* We finally got some economic news today, all of it bad * All of it "unexpected"... * Hope springs eternal on Wall Street * That's why the Federal Reserve can maintain its forecast of an interest rate hike before the end of the year * Although now a second Fed official has come out saying he doesn't think a rate hike will be appropriate this year * All this was forecasted by me; there was a method to their madness to maintain the theater that a rate hike is even possible * When is the Fed going to admit that their earlier forecast of a big recovery and liftoff is wrong? * CNBC finally admitted they do not want me on because I correctly predicted that the Fed would not raise rates * The same is true for Bloomberg * However,  the last time I was on Fox Business, that video on my YouTube Channel got over 80,000 views * That is probably more people who viewed the live show! * By the way, don't forget to like me on Facebook follow me on Twitter and and subscribe to my YouTube Channel * It's not going to be too much longer before more and more people will agree the Fed is not going to raise rates * If I am right and the Fed launches QE4, it will be hard for the conventional media to ignore me - I am not saying it will be impossible, though * These podcasts are developing a greater and greater audience, and you can help spread the word by sharing them, to get the word out * Let's get to the economic data, starting with the Weekly Mortgage Applications * This number was significant in the precipitous 27.6% drop in the composite index with purchased mortgages dropping 34% * Part of this was due to last week's big jump as mortgage applicants tried to get ahead of new government rules * But the drop is much bigger than the pop - this is a bad sign * The consensus forecast for the Producer Price Index was for month over month prices to drop .2% instead they dropped .5% * Year over year, down 1.1%; last month it was down .8% * This is bad news to the Fed, which is looking for higher inflation * The real negative news was the September Retail Sales Number * It was expected to be weak, up only .1 and that's what we got, but last month's .2 number was revised down to flat * Now we're up .1 from zero, meaning August and September Retail Sales missed expectations * This will pull numbers away from Q3 GDP * I think we will get Q3 GDP below 1% * It might be below zero, which will be the first half of a recession * We also got Business inventories, which were unchanged, but the inventory ot sales ration popped up to 1.37 - that ties the high for the move * This glut of product is bad news for the economy * The last 2 times we had inventory to sales ration this high, we were already in recession - 2001 and 2008 * The worst news was Walmart's bombshell announcement that profits are suffering due to labor costs * Their sales are suffering, too * 75% of the losses are due to higher wages and the balance came from lower sales * Walmart is the nation's biggest retailer and should benefit most from a stronger dollar and cheap gas * Walmart's stock was down 10% on the day, one of the worst days in the history of Walmart * YTD, it is down 33% from its highs - a super bear market for Walmart * The Left proclaims that Walmart is getting rich on the backs of the workers - a collapse in Walmart stock price is not good for workers because profits are what creates the jobs Privacy & Opt-Out: https://redcircle.com/privacy

* The Dow Jones finished up almost 140 points - back over 17000 * The Dow has now rallied 1,000 points since its lows on Friday following the lower than expected Non-Farm Payroll number * The market originally sold off until traders realized that bad news is good news and they bought the dip * The buying intensified today following the release of the FOMC minutes from the last meeting * I predicted the markets would experience a rally based on the weak Non-Farm Payrol number * The U.S. market looks like it's standing still compared to the markets overseas * Now that so many traders are starting to connect the dots and realize that a rate hike is not around the corner we've seen a huge rally in overseas stocks, particularly in emerging markets * All currencies continue to gain against the dollar * Silver prices earlier in the week hit a 3-1/2 month high * Gold got back above 1150 * Oil prices are close to $50/barrel * All of this is happening because traders are beginning to pare back their rate hike bets * In light of today's release of the dovish September FOMC meeting minutes the trend will intensify * Why were people surprised by the dovish minutes? * If you read the minutes, the real reason the Fed did not raise rates is because inflation is too low * They also said they would risk credibility raising rates below 2% * Lose credibility with whom? * If they are afraid to raise rates with inflation below 2%, they why have they been bluffing that they are about to raise rates? * The official inflation number has been below 2% the entire time they have been talking about a rate hike * I have been saying that they will continue to pretend to raise rates, but they won't * I thought it was funny that Netflix raised their rates 11% - the Fed must have thought this was good news * The real reason the Fed won't rais rates is that they don't want to prick the bubbles * We have a bubble in the stock market * A bubble in the real estate market * A bubble in the bond market * Auto loans, student loans, consumer credit, art - you name it * The Fed doesn't want the government to deal with higher interest rates * Look at the headline in the Wall Street Journal about foreign central banks beginning to dump treasuries * Look at how many treasuries China has sold * This is the tip of a huge iceberg * How is the Fed going to end QE when it has to take the other side of the mother of all trades? * CNBC cited overseas problems washing up on our shore as the reason why the Fed won't be raising rates - these are not overseas problems * The problems started here - they're just coming back * The overseas markets were reacting to higher interest rates and a strong dollar * This game is going to end - the next time the dollar goes down, it's down for the count * Rather than having foreign central banks coming to its rescue, they are going to be joining in the dollar selloff just like everybody else * I wanted to comment on an Robert Wenzel's article in the Economic Policy Journal * Wenzel appears to be referring to me but does not mention my name * Here's the title of his piece, dated September 18, following the most recent Fed meeting: * "The Absurd Idea That The Fed is Not Going to Raise Rates" * Wenzel refers to "certain so-called Austrians out cheering that they were proven correct in their view that the Fed will not raise rates..." * Many people commented that he must be referring to Peter Schiff, but he denied this * Wenzel seems to believe I do not think the Fed should raise rates * I am not saying what I think the Fed should do, I'm saying what I think they will do Privacy & Opt-Out: https://redcircle.com/privacy

* It is the first Friday of the month, and that means that this morning we got the September Non-Farm Payroll number * Anyone who has listened to my podcasts and video blogs knows that for months I have criticized these so-called strong jobs reports * I think what's going on is a transformation of the economy from full-time jobs to part-time jobs and that necessitates creating more jobs that you destroy, but the real story is beneath the surface * The report we got today was one of the weakest reports relative to expectations than we've had in years * This may be the final missing piece to the economic puzzle that shows that the economy is not as strong as everybody, including the Fed pretends it to be * And that the rate hikes expected to be around the corner are a distant blur on the horizon * Soon more will join me in recognizing the more QE is coming * Of course QE is not medicine; it is toxic * Let's get down to the tale of the tape with the jobs numbers * First, the bigger number is the August number, which was expected to be revised up, was revised down to 136,000 jobs * July was also revised down * The September number was expected to be 203,000 and actually came in at 142,000 * This is an average of 163,000 jobs for the last 3 months * Six of the last 8 jobs numbers have been revised downward * The August labor force participation rate was 62.6, which was the lowest of the "recovery" * The September rate dropped another .2 to 62.4, which is the lowest since 1977 * Another 579,000 left the labor force in September - now there are 94.6 million Americans not working * Average hourly earnings, expected to rise .2, remained flat * In fact, the average work week declined from 34.6 to 34.5 * If you remember, what has Janet Yellen stated as a requirement for a Fed rate hike? - An improvement in the labor market. * The labor market was singled out as a reason why rates remained at zero in September * While others speculated that rates might hike in October or December, I said the labor market is not going to improve, so the Fed will not raise rates * Janet Yellen is looking at labor force participation, which has declined to a new low * Yellen is also looking for an improvement in wages - that is going the other way * If you also look at the details of this jobs report, you'll see that jobs created are low-paying jobs and jobs lost are higher-paying jobs * For example, we lost jobs in wholesale trade, manufacturing and logging - those are good-paying blue collar jobs * We gained jobs in leisure and hospitality, education and healthcare, retail trade - and a lot of these jobs are temporary or part time * This is why there is not real recovery, why people can't save or buy houses * This weak jobs number is another excuse for the Fed not to raise rates * Some are pointing to this jobs number as proof of the Fed's wisdom in not raising rates in September * However, Yellen stated that rates would go up if the economy continues to improve as the Fed expects - but the economy is getting worse * I've always said that the Fed does not want to raise rates because it does not want to look foolish if it has to back down from a rate hike * We got more economic data today: factory orders wer down 1.7% worse than the expected number of -1.3% * Also, last month's number was revised down, making this the tenth month in a row that factory orders have been down, year over year * This only happens in a recession * Maybe we are in a recession * We don't have Q3 GDP numbers yet, but yesterday the Atlanta Fed reduced its Q3 estimate to .9 * The consensus on Wall Street and at the Fed is still 2.5 * I think that given this jobs number,Privacy & Opt-Out: https://redcircle.com/privacy

* It's been over a week since I did my last podcast there's been a lot of economic news - almost all bad * The markets have been under pressure - we're back down near the mini-Black Monday lows, solidly in correction mode * The pressure on international markets has been greater * Yet the vast majority of economists expect the Fed to raise interest rates by December * This would really mean last minute - as the Fed's messaging hints at an interest rate hike by the end of the year * If you look at the Fed's reasons it listed were: * Weakness in overseas economies * Lack of inflation, as the Fed measures it * Increased improvement in the labor markets * Why would the Fed move if all these concerns still exist? * The answer is, it would not move * No one wants to connect the obvious dots * When the Fed refused to rule out an interest rate hike in October or December it might have been the worst thing for the markets because it is admitting it is considering kicking the economy when it is down * Initially I thought the Fed would indiciate a dovish hold, but they opted for a hawkish hold, which exacerbates the issues with the markets, as the hike is already priced in * International markets assume America can handle higher interest rates; but the Fed is still talking up the economy to send the message that the U.S. can handle higher rates, even though it can't * I discussed this at length in my recently released video of my address in Jackson Hole, Wyoming * I really want discuss in today's video two people who are in the news: Donald Trump and Carl Icahn * Trump was on 60 Minutes this week and Carl Icahn recently released a video called, 'Danger Ahead' * Trump's performance really hit the ball out of the park with his delivery, not that I agree with everything he said * The typical voter will buy his bill of goods * The interview was a commercial for Donald Trump in which he promises everything to everybody * The promises to cut taxes on everyone but the hated hedge fund managers * He promises to repeal and replace Obamacare with something even better and still insure everybody * He promises to save Social Security * He promises to grow the economy * To the average voter, who doesn't really understand economics, he sounds like he can pull it off * He sounds optimistic about what the country can be like if he is elected president * The economy will grow because jobs will come back from overseas * How is he going to do that? I don't know, but it doesn't matter * He says it in a way that people are going to believe it * Who will argue against it? * He is not singling out any one interest group that will suffer * His performance was brilliant, even though much if what he promises is impossible * His tax message resonates because currently the government uses high corporate taxes so that special interests groups can be given favors by Congress, and higher taxes are held over the heads of those who do not buy them off with votes * With lower corporate taxes, the politicians lose that leverage * Trump doesn't need these special interest votes because he's spending his own money * All Trump needs to do is get the nomination, then the Republican Party will support his Presidential Campaign * His campaign for the nomination has been largely fueled by publicity * He is running a better campaign in light of public perception * Trump is throwing light on the problems who the average guy really feel - even if he is pie and the sky * Carl Icahn is in the news because he could be Treasury Secretary i...Privacy & Opt-Out: https://redcircle.com/privacy

* Tuesday's podcast was titled, "Will She or Won't She?" referring to whether or not Janet Yellen would announce an interest rate hike for the first time in almost 7 years * Today we got the official answer: "No." * For the 54th consecutive time, the Fed has left interest rates unchanged at zero * What is even more amazing, in the Q&A immediately following the announcement, Janet Yellen admitted that she could not rule out the possibility that interest rates would stay at zero forever * A reporter asked her if the Fed may be trapped at zero forever * Among the excuses the Fed used was problems in overseas markets, which opens up a grab bag of excuses for the Fed conveniently explain why it is not going to raise rates * I said from the beginning the Fed has no intention of raising rates * They also mention that these problems may spill over into the U.S. economy * She also mentioned additional problems in the labor force: wages, people re-entering the workforce and more full-time jobs * That is not going to improve in the next three months, yet the Fed is still pretending that it could raise rates in October or December * Yellen is also no ruling out that the Fed could keep interest rates at zero forever, so who cares about what she won't rule out? * Janet Yellen answered the reporter's question by saying, " We don't think we are going to be in that situation, however I can't rule it out." * So the fact that she is not ruling out an October or December rate hike means nothing, because she also can't rule out zero interest rates forever * What else does this tell you? * She is concerned that rates will be at zero for a long time * Janet Yellen believes that the Fed could actually keep interest rates forever * They won't even stay at zero for the end of this decade because ther is going to be a currency crisis that forces the Fed to raise rates * The only reason the Fed has maintained the illusion of control for so long is that the market is believing them * When They figure what the Fed is really doing, then it is over with * Then the dollar will tank, creating upward pressure on inflation * They will have to raise rates; market will not give them a choice * Janet Yellen does not know this * Another reporter asked her if the Fed will adjust their policy if inflation gets to inflation sooner than anticipated * Yellen went out of her way to state that 2% is the target, but not the ceiling * I think the Fed does not have a ceiling, but the market does * Another interesting discussion was regarding the balance sheet * The Fed can't start shrinking the balance sheet until they raise rates * Yellen admitted that since rates are still at zero, they are pushing back the time when the Fed will begin shrinking the balance sheet * If the Fed never raises rates, then it can never shrink its balance sheet * The Fed may never raise rates on its own volition: I know eventually they will have to raise rates * And then it will be a complete catastrophe * But everybody is still pretending everything is great, maybe the Fed will raise rates in October of December * Here's another interesting development: the market was up all day but it sold off down 65 points. A pretty big reversal. * Ultimately the Fed will have to officially take rate hikes off the table * What kind of bad news will they need to do that? * We got bad news today: Housing Starts were significantly below estimates and the prior month was revised down * Bloomberg Consumer Comfort Index had its second lowest week in a year * The worst number that came out was Philly Fed - was expected to come in at +6, but actually came in at -6 * The biggest miss in 4 years Privacy & Opt-Out: https://redcircle.com/privacy

