The April non-farm payroll report has been called the “Goldilocks” report, because it apparently provided just the right data markets wanted to see. A better-than-expected job creation number “proved” that the US economy continues to recover. However, the report was not strong enough to spur the Federal Reserve to raise interest rates sooner, which could spook Wall Street.
Yet the rosy mainstream sentiment completely ignores the underlying facts of the report, which Peter Schiff lays out in his latest written commentary for Euro Pacific Capital.
The biggest shock should have been the downward revision of the already weak March numbers, which most people had expected would be revised upwards. Instead, 41,000 jobs were cut from March, leaving only 85,000 hires for the month, making it the worst month in job creation in three years.
Peter Schiff tackles the latest economic data, which he argues strongly indicates the United States may be on its way into another official recession in 2015. When that happens, Peter expects not just more quantitative easing, but “old-fashioned, Keynesian pump-priming stimulus” in the form of major deficit spending.
Can the economic health of the nation’s largest cities tell us anything about the health of the greater economy? Perhaps.
On Tuesday, Moody’s downgraded Chicago’s credit rating to junk level. The downgrade comes in response to the city’s growing pension liabilities, paired with a new Illinois state court ruling that public pensions cannot be cut as a method of repairing the state’s finances. Moody’s wrote, “In our opinion, the Illinois Supreme Court’s May 8 ruling raises the risk that the statute governing Chicago’s Municipal and Laborer pension plans will eventually be overturned.”
The World Gold Council (WGC) released its Gold Demand Trends report for the first quarter of 2015. The WGC considers 2014 a year of stabilization for the gold market, and the the first quarter of the year saw this trend continue. The supply-demand picture for gold remained relatively unchanged. However, looking to the rest of 2015, the WGC sees supply subsiding. At the same time, demand could rise as investors adjust their strategies in response to weak economic growth in the West. In fact, the first three months of 2015 already saw a noticeable increase in gold investment demand:
ETFs (+26 tonnes) benefited from improved Western investor attitudes towards gold; Q1 2015 was the first quarter of positive net purchases since Q4 2012. Bar and coin demand, 10% weaker year-on-year, remains elevated compared with historical levels.
In this video interview, WGC’s Head of Market Intelligence Alistair Hewitt summarizes the report’s findings.
The use of silver in emerging technologies, particularly solar energy production, sets the stage for surging demand and rapidly rising silver prices in the future.
That means the silver market provides some great opportunities for investors.
According to a report in The Telegraph, analysts expect the demand for solar energy to increase 30% in 2015 alone. Silver paste serves as a key component in crystalline silicon photovoltaic (PV) cells, and the increased demand for solar energy will likely drive a concurrent demand for silver. Analysts estimate PV cell production alone will require some 70 million ounces of silver through 2015 to the beginning of 2016.
John Williams of ShadowStats.com shares Peter Schiff’s expectation of a new round of quantitative easing from the Federal Reserve. Williams believes the United States economy is slowing down and headed into another recession. He sees inflation rising in the coming years as the markets realize that the Federal Reserve is incapable of actually helping the fundamental economy. In this interview with Greg Hunter of USAWatchdog, Williams explains and defends his reasoning.
Jim Rickards spoke at the National Center for Policy Analysis in late April. In this long video, the author of The Death of Money first discusses why central banks are always so wrong in their forecasting and policies. He relates how it took 100 years for science to understand and accept that the planets revolve around the sun in elliptical orbits. In the same way, modern economics is just beginning a similar process of realizing its fundamental models are entirely incorrect.
Rickards moves on to explain why a much larger financial crisis is imminent since modern economic policy is so wrong. He sees a bailout of global central banks in the not-too-distant future, which would lead to massive inflation and eventually $10,000 an ounce price for gold. It’s no wonder he recommends owning physical gold and other hard assets as a way to protect your portfolio.
On his Friday podcast, Peter Schiff told the story of his encounter with Ben Bernanke at the SALT Conference last week. He managed to snap a photo with the former Federal Reserve Chairman, which you can see here. Peter first discusses the latest economic data, then starts talking about Bernanke at 13:30.
The British Royal Mint has released coins commemorating the birth of Princess Charlotte that cost far more than the value of the metal they contain.
These are certainly beautiful, high-quality coins. However, investors should be aware that they are not paying bullion prices for these limited-edition products. More importantly, there is no guarantee that coins like these will hold their collectible value in the future.
Gerald Celente agrees with Peter Schiff. The United States economy is in terrible shape, and the official jobs numbers are not representative of the true health of the domestic labor market. Celente believes that gold will reach $2,000 or higher when investors realize that the equity markets are vastly overvalued.
