In-Depth Gold, Inflation & Other Macro: Peter Schiff

Introduction and Opening Remarks
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you make no friends in the pits and you take no prisoners one minute you’re up half a million in soybeans and the next boom your kids don’t go to college and
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they’ve repossessed your bentle are you with me the revolution Starts Now starts now we have to pass the bill so that you
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can uh find out what is in it turn those machines back on you are about to enter
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make a virtue out of selfishness your money your stories your freedom the
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lowercase the Peter Shi [Music]
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show well earlier today the fomc the Federal Open Market Committee announced
Federal Reserve’s Interest Rate Announcement
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that it was leaving interest rates unchanged very uh highly anticipated
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announcement so the FED funds rate is now four and a quarter to 4 and a half
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percent the uh expectation remains for two additional rate Cuts between now and
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the end of the year so I think the markets are looking for a rate cut in June and then maybe another one in
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December and then a couple of more rate Cuts uh the year after
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that um I think the announcement though was on the do side in fact probably more
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dovish than even Wall Street uh
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comprehends one of the things that they they did announce in addition to the
Discussion on Quantitative Tightening
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fact that they were leaving rates unchanged was that they were going to slow down the pace of their balance
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sheet runoff otherwise known as quantitative tightening and so instead of allowing 25
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billion of uh treasuries to run off meaning that when a treasury matures
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they don’t roll it over and buy another treasury they just kind of let it mature and uh and so the balance sheet
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declines you know naturally instead of allowing 25 billion to run off per month
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they are only going to allow five billion which means they’ll be rolling
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over more of that maturing debt into into new debt and and so that basically
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uh you know amounts to an ease uh because they are reducing the amount of
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liquidity they are removing through that quantitative tightening program now they’re not slowing down the pace of
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mortgage back Securities which they’ll continue to run off and you know just to skip ahead a little bit to the podcast
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uh during the Q&A he they he was asked a question about about that about the um
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the mortgage back Securities and he indicated that the FED really wanted to get those off their balance sheet and so
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they might continue to allow that runoff but they may decide to do it in a way
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that is neutral for the balance sheet and so what that implies is that they may start buying treasuries again in
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order to continue to allow the mortgage back Securities to run down without it
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having a an effect on the balance sheet so if they uh allowed 20 billion of
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mortgage back to run off they would go into the market and buy an additional 20
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billion of treasuries in order to offset that so it wouldn’t uh shrink the balance sheet of course the FED should
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continue to shrink the balance sheet the balance sheet is much too large uh the fact that the the FED is uh dramatically
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slowing uh the rate of reduction I think it’s just another step in the direction
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of a return to all you know allout quantitative easing I think that’s coming but the reason I I I think that
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this is a very doish move by the FED uh has to do with the way in which
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um pal really dismissed uh the the pickup in inflation
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as if it’s really no big deal or even denying that it exists and and and
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showing that the FED is still focused on these rate cuts when in reality they should be hiking rates as I’ve said on
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this podcast on numerous occasions the FED never actually got
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monetary policy into restrictive territory uh they’ve been too loose the
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entire time and rather than discussing um interest rate uh cut
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they should be hiking raid so the fact that cuts are even on the table uh is is very dobish and is a mistake you know
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one of the uh facts that didn’t come up once during uh the Q&A and I’m going to
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get into a lot of the that but one question that nobody asked which should
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have been uh you know asked by by everybody was the price of gold no
Gold Prices and Market Signals
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nobody said to Pal hey what do you think about $33,000 gold because on Monday
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gold closed above 3,000 for the first time ever it closed above 3,000 again on
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Tuesday and again today it hit another record high it closed at
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3,048 and it’s up again the evening another $5 so as I’m recording this
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podcast live on Wednesday evening here in New York or I’m not in New York but New York time gold is trading in the
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spot Market at $3,533 of
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$5 nobody brought this up because gold
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is flashing a warning that the FED is too loose you know in the
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Q&A one of the reporters brought up Allan Greenspan’s old definition of
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price stability where Greenspan said well price stability is where uh
