Contact us
CALL US NOW 1-888-GOLD-160
(1-888-465-3160)

Peter Schiff Talks Trade Wars

  by    0   0

Monday was another rough day on Wall Street as the ongoing trade war weighed on stocks. The Dow dropped 617 points and closed below Friday’s low. The NASDAQ was down 3.4% on the day. The Russell 2000 was also off by more than 3%.

In his podcast Monday evening, Peter Schiff said he thinks the bear market rally is over.

Long live the bear market. This bear market rally is dead. We are going a lot lower.”

China announced it will impose higher tariffs on most US imports on a revised $60 billion target list. On Tuesday, a little optimism returned after Pres. Trump said he thought trade negotiations would prove successful. But Peter doesn’t think so. He said he still doesn’t think there will be a deal – and even if there is, it won’t be a significant “win” for the US.

I’ve been saying for a long time that even if we got a deal, it was going to be a ‘buy the rumor sell the fact.’ But I also said it was becoming obvious that Trump had so overpromised about a great deal that it was almost impossible to have a deal without disappointing the markets. So, I think Trump made a calculated decision that no deal is better than a deal that disappoints, especially since he had already goosed the market up to new highs so even if we sold off, Trump could say, ‘Well, this is some short-term pain. It’s necessary for the long-term gain.’ And it may be the catalyst that causes the Fed to cut interest rates and launch QE, which is what Trump wants.”

Peter talked about that scenario in a podcast last week.

Yesterday, Peter said that if the market really understood the gravity of the situation, it wouldn’t be down 600 points, it would be down 6,000 points.

Gold got a little boost from the trade war, briefly trading above the $1,300 per ounce mark, but never really gained any traction above that important technical level.

Gold would be up hundreds of dollars an ounce if people really perceived reality, or understood what this means.”

When the Chinese announced retaliation for the higher tariffs the US levied on Friday, Trump basically said, “Bring it on.” Trump even tweeted out that the strong GDP number in the first quarter was due to the tariffs.

Peter said the tariffs actually did have some bearing on the GDP number — primarily the timing of some imports and the big inventory build. But he said the truth is, there were a number of one-off factors that masked a weakening economy.

By the second quarter, those factors will not be there and the weakening economy will be laid bare for everybody to see and it is going to be a lot weaker because America is not going to win this trade war. We are going to lose this war and we are going to lose it badly and the winner is going to be China.”

Peter said the reason the Chinese are going to win is because they have been losing the trade game with the US for a long time.

We have been riding on a Chinese gravy-train. We have been relying on China for capital and we have been relying on China for consumer goods. The supply us with the savings we don’t have and they allow us to import the products we consume.”

Peter discussed some of the retaliatory measures that China is threatening to take and the impacts they might have. He also explained how the Chinese have financed America’s big government and all the debt it has run up.

We used to save. We used to make capital investments. We don’t do that anymore. We just borrow and spend. And where do we get the money that we’re borrowing? From the Chinese and other nations that are doing the savings for us. So, they’re saving for us. They’re producing for us. And we’re living off their productivity and their under-consumption. And that party – that global gravy train is about to come to an end.”

Trump says America just needs to start making things itself. That’s a fine idea, but as Peter said, it’s easier said than done. Companies would have to build factories, buy machines and create completely new supply chains. That takes time and requires capital – capital that doesn’t exist in the US because the Fed has completely discouraged savings.

Anybody can consume. The hard part is to produce.”

You’ll definitely want to check out Peter’s whole discussion.

Download SchiffGold's Gold vs GLD EFT's Guide Today

Get Peter Schiff’s most important Gold headlines once per week – click here – for a free subscription to his exclusive weekly email updates.
Interested in learning how to buy gold and buy silver?
Call 1-888-GOLD-160 and speak with a Precious Metals Specialist today!

 


Related Posts

Peter Schiff: What Is the Economy Going to Recover to?

A lot of people still seem to think at some point, Donald Trump will flip a switch and the government will start humming again. As Peter Schiff explained in his podcast Friday that’s not going to happen. The best we can hope for is recovering from a depression to the recession we were going to […]

READ MORE →

Peter Schiff: It’s Not Going to Be Fine

We just wrapped up the worst first quarter in the history of the US stock market. Think about that in context. Even during the dark days of the Great Depression, there has never been a worse start to a year for the US stock market than 2020. Nevertheless, there are still a lot of people […]

READ MORE →

Peter Schiff: The Fed’s ‘Help’ Is Actually Hurting

The Federal Reserve is injecting trillions of dollars of monetary stimulus into the financial system to ‘help’ the economy through the coronavirus pandemic. This is the same kind of ‘help’ the central bank offered in 2008. But as Peter Schiff explains in his latest podcast, this kind of ‘help’ is actually hurting. In fact, the […]

READ MORE →

Peter Schiff: Americans Are in For a Rude Awakening

All eyes have been on the stock market in recent weeks as it has reflected the fears about the coronavirus-induced economic shutdown and the hopes of massive stimulus. It’s been quite a rollercoaster ride. But in his podcast on March 27, Peter Schiff said there’s an even bigger problem looming on the horizon that people […]

READ MORE →

Peter Schiff: This Is Where the Problem Really Starts

The Federal Reserve has launched QE infinity. As Peter Schiff put it, the Fed has gone all-in on quantitative easing. So, what does this mean? What are the ramifications of all this debt monetization and money printing? In his podcast, Peter said this is where the problems really start.

READ MORE →

Comments are closed.

Call Now