March 31, 2011

Video Market Update: Spending & Savings


Topics: spending, savings, us economy, food prices, gas prices, rising cost of living, inflation;

Peter Schiff`s comments on the economy, stock markets, politics and gold. Schiff is the renowned writer of the bestseller Crash Proof: How to Profit from the Coming Economic Collapse.

March 30, 2011

Prices Are Going To Be Up In The Stratosphere

If people think that gas prices are high now and that food prices are high now, just wait for another couple years. Prices are going to be up in the stratosphere. - in finance.yahoo.com

Related: PowerShares DB Agriculture Fund (NYSE:DBA), iPath S&P GSCI Crude Oil Total Return (NYSE:OIL), iShares Silver Trust (ETF) (NYSE:SLV)

Peter Schiff`s comments on the economy, stock markets, politics and gold. Schiff is the renowned writer of the bestseller Crash Proof: How to Profit from the Coming Economic Collapse.

March 28, 2011

Corporate Taxes.

"Why tax the corporations on the money they don't spend in salaries and they don't pay in dividends? That money is the money they use to grow their businesses to make capital investments." - in Yahoo Finance

Peter Schiff`s comments on the economy, stock markets, politics and gold. Schiff is the renowned writer of the bestseller Crash Proof: How to Profit from the Coming Economic Collapse.

We Need To Reduce The Size Of Government

"We need to reduce the size of government. In fact, if we can cut government enough, then we can reduce taxes." - in Yahoo Finance

Peter Schiff`s comments on the economy, stock markets, politics and gold. Schiff is the renowned writer of the bestseller Crash Proof: How to Profit from the Coming Economic Collapse.

March 26, 2011

A New Phase On The Path To A Dollar Collapse

2010 was the year that China began cutting back its Treasury purchases in favor of Gold Bullion, hard assets, and emerging market currencies. The Fed has stepped in as a major purchaser of Treasuries.

This represents a new phase on the path to Dollar collapse, and it will manifest in 2011 in the form of more "unexplainable" inflation – as we are now seeing in the prices of everything from corn to gasoline. - in goldnews.bullionvault.com

Related: SPDR Gold Trust (ETF) (NYSE:GLD), ProShares UltraShort 20+ Year Trea (ETF) (NYSE:TBT), iShares Barclays 20+ Yr Treas.Bond (ETF) (NYSE:TLT)

Peter Schiff`s comments on the economy, stock markets, politics and gold. Schiff is the renowned writer of the bestseller Crash Proof: How to Profit from the Coming Economic Collapse.

March 25, 2011

We Are An Indebted Family...

To me, it's like watching someone walk into the same sliding glass door again and again. Wall Street must know by now that large infusions of liquidity from the Fed spur present consumption at the expense of investment for the future.

We are an indebted family going out for an expensive meal to celebrate getting approved for a new credit card. It might feel good (at the time), but we're still simply delaying the inevitable.

Related: PowerShares DB US Dollar Index Bearish (Public, NYSE:UDN), PowerShares DB US Dollar Index Bullish (Public, NYSE:UUP)

Peter Schiff`s comments on the economy, stock markets, politics and gold. Schiff is the renowned writer of the bestseller Crash Proof: How to Profit from the Coming Economic Collapse.

March 24, 2011

The Mechanics Of The US Treasury Market

Very few people have either the time or patience to sift through the data released by the Treasury Department in the wake of its bond auctions. But the numbers do provide direct evidence of the country's current financial condition that in many ways mirror a financial shell game that typifies our entire economy.

Despite continued deterioration of America's fiscal health, the Treasury is still attracting adequate numbers of buyers of its debt, even with the ultra low coupon rates. Market watchers take these successful auctions as proof that our current monetary and fiscal stimulus efforts are prudent. But who's doing the buying, and what do they do with the bonds after they have been purchased?

Most people are aware that foreign central banks figure very prominently into the mix. They buy for political reasons and to suppress the value of their currencies relative to the dollar. And while we think their rationale is silly, we do not dispute that they will continue to buy as long as they believe the policy serves their own national interests. When that will change is harder to determine. But another very large chunk of Treasuries go to "primary dealers," the very large financial institutions that are designated middle men for Treasury bonds. In a late February auction, these dealers took down 46% of the entire $29 billion issue of seven year bonds. While this is hardly remarkable, it is shocking what happened next.

