The Peter Schiff Show Podcast

Catch Peter on Simon Black's podcast, "Sovereign Man" recorded yesterday in Italy.

https://www.sovereignman.com/category/podcast/

Catch Me on Sovereign Man

There's been a lot of action over the last couple of days in the U.S. stock market.  In fact, the market just closed a few minutes ago, as I am recording. It is now after 10pm in the evening here in Italy. If you don't already know by now, I am out here in Italy with my son, and that's why I'm not recording as many podcasts as I normally would.  Although, I did record a podcast with my friend Simon Black, of Sovereign Man. I'm actually staying with Simon and some other guests of his for a few days in Umbria.  We leave tomorrow for Florence, then Venice and then home. So I recorded a podcast with Simon yesterday.  We talked for about an hour.  So if you want more material, just go ahead and have a listen to that.  You'll get over another hour discussion.

Check out my Debate with Art Laffer on YouTube

Also, I put up the YouTube video this morning that I meant to put up a couple of weeks ago. I uploaded

Catch Peter on Simon Black's podcast, "Sovereign Man" recorded yesterday in Italy.

https://www.sovereignman.com/category/podcast/

Catch Me on Sovereign Man

There's been a lot of action over the last couple of days in the U.S. stock market.  In fact, the market just closed a few minutes ago, as I am recording. It is now after 10pm in the evening here in Italy. If you don't already know by now, I am out here in Italy with my son, and that's why I'm not recording as many podcasts as I normally would.  Although, I did record a podcast with my friend Simon Black, of Sovereign Man. I'm actually staying with Simon and some other guests of his for a few days in Umbria.  We leave tomorrow for Florence, then Venice and then home. So I recorded a podcast with Simon yesterday.  We talked for about an hour.  So if you want more material, just go ahead and have a listen to that.  You'll get over another hour discussion.

Check out my Debate with Art Laffer on YouTube

Also, I put up the YouTube video this morning that I meant to put up a couple of weeks ago. I uploaded

Recorded August 6, 2019

Trade War: New Tariffs and Accusation of Currency Manipulation

Yesterday was the worst day of the year for the Dow Jones.  At one point, we were down about 950-odd points.  I think we closed down under 800; 767 points.  But it was a follow-though from the weakness that we had on Friday and the news, too, that we had on Friday about the escalation of the trade war, where Donald Trump announced the imposition of new tariffs on China.

Normal Movements in a Currency Market

But what happened overnight in China was the yuan went below 7:1 against the dollar. This is the first time it has been that low since China started to allow its currency to appreciate against the dollar. It had been appreciating… now 7 is not that much weaker than it was when Donald Trump became President.  The Chinese yuan is only down 2-3% since Trump took office. That's not a whole lot, when it comes to a currency. Everybody is up in arms; now Trump is upset that the Chinese are weakening their currency, when the currency has not weakened very much.  In fact, the U.S. dollar is down about 2 or 3% against the Swiss franc since Trump became President. So what's the big deal? Switzerland isn't accusing the United States of manipulating its currency, just because the currency dropped a few percent. These are normal movements in a currency market.

Dow Trading Higher after China Blinks?

But the minute the yuan dropped below 7:1, everybody was saying, "Currency War!"  and "Who knows how much further the yuan is going to drop?" And so that sparked a lot of selling in the Chinese market.  And so the U.S. market went down… I think the futures went down maybe about 300 Dow points or so before we opened.  But then, as soon as we opened, we sold off hard and we did have a little bit of a rally into the close, so we closed off the lows, but as soon as the U.S. stock market closed, the futures sold off again. I think at one point last night, the Dow was off another 4-500 points before reversing on the Chinese yuan having a fix, I think, that was a little bit higher than the markets were worried about, so that caused the traders to breathe a little sigh of relief that the yuan didn't fall again. So that sparked a rally.

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Recorded August 6, 2019

Trade War: New Tariffs and Accusation of Currency Manipulation

Yesterday was the worst day of the year for the Dow Jones.  At one point, we were down about 950-odd points.  I think we closed down under 800; 767 points.  But it was a follow-though from the weakness that we had on Friday and the news, too, that we had on Friday about the escalation of the trade war, where Donald Trump announced the imposition of new tariffs on China.

Normal Movements in a Currency Market

But what happened overnight in China was the yuan went below 7:1 against the dollar. This is the first time it has been that low since China started to allow its currency to appreciate against the dollar. It had been appreciating… now 7 is not that much weaker than it was when Donald Trump became President.  The Chinese yuan is only down 2-3% since Trump took office. That's not a whole lot, when it comes to a currency. Everybody is up in arms; now Trump is upset that the Chinese are weakening their currency, when the currency has not weakened very much.  In fact, the U.S. dollar is down about 2 or 3% against the Swiss franc since Trump became President. So what's the big deal? Switzerland isn't accusing the United States of manipulating its currency, just because the currency dropped a few percent. These are normal movements in a currency market.

Dow Trading Higher after China Blinks?