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businesses and and workers don’t even bother to calculate price
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changes into their plans because prices are going up so slowly that nobody
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really cares right so it’s like indifferent in decision making and he asked jome pal if he would you know
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ascribe to that definition and if he believes that we have price stability and he did say yes I like that
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definition uh but he really didn’t answer as to whether or not he thought we had price stability kind of dodg that
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but the point I’m making in bringing it up is that Allan Greenspan also talked
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about the importance of gold in setting monetary policy Allan Greenspan said
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that even though we’re not officially on a gold standard he said that he used the
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gold price as a reference as a signal to all let him know whether
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monetary policy was too tight or too easy what green span said was that if gold gets up to $400 an
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ounce that means that he’s too loose if it goes below 300 that means he’s too
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tight so obviously at the time that Greenspan made the statement gold was probably around $350 an ounce and he
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kind of looked at if it was going above 400 I’m too loose maybe we got a tighten
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policy but if the price of gold drops below 300 maybe we’re too tight right we got to ease up well course Gold’s 3,000
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now right so that shows you how much things have changed you know I looked again at the chart going back to the
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beginning of this Century the S&P is actually down 60% if you price it in
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Gold I mean that is enormous bare market and it really shows you that the entirety of the gain in the stock market
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is due to uh inflation it’s due due to uh the destruction of the value of money
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not a real increase in the value of the companies uh that are represented by the S&P 500 but that we are uh you know
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measuring their value in rapidly depreciated currency and it’s not just the dollar relative to the Euro or the
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Yen or the pound because all those currencies have have gone down uh and so
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it’s a global inflation uh it’s not just an inflation in in the United States but
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green B acknowledged that in that gold was an important Market signal and he
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even said we’re not officially on a gold standard but it’s kind of like we are because I’m using gold right so if gold
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goes up I’m going to tighten right and so it’s kind of like a gold standard but it’s not a gold standard well what about
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now what is $3,000 gold saying about fed monetary
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policy well apparently nobody cares nobody even wants to ask these questions not one reporter in that room there was
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a reporter who asked pal about the stock market and it’s Decline and if the
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decline in the stock market concerned him at all but nobody asked him about
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the rise in the gold market and if that was concerning You’ think you would ask
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the the chairman of the Federal Reserve hey the price of gold keeps going up and now it’s at an all-time record high it
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just blew through 3,000 are you worried about that chair pal are you worried
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that the gold market is saying something that maybe you’ve got your policy wrong
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the fact that Central Bankers all around the world are dumping the currency that
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you print right Federal Reserve notes right that they’re Federal Reserve notes they’re notes of the Federal Reserve
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that’s what the dollars are and all these other Central Bankers are dumping the notes of the Federal Reserve to buy
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gold they are foregoing 4% four and a half% interest
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on us treasuries in order to put gold in a vault and earn no interest are you
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concerned about that right are you concerned that the markets are repudiating your policies that the
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markets are telling you that interest rates are too low and that inflation is going to be too high nobody is even
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asking pal you know his opinion on that I I mean I would love to hear his answer although I’m sure you know he’d find a
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way of of weaseling out of it like he does for any question that he you know either can’t answer or is
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uncomfortable answering but that is the reality that that is the real proof that
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the FED is wrong because you have a market that is uh saying that the FED is
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too loose and that these rate cuts are a mistake whenever they come the FED
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should be hiking interest rates not deciding when to cut
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and again gold is the canary in the monetary coal mine right the canary
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obviously is dropping dead right gold is shooting up it is a warning but it’s
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falling on the deaf years of fomc that doesn’t even know what they’re hearing
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or they’re just that they can’t hear it at all they’re oblivious they’re toned deaf because they don’t even understand
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uh inflation or monetary policy and again all pal looks at when he when when
Inflation Concerns and Monetary Policy
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he gets all these questions about inflation uh he always responds that you
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know he wants to look at the prices and determine you know why the prices are rising you know is it going to be