According to analysis that appeared in Zero Hedge, nearly 53% of those bonds were then sold to the Federal Reserve on March 8, under the rubric of the Fed's quantitative easing plan. While it's certainly hard to determine the profits that were made on this two week trade, it's virtually impossible to imagine that the private banks lost money. What's more, knowing that the Fed was sure to make a bid, the profits were made essentially risk free. It's good to be on the government's short list.

Given that the Treasury is essentially selling its debt to the Fed, in a process that we would call debt monetization, some may wonder why it doesn't just cut out the middle man and sell directly. But the Treasury is prevented by law from doing this, so the private banks provide a vital fig leaf that disguises the underlying activity and makes it appear as if there is legitimate private demand for Treasury debt. But this is just an illusion, and a clumsy one to boot. - in Europac

Related: ProShares UltraShort 20+ Year Trea (ETF) (NYSE:TBT) , iShares Barclays 20+ Yr Treas.Bond (ETF) (NYSE:TLT) , iShares Lehman 7-10 Yr Treas. Bond (ETF) (NYSE:IEF)

Peter Schiff`s comments on the economy, stock markets, politics and gold. Schiff is the renowned writer of the bestseller Crash Proof: How to Profit from the Coming Economic Collapse.

March 23, 2011

Oil Prices Were Going Up Anyway Regardless Of The Events In The Middle East

Oil prices were going up regardless of the events in the Middle East, so it was bound to happen anyway. It was a catalyst, but if it wasn’t that, it would have been something else. Oil prices have been trending up for a while, and so are other commodities. And that’s going to continue.

It’s a result of the Federal Reserve, and of other central banks that are following the Federal Reserve’s lead. Monetary policies around the world are too loose. Central banks are printing a lot of money, and so prices are going to keep rising. - in index universe

Peter Schiff`s comments on the economy, stock markets, politics and gold. Schiff is the renowned writer of the bestseller Crash Proof: How to Profit from the Coming Economic Collapse.

March 22, 2011

IS A Weakening Currency Good For Economic Growth?

Conventional wisdom is that a weakening currency is a boon for economic growth and exports; however, history does not support this view.

For example, during the 20-year period from 1971 to 1991 - often referred to now as an economic miracle - the Japanese yen tripled in value against the dollar, an average appreciation rate of about 10% per year. This increasing purchasing power enabled the Japanese to enjoy steady economic growth and rising living standards. Over that time, Japan’s GDP grew at an average rate of 4.5% and net exports increased fivefold. Government debt as a percentage of GDP fell slightly to about 20%.

Over the following 20 years, from 1991 – 2011, the Japanese economy has been dead in the water. Yen appreciation slowed considerably, with the currency rising by approximately 50% against the dollar, or about 2.5% per year. However, over that time, the Japanese economy and net export growth essentially stagnated, with GDP growing by less than 1% per annum and government debt exploding to over 120% of GDP.

The real problem for Japan is that in the aftermath of the bursting of the stock and real estate bubbles, the Japanese government refused to allow market forces to repair the damage. Instead, it based its foolish approach on restricting the rise in its currency to maintain exports to the United States. In this cart-before-the-horse worldview, Japan assumed its economic growth was a function of its exports. In reality, exports flow from economic growth.

So, in order to engineer an export-led recovery, Japan embarked on an era of central government planning, Keynesian style pump-priming, and nearly endless quantitative easing. The result was disaster. The only bright spot was that the underlying strength of the Japanese economy kept a lid on consumer prices despite all the inflation deliberately created by the Bank of Japan. So even while good jobs have become harder to find, ordinary consumers have had the benefit of falling prices. It is ironic that Japan’s ”deflation” is cited as the primary cause of its malaise. If Japan’s economy had been less efficient, its 20-year malaise would have been accompanied by increasing consumer prices, a.k.a. stagflation. This would have caused much more suffering to the Japanese people.

