When the August jobs report came out earlier this month, much was made over the “solid” wage growth. Average hourly wages increased by 2.9% on an annualized basis.
Peter Schiff raised an important question when the report hit the news cycle. Is this wage growth indicative of a growing economy? Or is it simply a sign of inflation?
When the New York Times published an op-ed from a White House insider claiming there are people inside the Trump administration actively working to undermine the president, the markets shrugged it off. In fact, as Peter Schiff said in a recent interview on thestreet.com, the markets are shrugging pretty much everything off.
Everything is bullish as far as investors are concerned. They believe the US economy is in great shape. According to President Trump, it’s in the best shape ever. This is the greatest boom in the history of the United States. And so that fantasy continues to dominate the narrative and markets are shrugging off all the bad news.”
Despite the optimism, Peter said the economy is headed for the “greatest bust ever.” And that’s the perfect storm for gold.
The US stock markets had another big day Wednesday with a number of the indexes, including the Nasdaq and the S&P 500, in record territory. So, what’s with the recent move up in US stock markets?
Donald Trump and a lot of Republicans have been taking credit for it, saying their economic policies are causing a boom. But in his latest podcast, Peter Schiff thinks the real impetus for this leg up is the dovish tone of recent Federal Reserve comments.
It’s all capitalisms fault!
At least that’s the narrative you get from the political left, and quite frankly, not infrequently from the political right.
Friday was an active day in the markets. The S&P 500, the Russell 2000 and the Nasdaq all hit record highs. The Dow Jones didn’t quite crack into record territory, but it was up over 100 points. Meanwhile, the dollar fell and gold was up more than $20.
In his latest podcast, Peter Schiff said he thinks the dovish speech by Federal Reserve chair Jerome Powell at Jackson Hole drove all of this. And it could have longer-term ramifications.
We are well into the third quarter of 2018. In our perpetual fast-forward world, analysts are already looking toward Q4. What will the last quarter of the year bring?
It’s virtually impossible to predict the short-term. Who knows what kind of political event, natural disaster or emerging trend will drive the markets over the next few months?
Of course, we can’t predict the future at all. We’re not fortune tellers or Old Testament prophets, but as Dan Kurz notes in his latest post at DK Analytics, it is a bit easier to project what will happen to the economy in the long run because we can clearly see the big-picture dynamics and fundamentals underlying it. As he put it, he’s less sure where America is headed in Q4 than ‘down the road’ in general. The whole thing (political, financial, economic) could fall apart at any time.”
One of the biggest enduring economic myths is the notion that the minimum wage laws only help workers and have no real negative effects. The fallacy inherent in this line of thinking becomes immediately clear if we simply propose a $1,000 per hour minimum wage. After all, if $15 is good, $1,000 would be fantastic, right?
Of course, nobody would pay somebody $1,000 per hour to perform a low-skill task. It’s obviously unaffordable. A $15 per hour minimum is just as unaffordable.
Are US Treasuries a good investment right now?
Not if you consider the rising inflation rate. In fact, in his most recent podcast, Peter Schiff called US Treasuries a “lousy deal.”