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Fed Hikes Rates To Feign Confidence – Ep. 235
16 maart 2017 · 33 min
* Today the Federal Reserve raised interest rates for the third time in 10 years Lees meer
* 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 l…
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Trump Lauds Job Statistics He Once Impugned – Ep. 234
11 maart 2017 · 39 min
* I guess you could say a good jobs report is all in the eye of the beholder Lees meer
* And when it comes to President Trump's eyes, he is now beholding an excellent jobs report
* Whereas a candidate, similar reports were described by Trump as phony, a hoax
* I have a lot more sympathy for Candidate Trump than I do for President Trump
* Now President Trump is trying to pretend that the jobs numbers that he used to be so critical of
* Are now reflecting what a great job he is doing as President
* When there's really no difference between the metrics of this job report and the ones we got under Obama
* With probably one exception
* And that is in the number we got is better than expected, though not as good as some had hoped, given the very strong ADP number we got earlier
* We got a surge in manufacturing jobs there was also a bump in construction jobs
* But I am very suspicious of the manufacturing jobs
* I know a lot of American manufacturers are really trying to curry favor with Donald Trump early in his Presidency
* And this could all be some Trump-related window dressing
* This is a long trend of hemorrhaging manufacturing jobs
* And I don't think this one blip necessarily means that trend has changed
* I wouldn't get too excited; it is a good thing to be creating goods-producing jobs, manufacturing jobs
* I'm not criticizing that
* But the question is, is it sustainable, is it real, or is it simply some smoke and mirrors
* Orchestrated selectively to make Trump look better early on
* So certain companies can get what they want from Trump when it comes to tax reform, or other issues where these companies may have a vested interest
* Let me go over the actual February Non-Farm Payroll numbers:
* The consensus was 200,000 jobs; 227,000 was the number created in January
* Most of that was prior to Trump becoming President, though subsequent to his election
* So we did 227,000 jobs in January and they actually revised that up to 238,000 jobs
* We did…
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Why TrumpCare Won’t Work, Either – Ep. 233
8 maart 2017 · 32 min
* It looks like the Republicans on Capitol Hill, with the blessing of Donald Trump, are trying to repeal one big healthcare program and replace it with another big government entitlement Lees meer
* They're calling it TrumpCare
* First they were calling it ObamaCare Lght, but now they're embracing the term, "TrumpCare"
* Whatever it is, it is not going to work
* It's just going to be another disaster wrapped up in a different package
* But before I get into explaining this, I want to talk a little bit about the GDP numbers and the Atlanta Fed
* In my last podcast, I mentioned that even though the Fed was getting closer to the point at which it was going to raise interest rates again
* Even though it was talking tough on raising rates, the GDP estimates were collapsing
* Well, they collapsed again today
* Now the same Atlanta Fed that was at 1.8% for Q1 GDP is now at 1.3% as of today
* When we began the month of February -
* February 1st - they were looking for 3.4% GDP for the first quarter
* If you go back and listen to my podcast, at the time I recorded it
* I said, they're kidding. They've got to be crazy - there's no way we're going to get 3.4%
* They're going to have to come down, and that's all they've done
* And now we're at 1.3% and falling
* Now maybe part of that is because we got the worst trade deficit today in 5 years
* Although, I think the numbers were highly anticipated so I don't know why that would have come as a surprise
* And we got Consumer Credit for December and it was a huge drop in the increase of credit card debt
* Meaning that consumers took on a lot less credit card debt than Wall Street expected
* Now that's a good thing
* I don't like it when Americans go deeper into debt to buy stuff
* You've got a bubble economy that's 7%, people buying stuff they can't afford
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Rate Hike Odds Surge As GDP Forecasts Collapse – Ep. 232
4 maart 2017 · 44 min
* According to Goldman Sachs, the odds of a Fed rate hike coming up at the March meeting, which is less than 2 weeks away is now 95% Lees meer
* It was 90% before Yellen spoke, that was looking at the Fed Fund futures, in fact the probability of a rate hike had been rising all week based on speeches of a number of Fed officials
* Everyone indicating that a rate hike was coming soon
* Nobody actually said how soon
* But they kept talking about why raising interest rates would be appropriate
* Why they didn't want to wait too long
* But of course they always reiterate that they want to proceed slowly
* And of course, that they are data dependent
* Meaning that in order to deliver these rate hikes that they claim would be appropriate
* They will be slowly applied over some abstract period of time and
* The economy has to evolve according to their expectations
* Which probably is not going to happen
* But nonetheless, when Janet Yellen spoke, this was the last opportunity that a Fed official had to kind of dial back those expectations
* If Yellen didn't like the fact that the markets were 90% sure of a March rate hike
* She had the opportunity to dial that back in her rhetoric
* And she did not
* She allowed the markets to continue to price in a rate hike in the March meeting
* And that is why, now, the odds went from 90% to 95%, which is virtually a lock
* Which means that barring any huge drop in the stock market between now and the March meeting
* That hike's probably going to come
* Because I think that the reason the Fed feels confident to raise rates is that the Dow is at 21,000!
* Just like it felt confident to raise interest rates the first time in December of 2015 because the markets were giving a false signal that rate hikes were OK
* And, of course after the rates were hiked, the market thought about it again, and it dumped
* And then we had the worst January in the history of Janaries
* And the Fed waited until the following December to raise …
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Trump To Make Government Greater Again – Ep. 231
1 maart 2017 · 38 min
* Last night, following tradition, President Trump delivered his first State of the Union Address Lees meer
* Although people are saying that it's not technically a true State of the Union Address
* We'll have to wait another year for that; that he has been President for too short a period
* So it's just an address before the Joint Session of Congress
* But whatever you call it, apparently the president's address was well received
* Even some of the President's critics are giving him credit, although not all of his critics are being so kind to the President
* On the other hand, I was not impressed at all by what President Trump said
* If his main goal was not to offend anybody
* To get a positive reaction from the political classes, the media and Wall Street
* Then I guess he gave a great address
* But if you were looking for the President to actually indicate that true change is coming
* That America might actually be great again
* That President Trump might actually be a different type of President than his predecessors
* You got no indication that that was going to be the case
* In fact, Trump gave me every indication that his administration would be more of the same
* Donald Trump wants to make America great again
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Trump Should Be a Statesman Not A Politician – Ep. 230
25 februari 2017 · 37 min
* Yesterday it looked like the Dow's winning streak may have come to an end Lees meer
* We were up 10 days in a row, which was the biggest winning streak since 1987
* The Dow was down 50-60 points for the entire day
* It opened down and it stayed down until the very last hour, it started to rally
* In the last 15 minutes it managed to eke out a positive close
* To extend the winning streak to 11 consecutive day
* And of course, another record high for the DJIA
* For those bitcoin fans out there, I know a lot of you have given me crap because the price of bitcoin has gone up and just this week it got back above 1200, getting close to the price of gold
* Gold was up again this week, it got as high as $1260
* Remember on my last podcast I said we were building up a lot of resistance around $1240
* And I thought we would take it out and then we would see a little bit of a jump
* That's exactly what we did
* We closed at $1259.60
* An observation, though: gold stocks were down in general on Friday; they were also down on Thursday
* In fact, they had a sell-off at the end of the day
* I think the last 2% rise in the price of gold - we've had about a 4% drop in gold stocks
* Gold stocks rose early on, and they did a very good job of forecasting this gold rally
* So, the question is, are the gold stocks now accurately forecasting a sell-off, a profit-taking or a correction?
* That's possible, and if that is the case, I think that is a great buying opportunity because I don't think the correction will be very long-lived, or that deep
* And I do expect much, much higher prices later in the year
* But it's also possible that this skepticism on the part of gold traders
* Obviously if gold traders have been selling gold stocks these last several days, they thought that the price of gold was topping out
* So far, they've been wrong, because gold prices continue to rise despite the fact that gold has been falling for over a week
* Maybe they're not wrong; maybe they …
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The Iceman Goeth, Robots Cometh – Ep. 229
23 februari 2017 · 35 min
* The Dow finished with yet another gain today Lees meer
* We closed at 20,775.60
* I've been told that this is the longest consecutive winning streak for the Dow Jones since 1987
* Of course, we all remember how that streak came to a crashing end in October with the 1987 stock market crash
* We'll see if the market has better luck this time around
* We got the FOMC minutes released earlier today
* I think they were interpreted as being hawkish; remember, this is all on a relative scale, they're all doves now
* It is simply degrees of dovishness, there are no actual hawks on the FOMC or on any central bank
* The question is, "Who is more dovish and how dovish can you be?"