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transitory it’s hard to believe they’re even using the word transitory again but you know is it gonna stick or you know
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he he he there he’s all focused on prices but prices going up are a result
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of inflation you can’t just focus on prices it’s again it’s like driving in
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the rear view looking in the rearview mirror you’re going to get into an accident it’s the money supply expanding
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which is continuing and credit right inflation is not just the expansion of
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the money supply it’s an expansion of credit because credit can be used as
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money you can buy stuff with credit even if you don’t have any money right and so the more credit there is in the economy
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the more upward pressure there is on prices so you have to look at the money supply and the credit Supply to know
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what’s going to happen to prices in the future if you’re just looking at prices and you’re ignoring all that you’re not
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going to fight inflation and in fact if you’re saying I’m going to wait until I see a sustained increase in prices
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before I do something about inflation well then you’re too late you have to be preemptive you have to understand how
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the monetary Aggregates are ultimately going to impact prices there is a lag
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that’s why they say don’t let the inflation Genie out of the bottle by definition if you do what pal says he
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wants to do wait until you see that prices are really going up right looking
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through uh the impact of tariffs because a lot of discussion was well the tariffs
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and you know how do you know if the price increases are a one-off event by the tariffs or if it’s something more uh
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and you know a lot of times too when pal talked about that inflation was a bit higher he always attributed it to the
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tariffs or the fear of the tariffs uh you know when prices were going up even before we had the tariffs H but of
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course he’s trying to you know pre- blame any inflation on the tariffs I mean I know this was going to happen
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right anything that happens he’s going to say well I guess it was the tariffs right that’s how the FED is going to
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deflect the blame from its own monetary policies and put them on onto the tariffs that’s another reason why Trump
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shouldn’t have done it because it gives uh the FED an excuse uh and it lets them them off the hook because it it’s very
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easy to blame the inflation on tariffs but if pal does what he says you know
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just really Waits until he can figure out whether the price increases are
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transitory or whether it’s more permanent by the time he figures that out it’s much too late to do anything
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about it right because you know the prices are really going so his whole
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methodology of waiting for inflation to become a bigger problem before he tries to solve it means that you know he can’t
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solve it because because of the lags and of course it doesn’t even matter anyway inflation is already going to be much
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higher based on the mistakes that have already been made you know the credit supply has been consistently growing
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throughout the entirety of the rate hike and then of course the FED stopped hiking money supply is growing now they
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are they are you know shrinking the balance sheet uh less which is also going to end up being
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inflationary and now the dollar is weakening and one of the main reasons
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that the CPI retraced was the strength of the dollar
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it was the dollar moving up that brought commodity prices down well commodity
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prices are now rising and they’re going to rise even faster now that the dollar is falling uh so the temporary effects
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of lower inflation are are going to be gone that’s what was transitory it was
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the dip in inflation that was transitory that was a transitory decline in
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inflation and now inflation is going to resume its acceleration and it’s going
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to be particularly uh fast because the FED is not doing anything to put on the brakes and in fact the FED is still
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planning on cutting rates and again that was also why I thought and even the markets would
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probably agree that this was dovish in that F had pal had to acknowledge that
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inflation was going to be higher in fact they increased their forecast for
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inflation this year from 2.5 to 2.8 and I think they’re looking at the pce or
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the core PC they’re not looking at the CPI they’re they’re they’re using the the index that’s the lowest but even
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then they acknowledged that infl is going to be higher this year than they thought but despite the fact that they
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had to up their inflation forecast they still telegraphed two rate Cuts this
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year Well if inflation is moving up and it’s higher than you thought it was going to be and it’s Mo moving farther
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away from uh 2% then why are you telegraphing cuts at all why are there
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any cuts on the table why doesn’t defense say no we’re not cutting rates at all uh until we see inflation coming
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down they’re still uh indicating that they’re going to cut rates even though inflation is going up and one of the
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reasons is at the same time in this forecast they regroup they reduced their
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estimates for GDP growth uh this year now they’re at 1.7 of course they’re ignoring the fact that Atlanta fed is
