Episode 13 Synopsis: Treats on Wall Street Equal one Big Trick. Belief that QE worked sparks optimism:

    New record high in Dow Jones & S&P
    NASDAQ highest since 2000
    Dollar index closed at a 4-year high
    Yen at a 6-year low
    Gold/Silver prices at a 4-year low
    Gold Stocks at a 10-year low or more

Ep. 13: The U.S. Recovery is as Real as Ireland is a Part of the U.K.

    First trading day of march - NASDAQ closed above 5000 for the first time in 15 years
    Each time the market goes up with crazy valuations, pundits say, "This time it's different."
    This time the Fed is under more pressure to create the illusion of prosperity
    Today's rally came against the backdrop of weak economic data
    The only way this bubble won't burst is if the Fed intervenes with more stimulus
    Bubbles force you to make an important decision:
    Look like a fool before they pop, or look like a fool after they pop
    It doesn't matter how much money you make, it's how much money you keep

Ep. 57:  This Time It Is Different - It S Worse

    The Dow Jones had its worst week since January - closed the week at 17,568, down 518 points
    Friday's drop alone accounted for 163 points
    Capital One had a huge earnings miss and announced big layoffs
    Big losses on bad debt
    All the economic data from this year has been negative
    There is no precedent for the Fed to raise rates when all economic indicators are down
    Normally The Fed stimulates when the economy is down
    The most interesting economic news on Friday was a leak from the Federal Reserve
    Fed employees' internal projections are way below the Fed's public estimates
    Projections go all the way out to 2020 and can only amount to guesses
    The document is posted on my Facebook page
    Real GDP: 2015: 2.31 way below the official forecast but still overly optimistic
    Real GDP for 2016: 2.38 - 2017: 2.17 - 2018:1.76 - 2019:1.75 - 2020:1.74
    This shows an average of under 2% for the next 5 years
    If the Fed believes its staff's estimates, why would they be talking about raising rates?
    Inflation numbers are even more difficult to believe:
    2015: 1.15 - 2016: 1.54 - 2017:1.76 - 2018:1.89 - 2019: 1.92 - 2020: 1.94
    How can they possibly know? It looks like they just picked numbers somewhere below 2%
    They even have the core PCE
    2015: 1.33 - 2016: 1.52 - 2017: 1.78 - 2018: 1.9 - 2019: 1.92 - 2020: 1.94
    Fed Funds Numbers:
    2015: .35%(implies one rate hike) - 2016: 1.26% - 2017: 2.12% - 2018: 2.8% - 2019: 3.1% - 202 : 3.34%
    After 5 years of tightening rates would still be at historically low levels
    This indicates how little confidence the Fed has in the economy
    They predict the yield on the 10-year note to rise 2.63% in 2015 up to 4.2 in 5 years
    One of the most ridiculous assumptions is unemployment: 2015: 5.34% - 2016: 5.24% - 2017: 5.18 - 2018: 5.15 - 2019: 5.15 - 2020: 5.16
    These are all just guesses. How do they know?
    This shows by the Fed's own estimates that employment is not expected to improve
    Th
    The Fed expects the economy to grow even slower over the next 5 years than during the preceding 5 years
    The Fed is either ignoring staff's numbers to paint a rosy picture or they don't trust their own staff
    I think the market can't handle the truth and that may have been the reason for Friday'd drop in the Dow
    The only thing that will stop the market from going down is some talk from Janet Yellen to dial back the rate hikes and to open the door to QE4
    Another number that came out on Friday which confirms the slowdown in the economy is the new home sales
    The current rise in new home sales is primarily for those trying to beat the Fed
    June's number was awful: 482,000 against an expectation of 550,000
    The last 2 month's estimates were revised down
    The July plunge was the biggest number since November of 2014, and the biggest miss in a year
    There is also an interesting statistic on new homes: prices are continuing to rise
    It now requires 10 times your salary to buy a new home
    In the 1950's it took 2 times a year's salary to buy a new home
    All the government spending on "affordable housing" has managed to increase the cost of a home from twice a worker's salary to ten times a worker's salary
    That is a 500% increase - that is far beyond failure
    This also illustrates how much our standard of living has fallen
    New York State passed a minimum wage of $15/hr, which applies to chains of over 30 restaurants
    Because employers cannot be forced to pay wages higher than workers' productivity allows, employers will be forced to fire some employees and will seek automation to replace unskilled workers.
    Just as workers can not be expected to work for free, employers cannot be expected to maintain a business at a loss, for the benefit of the employees

