It looks like Donald Trump is launching a full-blown trade war. Not to worry though. According to the president, a trade war is “easy to win.”
When a country is losing many billions of dollars on trade with virtually every country it does business with, trade wars are good, and easy to win. Example, when we are down $100 billion with a certain country and they get cute, don’t trade anymore-we win big. It’s easy!”
Peter Schiff has a little different take. He said in his podcast last week winning a trade war isn’t so easy. In fact, America can’t do it.
In a podcast last week, Peter Schiff said rookie Federal Reserve chair Jerome Powell couldn’t be more wrong about the economy. He sees smooth sailing ahead. Peter sees a storm.
Former Reagan Office of Budget Management director David Stockman made a similar observation in a column last week.
What’s ahead is tumult, not smooth. That’s because the disconnect between a flat-lining main street economy and Wall Street’s bubble-ridden financial house of cards is blatantly unstable and unsustainable. Indeed, this fraught condition, which Powell and his Keynesian posse fail to see, will soon give rise to a thundering upheaval triggered by the Fed’s own action.”
Russia has passed China to become the world’s fifth-largest gold-holding country.
According to a Bloomberg report, the Bank of Russia added nearly 20 tons of gold to its stash in January, raising its total to 1,857 tons. The People’ Bank of China reported holdings of 1,843 tons.
Russia has bought gold every month since March 2015 in an effort to diversify its foreign currency holdings and minimize its dependence on the US dollar.
The stock market plunge earlier this month reminds us why we should buy gold. As a report released by the World Gold Council shows, gold acted as a portfolio hedge during the brief downturn. The price of gold rose as stocks sold off; as stocks partially retraced their losses, gold trended lower.
But gold’s effectiveness improves when market corrections are wider or sustained for longer. In our view, the recent selloff is a good reminder that gold can deliver returns and reduce risk in portfolios.”
This is some food for thought especially in light of the fact we are ripe for a 1987-style market crash.
The dollar has shown some resilience this week. The dollar index clawed back after hitting multi-year lows last week. Meanwhile, gold saw its worst single-day decline in more than a year on Tuesday.
One thing that hasn’t changed is the upward pressure on bond yields. In his most recent podcast, Peter Schiff said he thinks this is the reason we’re still seeing some life in the dollar and downward pressure on gold.
The mainstream investment world is starting to worry about the federal debt.
Goldman Sachs sees a tidal wave of red ink — and it may drag the US economy into its undertow.”
Goldman recently released a note to clients saying virtually the same thing Peter Schiff has been saying for months. The US economy won’t likely get the promised economic growth out of GOP tax cuts – at least not over the long-haul.
We knew it was only a matter of time.
Uncle Sam has suddenly become very interested in Bitcoin.
Over the last several months, we’ve reported on various countries announcing plans to regulate cryptocurrencies. Now Congress is looking to get into the act.
Inflation came in hotter than expected at 2.1%. A CNBC report said the number “pushes the economy toward a potential danger zone for inflation.”
Analysts had expected January inflation to come in at 0.3, after being up by 0.1 the previous month. Instead, the December number was revised up to 0.2 and January came in at 0.5. As Peter Schiff pointed out in his podcast, if you multiply 0.5 by 12 months, it comes to 6% inflation per year.
In his Feb. 16 Liberty Report, Ron Paul talked about inflation and its effect on everyday Americans. He said when it comes to this subject, the mainstream is all mixed up. More significantly, the creation of new money doesn’t impact everybody equally. Some benefit at the expense of others.
The US dollar dropped to its lowest level in three years Friday.
Extending losses on Thursday, the dollar index against a basket of six currencies dropped to 88.253. This marks its lowest level since December 2014.
A Reuters report noted that “Traders’ confidence in the dollar has also been eroded by mounting worries over the United States’ twin budget and current account deficits.” Interestingly, just last month Peter Schiff said these twin deficits may ultimately doom the stock market.
Inflation is back. So what does this mean for gold?
The consumer price index came in hotter than expected at 2.1%. A CNBC report said the number “pushes the economy toward a potential danger zone for inflation.”
