The Peter Schiff Show Podcast

It looks like there is going to be some kind of deal to avoid the "Grexit"

Greek's exit would be great for Europe, but it would not be politically attractive for either side

As long as Greece stays in the Eurozone, the Greek government can continue to blame Germany or Brussels for their problems

So-called austerity will continue without any haircut to the debt

The same is true for cuts to government spending

The Greek government may increase taxes and/or adjust the retirement age for pension, but no government spending cuts are on the table

Tax increases will provide more incentive for tax evasion or avoidance by leaving the country

All talks are re-arranging deck chairs on the Titanic - extend and pretend

The markets are higher - the euro down big

The market is anticipating more cheap money, which would be threatened by a Grexit

In an ideal world, if Greece were to leave the Eurozone and set themselves up as a bastion of free market capitalism, then they could come back strong

Given the electorate, this move is unlikely

Socialism only works in Greece as long as they have another country's money

The sell-off in gold based on the Fed's dovish statements last week

The Fed will only raise interest rates nominally in order to keep the market from balance sheet expansion stimulus into its calculations

Good news from housing numbers - a surge in the Northeast

Mortgage rates have been rising, although still low. Some buyers are worried about higher rates

Higher rates, however would price buyers out of the market

Monday Chicago Fed National Activity Index came in at -.17, continuing a downtrend consistent with a recession

May Durable Goods down 1.8% three times lower than expectations

X transportation met recently reduced expectations

Durable goods has missed for 5 out of the last 7 moths

Chicago PMI Manufacturing weaker than expected decrease to 53.4 - now at the lowest level since October 2013

Manufacturing and production data sis weak - housing numbers are getting a boost from interest rate expectations

Home ownership rate continues to fall

Rents are rising

* Today was the expected day for expected rate hikes, indicating economic "lift-off"

* The June rate hike is off the table and everyone is focusing attention on September

* The prepared remarks are just a smokescreen to maintain the pretense that the economy can withstand a rate hike

* The Q&A session after the the prepared remarks were more revealing

* Janet Yellen ducked the question of why people who recommend postponing the rate hike to 2016 are wrong

* Yellen stated that the "dots" used to forecast rates are based on mere projections

* The FOMC is always too optimistic about the economy, so if they are wrong again, the dots are meaningless

* Yellen tacitly admits she is hiding behind the data, stating that even if rates to rise, it will be a nominal amount

* Yellen's response to CNBC's Steve Liesman question regarding what labor milestone would justify a rate hike was especially telling

* She said she needs to see further improvement in the Labor Market before she begins to raise rates

* How much improvement does Yellen expect in the labor market over the next three months?

* There is a good chance that the labor market will not be as strong in the next three months

* She is letting the cat out of the bag; saying that rate hike is not likely in September, either

* Yellen questioned the "obsession" about when rate hikes start because the first rate hike will not necessarily indicate normalization

* She is indicating that a rate hike may be symbolic

* The highly stimulative rate of zero to .25 is only necessary when trying to sustain a bubble

* In response to a question about the Federal Reserve under Greenspan, Yellen indicated that it was a mistake for him to raise rates slowly and methodically

* I was vocal Greenspan's decisions at that time, arguing that his actions were creating the real estate bubble

* Yellen is now moving interest rates even more slowly over a period of 7 years

* I may not be the only person who noticed how dovish Yellen's statements are

* The knee-jerk reaction on the Fed's statement was to buy the dollar, but quickly turned into a selloff, and it intensified during the Q&A session

* The dollar was on the lows of the day as it gets closer to the time rates were expected to raise

* My video blogs are always available on schiffradio.com and on YouTube


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Today was the expected day for expected rate hikes, indicating economic "lift-off"

The June rate hike is off the table and everyone is focusing attention on September

The prepared remarks are just a smokescreen to maintain the pretense that the economy can withstand a rate hike

The Q&A session after the the prepared remarks were more revealing

Janet Yellen ducked the question of why people who recommend postponing the rate hike to 2016 are wrong

Yellen stated that the "dots" used to forecast rates are based on mere projections

The FOMC is always too optimistic about the economy, so if they are wrong again, the dots are meaningless

Yellen tacitly admits she is hiding behind the data, stating that even if rates to rise, it will be a nominal amount

Yellen's response to CNBC's Steve Liesman question regarding what labor milestone would justify a rate hike was especially telling

She said she needs to see further improvement in the Labor Market before she begins to raise rates

How much improvement does Yellen expect in the labor market over the next three months?