* Tomorrow we have the most highly anticipated Fed meeting ever, but this will not be the last time I'll say this * We'll also be anticipating October and December if the Fed does not raise interest rates in September * The odds are they won't do it * I put a Bloomberg story on my Facebook page: Yellen's former aid says a rate hike would be a serious error * Why? The official target for the Fed Funds Rate now is at a range of 0 to .25 basis points * The Fed is contemplating a rate of .25 which is the high end of the existing range * If they decide to keep the rate at .25, all they've done is fixed the rate at the high end of the range * This is not even a rate hike * Why would this be a disaster? * Isn't that an admission that the economy is fragile? * When Alan Greenspan lowered interest rates to 1% after the dot com bubble and after Sept 11, people though, this is ridiculous! * Now we are talking about raising rates to a quarter of that and it is considered a disaster * What is going to change between September and October and October and December - unless they get worse * The serious error is to prick the bubble economy * The more serious error is for the Fed to raise rates and then admit that it was a mistake they lose credibility * We're going into recession regardless * If they raise rates, they will have to launch QE4 sooner * Any rate hike will sow the seed of a rate cut * On the topic of a recession, let's talk about the economic news we got today * The first release we got was August Retail Sales * A rise of .3 was expected and we got a gain of .2 * These are not great numbers * The worse number of the day was Empire State Manufacturing: last month's horrible number was -14.92 the lowest since 2009 * Wall Street was looking for -.5 * September was -14.67; barely an improvement * Back to back the worse numbers since the great recession * The media barely reported on this number at all, but if it were good, it would have been in the headlines * The Redbook Year over Year Same Store Sales Index has collapsed - right now it is at 1.3 * Previous years ranged between 3% and 5% * Industrial Production was expected to fall by .2, but fell by .4 * Capacity Utilization dropped from 78 last month to 77.6 * Manufacturing output dropped as well to -.5 * Auto manufacturing had its biggest drop in 4 years * I have been talking on this podcast about the Auto Bubble and we are getting more evidence that the bubble has burst * The biggest decline in manufacturing in 4 years is pretty good evidence * The fact that there is a huge inventory of unsold cars on dealers' lots is evidence that the market is saturated * We got more news from business inventories: up .1 as expected * Sales are also falling, so the inventory to sales ration is still 1.36, a notch below the record high from the '08 financial crisis * Inventories have to come down a lot more because sales are not there * They are not there because the economy is weak * Earlier strong GDP growth was from inventory buildup * All the evidence points to recession * Employment numbers, which are theoretically good, are a lagging indicator * All the leading indicators of the economy are flashing a warning * Yet the media is ignoring the warnings and paying attention to Janet Yellen * She is pretending the economy is strong so she can pretend to raise rates * We need to allow the economy to go through that unfortunate crisis and allow the bubble economy to burst and the real economy to heal * The Federal Reserve shot us up with all these monetary drugs so unfortunately we have to check into monetary rehabPrivacy & Opt-Out: https://redcircle.com/privacy

* The U.S. stock market finished out this holiday-shortened week on an upnote with the Dow Jones up just over 100 points * This was the best week the market has had since March * The dollar was softer on the week; the euro ended solidly above 113 * Gold was under pressure throughout the day but closed only off about $3.00 * Gold stocks earlier this morning were at the lowest I've seen in this cycle but then had a sharp reversal finishing much stronger on the day * The markets are looking forward to no rate hike in September * Michigan Consumer Sentiment Numbers may have been the catalyst to turn the market * They were looking for 91 - slight below last month; instead we got 85.7 - a huge miss * This is the biggest miss in the history of the index * The bigger number was the Wholesale Trade Number, which was expected to reflect inventories to rise .3% * Instead, inventories declined by .1% * This will notch a little off of Q3 GDP * More importantly, inventories went down, but sales also declined by .3% * This means the inventory to sales ratio rose again * It is not at the highest it has been since the 2008 financial crisis * This level has only existed twice in the last 15 years and both of those times, the economy was in recession * Another interesting chart is inventory to sales in the Auto sector * Auto inventory to sales level has risen to 1.73% - the highest since 2009 * Today's inventory to sales ratio is even higher than the recession of 2001 * This is a sign that the Auto bubble is bursting * If the Fed were going to raise interest rates in September, wouldn't we already know by now? * The longer the Fed waits to raise rates, the less likely is is to do it * If the Fed does rates and then has to go back to zero, it will look like the Fed was wrong about the economy * It would be better now to keep rates at zero, indicating they understand the weakness in the economy * The other risk of raising rates, and weakening the economy is that it may become evident that the Fed can never raise rates * The driving force behind the dollar rally is expectation of normalization of rates * The Fed has severed the legs of the economy and higher rates will expose this * The Fed has plenty of excuses not to raise rates, but now that they started zero percent interest rates, they will not be able to stop * The balance sheet has not shrunk at all * There is no way out * How can people think that we can keep interest rates this low for this long and not have problems? * Artificially low interest rates causes mis-allocation of resources * Those mistakes are corrected when interest rates go up * The next economic downturn is going to leave the Fed with no other recourse than QE * Fiscal stimulus will roll out during the election year to cover the bigger deficits caused by Keynesian stimulus package * Also the emerging markets are just starting to unload U.S. Treasuries because they no longer need them to keep their currencies from rising * When they realize that the dollar has peaked and a new bear market has begun, the Fed will have to not only stimulate the economy and monetize the growing deficit, they will also have to monetize the treasuries that are being sold by foreign central banks * QE4 for will be bigger than QE1, QE2 or QE3 * The question is, when are people going to figure this out? * When is the dialogue going to turn from when will the Fed raise rates to how big is the next stimulus package be and how soon will it be here?Privacy & Opt-Out: https://redcircle.com/privacy

* Another day, another 450-point swing in the Dow Jones * The market opened about 250 points higher off the back of overseas markets * Japan was the standout; it was up about 7% on the hope of more money printing * All overseas markets were stronger and the U.S. followed that lead, but at the end of the day, the market was down about 240 points, a lot of selling coming in the final hour * Huge swings almost daily over several weeks generally indicates a change in trend * The long-term trend of a rising market followed by extreme volatility usually marks the end of that trend * All this volatility is based on rate hike uncertainty * Sentiments range from rate hikes coming either in September, October, or December * The first rate hike is not scaring everybody, it is the consequences of interest rate normalizaion * If the Fed does raise rates, I think the market will start looking toward the next rate cut * This bubble is so big, the slightest pin will prick it * The Fed's only option will be stimulus to get out of the next recession * The cycle will be much shorter because of the amount of debt we have * Sentiment is coming from everywhere asking the Fed not to raise rates, which plays into the Fed's hand * This disguises the Fed's actual intention not to raise rates * Market volatility today was probable due to the JOLTS report today which unexpectedly jumped up to the highest level in years, indicating a huge number unfilled jobs * The JOLTS numbers have been good for years, and wages still have not gone up * This is just the raw number of jobs, so these may be a larger number of part time jobs open replacing full time jobs * Many low-paying jobs won't be filled because entitlements provide higher compensation * Everyone is on pins and needles because they know that cheap money is the only thing that is fueling the economy - it's not real earnings * The market may have sold off anyway because there has been a lot of technical damage done to this market and it is likely to go down until the Fed admits that rates are not going up * The stock market, unlike the foreign exchange market or the commodities market or the emerging markets have not discounted rate hike normalization * This means that if the Fed does rates by a quarter point, the dollar could sell off because it is too little too late * It could be the shortest tightening cycle ever * The stock market needs to know that the Fed is not going to raise rates * The U.S. will lose its safe haven appeal * One small example why the Fed can't raise rates is the sub-prime Auto Loan bubble, which is now above a trillion dollars * The short-term benefit to the economy is increased manufacturing, inventory and jobs * But the huge reduction in credit quality of these loans provides risk of fewer future sales due to longer payoff terms * It is much easier to default on an auto loan than it is to default on a home * If we have a trillion dollars in auto loans, if we go into recession next year, we would lose at least $100 - 200 billion on car loans which will further exacerbate the recession in a big way * High-paying jobs in the auto industry will be lost,and the Fed has to know this already * Another trend is a record high in auto leases because they offer lower monthly payments * Leases are not the best choice unless they are bought for a business, providing a tax write-off * Otherwise, for personal use, your payments never end - you never own the car/li> * I have already recommended not to borrow money to buy a car * Save your money and buy a used car you can afford * In the Chinese economy, most cars are purchased with cash, from savings Privacy & Opt-Out: https://redcircle.com/privacy

* Earlier today we released the most important Non-Farm Payroll report ever, at least according to the media * A WSJ article stated that this report could "seal the deal" on rate hikes * Interest rates have been at zero for 7 years as the Fed contemplated lift-off * It all boiled down to one jobs report? * If the Fed were going to raise interest rates in 2 weeks, how can it count on its accuracy or the fact that numbers will change next month? * Let's get into the numbers: * The number we got was 173,000 - well below the consensus forecast * One of the weaker components was private payrolls, which only grew by 140,000 vs and expected 211,000 * The headline number is the unemployment drop to 5.1% - the lowest in the Obama presidency * Once again, the devil is in the details * The unemployment rate is falling because of the mass exodus from the labor force * Another 261,000 Americans left the labor force this month * The participation rate held steady at 62.6% * The lowest rate since 1977 * I think it's heading lower * The total number of persons not in the labor force rose to a new record: 94,031,000 * Also this month another 158,000 Americans find themselves involuntarily employed part-time * That's what's responsible for the "improvement" in the labor numbers * Janet Yellen specifically wanted to an increase in labor force participation and more full-time jobs before contemplating raising rates * Those numbers have gone in the wrong direction * Why is nobody pointing this out? * This is the 9th month in a row that year-over-year factory orders have declined * The only other time that has happened is during recession * Every time we've seen a sharp decline in the market accompanied by an increase in the volatility index, the Fed has responded with Quantitative Easing * More and more people now do not believe the Fed will raise rates in September * If the Fed raises interest rates and the market keeps falling and the economy rolls over, the Fed loses a lot of credibility * This is affecting global markets * The Dow is now in correction * I pointed out in my last video blog that: a) the Fed has never raised interest rates from zero and b)normally the Fed raises interest rates into an accelerating economy * This time the Fed is raising interest rates when the economy is weakening * This time a rate hike will prick a much larger bubble * Even if the Fed raised rates to a quarter of a percent, that is still cheap money * The markets are forward-looking and they are not going to like what they see * The dollar strengthened on anticipation that the Fed will raise rates * America cannot afford higher interest rates on the debt we have now * One of the things most people overlook is the huge stockpile of U.Ss treasuries that are held abroad * Why do the emerging markets have so may dollars? * In the aftermath of the 1997 Asian economic crisis, they bought dollars as a reserve to defend their currency if it started to fall * That is happening * So now, foreign governments are going to start drawing on their reserves, selling treasuries to shore up their currencies * The vast majority of the accumulation happened after QE1, when we had a currency war * The media has labeled this sell-off "Quantitative Tightening" * China has already started to gradually sell treasuries * The Fed has promised not to roll over maturing treasuries and to shrink the $4.5 trillion balance sheet to about a trillion * That's $3.5 trillion of Quantitative Tightening * Interest rates would have to rise dramatically to attract real buyers to U.S. treasuries * No one can afford higher rates,Privacy & Opt-Out: https://redcircle.com/privacy