Ep.  98:  Fed Leaks, Fast Food, Housing & Gold

The bear market in global stocks continues, and I believe we’re in a bear market in the U.S.
Technically the major averages are not quite down 20%, although some of the averages are
Transports were down 30% from their highs
The Russell 2000 was down more than 25%
Many individual sectors are way down into bear market territory, as are some individual stocks
IBM hit a new 6-year low; and, of course, IBM is the poster boy for share buy-backs
Imagine how much shareholder money has been flushed down the toilet buying back stock at over $200/sh and now we’re looking at 12o and falling
But remember: all bear markets begin as corrections
The bear market of 2001, when the S&P was cut in half, and the NASDAQ fell by 80%, started as a correction
The same thing in 2008 – they were calling that a correction, too, until they realized that it was a bear market
In fact, the main thing I am hearing today is the comeback – the Dow had a huge comeback because it was down more than 560 points at the low and it closed down at just 249
The NASDAQ was down more than 160 and it closed down only 5
Had we closed at the lows of the day maybe we would be closer to a short-term bottom
This is another short-covering inter-day rally creating a slippery slope of hope for the market to continue to slide down

Ep. 132: It Looks Like A Recession Because It Is One

    Gold and silver prices continue to march higher
    Gold was up another $7 today; it closed at $1363.20 - that is the high for the year
    Silver was up .15 at $20.06
    Silver is now going up relative to the price of gold which is very for the precious metals complex
    Gold stocks are on fire; the XAU index, a gold stock index was up 3.27% today
    It's now up better than 135% on the year and well over 150% from the lows on the third week in January
    But do you think that any major players on Wall Street have recommended gold stocks?
    Do any of the big hedge funds have positions in gold?
    No! They are clueless
    What is happening, as I have said before, is that there is a picture, that's kind of blurry, but it's coming into focus, still not clear, but it's a game changer
    The perception is that we had this great recovery and that the Fed was going to be able to unwind its balance sheet, normalize interest rates and everything was going to be great
    So the whole investment world was preparing for higher rates, a stronger dollar and a stronger U.S. economy
    But what is the actual picture?
    The actual picture is an economic recovery that is over, if it ever even happened,
    The Fed is finished tightening and they're about to start a new easing campaign
    We're not done with QE; we're just getting started - QE3 is closer to the beginning than the end
    Rather than shrinking the balance sheet, it's about to explode
    This picture is getting clearer and now you see the markets re-pricing
    Gold is going up every day
    Gold stocks are going up
    The banks are getting crushed
    The European banks hit new lows again today
    FOMC minutes came out for June and what did the minutes reveal?
    The members were concerned about weakening employment number and they wanted more data before raising rates
    They wanted to make sure the weakening numbers were an aberration rather than a new trend
    Who didn't see that coming?
    Also they wanted to see what happened with the Brexit vote
    We knew about the Brexit vote all year - why did the Fed ever pretend that they would raise rates in June?
    Because they wanted the market to believe that a rate hike was possible because it validates the phony recovery
    So now the instead of raising rates, they spoke about raising them and they are going to cut rates by just talking about reducing them
    They can do a lot by adjusting their rhetoric before they actually cut rates
    They are already cutting by backtracking their rhetoric, because that's all they've got
    Teddy Roosevelt said, "Walk softly but carry a big stick."
    The Fed has to speak loudly because it has no stick

Ep. 179: Fed Minutes Reveal The Easing Cycle Has Already Begun

It is Wednesday, November 9, 2016, one day following one of the biggest political upsets in U.S. political history
    As Donald Trump shocked everybody by defeating Hillary Clinton
    Hillary Clinton was supposedly the most qualified person ever to seek the U.S. Presidency, and Donald Trump had no experience whatsoever
    And the establishment had already sworn in Hillary Clinton; it was pretty much a foregone conclusion that she was going to win
    I think she was almost a 10:1 favorite even on the day of the polls
    Even the early exit polls were predicting a Clinton win
    All the while, I felt in my gut that Donald Trump was going to win this election
    Why did I think he had such a strong probability of winning?
    I understood what almost no one in the mainstream media got, and that is the phony nature of the U.S. recovery
    The entire time President Obama was congratulating himself for having gotten us out of the mess created by his predecessor, and bragging about the strength of the recovery
    And labeling all critics as "fiction peddlers"
    I understood that the "fiction that was peddled" was in fact, reality
    And the real fiction peddler was the Commander in Chief
    Not only President Obama, but the Federal Reserve - Janet Yellen and the rest of her cronies at the Fed
    Constantly talking up the U.S. recovery and how the strengthening recovery would somehow result in higher interest rates
    Of course, Wall Street had a vested interest in peddling that fiction
    So everybody believed that the economy was strong, and therefore the voters would want to sign up for 4 more years
    After all, if Obama was responsible for the recovery voters would want to continue that recovery under Clinton
    They would not want to go back to the supposed failed policies of Bush that somehow would be adopted by Trump
    I knew that the entire recovery was an illusion
    And it simply existed in the minds of the people who fabricated it

