Contact us
CALL US NOW 1-888-GOLD-160

Peter Schiff: The Most Reckless Combination of Monetary and Fiscal Policy in History

  by    0   0

On Friday, all the major stock markets finished the week at weekly highs in record territory. Positive data on personal income and spending helped push stocks higher to close out the week. Everybody keeps cheering the “strong economy,” but during his podcast Friday, Peter Schiff said the in truth, the US economy is the biggest bubble ever. And it’s being driven by the most reckless combination of monetary and fiscal policy in history.

Even as we got strong income and spending data, another manufacturing number came in weak. The Kansas City manufacturing index charted its lowest print in four years. It was the sixth monthly decline in that index.

That really is par for the course. We get stronger economic data when it comes to people spending money, but we have weaker data when it comes to generating real production, real wealth, goods production, manufacturing — all that data comes out weaker than expected.”

The final Q3 GDP numbers bear this out. The headline number was unchanged at 2.1%, but consumer spending and government spending were revised up while home building, inventory accumulation, and net exports were revised down. In other words, the economy is being propped up by consumers borrowing and spending money.

Really, what the GDP numbers are confirming is what I’ve been saying all along – that this is a bubble economy; this is not legitimate economic growth. This is a bubble. Because the only thing that is driving that 2.1% increase in GDP is consumers spending borrowed money and the government spending borrowed money.”

This isn’t what we’re being told by the Trump administration and the financial network pundits. The “strong” economy is not about a boom in manufacturing or industry or business.

This is old fashioned pump-primed, excess government and consumer spending.”

It looks increasingly like we will close out this decade without a recession. Even so, it has been a decade of extremely low growth. Many decades with recessions still ended up with higher average GDP growth than this one. This slow growth comes despite the fact that interest rates were lower over the past 10 years than in any previous decade. When you factor in inflation, real interest rates were negative for much of the past decade.

So, we had massive monetary stimulus during this decade. Yet despite that, we delivered mediocre to low overall economic growth.”

On top of that, we’ve had an enormous amount of fiscal stimulus with massive budget deficits.

So, they threw the sink at this economy when it comes to Keynesian stimulus, monetary and fiscal, and they were not able to deliver above-average GDP growth. In fact, very below-average growth.”

And Peter said he doesn’t even believe the government numbers. Things are likely even worse than we’re being told. Peter thinks inflation has been understated. That means growth has been overstated.

Peter also talked about the spending bills recently passed by Congress. President Trump has been pushing for more military spending, and he got it. But as Peter pointed out, all of this money has to be borrowed.

I would argue bringing the nation deeper into debt is a greater threat to our national security than whatever threats are being diminished by building the military even stronger. So, he is making the nation weaker, not stronger, by going deeper into debt to spend more money on defense.”

And there was also all kinds of domestic spending crammed into the spending bills, including 12 weeks of paid parental leave for government workers.

Peter called all of this government spending a “disgrace.”

If we’re going to have deficits during the greatest economy ever, well, when are we ever going to have surpluses? How are we ever going to put an end to the debt if we can’t even do it when times are great?”

Peter also talked about QE4 and the repo markets. Peter called all of this “the most reckless combination of monetary and fiscal policy in the history of our nation.”

Get Peter Schiff’s key gold headlines in your inbox every 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: Coronavirus Is Just an Excuse for Stock Market Woes

The Dow Jones fell 603 points on Friday and was down about 1% through the first month of 2020. As Peter Schiff pointed out on his latest podcast, if the old saying “so goes January, so goes the year” turns out to be the case, 2020 could longest bull market in history could be at […]


Peter Schiff: Greatest Economy in American History? Nonsense!

Donald Trump was in Davos talking up the US economy in his typically hyperbolic terms. He called it “the greatest economy we’ve ever had in the history of our country.” To hear the president tell it, you would think that America is experiencing some kind of economic boom that has never been experienced by anybody […]


Peter Schiff: The Art of the Fake Trade Deal

Donald Trump and Chinese Vice Premier Liu signed the Phase 1 trade deal on Wednesday. The mainstream was generally bullish on the news, but there was some underlying concern because the deal did not bring substantive tariff relief. Peter Schiff broke down the deal in his latest podcast, saying that despite all the hype, the […]


Peter Schiff: War Is Off But Risk Is On

In his latest podcast, Peter talks about sudden silencing of the war drums, the risk that remains in the markets, the stealth bull market in gold, the risk of a socialist president, rampant economic illiteracy, inflation and more. As Peter put it – what a difference 48 hours makes.


Peter Schiff: Gold Climbs Wall of Worry

Gold surged above the $1,550 mark in the wake of a US airstrike that killed a prominent Iranian general and has hit levels not seen since 2010. Monday morning, gold was trading above $1,575. As Peter Schiff put it in his podcast Friday, the yellow metal is climbing a “wall of worry.”


Comments are closed.

Call Now