* The Dow just finished its worst month in over 4 years * A lot has happened in the market since I recorded my last podcast * When I recorded that podcast, I had anticipated a "Turnaround Tuesday" where the market would gap up, but then sell off by the close * That is exactly what happened * Then the Dow had its biggest 3-day rally in history * Still that record-setting rise was not enough to repair the damage done that was done earlier * The Dow had its biggest down month in over 4 years * Still in official correction territory * Adding woes to the stock market are Fed comments that September rate hikes are not off the table * This will continue to add pressure on the markets * If this week's Non-Farm Payroll number is positive, it could be very dangerous for the Dow Jones * Technically, the market is very vulnerable, and without the Fed's support there is little to stop the correction from progressing into a bear market * All of the big money is starting to sell stocks because they believe the Fed may raise rates * The market will keep falling until the Fed cries, "Uncle!" * Once the Fed comes to the rescue, big money will start buying again * The Fed is still ignoring negative economic data, such as today's August Dallas Fed Manufacturing Survey which came in at -15.8 * There is probably not going to be much change in the unemployment number, no matter how weak the economy is * Walmart is now cutting back on hours because they increased wages earlier * As long as the Fed is continuing to bluff that rate hikes are on the table for September or October, this market will be under a lot of pressure * If we close below the lows of last Monday, it is going to get ugly really fast * The Fed doesn't want the market to connect the dots directly from monetary policy to market performance * That would illustrate how unsustainable its policies really are * I compared the Fed's tactics to trying to yank the table out from under the tablecloth, rather than the tablecloth out from under the dishes * The Fed was basing the whole recovery on lifting the asset markets * As soon as the Fed stops lifting, the recovery goes away * One of the interesting things today was the reversal in oil prices * One of the few times oil prices rose, and the stock market didn't * Over the last 3 three days, we've had better than a $10 increase in the price of oil * Oil needs to go up quite a bit more before we can say a bottom is in * An end to rate hike rhetoric will knock the support out from under the dollar and that the strong dollar is undermining global demand for crude oil * I was in Jackson Hole during The Federal Reserve's Annual Economic Policy Symposium to participate in the American Principles Project Economic Summit, which was a protest against Fed policy * Concurrent to our conference another organization called, "Fed Up", sponsored by the AFLCIO and Black Lives Matter * Working class protesters carried signs encouraging the Fed to keep interest rates down and target higher inflation * How is that going to help these working-class "protestors"? * These participants probably had very little knowledge of the Fed or monetary policy * The American Principles Project Economic Summit was denied access to the resort where the Fed Summit met because for security reasons, citing that other group was allowed to meet in that venue * "Fed Up", however, was allowed to meet in the same venue as the Federal Reserve * I think "Fed Up" conference was staged. They conveniently provided a backdrop of signs encouraging more of the Fed's existing monetary policy * The protest I participated in was sharply critical of the Fed's monetary policy,Privacy & Opt-Out: https://redcircle.com/privacy

* It wasn't a Black Monday of the 1987 variety, but it was one for the record books * The Dow was down opened downjust over 1,000 points - the biggest intra-day point drop ever * When the market opened down that low, bargain hunters came in for a spectacular rally * Bringing the Dow almost back into positive territory before surrendering those gains and ending the day down 588 points, another 3.5% drop, closing at 15,871 * Taking out the 16,000 handle just a few days after taking out the 17,000 handle * All of these drops are being blamed by the media on China * The Dow Jones is down about 11% year to date * After today's drop, the Chinese market was down less than 1% * This is not all about falling Chinese stocks * It's the Fed - Everybody believes the Fed is going to end the party * As we got closer to September, the stock market was already going down * I've said all along that the Fed was bluffing - it is a game of chicken * Finally, today, Barclay's is predicting a Fed rate hike in March of 2016 * I think the Fed will launch QE4 before we get to a rate hike in March 2016, which is an election year * The media wants to blame the correction on China, as if there are no domestic problems to worry about * China should be blaming it on us - we're the ones who got the world hooked on zero percent interest rates * The fantasy was that we could raise rates without an impact on the economy * The falling stock market is going to have an impact on the real economy * The economy is weak and getting weaker * This correction will turn into a full-fledged bear market unless we get some official statement from the Fed that they will not raise rates * That may come later this week in Jackson Hole * I am going to be in Jackson Hole at an anti-Fed conference * Here's an example of how ridiculous the "Blame China" rhetoric is: * Maria Bartoromo was talking about the market decline with respect to the China currency devaluation * She actually said that by devaluing the Yuan, Chinese made products will be more competitive against American-made products * America does not produce products that compete with Chinese products! * She's grasping at straws to connect the stock market correction with the Chinese Yuan devaluation * Right now it is positive for America if we can purchase Chinese products more cheaply because we're buying them anyway * Eventually, however, Chinese products will get more expensive when the yuan goes up * She's just trying to fit the narrative because that's what makes everybody feel comfortable * That's why I am not on CNBC and CNN - they realize my comments do not support their editorial policy * I am not talking about Armageddon for the markets - I am talking about the Fed saving the day * I don't think the market is going to crash, but I believe it will go down until the Fed cries "Uncle" and prop up the equities markets with another round of QE * The Federal Reserve did not solve our problems in 2008 - they interrupted the crisis with QE and zero percent interest rates * That crisis would have solved the problem but we kicked the can down the road and we finally caught up to that can * We are resuming the financial crisis that the Fed interrupted from a much deeper hole * Had the Fed raised rates two years ago, we would have been in recession sooner * They should have allowed the markets to solve the problems they caused * Now we have more debt than ever before * I have also been talking about the developments in the foreign exchange markets * The dollar has been strong because rate hikes were expected * The strong dollar has weakened commodities,Privacy & Opt-Out: https://redcircle.com/privacy

* What a week for global stock markets, but in particular, the U.S. stock market, which had its worst week in 4 years * The Dow Jones down better than 1,000 points - over 10% from its peak puts it in official correction territory * One-third of the stocks in the S&P 500 are already down 20% from their highs * The Dow lost more than half of the 1,000 points today - 530 points, which is the 9th biggest point decline ever * This is on top of the 350 points dropped on Thursday * Thursday we broke below some key technical levels so Friday's drop was inevitable * There could be a bigger one looming for Monday * This is reminiscent of the weekend before Black Monday back in 1987 * We are only about 300 points above the lows from October last year when St. Louis Fed President James Bullard saved the market and sent the Dow up 2,000 points * This time he is throwing the market an anchor * He still indicates the Fed is undecided * What data over the next couple of weeks could be that significant? * The Fed does not want to admit that they can't raise rates * When is the Fed going to blink? * Valuations are extremely high, and the Fed is about to go from supporting the market to leaning against it * The economy is decelerating * I think the market is going to surrender all the gains it has made since March of 2009 * None of those gains have been real - they did not come from increased production or a genuine increase in corporate earnings, it was all Fed engineering * The market has gained no ground since QE was suspended * If the market goes down on Monday, what is the Fed going to do? * The Fed needs an excuse not to raise rates * The drop is not because of China * The problem in China and in the emerging markets is caused by the perception that U.S. Fed is going to raise rates * The markets want to blame the market correction on China but that is not why our market had a correction * Emerging market currencies are taking the brunt of the selling by those who are expecting a Fed rate hike * The euro is very strong today, and the dollar index is declining * The euro is going to go on a big move, especially if the Fed caves * Gold is up $80 in the last 2 weeks * What happened to the theory that gold will collapse below 1000? * Two weeks ago hedge funds were for the first time net short gold * How is that trade working out for them now? * A lot of people are trapped short the euro and short gold * Now pro-dollar bets are pressing smaller currencies * This is the last throes of the dollar bull, based on the rate hikes that aren't going to happen * At the end of the 6 or 7 year journey, there can't be a rate hike * If the Fed actually raises rates, they lose credibility because they will have to immediately reverse course * If they do not raise rates, they can say caution is needed because of another dip in the recession * This way they don't have to admit that the policy was a failure * The only economic data that came out today was the August Manufacturing PMI number - expected to improve over last month * It dropped again to 52.9 - the lowest level since October 2013, and the biggest miss in 2 years * If the Fed is truly data dependent it would have already admitted that it can't raise rates * At the end of 2014, I predicted that 2015 would be a much weaker economy than forecasted * I was right about that * I thought by now the Fed would have admitted that the economy is too weak for a rate hike * But the Fed just keeps talking about a potential rate hike as though it were a real possibility * This is a very dangerous game Privacy & Opt-Out: https://redcircle.com/privacy

* Today the FOMC minutes were released at 2:00 today and this is the last look inside the head of the FOMC members before September * Now expectations are being pushed back to December * Gold and silver prices were up today in spite of expected hawkish Fed comments * We are at more than a one-month high in the gold price now above 1130 against a backdrop of extreme bearishness suggests we've seen the low in this cycle * Silver was down yesterday and recovered dramatically today which suggests an upward trend * There is no more upside in the "Fed is raising rates" trade * The Fed may not raise rates at all, or say they might not raise rates again * Is the Fed raising rates just so they can cut them? Raising rates will accelerate the recession * Whether the Fed raises rates or does not raise them, this may be the end of the dollar rally and the end of the gold and silver decline * The FOMC minutes do not indicate a plan for a rate hike in the future * The Fed does not want to admit we're not progressing in the direction the Fed wants; we're moving the other way. * Case in point: the Empire State Manufacturing Index came out on Monday * Last month, in July the Index was 3.86% - a low number * The consensus for August was a slight improvement to 4.75% * We actually got -14.92% * This is the lowest number since April of 2009 and the biggest miss since 2010 * The Fed is worried that there is not enough inflation * There's not enough growth and the job market is not there yet * If the Fed is further away from their goal than they have been in this ridiculous monetary experiment of zero percent interest rates and quantitative easing * Walmart earnings are down - blaming weak earnings on the strong dollar * How much weaker will their earnings be with a weak dollar? * Americans are spending more money on food - inflation that is not being measured * The Stock Market is still selling off, because a rate hike is not priced in, as it is in the currency markets * This would be the first Fed rate hike in a decelerating economy * This is not a normal period, so don't expect the stock market to behave normally * Now, people are now starting to figure out that the Fed's process is not so smooth * The stock market will trend down until the Fed comes clean and admits that it cannot raise rates * This is just a lag between QE3 AND QE4 * Anything that can go wrong, will go wrong and when it comes to this Fed and this monetary policy, Murphy is going to look like an optimistPrivacy & Opt-Out: https://redcircle.com/privacy

* On Friday we finally got the Non-Farm Payroll numbers for July * The consensus is that this reports indicates that an interest rate hike is inevitable * This is the rate hike that everybody has been expecting and this report see * The report is weak, relative to previous months, but slightly ahead of the consensus * It seems like we are going in the wrong direction * Labor Force Participation Rate is stagnant at the lowest in decades * Q2 GDP was much lower than expected * the Atlanta GDP Now Forecast for Q3 at 1% - a third of the official forecast * If the Fed was not willing to raise rates last year, when the economy grew at 5%, why would they raise rates now? * The Fed may have backed themselves into a corner where they have to raise rates * If so, Yellen has already prepared the market for a tiny raise * They recognize that the market is fragile * It would be a more credible move for the Fed to not raise rates at all * The market's reaction to the jobs data and the "certainty" that rates are going up * The dollar sold off somewhat * Gold rose slightly * Higher interest rages are expected to be bullish for the dollar - Why didn't the dollar rise? * The old adage, "Buy on the rumor, sell on the fact" * If the Fed raises rates in September, it will be the most highly anticipated rate hike ever * If the market buys on the anticipation of a rate hike, the actual rate hike will be the sell signal * The market is telling us it has gained all that it is going to gain from any future rate hike * The Fed will deliver much less in the way of rate hike than the market expects * The reaction in the stock market was more interesting - The market was down again * The longest losing streak in the Dow in about 4 years * The fact that the U.S stock market is still falling indicates whereas the currency markets may have factored in a rate hike, the equity markets have not * I have been hearing the refrain,"There is no reason to fear a rate hike!" * This is a very naive to look at the market because there is no historical precedent for interest rates to stay low for so long * These are not "normal" times * More importantly, the market only expects a rate hike if the economy get better * But now the data shows that the economy is continuing to slow down * The crowd that believes a rate hike will not harm the economy should reassess their thinking * Corporate earnings, already under pressure will be further weakened by an interest rate hike * The consumer is barely surviving with rates at zero * 2015 is probably going to be the weakest year of the entire so-called recovery * If the Fed really begins to raise interest rates, what is going to happen in 2016? * We will be in a bear market, the real estate market will drop and a recession will follow * The Fed's only medicine at that point will be QE * The truth is, the economy did not need the first round of QE and it nees QE4 even less * This is going to be the mother of all money drops and all the people who have been saying,"The Fed was right!" are taking a premature victory lap * Hopefully it will shock the Keynesians into abandoning central banking and central planning * And finally embracing a real market recovery based on free market principles * Those of us who have seen the writing on the wall will be rewarded in the investment front * For having the fortitude to maintain our positions and not throw in a winning handPrivacy & Opt-Out: https://redcircle.com/privacy

* One piece of positive economic news ISM Non-Manufacturing Index for July surged to 60.3 - highest number in 10 years * The ADP Employment Report came in at 185,000 jobs, well below the consensus * June Trade Deficit rose 7.1% - in line with expectations * June Layoffs rose to 105,696 biggest layoff number in 6 years * Consumer Comfort Index down to 40.3 second lowest number since November * The Atlanta Fed dropped a bombshell forecasting Q3 at just 1% * Given this slowdown, could we possibly have a rate hike? * The stock market has had 6 consecutive down days * The stocks with no earnings are doing the best * Very reminiscent of the dot com era * The "story stocks" are selling in 2015 * Companies that actually have earnings are experiencing the greatest pressure on their share price * Every time we have a dip in the stock market, the Fed always comes to the rescue * Why wait until the economy is slowing down to raise rates? * They can't do that this time, unless they want to abandon their rate hike rhetoric * They will have to take the rate hikes off the table * Janet Yellen continues to say rate hikes are data dependent * The data has been bad for quite a while * The economy is growing at the slowest pace of the entire "recovery" * All the Fed can do is go back to the drawing board with more QE, because they can't admit that it never worked * The money printing is just getting started * Not that it is going to work, but it is the only policy remedy the Fed has * Some stocks are really getting beaten up as earnings continue to disappoint * This topping pattern has got to worry the Fed * Any rate hike will accelerate the decline * We have a stock market bubble and raising rates will prick that bubble * Ben Bernanke created the stock market bubble thinking the "wealth effect" would cure the economy * Bernanke would not acknowledge that bubbles weaken the economy because it was not politically advantageous * The First Republican Debate was held tonight, so please follow me on Twitter for my comments * Donald Trump is far and away the leader in the polls and he is one of the few candidates who have been critical of the Fed * The only other candidate in the race who knows anything about the Fed is Rand Paul * Tomorrow could be a big day - the question is, if we get a bad jobs number, will we finally have a reaction in the currency markets?  Privacy & Opt-Out: https://redcircle.com/privacy

