Jerome Powell took center stage last week and the Federal Reserve chair didn’t do anything to dampen expectations of a rate cut. His comments sent both stocks and gold higher.
Peter Schiff recently appeared on RT Boom Bust with University of Amherst economics professor Richard Wolff to talk about the Fed and its impact on the markets. Pete said no matter what the Fed does, a recession is coming.
Jerome Powell took center stage this week and the Federal Reserve chair didn’t do anything to dampen expectations of a rate cut. That sent both stocks and gold higher. The yellow metal pushed back above $1,400 after tanking in the wake of last Friday’s June jobs report and stocks swooned. Everybody seems to love Easy Street. In this episode of the Friday Gold Wrap podcast, host Mike Maharrey breaks down what the Fed chair said and didn’t say. He also debunks the “there is no inflation” myth and highlights some other interesting news in the gold markets.
The price of gold is up over 9.5% since the beginning of the year. One strategist who appeared on CNBC yesterday says he sees it going even higher – as high as $2,000 by the end of the year.
David Roche heads London-based Independent Strategy. During an interview on CNBC’s Squawk Box, he said he sees bad things to come in the stock markets but gold will shine.
I actually believe financial markets are now poised to crumble like a sand pile.”
Gold has gone through some wild mood swings this week. It plunged back below $1,400 per ounce on Monday only to rally and climb back above that key level on Tuesday. What’s driving these fluctuations? And what should investors be focusing on? Mike Maharrey talks about it in this week’s Friday Gold wrap. He also touches on some positive signs in the silver market, the global movement toward de-dollarization, and he remembers a friend of liberty who passed away this week.
The Dow Jones just had its best June since 1938. Overall, stocks were up around 7% last month. It was also the best first half for stocks in 22 years.
Meanwhile, gold gained about 8% on the month. As Peter pointed out in his latest podcast, while stocks had significant gains in dollar terms, they actually lost value in terms of real money.
And as Peter also pointed out, when you look at the recent stock market gains, you have to put them into context.
And just like that, gold was over $1,400. Just a couple of weeks ago, we were talking about how gold was struggling to crack through the key $1,300 level. In this episode of the Friday Gold Wrap, host Mike Maharrey talks about the main drivers behind the gold market right now, including the trade war and central bank mechanizations. He also covers some supply and demand fundamentals.
Do deficits even matter?
They used to — at least in conservative circles. And even in some progressive circles when Republicans were in control of Washington D.C. But today, the federal government is running record deficits and has pushed the national debt over $22 trillion and virtually nobody even bats an eye.
In a recent Wall Street Journal article, John Yarmuth, chair of the House Budget Committee summed up the attitude toward the spending and debt in Washington D.C. He said he rarely hears from constituents concerned about rising deficits and debt. Many voters’ attitudes, he says:“There haven’t been any cataclysmic consequences, so why worry about it?”
When people talk about the economy, they generally focus on government policies such as taxation and regulation. For instance, Republicans credit President Trump’s tax cuts for the seemingly booming economy and surging stock markets. Meanwhile, Democrats blame “deregulation” for the 2008 financial crisis. While government policies do have an impact on the direction of the economy, this analysis completely ignores the biggest player on the stage – the Federal Reserve.
Peter Schmidt has written extensively about the “Confederacy of Dunces” that helped bring about the financial collapse of 2008 and their “fatal conceit.” By fatal conceit, he means the arrogant belief that because of their superior intellect and education, they have the wherewithal to micromanage the economy.
One of the members of Schmidt’s “confederacy of dunces” is Lawrence Summers. He served as a senior Treasury Department official during the Clinton Administration and was at the center of enormous and easily discernible blunders in judgment that directly led to the crisis. But he has never taken ownership for the role he played and he continues to pontificate about economic issues.
In the following article, Schmidt uses Summers recent comments about one of Pres. Trump’s potential Federal Reserve Board nominees to highlight the fatal conceit of central planners.
After the stock market started to tank last fall, the Federal Reserve rushed in and saved the day – at least temporarily. Peter Schiff predicted this would happen. In fact, last December he said the Fed was about to initiate its last rate increase. But Peter also said the “Powell Pause” wouldn’t be enough. Just a couple of weeks ago, Peter reiterated that the Fed is about to cut interest rates again.
This isn’t mere speculation. Peter is basing these predictions on fundamental economic calculations. Central banks can stimulate the economy with easy money, but the boom can’t last forever. In an article published on the Mises Wire, economist Thorsten Polleit explains why the Federal Reserve-induced boom will eventually get exactly what’s coming to it.