Despite all kinds of economic bad news, as of Friday, the Dow Jones was on pace for the best October in history. As Peter Schiff explained in his podcast, this demonstrates the fact that for now, bad news is good news, and stocks are priced for perfection in an imperfect world.
Managed money has controlled the gold and silver market over the last several months. But there are other dynamics going on unnoticed under the surface.
Please note: the CoTs report was published 10/28/2022 for the period ending 10/25/2022. “Managed Money” and “Hedge Funds” are used interchangeably.
Most people have a sense of history that goes back about two weeks. This is especially true in the world of investing and finance. As a result, people have a hard time seeing the big picture. For instance, a lot of people think the current inflation crisis was only due to the Fed failing to respond fast enough. As Peter Schiff pointed out, this inflation was in fact decades in the making.
And as James Anthony pointed out, the current inflation problem along with all of the big economic crises that occurred in the 20th and 21st centuries have one commonality — progressive government coupled with monetary policies run by the Federal Reserve.
A lot of people seem to think that if the Fed had just started fighting inflation a little earlier, we wouldn’t have seen the rapidly rising prices that continue today. The mistake, they say, was thinking inflation was transitory. But as Peter Schiff has pointed out, this problem didn’t start last year, or even with the pandemic. This problem was decades in the making.
And at the root of the problem was year after year of easy money. Wall Street was drunk on cheap money for a decade and it is ultimately going to end in another financial crisis.
“How did you go bankrupt?”
“Very slowly at first, and then very quickly?”
The data shows that the Comex is in the middle of experiencing a run on its vaults that is really taking its toll and continuing to accelerate. If you read no further in this analysis, first just take a look at Figure 8 and Figure 18 – those two charts will tell you everything you need to know about the impact of the vault exodus.
The Fed is supposed to be reducing the balance sheet by $95B a month. This is up from $47.5B before September. As the chart below shows, the Fed has only succeeded in meeting or exceeding its goal a single time (August) in 6 months.
In the latest month, the Fed came up 25% short with a taper of only $72B. Even when removing the $10B increase of “Other”, which is a range of other instruments not related to MBS or Treasury, the Fed was still over $12B short of target.
The third quarter GDP data came out this week and it looks like the recession is over. (If there ever was one.) But in this episode of the Friday Gold Wrap podcast, host Mike Maharrey digs into the data and says, “Not so fast!” He also talks about a mainstream economist who sounds a lot like Peter Schiff and a big problem brewing with diesel fuel.
People keep saying the economy is fine. We’re not in a recession. There’s nothing to see here.
Meanwhile, business activity contracted for the fourth straight month in October.
We have been saying the Federal Reserve is bluffing in this inflation fight because it is holding a losing hand.
And Peter Schiff thinks the central bank has folded with a soft pivot. He explained why on his podcast.
Money Supply shrunk last month by $129B, the largest monthly fall ever going back to 1959. April and June also set records at the time from a gross change perspective. From a percentage amount, Feb. 1970 had been the largest contraction ever (-6.5% annualized), but the current month beat that number at -6.9% annualized.
