ThinkCivics News
An educated citizenry is a vital requisite
for our survival as a free people.
Join ThinkCivics+
  • Culture & Society
  • Economy
  • Health
  • US News
  • Faith
  • Science & Tech
  • World News
No Result
View All Result
ThinkCivics News
  • Culture & Society
  • Economy
  • Health
  • US News
  • Faith
  • Science & Tech
  • World News
Join ThinkCivics+
No Result
View All Result
ThinkCivics News
Join TC+
Home Economy

Peter Schiff: It’s Game Over If The Markets Call The Fed’s Bluff

Zero Hedge by Zero Hedge
July 29, 2021
in Economy
Reading Time: 4 mins read
0
0
Peter Schiff: It’s Game Over If The Markets Call The Fed’s Bluff

The Federal Reserve insists inflation is “transitory” and the economy is making “progress.” Yet, it continues with the extraordinary monetary policy it launched at the onset of the COVID-19 pandemic. Meanwhile, we’re seeing all kinds of data hinting that the economy may not be as great as advertised. Despite this, and even as prices continue to spiral higher, the Fed’s only monetary policy is talk. Peter breaks it all down on his podcast and drills down to the key question: what happens if the markets call the Fed’s bluff?

The July Federal Reserve meeting took center stage this week, but there was a lot of economic data that got lost in the shuffle. Peter said the data “really evidences the stagflationary environment that we’re in.”

On Wednesday, the trade deficit in goods data came out. It exceeded the high end of estimates and set another record high, rising 3.5% to $91.2 billion. Peter said he doesn’t think this record will last long.

These records are going to fall like dominoes. And this is not happening because we have a strong economy. It’s happening because we have a weak economy.”

A lot of mainstream pundits keep looking at these numbers as if they somehow reflect strength because Americans are buying so much stuff. But as Peter pointed out, the strength of an economy isn’t measured by what you buy but by what you produce.

Strong economies produce more. They don’t simply consume more. We are consuming more despite the fact that our economy is weak. How are we doing that? Well, the Fed is printing money and we are spending it. But that does not constitute strength. That really evidences profound weakness.”

Recklessly spending money created out of thin air does not create economic strength. The only reason these numbers look good is because of Fed magic via monetary policy.

The Fed is really not as clueless as people think when it comes to inflation. They’re not missing the inflation problem. I think they understand that there’s an inflation problem. They also understand that they would create an even bigger problem, from their perspective, if they tried to do anything about it, which is why they’re not, which is why they are pretending that the situation is transitory.”

The mainstream understands that inflation is worse than the Fed claims. But it doesn’t understand why the Fed isn’t doing anything about it because they don’t understand the Fed can’t do anything about it without collapsing the economy.

They don’t understand that we have a bubble. It is the biggest bubble in history. And even the tiniest little pin would prick it, which is why the Fed does not want to supply that pin.”

Most people in the mainstream think the Fed did the right thing by expanding monetary policy in response to the pandemic. (It didn’t.) But they don’t understand why the Fed is continuing that policy now, given that we’re in a recovery. They’re sitting around scratching their heads wondering why the Fed doesn’t go ahead and tighten things back up.

They don’t understand that we haven’t recovered. We’ve just become addicted to the stimulus. The stimulus is a monetary heroin. And not only can’t the fed withdraw the drug; the Fed has to continue to supply the habit with greater and greater quantities of the drug.”

Over the last two months, exports have remained flat while imports exploded. Peter said this is like a company hemorrhaging red ink. How can the US finance these massive deficits? Because foreigners are willing to trade stuff for financial assets. But how much longer can this continue?

June durable goods data also came out on Wednesday. It was also a big miss on the downside and the number is trending lower. Meanwhile, new homes sales collapsed in June for the third consecutive month, hitting a 14-month low. Why are home sales slowing? Because prices are rising so fast. Even with mortgage interest rates at record low levels, people are being priced out of the market. Peter said he doesn’t think the rise in home prices is anywhere close to ending because the cost of construction continues to rise. At some point, construction will likely slow and that will have an impact on employment.

Rent is a big component of CPI. According to government calculations, rents have remained relatively low. But MarketWatch analysis shows that actual rents are up 25% year-over-year. That is 10 times the level the government is using to calculate CPI.

Imagine what the CPI would be right now if you replaced the government number with a 25% private-sector number from Realtor.com. You would be looking, I think, at a year-over-year inflation rate, right now, at 13%.”

Meanwhile, the Fed continues to insist inflation is “transitory” and everything is fine.

Peter goes on to break down the Fed meeting and Jerome Powell’s post-meeting press conference. He notes that it’s all talk and the Fed is basically bluffing.

The real question is what happens if markets call that bluff? And there are signs that may be happening.

This article was originally published by Zero Hedge. Read the original article.