* But there were some statements that caused the markets to think, "Hey, maybe a rate hike is coming."
* Because I think the members said it would be appropriate to raise rates sometime soon
* What is sometime soon?
* Is that March, or is that April, May or June?
* That's still soon, in the scheme of things
* If you look at how slowly the Fed has been moving
* Glacial speed, when it comes to raising rates
* Soon can certainly be a few months from now
* It doesn't necessarily mean that it is going to be March
* They could have said March - "It might be appropriate to raise rates in March"
* They didn't say March - they just said soon
* Nobody really knows what soon is
* They did comment that they thought the markets might interpret gradual rate increases as meaning only 1 or 2 rate hikes a year
* And they were troubled by that, because maybe by saying that, by gradual, they mean 3 a year
* Not 1 or 2
* I heard some people saying,
* "Maybe the Fed is not going to go slowly."
* Even if they do 3 - we're still talking very gradual rate hikes, especially if you put it in context of how low rates are right now and how high inflation is already
* I keep hearing these comments from Fed officials
* They're doing interviews and they're saying, "Yes, we're making progress; we're moving slow…
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Inflation Finally Rears Its Head – Ep. 228
17 februari 2017 · 30 min
* We had a very significant day in the currency and gold markets yesterday Lees meer
* We had some good follow through today that really buttresses the point that I want to make
* We got some economic news that was released yesterday that would have been considered bullish for the dollar and bearish for gold
* By most people, other than me, who trade currencies and who trade gold
* But the fact that gold did not sell off or the dollar did not rally was very significant
* The news was the CPI and Retail Sales
* First of all, Retail Sales came out stronger than expected, they were looking for a gain of .1% and we got a gain of .4%
* They actually revised the prior month's gain from +.6% to +.1%
* Now a lot of the gain in retail sales, though has to do with the fact that prices are higher
* Retail sales are not adjusted for inflation
* Prices are going up
* Retail sales may be going up, particularly things like gasoline
* It's not just the price of gas that's going up; everything is going up
* The CPI came out at the same time as Retail Sales and that is the bigger number
* We got a .6% rise in consumer prices
* That's versus the expected .3%
* Even the core - you take out food and energy - we were up .3% there versus an estimate of .2%
* Year over year CPI 2.5% that's the official number
* Obviously prices are going up a lot faster than that but according to the government they're going up at 2.5%
* Even if you take out food and energy and just look at the core, year over year the change is 2.3%
* Now remember the Fed is saying their target is 2%
* When Janet Yellen testified this week she said that she's confident this week that we're going to hit her objective
* Well, we've already surpassed her objective
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When Yellen Talks Why Do People Still Listen? – Ep. 227
15 februari 2017 · 33 min
* Today Janet Yellen was up on Capitol Hill, it was the first of her 2-day testimony Lees meer
* She was before the U.S. Senate today; tomorrow she will be testifying before the House of Representatives
* She talks about monetary policy; we have a bunch of Senators and Congressmen who engage in political grandstanding
* To me, a lot of the people asking Janet Yellen questions are really just trying to speak for sound bites for the media, trying to score brownie points for their constituents
* One senator had to make some comment about global warming - do you think global warming is one of the things the Fed considers when it sets monetary policy?
* Elizabeth Warren is trying to get Janet Yellen to criticize the Trump administration's efforts to pull back Dodd-Frank
* Because she believes it was the bank that caused the financial crisis
* She doesn't lay any of the blame at the foot of Congress or the Federal Reserve or the artificially low interest rates
* She thinks it was just Wall Street greed that blew up Wall Street and that the reason we haven't had another financial crisis was because of the great legislation Dodd-Frank
* And that somehow, if any bit of that is rolled back, it's going to unleash another wave of rampant Wall Street speculation and blow up the economy all over again
* Probably one of the dumbest comments from one of the senators is why we need more minorities on the Federal Reserve
* The senator commented to Janet Yellen that we needed more African Americans on the Fed because they represent a significant percentage of the population, of the work force, and they need some representation at the Fed
* I'm thinking, "What is this guy talking about?"
* Do you have to be black to conduct monetary policy on behalf of other blacks?
* Does that mean that only whites can conduct monetary policy for whites?
* What is black monetary policy?
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Trade Deficits Make America Poorer Not Richer – Ep.226
8 februari 2017 · 32 min
* I will be in Orlando tomorrow for the Money Show Lees meer
* I will be there Wednesday and Thursday returning Friday
* I have several speaking events, a couple of workshops
* If you're in the Orlando area, come by, it's free to register online
* You can pick up your badge on site
* We'll have a booth in the exhibit all, you can come by and meet some EuroPac employees
* We look forward to seeing clients and listeners
* Last week I spoke about President Trump and his weak dollar policy
* He thinks the dollar is too low, the euro is too low, the yen is too low, the Chinese yuan is too low
* Over the weekend Germany's finance minister came out and agreed with President Trump
* He agrees that the euro is too low
* We know that the Bundesbank does not approve of the easy money policies, the QE, the negative interest rates that Draghi and the ECB have force upon them
* I believe that rising German opposition as well as rising inflation both in Germany and throughout the European union will ultimately force the ECB to abandon their monetary policy
* Maybe even at the same time that the Federal Reserve is finally admitting that they're about to ease again
* We got the jobs numbers on Friday, I did a video blog about it
* To me, the numbers seem troubling for the Fed because even though we created better than 200,000 jobs the number of people who rejoined the workforce, who now want jobs jumped dramatically
* So you have a lot of people looking for jobs; the jobs aren't there
* So the unemployment rate is going to come up
* There will be wage pressures, and that is going to push the Fed in an easing direction
* In fact, we got some numbers that came out today on Consumer Credit
* Credit card debt grew by the smallest amount since 2013, which is a good thing
* We don't want consumers taking on credit, it's bad economically to borrow money to consume
* I really made that point in my book, "How an Economy Grows and Why it Crashes"
* If you haven't read it, pick u…
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Rising Unemployment Is Just The Excuse The Fed’s Been Waiting For
4 februari 2017 · 35 min
* Yesterday we got the first jobs report of the year and the way Wall Street and the media seem to be spinning it: Lees meer
* "It was a good report!"
* It was good news because the headline number beat expectations:
* We created 227,000 jobs in January vs the 175,000 that had been expected
* Of course it was an improvement on the 157,000 jobs which was a disappointing report in December
* But once again, if you look beneath the headline number, you'll find that there are a lot more problems to this report than the media is reporting
* First of all, as always, the lion's share of these jobs are lower-paying service sector jobs
* They're in retail trade, leisure and hospitality
* So we're not creating the types of jobs that will Make America Great Again
* In fact, if you look at the higher paying jobs - manufacturing, mining logging
* These jobs are barely adding workers, if not losing workers
* But the bigger story here has to do with what's happening to labor force participation, wages and unemployment
* The official U3 Unemployment rate went up from 4.7% to 4.8%
* The more revealing U6 number, which I think paints a more accurate picture of the true state of the labor market
* That went up from 9.2% to 9.4%
* Even Donald Trump, when he was campaigning, said that that number was far more accurate than Obama's official numbers
* Why did the unemployment rate go up so much, considering that we had 227,00 jobs created?
* The reason was that we had over 700,000 workers re-enter the labor force
* This goes against the trend that has dominated the entirety of the Obama administration
* Where we saw a mass exodus of workers leaving the labor force
* In fact, the labor force participation rate went up in January from 62.7% to 62.9%
* First of all, why did so many Americans decide to re-enter the labor force in January?
* Maybe there are 2 possible explanations and maybe they're both accurate:
* One might have to do with all the optimism surrounding the Donald…
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U. S. Dollar Has Worst January In 30 Years! – Ep. 225
2 februari 2017 · 29 min
* The month of January came to an end, and it didn't play out the way most people believed it would Lees meer
* Remember when the year began, everybody was optimistic on the U.S. dollar
* Remember I said that it was the most crowded trade
* It was just like gold the year before
* Everybody was convinced that now that Trump was President we were going to have all this fiscal stimulus
* The Fed was going to be tightening rates more aggressively
* The dollar had no place else to go but up;
* Everybody started the year long the dollar
* I just read that this was the worst January for the dollar in almost 30 years!