Still, as a result of its enormous economic policy errors, much of Japan’s efforts over the past 20 years have benefitted Americans rather than its own citizens. A tremendous share of their purchasing power was transferred across the Pacific, helping to inflate a bubble economy in the United States. Of course, as the Japanese economy struggled beneath the weight of this massive American subsidy, it gradually passed the baton to China, which for the same foolish reasons was happy to run with it. - in Liberty Maven

Related: iShares MSCI Japan Index (ETF) (NYSE:EWJ), Mitsubishi UFJ Financial Group Inc (ADR) (NYSE:MTU), Mizuho Financial Group, Inc. (ADR) (NYSE:MFG)

Peter Schiff`s comments on the economy, stock markets, politics and gold. Schiff is the renowned writer of the bestseller Crash Proof: How to Profit from the Coming Economic Collapse.

March 21, 2011

Rising Prices, Inflation And 1 Dollar Bills

In fact, they’re denying that there’s any connection between rising prices and the money they’re printing. I mean, they’ll claim credit for rising stock prices, but they don’t want to, say, accept responsibility for rising oil prices or rising food prices. They deny that there’s any inflation, even as inflation has driven the costs of printing money. The government admits that the cost of printing money has risen by 50 percent in the last three years.

In fact, it’s getting so expensive to print $1 bills that they’re thinking of not printing them anymore. It’s really ironic. There’s all this inflation, the Fed can even see it in how much it costs it to print money, yet they don’t even realize that there’s inflation. And the reason that it costs so much to print money is because they’re printing so much money. They’ve driven up the costs. - in indexuniverse

Peter Schiff`s comments on the economy, stock markets, politics and gold. Schiff is the renowned writer of the bestseller Crash Proof: How to Profit from the Coming Economic Collapse.

March 18, 2011

Oil Prices Are Going Up Because Of The Federal Reserve

Oil prices were going up regardless of the events in the Middle East, so it was bound to happen anyway. It was a catalyst, but if it wasn’t that, it would have been something else. Oil prices have been trending up for a while, and so are other commodities. And that’s going to continue.

It’s a result of the Federal Reserve, and of other central banks that are following the Federal Reserve’s lead. Monetary policies around the world are too loose. Central banks are printing a lot of money, and so prices are going to keep rising. - in indexuniverse

Related: United States Oil Fund (USO), Exxon Mobil (XOM), Murphy Oil (MUR), IPath Crude Oil ETF (OIL), SPDRS Select Energy ETF (XLE), ConocoPhillips (COP)

Peter Schiff`s comments on the economy, stock markets, politics and gold. Schiff is the renowned writer of the bestseller Crash Proof: How to Profit from the Coming Economic Collapse.

March 17, 2011

Impact Of The Japanese Disaster

First of all, there bare plenty of pundits on television saying that aside from the human toll this is an opportunity for growth, this is going to be a boom to the japanese economy because after all they are going to have to spend a lot of money now to rebuild what has been destroyed and its the rebuilding that causes the economic growth. This is complete nonsense. - in Schiff`s Video Blog

Peter Schiff`s comments on the economy, stock markets, politics and gold. Schiff is the renowned writer of the bestseller Crash Proof: How to Profit from the Coming Economic Collapse.

March 16, 2011

The Economic Dimension Of Japan`s Disaster


A market view on the japanese disaster.

Related: iShares MSCI Japan Index (ETF) (NYSE:EWJ)

Peter Schiff`s comments on the economy, stock markets, politics and gold. Schiff is the renowned writer of the bestseller Crash Proof: How to Profit from the Coming Economic Collapse.

March 9, 2011

Why Is The Unemployment Rate "Only" 8.9 Percent?

"One of the reasons the unemployment rate is only 8.9% is because a lot of people are simply dropping out of the labor force entirely because they are so discouraged with the labor market that exists." - in Schiff video blog

Peter Schiff`s comments on the economy, stock markets, politics and gold. Schiff is the renowned writer of the bestseller Crash Proof: How to Profit from the Coming Economic Collapse.

March 8, 2011

Gold & Silver

If the world were going to hell in a hand-basket, then I would expect gold to outperform silver. However, it is only the developed economies that are on the rocks -- and only the US that faces true catastrophe. Thus, we have seen silver outperform gold for the last eight years. The market is telling us that while uncertainty reigns supreme, the global economy will prosper in the years ahead. While gold most effectively insures the investor against economic devastation, silver offers both a shield against monetary turmoil and exposure to market growth. - in Schiff Gold Newsletter

Related: iShares Silver Trust (ETF) (NYSE:SLV), SPDR Gold Trust (ETF) (NYSE:GLD)

Peter Schiff`s comments on the economy, stock markets, politics and gold. Schiff is the renowned writer of the bestseller Crash Proof: How to Profit from the Coming Economic Collapse.

