Pulling Back the Curtain on Fed’s Rate Hike Circus (Audio)

In his podcast released yesterday, Peter Schiff reviews the latest economic data and the ridiculous September rate hike talk from the Federal Reserve. He also talks about his visit to Jackson Hole this past weekend, and the so-called “protest” that the Fed allowed to run parallel to its official event.

I think Fed Up was there, because the Fed wanted them to be there. I think this whole thing was staged. I think this is exactly the kind of protest the Federal Reserve wants. Because basically this protest was saying, ‘We applaud the Fed. We think you’re doing the right thing. Your monetary policy is creating economic growth. It is creating jobs. Just not enough. Not in the black communities…'”

Highlights from the podcast:

“The Dow just finished its worst month in over four years. We finished the month of August on a down note. On Monday, today, the Dow down just shy 115 points, settling at 16,528. A lot has happened in the market since I recorded my last podcast. I think it was on Monday evening, following the “Black Monday” day, when the Dow Jones opened down about 1,000 points. It didn’t close down 1,000 points. It recovered about half of that loss by the time they rang the bell, but it was still, I think, one of the biggest point drops ever…

“We had the biggest drop in history, then we had the biggest point rise in history. But still, that record-setting 3-day rise, which came to an end today… But it wasn’t enough to repair the damage done earlier… The Dow Jones is still more than 10% below its record high. So it’s still in this official correction territory.

“I think what’s adding to the woes of the stock market are comments by the Federal Reserve, where they’re really still pretending that they’re considering raising interest rates in September. They’re not saying they are going to do it for sure, but they’re not taking it off the table. They haven’t come out and denied that rates will not rise in September. I think this is going to continue to add pressure on the markets. We’re going to get more economic data out later this week. We get the big, non-farm payroll number on Friday. If that report is good, at least the way the Fed measures it (at least another 200,000 plus jobs), that could be very, very dangerous for the Dow Jones…

“We got the August Dallas Fed Manufacturing Survey. The July number was bad. It was minus 4.6. That was a weak number in July. The market was looking for another weak number, but not as weak. They were looking for an improvement from minus 4.6 to minus 0.25. Still weak, but not as weak as the minus 4.6. What they actually got was minus 15.8. Nobody had anything like this on their estimates of what they actually thought the manufacturing number would be in August from the Dallas Fed. Horrible, horrible number. You got to go back to the financial crisis, the Great Recession, to find a number this bad. All the sub-indexes, the employment, the hours worked, everything was falling sharply…

“If the market really goes down on the talk of a rate hike, that makes the concept easier for people to grasp that the only reason markets were up was because of the Fed’s supports. If the Fed just talks about removing the support, the markets are going to tank. The Fed doesn’t want people to connect those dots…

“One of the interesting things about today’s market action was the reversal in oil pricing. Today was one of the first days where oil prices rose, and the stock market didn’t. In fact, over the past three days, we’ve had better than a ten dollar increase in the price of oil. Oil was down about $38 three or four days ago. Today it closed around $48 and change, almost back to 50 bucks… Oil needs to go up quite a bit more before we can say a bottom is in…

“I went out to Jackson Hole on Thursday and Friday. I wasn’t there to take part in the official symposium of the actual Fed people. I was there at a protest conference that took place up the street. It was about 10-15 minutes away in a barn. It was kind of like in the middle of nowhere. It was hosted by the Americans Principle Project. It really was a protest of the Fed. There were a lot of very good speakers there criticizing the Fed…

“We were one of two protest conferences. The other one was put on by an organization called Fed Up, which is basically the American labor unions, the AFL-CIO, and also the group Black Lives Matter…

“Here’s the interesting thing about it. There were protestors there with signs about the Fed. ‘What Recovery?’ ‘Minority Unemployment’ ‘Don’t Raise Rates’… These people were flown in by the labor unions… It was basically an all-expense paid trip to Jackson Hole. I’m reading this one article, where they interview this woman Dawn O’Neil. She’s a 48-year old teacher. She’s a mother of four, and she works at a daycare center and she’s paid $8.50 an hour. Like she has the time or the money to fly all the way from Atlanta to Jackson Hole. Maybe they’re even paying her… She says, ‘I don’t think those at the Fed know how life is here in [her county], where they say the economy is recovering.’ She’s complaining that she doesn’t have enough money to cover rent, and food, and utilities… Yet everything the Federal Reserve is doing is helping make those prices go up… Part of the official protest is a call for the Fed to target a 4% CPI, instead of a 2% CPI. Meaning we need a lot more QE, we need a lot more stimulus, because the goal should be to get the official rate of inflation up to 4%. How is that going to help this woman who is struggling to pay her rent and utilities? … Obviously it’s not…

“Here is the most interesting part of this thing. [I talked to the organizer of this event.] When he originally organized event, he wanted to have the event in the same location as the official event with the Federal Reserve. Obviously, he wanted to get as much publicity as possible… He was told that nobody other than the Fed could be there… for security reasons. Any other groups or organizations were block out… Now, this other group – Fed Up – they were doing their protest in the same building as the Federal Reserve. Why? If there was a rule that said nobody other than the official Fed could be there, how did Fed Up manage to get there? I think Fed Up was there, because the Fed wanted them to be there. I think this whole thing was staged. I think this is exactly the kind of protest the Federal Reserve wants. Because basically this protest was saying, ‘We applaud the Fed. We think you’re doing the right thing. Your monetary policy is creating economic growth. It is creating jobs. Just not enough. Not in the black communities….’ “

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