* For all the fanfare and the hype about Dow 20,000
* The Dow was only up about .5% in the month of January
* You would think that it was much higher than that
* And of course, measured in any other currency, the Dow was down quite a bit
* In fact, if you just look at our mutual funds
* To just give you an example of what's going on overseas
* First of all, our Gold Fund up 12% in the month of January
* But my International Value Fund was up 6.5% in the month of January
* That fund is the #1 fund on Morningstar so far in 2017
* It was also the #1 fund in its category of 400 or so for all of 2016
* And it's already the #1 fund for 2017
* But if you look at the returns that are being achieved internationally
* Investing outside the dollar
* Investing in gold stocks
* That's where all the money is being made
* It's not being made in the U.S. Stock Market
* In other currencies, it's actually, it's only up in dollars
* But it's down in terms of just about every other currency
* So you wouldn't know that from listening to the pundits
* Everybody is so excited about what's going on
* Again this is probably how it all started when George Bush came in
* People were still initially enthusiastic about what was going to happen
* But the honeymoon didn't last long
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America Will Lose Any Trade War – Ep. 224
28 januari 2017 · 36 min
* Earlier this morning we got the first look at Q4 GDP Lees meer
* As I suggested on the last podcast, in fact as I have been saying all along
* We did see a sharp decline from the Q3 3.5% GDP
* The consensus was for a 2.2% estimate for growth in Q4
* And we came in at 1.9%
* Quite a way below estimates and psychologically below the 2% number
* Part of the reason was a big drop in exports
* I talked about this last quarter
* One of the reasons we got that 3.5% jump in Q3 GDP
* Was the big surge in soybean exports, because of a drought overseas
* Which created a temporary increase for U.S. beans
* The rest of it was an inventory build, which I still think needs to be worked off
* In fact, I think we're going to work off a lot of it in the first quarter of this year
* That's the first estimate, and, who knows, they may downward revise it the next time they give us the numbers
* If you now take the first 3 quarters of GDP growth, and use the first estimate for Q4
* For the entire year of 2016 GDP grew at just 1.6%
* That is the lowest number since 2009, tied with 2011, at 1.6% also
* If you remember 2011 GDP growth was so weak that they launched QE3 for 2012
* So they ended QE2, the economy started rolling over
* And when they got that 1.6% GDP for the entire year
* The Fed very quickly came out and launched QE3 the following year to goose the GDP back up
* What are they doing now? Not only is the Fed not preparing to launch another round of QE
* They are tightening monetary policy
* They're saying, "We're going to raise interest rates 3 times, even though GDP is as low as it has been for the entire "recovery'
* Even though the economy is decelerating, we are going to sedate it with rate hikes
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Will Trump Change the Game Or The Players? – Ep. 222
21 januari 2017 · 31 min
* Short and not-so-sweet. Maybe that's how you would describe President Trump's inaugural speech Lees meer
* Which, I think was the briefest since Jimmy Carter
* But now, Donald J. Trump is the 45th President of these United States
* I did in general like his speech; I agree with much of what Donald Trump had to say
* Talking about how bad things are in the U.S. economy
* Yes, there were some people who benefited
* People in Washington certainly benefited, certainly Washington has been booming, right?
* Because they've been sucking all the wealth out of the rest of the country
* So the bureaucrats and certain segments of the population have benefited
* From central planning and central banking and the cheap money and the bubbles
* But Donald Trump hit the nail on the head
* When he talked about all the factories like tombstones littering the landscape
* How our wealth has been sucked out
* The Middle Class has been hollowed out and the country is hurting
* All this is true, and I like the fact that he says we're going to take back the government for the people
* Take it away from the elites, take it away from the bureaucrats and bring the power back to the people
* All that is great.
* The question is, What exactly does Donald Trump mean by that?
* Does he mean, get the government off the people's backs?
* Does he mean unshackle us from government
* Get rid of all the regulations, get rid of all the taxes and government spending
* Get rid of all the bubble blowing
* Let's have sound money and higher interest rates
* Let's have a real economy so that individual Americans can pull themselves up out of the ditch on their own?
* That we can roll up our sleeves and work our way out of this gigantic hole that the government placed us in
* And if it's going to be free enterprise, limited government and freedom?
* Of that's what he means by "Taking back the government for the people"
* Then, that's great
* But what if he doesn't mean that?
* What if he m…
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Trump Honeymoon Ends Before Marriage Begins – Ep. 221
18 januari 2017 · 29 min
* As I said on a prior podcast, this could be the first Presidential Honeymoon to end before the marriage officially begins Lees meer
* 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
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Government Can’t Do Anything Right – Ep. 220
14 januari 2017 · 36 min
* It's Friday the 13th and it is a Friday before a 3-day holiday weekend Lees meer
* Monday, of course is Martin Luther King Day
* The stock market will be closed in observance of the holiday
* Once again, I guess Friday the 13th was bad luck for those hoping for Dow 20,000
* In fact, the Dow finished the day Down, it was a slight decline for the Dow
* But not so for gold; gold was up again
* The Dollar was actually down again
* In fact, this year is already shaping up to be a mirror image of what everybody expected when the year began
* The Dow is up slightly, about a half a percent; the S&P is maybe up about 1-1/2 percent
* But look at the dollar; the dollar index is down 1%
* In terms of foreign currencies, the Dow is actually down
* The dollar index is mostly the euro
* If you take a look at some of the other currencies, the Canadian Dollar, for example, is up 2.5% so far in 2017
* The Australian dollar is up 4%
* These are some pretty big moves early in the year
* Remember, everybody was bullish on the dollar
* That was the trade, it was so crowded, everybody was in it
* Every strategist that I saw on financial news at the end of last year and early this year
* Was long the dollar, short the Aussie, short Canada, short the euro, short the yen
* Meanwhile, all these currencies are going up
* I think they're going a lot higher and I think the shorts are going to lose a lot of money
* Take a look at gold stocks
* Gold stocks are up about 10% so far in 2017 only 2 weeks into the year
* This is already a much stronger start for gold stocks than we had last year
* And of course, last year was a great year for gold stocks despite the fact that they sold off toward the end of the year
* Based on all the hype surrounding Donald Trump and all the great economic growth that we are going to get
* And how the Fed is going to be raising rates even faster and the dollar was going to be even stronger
* I knew all that was a bunch of nonsense
* People still b…
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Will Trump Follow Obama In His Failure To Deliver? – Ep. 219
11 januari 2017 · 37 min
* The NFIB Index of Small Business Optimism in the month of December, so this is post the election of Donald Trump Lees meer
* Shot up from 98.4 in November to 105.8
* This is the highest level in 12 years - since before Obama was President
* And it's the biggest monthly jump in 37 years
* You have to go all the way back to 1980, the election of Ronald Regan to find a moment in time where you saw this big an increase in optimism, in confidence among small business owners
* Remember, it was Michelle Obama not too long ago
* Saying, "This is horrible, there's no hope anymore in America!"
* Well, small business owners haven't been this hopeful since I was in high school
* Why are they so optimistic?
* Well, first of all, it's more a testimony to how horrible things have been over the last 8 years
* People are just hopeful that now there's going to be some relief, that Barack Obama is gone
* Because the lat 8 years have been very, very difficult for small businesses
* First of all, if you're running a small business, you can't take advantage of zero percent interest rates
* You can't just show up at the discount window and borrow from the Fed
* Also, you can't sell bonds into the bond market, like big corporations can
* If you're a small business, and you need credit, you've got to go to a bank and get a loan
* But the banks don't have any money - there's no savings - nobody's putting money into the bank
* And no banker wants to carry a risky loan on his books
* When he can just own U.S. Treasuries
* The regulators are all over you, if you actually make a loan to a business
* So businesses haven't gotten capital
* Meanwhile the cost of doing business has gone up because there's been all sorts of regulations that have been added to the burden of business
* Over the lat 8 years
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Obama Hands Trump Huge Bubble – Ep. 218
7 januari 2017 · 38 min
* Yesterday we got the final jobs report of the Obama era, Lees meer
* We got the December Non-Farm Payroll.
* Now technically, when we get the January number, the first Friday of February,
* Half of that would have been during the Obama presidency,
* But because we won't get the official news until the Trump presidency,
* I'm sure that Donald Trump is going to take the credit, or maybe have to deal with the blame,
* Depending on how that number ends up being received, whether it beats the consensus or misses,
* But this is really the final jobs number for Obama.
* The number came out O.K.
* It missed the consensus estimate, which was 175,000 jobs,
* And the actual number, at least until they revise it next month was 156,000
* So that was below what was expected.