March 7, 2011

Video Market Update: Jobs, Labor Force Participation


Schiff discusses the job market and Alan Greenspan`s latest remarks.

Peter Schiff`s comments on the economy, stock markets, politics and gold. Schiff is the renowned writer of the bestseller Crash Proof: How to Profit from the Coming Economic Collapse.

March 5, 2011

Inflation On Emerging Economies

"The price of the inflation we're exporting is being disproportionately paid by emerging economies." - in CNBC

Related: iShares MSCI Emerging Markets Indx (ETF) (NYSE:EEM), Market Vectors Egypt Index ETF (NYSE:EGPT), Market Vectors Vietnam ETF. (NYSE:VNM)

Peter Schiff`s comments on the economy, stock markets, politics and gold. Schiff is the renowned writer of the bestseller Crash Proof: How to Profit from the Coming Economic Collapse.

March 4, 2011

Rand Paul On Schiff Radio


Sen. Rand Paul (R-KY), founding member of the Senate's newly formed tea party caucus, on whether he can help his Republican colleagues discover their collective backbone before America implodes.

in Schiff Radio

Peter Schiff`s comments on the economy, stock markets, politics and gold. Schiff is the renowned writer of the bestseller Crash Proof: How to Profit from the Coming Economic Collapse.

March 3, 2011

We Print Money To Buy Stuff The Rest Of The World Produces

“We have this phony economy that is based on the dollar being the reserve currency. It’s based on our ability to print money and buy stuff the rest of the world makes and to borrow what the world saves. But that is coming to an end because it is exerting huge consequences, huge costs on the rest of the world.” - in CNBC

Peter Schiff`s comments on the economy, stock markets, politics and gold. Schiff is the renowned writer of the bestseller Crash Proof: How to Profit from the Coming Economic Collapse.

March 2, 2011

10Th Anniversary Of The Gold Bull Market

This month marks the ten-year anniversary of the start of gold's bull run. But it's no time to start itching for a new favorite asset class, as our relationship with the yellow metal still holds the promise of many happy times ahead.

This month, my focus turns to silver - which has actually beaten gold by hundreds of percentage points since '01. I'll explain some of the factors behind that outperformance, and why I think it's likely to continue.

Jeff Clark discusses the institutional factor that may drive the next phase of the precious metals bull, while the Aden Sisters delve into the special relationship between these metals and the broader commodities market.

Both gold and silver have pulled themselves out of the winter doldrums and are gearing up for a profitable year. The global economy still has a rocky road ahead - it's time to ask yourself whether you want to drive your savings forward in a vehicle made of paper or metal.

Peter Schiff`s comments on the economy, stock markets, politics and gold. Schiff is the renowned writer of the bestseller Crash Proof: How to Profit from the Coming Economic Collapse.

Latest Market Update: Ben Bernanke & Silver, Gold


Related: iShares Silver Trust (ETF) (NYSE:SLV), SPDR Gold Trust (ETF) (NYSE:GLD) , ProShares UltraShort 20+ Year Trea (ETF) (NYSE:TBT), iShares Barclays 20+ Yr Treas.Bond (ETF) (NYSE:TLT), PowerShares DB US Dollar Index Bullish (NYSE:UUP), PowerShares DB US Dollar Index Bearish (NYSE:UDN), iShares Lehman 7-10 Yr Treas. Bond (ETF) (NYSE:IEF), PowerShares DB Agriculture Fund (NYSE:DBA)

Peter Schiff`s comments on the economy, stock markets, politics and gold. Schiff is the renowned writer of the bestseller Crash Proof: How to Profit from the Coming Economic Collapse.

March 1, 2011

CNBC Video: The Rug Is Going to be Pulled Out


Peter Schiff`s comments on the economy, stock markets, politics and gold. Schiff is the renowned writer of the bestseller Crash Proof: How to Profit from the Coming Economic Collapse.