The Federal Reserve held its first FOMC meeting of 2022. The central bank didn’t do anything, but the tone coming out of the meeting was widely perceived as even more “hawkish.” Everybody is convinced the Fed really means it now. The inflation fight is on. Is it though? Host Mike Maharrey talks about the messaging and perceptions coming out of this meeting and calls it a big flim-flam.
Peter Schiff was a guest on the Wharton Business Daily podcast produced by the Wharton School of Business at the University of Pennsylvania. Peter talked about inflation and how it will impact the US economy moving forward. He said ultimately, we’re heading toward stagflation.
Inflation is running hot. Economic data is running cold. Stocks and bonds are under pressure. The Fed is scrambling. In his podcast, Peter Schiff talked about the trajectory of the economy. He said we’re on the cusp of the most obvious crisis that virtually nobody saw coming. The Federal Reserve made this bed. Now we have to lie in it.
As governments shut down the economy in response to COVID-19 and the Federal Reserve put money printing into hyperdrive, we warned that it was a recipe for stagflation. Today, it looks like stagnation is here.
Stagflation is an economic environment with rapidly rising prices, a weak labor market, and low GDP growth. It’s looking more and more like we have all three elements.
Last week’s jobs numbers came in weaker than expected. September’s CPI came in hotter than expected. That puts the Federal Reserve between a rock and a hard place. Does it tighten monetary policy to fight inflation? Or does it keep stimulating to boost the economy? In this episode of the Friday Gold Wrap, host Mike Maharrey breaks down the data and says it’s about time for the central bank to pick its poison.
Government policies – from shutdowns, to stimulus, to vaccine mandates – in response to the coronavirus pandemic have thrown the US economy completely out of whack. Looking at employment reveals just how messed up the economy has become.
The number of Americans quitting their jobs surged to a record high in August. According to the Labor Department Job Openings and Labor Turnover Survey (JOLTS) report, job quits increased by 242,000 in August, pushing the total to a record 4.3 million. The quits rate surged to an all-time high of 2.9% in August from 2.7% in July.
We got the highly anticipated employment report on Friday. It came in far below expectations. But despite weak economic data, bond yields are rising, along with the price of just about everything. Meanwhile, a gold rally fizzled. Peter Schiff talked about it during his podcast, explaining just how badly the markets are misinterpreting the data. When you add up plunging bonds yields, strong oil, and weak economic data – that equals stagflation.
The August jobs numbers came in much lower than expected, a kick in the teeth for those touting the “improving economy” narrative. Meanwhile, personal incomes continue to grow but rising prices are eating up that growth and then some.
The economic data suggest the Fed’s plan is failing and stagflation looms on the horizon.
GDP for the second quarter disappointed, coming in at an annualized rate of 6.5%. Is this a sign of impending stagflation?
While 6.5% growth looks good on the surface, economists polled by the Wall Street Journal expected annualized GDP to chart around 9.1%. This was a huge miss and indicates the economy isn’t growing nearly as fast as everybody assumed.
Prices are going up. The Federal Reserve is printing money at an unprecedented rate. The US government continues to borrow and spend at a torrid pace. As Peter Schiff put it in a recent podcast, we’re adrift in a sea of inflation. Gold is supposed to be an inflation hedge. So, why isn’t the price of gold climbing right now?
In a nutshell, rising bond yields have created significant headwinds for gold. And the mainstream is reading rising yields and their relationship to gold all wrong.