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already negative2 point something for q1 so nobody even brought that up uh but
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they reduced their growth forecast to just 1.7% so they’re reducing their growth
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and their increase in the inflation what pal said later on which is not true is
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he said well these things cancel each other out higher inflation and lower growth cancel each other out no they
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don’t they don’t cancel each other out because lower growth doesn’t reduce inflation in fact it may actually
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accelerate inflation uh because it increases budget deficits and uh puts
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downward pressure on the dollar and is actually inflationary but he’s trying to say well they cancel each other out so
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we don’t have to change our policy you know what that is that’s stagflation it’s the one thing that they H they
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didn’t have it’s the one thing they have no contingency plan for that’s the reality anyway I’m going to talk more
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about this press conference the Q&A on the other side of the commercial break so stick around we’re coming right back
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gold all right before I continue discussing today’s uh press conference I want to mention the special that we’re
Special Offers on Gold and Silver
20:42
having at shift gold to uh commemorate $33,000 gold we’ve got a special on Gold
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Eagles $99 over spot again on the Gold Eagles that is a great price for gold
20:55
Eagles but even though it’s gold celebration I still think that silver is the better
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buy silver is still under $34 an ounce you know uh gold has moved up
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50% uh since um hitting 2000 for the first time in uh I think March or April
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of 2020 well silver is actually lower silver was above 35 at its peak and so
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gold has gone up 50% and Silver’s gone down I mean you you can’t really find
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uh you know a a a another time period where where that happened right this is
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kind of an unprecedented uh weakness in silver in relation to gold and you know again the
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reasons for that are that average investors have sat out the whole bull market it’s the central banks that have
21:47
been buying that’s why the mining stocks are still so cheap that’s why you’ve got a gift horse you know to buy the
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europacific gold fund uh or any gold stocks or to to buy silver for that
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matter so we’ve got a special on Silver Eagles
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$369 over spot and my guys there are telling me that this is the lowest price
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in the industry that you won’t be able to find uh silver eagles cheaper than
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$369 uh overs spot anywhere uh so you know and normally at a big bull market
22:23
like this the premiums would be going up the public is still asleep they don’t realize what’s going on you know the
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first two times that gold got to 2000 you know 2011 it almost got there and in
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2020 it got above 2,000 there was a lot of enthusiasm investors were buying
22:43
premiums were blowing out the phones were ringing off the hook uh but when gold got to 2000 for the third time late
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last year nobody wanted to buy it you know and that’s very interesting because
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the first two times you know two when it when it went up to 2000 in um almost
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2000 in 2011 then it pulled back uh to 1,50 but remember that bull market
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Started From Below 300 so gold went from below 300 to 1900 without a you know any
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kind of meaningful Decline and then everybody you know rushed in near 2,000 and then you know it almost got cut in
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half to 1,50 so people got burned they bought gold near 2,000 right they lost
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money then it rallied up to 2,000 again during covid and went above 2,000 and
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everyone thought okay this is it last time it couldn’t get above 2,000 now it’s above this is the breakout a lot of
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money came in and then the market sold off but not as much right gold held
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1600 um and uh and now and then it Rose back but by the by the third time it got
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to 2000 the public had been burned twice buying $2,000 gold and what guys were
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telling me at shift gold was people didn’t want to buy gold to 2000 they wanted to wait for another pullback and
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I kept saying you know what I don’t think we’re going to get a pullback this time we’ve had the pullbacks we’ve built
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an enormous base and I kept saying on the podcast for several months 2000 is
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the floor it’s no longer the ceiling on gold it’s the floor I kept saying buy it
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you know 2100 2200 this is cheap people were reluctant to buy waiting for a
24:25
pullback and here we are at 3,000 50% higher no pullback so I don’t want
24:32
people to make the mistake of saying I don’t want to buy gold at 3,000 I want to wait for a pullback you’re probably
24:39
not going to get a pullback large enough to make it worthwhile I mean you could go go back down to 2900 of course but
24:47
don’t wait for it just buy it if you want to buy gold buy gold because it’s
24:52
going to go up this is just the beginning this is going to be a huge rally but if you don’t want to buy the
24:58
top in Gold then at least buy silver because silver is nowhere near the top the top was 50 it’s below 34 so you can
25:06
load up on Silver and then maybe when it you know doubles or triples whatever you
25:11
can sell some and buy some more gold if go if silver goes up more than gold
25:16
which it should I think one day we’re going to see this huge rally in in the price of silver uh so before that huge
25:24
rally you know you could buy yourself some at $36 69 cents those are for the
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silver eagles uh that’s where we got the special you go to shift gold.com to do that and again if you
25:36
really want to hit the ball out of the park if you’re a risk taker go to EUR uh