* This is my 100th Podcast * This new format allows for timely analysis when is is most convenient for me and for you, the listener * Please share these podcasts, to get this valuable information out * My podcasts can be accessed on YouTube, on iTunes and other podcast sites and right here on my website * Also don't forget to check out my Twitter feed, because I comment much more frequently on daily economic news * Check out my post on Facebook about the CEO who established a $70,000 minimum salary for all his workers, and the latest news is that his policy is about to take the company down * Today a bombshell was dropped on the labor markets on Friday in the form of Employment Cost Index * Measures the cost to employers: wages and benefits * The expected increase was .6, but the actual number came in at just .2 for the quarter * This the weakest number since 1982, since they began keeping records * Janet Yellen has been saying that improvements in the labor market must precede a rate hike * This is understood to mean wages, labor participation rate and full time vs part time jobs * We're 0 for three, right now - all three are falling * As soon as this number came out, they dollar sold hard * But then, the dollar clawed its way back, and gold was down again - gold stocks got crushed - Why? * Jon Hilsenrath, the chief economics correspondent for The Wall Street Journal, came out with an article, speaking for the Fed, stating that the Fed does not need wage growth to hike rates * Really? The Fed is going out of its way to preserve the pretense that it can actually raise rates * They are seeking the psychological effect of rate hikes without the real world damage of actual rate hikes * If the Fed still believes it won't raise rates unless the labor market improves and they are taking wage hikes off the table, then what are they waiting for? * The other two remaining criteria are still down * Janet Yellen still says she's data dependent and all the data that she is depending on is negative * The stock market looks very toppy - it looks like it will roll over and when it does the Fed will bring in the cavalry in the form of stimulus * The Fed built the recovery on a stock market bubble and a real estate bubble * Ben Bernanke's goal for 7 years was to create a "wealth effect" on assets that are now at risk - they are not going to let them collapse * All of the data would argue for no rate hike in September * Janet Yellen is implying, by talking about rate hikes, that she believes that the economy is going to improve, when all signs indicate the opposite * Therefore traders are ignoring bad economic data because they trust that Janet Yellen believes the economy will improve soon * Don't pay any attention to the man behind the curtain, because Janet Yellen says the bad news is not real * We can all see the negative data, but no one wants to acknowledge it because Janet Yellen is not recognizing it publicly * They buy the dollar, they sell gold and there is a dichotomy between those who don't own gold and have no ability to deliver it and are selling gold to those who don't actually want it - they are gambling on the price of gold * The amount of gold being gambled is greater than ever before * Sales for those who want to hold gold are skyrocketing - the mints are running out of supply * We are running out of some of our silver * Schiff Gold * Our customers who buy gold and silver are not offering to sell - they are buying more * They are reacting to lower prices * On the other side of the coin, clients are reacting negatively to the high dollar weighing on the relative value of foreign stocks Privacy & Opt-Out: https://redcircle.com/privacy

* This morning we got the first look at Q2 GDP * Q1 had been reported most recently at -.2 * Everybody was looking for an upward revision due to the double seasonal adjustments * The revision brought Q1 into the black, but only by .6 * Q2 expectation was 2.9; instead it came in at 2.3 * I had mentioned that at best, Q2 GDP would be in the low 2's, which is what we have * After revisions, however, we could end up at below 2 for Q2 * Wall Street and the Fed were too optimistic about Q2 * Now previous GDP years have been revised, with the net effect of lowering U.S. GDP growth almost 1 percentage point for the past three years * After revisions, the average growth rate is 2% per year * 2015 Q1 & Q2 average GDP growth rate is just 1.45% * The worst first half of the "recovery" * What is the point of raising rates now, when the economy is at its weakest? * The Fed is still waiting to see improvements in the labor market * Unemployment is low * The Fed is waiting to see increases in wage growth and in labor force participation * It is unlikely that there will be more part-time workers finding full time jobs * The Fed is still putting on a show, pretending that a rate hike will be appropriats * This recovery is the weakest recovery in the modern era, since WWII * We have had the most Keynesian monetary stimulus ever * The Keynesians will not consider that their policies are an economic sedative * Even though this is the biggest economic ever, the Keynesians still want more * Redbook Year-Over-Year Same Store Sales rose by just 1% * Last year, the year-over-year growth was 3% * Pundits blame poor retail sales on "hot weather" * People aren't shopping because they aren't making enough money * The U.S. home ownership rate fell to a new low of 63.4% * The result of government efforts to increase home ownership is the the lowest rate since 1967 * Rental prices are at an all time record high * July Consumer Confidence plunged from 99.8 in June to 90.9 in July * As evidence continues to pour in that the U.S. economy is weaker than the government and the press report, the dollar remains high * Gold is not getting a rally from the economic news * Shorting of gold by speculators is a dangerous game, as there is no indication that the price of gold overvalued * It's not the traders who are buying gold. It's the strong, long-term holders that are doing all the buyingPrivacy & Opt-Out: https://redcircle.com/privacy

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

* Today's Podcast is entirely devoted to gold and gold stocks * Last night, in just a few minutes, gold dropped $50 * One or more major sell orders hit the market at the same time and gold went down below $1100 * It was down $20 by the time New York trading opened and by market close gold was down around $37 on the day * Silver was down only about .15 today * Why was all that gold dumped? The goal could not have been to get a good price - the goal was to knock the price down * The HUI was down 10% on the day * This bear market in gold stocks is now bigger than the one from 1996 to 2000 * Gold stocks are much cheaper today than they were at the end of the dot com bubble * If this a measure of trust in central bankers, the market is expressing greater confidence in Janet Yellen than it did in Alan Greenspan in 1999-2000, * We know how badly that turned out for stocks and how bullish it turned out for gold * The timing of this selloff comes on the heels of the media's spin on Janet Yellen's recent Congressional testimony * But the real news that ignited the sell-off was China's admission that they have gold reserves and in fact they intend to add to those reserves, surprising the market * If China was lying about how much gold they have had for the last six years, why does anyone believe they are telling the truth now? * I think they are still lying - being strategic * They want to get the price of gold down because they still want to buy a lot more gold * If China still needs more gold, eventually this will bring the price of gold up * Also a very negative WSJ article compared gold to the "pet rock" craze * This is the same nonsense that proliferated in the 1990's * The WSJ article describes gold investment as "a leap of faith" relative to dollar or stock investments * Gold should not be compared to stocks - it is currency, a commodity * Gold has intrinsic value, whereas the dollar is a fiat currency, backed by faith alone * Gold has had value for 5,000 years - you don't need ot have faith, you just own it * There will always be a use for gold * Why have faith in central bankers when everybody who has put their faith in central bankers in the past has been burned * An article on Zero Hedge compared the WSJ op-ed to a similar one from 1999 * The title was, "Who Needs Gold, When You Have Alan Greenspan?" * They called him "the maestro" * He gave us the dot com bubble, the real estate bubble and the financial crisis of 2008 * That's what happened to the people who put their faith in Alan Greenspan * Over the next 12 years after that article was written, gold appreciated 650% * Who needs gold when you have Alan Greenspan? Everybody * Today Alan Greenspan recommends gold * If we've got Janet Yellen, then we need gold * Greenspan wrote the playbook that Bernanke and Yellen are expanding and he knows it does not work * When you have Janet Yellen, you need all the gold you can get * Fortunately, it's a lot cheaper to buy gold and it is a lot cheaper to buy the companies that mine it * What could go wrong? Everything - what went wrong in 1999 and in 2008? * The same thing that went wrong then will go wrong now, because it is the same central bankers * And the same players on Wall Street either don't recognize the danger or are pretending it doesn't exist and abandoning everything we know about monetary policy * This is the biggest bubble yet - the entire economy is dependent on bubbles * Just when people trust the central bankers the most, that's the best time to buy gold * When this market turns it's going to be vicious * Once the market turns,Privacy & Opt-Out: https://redcircle.com/privacy

* Today Janet Yellen goes back up the Hill for the second of her 2-day Congressional testimony and the press has already made headlines about what she did not say * According to the headlines, Yellen's "hawkish" testimony reflected that she is putting the Fed on a path to hike rates later later this year * That is not what she said * From her prepared, written testimony, which was carefully crafted for all eyes, this is what she said: * "If the economy evolves as we expect, economic conditions likely will make it appropriate at some time this year to raise the Federal Funds rate target, thereby beginning to normalize the stance on monetary policy." * This sentence starts with a big condition: "If the economy evolves as we expect" * When has the economy ever evolved as the Fed expected? - Probably never * Even if the economy improves, those improvements may not live up to the Fed's unspecified expectations * "Economic conditions might make it appropriate to raise rates- * Not result in raising rates, of require us to raise rates - just because it is appropriate to raise rates doesn't mean the Fed will raise them * If the Fed was going to do what was appropriate, they would have raised rates a long time ago * Zero percent interest rates was never appropriate * Yellen herself has said she was likely to leave interest rates lower than would be appropriate because of "special circumstances" * Even if it is appropriate, there is no commitment to raise rates at any point this year * If Janet Yellen really said what the headlines infer, she would have said: * "Given the strength in the economy we will be raising interest rates later this year * She said nothing like that * The Fed went way out of its way to commit to nothing * Yet that's not the way the media is covering this * Why is that? Everyone wants to pretend that the economy is good and that the Fed is going to normalize interest rates * All of this make-believe causes the dollar to rally and gold to go down * By talking about raising interest rates, the Fed is pretending that the U.S. economy is strong enough to withstand higher interest rates without actually inflicting the pain of higher interest rates on all those addicted to the bubble economy * Yellen's responses to to questions during the Q&A were equally dovish * At one point in particular Yellen admitted that we've had zero percent interest rates for a long time and will proceed slowly in any attempt to raise rates * If we notice higher rates are causing pain, we will slow down * What is hawkish about that? * When Paul Volker raised rates to 20% of course he knew it would hurt the economy in the short term, but he knew it was needed * Yellen is worried that if the patient makes a bad face, she will discontinue the "medicine" * It is impossible to raise rates without hurting the economy, especially because a large part of our economy is now dependent on zero interest rates * Higher interest rates will expose a lot of unsound business decisions * It's not the economy that will be hurt, but the bubble - zero percent interest rates are the fuel for the bubble * Zero percent interest rates are more essential now than they were six years ago * Now we have much more debt to service * An interest rates hike would quickly wipe out any minimal gain from a stronger economy * The reality is the economy is already weakening * 70% of our GDP is consumption fueled by debt * Yellen said that zero percent interest rates may be a problem in the long run * It's the long run now * The deficit is already unsustainable * One of the most interesting rates went unanswered: Privacy & Opt-Out: https://redcircle.com/privacy

* As I have been saying all along, the Greek Prime Minister capitulated to German demands * In fact, he is agreeing to a plan that is more onerous on Greece than the one he encouraged his own people to vote down just over a week ago * Those who thought Greece held all the cards, that the Eurozone would risk a domino effect of other nations leaving the euro * I felt Germany held the stronger hand and would push Greece from the Eurozone rather than cave in to Greek demands * Greece is going to stay a part of the Eurozone, at least for now, because it is the only way they can get the bailout funds they need to sustain Greek socialism * Greek socialism will be mitigated to a degree, by the austerity demands to cut government spending * They don't need higher taxes * If Germany were to allow the Greek debt to be forgiven, the moral hazard for other struggling states would be enormous * The message Germany is sending is that it did not go well for Greece, it is not going to go well for any country who refuses to get their economic house in order * Germany demonstrated that membership in the Eurozone is not for life * This will force other countries to get their house in order * I don't agree with Greece's choice, although it might be better for Greece in the short than leaving the Eurozone * No Greek politician wants to accept responsibility for the austerity measures - it is easier to throw the blame over to Germany of Brussels * Push comes to shove no politician is going to be able to undo Eurozone austerity measures without having to face the music * Greece has run out of other people's money to fund socialism * Now their debt to GDP will be over 200% * They can't pay their debt now - how are they going to pay off a larger debt? * Part of the austerity measures, included a €50 billion privatization program, similar to the IMP's recommendation years ago * Greek government assets will be sold off for the benefit of foreign creditors * I think it would have been best for Europe to kick Greece out and loan them no more money * The euro is down today, but I think it is a dip to buy the euro * This move will show the markets that the euro is here to stay * Greece could have done one of two things: * Greece could have refused the aid package and defaulted on the debt * If they got kicked out of the euro, they could still use the euro as currency, they just would not have access to the ECB for bailout * If this happened, banks would fail; the government would have to downsize, pensions would have to be cut; * Without a tax income in euros, the government would have to operate on a balanced budget * Eventually, relieved of the debt they currently owe, they would be about to re-establish better credit * Greece could then enact real tax reform, become a tax haven in Europe and that would grow the Greek economy * The liberals will point to Greek economic challenges as proof that cuts in government spending do not work * It's not about asking the people who are already pulling the wagon to pull harder; it's about the people who are riding in the wagon to get out and start pulling themselves * Greece needs government level austerity * The Greek shipping industry is vibrant because it is not taxed * If shipping is now taxed, it will drive the industry away from Greece * In order to stimulate business with lower taxes, they would have to leave the Eurozone * Another choice is to establish a sound drachma backed by gold * Where would they get the gold? From privatization of assets * I would use the proceeds to back up my currency * Alternatively, they could back the currency with a Foreign Exchange Reserve Privacy & Opt-Out: https://redcircle.com/privacy