The Peter Schiff Show Podcast

Making America Great Again Will Be Much Harder Than Voters Think

What a difference a day makes
    Between Tuesday evening, when the markets first began to realize that Donald Trump was going to win the election and the predictions of collapsing stocks and soaring gold prices appear to be taking hold
    Because at one point the Dow was down about 800 points and gold was up about $60
    All of a sudden, the sentiment started to shift and by the time the U.S. markets had opened for trading
    Gold had lost its rally, the stock market had recovered its losses
    And we began a huge rally, in fact, the Dow was up about 1,000 points this week
    This was one of the biggest up weeks in the Dow since 2011
    Also the gold market ended up down, I think it was down about $70 on the week
    Better than $100 below the high it hit on Tuesday night
    Silver also down about $1
    Gold & silver stocks down closer to 20%
    The opposite was going on in the bond market, it had its worst week since 2013
    It looks like a lot more carnage can come if we really start to break down; yields are still low
    The yield on the 10-year is just above 2.1 and on the 30-year it's just above 2.9
    These are still low yields, but they're not nearly as low as they were
    What's more important is the momentum in this move and how much higher interest rates could potentially go
    As this bond bubble deflates
    What is responsible for this change of heart?
    Everybody was so convinced that the markets would tank if Trump was elected that we had a 300+ point rally on Monday, the day after the FBI decided that they weren't going to do anything about the Clinton email scandal
    And the market rallied because people thought, "Oh, OK, this means that Hillary is a shoe-in."
    And then Trump became President and the market rallied even more
    And the opposite on gold; gold sold off when it looked like Hillary would win, and it had a big rally when it seemed that she wouldn't
    After we got Trump, the metals went the other way
    What is responsible for this change of heart?
    Remember, I always said if didn't make sense that people thought Hillary was good for the stock market
    What did Hillary mean for business?
    More regulation, more government, higher taxes
    What was Donald Trump promising?
    He was promising tax cuts, tax reform, repatriation, regulatory reform, repeal Dodd-Frank, repeal Obamacare
    So he's saying, we're going to take away the regulation, we're going to take away the taxes
    That has got to be good for the economy, so why were people so excited about Hillary
    When Trump was talking about a pro-growth, pro-business agenda?

Ep. 210: Fiscal Stimulus Impossible Without Monetary Stimulus To Finance It

The Dow Jones is in record territory, closing above 19,000; they're already starting to talk Dow 20,000 now
The markets are euphoric
All the traders who were so convinced that President Trump would be a disaster for the stock market, now think it's a boom for the stock market
It shows you how fickle investors are, but also how quickly the narrative can flip
Personally, I don't think it has anything to do with the fundamentals
I think traders are trying to push the markets in a particular direction, and they're just grasping for reasons to justify it
Obviously, what they're talking about now is all this extra economic growth and inflation (supposedly inflation is a good thing)
This is going to result from the the massive fiscal stimulus that we're going to get from the Trump administration
Of course, everybody is ignoring the monetary drag that is already evident from the bloodbath in the bond market
And this is going to continue, in fact if you look at the trend lines
We've broken some trend lines now, which were down in yield and up in bond prices that have been in existence since 2007
So we have done some serious technical damage to the bond market
The 10-year yield, right now, is at 2.357, which is still low
But it has moved up by 32% in the last 2 weeks
That is a huge percentage increase in long-term interest rates
First of all, this is already decimating the commercial real estate market, which is the bulk of Donald Trump's net worth
He's going to be running his business from the White House while he is running the country; he says that's perfectly legal
Clearly he doesn't want to see a continuation of the collapse in the commercial real estate market
But believe me, these cap rates are moving up rapidly

Ep. 212: Trumped Up Irrational Exuberance Continues

It's been a while since my last podcast and I've gotten quite a few emails from people wondering what happened to me
    I was out of the country for about a week, and I did manage to get one podcast off from my hotel room
    But when I got back, I was backed up with work, and by the time I caught up, I came down with a case of laryngitis, which has still not completely gone away
    I want to start off by talking about the stock market
    The Dow hit a new record high today; inter-day we got to 19,824 - we closed at 19,796, getting closer and closer to the 20,000 level
    NASDAQ, on the other hand was down to day
    But one of the interesting things about this is that the rally is predicated on Donald Trump and all of the great things that are going to happen as a result of his election
    And of course, the very people who are buying this Trump rally are the same people who are telling us what a disaster it would have been if Trump won
    He won - but now they've reversed course
    I'm sure if Hillary had won the market would be rallying now with a different spin - we dodged the bullet of Trump
    The markets were looking for an excuse to rally, and there were a lot of shorts in the market, so now, we're rallying
    But the interesting thing about this is, if you remember when Donald Trump was running for President
    He kept talking about the "big, fat, ugly bubble"
    He was talking about the stock market
    Now, if you listen to Trump talk, he loves the stock market - he's taking credit for the gains in the stock market
    He wants us to judge him based on when he was elected, not based on when he is inaugurated because he is trying to claim credit for the gains in the stock market
    Wait a minute - if the stock market was a big, fat, ugly bubble before Trump was elected
    And if now the stock market is much higher
    Isn't it bigger, isn't it fatter, isn't it uglier now?
    If that's the case, why doesn't Donald Trump still call it a bubble?