25:51
europa.eu today at $11.83
25:58
uh so if you look it up uh you know by the way I noticed I’m not sure we were up a little bit today
26:04
but as of yesterday my dividend payer fund was up over 19% year-to date uh you
26:11
know with the S&P down but it was actually it’s actually the number one Fund in the international value category
26:18
the whole category is up I think the average was about 133% or but my fund is up 19% because we did some excellent
26:25
stock picking in uh in that in that fund but anyway let me go over uh some of the
26:31
stuff that happened in today’s uh Q&A with pal I mean first of all there
Analysis of Tariffs and Inflation
26:39
was a lot of discussion of tariffs and you know a lot of people you
26:45
know wanted to get pal the blame uh you know their higher inflation forecast on the tariffs obviously right
26:52
because they want to be able to blame it on Trump and and and his answers you know pretty much to me was yes because his
27:01
initial answer to the direct question was some of it a good part of it so if
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you say some of the higher inflation forecast a good part of it is because of tariffs well you’re blaming it on the
27:12
tariffs but then every time he talked about inflation being higher he always
27:17
interjected the tariffs uh so you can see that this is going to be the scapegoat right the FED is not going to
27:24
have to accept responsibility for the inflation it’s going to blame it on the
27:29
tariffs but again you know if it is the tariffs that caused inflation then why didn’t the FED know that the tariffs
27:35
were going to cause inflation and why did they keep cutting rates why didn’t they hike rates so it’s still the fed’s
27:41
fault either way uh but the real uh problem is all the money the FED created
27:46
all the credit that they created uh it’s not the tariffs I mean the tariffs are taxes they’re taxes that Americans are
27:53
going to pay when they buy stuff so they’re consumption taxes and and they’re better than the deficit so I’d
28:00
rather have a tax on consumption than more debt but what these higher consumption taxes will do is accelerate
28:08
the recession because the recession has been postponed or hidden by all the
28:14
excess consumption caused by the deficit spending well if the deficits are reduced because we tax Americans for
28:22
spending and so they spend less we have a smaller deficit that’s good in the long run but in the short run when when
28:28
you’re talking about having a bubble economy you’re letting some air out of that bubble and that means we have an
28:34
even deeper uh recession now pal talked about the data he said you know the
28:41
economy overall he said we have a strong economy so he’s still clinging to the fiction that the economy is
28:48
strong and pal claims that all the hard data says the economy is strong now I
28:54
don’t know what hard data he’s really relying on because I see a lot of weak n in the hard data but pal uh admitted
29:03
that in the the Soft Data in the surveys that there seems to be a lot of concern
29:09
and a lot of worry about the future so he acknowledged that um and um he said
29:17
there’s a lot of uncertainty right he used the word uncertainty probably more than any other word and again I think
29:24
this is also trying to uh blame the Trump administration because that where a lot of the uncertainty is coming from
29:30
it’s policy uncertainty in particular related to the tariffs so he’s kind of
29:35
blaming a lot of the the concern that is evidenced in these surveys on the
29:42
tariffs right and that and that’s what’s going on uh but he get he said his base case is that any impact on inflation
29:50
will be transitory uh and that you know I if there if it’ll go away on its own it’s
29:57
like an inflationary impulse or something he said that would go away on on his own but he really dismissed these
30:04
surveys kind of out of hand he acknowledg them but I think one of the most ridiculous things is he was asked
30:10
about inflation expectations you know are you concerned about you know Rising inflation expectations and he said no he
30:18
said that inflation expectations aren’t going up now he acknowledged that they’re going up for the short run he
30:25
said you know people are concerned about one year inflation going up but he said
30:31
we’re we don’t factor that in see all of a sudden now the FED is qualified inflation expectations because
Fed’s Shift in Inflation Expectations
30:38
it’s it’s never really uh you know done this before it’s always said we want to make sure that inflation expectations
30:45
remain well anchored and now he’s saying well we want to make sure that long-term inflation expectations are well anchored
30:52
we don’t really care about short-term expectations because you know they’re you know they’re too volatile or
30:58
something or they may not really count so now he’s trying to say that because you know people are looking for 5%
31:04
inflation over the next year well we’re not g to we’re going to look past that we don’t really care about that just so
31:09
long as long-term inflation expectations remain anchored and that’s what he said he said we’ve seen no indication
Powell’s Dismissal of Five-Year Inflation Concerns
31:17
anywhere that inflation five years out that people expect that to be a lot
31:22
higher which is an outright lie and nobody pointed it out to him I mean two or three people people ask them about it
31:29
as if they they realize it but I I talked about it on my last podcast that uh five-year inflation
31:37
expectations jumped to 3.9% that’s the highest in over 30 years
31:43
I think like 32 years so how can pal ignore that that was a big jump and this
31:49
is over five years consumers believe that inflation is going to average almost 4% a year for the next 5 years
31:58
and pal completely dismissed that out of hand that oh we don’t really care or maybe we notice these higher
32:04
expectations but we don’t believe them I don’t know what he was trying to say because he actually said that fiveyear
32:10
expectations have not moved that they’ve stayed at 2% when they’re they’re practically double uh
32:18
2% you know one of the um more ridiculous comments that he made was you
Consumer Sentiment and Price Levels
32:24
know somebody said you know consumers are really unhappy you know you’re telling us that the economy is really
32:29
good and that inflation is coming down and you know they’re still upset about how expensive things are right and so
32:36
they they’re not buying this and what pal said he said well you
32:43
know I understand they’re upset about the price level yes prices went up a lot in the past and what they’re really
32:50
worried about is the past inflation but we’ve made a lot of progress inflation has come all the way down and so they’re
32:58
not really worried about current inflation right it’s just the the the past inflation as if the FED had nothing
33:05
to do with that and that so there’s no reason to worry now because the FED has already reduced inflation uh but yes you
33:12
know it’s he recognizes that the price level is still very high and that’s
33:18
painful but like there’s nothing he can do about that because he’s already brought future inflation under control
33:24
so the consumer just doesn’t realize uh how good it is because they’re fixated
33:29
on these high prices and they don’t realize that the FED has you know solved the inflation problem which it has not
33:35
done because first of all not only is the Fed responsible for the current elevated price level that pal agrees
33:43