There is a good chance that the labor market will not be as strong in the next three months

She is letting the cat out of the bag; saying that rate hike is not likely in September, either

Yellen questioned the "obsession" about when rate hikes start because the first rate hike will not necessarily indicate normalization

She is indicating that a rate hike may be symbolic

The highly stimulative rate of zero to .25 is only necessary when trying to sustain a bubble

In response to a question about the Federal Reserve under Greenspan, Yellen indicated that it was a mistake for him to raise rates slowly and methodically

I was vocal Greenspan's decisions at that time, arguing that his actions were creating the real estate bubble

Yellen is now moving interest rates even more slowly over a period of 7 years

I may not be the only person who noticed how dovish Yellen's statements are

The knee-jerk reaction on the Fed's statement was to buy the dollar, but quickly turned into a selloff, and it intensified during the Q&A session

The dollar was on the lows of the day as it gets closer to the time rates were expected to raise

My video blogs are always available on schiffradio.com and on YouTube

* Dow under pressure on the back of EU talks with Greece

* There is a lot of room for the market to decline pending the Fed's announcements

* The consensus is that rates will hike September or later

* If Fed does not rates in September, Election year next year might also put off rate hikes

* Bloomberg article quotes B of A hinting that additional stimulus would further damage the economy

* B of A admits this risk has been getting the least amount of attention

* Empire State Manufacturing Index missed 5.9 forecast - came in at -1.98

* May Industrial Production expected +.2 - came in at -.2

* Capacity Utilization dropped 78.3 to 78.1

* Manufacturing down .2

* Industrial Production has been negative for 4 of the last 6 months

* Currency markets still believe Fed will raise rates

* Consumer spending was up in May because of rise in gas prices

* Weekly Jobless claims saw a slight uptick - exceeded forecast

* Bloomberg Consumer Comfort Index continues to decline

* Listener's Questions, Peter's Answers to resume on this podcast

* Submit your questions on schiffradio.com


Our Sponsors:
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Dow under pressure on the back of EU talks with Greece

There is a lot of room for the market to decline pending the Fed's announcements

The consensus is that rates will hike September or later

If Fed does not rates in September, Election year next year might also put off rate hikes

Bloomberg article quotes B of A hinting that additional stimulus would further damage the economy

B of A admits this risk has been getting the least amount of attention

Empire State Manufacturing Index missed 5.9 forecast - came in at -1.98

May Industrial Production expected +.2 - came in at -.2

Capacity Utilization dropped 78.3 to 78.1

Manufacturing down .2

Industrial Production has been negative for 4 of the last 6 months

Currency markets still believe Fed will raise rates

Consumer spending was up in May because of rise in gas prices

Weekly Jobless claims saw a slight uptick - exceeded forecast

Bloomberg Consumer Comfort Index continues to decline

Listener's Questions, Peter's Answers to resume on this podcast

Submit your questions on schiffradio.com

* Once again, a week of worse than expected economic data punctuated by another better than expected non-farm payroll report from the government

* ADP private sector payroll report was slightly below estimates

* 5,000 manufacturing jobs lost - 3rd consecutive monthly decline

* Unemployment rate dropped

* Labor participation rate up to 62.9 - .2% above lowest point

* Large sector of labor force still comprised of older workers

* Teens, twenties and thirties are at all-time lows

* Older Americans want part-time jobs, so increase of part-time jobs contribute to increase in all jobs

* Given the strong government jobs number, the media is discounting all the weak data, including GDP, productivity, consumer spending and industrial production

* The jobs we're creating do not reflect economic strength

* The weekly unemployment numbers are hovering at 42-year lows

* Does anyone believe that this is the strongest economy in 42 years?