But the minute the yuan dropped below 7:1, everybody was saying, "Currency War!"  and "Who knows how much further the yuan is going to drop?" And so that sparked a lot of selling in the Chinese market.  And so the U.S. market went down… I think the futures went down maybe about 300 Dow points or so before we opened.  But then, as soon as we opened, we sold off hard and we did have a little bit of a rally into the close, so we closed off the lows, but as soon as the U.S. stock market closed, the futures sold off again. I think at one point last night, the Dow was off another 4-500 points before reversing on the Chinese yuan having a fix, I think, that was a little bit higher than the markets were worried about, so that caused the traders to breathe a little sigh of relief that the yuan didn't fall again. So that sparked a rally.

Recorded August 2, 2019

July NonFarm Payroll Report: Great? Not so Great

This morning we got the release of the July NonFarm payroll report, and the general consensus among the analysts seem to be that it was s strong report, a solid report. I saw Larry Kudlow this morning on Fox Business talking about another "solid performance" in job creation.  But once again, once you look beneath the surface, and you don't have to look too deep, this is not a good report.

The Bar Was Set Pretty Low

First of all, the bar was set pretty low.  The consensus was 151,000 jobs.  That's not a lot of jobs, so it's not that hard to beat it, and we did.  We got 164,000 jobs.  But the reason we beat it was because we created more government jobs than the market expected. For private payrolls, the consensus was 160,000 jobs and we only created 148,000 jobs.  So we created 12,000 fewer private sector jobs than had been expected and we made up the difference by creating government jobs, whether they are for the Federal government or state government.

Public Sector Jobs vs Private Sector Jobs

But there's a very big difference between private sector jobs and public sector jobs, in that the taxpayer isn't on the hook to pay the salaries of the private sector workers. They're working in companies that are generating profits, so the salaries are paid for by the profits that the businesses generate.

The Government Does Not Generate Profits

The government doesn't generate any profit. It just has to suck up tax revenue; we have to pay for these.  So it's not a good thing that government gets more bloated and hires more people.  Especially since a lot of government bureaucrats tend to complicate things. They make everybody less efficient.  If we're hiring more regulators to slow down the economy and get in everybody's way, that's not a good thing. I'd rather have a lean, mean government. Of course, that's not going to happen.

 

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Recorded August 2, 2019

July NonFarm Payroll Report: Great? Not so Great

This morning we got the release of the July NonFarm payroll report, and the general consensus among the analysts seem to be that it was s strong report, a solid report. I saw Larry Kudlow this morning on Fox Business talking about another "solid performance" in job creation.  But once again, once you look beneath the surface, and you don't have to look too deep, this is not a good report.

The Bar Was Set Pretty Low

First of all, the bar was set pretty low.  The consensus was 151,000 jobs.  That's not a lot of jobs, so it's not that hard to beat it, and we did.  We got 164,000 jobs.  But the reason we beat it was because we created more government jobs than the market expected. For private payrolls, the consensus was 160,000 jobs and we only created 148,000 jobs.  So we created 12,000 fewer private sector jobs than had been expected and we made up the difference by creating government jobs, whether they are for the Federal government or state government.

Public Sector Jobs vs Private Sector Jobs

But there's a very big difference between private sector jobs and public sector jobs, in that the taxpayer isn't on the hook to pay the salaries of the private sector workers. They're working in companies that are generating profits, so the salaries are paid for by the profits that the businesses generate.

The Government Does Not Generate Profits

The government doesn't generate any profit. It just has to suck up tax revenue; we have to pay for these.  So it's not a good thing that government gets more bloated and hires more people.  Especially since a lot of government bureaucrats tend to complicate things. They make everybody less efficient.  If we're hiring more regulators to slow down the economy and get in everybody's way, that's not a good thing. I'd rather have a lean, mean government. Of course, that's not going to happen.

 

Recorded August 1, 2019

Trifecta Podcasts this Week

I hadn't planned on recording a podcast today; I did one yesterday and I figured I'd wait until Friday, get the … payroll numbers and finish up the week with a Friday podcast.  But so much action in the markets today, that I just couldn't resist.  I knew there would be a lot of people who would be excited to get a podcast today, so we're going to have a trifecta - we're going to have three days in a row of podcasts.

Nobody on CNBC saw the Rate Cut Coming… But I Did

Before I even get into a lot of the market action today, I want to talk a little bit about what I heard on CNBC this morning. They're still talking about the rate cut that we got yesterday and the host said, "Six months ago, nobody could have possible predicted… nobody would have believed that we'd be here today and the Fed would be cutting rates. And nobody could have possibly believed that the Fed would be ending the quantitative tightening program, because it's now over!" So, according to CNBC, nobody could have possibly predicted this, yet it happened anyway. Wait a minute: what about me? I predicted it. I said it was going to happen.  I didn't say it on CNBC because they won't let me on, but I said it on my podcast.  I even said it on their competitor network, Fox Business. Maybe if they watched Fox Business they would've known about this.