consumers have a right to be pissed off about but because remember even before this happened pal said that the fed’s
Fed’s Inflation Averaging Policy
33:50
policy was inflation averaging he said that we need to make up for the fact that inflation was below 2% for so many
33:57
years we need to let it run above 2% so pal wanted the price level to move up
34:02
more than 2% because he felt like you know consumers got ripped off in
34:08
previous years because they didn’t get enough inflation and so he wanted to make sure that they made up for that low
34:13
inflation with some higher inflation but pal still says that the fed’s goal is
34:20
not to take these high prices and bring them down Pal’s official goal is to make
34:27
sure that these elevated prices that nobody likes everybody’s upset about and pal
34:34
agrees that people have a right to be acet about how high prices are his goal
34:41
is to make sure that those high prices not only don’t come down the official
34:46
goal of the FED is to make sure that already high prices that people are complaining about go up every year by at
34:54
least 2% and of course especially you know grocery prices because you know grocery
35:00
prices go up more than that as long as you can offset it with some other BS that’s part of the CP right and of
35:07
course they don’t even want to look at uh uh you know the headline they want to
35:13
focus on the core which doesn’t even count food and energy so really as far as Pal’s concerned I don’t care how
35:20
expensive food is because we don’t even look at that we only want 2% inflation when you don’t count
35:25
food uh the the problem is the Fed should have a policy of reducing prices
35:31
see if the fed’s goal is 2% inflation per year right and all of a sudden you
35:36
get 20 or 30% inflation over a few years don’t you want to have some deflation
35:42
can’t you have prices go down because it would still have an average remember pal
35:48
said that when inflation was running below 2% for a number of years we had to
35:53
average it up well why can’t we average down some of this really high inflation
35:59
why can’t prices fall for a few years so that we can produce an average of a 2%
36:05
gain right what’s wrong with that because it was all Bs from the beginning pal needs to create inflation that’s how
36:12
they keep this whole bubble economy going is by creating inflation and you’re not providing relief for
36:18
consumers if you’re telling them that the prices that they can’t afford are going to keep going up now maybe some
36:25
people if they can get a raise if they can if their wages can rise faster than
36:30
these increases they can catch up but they’re still not catching a break they’re still being permanently punished
36:37
by higher prices they’re paying these higher prices every single year it’s not
36:42
that okay prices went up you know 20% and you pay it for one year the
36:47
inflation that the FED deliberately created is plaguing Americans every year
36:54
for the rest of their lives there is no reprieve because the fed will never allow past price increases to be even
37:02
partially reversed right what what an asinine policy right no prices can never
37:07
go down no matter how much they go up in the past we can never let them go down they always have to keep going up the
37:14
only thing the FED wants to do is slow down the rate of increase until all of a
37:19
sudden it spikes up again I mean what if the FED actually succeeded in keeping
37:25
inflation at 2% a year for few years and then all of a sudden it shot up to 10 or 20% in one year then okay all right well
37:33
all right we’ll bring it down to 2% and and then they succeed and you you know you have several years of 2% but every
37:40
you know so often you have a 10 or 20% Spike you don’t have 2% inflation the whole thing is BS uh you know H and the
37:49
reporters in this room I guess are buying it you know based on the questions that they ask Wall Street buys
37:55
it they let these Central bankers get away with all of this uh all this nonsense but you know pal admitted you
38:01
know that the consumers you know don’t agree that the economy is as good as he
38:07
claims it’s not just the consumers it’s the voters that’s why Trump is President
38:12
because voters didn’t agree with the FED either right now um let’s see yeah so
38:19
another really ridiculous uh point that that that pal tried to make this was in response to uh
38:27
a question somebody asked them about the composition of jobs because a lot of
Government Jobs vs. Private Sector Jobs
38:35
jobs are government jobs or government related jobs in education or in health
38:41
care uh and so we’ve had all these public sector jobs and we’ve you know at
38:47
the expense of a private sector job so he asked pal are you worried about this composition that too many of the jobs
38:53
that we’ve created are these government jobs and pal basically said no you know
39:00
pal said that you know they the FED doesn’t distinguish what kind of job it is right
39:08
I mean jobs are jobs he says that we don’t care he said from our standpoint
39:13
employment is employment it doesn’t matter where the job is coming from and it doesn’t matter what the person is
39:19
doing right as far as the FED is concerned all jobs are created equal
39:25
which is a bunch of nonsense I mean does he really believe that is he really that ignorant about basic economics of course
39:33
all jobs are not equal a productive private sector job is worth a lot more
39:39
to the economy than a nonproductive government job I mean as far as pal is
39:45
concerned if the government hires one person to dig a ditch and another person
39:51
to fill the ditch back up those are two jobs as far as he’s concerned those are jobs he doesn’t
39:57
differentiate between those two jobs that produce absolutely nothing of value for anyone and two people getting actual
40:05
jobs right at a business making stuff right he he thinks that there there’s no difference between those jobs there is a
40:11
huge difference especially if you’re trying to limit inflation productive
40:19
employment uh puts downward pressure on prices right because if people are producing more Goods you have more Goods
40:26
in the economy you have greater Supply and that could keep prices down but if two people are working and producing
40:33
nothing and getting checks from the government and the government is running up bigger deficits to give people that
40:39
produce nothing money to spend to buy stuffs that they didn’t produce you are putting upward pressure on prices so if
40:47
the fed’s goal is to have price stability then they better consider the
40:53
nature of the jobs because nonproductive jobs add to the inflationary pressures
40:59
in the economy does pal not understand that is he that ignorant about inflation I mean that’s supposedly what he’s so
41:06
smart about he’s supposed to be an expert right the smartest guy in the country on inflation that’s why he’s the
41:13
chair of the Federal Reserve yet he doesn’t even understand that the impact that productivity has on prices or the
41:20
in Impact that deficits have now I have a feeling he’s got to know I mean this is such basic stuff but he’s afraid to
41:26
say yeah those government jobs you know were not good you know because he’s talking about how great the job market
41:32
is so he doesn’t want to say anything to diminish uh you know the fact that so
41:37
many of these so-called jobs were nonproductive jobs one of the reasons that we have so much debt uh is because
41:45
of government jobs and you know by the way I I I recently looked into this you know we got a 36 trillion national debt
US National Debt and Borrowing Challenges