* This podcast comes from my hotel room in Las Vegas, as I am attending Freedom Fest * Janet Yellen received a standing ovation at the end of her talk, and I can't understand why... * Headlines from the talk report "Rates to go up by the end of the year" * Actual quote:"Based on my outlook, I expect that it will be appropriate at some point later to take the first step to raise the Federal Funds Rate, and thus begin normalizing monetary policy." * "I want to emphasize that the course of the economy and inflation remains highly uncertain, and unanticipated developments could delay or accelerate the first step." * In other words, the process will be delayed because whatever happens will be unanticipated or unannounced because the last thing Yellen wants to do is to admit that she can't raise rates. * We have gone 9 years without a rate hike * The market is not prepared for a rate hike given the enormity of the debt * The U.S. owes more money than all the other debtor nations combined * We can only pretend to be solvent and zero percent interest rates are a big part of that pretense * We will not be able to service our debt under normalization * Yellen states that the labor market is continuing to improve * No, it's not * Didn't she see Friday's jobs report, based on downward revisions to prior months? * Didn't she see the plunge in the labor force participation rate to a new low since 1977? * Didn't she see the all the part-time jobs that have replaced the lost full-time jobs? * Didn't she see yesterday's weekly jobless claims report that surged to 297,000? * Yellen previously stated that she would not raise interest rates until the labor market improves, and since then, the labor market has worsened * Wholesale inventories for May up by .8% * Year over year, sales are down 3.4%, the biggest decline since the 2008 financial crisis * Greece is forced to revisit austerity measures as Germany refuses to budge * Greece realizes they don't want to leave the Eurozone * The moral hazards are such that Europe can't budge * I dont'know how the Greek economy can grow, given the enormity of their debt in the hands of a socialist government * Europe needs to keep pressure on Greece in order to maintain standards for weaker economies * The Chinese stock market "collapse" is being overstated in the press * Even though the Chinese market is down 30% in a short period of time the Chinese market is still positive on the calendar year * The U.S. market is down * In April of this year, Chinese stocks took off because changes in Chinese government policy, making it possible for investors to own certain stocks for the first time * It should be no surprise that when a rush of investors tried to buy the new stocks, the price went up * At some point there is going to be profit-taking, sparking panic selling * This is normal market behavior * The market just retraced its steps, leaving gains achieved prior to April * The fundamentals that drove the market higher earlier this year are still solid, and they're in place * The dip in the market is a buying opportunity * The next round of gains will be more sustainable * The Chinese government exacerbated the volatility, making a classic mistake by chasing the market * U.S. economic pundits are commenting on the absurdity of the valuations on some of the Chinese stocks * They are living in a glass house - why are they throwing stones? * The same can be said about some U.S. stocks with ridiculous valuations * The Chinese monetary policy is creating issues, but beneath the bubble is a legitimate economy with production growth, savings and investment Privacy & Opt-Out: https://redcircle.com/privacy

* Over the weekend the Greeks voted no to the Eurozone bailout terms * The Greeks ars still hoping for a better deal, hoping to avoid austerity * The irony is that the consequences of their vote will bring on even more austerity, as a return to the drachma will result in a lower-valued currency * For example, pensioners will be paid not in fewer euros but drachmas that buy less * This will mean a huge collapse in the standard of living in Greece - far worse than the "austerity" called for under the Eurozone bailout terms * There is no way out without substantive reforms, particularly in smaller government * The markets are reacting adversely because they want to extend and pretend * The euro will be stronger without Greece, despite comments in the press to the contrary * Fears of "contagion" - other countries leaving - are unfounded * Greece is headed for hardship, but they will have to impose austerity from within they could rebound * Greece has a lot of potential, they have natural resources and a thriving shipping industries * The secret of the success of the shipping industry is that it is not taxed * The answer will be fewer taxes and less government spending * Short term, leaving the Eurozone will be negative for Greece * The Greek vote will be positive for the euro * There is still a flight to the dollar for safety over gold * The reason gold has not benefited from Greek instability is that the dollar is still viewed as a safe haven * More and more economic data reveals how weak the U.S. Eeconomy is * This week the Service Sector PMI for June contracted from 56.8 in May to 54.8 * More and more people are looking for a rate hike in December rather than September, but they are still buying the narrative that interest rate hikes are feasible * This belief supports the dollar over gold * Our economy is weaker than other countries whose interest rates are higher * When are the dollar buyers going to realize that they have jumped out of the frying pan into the fire? * The dollar is the grandaddy of the fiat currencies * In light of continued weak economic data and further deterioration in the job market, the Fed will have to come out with another round of QE * That will be a game changer * All the economic news around the world is fundamentally good for gold * At some point the speculative forces that are restraining gold will not hold up * All that stands behind the U.S. dollar is faith * At one point people had faith in Greece, they had faith in Puerto Rican government bonds and in sub-prime mortgages - and then they didn't * When we were on the gold standard, we had real value backing up our money * All that stands between us and economic collapse is the faith we have in a worthless piece of paperPrivacy & Opt-Out: https://redcircle.com/privacy

* Happy 4th of July to everyone * Unfortunately, we have given up our independence to government tyranny * I will be back on the radio again - I'll be on the Alex Jones Show every first and third Friday of every month when the Non-Farm Payroll numbers come out * I will be doing tomorrow's show - the second hour of the show * The Non-Farm Payroll Report came out early this week because of the 4th of July holiday * The consensus forecast of 230,000 jobs was close to the actual number 223,000 * The unemployment rate of 5.5% last month was expected to come in at 5$% - actually came in at 5.3%, the lowest unemployment rate in 7 years * Great news, right? Not great news * The devil is in the details * The Labor Force Participation Rate - 62.9 last month - plunged down to 62.6% * This is the lowest rate since 1977 * 432,000 people dropped out of the labor force in June - twice the number of people who got jobs in June * Once again, these new jobs are low-paying service sector jobs * During the Obama "recovery" we have lost 1.4 million manufacturing jobs and gained 1.4 million wait staff and bartender jobs * According to the Household Survey 640,000 Americans left the labor force in June * Now we have a record 93.6 million Americans no longer in the labor force * The Household Survey reports 349,000 jobs were lost during the month * The only net gain - 161,000 part time jobs - represent a net loss * The Household Survey shows that we lost good jobs * When asked about the Labor Force Participation Rate number, Secretary of Labor Perez commented, "One month does not a trend make." * This trend has been going down every month of every year that President Obama has been in office * Janet Yellen announced that the Fed would not start raising rates without "further improvement in the labor market" * She specifically cited the Labor Force Participation Rate and proliferation of part-time jobs as troubling trends * We are now further from that goal * The demographic leaving the labor force are young people who cannot find jobs * Average Hourly Earnings, to increase .2, actually came in flat, at zero * Last month's .3 increase was revised down to .2, failing to beat the estimate * Weekly Jobless Claims expected to come in at 270,000, actually came in at 281,000 and I think this number is going to go higher * There have been fewer hires and fewer fires than expected because the estimates were based on the Birth/Death model, that is proving inaccurate * Factory Orders are down for 9 of the last 10 months - this month we were looking for -.3% and we got -1% * April was originally reported as -.4 but was revised down to -.7 * Year over year Factory Orders are down 6.3% (adjusted) * The only time we have seen numbers this weak is during a recession * The economy is in worse shape now that when QE3 was launched * Yet the markets did not react to these bad numbers * They still cling to the narrative that the Fed is going to raise rates because the U.S. economy is in good shape * Article on Motley Fool refers to me as someone who was "right for the wrong reason" * The misquoted me on my prediction on (mortgage)interest rates going up * After I made that statement, interest rates did go up for 2 years - they did not go down until after the bubble burst * The Fed raised interest rates from 1% to 5-1/2 percent * This quote was taken out of context - read my 2007 book, "Crash Proof" * There are dozens of articles about the real estate bubble 2004-2007 * The record shows that I was right for all the right reasons * I did think the dollar would go down after the housing bubble burst,Privacy & Opt-Out: https://redcircle.com/privacy

* One more time President Obama seeks to buy Democratic votes with a free lunch by appealing to workers * Promising more overtime pay, to go into effect in 2016 * Raises the threshold for overtime pay requirements * Workers who earn salaries of $50,000 or less must be paid overtime for hours worked over 40 hours per week * This prevents workers who put in extra hours on their own time to try to advance * This could cause employers to reduce salaries to factor in overtime * It will be harder for employers to change existing work agreements * This will adversely affect workers on flexible schedules, such as those who work at home in 2016 * Employers will have to seek more control over workers' schedules * New law will disproportionately hurt women, the very constituency Democrats claim to protect * Those who have variable workloads throughout the year will be adversely affected * This law eliminates choice and increases costs, but it's great politics * Followup on Puerto Rico: Minimum Wage * Puerto Rico is an example of the adverse effects of a minimum wage law that has devastated an economy * Puerto Rico's has more than 20% unemployment * Puerto Rico labor force participation rate is 42-43% * The minimum wage has priced out more than half of the labor force * There is no entry level work in Puerto Rico * If the minimum wage is so good, why does it not work in Puerto Rico? * Puerto Rico is a real-life case study on the adverse effects of minimum wage laws * Puerto Rico's only advantage is its tax law for incoming businesses which will increase demand for labor * Recent comments on my last podcast questioned my support for Puerto Rico * I never advised buying Puerto Rican debt - I knew it was a problem * It makes sense to move to Puerto Rico to take advantage of the new tax lawsPrivacy & Opt-Out: https://redcircle.com/privacy

* Global stock markets got beaten up overnight and the carnage continued here in the U.S. * Dow Jones down 350 points by closing bell - biggest point loss of the year * NASDAQ down 122 points * Possible Grexit sparked sell off in FOREX markets * Banks in Greece closing, sending masses to the ATM machines * Euro ended up closing near the highs of the day - nearly to $113 * The dollar was weak all day against the Yen and against the Swiss Franc * There was no safe haven move into the dollar - gold up * The dollar lost considerable ground against the euro * Another confirmation that the dollar's rally is over * My newsletter released today does a good job comparing the U.S. vs global markets * The U.S. did well against the international market from 1996 to 2000 * In 2008 the U.S markets went sideways and the markets I recommend skyrocketed * We have been in a period similar to '96 - 2000 and now we are about to see returns even greater than the 2008 gains in our markets * Regardless of the direction that Greece goes in this weekend's referendum, the dollar is going down against the euro * Puerto Rican governor finally admitted the obvious - repaying their debt is impossible * Puerto Rican debt is a fraction of the U.S. national debt * If it is mathematically impossible for Puerto Rico to pay their debt, why does anyone think the U.S. will be able to eventually pay off its debt? * The only way we can pretend to pay our debt is for the Fed to do it for us by creating inflation * This is yet another reason why the Fed is not going to raise rates in September * We continue to get recession-like economic data, despite the fact that the Fed is still optimistic * The Federal Reserve is looking for an excuse to not raise interest rates * Maybe the situation in Greece will provide that excuse * Maybe it will be the volatility in China * "External problems" are providing an excuse to not raise rates * It is important to point out that Puerto Rico would not be experiencing such insurmountable debt if it were not for U.S. policy. * Puerto Rican debt has seemed attractive with its high yield and triple-tax-exempt status * Zero interest rates from the Fed, on top of high yields, have caused the debt to seem safe, even though mathematically it cannot be paid * People may begin to wake up when they realize what's going on in Puerto Rico and that may become an even bigger problem than GreecePrivacy & Opt-Out: https://redcircle.com/privacy