* Now they did revise upward the prior month from 178,000 to 204,000
* And the month before that was revised down a bit
* So I guess, when you take all the revisions, it was probably about a push on the number.
* This report should have been seen as not so good,
* Most of what I was reading was about how strong, not only this report was,
* But the entire job-creation legacy of Barack Obama
* This is what you get from the mainstream media
* That peddles all the fake news
* About what a great economy President Obama is handing off to Donald Trump;
* That we have really low unemployment -
* The official unemployment rate kicked up from 4.6, but still 4.7,
* So, low unemployment, all these jobs being created,
* Forgetting about the fact that once again, you're talking about low-paying, part-time jobs that have been created
* In fact, the number of Americans not in the work force grows again;
* It wasn't a big jump, but it was still a jump
* To a new all-time record high.
* So labor force participation has been eviscerated during the Obama years.
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Bitcoin Again Approaches Parity with Gold – Ep. 217
5 januari 2017 · 25 min
* This is another big week for economic data; it is a holiday-shortened week Lees meer
* 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 …
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Hollywood Minimum Wage Hypocrisy – Ep. 216
31 december 2016 · 41 min
* The Dow 20,000 party is going to have to wait until 2017 Lees meer
* Although I wouldn't necessarily buy a ticket for January
* The selloff that started this week may resume in the first week of the new year
* The dow rang out the old year with a 57-point loss to cap a losing week
* Probably the first down week since the Trump victory
* The Dow now at 19,762 - the close on the Dow for the year
* Most people think it's just a matter of time; we can easily rally early on in the new year
* But again, there should be a lot more selling pressure in the new year
* I mentioned this on the last podcast
* A lot of people who had gains didn't want to take them in December because hopefully the taxes will be lower next year, so why pay higher taxes sooner, when you can pay lower taxes later?
* We'll see what happens in early January
* If we ring in the new year like we rang out the old, it could be a long time before we get to celebrate Dow 20,000
* I'm sure eventually we will, even if we don't do it right away
* Everything goes up when you're measuring in terms of U.S. dollars, so it is inevitable that the Dow will get to 20,000
* The question is, what will Dow 20,000 be worth in purchasing power - that's a whole different story
* It's easy to go up in nominal terms, it's a whole different thing to go up in real terms
* The Dow actually had a pretty good gain this year; it was up about 13-13 1/2 percent
* Almost all those gains happening post-Trump
* Although the problem for Donald Trump, is that he is claiming credit for this rally
* What he should be doing is saying
* "This is a bubble, I said it was a bubble when I was a candidate, it's still a bubble, now it's even bigger"
* But he owns this bubble now; he has embraced it
* Donald Trump has come out and said, "The market is going up because of me."
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Ep. 215: Irrational Exuberance Trumps All
23 december 2016 · 31 min
* The Dow 20,000 party is going to have to wait - at least for another day Lees meer
* The Dow was down a little bit today - 23 to 19,918
* The broader market was a bit weaker than the Dow
* The markets continue to shrug off very weak economic news that came out throughout the day
* We got bombarded with all sorts of negative pieces of news that ordinarily, maybe before the election of Donald Trump, would have weighed down the market
* Certainly it would have weighed on the currency markets
* The dollar would have been very weak and gold would have had a big rally
* Instead, gold was down a little bit, and the dollar rose a little bit despite very weak economic data that I will get to
* I want to start off by focusing on the stock market and the optimism which is really quite ridiculous and unfounded
* Part of the reason for the rally, though, is a lack of selling
* We have a lot of people mindlessly buying the markets, but you don't have a lot of selling
* One of the reasons is that people would rather sell in January than in December
* People are enthusiastic about Trump's presidency because he will cut taxes
* If you have a gain in the stock market, why realize that gain now in the waning trading days of 2016
* If you sell now, not only do you have to get your check into the IRS by April of next year
* But also, you've got to pay the current tax rate
* If you wait until the firs week of January, you don't have to pay taxes until a year from this coming April
* You have all that time to use the money and the tax rates may be a lot lower
* So why sell now? A lot of people are being given that advice; don't sell now - wait until January
* Who knows - this market could ring in the new year with a major sell-off
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Fed Fakes Confidence With Another Dec. Quarter Point Rate Hike
16 december 2016 · 37 min
* On Wednesday, the Federal Reserve did exactly what they did last year Lees meer
* They waited until the last possible meeting to nudge the Federal Funds rate by 1/4 of 1%
* So now, after 2 years of tightening, the lower bound of the Fed's range has gone from zero to 1/2 of 1%
* Now Janet Yellen said the Fed made this decision to lift rates because of its confidence in the U.S economy
* That is complete nonsense
* If the Fed were confident in the U.S economy, rates would be much higher than a half of a percent
* The Fed would have raised rates a long time ago and by much more than this
* In fact, they could have lifted rates by more than 25 basis points on Wednesday
* Yet, they had so little confidence in the economy that this is what they did
* In fact, I believe that the only reason the Fed raised rates this December
* Is the same reason they did so last December: they did it despite having no confidence in the economy
* But they didn't want to send a message that they were that worried, so they raised interest rates by the smallest possible amount
* And they also did it to try to preserve their credibility when it comes to talking about future interest rates
* Think about one half of one percent
* When Alan Greenspan slashed interest rates in the aftermath of the September 11 disaster and the bursting of the dot com bubble
* When the stock market was plunging and the economy was in recession, he was so worried about the economy that he lowered rates down to 1%
* Now Yellen is so confident in the economy, the highest she's willing to raise them is 1/2 of 1%?
* This is half of where they were lowered in panic by Greenspan?
* So the fact that rates are only 1/2%, what does that tell you about the true confidence that Janet Yellen and the rest of the Federal Reserve have in the U.S. Economy?
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A Candidate’s Bubble Is a President-Elect’s Bull Market – Ep. 214
13 december 2016 · 34 min
* It's been a while since my last podcast and I've gotten quite a few emails from people wondering what happened to me Lees meer
* 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?
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QE4 Is Going To Be Huge – Ep. 213
1 december 2016 · 31 min
* The Trump fantasy rally continued today, of course the big irony here is that all of the stock traders who were so worried about a Donald Trump presidency Lees meer
* Now, he's Ronald Regan re-incarnated
* They're partying like it's 1983 - when Regan first stepped in the market had a very difficult couple of years
* We went through a recession before we got that Regan Rally - we're going to skip all that
* It's amazing that people believe you can have reckless monetary policy for 8 years
* You can have zero percent interest rates, you can have all this quantitative easing
* You can have this gigantic bubble, and we can magically go from a bubble economy to a real economy
* Without any pain inbetween
* If that really were the case, the Fed would have tried to raise interest rates a long time ago
* The fact that they've been stuck at zero is proof that they really can't go up
* Now everybody seems to dismiss all these concerns simply because Donald Trump will be President
* Even though this is the exact same guy who scared the bejesus out of everybody right up until the moment that he was elected, and now, of course everything is going to be great
* It's not going to be great - this fantasy is going to come crashing into a wall of reality
* Meanwhile, the stock market rally did fizzle out today, the market was up most of the day
* The Dow managed to eke out about a 2 point gain
* Although the NASDAQ was down about 50 points
* Most of the action was in other markets
* Oil prices up about 10% on the day
* Crude up just under $4/barrel - just below $49/barrel at close
* The catalyst for the surge in oil prices was an agreement by OPEC to restrict output
* Finally OPEC getting their act together - the Saudis, the Russians working together to reduce production and increase the price of oil
* Of course, with the dollar continuing to strengthen, that means oil prices are rising even faster for everyone outside the U.S.
* Bond market getting clobbered again tod…
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Trumped Up Irrational Exuberance Continues – Ep. 212
24 november 2016 · 41 min
* The Dow Jones is in record territory, closing above 19,000; they're already starting to talk Dow 20,000 now Lees meer
* 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
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Yellen’s Remarks Cause Markets To Anticipate The Impossible – Ep. 211
18 november 2016 · 23 min
* The stock market continues to ride the Trump wave to new highs, in fact the Russell 2000 hit an all-time record high today Lees meer
* The enthusiasm for stocks not being dampened by the carnage in the bond market
* We now have the yield on the 10-year treasury up at around almost 2.3
* And the yield on the 30-year now, just below 3% - 2.99
* Yields are still low, but nowhere near as low as they were
* And of course, nowhere near as low as they're headed
* It's not just the fact that bond yields are rising, but the rapidity with which they're rising
* And the technical damage that is being done
* This again, as I said in an earlier podcast this could be the beginning of an explosive move up in interest rates
* And right now, nobody seems to care, least of all Janet Yellen
* She testified today - her supposedly hawkish testimony is one of the reasons that gold sold off today and the dollar rallied
* Before she spoke, gold was positive on the day
* She did say it would likely be appropriate to raise rates "soon"
* And everybody interprets "soon" as, the next chance they get, which is less than a month from now
* Although, if the Fed is really determined to raise interest rates in December
* Why not just say it?
