The US federal government posted the largest budget deficit since 2012 in fiscal 2018. Uncle Sam ended 2018 $779 billion in the red, adding to the ballooning national debt. The Bipartisan Policy Center called the Treasury report a “wakeup call,” noting that trillion dollar deficits during an economic expansion are a serious issue.
But not everybody is concerned. Peter Schiff appeared on RT this week to debate a socialist about the deficit.
In the wake of the stock market plunge last week, Pre. Donald Trump said the market drop wasn’t because of his trade war. Trump said, “That wasn’t it. The problem I have is with the Fed. The Fed is going wild. They’re raising interest rates and it’s ridiculous.” He also said the Fed is “going loco.” In a Thursday interview, the president doubled down, saying “I’m paying interest at a high rate because of our Fed. And I’d like our Fed not to be so aggressive because I think they’re making a big mistake.”
Peter Schiff appeared on Fox Business Countdown to the Closing Bell along with National Alliances head of fixed income Andy Brenner to talk rate hikes, the stock market and where things might go next.
Could we be heading toward $5,000 gold?
Last week, there was a big sell-off in the bond market. Yields on the 10-year Treasury soared 11 basis points in one day. Global stock markets sold off the following morning and US stock markets followed suit. This week, things really got really ugly on Wall Street. The Dow dropped over 1,300 points in two days. In a video for SchiffGold, Peter Schiff said stock market investors “finally took notice of the carnage that was going on in the bond market.”
On Thursday, the price of gold popped, rising nearly 3%. But despite all of the action this week, most people in the mainstream remain complacent. The narrative is that this is a normal bull market correction. Peter said nothing could be further from the truth.
The economy is even a bigger bubble than the stock market.”
On the Aug. 10 edition of Countdown to the Closing Bell on Fox Business, Peter Schiff faced off against Republican strategist Kevin Paul Scott to debate the success of Trumpanomics.
Liz Claman started the segment touting the “great jobs numbers.” So, has Peter jumped on the Trump economic bandwagon?
Not at all.
Pretty much everybody in the mainstream is giddy about the US economy. As Charles Payne on Fox Business put it, “The Trump economy continues to fire on all cylinders.”
Payne rattled off a long list of positive indicators, from increasing wages, increasing consumer confidence, and strong spending and income numbers. Payne said this is all “building on what’s already been an amazing economy.”
And then Peter Schiff came on and dumped cold water on the party.
Peter Schiff talked politics in his latest podcast and raised a sobering question: Could the US be on the path toward a socialist administration?
Peter noted that we are long overdue for a recession. There are plenty of signs a major economic downturn could be lurking right around the corner, including stock market weakness. And as we reported today, US Treasury yield curves are flattening. The average global yield curve has inverted. Inverting yield curves are a strong predictor of recession.
This is bad news for President Trump, who has taken credit for the “great” economy and strong stock market. Peter said the president has set himself up as the fall-guy when the crash happens. Meanwhile, the Democratic Party is drifting further left.
A lot of seemingly positive economic data came out last week, but in his most recent podcast, Peter Schiff said it is just feeding into a delusional economic narrative that ignores the most fundamental storyline – debt. Everybody is talking about a new era of prosperity, but Peter said it’s a phony prosperity and it isn’t going to last.
Not everybody in the mainstream is bullish on the dollar and expecting rate hikes as far as the eye can see. In fact, the global head of commodities at TD securities sounds a little like Peter Schiff.
In his podcast last week, Peter said that the recent dollar strength is nothing more than upside correction in the midst of a bear market, emphasizing that the primary trend is down. He also said he thinks the Fed may be near the end of its hiking cycle.
In his most recent podcast, Peter Schiff hit a number of subjects including oil prices, bond prices, Bitcoin, the dollar and tariffs. Peter said he thinks we’re seeing a lot of movement in a number of markets that are counter to the long-term trends. For instance, oil dropped late last week, but he expects it’s long-term trend to continue upward. The dollar has picked up strength, but the broader trend is toward a weaker dollar. And bond yields fell, but the overall trajectory for interest rates is up.