Through the last several presidential administrations, the US has maintained a “strong dollar” policy. As Peter Schiff pointed out in his most recent podcast, it wasn’t so much that you could pinpoint the specific tenets of the policy. It was more about the rhetoric that came out of Washington D.C. Everybody talked about the strong dollar being in the national interest.
Having the belief that there was some kind of hidden strong dollar policy helped to create confidence in the dollar. Even periods where the dollar was declining, perhaps it would have declined even more had it not been for the belief that there was some kind of strong dollar policy.”
But times have changed. As Peter put it, “It should be pretty obvious that Donald Trump has a weak dollar policy.”
There is plenty of bad news out there. We have a trade war. Geopolitical tensions between the US and Iran and the US and Russia are high. Turkey is in the midst of a currency crisis that some fear will spread beyond that country’s borders. So, why aren’t people seeking safe haven and buying gold and silver?
The CEO at Australia’s Perth Mint has a theory. Richard Hayes said bad news has become so prevalent nobody really pays attention to it anymore. In a nutshell, bad news has become the norm. As a Bloomberg report put it, “Investors have grown immune to the economic and geopolitical risks that typically drive haven demand for gold.”
One of the biggest enduring economic myths is the notion that the minimum wage laws only help workers and have no real negative effects. The fallacy inherent in this line of thinking becomes immediately clear if we simply propose a $1,000 per hour minimum wage. After all, if $15 is good, $1,000 would be fantastic, right?
Of course, nobody would pay somebody $1,000 per hour to perform a low-skill task. It’s obviously unaffordable. A $15 per hour minimum is just as unaffordable.
The bulls are running down Wall Street, but are bears lurking just around the corner? The mainstream doesn’t think so, but Peter Schiff does.
The Dow Jones climbed nearly 400 points Thursday after the Chinese announced a willingness to resume trade talks with the United States. No agenda was set, but the mere prospect of progress injected a shot of optimism in the market. Walmart also helped drive the surge, rising 10% after it beat earnings expectations.
In his most recent podcast, Peter asked the obvious question: why did the slimmest hope that we could see some resolution in the trade war give the stock market such a big bounce? It’s not like the market tanked because of the trade spat. In fact, everybody expects America to win. It’s the Chinese market that has been killed because of the trade war. It didn’t rally at all based on the prospect of talks
Turkey has been in the headlines over the last few weeks as a currency crisis has rocked that country. But as Peter Schiff pointed out in his most recent podcast, all of the things commentators are frying Turkey over are happening in the US as well.
All of the criticism that is being leveled against Turkey – that their deficits are too big, that they have a current account deficit, they’re keeping interest rates artificially low, they’re keeping interest rates below the rate of inflation – all of that criticism can be applied to the United States.”
You’ve probably heard about economic troubles in Turkey. But what’s really going on and what caused it?
In simplest terms, Turkey is in the midst of a currency crisis. The value of the lira has dropped to record lows. Year-to-date, the Turkish currency has fallen 45% against the US dollar. The official inflation rate is over 15%, but economics professor Steve Hanke said the real annual inflation measured for today tops out at 101%.
While mainstream pundits and talking heads cluck about great jobs number and amazing economic growth, by and large, they completely ignore the fact that the entire economy is built on giant piles of debt.
In our Friday Gold Wrap podcast last week, Mike Maharrey talked about the fact that the economy is drowning in debt, focusing on ever-increasing consumer debt and government debt. He didn’t even get into corporate debt.
So, just how much debt is really out there? The following bullet points will give you a good birdseye view of the debt stretching from horizon to horizon.
Gold imports into India jumped for the first time in seven months in July as jewelers replenished stocks.
Indian gold purchases surged 44.2% year-on-year to 75 tons.
India ranks as the number two consumer of gold in the world. According to a Reuters report, increased demand, “could support global prices,” which are struggling to hold ground in a strong dollar environment.
Are US Treasuries a good investment right now?
Not if you consider the rising inflation rate. In fact, in his most recent podcast, Peter Schiff called US Treasuries a “lousy deal.”