Peter Schiff: Gold Weathers Mixed Data

In this episode, Peter addresses another batch of economic data, its impact on the precious metals market, and inherent weakness in the economy. The political and media class wants Americans to think the economy is in good shape, but as Peter will explain, that claim doesn’t pass the sniff test. 

The metals market declined slightly last week since some data, including consumer confidence, appeared more positive than forecasted. Gold stocks declined more than gold itself:

“If you look at the reaction and the media spin on this data, you would think that we got good news, but we actually got nothing but bad news. And because of the misperception, we did have a pullback in the price of gold, although minimal; gold closed over 2,500. So the pullback was about maybe a third of 1% from where we were a week ago. But despite that very minor decline in the price of gold, gold stocks got hit pretty hard.”

Some data may be better than expected, but this doesn’t change the fundamental illnesses plaguing the economy:

“People are going into debt just to keep their economic head above water. This is not good times. This is nonsense that the media wants us to believe– that we deplete our savings and go into debt when times are good. No, we don’t. … If you run into an old buddy of yours that you haven’t seen in a long time and you say, ‘Hey, how you doing?’ The guy says, ‘Well, I’m loaded up with debt. I maxed out three credit cards. I depleted my retirement accounts. I pulled all the money out of my IRAs and I spent it all.’ Is your assumption that the guy’s doing terrific?”

It’s unlikely that government statistics can adequately quantify the effects of inflation:

“This is the disaster of an economy. If you look at the personal income and spending numbers, they’re not even adjusted for the actual inflation rate. The main reason that people are spending more money is because things cost more. That’s why they’re spending more. They’re not buying more. They’re just paying more. Now I know there’s a deflator that’s here that’s supposed to equalize it, but it’s all BS because the government numbers by design do not capture the real degree to which prices are rising.”

With the Fed contemplating rate cuts, the fault lines in the economy could become even more visible soon:

“We have a very weak economy; it’s much weaker than people perceive. But that weakness is not going to push inflation down; it’s going to actually pressure inflation up, which is going to go up anyway. But as the dollar rolls over—and the dollar, I think, is in the process of collapsing—as the dollar collapses, that’s going to ignite a new surge in commodity prices, in particular oil, but across the board. And all of that is going to put a lot of upward pressure on the CPI at the same time that the recession is worsening.”

Other data are more obviously negative, with a decline in manufacturing serving as a strong signal of coming recession:

“Look at the Dallas Fed manufacturing: another negative month. I can’t even remember the last time this was a positive month; it was minus 9.7. Yeah, it wasn’t quite as bad as the minus 17.5 that we got in July, but it’s still a negative number, right? These are weak numbers. All of the data confirms that manufacturing has been in a recession. So how can manufacturing be so weak, and the Biden administration claim, and through Harris now, that the economy is so strong?”

Peter thinks political polls are understating the nation’s support of Donald Trump, especially with the media propping up the Harris-Walz ticket:

“I still believe that a lot of the people who are being polled, I mean, I don’t know how they ask these questions, but they’re probably, maybe embarrassed to say that they’re going to vote for Trump. They want to give the answers that the pollsters want; they want to virtue signal. ‘Oh yeah, I’m going to vote for Harris,’ you know, because maybe you’re a better person if you support Harris. But when people get into the voting booth, there’s nobody there. There’s no cameras. You can vote your conscience.”

For another recap of last week, be sure to check out the SchiffGold Gold Wrap Podcast.