[fullwidth background_color="" background_image="" background_parallax="none" parallax_speed="0.3" enable_mobile="no" background_repeat="no-repeat" background_position="left top" video_url="" video_aspect_ratio="16:9" video_webm="" video_mp4="" video_ogv="" video_preview_image="" overlay_color="" overlay_opacity="0.5" video_mute="yes" video_loop="yes" fade="no" border_size="0px" border_color="" border_style="" padding_top="20" padding_bottom="20" padding_left="0" padding_right="0" hundred_percent="no" equal_height_columns="no" hide_on_mobile="no" menu_anchor="" class="" id=""] [one_full last="yes" spacing="yes" center_content="no" hide_on_mobile="no" background_color="" background_image="" background_repeat="no-repeat" background_position="left top" border_size="0px" border_color="" border_style="" padding="" margin_top="" margin_bottom="" animation_type="" animation_direction="" animation_speed="0.1" class="" id=""] [fusion_text] In reviewing my Wikipedia page, I noticed some information that is either wrong or narrowly slanted to promote a negative impression of me. We've tried to correct the issue, but Wikipedia makes it very difficult for anyone directly connected to the person or subject of the page to make changes, claiming "Conflict of Interest". This opens the door, however, for those who have a good grasp of editing Wikipedia but who have a decided "left" slant to claim the substance and the direction of the information. Once it's out there, it is very difficult to fix. Wikipedia wants editors to be unrelated to the subject to make contributions. Below are a few things that should be added to the page. Please feel free to make these additions as you would like. Please note that changes need to be discussed in the "Talk" page, first. Here are Ten Simple Rules for Editing Wikipedia. [/fusion_text][/one_full][one_full] [title size="1" content_align="left" style_type="" sep_color="" class="" id=""]On Minimum Wage[/title][fusion_text] Eliminate the minimum wage so teenagers and other low-skill workers can get jobs, and acquire the on-the-job training necessary to earn higher wages in the future. It should not be illegal for people who lack skills to accept employment. The minimum wage punishes workers by legally preventing them from offer their services below a specified legal minimum. If they do not have the skills to justify that minimum, it is illegal for them to work, even if they can offer some value to employers, just not enough to cover the minimum wage mandated by government. So instead of entry level jobs, that will lead to higher skills and wages in the future, many individuals are rendered legally unemployable. People have a right to accept any job that they personally prefer to unemployment. Government should not substitute its judgement for the judgment of workers.[/fusion_text][/one_full] [title size="1" content_align="left" style_type="" sep_color="" class="" id=""]The Housing Market[/title][fusion_text]The government should stay out of housing completely. Abolish agencies that loan money or guarantee mortgages etc. no FHA, Fannie, Freddie. No Department of Housing and Urban Development. There should be a free market in housing. What I actually said on the home mortgage deduction was that, absent the repeal of the entire income tax, we should have a flat rate tax with no deductions including home mortgage, but that would include a much lower rate, so that the removal of the home mortgage deduction did not result in higher taxes. It just eliminates the government- created incentive to buy verses rent.[/fusion_text] Peter Schiff Says The Real Financial C...Privacy & Opt-Out: https://redcircle.com/privacy

* It looks like there is going to be some kind of deal to avoid the "Grexit" * Greek's exit would be great for Europe, but it would not be politically attractive for either side * As long as Greece stays in the Eurozone, the Greek government can continue to blame Germany or Brussels for their problems * So-called austerity will continue without any haircut to the debt * The same is true for cuts to government spending * The Greek government may increase taxes and/or adjust the retirement age for pension, but no government spending cuts are on the table * Tax increases will provide more incentive for tax evasion or avoidance by leaving the country * All talks are re-arranging deck chairs on the Titanic - extend and pretend * The markets are higher - the euro down big * The market is anticipating more cheap money, which would be threatened by a Grexit * In an ideal world, if Greece were to leave the Eurozone and set themselves up as a bastion of free market capitalism, then they could come back strong * Given the electorate, this move is unlikely * Socialism only works in Greece as long as they have another country's money * The sell-off in gold based on the Fed's dovish statements last week * The Fed will only raise interest rates nominally in order to keep the market from balance sheet expansion stimulus into its calculations * Good news from housing numbers - a surge in the Northeast * Mortgage rates have been rising, although still low. Some buyers are worried about higher rates * Higher rates, however would price buyers out of the market * Monday Chicago Fed National Activity Index came in at -.17, continuing a downtrend consistent with a recession * May Durable Goods down 1.8% three times lower than expectations * X transportation met recently reduced expectations * Durable goods has missed for 5 out of the last 7 moths * Chicago PMI Manufacturing weaker than expected decrease to 53.4 - now at the lowest level since October 2013 * Manufacturing and production data sis weak - housing numbers are getting a boost from interest rate expectations * Home ownership rate continues to fall * Rents are risingPrivacy & Opt-Out: https://redcircle.com/privacy

* Today was the expected day for expected rate hikes, indicating economic "lift-off" * The June rate hike is off the table and everyone is focusing attention on September * The prepared remarks are just a smokescreen to maintain the pretense that the economy can withstand a rate hike * The Q&A session after the the prepared remarks were more revealing * Janet Yellen ducked the question of why people who recommend postponing the rate hike to 2016 are wrong * Yellen stated that the "dots" used to forecast rates are based on mere projections * The FOMC is always too optimistic about the economy, so if they are wrong again, the dots are meaningless * Yellen tacitly admits she is hiding behind the data, stating that even if rates to rise, it will be a nominal amount * Yellen's response to CNBC's Steve Liesman question regarding what labor milestone would justify a rate hike was especially telling * She said she needs to see further improvement in the Labor Market before she begins to raise rates * How much improvement does Yellen expect in the labor market over the next three months? * There is a good chance that the labor market will not be as strong in the next three months * She is letting the cat out of the bag; saying that rate hike is not likely in September, either * Yellen questioned the "obsession" about when rate hikes start because the first rate hike will not necessarily indicate normalization * She is indicating that a rate hike may be symbolic * The highly stimulative rate of zero to .25 is only necessary when trying to sustain a bubble * In response to a question about the Federal Reserve under Greenspan, Yellen indicated that it was a mistake for him to raise rates slowly and methodically * I was vocal Greenspan's decisions at that time, arguing that his actions were creating the real estate bubble * Yellen is now moving interest rates even more slowly over a period of 7 years * I may not be the only person who noticed how dovish Yellen's statements are * The knee-jerk reaction on the Fed's statement was to buy the dollar, but quickly turned into a selloff, and it intensified during the Q&A session * The dollar was on the lows of the day as it gets closer to the time rates were expected to raise * My video blogs are always available on schiffradio.com and on YouTubePrivacy & Opt-Out: https://redcircle.com/privacy

* Dow under pressure on the back of EU talks with Greece * There is a lot of room for the market to decline pending the Fed's announcements * The consensus is that rates will hike September or later * If Fed does not rates in September, Election year next year might also put off rate hikes * Bloomberg article quotes B of A hinting that additional stimulus would further damage the economy * B of A admits this risk has been getting the least amount of attention * Empire State Manufacturing Index missed 5.9 forecast - came in at -1.98 * May Industrial Production expected +.2 - came in at -.2 * Capacity Utilization dropped 78.3 to 78.1 * Manufacturing down .2 * Industrial Production has been negative for 4 of the last 6 months * Currency markets still believe Fed will raise rates * Consumer spending was up in May because of rise in gas prices * Weekly Jobless claims saw a slight uptick - exceeded forecast * Bloomberg Consumer Comfort Index continues to decline * Listener's Questions, Peter's Answers to resume on this podcast * Submit your questions on schiffradio.comPrivacy & Opt-Out: https://redcircle.com/privacy

* Once again, a week of worse than expected economic data punctuated by another better than expected non-farm payroll report from the government * ADP private sector payroll report was slightly below estimates * 5,000 manufacturing jobs lost - 3rd consecutive monthly decline * Unemployment rate dropped * Labor participation rate up to 62.9 - .2% above lowest point * Large sector of labor force still comprised of older workers * Teens, twenties and thirties are at all-time lows * Older Americans want part-time jobs, so increase of part-time jobs contribute to increase in all jobs * Given the strong government jobs number, the media is discounting all the weak data, including GDP, productivity, consumer spending and industrial production * The jobs we're creating do not reflect economic strength * The weekly unemployment numbers are hovering at 42-year lows * Does anyone believe that this is the strongest economy in 42 years? * The hiring numbers are suspect to begin with because of the government's assumptions * The Trade Deficit dropped not because our exports surged, but because out imports plunged * Our economy is too weak to support a greater number of imports * A closer look at the data behind the government jobs number actually supports the rest of the weak economic data * Personal Income and Spending on the month missed estimates * May Manufacturing PMI dropped slightly * April Factory Orders fell by more than expected * Year over year, orders are down 6.4% * 6th consecutive month that factory orders have been down year over year * This has only happened in America during a recession * Mortgage applications fell sharply on the week - 7.6% decline, led by a 12% decline in re-fi's * May Services PMI fell to 56.2 - lowest level since January * ISM Non-Manufacturing Index dropped to 55.7 - the lowest level of the year * The revision to Q1 Productivity - 3.1% decline * We also had a decline in 2014 Q4 * Corporate profits plunged 5.9% in Q1 * Unit Labor Costs surged by 6.7% - this does not represent wages * All this data predicts future layoffs * The Fed knows this, so they are reluctant to raise rates * The Bloomberg Weekly Consumer Comfort Index fell to 42.5 the 8th consecutive decline - the first time in its 30 - year history * The Dow continued to decline on the jobs report * NASDAQ still hanging in * Margin debt is at a record high * The dollar was stronger on the week * The euro finished positive * By next year European inflation will force the Bundesbank to retreat from QE * Gold was down on the week, as euro strength signals QE less likely in Europe * Expectations of rising interest rates have been suppressing gold, but when reality rears its ugly head, the sellers will be gone and the buyers will be out in full forcePrivacy & Opt-Out: https://redcircle.com/privacy

* Short week closed with some horribly bad news * People are not paying attention to the data; they are paying attention to the Fed * Government released revision to the GDP: -.7 * The assumption of deflation is cooked into the number * Most Q2 data is weak * Q1 Corporate profits plunged by 5.9% * JP Morgan announced 5,000 layoffs * Corporations are already levered up to the max * May Chicago PMI plunged back down to 46.2 - close to March's -year low * April Durable Goods fell .5 * March Services PMI fell to 56.4 - second monthly drop * May Dallas Fed Manufacturing crashed to -20.8; fifth consecutive monthly decline * The Fed has never predicted a recession; in fact they have forecasted economic growth while in a recession * Bloomberg Consumer Comfort Index: fell for the 7th consecutive week * There are fewer good jobs available and if someone loses their job the are likely to have to take one they are overqualified for * The Fed is too concerned about maintaining the illusion of prosperity to allow genuine prosperity * They are propping up the stock market and the housing market, pretending everything is OK, and allowing the government to continue deficit spending * People still think the Fed will raise interest rates; the most we would get is a trivial hike< just to say they raised rates to get things back to normal * There is no more normal anymore; the new normal is interest rates at zero and perpetual QE until the whole thing blows up * How can we expect to learn from our ancestors when we can't even learn from our own mistakes?Privacy & Opt-Out: https://redcircle.com/privacy

* The U.S. dollar started out this morning on the defensive * Government released CPI numbers generated a sharp reversal across the board * Gold sold off, but closed slightly down against the dollar * April CPI up just .1% on the month; year over year prices dropped -.2% * Lowest CPI since October 2009 * Core CPI (excludes food & energy) rose .3% * Biggest monthly jump since March 2006 * News sent dollar up on anticipation that rate hike will be more likely * Inflation benchmark is just as real as the 6-1/2% unemployment goal * Traders still haven't figured out that if we ever approach the goal, it will be moved * Biggest factor within the .3% rise in the Core was +.7% in health care costs * Biggest increase since January 2007 - prior to Obamacare * Rising costs will slow consumer spending, weakening the economy and undermining employment * Yellen in a press conference today did not actually project a rate hike * It's all about extend and pretend; actually postponing the rate hike will buy the Fed some time before launching QE4 * Increased inflation as the economy cools down means stagflation * The media is spinning increased inflation as good news * Bad economic news released yesterday: * Unemployment numbers came out higher * Fewer hires mean fewer fires * Chicago Fed National Activities Index came in at -.15 * Three month moving average down to -.23 * MAY PMI expected to rise to 54.6 unexpectedly declined to 53.8 - lowest lever in 16 months * Bloomberg Consumer Comfort Index continued to slide from 43.5 to 42.4 * May Philadelphia Fed looked for a bounce back to 8; missed expectations with 6.7 * Missed expectations 5 out of the last 6 months * Existing Home Sales expected improvement over March; dropped to 5.04 million * Kansas City Federal Reserve Manufacturing Index missed expectations at -13; dropping for 5 consecutive months * Economic data as bad as 2009 and inflation is getting worse * Janet Yellen acknowledged underlying issues with unemployment number, mentioned discouraged and part-time workers * Labor Force Participation Rate is not improving * Low-skilled jobs in jeopardy with minimum wage hikes * $15/hr fever will further hurts employment and erodes the tax base * Higher minimum wage will transform workforce because employers will hire better workers for the higher wages * Movement will substitute technology for labor costs * Minimum wage hikes will undermine the economic recovery that Janet Yellen pretends is existing * So she can continue to pretend that the Fed's monetary policy is working * And she can pretend that they can actually raise interest rates * In the unlikely event Yellen tests a rate hike, they will have to acknowledge that they were wrong * The Fed can always blame the data for deciding not to raise rates and therefore save facePrivacy & Opt-Out: https://redcircle.com/privacy