Zero Hedge

Zero Hedge is a libertarian leaning financial blog.

www.zerohedge.com/
Tags: Federal ReservePeter Schifftransitory

Related Posts

3 Reasons To Use Store Financing for Furniture

3 Reasons To Use Store Financing for Furniture

July 6, 2022
Red States Leave Blue States Eating Their Economic Dust in the Post-Pandemic World

Red States Leave Blue States Eating Their Economic Dust in the Post-Pandemic World

July 5, 2022

A Rare Paradigm Shift With Huge Implications… 5 Reasons Why It’s Imminent

July 5, 2022

Karine Jean-Pierre Throws Hissy Fit at Jeff Bezos for Blasting Bidenomics

July 3, 2022
Load More
Next Post
State AGs Fight Dismissal of Facebook Antitrust Case

State AGs Fight Dismissal of Facebook Antitrust Case

Bipartisan Senate group looks to cryptocurrency tax revenue to pay for infrastructure package

Bipartisan Senate group looks to cryptocurrency tax revenue to pay for infrastructure package

Questions that Won’t be Asked by the January 6 Commission

Questions that Won't be Asked by the January 6 Commission

TODAY'S TOP STORIES

  • WATCH: Biker kicks car, then what happens next is priceless

    WATCH: Biker kicks car, then what happens next is priceless

    0 shares
    Share 0 Tweet 0
  • American Heart Association issues warning on mRNA vaccines

    2 shares
    Share 0 Tweet 0
  • Dem Strategists Get Clocks Cleaned After ‘Report’ About Ron DeSantis Is Debunked by Journalists

    0 shares
    Share 0 Tweet 0
  • Whistleblower: Nearly 50,000 Medicare patients died soon after getting Vaccine

    1 shares
    Share 0 Tweet 0
  • WATCH: Joey Chestnut Takes Down Protester Before Winning Hot Dog Eating Contest

    0 shares
    Share 0 Tweet 0

‘Zero Trust in Our Government’: Spouse of WNBA Player Jailed in Russia Blasts Biden Administration

by ThinkCivics Newswire
June 22, 2022
0
‘Zero Trust in Our Government’: Spouse of WNBA Player Jailed in Russia Blasts Biden Administration
National Security

Joe Biden's ineptitude knows no bounds. As Obama famously said, "Don't underestimate Joe's ability to f*ck things up." So it's...

Read more

State Dept ‘racial equity’ czar said white colleagues too ‘protective of US, lack ‘humility, empathy’

by ThinkCivics Newswire
June 21, 2022
0
State Dept ‘racial equity’ czar said white colleagues too ‘protective of US, lack ‘humility, empathy’
National Security

A 2020 podcast episode with Desirée Cormier Smith resurfaced after the U.S. State Department appointed her on Friday to serve...

Read more

More countries looking at nuclear weapons programs because of Russia

by Hot Air
June 21, 2022
0
More countries looking at nuclear weapons programs because of Russia
National Security

Over the past year, we have seen multiple nations including the United States conducting tests of their nuclear-capable weapons delivery...

Read more

22 Democrats who voted against extra security for SCOTUS justices approved it for themselves after Jan 6

by ThinkCivics Newswire
June 15, 2022
0
22 Democrats who voted against extra security for SCOTUS justices approved it for themselves after Jan 6
National Security

Ahead of the highly anticipated decision that could overturn Roe v Wade, the House passed a bill on Tuesday to...

Read more
3 Reasons To Use Store Financing for Furniture
Economy

3 Reasons To Use Store Financing for Furniture

by ThinkCivics News Staff
July 6, 2022
0

Buying new furniture can get expensive, especially when you’re trying to furnish an entire room. Many furniture stores offer their...

Read more
Red States Leave Blue States Eating Their Economic Dust in the Post-Pandemic World
Economy

Red States Leave Blue States Eating Their Economic Dust in the Post-Pandemic World

by RedState
July 5, 2022
0

Red states –those that lean Republican—are performing better economically and gaining more residents than blue states, where economic performance lags...

Read more
A Rare Paradigm Shift With Huge Implications… 5 Reasons Why It’s Imminent
Economy

A Rare Paradigm Shift With Huge Implications… 5 Reasons Why It’s Imminent

by ThinkCivics Newswire
July 5, 2022
0

Although many don’t realize it, interest rates are simply the price of money. And they are the most important prices...

Read more
Karine Jean-Pierre Throws Hissy Fit at Jeff Bezos for Blasting Bidenomics
Economy

Karine Jean-Pierre Throws Hissy Fit at Jeff Bezos for Blasting Bidenomics

by RedState
July 3, 2022
0

Welp, this one started out bad — and quickly swirled down the White House personal-attack toilet. Zillionaire Amazon founder and...

Read more
Facebook Twitter RSS

Brilliantly

SAFE!

thinkcivics.com

Content & Links

Verified by Sur.ly

2022

Recent News

  • Dutch Farmers Converge on Police Station, Demand Release of 16-Year-Old Who Was Shot at by Police
  • The Mother of All Ads Drops After Gavin Newsom Burns Money Attacking Ron DeSantis
  • YouTuber Talks Leaving the Left and Exposes an Interesting Fact About Political Division

Category

  • Culture & Society
  • Economy
  • Editorials
  • Education
  • Elections
  • Energy
  • Environment
  • Faith
  • Health
  • Immigration
  • Military
  • National Security
  • Politics
  • Science & Tech
  • US News
  • Videos
  • World News

© 2022 ThinkCivics Media. All Rights Reserved.

  • Login
  • Sign Up
  • Cart
No Result
View All Result
  • Home
  • About
  • Store
  • Contact Us
  • Join
  • Contribute

© 2022 ThinkCivics Media. All Rights Reserved.

Welcome Back!

Login to your account below

Forgotten Password? Sign Up

Create New Account!

OR

Fill the forms below to register

All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In
This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.