41:52
right more 36 trillion it’s probably over 37 right now because the debt ceiling is still suspended so they’re
41:59
not officially adding the debt but it’s unofficially there so who the hell knows uh where the national debt is I’m sure
42:06
it’s way above 37 trillion but it’s still showing on the national debt clock at like 36 you know in
42:13
change but 26 trillion of the 36 trillion 26
42:20
trillion matures over the next four years think about that 26 trillion
42:27
now over those four years the government’s going to run at least another 10 trillion in debt two and a
42:33
half trillion a year minimum budget deficits so that means the US government over the next four years has to borrow $
42:40
36 trillion 36 trillion now some well they don’t have to borrow it because you know
42:47
they just roll over 26 trillion that’s borrowing it again because what happens
42:52
is somebody owns a treasury that matures which means they get their money back
42:58
the government owes the money the owner of that bill has to
43:04
decide you know what I don’t want my money back I’ll just loan it to you again just you know I I’ll sign up for
43:10
another year another two years another three whatever right but that’s selling you have to get the lender to make a
43:17
decision to loan you the money that they don’t want their money back and if that
43:23
lender doesn’t want to reloan the money he wants his money back the government
43:29
has to find a new lender to loan it the money right because the government can’t pay anybody back unless somebody else
43:36
loans them the money right it’s running a gigantic Ponzi scheme I don’t think
43:41
the government is going to be able to borrow $ 36 trillion in the next 10
43:47
years not at four and a half percent interest rates not a chance so one of two things has to happen interest rates
43:54
have to go way up so so that lenders will want to loan the money to the US
44:01
government but the problem is we can’t afford to pay much higher interest rates
44:06
than the ones we got right now so if rates aren’t going to go up and no one
44:12
buys our treasuries who’s going to buy them the FED right massive quantitative
44:17
easing there’s no other way to avoid avoid default because we can’t pay a
44:22
market rate of interest so we have to have massive inflation nobody asked pal
44:28
about that at the press conference are you worried about the ability of the government to roll over so much debt
44:35
over the next four years or Finance this debt and you know are you willing to buy
44:41
whatever the market won’t buy are you going to artificially cap interest rates to prevent them from skyrocketing I mean
44:48
none of these things come up but with the dollar falling the way it is with gold going up I mean who the hell is
44:55
going to want to loan money to the US government at 4% they should just take that money and buy gold that’s what
45:01
they’re going to do I mean you’re going to wa you’re going to make a lot more than 4% buying gold looking at the way
45:07
it’s going up right or they’re going to buy Bonds in in uh in Europe you know
45:13
interest rates in Europe are going up they’ll buy buns right if Japanese rates
45:18
keep going up they’ll buy jgbs right there there’s a lot of other Sovereign credit that the us is going to be
45:25
competing with look what’s happening to the stock Market it shows you the US Stock Market is going down now but where
45:31
is the money that’s going out of US Stocks going not into US bonds it’s going into European stocks it’s going
45:38
into Asian stocks it’s going into gold and those Trends are going to accelerate
45:43
and the only way to get foreigners into US dollar bonds is going to be to bribe
45:48
them with a much much higher rate of interest but of course we can’t do that and I don’t even know that they’d fall
45:54
for that because if rates went up that high we have a massive recession and the FED would go right back to QE and
46:00
printing a bunch of money and so there’s really no way out of this uh but massive inflation which is ridiculous again to
46:07
see you know pal uh you know just so complacent about inflation is going to come back down uh to 2% uh there’s no
46:15
chance uh that that’s going to happen you know somebody asked him about the doge divid is uh there was a question
46:23
like hey you know the savings that are coming out of Doge which of of course as I warned a lot of that is just you know
46:30
hype you know and the judges of course are already saying that the people that Doge fired have to get their jobs back
46:37
and a lot of the spending cuts don’t count and of course Congress voted to fund a lot of the you know the Fraud and
46:43
Abuse that Doge was supposedly cutting uh so government is getting bigger and
46:48
bigger and bigger but somebody asked him about um uh the Doge
46:54
dividend which is would and what the do Dividends are is to the extent that Doge
47:00
saves some money that we mail out the Savings in the form of a check like a rebate to the
47:07
taxpayers and um he didn’t comment because he was asked you know what do you think about
47:12
that you know oh I I won’t comment on on on on government policy on fiscal policy
47:18
which again is not only just a copout it is it is wrong that is why pal is there
47:25
and especially during his uh Humphrey Hawkins he makes the same BS excuse when
47:32
he actually goes to Congress and he sits before the house and the Senate and they
47:39
ask him hey we’re considering this policy what do you think what do you
47:44
think the impact of this policy will be on inflation right because he’s supposed to be the the genius on inflation right
47:51
the smartest man in the room so we’re all in a room and you’ve got these you know numskulls in Congress who you know
47:58
weren’t elected because they’re the smartest right apparently we appoint pal because he’s really really smart but we
48:04
vote for whoever gets the mo you know has the slickest ad campaign right so the people who are in Congress you know
48:12
they don’t even have to have an economics background right they don’t have to be you know know anything about basic economics you know they just get
48:19
elected right I mean AOC was a bartender right she goes to Congress what the hell
48:24
does AOC know about economics right she doesn’t know anything right but apparently she’s there and there’s a
48:30
there’s a bill that they’re considering and she wants to ask the chairman of the FED right the smartest of the smart
48:37
right who’s supposed to be you know this real all- knowing guy hey here’s a bill that I’m thinking about voting I want to
48:44
know what you’re what you think about it I’d like to know if you think if we pass this bill is it inflationary you know is
48:51
it a good idea right he’s there he’s at Congress right to share his wisdom and
48:57
his knowledge with with with with with all these people but instead of doing that he says nope I’m going to keep my
49:04
mouth shut right so even if I think you’re gonna do something really really
49:10
dumb I’m not gonna tell you I’m not gonna give you any warning I’m just gonna let you do it I mean what the hell
49:17
is that I mean what is the point of having a independent Federal Reserve if
Critique of Fed’s Independence and Policy
49:24
he can’t criticize bad polic policy and if he can’t give some advice to people
49:30
who know a lot less than he’s supposed to know if they’re doing something really dumb right so what he should have
49:36
said is you know those Doge dividend checks that’s a dumb idea what is the
49:42
point of saving all this money to reduce the deficit and then blowing the savings by rebating the taxpayers you you’ve