I Predicted, Live, That December Hike Would the Last Hike

So, really, what they meant is nobody on CNBC saw it coming. None of their anchors, none of their regular guests saw an end to quantitative tightening. None of them saw the rate cut. But I did. Not only did I predict that the Fed would cut rates, I predicted, live, that the December hike was the last hike. and that the very next move by the Fed would be a cut. And that is exactly what they did.

 

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Recorded August 1, 2019

Trifecta Podcasts this Week

I hadn't planned on recording a podcast today; I did one yesterday and I figured I'd wait until Friday, get the … payroll numbers and finish up the week with a Friday podcast.  But so much action in the markets today, that I just couldn't resist.  I knew there would be a lot of people who would be excited to get a podcast today, so we're going to have a trifecta - we're going to have three days in a row of podcasts.

Nobody on CNBC saw the Rate Cut Coming… But I Did

Before I even get into a lot of the market action today, I want to talk a little bit about what I heard on CNBC this morning. They're still talking about the rate cut that we got yesterday and the host said, "Six months ago, nobody could have possible predicted… nobody would have believed that we'd be here today and the Fed would be cutting rates. And nobody could have possibly believed that the Fed would be ending the quantitative tightening program, because it's now over!" So, according to CNBC, nobody could have possibly predicted this, yet it happened anyway. Wait a minute: what about me? I predicted it. I said it was going to happen.  I didn't say it on CNBC because they won't let me on, but I said it on my podcast.  I even said it on their competitor network, Fox Business. Maybe if they watched Fox Business they would've known about this.

I Predicted, Live, That December Hike Would the Last Hike

So, really, what they meant is nobody on CNBC saw it coming. None of their anchors, none of their regular guests saw an end to quantitative tightening. None of them saw the rate cut. But I did. Not only did I predict that the Fed would cut rates, I predicted, live, that the December hike was the last hike. and that the very next move by the Fed would be a cut. And that is exactly what they did.

 

I Bet an Ounce of Gold that Fed would Cut Rates

Today I officially won an ounce of gold! I am referencing a bet that I made back in January of this year. During a panel discussion, I said that I though that the Fed was more likely to cut rates in 2019, than hike them.  I was the only person on the panel who believed that.  Everybody else thought that the Fed would be raising rates, which pretty much was the conventional wisdom in early January.

Check out My Forecasts in December and January on YouTube

So today, the Fed cut rates, which is what I have been saying they would do.  In fact, not only did I put up a small YouTube video of that bet, as well as a video of the entire panel on my YouTube channel. But I also cut a minute or so segment from my interview on the Monday in December 2018 the week the Fed raised rates, 2 days later on a Wednesday.  That was the final hike where the Fed went from 2% to 2.25%, to 2.25% to 2.5%.

Fed Cut Rates by 25 Basis Points

I was interviewed by Liz Claman- by the way I will be on Liz Claman's show tomorrow - they've renamed the show it is the Claman Countdown. But when I was on Liz' show back in December I made the forecast then: If the Fed raised rates in December that week, which, I thought they would, (everybody believed they would - they wouldn't want to disappoint the markets) I said that it would be the last hike, and that the very next move that the Fed would make would be to cut rates. And that is exactly what they did today. They cut rates by 25 basis points.

December's Rate Hike Erased

So they basically took away the last rate hike and the rate is now where it was prior to the December rate hike. Now, I believe that cutting rates was a mistake.  I think the Fed should have already raised rates by more than they have. Not because the U.S. economy is in great shape, because it's in lousy shape. It is a gigantic bubble.

Our Sponsors:
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I Bet an Ounce of Gold that Fed would Cut Rates

Today I officially won an ounce of gold! I am referencing a bet that I made back in January of this year. During a panel discussion, I said that I though that the Fed was more likely to cut rates in 2019, than hike them.  I was the only person on the panel who believed that.  Everybody else thought that the Fed would be raising rates, which pretty much was the conventional wisdom in early January.

Check out My Forecasts in December and January on YouTube

So today, the Fed cut rates, which is what I have been saying they would do.  In fact, not only did I put up a small YouTube video of that bet, as well as a video of the entire panel on my YouTube channel. But I also cut a minute or so segment from my interview on the Monday in December 2018 the week the Fed raised rates, 2 days later on a Wednesday.  That was the final hike where the Fed went from 2% to 2.25%, to 2.25% to 2.5%.

Fed Cut Rates by 25 Basis Points

I was interviewed by Liz Claman- by the way I will be on Liz Claman's show tomorrow - they've renamed the show it is the Claman Countdown. But when I was on Liz' show back in December I made the forecast then: If the Fed raised rates in December that week, which, I thought they would, (everybody believed they would - they wouldn't want to disappoint the markets) I said that it would be the last hike, and that the very next move that the Fed would make would be to cut rates. And that is exactly what they did today. They cut rates by 25 basis points.

December's Rate Hike Erased

So they basically took away the last rate hike and the rate is now where it was prior to the December rate hike. Now, I believe that cutting rates was a mistake.  I think the Fed should have already raised rates by more than they have. Not because the U.S. economy is in great shape, because it's in lousy shape. It is a gigantic bubble.