* The hiring numbers are suspect to begin with because of the government's assumptions

* The Trade Deficit dropped not because our exports surged, but because out imports plunged

* Our economy is too weak to support a greater number of imports

* A closer look at the data behind the government jobs number actually supports the rest of the weak economic data

* Personal Income and Spending on the month missed estimates

* May Manufacturing PMI dropped slightly

* April Factory Orders fell by more than expected

* Year over year, orders are down 6.4%

* 6th consecutive month that factory orders have been down year over year

* This has only happened in America during a recession

* Mortgage applications fell sharply on the week - 7.6% decline, led by a 12% decline in re-fi's

* May Services PMI fell to 56.2 - lowest level since January

* ISM Non-Manufacturing Index dropped to 55.7 - the lowest level of the year

* The revision to Q1 Productivity - 3.1% decline

* We also had a decline in 2014 Q4

* Corporate profits plunged 5.9% in Q1

* Unit Labor Costs surged by 6.7% - this does not represent wages

* All this data predicts future layoffs

* The Fed knows this, so they are reluctant to raise rates

* The Bloomberg Weekly Consumer Comfort Index fell to 42.5 the 8th consecutive decline - the first time in its 30 - year history

* The Dow continued to decline on the jobs report

* NASDAQ still hanging in

* Margin debt is at a record high

* The dollar was stronger on the week

* The euro finished positive

* By next year European inflation will force the Bundesbank to retreat from QE

* Gold was down on the week, as euro strength signals QE less likely in Europe

* Expectations of rising interest rates have been suppressing gold, but when reality rears its ugly head, the sellers will be gone and the buyers will be out in full force


Our Sponsors:
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Once again, a week of worse than expected economic data punctuated by another better than expected non-farm payroll report from the government

ADP private sector payroll report was slightly below estimates

5,000 manufacturing jobs lost - 3rd consecutive monthly decline

Unemployment rate dropped

Labor participation rate up to 62.9 - .2% above lowest point

Large sector of labor force still comprised of older workers

Teens, twenties and thirties are at all-time lows

Older Americans want part-time jobs, so increase of part-time jobs contribute to increase in all jobs

Given the strong government jobs number, the media is discounting all the weak data, including GDP, productivity, consumer spending and industrial production

The jobs we're creating do not reflect economic strength

The weekly unemployment numbers are hovering at 42-year lows

Does anyone believe that this is the strongest economy in 42 years?

The hiring numbers are suspect to begin with because of the government's assumptions

The Trade Deficit dropped not because our exports surged, but because out imports plunged

Our economy is too weak to support a greater number of imports

A closer look at the data behind the government jobs number actually supports the rest of the weak economic data

Personal Income and Spending on the month missed estimates

May Manufacturing PMI dropped slightly

April Factory Orders fell by more than expected

Year over year, orders are down 6.4%

6th consecutive month that factory orders have been down year over year

This has only happened in America during a recession

Mortgage applications fell sharply on the week - 7.6% decline, led by a 12% decline in re-fi's

May Services PMI fell to 56.2 - lowest level since January

ISM Non-Manufacturing Index dropped to 55.7 - the lowest level of the year

The revision to Q1 Productivity - 3.1% decline

We also had a decline in 2014 Q4

Corporate profits plunged 5.9% in Q1

Unit Labor Costs surged by 6.7% - this does not represent wages

All this data predicts future layoffs

The Fed knows this, so they are reluctant to raise rates

The Bloomberg Weekly Consumer Comfort Index fell to 42.5 the 8th consecutive decline - the first time in its 30 - year history

The Dow continued to decline on the jobs report

NASDAQ still hanging in

Margin debt is at a record high

The dollar was stronger on the week

The euro finished positive

By next year European inflation will force the Bundesbank to retreat from QE

Gold was down on the week, as euro strength signals QE less likely in Europe

Expectations of rising interest rates have been suppressing gold, but when reality rears its ugly head, the sellers will be gone and the buyers will be out in full force

* Short week closed with some horribly bad news

* People are not paying attention to the data; they are paying attention to the Fed

* Government released revision to the GDP: -.7

* The assumption of deflation is cooked into the number

* Most Q2 data is weak

* Q1 Corporate profits plunged by 5.9%

* JP Morgan announced 5,000 layoffs

* Corporations are already levered up to the max

* May Chicago PMI plunged back down to 46.2 - close to March's -year low

* April Durable Goods fell .5

* March Services PMI fell to 56.4 - second monthly drop

* May Dallas Fed Manufacturing crashed to -20.8; fifth consecutive monthly decline

* The Fed has never predicted a recession; in fact they have forecasted economic growth while in a recession

* Bloomberg Consumer Comfort Index: fell for the 7th consecutive week

* There are fewer good jobs available and if someone loses their job the are likely to have to take one they are overqualified for

* The Fed is too concerned about maintaining the illusion of prosperity to allow genuine prosperity

* They are propping up the stock market and the housing market, pretending everything is OK, and allowing the government to continue deficit spending

* People still think the Fed will raise interest rates; the most we would get is a trivial hike< just to say they raised rates to get things back to normal

* There is no more normal anymore; the new normal is interest rates at zero and perpetual QE until the whole thing blows up

* How can we expect to learn from our ancestors when we can't even learn from our own mistakes?