49:49
just you know defeated the whole purpose you were supposed to be reducing the deficits the deficits are too big and he
49:55
should also say that you do that it’s inflationary because you would have reduced the deficits but instead you
50:01
sent out money to people to go buy stuff and bid up prices and of course that’s not the only mistake I mean just about
50:07
everything Congress is does is a mistake and I I it’s a disservice to the country
50:15
for pal not to uh opine on on fiscal
50:20
policy because that does not violate the independence of the fed and again the
50:27
FED is supposed to be independent of Congress and the White House the White
50:32
House and Congress are not supposed to go be independent of the FED see it’s not a two-way street it is a one-way
50:39
Street the idea of an independent Central Bank is so the Central Bank does
50:44
not come under political pressure to do stuff that’s expedient because the
50:49
politicians always want you know to make things look good for the next election
50:56
even if what the FED has to do to make things look good for the next election
51:01
hurts the country in the long run so the idea is the central Banker is above
51:07
politics so the central Banker is not going to do something just to help
51:12
reelect politicians just to make the economy better in the short run he’s
51:17
supposed to or she is supposed to care about the long-term health of the country even if his policy imposes
51:25
short-term pain if it’s going to result in long-term gain then we need an
51:32
independent fed that’s willing to administer the bad tasting medicine it’s
51:37
the Congress and the White House that don’t want any part of that bad tasting medicine because they might not get
51:43
reelected so the idea is so that the FED is independent from political pressure
51:50
to to do things that are good politics but maybe bad economics but we don’t need indep it’s the other way there is
51:58
nothing wrong with the FED criticizing Congress or criticizing the president in
52:04
fact there’s everything right about that that’s what we want the FED to do we
52:09
want the FED to criticize Congress and the White House and the biggest irony of it all is I just heard in a recent
52:17
interview with um with drone pal he was asked which fed chairman prior fed
52:24
chairman do you admire the most and he said Paul vulker well Paul vulker did
52:31
exactly that he was a huge critic of government he criticized government
52:37
spending he said you got to cut spending you know you know he was he was pounding
52:43
the table for spending cuts smaller reducing the size of the deficit and he
52:48
kind of forced you know more responsibility by jacking rates up to 20% right so you know he was telling
52:55
them what they need to do and he was raising rates uh to force them to do what they needed to do uh there has been
53:02
no change in you know fed Independence there’s been no rules that have been
53:08
passed since vulker left office that say that fed chairman can’t speak critically
53:15
of Congress or the president they absolutely can and they they they must
53:21
that is their Duty uh to to to say the truth because the politicians won’t do
53:26
it the politicians just want to get reelected the the FED chairman is supposed to be above politics and it
53:33
it’s it’s particularly annoying when he talks about oh you know the S the sanctity of the the independence of the
53:39
FED we have to preserve that Independence the reason that we preserve it is so you could be critical of bad
53:47
policy if you’re going to shut up and bite your tongue and refuse to criticize
53:52
policy that you know is bad then what is the purpose of this so called Independence and again I think the fact
53:59
that they’re cutting rates and that they’re saying they’re going to cut rates even as inflation is going up is a
54:08
basic an admission that it’s all political the only reason they’re not hiking rides now is the politics because
54:16
it’s going to push the economy deeper into recession it’s going to be a big uh a problem for the government and all the
54:22
other people that are in debt but why does everybody have so much debt cost of the fed the FED kept interest rates so
54:29
low for so long that everybody loaded up on so much debt that now they can’t raise rates high enough to put the
54:35
inflation that they deliberately uh released back in the bottle so we’re
54:41
stuck we’re lying in the bed that the FED made anyway that’s it for today’s H
Investment Advice and Market Trends
54:47
podcast again don’t forget you know don’t make the mistake of thinking that 3,000 is the top of gold a lot of people
54:55
didn’t buy gold at 2,000 000 and now they still haven’t bought it and now it’s at 3,000 $3,000 is cheaper than
55:01
4,000 and if you don’t buy it at 3,000 you may end up buying it at 4,000 if you don’t buy 4,000 maybe 5,000 so you might
55:09
as well buy it now and if you want to turn back to clock buy silver again we got those specials at shift gold just go
55:17
there call up uh uh the Reps there or use the the shopping cart uh look at these gold and silver
55:23
mining stocks they finally took out the highs by by the way uh yesterday they took out the the uh April 2020 highs
55:31
just barely just barely uh but gold stocks are up like 26 27% on the year uh
55:38
you know with the NASDAQ down uh Russell 2000 down nastic was down about 9%
55:43
before today I think it was up you know uh so now it’s only down maybe about 8% uh but this is a huge Divergence but
55:50
these stocks are still ridiculously cheap in fact gold stocks went down today uh and uh you know although that
55:58
they were up by the end of the day but early this morning you know gold was down like six seven bucks and gold
56:04
stocks were down a percent which ridiculous I mean so gold went from 235 to 2000 I mean
56:11
335 to 328 and people dump gold stocks who cares I mean there’s Gold’s still
56:18
above 3,000 I mean gold stocks would be cheap if gold was at 2,000 but it’s not going to 2,000 you know as long as gold
56:25
is within a few hundred of 3,000 even below the earnings are
56:30
going to blow away estimates so the people should not even care this is noise gold stocks should be going up
56:37
every day regardless of what the price of gold does because it can’t go down enough to make these stocks less
56:43
valuable than they are right now they have to go up so much just to catch up to where they are people should
56:50
shouldn’t even pay attention to the Daily fluctuations in the price of gold because they’re actually irrelevant to
56:55
these stocks uh and so buying the gold stocks now uh is a great idea and again if you’re not a subscriber yet uh to uh
57:04
uh shift Sovereign make sure and get our our letter you know we’re starting to get more people signing up for the
57:09
premium uh products uh we have a couple of different uh uh products there that you can you can pay but at least start
57:16
in with a free one and all you got to do is go to shifts sovereign. comom and give us your email address and some
57:22
other information and you’ll start getting uh the free letters into your inboxes weekly there are several per
57:28
week that we put out also again if you like uh today’s podcast give me a thumbs up if you’re watching it on YouTube uh
57:35
like it uh leave me a comment or two uh you know I read them and every once in a while your comments make it into uh my
57:43
next podcast because people have questions or there’s things that they want me to elaborate on I read it and I
57:48
think hey that’s a good point and then I address it on my uh on my next podcast.