In his most recent Gold Videocast, Peter Schiff takes on San Francisco Federal Reserve President John Williams’ new monetary prescription for the ailing US Economy. Williams sees the current trend of slow economic growth as a “new normal”. His plan calls for raising the target inflation rate beyond its current 2% value. But how does Williams want to raise inflation? With a simple sleight of hand trick that no longer uses real GDP growth (i.e. adjusted for inflation), but uses nominal GDP growth.
Essentially, Williams wants to use a less accurate (and conveniently higher) number as the standard for measuring the economy’s “real” growth. It’s the policy equivalent of removing the gold standard. Once again, the government substitutes something real for something fake. The Fed can now add fantasy numbers to their magician’s box, which they use to hide the real recession we’re in.
Billionaire and founder of Icahn Enterprises, Carl Icahn, recently appeared on Bloomberg to discuss his support for Donald Trump and a future move to start his own super PAC. During the discussion he had with Erik Schatzker, the wealthy activist made a case for the coming demise of the US economy and collapse of the dollar due to over-regulation of the markets and lack of capital spending.
The US Federal Reserve Presidents have been busy this week, flexing their speculative muscles and antagonizing the markets. In case you missed it, here’s everything they’ve been up to in the past seven days.
Global Banks Abandon US Bonds: Largest Selloff since 1978
In total, $192 billion of US Treasury bonds have been dumped off by other nations’ central banks in the first half of 2016, according to CNN Money. That’s more than double the rate of 2015. What does this mean? The world economy seems to be showing an overall trend of drastic weakening. Many of the nations, which include China, Japan, France, and others, need quick cash in an attempt to stabilize their shaky economies.
Earlier this year, chief of the International Monetary Fund Christine Lagarde predicted the beginnings of a global economic destabilization.
“There has been a loss of growth momentum,” Lagarde said. “Emerging markets had largely driven the recovery and the expectation was that the advanced economies would pick up the ‘growth baton.’ This has not happened.”
Now that these numbers have been released, it seems world banks are retreating inwards more quickly than the IMF anticipated. That’s a move Lagarde sees as a danger to everyone.
On his latest podcast, Peter Schiff takes New York Federal Reserve President, William Dudley, to task for his off-the-cuff remarks about a September rate hike. Peter also looks at the fine print of San Francisco Federal Reserve President John Williams’s new “era” monetary policy proposal, which is only a panacea if you want higher inflation, lower interest rates, and more quantitative easing.
Yesterday was the end of some short-lived rallies as stocks fell back from their record highs and the dollar index retreated back to pre-Brexit lows. In the long term, these changes are showing the dollar continues to lose its purchasing power due to central banking’s bad fiscal policy. As the dollar declines, gold prices are likely to respond with upward movements throughout the remainder of the year.
It’s been an electrifying summer for gold. The explosive potential of precious metals investment has really taken off over the past few months, and the Fed has followed the exact trajectory Peter Schiff predicted they would. Peter recently appeared on Albert Lu’s Power and Market Report to discuss gold’s true value, the Federal Reserve’s mishaps, and the recent merger with GoldMoney.
Several economists for the International Monetary Fund (IMF) recently expressed concerns about moving interest rates into negative territory. They believe it could backfire on the European Central Bank (ECB), making banks less profitable overall and reducing lending.
Each week there are plenty of new reasons to get fed up with our beloved central bank. Here’s what they’ve been up to in the past seven days.
Ben Bernanke: Uncertainty Could Lead to No Rate Hike until 2017
On Monday, former Fed Chair Ben Bernanke laid out his thoughts on how the rest of this year would play out for the US economy. Overall, he sees that the past two years have brought about tighter financial numbers, weaker growth, and low inflation. Bernanke seems to estimate the Fed’s false promises of a rate hike have caused investors to slow down and even reverse course in some ways.
“Fed-watchers will see less benefit in parsing statements and speeches and more from paying close attention to the incoming data,” Bernanke said in his article for Brookings. “Market participants now appear to expect few if any additional rate rises in coming quarters.”
Of course, Peter Schiff has been predicting all along that any expectation that the Fed will raise rates should be taken with a hefty grain of salt.
The price of gold is up 26% for the year so far. Overall, the price increase is beginning to change investor portfolios, as more people consider buying gold and other precious metals. However, the hike in gold prices is also starting to influence governments and cultures all over the world, from Japan scouring the ocean floor for gold to Egypt changing its long-held marriage rites.
Lately, there’s so much gold stockpiled by governments and investors, someone should pitch a new reality TV show called Gold Hoarders. But rather than poor agoraphobics maddeningly piling up old newspapers and canned food, the show would feature smart individuals like Bill Gross who have the foresight to see the writing on the wall. The message is simple, “Look out for a collapsed dollar and low-yielding assets.”
Bill Gross is all straight talk when it comes to his preference for precious metals investment. “I don’t like bonds; I don’t like most stocks; I don’t like private equity,” the Janus Capital portfolio manager told investors this week.
What’s his reasoning? It’s pretty straightforward. Central banking policy has eliminated a healthy, open market atmosphere where high-yield opportunities are no longer readily available.