* Earlier today latest FOMC minutes released * Once again the weather is blamed for missed expectations, pretending the economy is better than it is * Now the Fed dismiss numbers as inaccurate, because seasonal adjustments are off * Why does the government need to seasonally adjust the numbers * Yearly GDP is the number that matters * Once the numbers begin adjusting the numbers you open the floodgates to manipulation and subjectivity * Wall Street analysts tend to be more optimistic for the first quarter * Studies show that Consumers spend most money in Q4; by the following Q1 consumers are taking a break * Same studies show Q2 is usually stronger * Why does the government have to come back with a new GDP measurement in order to come up with a bigger number? * To come up with low unemployment numbers they find ways to under-calculate the unemployed and count under-employed * Analysts are discounting weak data and expecting eventual rate hikes * The Fed is denying the weak economy not because they want to raise rates, but because they can't admit that their monetary policy has failed * Mixed economic data came out this week * Housing Market Expectation Index dropped from 56 in April to 54 in May - missing estimates for fifth time in 6 months * Housing Starts surged to 6 or 7-year high * Lingering optimism for a recovery * Walmart came in far below estimates, attributing miss to the strong dollar * Walmart is a net importer, so the strong dollar should work in its favor * Big drop in gasoline prices in Q1 did not provide a boost for Walmart because the underlying economy is weak * Los Angeles is the largest city in the country to pass the $15/hr minimum wage * They staggered the increase over 5 years, so adverse effects will not be directly attributed to those who voted for the increased minimum wage * It will be difficult to measure decisions not to hire as a result of the minimum wage * The $15/hr minimum wage makes it illegal to hire low-skilled workers for less, preventing them from gaining skills in order to earn more later * We're hiring at Schiff Gold - If you are interested contact Matthew Malleo 800-465-3160 Privacy & Opt-Out: https://redcircle.com/privacy

* S&P responds to bad news with new high; DJ just barely off record high * Dollar continues to fall * The currency traders still have not accepted the significance of bad news * Lower dollar will be the trend * Friday got a trifecta of bad economic news * Thursday Weekly Jobless Claims number declined to 264,000 - lowest weekly jobless claims in 42 years * Why are there so few job losses? Because so few people are getting hired * Government numbers come from the Birth/Death Model, which assumes a certain number of businesses created each month * What if these businesses are not actually created? * This would explain lower number of unemployment claims * There's no way we can say that the economy is the best it has been in 42 years * Empire State Manufacturing Index, which was weak last month, expected to be +5, came in at 3.09; below estimate for the 4th month in a row * Both Business Expectations and Hiring declined from April to May * Industrial Production Capacity Utilization was expected to be flat; down again .3% * This is not the 5th consecutive monthly decline in Industrial Production; longest losing streak since 2009 * Consumer Sentiment Number 95.9 in April - expected to hold steady - came in at 88.6; biggest drop since December 2012, and biggest miss ever * If the job market is so strong, why is confidence plunging? * The percentage of employees who fear losing their jobs is at highest level since March of 2009 * The bubble is rapidly deflating * Unofficially, I think we have been in recession for the entire "recovery" * The government is not accurately measuring inflation in the GDP deflator * The Fed has not forecast a single recession * Recessions always happen contrary to forecasts * If we are in a recession there can not be a rate hike * At some point they are going to have to acknowledge that the numbers are not accurate * The unemployment rate is going to have to tick up at soe point this year * At some point after the end of the quarter it will become obvious that there is no rate hike coming * The only question is, What is the Fed going to do? * The Fed has not managed to shrink the balance sheet, and further QE will take the deficit to a whole new level * This will put massive downward pressure on the dollar * Oil prices will spike * Cheap gas prices did not create a bounce in Q1 * Consumer Confidence will plunge * Reality is finally going to set in on the failure of the Fed monetary policyPrivacy & Opt-Out: https://redcircle.com/privacy

* Another week and another round of bad economic news * Wall Street may be finally paying attention * JOLT Report projected at 5.158 million; came in at 4.994 million * April Retail Sales expected to rise .2%; came in flat * X Automobiles expected an increase of .5, actual number was .1 * Beneath the surface there was a collapse in retail sales in all areas except groceries * Weakest year over year increase in retail sales since 2009 * Department Store Sales experienced the biggest drop since January 2014 * A look beneath the headlines of the jobs numbers reveals that the jobs are not good jobs * The Birth/Death Model assumption added 175,000 jobs to the last jobs report * These numbers came from a biased source * The fact that there is no spending is evidence that the job market is not as robust as the numbers claim * Jobs numbers can be made up but retail sales can't * Wall Street is surprised that we have weak data because they believe we are experiencing job growth * March Business Inventories up .1% versus expectation of .2% * February Business Inventories was revised down from .3% to .2% * I estimate that Q1 GDP will contract by greater than 1% * The Atlanta Fed just revised down their Q2 GDP estimate to .7, which would indicate the U.S. economy contracted for the first half of the year * The Fed is still looking for 3% rise in GDP for 2015, which would mean we would need growth of 6% for the last half of the year * It is more likely that we will get a negative number again for Q2 * Two consecutive contracting quarters will indicate an official recession * If we are in a recession, the Fed will not raise rates and is more likely to respond with stimulus * I predicted that a pause in QE3 would trigger another recession * When the Fed is unable to raise rates to stimulate the economy, the only trick they will have up their sleeve will be QE4 * When that happens, the moves we saw today in the FOREX and Precious Metals markets will look tame by comparison * The dollar has already broken its uptrend * Europe, with the exception of Greece is experiencing growth in GDP, and Great Britain is doing better than Europe, because they shrunk their government instead of applying stimulus * What we are going to get next is old-fashioned Keynesian, pump-priming stimulus * Will that give us economic growth? Not a chance. * The last three rounds of QE didn't give us economic growth and neither will the next one * It may blow more air into the stock market bubble, but the air is going to come out of the dollar bubble even faster * Where is the Fed's balance sheet going to be at the end of QE4? It is 4.5 trillion right now. * How can anyone possibly believe Janet Yellen when she says she is going to shrink the balance sheet? * Are creditors are going to get wise and there is going to be a run on the dollar * You can see the beginnings of it today * The dollar was down across the board * Gold was back to about $1,250; every time it gets to this level it gets knocked down by short-sellers, but eventually they are going to have to give up * All this bad economic data is going to sink in * It is not the weather * The market still has to adjust for the reality that the economy is really weak * The Fed will not admit that QE didn't work, so in the face of recession they will have to do it againPrivacy & Opt-Out: https://redcircle.com/privacy

* First official jobs report of Q2 * Wednesday's ADP private payrolls were below expectations * March was revised down, indicating a softer labor market * Challenger job cuts numbers well above previous month, biggest year over year increase in 10 years * The jobs number came in at 222,000 jobs with unemployment down to 5.4% * The media is spinning the headline number * The picture underneath the jobs report is not as nice * The March downward revision by 41,000 jobs causes one to question whether today's job number will be revised downward given all the negative underlying data * The stock market recognized this; sensing the Fed will remain on pause * Average Hourly Earnings increased only .1%, half expectations * Numbers of Americans who have left the labor force is now at a record high * When employers are changing the nature of the workforce replacing full time workers with part time workers it distorts the net number of jobs * The Household Survey indicates the breakdown of full time vs. part time * The government makes no such distinction * In April we created 437,000 part time jobs - biggest gain in part time employment since last June * The number of full time jobs declined by 252,000 - the biggest drop of the year * The bad news of full time job loss is buried beneath the superficial layer of part time jobs * The demographic breakdown indicates workers 55 and older gained 266,000 jobs in April * Workers 25 - 54 lost 19,000 jobs * This blows a hole in the notion that labor force participation is going down because of retiring baby boomers * Other bad news to hit this quarter's GDP: * Wholesale Trade numbers: inventories expected to rise by .3% but rose by .1% - smallest gain since March of 2013 * Wholesale Sales expected to break 3-month losing streak; instead increasing streak to biggest year over year decline since November of 2008 * Earlier in the week, Q1 Productivity down 1.9% following 2.1% decline last quarter * Unit Labor Costs rose more than expected +5% * Challenger numbers show a big explosion in layoffs * The reality is that the economy is weakening rapidly * The Fed and the media don't want to acknowledge this because they are afraid of how the market will react * Recent encounter with Former Fed Chairman Ben Bernanke * Ben Bernanke was a speaker at the SALT conference * I introduced myself to him after his presentation, told him "I am probably your biggest critic." * He responded, "You have a lot of competition." * Later that evening at a cocktail party I approached him and he offered to pose for a photo. * Photo got more views and likes that most other photos on Facebook * I tried to give him a cliff's notes version of my take on the Fed's part in the housing bubble * Bernanke blamed regulations, Fannie & Freddie and the sub-prime mortgages * I said the Fed created the conditions for Sub-Prime mortgages because low interest rates made them affordable * I asked why he did not warn us in advance of the regulations, Fannie & Freddie and the Sub-Prime Mortgage business? * Bernanke originally denied the housing bubble existed * Ben Bernanke had no clue that the Fed's policies created the bubble even after it burst * In hindsight, he lays blame on aspects of the market that he should have identified in advance * I asked him, "how can can you be sure you were right, when interest rates are still at zero and the Fed's balance sheet still hasn't shrunk? * Is there anything that might change your opinion that your decisions were right? * He evaded the answer, but I believe he was sincere about his opinions * Later that evening,Privacy & Opt-Out: https://redcircle.com/privacy

* Upcoming Appearances * Thursday morning panel at the SkyBridge Capital SALT Conference in Las Vegas * Liberty Forum - Salt Lake City * MoneyShow - Las Vegas * Economic News for the Week: March Factory Orders met expectations, but downwardly revised February number for 5th straight year-over-year monthly drop * March Trade Deficit: $51.4 billion, a miss greater than $10 billion and the single worst trade deficit since October 2008 and largest monthly gain in nearly 20 years * If the economy is so good, why do we have such a large trade deficit? * Rising oil prices, along with other rising prices are putting additional pressure on consumers * April U.S. Auto Sales fell, missing expectations for the 5th month in a row - sales at lowest year-over-year start since 2009 * The auto bubble has burst * The United States has been spared the discipline of the market by virtue of the dollar being the reserve currency * Gold is still just below $1,200/ounce - we will eventually run out of sellers who are keeping prices down, and when it goes up it will go up in a spectacular way * Aussie dollar is up a percent and a quarter * Canadian dollar up half a percent * Euro up a third of a percent * Swiss Franc up almost a full percent * There was some good news: April ISM Service Non-Manufacturing Index rose, to 57.8, beating estimates * New orders plunged into negative territory * April PMI dropped from 59.2 in March to 57.4, a bigger drop than expected * No one is looking for the April jobs number to be lower * The consensus is also for unemployment to keep falling from 5.5% to 5.4% * If we have all these jobs, why isn't the consumer spending? * The answer is the jobs don't pay very much or the hours are reduced * Meanwhile, as much as the Fed wants to pretend there is low inflation, the cost of living is rising * The one safety net for the consumer was oil prices, and now that is gonePrivacy & Opt-Out: https://redcircle.com/privacy

* Markets on roller coaster ride final two trading days of this week * Bad news parade marches on in April * The players are still clinging to fantasy of U.S. economic recovery * Dollar finished down substantially on the week - April was the first down month in 10 months * Dollar has seen its highs and is heading lower * Gold back below 1200 * Oil prices added to gains closed above $59 - moving opposite to the dollar * Friday - March Personal Income & Spending flat below expectations * Personal Spending also lower than expected; .4% gain * Savings dropped from 5.7 to 5.3 - the lowest savings rate of the year * April PMI Manufacturing Index - dropped more than expected to 54.1 even as weather warms * ISM Manufacturing expected to rise to 52 - remained flat * Employment Index dropped two points - the first drop in 2 years * March Construction Spending fell by .6 missing expectations * Atlanta Fed correctly forecasted Q1 GDP at .2, forecasting Q2 at .8 * Article on Zero Hedge: Goldman Sachs warning Europe about severe "Lowflation" * Article in Bloomberg: Chinese can't "kick" savings habit * Blames problem on "not enough government" * The reason America is in so much trouble is that we don't save * Once the Chinese have built up a cushion, then they will spend * When our phony economy bursts, it will be apparent that we did not save enough and had too much debt * America gives capitalism a bad name - we preach it but do not practice it * We rely on a giant government-run ponzi scheme of socialized savings * We are telling the Chinese they have too much free market capitalism * We have been indulging our present and sacrificing our future * The Chinese will be rewarded for their prudence * The most ironic thing about the Bloomberg article is that they suggest Chinese would be better off under CommunismPrivacy & Opt-Out: https://redcircle.com/privacy