Our Sponsors:
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Short week closed with some horribly bad news

People are not paying attention to the data; they are paying attention to the Fed

Government released revision to the GDP: -.7

The assumption of deflation is cooked into the number

Most Q2 data is weak

Q1 Corporate profits plunged by 5.9%

JP Morgan announced 5,000 layoffs

Corporations are already levered up to the max

May Chicago PMI plunged back down to 46.2 - close to March's -year low

April Durable Goods fell .5

March Services PMI fell to 56.4 - second monthly drop

May Dallas Fed Manufacturing crashed to -20.8; fifth consecutive monthly decline

The Fed has never predicted a recession; in fact they have forecasted economic growth while in a recession

Bloomberg Consumer Comfort Index: fell for the 7th consecutive week

There are fewer good jobs available and if someone loses their job the are likely to have to take one they are overqualified for

The Fed is too concerned about maintaining the illusion of prosperity to allow genuine prosperity

They are propping up the stock market and the housing market, pretending everything is OK, and allowing the government to continue deficit spending

People still think the Fed will raise interest rates; the most we would get is a trivial hike< just to say they raised rates to get things back to normal

There is no more normal anymore; the new normal is interest rates at zero and perpetual QE until the whole thing blows up

How can we expect to learn from our ancestors when we can't even learn from our own mistakes?

* The U.S. dollar started out this morning on the defensive

* Government released CPI numbers generated a sharp reversal across the board

* Gold sold off, but closed slightly down against the dollar

* April CPI up just .1% on the month; year over year prices dropped -.2%

* Lowest CPI since October 2009

* Core CPI (excludes food & energy) rose .3%

* Biggest monthly jump since March 2006

* News sent dollar up on anticipation that rate hike will be more likely

* Inflation benchmark is just as real as the 6-1/2% unemployment goal

* Traders still haven't figured out that if we ever approach the goal, it will be moved

* Biggest factor within the .3% rise in the Core was +.7% in health care costs

* Biggest increase since January 2007 - prior to Obamacare

* Rising costs will slow consumer spending, weakening the economy and undermining employment

* Yellen in a press conference today did not actually project a rate hike

* It's all about extend and pretend; actually postponing the rate hike will buy the Fed some time before launching QE4

* Increased inflation as the economy cools down means stagflation

* The media is spinning increased inflation as good news

* Bad economic news released yesterday:

* Unemployment numbers came out higher

* Fewer hires mean fewer fires

* Chicago Fed National Activities Index came in at -.15

* Three month moving average down to -.23

* MAY PMI expected to rise to 54.6 unexpectedly declined to 53.8 - lowest lever in 16 months

* Bloomberg Consumer Comfort Index continued to slide from 43.5 to 42.4

* May Philadelphia Fed looked for a bounce back to 8; missed expectations with 6.7

* Missed expectations 5 out of the last 6 months

* Existing Home Sales expected improvement over March; dropped to 5.04 million

* Kansas City Federal Reserve Manufacturing Index missed expectations at -13; dropping for 5 consecutive months

* Economic data as bad as 2009 and inflation is getting worse

* Janet Yellen acknowledged underlying issues with unemployment number, mentioned discouraged and part-time workers

* Labor Force Participation Rate is not improving

* Low-skilled jobs in jeopardy with minimum wage hikes

* $15/hr fever will further hurts employment and erodes the tax base

* Higher minimum wage will transform workforce because employers will hire better workers for the higher wages

* Movement will substitute technology for labor costs

* Minimum wage hikes will undermine the economic recovery that Janet Yellen pretends is existing

* So she can continue to pretend that the Fed's monetary policy is working

* And she can pretend that they can actually raise interest rates

* In the unlikely event Yellen tests a rate hike, they will have to acknowledge that they were wrong

* The Fed can always blame the data for deciding not to raise rates and therefore save face


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