* Why say it may be appropriate to raise them soon?
* Just say, "It's appropriate to raise them in December"
* They still want to leave themselves plenty of wiggle room
* Even though the markets are saying it's a 95% probability
* The Fed is still being very coy and data dependent
* I think what's more important for the markets is the fact that Janet Yellen acknowledged
* That if we get a fiscal stimulus - which she doesn't even think is needed -
* She pointed out that we have a growing economy, everything is good, the unemployment rate is very low
* And that stimulus now in the form of tax cuts or extra government spending could overheat the economy
* And that she will have to adjust her monetary policy based on what Congress and President Tr…
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Fiscal Stimulus Impossible Without Monetary Stimulus To Finance It – Ep. 210
12 november 2016 · 45 min
* What a difference a day makes Lees meer
* 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 …
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Making America Great Again Will Be Much Harder Than Voters Think – SchiffReport
10 november 2016 · 29 min
* It is Wednesday, November 9, 2016, one day following one of the biggest political upsets in U.S. political history Lees meer
* 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
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Will A Trump Win Rain On Stock Market’s Clinton Victory Parade? – Ep. 209
8 november 2016 · 30 min
* It's not going to be a new record as far as the consecutive days of declines for the U.S stock market Lees meer
* The 9-day losing streak ended today in a huge pre-relief Clinton victory rally
* The markets had been factoring in a higher probability of a Donald Trump victory ever since the FBI announced that they were re-opening the email investigation
* Thanks to a treasure trove of 650,000 emails on Anthony Wiener's (a.k.a. Carlos Danger) laptop computer
* Apparently they have now gone through all 650,000 emails in under a week and yesterday, on a Sunday afternoon Comey made the announcement that the FBI had completed their investigation of these additional emails and that nothing had changed with respect to the FBI's original recommendation
* Which was, if you forget, that despite recklessness and carelessness on the part of Hillary Clinton to have set up this private server, and to have used it to send out classified emails
* That they found no evidence of deliberate wrongdoing, that Sec. Clinton just made an "honest mistake".
* That she had no idea that it was a bad idea to send classified emails out of a private server
* I remember at the time, I said, if this is true, she's too incompetent to be President, if she's really that naive
* If she really thinks that she doesn't have to handle classified data with any kind of care
* Then she's not competent to be President
* Either she is incompetent or she's dishonest
* Of course there is plenty of evidence that Hillary Clinton lied about the fact that she did, in fact send classified information out of her private server
* She claimed that she did not and then the FBI found them
* Also, she engaged in a cover up, obstruction of justice
* As soon as she knew that she was under investigation, she destroyed evidence that she was ordered to preserve
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Stocks Slide As Jobs Report Keeps Rate Hike Possibility Alive – Ep. 208
5 november 2016 · 27 min
* Today U.S. stocks extended their losing streak to 9 consecutive days Lees meer
* We haven't had a losing streak this long since 1980 - that was 36 years ago
* 8 consecutive down days last took place in the financial crisis year of 2008, so we had tied that yesterday
* Now we one-bettered it and we're back to the longest streak since 1980
* The record for consecutive down days is 12
* The last time that happened was in 1966
* And if you don't know what the significance was of 1966 - that was the peak of the bull market
* And the bear market that ensued went on for 16 years in nominal terms and much longer than that in real terms
* The Dow hit 1,000 in 1966 and it didn't get above 1,000 until 1982!
* Of course, adjusted for inflation, 1,000 in 1982 wasn't even close to 1,000 in 1966
* Certainly in terms of gold; gold was $35/oz. in 1966 and in 1982 it was probably about $500
* In terms of gold, the Dow was slaughtered during those 16 years
* Even adjusted for the CPI, I don't think we got back to 1,000 until toward the end of the 1990's stock market bubble
* We'll see - we may well be down on Monday, so that would make it 10, and if we're down on Tuesday, 11
* And if Trump wins, then we'll probably be down on Wednesday, so we'll see if we can set this rather dubious record
* Gold, on the other hand was going in the opposite direction
* It managed to finish the week with a small gain, but nonetheless closing above $1300
* Closing out the week at $1304, that's the highest weekly close in some time
* Silver also eked out a small gain of 8¢, at 18.41
* The dollar continued its losing streak of late, with the dollar index closing below .97 with a .96 handle - 96.89
* As stocks are weakening, so is the dollar, and gold is strengthening
* What does this portend for the presidential election?
* Typically, when the incumbent party wins, which in this case would be Hillary, the stock market rises prior to the election
* Normally, when the stock market is falling…
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Is Nov. Trump Victory More Likely Than Dec Rate Hike? – Ep. 207
3 november 2016 · 30 min
* Today the possibility of a Fed rate hike in December rose about 10 points Lees meer
* We're now at about an 80% probability, at least the way the markets assess the odds
* That the Fed will raise rates in December after failing to raise rates today
* If you remember, after they didn't raise rates last time there was some probability of a November rate hike
* But by this morning, the probability of November had pretty much been reduced to about zero
* With everybody believing that the Fed would raise rates in December
* And now, as a result of their failure to hike in November
* The probability apparently is now higher based on the language of their non-hike
* This, despite the fact that there were only 2 dissenters when the Fed didn't raise interest rates the last time they met
* Three members voted to hike and six voted not to hike
* This time it was 7 to 2 in favor of not hiking
* So what happened between meetings that caused the one guy who wanted to hike rates last time to decide he doesn't want to hike rates now?
* Is it possible that some data came out over the course of those weeks that caused him to re-assess his feelings about the strength of the economy
* And if so, why is that member going to flip back to "hike" in December, after just flipping to "no hike"
* Is it pure politics?
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Was Q3 GDP Rigged Just In Time For The Election? Ep. 206
30 oktober 2016 · 36 min
* Yesterday we finally got the release of the initial estimate for Q4 GDP Lees meer
* The Atlanta Fed had originally come out with an estimate of about 3.8 and had steadily reduced their estimate
* They got down as low as 1.9 before ratcheting it up a couple of times and their estimate was at 2.1 when we got the official release
* And the number came out at 2.9; not only much higher than Atlanta Fed's estimate, but much higher than the consensus forecast at 2.5
* I am very suspicious of this number
* This is the strongest number in over 2 years and it comes out less than 2 weeks before the election
* Of course one of Donald Trump's issues has been the weak GDP growth, which has averaged just 1% for the last 3 quarters
* All of a sudden it's 2/9?
* Does anybody really believe that suddenly the U.S. economy in the fall of 2016 was 3 times as strong as the last 3 quarters?
* I dont' think so. I don't believe that for a second
* I do believe that after the election when we get the revisions we will get a downward revision to this number
* But, even if this number were real; even if it holds up
* If you average the last 4 quarters to get the entire year, looking back, you're just below 1.5% for the entire year, which is still extremely weak growth
* Once you look beneath the surface of this 2.9, it's very easy to see how they rigged it, to use Donald Trump's expression
* Not that it's some kind of a conspiracy
* Look at these numbers - there was a 10% spike in exports - this the biggest gain in exports in 3 years
* It's not in manufactured products that we're exporting, where you've got some high-paying jobs
* It was primarily let by a one-time surge in soybean exports
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Markets Ignore Fed’s Bullard One And Done Admission – Ep. 205
25 oktober 2016 · 47 min
* The odds of a December rate hike continue to ratchet up above 70% Lees meer
* We had a parade of Fed officials, most recently again today coming out and talking about why a December rate hike is a good idea, probable, possible, appropriate
* You name the adjective, some Federal Reserve president, governor is discussing it
* The markets are ratcheting up their expecations
* The dollar index continues to move higher, we hit about a 9-month high today
* We got above 99; but we didn't close there, in fact the dollar index managed to close down a notch
* Interestingly enough, gold had a pretty strong day today, we had about I think we're at $12.73
* Even to the extent the FOREX traders are worried about a December rate hike, the gold traders don't seem to care about how a rate hike might impact the price of gold
* This says either the gold traders don't believe that a December rate hike is coming, or they've correctly concluded that even if the Fed does raise interest rates in December, it's no big deal
* It's too little too late to be a negative for the gold market
* The Fed is going to deliver far less than it promised when it comes to rate hikes
* In fact the most interesting comment from a Fed official came last week from St. Louis Fed President James Bullard
* He said that the Federal Reserve only needs to nudge interest rates up by 25 basis points
* Right now, the official rate of Fed funds is between .25 and .50
* It used to be between 0 and 25
* I think where we actually are right now is 38 basis points
* So if we moved up 25, at least these are the numbers Bullard is throwing out, we'd move up to 63 basis points for the Fed Funds Rate
* Which is just barely above a half point
* He says that's all we need to do is nudge it up to 63 basis points, and that's it - we're done
* He said, "We need to do it in December, but then that's it, interest rates are going to stay really low for years."