Ep.  214: A Candidate's Bubble Is a President-Elect's Bull Market

This is another big week for economic data; it is a holiday-shortened week
    On Friday we get the big Non-Farm Payroll report
    If it's a good number, somehow Donald Trump will try to take credit for it, as he has for the rise in the stock market
    But I think that the job numbers, while maybe not bad just yet, but I think we will have a lot of problems with the non-farm payroll numbers in 2017 as the air starts coming 0ut of the part-time job bubble while Trump is in office
     But we did get some economic news today, most importantly, the minutes from the last Federal Open Market Committee Meeting and
    What do you know? The members of the FOMC are concerned that maybe, they're not optimistic enough when it comes to growth
    Because of the stimulus packages that may be passed by Donald Trump, that they may be wrong, and that the economy could grow faster than they think
    They also were worried that they might overshoot on the downside on unemployment
    Unemployment could actually get even lower than what they thought
    And therefore that ultra-low unemployment may put some upward pressure on inflation
    Of course, this is all the Keynesian/Phillips Curve myth
    That low levels of unemployment are what cause inflation
    Ironically, it is the Federal Reserve that causes inflation and there is going to be
    Consumer price increases that are the consequences of the inflation that the Fed has already created and that the Fed is going to create
    In fact, if we do have a stimulus package that gets through Congress early in 2017
    That includes tax cuts and government spending increases which results in a larger deficit
    The inflationary forces are not going to be the debt itself, but the Fed's willingness to accommodate those deficits with more aggressive monetary easing
    In fact, the complexion of the FOMC is actually going to get more dovish next year as some of the so-called hawks, and of course, none of them are actually hawks, it's all degrees of dovishness
    Some of the less dovish members will be leaving and will probably be replaced by members that are just as dovish as everybody else
    So I think the Fed will be willing and able to accommodate these deficits
    That is what is going to cause inflation

Ep. 217: Bitcoin Again Approaches Parity with Gold

As I said on a prior podcast, this could be the first Presidential Honeymoon to end before the marriage officially begins
    Donald Trump will not be sworn in until Friday
    Yet the Honeymoon already appears to be over for the Trump Trade
    The dollar continues to decline again today; gold continues to rise
    Confounding the experts who, at the beginning of the year, predicted the opposite
    Gold up again today about $14 it was up $4-5 yesterday, on the Martin Luther King holiday
     We're now at about $1217 for the price of gold
    We're still below where we were the day Trump won
    But this is the highest we've been in about 6 weeks, maybe more
    It's certainly the highest for the year
    Dollar down across the board; dollar index at the low for the year
    Still up from Trump's victory but down quite a bit from the highs
    Of course, other currencies, even though the dollar index is down 2%
    You've got currencies like the Australian dollar up 4.5%
    So that currency has pretty much recovered everything that it lost based on the Trump victory
    Gold, although it hasn't recovered everything, it's still up almost 6% so far year to date
    Silver's up better than 7% year to date
    Gold stocks, look at the GDX, up 12% so far this year
    That means that gold stocks by far is the top performing sector in 2017
    They were by far the top performing sector in 2016
    I actually think the out-performance in 2017 will be even greater than 2016
    The Dow, down again, at one point it was down close to 100
    Dow transports ended down over 100
    I think the Dow is basically flat on the year - slightly positive
    The NASDAQ was down 35 points; S&P down as well
    So U.S. stocks are barely moving
    Foreign stocks - some of these emerging markets are up huge, especially priced in U.S. dollars
    All the foreign markets, thus far in 2017 are beating the U.S. market
    Again, that is not what all the experts were expecting from the Trump Rally

Ep. 221: Trump Honeymoon Ends Before Marriage Begins

Today the Federal Reserve raised interest rates for the third time in 10 years
    Of course, the tightening cycle began with the first rate hike in December of 2015
    Followed by the second rate hike in December of last year
    And now, breaking from tradition, rather than waiting an entire year for the third hike
    We got the hike in March
    Of course the Fed had allowed market expectations to rise to 100% in anticipation of this rate hike
    When the Fed raised rates for the first time they talked about raising rates for an awfully long time before they actually got around to doing it
    Ironically, though, about 2 hours earlier than the rate hike announcement, the Atlanta Fed revised down again its projection for Q1 GDP  to .9
    Remember - at the beginning of February, not even 6 weeks ago, the Atlant Fed was at 3.4% for Q1 GDP
    They're down to .9%!  That is a huge collapse in estimates for economic growth in the first quarter
    And I'm sure it portends ill for subsequent quarters
    And remember - Janet Yellen has always said that the Federal Reserve is not on a preset course
    And that rate hikes that they are forecasting will only happen to the extent that their economic forecast pans out
    That all of their rosy expectations of economic recovery has come true
    Yet none of it has come true
    If anything, you've had a collapse in growth estimates since the last time the Fed met, yet
    The collapse in GDP forecast has done nothing to alter the Fed's path, because they've ignored all the data
    And they raised interest rates yet again
    That doesn't mean that interest rates are high, I mean they're still very low
    Remember, we're still not at a range between .75% and 1% so the average of that range, the midpoint, is still below 1%
    1% was the emergency level that Alan Greenspan slashed rates to, after the dot com bubble bust and after the September 11 terrorist attack sent the U.S. economy into recession
    At that point, in a recession, the lowest rates got was 1%
    The Fed would have to hike rates again to get back up there

