Americans Not Buying What the Fed Is Selling (Video)
Here’s some free advice for the Federal Reserve.
It’s OK. You can tell them. They already know.
The economy is not good.
As Peter Schiff pointed out on CNBC yesterday, the Fed doesn’t really want to raise interest rates. We just witnessed what even a small nudge upward did to the stock markets after years of low rates and monetary policy artificially pumped them up. But on the other hand, the Fed doesn’t want to admit the US economy really isn’t in great shape:
The Fed is trying to walk a fine line, because they don’t want to admit how weak the economy is when President Obama is trying to elect Hillary Clinton based on the strength of the economy.”
But seriously, the American people already know. They’re simply not buying what economists, government officials, and the Federal Reserve are selling. As CNBC reports, surveys bear this out – most Americans have a dim view of the economy:
Despite the seemingly endless stream of Wall Street economists who believe the US is about to snap out of its malaise, most Americans think the economy is bad and getting worse, according to recent surveys.”
Gallup’s US Economic Confidence Index tracks the difference between those who say the economy is improving or declining. According to CNBC, the most recent results are not good:
Fully 59% say the economy is ‘getting worse’ against just 37% who say it is ‘getting better.’ That gap of 22 percentage points is the worst since August, according to Gallup, which polled 3,542 adults. The index carries a sampling error of plus or minus 2 percentage points.”
Actual economic data backs up these sentiments.
Retail sales tumbled 0.3% in March. It was the weakest month since February 2015. March saw a collapse back to just 1.7% year-on-year – deep in recession territory.
US industrial production also fell last month. The Wall Street Journal called it a sign of persistent weakness.
Industrial production—a broad gauge of output across US factories, mines and power plants—decreased a seasonally adjusted 0.6% in March from the prior month, the Federal Reserve said Friday. Output has fallen for six of the past seven months. In the first quarter, it fell at an annual rate of 2.2%.”
And as Reuters reports, small business confidence is at a two-year low:
The National Federation of Independent Business (NFIB) said on Tuesday its small business optimism index dipped 0.3 point to a reading of 92.6 last month, the lowest since February 2014.”
No wonder Americans think the economy is getting worse. It is!
At some point, the Federal Reserve will have to face reality. During the CNBC interview the host asked Peter if he thought the Fed would take any action this year:
I think there will be some action, but it might be an admission that the economy is much weaker that they originally believed, and that they’re going to come back with more stimulus – either rate cut, or a combination of a rate cut and relaunching of quantitative easing.”
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