* He's talking 2 or 3 years or maybe even more of ultra low int…
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Pace Of Consumer Price Increases Set To Accelerate – Ep. 204
19 oktober 2016 · 47 min
* The official probability of a December rate hike continues to diminish over the last several days Lees meer
* The markets had the rate hike at about a 70% probability; now we're down to about 60%
* Personally, I think the odds are closer to zero, and over time, as we get closer and closer to that December meeting, the odds will steadily move down
* Just like the Atlanta Fed keeps moving down its estimates for Q3 GDP; most recently down to 1.9%
* I expect the Atlanta Fed to move lower again this week on more weak economic data
* As the potential for a rate hike diminishes, gold's appeal improving, gold prices now back above $1260 today
* We've had a couple of back to back strong days in the gold sector
* Maybe the catalyst for the recent correction in the price of gold was the renewed expectation of a November and now December rate hike
* As those expectations are realistically dialed back, you'll see more money moving into the metals
* The dollar, though, continues to trade firm
* It's not moving higher, but it's not really surrendering much of its gains
* Maybe some of this has to do with weakness particularly in the pound
* Why is the pound so weak?
* The Bank of England was very forthright, they wasted no time in warning voters not to vote for Brexit as it would be a disaster for the British economy
* Well, sure enough, the people voted for Brexit, and so now, it is a self-fulfilling prophecy
* The central bankers in Britain had convinced themselves that the economy would require stimulus, and therefore announced an increase in their QE program
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Media Trumps Up Obama To Help Clinton – Ep. 203
15 oktober 2016 · 40 min
* It's another week where the dollar remained relatively firmly bid; the dollar index closing just above 98 Lees meer
* Gold prices seem to have a lid on them; they closed down today about $7
* Gold's not really going down, but it's not really going up, either
* What are going up are bond yields, long-term bond yields are rising today to about a 4-month high
* 30-year Treasury yield to about 2.5%
* The 10-year just below 1.8
* This despite the fact that the economic news, during the week, on balance, was generally weaker than expected
* Obviously the numbers are worse because the Atlanta Fed reduced again their Q3 GDP estimate down to 1.9%
* This is the first time it has been below 2
* It is not half of what it was just over a month ago, when they were at 3.8
* I still think their estimate is too high
* I do think that Q3 is going to be a stronger quarter than Q4, which will probably be another 1% or below
* The last 3 quarters averaged 1%
* This is the weakest 3 consecutive quarters of this entire so-called recovery
* Yet now the Fed is supposedly raising rates?
* In fact, we got the JOLTS report on Wednesday, supposedly Janet Yellen's favorite indicator of the labor market
* Not only did we have a slight downward revision to the prior month, but we had a 7.3% collapse in August
* That was the biggest drop since December of last year
* Everything about that report was weak
* If this is Janet Yellen's favorite number, and if the Fed didn't raise rates in September because they wanted more data on the job market, and now they just got the JOLTS number, which was much worse than expected,
* Why is every Fed governor talking about rate hikes in interviews?
* Another one was out on CNBC, talking about how rate hikes would be appropriate
* Yes! It would have been appropriate to raise them a long time ago
* It would have been appropriate in June, in September, in March, in January, last year, 2 years ago, 3 years ago
* It would have been appropriate a long …
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Putting The Trump Controversy Into Perspective – Ep.202
10 oktober 2016 · 49 min
* The most highly anticipated presidential debate in history is over and to me, the anticipation was more like a highly-promoted professional boxing match Lees meer
* Right away, as soon as the debate was over, CNN comes out with its poll, showing Clinton badly beating Donald Trump
* And I thought that, if this were like a prize fight, the ref's would have stopped the fight in the first 20 minutes
* That's how badly Donald Trump beat Hillary Clinton in this debate
* And then you see this poll coming out saying supposedly that Clinton clobbered Trump
* What debate were these guys watching?
* Like you see a fight and the decision goes totally against what you saw, and you think, "Aha, the fix is in".
* I think for CNN, the fix was in
* They badly wanted Hillary Clinton to win this debate, and so I think Hillary was going to win this debate according to their poll, regardless
* I think anybody who watched the debate objectively is going to conclude that Trump won
* I was pretty critical of Donald Trump's performance in the first debate
* And while, I didn't think this one was perfect, I think were a couple of things I would have liked for him to have said
* But I am armchair quarterbacking this, from my living room; he's there, live
* But I think he did as good a job as possible and I think he advance his standing
* But before I even get into the debate, I want to talk about the elephant in the room, which was the 2005 Access Hollywood tape that everybody is talking about
* In fact, it really let Hillary Clinton off the hook from issues that should have been addressed on her end
* Regarding leaks from her Wall Street speeches, that Bernie Sanders kept demanding that she release, and, if she had, Bernie Sanders would be the Democratic nominee at this time, and we would have a very different debate
* I want to address this topic in a way that no one else is addressing it
* I've mentioned my position on Facebook and I have noticed that I have lost some fans as a …
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September Jobs Report Even Weaker Than It Appears – Ep. 201
8 oktober 2016 · 32 min
* This morning the government released the most important, the most highly-anticipated economic release of the month Lees meer
* At least that's what everybody who trades in just about any market believes
* And that is the Non-Farm Payroll Report; the official scorecard on job creation and unemployment
* This time it was for the month of September, the final month of Q3
* We're still waiting for the GDP estimate for Q3
* By the way the Atlanta Fed, which continues to do the interest rate limbo, lowered the bar again today on the Q3 GDP, which was 3.8% a month ago, when Janet Yellen talked about how the case for a rate hike had been strengthening
* As of today, the Atlanta Fed is down to 2.1%
* Politically, they are still trying to keep the estimate above 2%, although by the data, I expect it to be south of 2%
* The important news today was the jobs number;
* People were looking for a strong report, I think the consensus was around 170,000, but most people were talking 190 - 200,000, some people were looking for a number north of 200,000
* We got 156,000 jobs, which was below expectations, but a little better than the prior month
* Originally reported at 151,000 but was revised up to 167,000
* So now, based on the revised number, it's actually worse than the prior month
* Even though they revised the prior month up, they revised the month prior to that down, so the net effect of the revision was a decline
* The unemployment rate, expected to hold steady at 4.9 actually ticked back up to 5%
* Average hourly earnings, expected to rise by .3, following a small increase of .1 the prior month came in at .2
* Not quite the gain everybody thought
* This is not a good report, and anybody who thought the Fed was going to hike rates in November, they clearly don't think it anymore
* In fact, even WSJ reporter Jon Hilsenrath said that today's jobs report took a November interest rate hike off the table
* I would suggest that a November rate hike was never on the table…
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Trumped Up Rate Hikes – Ep. 200
5 oktober 2016 · 35 min
* This is my 200th podcast and I looked back to the date of the first one and it was just over 2 years ago, September 2014 Lees meer
* I began this podcast shortly after I ended the Peter Schiff Radio Show
* I hope everybody is enjoying these podcasts and if you like what you're listening to, help turn on other people to the same information
* Statements early this morning by Richmond Fed President Jeffrey Lacker certainly sent tremors through the precious metals markets
* Gold tumbled over $40/oz; closing $1268 and change
* This is the first time we've actually been below $1300 in the last few months
* Silver down just over a buck; 17.78
* It wasn't that long ago that we'd gotten above $20
* It was even worse for gold and silver mining stocks; this was the worse day of the year for those stocks
* The markets closed right near the lows of the day
* There was a big sell-off right after those statements came out and there was no reprieve
* The dollar was stronger on the day, although not against the euro
* There were some rumors that the European Central Bank may begin to taper its QE program
* That held the euro steady against the dollar
* The weak currencies were the yen and the pound which was "pounded" again to about a new 35-year low
* On concerns that we might have a hard Brexit rather than a soft Brexit
* This is more a matter of the yen and pound weakness today than dollar strength
* The bond market was weaker on the day, closing near the lows
* The Dow, though, only off about 85 points
* If the markets really believe that a rate hike is coming, which is clearly what the metals traders seem to believe
* I think the stock market should be even weaker
* Although probably what's helping the stock market is the strength in the financials
* Because as I have said before, people actually believe that higher interest rates are good for the financials
* So the fear of higher rates actually lifted the financials, which helped support the market
* But peo…
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Fed Bigger Threat To Depositors Than Wells Fargo – Ep. 199
30 september 2016 · 32 min
* It looks like the U.S. stock market is going to close out the 3rd quarter on a positive note Lees meer
* The catalyst for the rally today is the big rally in Deutsche Bank; shares are up better than 14%
* They were in danger of going below $10 yesterday
* There were nervous about maintaining accounts with Deutsche Bank
* People were re-living memories of Lehman Brothers all over again
* I think the Obama Administration was beginning to get concerned
* The Dow was off about 200 points on the close yesterday
