If you look at past financial and economic crises, what is the common denominator?
Debt.
That’s why we talk so much about debt on these pages.
Yields have been on the rise this week in the midst of a bond market sell-off.
Two-year borrowing costs hit their highest level in a decade Wednesday. The yield on the 2-year Treasury climbed to 2.816%. Meanwhile, the 10-year Treasury yield hit a four-month high of 3.07%.
What’s going on here?
The trade war between the US and China escalated again this week. The US slapped an additional $200 billion in tariffs on Chinese goods. The tax starts at 10% and will increase to 25% by the end of the year. China retaliated by announcing another $60 billion in tariffs on US goods.
As Peter Schiff noted in his most recent podcast, people still think the US will win this trade war.
Sept. 15 marked the 10-year anniversary of the Lehman Brothers bankruptcy.
Many investors undoubtedly remember that day clearly. But as Jim Rickards pointed out in a recent article at the Daily Reckoning, that day was actually the culmination of a long meltdown. Investors should have seen it coming. In fact, they could have seen it coming had they been paying attention.
So, are we in the midst of a similar slow-motion meltdown today?
When the August jobs report came out earlier this month, much was made over the “solid” wage growth. Average hourly wages increased by 2.9% on an annualized basis.
Peter Schiff raised an important question when the report hit the news cycle. Is this wage growth indicative of a growing economy? Or is it simply a sign of inflation?
“The test of a first-rate intelligence is the ability to hold two opposed ideas in the mind at the same time and still retain the ability to function.” – F. Scott Fitzgerald
On the one hand, things in the economy look pretty good. The mainstream pundits sure seem to think so. They fill the financial news shows with daily doses of good cheer. But is everything really sunshine and roses? Or should we be holding some opposing ideas in our minds as well?
Saturday, Sept. 15, was the 10th anniversary of the Lehman Brothers bankruptcy. Many people consider it the seminal event of the 2008 financial crisis.
In his latest podcast, Peter Schiff said as we look back at the anniversary, we should realize that the next crisis is going to be worse. In fact, the next economic hurricane is going to be a category five.
Could gold help us find space aliens?
It just might!
NASA’s James Webb Space Telescope (JWST) is scheduled to launch into space in 2021. NASA claims the $10 billion telescope will allow scientists to “look back in time to see the very first galaxies that formed in the early Universe.” And thanks to its golden mirror and incredibly sensitive camera system, it may allow us to detect alien life out in space.
The SchiffGold Friday Gold Wrap podcast combines a succinct summary of the week’s precious metals news coupled with thoughtful analysis. You can subscribe to the podcast on iTunes.
I’m a pretty cynical person. And I don’t really trust people. To call me skeptical would be an understatement. I’m the guy who wastes time Googling an even slightly sketchy sounding story posted on Facebook to see if it’s really true. So, I don’t think I would be very easy to scam.
Now, I’m not arrogant enough to think it could never happen. I’m sure there are ways I could be fooled. But I still find it really difficult to understand how some of these scammers ever make a dime. I mean, who actually believes that Nigerian prince is going to send them $8 million? Who actually goes to Target to buy gift cards to send to the Indian IRS agent? (Yes. That is a thing.) And who goes to a storage facility to buy cheap gold?
That last one … It just happened.