Ep. 235: Fed Hikes Rates To Feign Confidence

Summary: President Trump needs to lead, not oppose.  He is opposing the very forces who put him in office.  By aligning with the mainstream Republican Party, he abandons the opportunity to lead the economy successfully through the inevitable consequences of the Obama Administration's failed economic policies.

Investors are jumping on the bandwagon of hype surrounding the Trump Presidency.  Abandoning safe havens and emerging markets, they are buying into the American stock market at high valuations, which is the equivalent of abandoning the lifeboat and swimming back onto the Titanic just because the band is playing.

    As I suspected, we now have a bit of a civil war breaking out in the Republican Party
    On the one side, you have the Freedom Caucus, and then you have everybody else, or the mainstream of the Republican Party
    It seems like Donald Trump is the general of the mainstream
    One of the battlefields is Twitter
    Where you have President Trump calling out even specific Congressional members of the Freedom Caucus by name
    And blaming them for the failure of the Republican agenda
    Remember: we don't want the Republican agenda
    Donald Trump ran on a platform of "Making America Great Again"
    One of the reasons America is not great is because of the Republican agenda
    Republicans have played a role in destroying this economy
    It's not like the Republicans are all good and the Democrats are all bad
    That's not the case
    The difference, in terms of the economy, between Republicans and Democrats, is like the difference between Coke and Pepsi
    They're all politicians!
    Their business is perpetuating their own careers and their own power base
    What do they need? They need votes and they need money
    How do you get votes? Promise something for nothing.
    Give out freebies.  Take advantage of the fact that the average voter is a moron, and they're just voting for free stuff from the government
    Sometimes there is a difference between the way the Democrats and the Republicans wrap it up
    Who said, "Let's wrap up Obamacare in a Republican bow."?
    Republicans like to wrap up socialism in different packaging
    That's how they get votes - they're afraid to engage the electorate on an intellectual level
    Because they really don't have one

Ep. 239: Trump Needs To Lead Not Oppose

Summary: Every tax cut is temporary. Ryan's premise that we can't get the stimulus we need without a permanent tax cut is complete nonsense.  Congress has no idea what the budget's going to be next year, let alone 10 years from now. The only budget that really counts, and even then they can't get it that accurate, is the current year. When the government cuts taxes it doesn't come with a guarantee that the rates are never going to go up.

    We had a bit of a turnaround Tuesday today; all of the major U.S. stock market averages were higher in the morning and we closed broadly lower on the day
    In fact, the Dow Jones did make an all-time record high this morning before closing down about 60 points, although the decline in the NASDAQ was greater
    We had a .082% decline in the NASDAQ; the Dow was only down by about .03%
    S&P 500 though had a bigger decline, it was down about .07%
    So the broader averages took a bigger decline than the Dow
    I don't think the technical damage is extreme
    Yes, we made new highs and closed lower, but it really wasn't an outside day
    It didn't close below Monday's lows, which would have been an outside reversal
    But when markets are as extended as they are, they can top on just about anything
    I put up an interesting article on my Facebook page that tried to draw a comparison between Amazon and Whole Foods merger and the big high-profile AOL-Time/Warner in 2000
    You had a big, internet darling making a big brick and mortar purchase and that marked the peak of the internet bubble
    And the author was making the case that this is another major internet company buying a brick and mortar company, a lot of fanfare, a lot of hype and maybe this is also going to mark a major top
    It's an interesting analysis, because I think we're at about the 15-year anniversary of the purchase
    It is an interesting comparison, not a perfect analogy; some things are similar and some things are not
    I do believe that the U.S. stock market is substantially overvalued, in fact a bubble
    The only reason I believe that the air is not going to come out of the bubble is because the Fed is not going to let it
    I am pretty sure that any significant decline in the stock market is going to be met with an aggressive Fed rate cut, quantitative easing
    I don't believe the Yellen Fed to allow the market to implode the way it did in 2008

Ep. 260: All Tax Cuts Are Temporary

Let the SS ObamaCare Ship Sink

The Republicans in the Senate finally unveiled their version of ObamaCare Repeal & Replace.  It's very heavy on replace, but there really isn't any repeal. They are replacing it with something that may even be worse. Regardless, we still should let the ObamaCare ship sink while it's called the SS ObamaCare.
Senate Bill Leans Toward Socialized Medicine