* When worries about contagion spilling over from European banks into U.S. Banks
* It wasn't good with these Wells Fargo Congressional hearings
* I am going to chime in on that later in today's podcast
* I think the Obama administration was getting nervous about precipitating another financial crisis before the election
* I think they gave a nudge to the Department of Justice which had been talking about a $14 billion fine on Deutsche Bank
* The rumors this morning are that they are nearing a settlement with Deutsche Bank for a much lower number; maybe around $5.5 billion
* Which is below the amount that Deutsche Bank had set aside to settle this
* So from $14 billion down to about $5.5 billion - this is causing a big rally in the shares of Deutsche Bank and in fact that is returning confidence to the entire sector
* I don't think that this means that the European banks or the American banks, for that matter, are out of the woods
* I still think there are a lot of problems in the financials, because as I said in a previous podcast,"They're damned if the Fed raises and they're damned if they don't"
* Negative rates are bad for the banks but rate hikes are also bad for the banks, based on their balance sheets
* I think there are still a lot of problems percolating beneath the surface for the financials
* As far as the Obama Administration is concerned, the key is to get everything through the next election without a crisis
* So I think that having the D…
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The Debate We Should Have Seen – Ep. 198
27 september 2016 · 35 min
* I'm going to use today's podcast to offer my take on last night's Presidential Debates Lees meer
* Which certainly did not live up to all of the hype and expectation
* But the airwaves today are filled with opinion makers proclaiming that Trump won or Hillary won
* And of course, all of the people who think Trump won, these are the Trump supporters, Republicans - their guy won
* And Hillary supporters are proclaiming that Hillary won
* I'm going to give you a different take because, clearly, (and if you don't know this by now, if the choice is between Hillary Clinton or Donald Trump, I would choose Trump)
* Yet despite the fact that I support Trump over Hillary, I think Trump really blew an opportunity with this debate
* I know in some cases there were some low expectations with respect to Trump, and did he exceed those low expectations, I don't know
* I expected more from Donald Trump; I was disappointed
* I think he should have mopped the floor with Hillary Clinton
* She gave him many opportunities, she teed it up for him over and over again
* And he didn't even take a swing
* In many cases, not only did he not try to hit the ball, he whiffed
* I wish he had paid me to help him with debate prep because I would have told him exactly how to handle Hillary Clinton
* I'll start off by giving one simple example, where he could have made lemonade out of lemons, but chose to hand Hillary and issue which I'm sure she will use against him
* This had to do with his comment in an interview over 10 years ago that pregnancy is inconvenient for employers - which of course, it is
* And Hillary Clinton said: "Donald Trump, you said that pregnancy was an inconvenience for employers"
* Instead of owning and embracing that comment, he backed away from it and denied having said it
* One of the big issues is that Hillary is a liar
* If Hillary is a liar, don't tell lies, yourself
* Trump has to be honest to exploit Hillary's lack of honesty
* And of course, Hillary can e…
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No Alien Invasion And No Rate Hike – Ep. 197
22 september 2016 · 27 min
* Aliens didn't invade the Earth, and the Federal Reserve didn't raise interest rates Lees meer
* If you remember, I was pegging the probability of each at roughly the same
* True to form, the Federal Reserve did pretty much exactly what I thought they were going to do and not raise interest rates
* Now I thought they might have tried to lower expectations for the probability in the markets of a December rate hike
* Even though they didn't say that, that was the effect of their announcement
* If you look at the dot plots, for example, the FOMC members were looking for rates to be lower for longer
* Surely, if you look at the reaction to the market, the market does not appear to be worried about a rate hike coming in either November or December, even though the Fed still maintains the narrative that the possibility still exists
* The Fed reiterated that the case for a rate hike had increased
* But, they chose not to raise rates despite their narrative
* Their reason was that they wanted to see more data
* This is exactly what I said after Yellen's statement at Jackson Hole
* The media interpreted her statement as a signal that a September rate hike was likely
* What did I say?
* I said the Fed didn't say anything about hiking
* They were speaking about the case for a hike
* I described it as a scale from, say 0 - 10
* If the case were a 3 and then it became a 4, the case had strengthened
* But if the Fed needs 10, and we're only at 4, they're not going to hike
* They never came clean about their scale, they simply said that the case for a hike had increased
* That doesn't mean they were going to raise rates, and that's exactly what happened
* It's interesting that in all of the prepared remarks and in the following press conference
* Janet Yellen never once admitted that the economy is weakening
* In fact, she continues to pretend that everything is great
* Ironically, one of the questions in the Q&A had to do with Donald Trump's position that the Fed i…
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Damned If They Do And Damned If They Don’t – Ep. 196
21 september 2016 · 39 min
* This morning the Federal Open Market Committee began its 2-day meeting, where they're supposedly going to discuss raising interest rates for the second time Lees meer
* We're going to get the official announcement of their decision on Wednesday
* Most likely there will be no surprise, that they won't raise interest rates
* But it will be the statement at the press conference that follows; that's typically where you can get more market-moving insights
* I said they're supposedly going to be discussing whether or not they are going to raise rates, but you would think that if they were going to raise rates, they'd know it before the meeting started
* But I don't think they're going to discuss whether or not they're going to raise rates; I think they know they're not going to raise rates
* What they're going to discuss is the bind they're in
* It's like they're damned if they do and they're damned if they don't
* On the one hand, market expectations went way up for a while, on a September rate hike
* Based on Janet Yellen's Jackson Hole speech, where she said, "The case for a rate hike had strengthened."
* Then later that day, another Fed official reiterated that there was nothing in Janet Yellen's speech that would rule out a rate hike in either September or December or both!
* Based on that, market expectations ramped up
* Of course, the Fed also claims to be data dependent, and the data over the past month has been lousy
* Even though the Fed has not gone out of its way to recognize the bad data, probably for political reasons
* The data has been bad, so the case for a rate hike has weakened, although Janet Yellen herself has not uttered those words
* You've had some other Fed officials come out and pay lip service to that effect more recently because the market started to fall so the doves came flying to the rescue to save the market
* But here's the conundrum: if they don't raise rates, which I think is the more likely option, then the Fed will have cried …
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Hedge Fund Billionaires Finally Calling Out The Fed – Ep. 195
15 september 2016 · 28 min
* We got a lot of economic data released today, most of it bad, and most of it worse than expected Lees meer
* What I did not expect was that the market shrugged it off
* Initially, there was a little reaction; gold jumped $3 but it never gained momentum and it rolled over to -$10 at the time of this recording
* The dollar index, which had moved into negative territory immediately following the release, quickly recovered back to positive territory
* It's still early in the day, as I'm recording, so this could change as some of this economic data has a chance to sink in
* I noticed that the Atlanta Fed just reduced its Q3 GDP estimate from 3.3 to 3%
* That' the second reduction in a row
* This is the lowest estimate the Atlanta Fed has had in about 2 months, although it is still pretty high
* Let's go over the data we got today:
* Retail Sales was one of the more significant numbers; everybody looks to retail sales to judge the health of the consumer
* Last month's number, relatively weak, it was flat, and they were looking for another flat month, but we were -.3% for August
* It gets worse from there - less autos, they revised the prior month from -.3 to -.4 and in August they were looking for +.3, they got -.1
* Less autos and gasoline, we were down last month .1%; they were looking for +.4% and we're down another .1%
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Fed Cavalry Charges To Market’s Rescue Ep. 194
13 september 2016 · 26 min
* Today was a day of damage control for the Federal Reserve Lees meer
* It almost seems like whenever they discuss the possibility of a rate hike, they're really launching a trial balloon
* They want to gauge the possibility of a rate hike and then if the market kind of shrugs it off, or blesses the rate hike the way it did last year nearing December, if the market seems it's OK with a rate hike, then maybe they'd consider actually implementing one
* But before they do it, they want to test the waters, they want to see how the market reacts to that possibility
* Clearly, the near 400-point decline in the Dow on Friday showed that the market really wasn't very friendly to the possibility of a rate hike
* Let alone the certainty of one
* Just the mere possibility, however remote, really spooked the market
* Today the Federal Reserve had a chance to dial it back
* They had 3 Fed presidents speaking today, and not one of them talked about the possibility of a rate hike
* Starting with an 8am talk this morning by Atlanta Fed President and CEO Dennis Lockhart
* Now Dennis was specifically asked about a rate hike, and whether he thought the Fed would move in September or December
* He specifically refused to comment
* He said, "Financial markets seem to be very sensitive to the remarks of Fed speakers at the moment"
* And so in light of market sensitivity, he refused to answer the question
* Why not answer it? Don't you want to prepare the markets for a possible rate hike?
