Peter Schiff: All the Data Confirms Stagflation

On Wednesday, Peter marked his return to the Peter Schiff Show studio. He tackles the most recent batch of 2025 economic data, highlights inflation signals in commodity prices, and comments on President Biden’s legacy as his term comes to a close. Donald Trump is set to take the reins on Monday, and Peter also analyzes the latest from the president-elect.

To start the show, Peter praises Trump for what appears to be a behind-closed-doors negotiation of a ceasefire between Israel and Hamas. Despite his strengths, Trump is unlikely to solve America’s economic troubles:

You know, I criticize Trump when criticism is due. And believe me, there’s a lot of criticism that is due. And I’m going to be criticizing him later in this podcast. But I do want to get credit for what credit is due. And it’s my feeling that he has a lot to do with this. There will be some successes during the Trump presidency. Unfortunately, economically, there’s going to be a lot of failures. And it’s not necessarily because of what Trump’s going to do. It’s kind of preordained. It’s baked into the cake here.

Turning to President Biden’s farewell speech, Peter reiterates how decisively the American electorate renounced the Biden presidency: 

He also talked about his accomplishments in his four years as president, which, of course, you know, he doesn’t really have any accomplishments. These are made up. I mean, the things that he’s bragging about actually undermined the economy during his four years. That’s why the public didn’t vote for four more. … The public didn’t feel that the Biden presidency was a success. They didn’t want four more years of that. They wanted four more years of Trump. And that’s because they thought the economy was better when Trump was president than it was when Biden was president.

When looking at recent economic statistics, Peter is reminded of commodity price action during the 2020 pandemic. If history repeats itself, the economy is in for another year of tough inflation:

If you remember, commodity prices really started to boom in the second half of 2020. I was talking about that on this podcast constantly, how we were going to have a big move up in inflation just looking at commodity prices. That’s when the Fed was not worried about it at all. …Look at commodity prices. They’re a leading indicator. And the big increase that we have in commodity prices in 2024, that’s not going to show up in the CPI until 2025 this year. So CPI was up 2.9% last year. Now we have soaring commodity prices. So what’s the odds that the CPI is going to be up less in 2025 than it was in 2024 before we had this big run up in commodity prices?

With alarming CPI numbers downplayed in the headlines, Peter points out that another important metric– the Empire State Manufacturing Index– plummeted this week, signaling recessionary pressures to go with inflation:

You know, while everybody was celebrating the fake good news about inflation, nobody noticed the Empire State Manufacturing Index, which was another disaster. They were looking for a positive number. They didn’t get one. They were looking for plus 1. They got minus 12.6. I think that’s about a seven-month low in the Empire State Manufacturing Index. Look, as far as I’m concerned, all the data confirms stagflation. 

Peter lambasts Treasury Secretary Janet Yellen for understating the role of the Fed in causing inflation in a recent interview. In fact, the Fed monetizing deficit spending was the primary driver of inflation over the last 5 years:

The deficit spending financed by Fed money printing, that was the inflation. So it wasn’t that the deficit spending may have contributed to it. It was it. It was part of it. It takes two to tango. And in fact, Chairman Powell actually asked for these deficits. He told Congress, ‘Run big deficits, spend a bunch of money, I’ll buy the bonds.’ He was encouraging the inflationary fiscal policy during COVID. So it didn’t just have a casual incidental effect. That was it.

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