The House already passed their version. The Senate version is even worse; it takes away all penalties for not buying insurance. At least the House version tried to create some kind of penalty. Now, a penalty of any sort would not be necessary if the government did not mandate insurance companies to cover people with preexisting conditions. The only way insurance companies can survive, if the Senate bill were enacted, is with massive government (taxpayer) subsidies.
Moral Hazard

Of course the Senate does not consider the moral hazard of offering a "medical bill-paying service", so the cost will be enormous. This solution will collapse the health insurance industry and lead to socialized medicine. If the Senate Republicans really want socialized medicine, they should just come out and say it. If you don't believe in the free market, just come out and say it.
Something For Nothing

If the government can deliver healthcare cheaper and better than the free market, then why not socialize everything? Republicans are afraid to say that they don't believe this because they want to get elected and they know that the voters don't understand that capitalism works.  They just want something for nothing.  The Senators want to get elected so they are going to provide it for them.

Ep. 261: Senate Plan Makes ObamaCare Worse

Summary:

Once again the solution doesn't work.  As with the Democrats' solution, the penalties are too low.  In both the House and the Senate, trying to force people to buy insurance won't work because the penalty for not buying insurance is not stiff enough. The reason they aren't doing that is, politically, it is a losing proposition. This is why the Republicans never should have touched this issue. If they did not have the guts for outright repeal, they should have never done anything. They should have left it alone and the Democrats would have owned this disaster. The best thing the Republicans can do, politically, is do nothing. In this way any collapse cannot be attributed to ambiguity in the market.
Downward Pressures on the Dollar

    Very big day in the market today; the most significant being the breakdown in both the NASDAQ composite and the U.S dollar.
    The dollar was down sharply and broadly today, led lower by a rally in the euro
    The catalyst for the euro rise was statements by Mario Draghi early in the morning where he commented that downward pressures on inflation were transitory
    A somewhat hawkish stance on inflation and the markets took that to mean that QE will come to an end sooner rather than later
    But I think the markets are looking for any reason to trade the dollar lower
    I have been talking about that on this podcast, that the dollar has been looking weak
    It broke down again today, the dollar index down just over 1 full percentage point on the day
    The dollar trading at its lowest level in 8 months
    I think this was the lowest closing level in about 9 months
    The euro is trading at a 113 handle

NASDAQ Woes

    At the same time the dollar was breaking down, so were tech stocks, the FANG stocks were particularly weak
    The NASDAQ composite down just over 100 points on the day
    That's a pretty big move; a 1.6% decline
    The Dow was only down about 100 points, just under a half percent
    So the NASDAQ experienced about triple the decline
    I talked about that on this podcast a couple of episodes ago when we had that one really big reversal day in the NASDAQ stocks
    When the NASDAQ stocks made an all-time record high and then closed negative
    We had that kind of flash crash coming into the final hour of trading
    To me, there was some big money that decided to get out of those stocks

Ep. 26: Republican Replacement Won't Fix ObamaCare

Summary:
Blue Apron Holdings IPO

The Blue Apron Holdings IPO today is reminiscent of the dot com boom.  The market is saying the 5-year old company is worth close to $2 billion. This IPO represents a "down round" which may occur after a company suffers a decline in valuation after it has received initial rounds of capital investment. The initial offering was $10/share, and by the closing bell it only managed to close at $10. This stock may go below $10 as early as tomorrow, as many investors were planning to flip the stock. The concept of this company is not proprietary; indeed the recent merger of Amazon and Whole Foods could pose a serious market threat to this company.
Rand Paul

In more news on this ever-evolving Republican Health Care saga. the Republicans are caving in to media and left spins the Republican Healthcare bill as a re-distribution of wealth from the poor to the rich.  You are not taking from the poor by stealing less from the rich. For some reason, the voting public expects American profit-seeking companies to sell insurance to people who are already sick. This would be the equivalent of selling home insurance for a house that has already burned, or car insurance for a car that has just been in an accident.   Rand Paul is getting a lot of press recently because he is the only Republican who opposes this on principle. He believes in the freedom for Americans to purchase the kind of insurance they need. They can pick their deductible; they can pick their co-pay. They can have the freedom to buy or not to buy health insurance.  But this can only happen in a market where insurance companies are allowed to make a profit and are free to compete for insurance business without government intervention.
U.S. Dollar Continues Decline

    The U.S dollar continued its decline today falling to a fresh 8-month low, closing to about 95.60
    The dollar is being led lower by a surging euro; the euro is actually at a 12-month high against the U.S. dollar
    Trading just below 114.5
    It wasn't too long ago the euro was down around 105, and there was a lot of talk about parity with the dollar
    I was saying that the euro has bottomed; that the euro is going to rise
    And the rise is just now beginning for the euro, I think there's a lot more to this move
    Other currencies are also following the euro's lead, but ultimately I think they will surpass it
    The dollar has a substantial ill-gotten gain that it needs to surrender
    The dollar got bid up for years based on a misunderstanding of the true state of the U.S. economy
    Of the efficacy of Fed monetary policy
    The market was factoring in far more rate hikes than the Fed was capable of delivering
    Meanwhile the economy is rolling over
    I mentioned on my last podcast Mario Draghi's statement about the deflationary threat subsiding
    About the drop in inflation being transitory and the euro rose on that
    The very next day, the ECB went out to do damage control
    Why is it "damage" when the currency is going up?

