important 5%

* Here is a detail that President Obama didn't mention at all: average hourly earnings were expected to rise .2% and that followed the big jump last month of .5%

* If you remember, on my video blog last month I said that was a one-off event

* That increase was the result of all the minimum wage hikes that kicked in in January

* I said that number would reverse by February and that's exactly what happened

* Instead of getting an increase of .2%, we got a drop of .1%

* That is the first time that's happened since December of 2014

* It is very rare to get a decline in average hourly wages, because prices keep rising

* In the last 10 years this has only happened 6 times

* In addition to the drop in earnings, hours worked actually declined from an average of 34.6 hrs to 34.4 hrs

* When you take into account that Americans earned less per hour and worked fewer hours you get a total drop in weekly earnings of .7%

* That is the biggest drop in weekly earnings as far back as they've been keeping records

* Is this something that President Obama wants to accept responsibility for?

* Here's some more information that we're not getting:

* I've said for a long time that the reason so many jobs are being created is because we are transitioning from full-time employment to part-time employment

* That is where all the jobs are coming from

* According to the household survey, 88% of the jobs created in February were part time jobs

* That means only 12% of that big 240,000 number were full time jobs!

* If you look further beneath the surface at the type of jobs, you'll see that 80% of those jobs were in low-paying service sector jobs, many of them being minimum wage

* We actually lost 17,000 manufacturing jobs

* We lost mining jobs

* We lost logging jobs

* We lost high-income jobs that provide benefits to American workers, and we replaced them with low-paying part-time jobs without benefits

* That is why you have so many people showing up for Bernie Sanders or Donald Trump Rallies

* They are hearing about a recovery, but they are living in a recession

* Let me get to some of the numbers that nobody paid attention to:

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The media, the Federal Reserve and President Obama continue to ignore the overwhelming evidence out this week, in fact every week for the past couple of months that the U.S. economy has already slipped back into recession

The last revision to Q4 GDP showed the economy grew by 1% for the quarter, but remember, the government never acknowledges a recession  until it's practically over

The Great Recession started in December of 2007 but it wasn't until the fall of 2008 that the government finally went back and revised the numbers down to show when the recession actually began

Halfway through the recession, the Federal Reserve and Wall Street didn't even have recession in their forecast despite the fact that we had been in one for more than 6 months

What everybody is focusing on are the jobs numbers

We got another non-farm payroll report yesterday and, again, low unemployment, 4.9% and more than 200,000 jobs created

President Obama, as he peddles his fiction of economic recovery, focuses on the fact that the unemployment rate is  low, and we're creating all these jobs, proving that his policies are working

He's trying to take credit for a recovery that doesn't exist.  Let's look behind the numbers of yesterday's better than expected jobs report

First of all the headline number: how many jobs were created? The consensus was 190,000 and we got 242,000 - a big beat

Not only that, last month's number up to 172,000

The unemployment rate held steady at 4.9%, still below the psychologically important 5%

Here is a detail that President Obama didn't mention at all: average hourly earnings were expected to rise .2% and that followed the big jump last month of .5%

If you remember, on my video blog last month I said that was a one-off event

That increase was the result of all the minimum wage hikes that kicked in in January

I said that number would reverse by February and that's exactly what happened

Instead of getting an increase of .2%, we got a drop of .1%

That is the first time that's happened since December of 2014

It is very rare to get a decline in average hourly wages, because prices keep rising

In the last 10 years this has only happened 6 times

In addition to the drop in earnings, hours worked actually declined from an average of 34.6 hrs to 34.4 hrs

When you take into account that Americans earned less per hour and worked fewer hours you get a total drop in weekly earnings of .7%

That is the biggest drop in weekly earnings as far back as they've been keeping records

Is this something that President Obama wants to accept responsibility for?

Here's some more information that we're not getting:

I've said for a long time that the reason so many jobs are being created is because we are transitioning from full-time employment to part-time employment

That is where all the jobs are coming from

According to the household survey, 88% of the jobs created in February were part time jobs

That means only 12% of that big 240,000 number were full time jobs!