* Government's first look at Q1 GDP * There was a lot of optimism around Q1 with expectations above 3% * Actual GDP was 1/5 of expectations at.2% * The rest of the story of Q1 GDP: * The deflator this time was negative - meaning that prices dropped by .1% * The last time the deflator was negative was 2009 Q2; still in the Great Recession * The previous occurrence of a negative deflator was in 1949 * I believe the true rate of inflation is higher than -.1% * Inventory build continued into Q1 - businesses continue to believe the myth of the recovery * Inventory to sales ratio are the highest they have been since the Great Recession * They are still blaming poor economic performance on the weather. It is always cold in the winter; why is bad weather always a surprise? * The Fed just released their official statement on interest rate policy * They removed language from statement indicating it is unlikely that rates will rise * Continuing give the illusion that they are progressing toward a point when they will raise interest rates * The Fed went out of its way to dismiss all the bad economic news we got in Q1 * The dollar just had its biggest 2-day decline in 6 years * The Fed came out and put a smiley face on the whole thing and the dollar recovered somewhat * The Fed is never going to confess that they are worried; that's not their job * What evidence is there that things will improve in Q2? * Cheap gas windfall is over; oil prices have risen every week in the past month * Early April economic data is negative * An economy based on spending is a bubble; production grows an economy * Consumers have lots of debt, but they don't have good jobs * Decline in the dollar signals that the markets are already sensing this * The Fed feels that economic growth will recover in Q2 & Q3 * They also said they need to see additional strength in the labor market * Business are making foolish decisions because they believe the Fed * As the economy disappoints, the labor market will continue to deteriorate * The Fed can't raise interest rates and they are headed ror QE4 * We need more and more stimulus because we've built up a resistance * The real crisis will be a dollar crisis * When the economy heads south and the Fed has to do QE 4, the Fed will lose a lot of credibility * Janet Yellen will not be able to deliver on her promise to shrink the balance sheet by the end of the decadePrivacy & Opt-Out: https://redcircle.com/privacy

* The Keynesian myth of mandating prosperity actually hurts the lower middle class and the working poor * Something for nothing is appealing to voters, so politicians make empty promises that are good politics but bad economics * A Seattle-based company called Gravity Payments has instituted a minimum salary of $70,000/yr * This has given him great publicity, but how will this work in his company? * Lower paying jobs will have to be eliminated, because they don't represent enough productivity to justify a raise that doubles the employee's cost * Higher salaried workers are not hurt because they keep their job and perhaps get a raise for picking up the extra duties formerly handled by lower-salaried workers * The most recent political gimmick in the State of Connecticut is a tax masquerading as a minimum wage law * The Democratic State Legislature have proposed a law that will fine companies of 500 or more employees $1/hr for any worker who is paid under $15/hr * How will this work in the State of Connecticut? * Right away, business just over 500 employees will pare down to fall under the new regulation, so jobs will be lost * In reality, this is just a tax increase on the people who can least afford it * For employees who are currently working at the minimum wage, a $1 fine is cheaper than a raise from the current $9.15 rate to $15/hr, if they do not eliminate that person's job * This is essentially another employment tax that will result in higher prices across the board * Neither the employee nor the employer benefits * For employees who are working above the current minimum of $9.15/hr a raise would cost the employer more than the $1 fine * According to minimum wage law, it is illegal to cut the worker's pay - the only option is to cut the worker * The penalty does not apply to higher paid workers; it only applies to jobs between the current minimum wage and the new minimum wage * It will be cheaper to pay the tax than to raise wages, but there will be less money to to toward employees because a large percentage of the workers' wages are going toward a tax * The reality of this new law, championed for the "little guy" is that the working poor will pay a higher marginal state income tax than the richest hedge fund managers in the state * Will the voters be able to figure it out elected officials are going after the working poor? * This tax will also raise the cost of living, wich also affects the poor more directly * Packaging a tax to pass off as minimm wage is fraud * Privacy & Opt-Out: https://redcircle.com/privacy

* S&P and the NASDAQ made new record highs * Stock market continues to ignore all the bad news about the economy * Bad news is not being ignored in the foreign exchange markets * Negative economic news is buoying the stock market because it removes fear of interest rate hikes * Weak economy means more cheap money which means higher stock prices * Oil prices hitting highest prices of the year * Gold is back above the 1200 level * April PMI Manufacturing Flash Index at 54.2 biggest miss ever * New Home Sales tumbled by 11.1% - biggest drop since July of 2013 * March Durable Goods slight bump based on military aircraft, but less transportation, the index unexpectedly declined .2% * Durable good orders, less defense and transportation dropped for the 7th consecutive month * April Service Sector PMI missed lowest expectations at 57.8 - the biggest miss ever * Dallas Fed Manufacturing Survey - recorded significant drop at -16; biggest losing streak ever * There will be a delayed reaction from the market to first quarter's bad economic news on top of this quarter's economic news * A Boston Fed official is considering retaining "balance sheet tools", i.e. QE * In other words, the Fed is considering not having an exit strategy - because it can't exit * We have done all sorts of crazy things that we never would have done but for zero percent interest rates and QE * A market that was built for 0% interest rates can't handle 2% interest rates * The product of all this stimulus will be big increases in prices, and the Central Banks are setting the stage for higher inflation * Declining Swiss consumer prices are described as "dangerous" * Currently, the Swiss consumers are enjoying lower prices and do not need a government "cure" * The law of supply and demand is so simple that only an economist would fail to understand it * Keynesians will spin ever-conflicting news to support their theory * Fitch has downgraded Japanese government debt to A- because or the Japan's deteriorating fiscal condition * Based on that logic, why is the U.S. AAA? * There is a general fear of downgrading U.S. debt, based on fines levied against the S&P * The real problem will be the collapse of the dollar, which means the debt will be repaid in dollars without purchasing powerPrivacy & Opt-Out: https://redcircle.com/privacy

* Markets have been volatile but economic data still looking bad * Chicago Fed National Activity Index: contrary to expectations, came in at -.42 in addition a downward correction for last week to a 2-year low * Weekly Redbook Same Store Sales Survey down to lowest annual increase in 4 years with a dramatic rate of decline in recent months * Implausible excuses, such as the weather or the timing of Easter, attempt to mask the fact that the economy is just weak * Oil prices moved above $57, forming a sizable W-bottom * Canadian dollar up about 5% * Canadian inflation, especially food prices up * This signals the end of rate-cutting cycle in Canada * Central banks around the world are going to have to dial back on their cheap money policies * The "Threat of Deflation" will be in the rear view mirror * Central banks may like high prices, but consumers don't * President of the Federal Reserve Bank of Boston Eric Rosengren stated our 2% inflation goal is "too low" * He thinks higher inflation allows for more growth, and allows interest rates to remain low * Cheap money does not create economic growth and doesn't create employment - it undermines both * Cheap money applied to a slower economy creates a vicious cycle * A weakening dollar will put upward pressure on already rising consumer prices * The Fed is hinting at a higher inflation goal * The problem is we can't do anything about our inflation because our debt is out of control * Fiscally solvent countries are able to raise rates and still service their debt * All the U.S. can do is "talk tough" * If they had a "Hall of Economists" in Disneyland, the Keynesians would have to be in Fantasyland * Paul Krugman's Keynesian experiment is blowing up the U.S. economy * Everybody will figure it out before Paul Krugman doesPrivacy & Opt-Out: https://redcircle.com/privacy

* Disney's theme parks are a monument to capitalism as it existed when Walt Disney envisioned Disneyland * The Hall of Presidents, however manages to honor presidents who supported big government over the free market * The choice of presidents demonstrates revisionist history that supports the liberal, big-government narrative * Whenever you expand government you contract liberty * The Dow ended the week down 279 points; NASDAQ down 75 * The search is on for excuses but the real issue is not global causes but U.S. economic performance * Housing Starts and Permits were way below estimates * Jobless claims were higher than expected * Leading Economic Indicators weaker than expected this month after last month's downward revision * Core CPI came in twice expectations, but described as "better than expected" * The dollar had a very weak week; Canadian dollar had strongest week in years, with a possible rally going forward * Weakness in Stock Market, continuing weak economic data makes June rate hike less and less likely in the minds of traders * The most prominent poster boy for the myth of the U.S. economic recovery, Paul Krugman, recently published an article claiming victory for U.S. Keynesian economic policy * Krugman claims U.S. is performing better than Europe due to Keynesian policies * Perception is not reality: the U.S. is not doing as well as Krugman would have us believe * Krugman references an article by Germany Finance Minister Wolfgang Shauble, criticizing him for rejecting macroeconomics * Macroeconomics IS B.S. and should be rejected * Krugman infers that Europe's woes are the result of rejecting Keynesianism * Shauble warns against going for the "quick fix" of Keynesian policies * Germany understands that austerity, rather than debt, is the answer * Krugman believes we should continue to create bubbles through stimulus and debt * It will be interesting to see what Krugman says when the U.S. economy slips back to recession as Europe grows * Europe's approach was not perfect, but it is better than the politically expedient solution championed by KrugmanPrivacy & Opt-Out: https://redcircle.com/privacy

* Dollar usually drops on bad news but rallies because traders automatically buy on the dip * Bad news is dismissed because the first quarter "doesn't count" * This puts greater pressure on the last 3 quarters to make up for the first quarter and still show growth * Expectations of a bump similar to last year are based on non-repeatable conditions - Obamacare and inventory build * Inventory to sales ratio is the highest it has been since 2009 * What is the basis for dismissal of the bad news in Q1? * Data confirms that the consumer is already broke * Consumers will be hit with rising oil prices * Traders who are loading up on the dollar are ignoring all the evidence that they are wrong * The wake-up call will be like the sub-prime mortgage crisis * The same thing will happen in the Foreign Exchange Markets when they realize the story is not about a recovery but about another round of QE * Changing trend coming in the dollar * Changing trend in the oil market * Changing trend in the gold market * If we don't get a recovery in the summer how is the Fed going to raise rates in Q4? * Election year 2016 will likely see no rate hikes * Retail Sales missed Wall Street expectations with a bounce of only .9 * March Small Business Optimism fell to lowest level in 9 months * Hiring Plans dropped to lowest level in 6 months * Business Inventories for February rose to .3 based on weak wholesale sales * Inventory to Sales Ratio holding at 1.36 (highest since July of 2009) * My radio broadcasts from a year ago predicted that the data was not reflecting reality * April Empire State Manufacturing Index missed expectations at -1.9, near a 2-year low * Employment down * Hours worked down * New orders down to 3-year lows * Prices paid went up * March Industrial Production dropped .6, missing expectations - 4th consecutive month below estimate * This news can't be blamed on April showers * Those who have been betting on the recovery are about to realize they made the wrong betPrivacy & Opt-Out: https://redcircle.com/privacy

* Markets continue to rally worldwide * Record highs overseas - much more action in Asia * Markets riding a sea of liquidity * Gold had an interesting week, closing at 1207 * The dollar had one of its best weeks in months * In terms of other currencies gold was at a 2-year high * This means that the euphoria about the dollar is not universally shared * Commodities in general were up - crude oil was up - holding above 50 * This is a good indication of a solid bottom on the price of gold * Traders continuing to make bullish dollar bets in the face of bad economic data * Traders are willing to throw out the first quarter - regardless the excuse * The bounceback from Q1 2014 was due to reasons that will not be repeated * Obamacare created a huge rush to sign up * There was a big inventory build anticipating future sales * Bets for a 2015 Q2-3 rebound are based on optimism for consumer spending * February Revolving Credit tumbled by $3.7 billion * Non-Revolving Credit surged $19.2 billion - mostly student loans * Consumers are cash poor, yet Wall Street believes they will start buying when the temperature rises * Government under-reporting student loan defaults due to forbearances * Wednesday release of FOMC minutes encouraged the dollar speculators because there were discussions about higher interest rates in June * Currency traders still haven't figured out the the Fed's comments are all theater * They are playing the game based on FedSpeak until it falls apart * A drastic turn in the FOREX markets will take a lot of people down with it * February Wholesale Trade declined again after January reported biggest decline in 6 years * This marks the first 3-month decline since 2008 financial crisis * Inventories rose slightly because of decline in sales * Inventory to Sales Ratio at 1.29 - highest since 2008 financial crisis * 2014 GDP increase was due to rush to build inventory in anticipation of recovery * Bottom line: economic data shows that a second-quarter bounce in the GDP is just wishful thinking * Ben Bernanke's new book titled "The Courage to Act" belongs in the fiction section * Let historians justify his role in history - it is far to early to claim success * This is the same guy who was blind-sided by the 2008 financial crisis * He claimed courageous decisions in the face of critics, while actually putting politics and the banks ahead of the country * His book may be coming out on eve of next economic fire that he setPrivacy & Opt-Out: https://redcircle.com/privacy

* Big double standard in the media regarding "sexism" * Rolling Stone story based on complete fiction about a woman who claimed she was raped in a fraternity house * The reporter accepted the woman's story without checking sources * After the facts were out, the reporter apologized to everyone except the men who were falsely accused and the fraternity involved * Where is the outrage that the real victims did not receive an apology? * Is it sexist to assume that men do not deserve apologies when wrongly accused? * The reporter refuses to condemn the woman who lied * The primary apology must go to the wrongly accused, the fraternity and to the universityPrivacy & Opt-Out: https://redcircle.com/privacy

* Media's take: Why run for President if you can't win? * "He's too Libertarian to win" * "He is not as Libertarian as his father" * "Rand Paul is closer to the mainstream than his father" * His chances are as good as anyone's at this point * He is actually closer to his father than he is to the mainstream * If you like Ron Paul, how can you not like his son? * Rand will maintain his father's supporters * There are a lot of Libertarian Republicans, and Rand will attract most of those votes * Rand has a chance to win in 2016 and in 2020 * If he wins, he will maintain his strong principlesPrivacy & Opt-Out: https://redcircle.com/privacy