Strength in Financial Markets

    The only segment of the market that was strong today were the financials
    The banks feel they are going to benefit from higher interest rates, higher spreads
    And here, we had those bogus stress tests where the Federal Reserve supposedly stress-tested all the banks
     And, what to you know? The all passed
     So that is creating a bid for the banks
    I have said this before, when it comes to higher interest rates and banks, be careful what you wish for

Ep. 263: Blue Apron: All That's Missing is the Sock Puppet

Summary

Independence Day is a great American holiday, but it fills me with joy and sadness.  I love to commemorate what America was, and the whole idea of what made America different. Once we declared our independence in 1776 the people created a government.  We the people had all the power and we surrendered some of our power to form a limited government.  The government was a creation of the people and they ceded some power to the government. This was unique. As a result of this limited government, this uniquely American way of life, America prospered and created the wealthiest country in the history or the world. So we celebrate the beginning of this experiment in freedom and limited government. Benjamin Franklin famously responded to the question, "What have you given us, Mr. Franklin?": "A republic, if you can keep it." We have become what the founding fathers feared most, a democracy.

Ep:264: Dependence Day. Americans Celebrate Free Stuff, Not Freedom

Summary:

One of the key differences between Americans and citizens of other countries is that in most nations of the world, individuals gradually won freedoms and privileges from a monarchy. In the U.S., however, we started with all of our rights.  Then, Americans created government by surrendering some of their power, empowering government.  These rights are spelled out in Article 1 Section 8 of the Constitution.
Free Stuff Rather Than Freedom

We have government not to give us stuff, but to secure our freedom. Americans today really don’t want freedom.  They want free stuff. When the government gives you something they take away your choice; they tell you what you are going to get and how you are going to get it. When the government gives you something, however, they must take away from someone else, diminishing that person’s freedom.
Article 1, Section 8 of the Constitution

Ep. 265: What It Means To Be An American

Summary:

There wasn't much of a market reaction to this Nonfarm Payroll report; the dollar index was only up .2% on the day. It closed up flat on the week. The Canadian dollar closed at a 10-month high against the dollar. Also bond prices continue to fall; this is a bad week if you own bonds, worldwide.  Yields are rising across the board.  The trend looks like we are about to break down in the bond market and break out in yield.

Ep. 266: Another Weak Jobs Report Portrayed as Strong

There are market indicators of a major top as illustrated by the Blue Apron IPO, as it represents the failure of a very weak company attempting to raise money my means of an IPO when the market may have lost its steam. The stock is trading at $7.14, down from its initial $10/share offering. Wall Street has lost control of this IPO. A smaller bank actually issued a price target of $2/share. The point is that they brought the IPO to the market and they could not keep the air in the bubble. SnapChat, another Wall Street darling, went public at $17 not too long ago and although it had a big pop initially up to $29, now trades at about half that price. The point is that this process is coming unglued. The inability of Wall Street to maintain the air in these bubble stocks is an indication that we're nearing the end of this bull market.

Ep. 267: Market Ringing Lots Of Bells

More weak economic data today sent the U.S. stock market to record highs; at least the Dow and the S&P hit new records. NASDAQ not quite, but very close.  The dollar hit a new low for the year.  The dollar index, settling in at 95.10, right on the low for the day.  That's down .63.  Some of the other currencies are strong.

Aussie Dollar Strong

The Aussie dollar was up about 1.3% on the day; one of the strongest of the currencies today. The Aussie dollar is very close to a 2-year high.  The Canadian dollar was very strong this week on the back of a rate increase by the Bank of Canada. But the dollar falling across the board.

Foreign Stock Gain

Foreign stocks did better than U.S stocks, given their tailwind from appreciating currencies.  Gold prices were up just over $11. Given the weakness in the dollar and the weak economic data, gold should be moving up a lot more than it is; I still think there is still a lot of short selling going on, but I smell the mother of all short squeezes coming.  Silver is up about .30; back up to $16. remember was a low as $15.10 earlier in the week.

Dollar Index Weakening

The dollar index index at 95.10, just down over 7% on the year. It ended last year just above 1.02. In fact, in January, hit almost 1.04, so we're down 8-1/2% since the January high, and the year is only half over. So I think there is a lot more momentum coming, especially in light of the economic data I'm about to get to.