If you look further beneath the surface at the type of jobs, you'll see that 80% of those jobs were in low-paying service sector jobs, many of them being minimum wage

We actually lost 17,000 manufacturing jobs

We lost mining jobs

We lost logging jobs

We lost high-income jobs that provide benefits to American workers, and we replaced them with low-paying part-time jobs without benefits

That is why you have so many people showing up for Bernie Sanders or Donald Trump Rallies

They are hearing about a recovery, but they are living in a recession

Let me get to some of the numbers that nobody paid attention to:

The trade deficit came out at $45.7 billion, higher than the expected $43.9 billion

In fact they revised up the December trade deficit from $43.4 billion to $44.7 billion

This will subtract from GDP in both Q4 of last year and Q1 of this year

In fact exports were the lowest in 5-1/2 years

* The Dow finished the last trading day in February, with a 123-point decline, in fact the Dow Jones closed at the low of the day; the NASDAQ was down 32.5 points

* Gold reversed the declined from Friday, it was up $16.5 today it's up another $2.50 as I record this, we're now back above $1240

* The reason gold declined on Friday was that the rate hike was apparently back on the table because of some stronger than expected Q4 GDP numbers and also the consumer income and spending numbers were hotter than expected

* If you remember, I thought Q4 GDP would be revised down from .7%, in fact the consensus was for a downward revision to .4%; as it turned out, the government moved it up to +1%

* The reason for the adjustment was that inventories were not draw down as much as was originally thought, so I suppose that will happen in 2016 Q1

* In fact, the Atlanta GDP has already walked down their estimate for Q1 a bit, since that number came out.

* I don't think it really matters with the government says Q4 GDP was, because before the year is over they will revise that quarter negative because they will have to admit that the recession began last quarter

* They always declare a recession after the fact by going back and revising down the data

* We got the January trade deficit in merchandise that actually came out bigger than expected;  $62.2 billion vs $61 billion - that's a lot of red ink for merchandise trade in one month

* What also spooked the gold market was the income and spending numbers - hotter than anticipated - personal income up .5 vs .4 expected, spending also up .5 vs .3 expected

* The core CPE numbers, the inflation numbers were hotter also; instead of being unchanged, were up .1

* Year over year, we were up 1.7 on the core and 1.3 overall

* The idea was that these numbers indicated that the rate hikes are back on the table

* I don't think so; especially when you look at the horrible numbers that came out today

* First is the Chicago PMI for February. Last month was 55.6, they were looking for 52.9; we got 47.6

* If you look at some of the sub-components, including employment, this was the weakest Chicago PMI since the great recession of 2009

*


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The Dow finished the last trading day in February, with a 123-point decline, in fact the Dow Jones closed at the low of the day; the NASDAQ was down 32.5 points

Gold reversed the declined from Friday, it was up $16.5 today it's up another $2.50 as I record this, we're now back above $1240

The reason gold declined on Friday was that the rate hike was apparently back on the table because of some stronger than expected Q4 GDP numbers and also the consumer income and spending numbers were hotter than expected

If you remember, I thought Q4 GDP would be revised down from .7%, in fact the consensus was for a downward revision to .4%; as it turned out, the government moved it up to +1%

The reason for the adjustment was that inventories were not draw down as much as was originally thought, so I suppose that will happen in 2016 Q1

In fact, the Atlanta GDP has already walked down their estimate for Q1 a bit, since that number came out.

I don't think it really matters with the government says Q4 GDP was, because before the year is over they will revise that quarter negative because they will have to admit that the recession began last quarter

They always declare a recession after the fact by going back and revising down the data

We got the January trade deficit in merchandise that actually came out bigger than expected;  $62.2 billion vs $61 billion - that's a lot of red ink for merchandise trade in one month

What also spooked the gold market was the income and spending numbers - hotter than anticipated - personal income up .5 vs .4 expected, spending also up .5 vs .3 expected

The core CPE numbers, the inflation numbers were hotter also; instead of being unchanged, were up .1

Year over year, we were up 1.7 on the core and 1.3 overall

The idea was that these numbers indicated that the rate hikes are back on the table

I don't think so; especially when you look at the horrible numbers that came out today

First is the Chicago PMI for February. Last month was 55.6, they were looking for 52.9; we got 47.6

If you look at some of the sub-components, including employment, this was the weakest Chicago PMI since the great recession of 2009