* Well they don't want to say what they want to do, because they don't like the way the market is reacting
* You'd better believe that if the markets reacted favorably to a rate hike, they would have stayed on script
* Because of the the sell-off on Friday, and where futures opened before Lockhart's speech, the Dow was set to open up down 100 points or more
* But once he spoke, all of a sudden, people were thinking, "Hey wait a minute, he didn't say anything about a possibility of a rate hike an…
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Markets Rattled by Rate Hike Possibility – Ep. 193
10 september 2016 · 33 min
* We had widespread selling in the markets today; it was real carnage across the board Lees meer
* Everything went down except the U.S. dollar
* The Dow Jones was down 394 points - about 2%
* That wasn't bad compared to what happened in other indices and other sectors
* In fact, when it comes to the Dow Jones averages, the utilities were the weakest, they were down 3.7%
* The NASDAQ was down 2-1/2%; the composite down 133 points
* Various sectors were hit very hard; particularly the interest rate sensitive sectors;
* Home builders got crushed
* Emerging markets got obliterated
* Gold stocks were down big - almost 6% on the day
* That's on basically a .6% decline in the price of gold; gold was down only about $10
* Silver dropped about 50 cents
* What's going on? It has just been 2 days when I did the last podcast
* Gold was soaring, the dollar was tanking, the markets were going up
* Why?
* The economic data we got for August confirms that we have the weakest economy, maybe in 6 years
* If you remember, what caused the markets to be concerned was the Janet Yellen/Jackson Hole statement that the case for a rate hike had strengthened based on the economic data that came out in June and July
* Based on the data released since she made that speech, this is data about August, that case has now weakened considerably
* The August data shows that the data that we got in June or July that might have been positive was a one-off event
* Now we're back in weakening mode, and so, if the Fed really were really data dependent, according to Janet Yellen
* Now the data is awful
* So why would they hike rates? That's exactly what happened
* The markets started to take those rate hikes off the table
* I never thought they were on the table, but there were many people who bought into it
* When they saw this horrible data, and they knew the Fed was data dependent, the markets reacted
* Now, in the last couple of days, particularly today, people are now questioning whethe…
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Data Dependent Fed Ignores Bad Data – Ep. 192
8 september 2016 · 39 min
* Last week on Thursday we got that much weaker than expected ISM Manufacturing number, which didn't get a lot of attention because it came out a day before the jobs number which cast a pretty big shadow on all the economic data Lees meer
* The number came in very weak, as I pointed out, it was 49.4, which is contraction mode
* Anything below 50 in the ISM numbers indicates a contraction and a recession
* But of course, no one cares about manufacturing because it is such a small part of the U.S. economy, which in and of itself, is a major problem
* The fact that it is such a small part of the economy should be very concerning, because without manufacturing you really can't have a service sector
* The way the U.S. gets away with it is to just import with everyone else manufactures and we run enormous trade deficits, which is an unsustainable model
* It's a great gravy train while the ride lasts, but when the rest of the world figures out that we can never pay our debts, then the gravy train comes to an end
* The trade deficit represents an artificially high standard of living, but in the long run it's unsustainable because our creditors will not let us get away with this forever
* I want to get to the ISM Non-Manufacturing number which came out yesterday; this represents the service sector of the economy
* They were looking for 55, which was not a great number; last month we got 55.5, so there was some optimism around that number
* They were looking for 55 even and, instead, the number came in at 51.4
* The lowest number in better than 6 years
* And if you look beneath the surface and all the various components; new orders, back logs, hiring - horrible numbers consistent with recession
* The complete opposite of what everybody was looking for, and when you combine this with the 49.4 we got from manufacturing that is a very bleak picture
* The fact that we are at 6+ lows in the service sector does not bode well for the future
* The trajectory is down, and how mu…
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It’s Not Bad News Until The Fed Says It’s Bad – Ep. 191
3 september 2016 · 32 min
* On Friday we got the Non-Farm Payroll report and, of course, this jobs report is the most important ever Lees meer
* Because it was going to determine whether the Federal Reserve would raise interest rates at its September meeting
* Of course, I didn't think the Fed would raise interest rates in September regardless of what this jobs number was
* It's just that so many people were convinced that it was going to happen just because several Fed officials said it was possible
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It’s Not Bad News Until The Fed Says It’s Bad – Ep. 191
3 september 2016 · 32 min
* On Friday we got the Non-Farm Payroll report and, of course, this jobs report is the most important ever Lees meer
* Because it was going to determine whether the Federal Reserve would raise interest rates at its September meeting
* Of course, I didn't think the Fed would raise interest rates in September regardless of what this jobs number was
* It's just that so many people were convinced that it was going to happen just because several Fed officials said it was possible
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The Fed Up Fix Is In – Ep. 190
31 augustus 2016 · 44 min
* The price of gold continues to retreat Lees meer
* Gold was down about $12 today; it closed around $1310
* The dollar index up again as more and more people begin to contemplate the possibility of a rate hike in either September or December
* Or maybe even both, because the odds of a rate hike, either in September or December have now increased to about even money
* If you go back to June, the odds were practically zero
* What has changed in the last couple of months?
* The only thing that has really happened is that you've had various Fed officials going out of their way to mention that a rate hike is still possible
* Why would they do that?
* Obviously, a rate hike is possible
* Usually they are asked the question and they mention the possibility
* If the Fed had no intention of raising interest rates, I doubt they would admit it at this juncture
* They want people to believe that a rate hike is possible because if you admit that it's not possible,
* That opens a can of worms that the Fed isn't interested in opening just yet
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Yellen Basically Admits The U.S. Is A Banana Republic – Ep.189
27 augustus 2016 · 34 min
* Earlier today Janet Yellen delivered her much-anticipated and way over-hyped speech at the annual Jackson Hole Symposium Lees meer
* It wasn't as irrelevant as I thought it was going to be, but the actual relevant part of the speech was lost on just about everybody
* Instead they keep focusing on whether or not the Fed is going to raise rates by another .25 in September or December or maybe both
* In reality, whether they do or do not is irrelevant, given the nature of where we are and where the U.S. economy actually is
* For a small person, Janet Yellen certainly casts a large shadow over the financial markets
* Everybody was on pins and needles, all the traders were there with their fingers on the buttons waiting to react to anything that Yellen said
* I mentioned on an earlier podcast that there had already been a sell-off on gold stocks a couple of days ago on the anticipation of Yellen's hawkish comments
* The rest of the market seemed to ignore the possibility that Yellen would be a hawk
* Before I discuss what she said, I want to examine whether anyone on the committee could be considered a hawk
* A hawk is predatory; is to be feared, reflecting a tough central banker who believes in sound money
* On the other hand, a dove is cute and fluff; doesn't really hurt anybody
* A dove wants cheap money - keep interests low so as not to harm anybody - nothing to fear
* When it comes to hawks with respect to the Federal Reserve, the bird is extinct
* They are all doves and the only difference is the degree of dovishness
* The hawks are gone and are probably never coming back
* Yellen was not a hawk, and neither was Stan Fischer
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