Retail Sales Disappoint

The big report was the Retail Sales numbers, were supposed to bounce back from May's -.3, and they did manage to revise that to down only .1%;but instead of getting a .1% rebound we had another drop.  We had -.2% in June, so that is back-to back declines.  In fact that is 3 consecutive months of falling retail sales. The picture gets worse when you strip out car autos. Last month, we got -.3%. That was unrevised.  They were looking for June to be +.2% - instead we were down another .2%. And if you strip out gasoline, it's even worse than that. They were looking for +4% and we got -.1%.  So very very weak retail sales. This was supposed to be the quarter of the big bounce back! How are we going to bounce back in GDP without retail sales?

Consumer Prices Weaker

We also got consumer prices that actually came out weaker than expected. That is supposedly bad news, the way the Fed spins it, because the Fed's trying to get higher inflation, at least the way the CPI measures it. They were supposed to get an increase of .1% for consumer prices following last month's .1% decline and instead we came in unchanged. Year over year CPI, up 1.6% vs an estimate of 1.7%, and core, stripping out food and energy, they were looking for +.2%. instead we were up .1%

Janet Yellen Wants More Inflation

So when Janet Yellen testified before Congress earlier in the week, the only thing she expressed concern about is that inflation is not high enough.  She does not seem concerned at all about the weakness in the economy.

Ep. 268: Weak Data Sinks Dollar But Floats Stocks

My recent trip to Las Vegas for The Freedom Fest provided some interesting lessons.  My observations that we are paying more for less were illustrated by the theft of my luggage,  as there are no more luggage security checkers in baggage claim exits.  Also, for the first time, major Las Vegas hotels are charging from $15 - $18 for parking.  This is causing hotel valet workers to lose money, as customers are less likely to leave a generous tip (or any tip) if they are already paying quite a bit to park. So the Las Vegas experience is changing; we're getting less for more money.  Prices are going up and wages are going down.

Taking Credit for Phony Statistics

This is the real U.S. economy. Forget about all these phony U.S. statistics. The real world reflects the truth about the economy and why Donald Trump is President.  I wish candidate Trump would come back; I would rather see the President questioning phony government statistics instead of embracing them. I'd like to see the President talking about the stock market being a bubble rather than a bull market and claiming credit for the increase.

Weakness in U.S. Dollar

The big story is the continued weakness in the U.S. dollar, in fact this morning the dollar index hit a new low for the year. It's now back in positive territory as I am recording this podcast, but the low this morning was 93.64 on the dollar index.  Remember, the dollar index rose about 6% between the election of Donald Trump and the Inauguration, and the reason for the rally was the optimism for economic growth as a result of tax cuts, de-regulation, fiscal stimulus and a tighter Fed.

Senate Backing Away From Repeal

At the time, I argued that that was nonsense, and so far I am being vindicated.  We're six months into the Trump Presidency and nothing has happened. They haven't even been able to repeal Obamacare, nor are they going to.  The Senate already backed away from the version that I said would not work.  Trump did a press conference yesterday talking about Obamacare, assuring everybody that pre-existing ban is going to stay. The very essence of Obamacare is that insurance companies can't charge sick people more for insurance than they charge healthy people. That's the essence of Obamacare that doesn't work and that's what Donald Trump and many Republicans want to preserve.

Preserving the Essence of Obamacare

Of course, in order to achieve that goal, they had to have employer mandates and penalties.  These are the only things the Republicans want to get rid of. But they want to preserve the very essence of Obamacare and that's the mandates and penalties were designed to deliver. So now they have to come up with another way to deliver the promise of Obamacare.

Currency Markets Get the Message

The point is, the currency markets have figured this out.  The dollar has dumped better than 10% since the Inauguration, but the stock market has made new highs. The Dow Jones is at a new high today; the NASDAQ hit a new high yesterday, so it's a disconnect.  The initial rally in the stock market happened for the same reason the dollar rallied.  The currency traders have connected the dots. What's the problem with the stock traders?  Why are they oblivious?

Dollar Weakness Spark Commodities

The weakness in the dollar is also sparking a rally in multinationals, in commodities.  Look at the move today in Freeport-McMoRan a major copper producer; that stock is up better than 13%.  Oil prices are coming back up; oil is up better than a dollar today. Emerging markets are strong.

Bullish Conditions for Emerging Markets

I have been saying that a weak dollar is extremely bullish for commodities. Why? Commodities are priced in dollars and as commodity prices go down, demand goes up. This is very bullish for emerging markets because a) they export commodities and b) emerging markets have a lot of dollar-denominated debt. Every time the dollar goes down the debt is cheaper to service.

Ep. 269: Lessons From Vegas Don't Stay in Vegas

Peter Schiff is an economist, financial broker/dealer, author, frequent guest on national news, and host of the Peter Schiff Show Podcast.  He follows up his daily two-hour radio show with podcasts focusing on weekly economic data analysis and unbiased coverage of financial news, both in the U.S. and global markets.  As entertaining as he is informative, Peter packs decades of brilliant insight into every news item.  Join the thousands of fans who have benefited from Peter’s commitment to getting the real story out every week.

Peter Schiff

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