Economic guru, Peter Schiff doesn’t mince words when he declared the precarious state the United States economy has found itself in. Schiff says “the truth is we don’t have a booming economy,” and he’s not the only one who has noticed.
October was the worst month for global equities in more than six years. Globally, stock markets lost 7.5%, their worst month since May 2012. Even with the late rally, it was the biggest monthly decline in the Nasdaq since 2008.
“All of the bulls were out in force on the financial networks claiming that the correction is over. Everybody was confident that the lows are in, that the big back-to-back rally is proof and you better buy now, otherwise you’re going to miss the rally, and this is the typical correction and now it has run its course. And you know what? If this really was the end of the correction, most likely there wouldn’t be so many people that were so confident that it’s over. You’d have a lot more fear, especially on Halloween. The fact that there is no fear, to me, shows that it’s more likely that this is not the end of the correction, but the beginning of the bear market and that this rally is a correction.” –Peter Schiff via Seeking Alpha
Schiff is well-known for predicting the 2008 financial crisis, but that becomes slightly more real when hearing him say that the job market if a gigantic bubble. Schiff says that jobs are just one more bubble that’s about to burst.
Two hundred thousand jobs a month in an economy the size of ours, especially given how few people, or what a large percentage of the workforce is not working, we should be creating a lot more than 200,000 jobs per month. But we’re not.”
Even though wages are rising for people that have jobs, the cost of living is rising faster. But the cost of servicing their debt is rising even faster than that.” –Peter Schiff via Seeking Alpha
Increasing prices is a direct result of a decade of Federal Reserve easy money policy, Schiff accurately says. Over the last 10 years, the Fed has printed billions of dollars out of thin air.
Oh, please! Not this guy again.
And pleeease stop calling this schmuck an economic guru just because he got lucky in 2008 and was right once.
No,he is absolutely right.
Peter Schiff needs to change his name to Chicken Little. Every article I have read of his for the last 5 years says collapse is imminent.
Peter Schiff is the poster child for the boy who cried wolf.
JS, I’d be willing to try any recipe for chicken little, LOL.
Peter Schiff needs to change his name to (((Peter Schiff)))
Stocks, PM’s and most housing is over priced. A correction will occur. No surprise here. My residence is not worth 900K but that would be the selling price and I would get it today easily.
Free market generally works as cost of production +10% net as a reward for your efforts.
Facebook, Amazon, Microsoft et al are not stocks they are the same as a playing games in a casino.
The only thing that is real is tangible useful property, everything else is all paper accounting.
I actually think precious metals are under priced. I bought 50 ounces of silver yesterday at $14.60 an ounce.
Cheapest it has been for a very long time. When the joy ride of the stock market ends, silver and gold will go up.
I guess my point is,
Shelter, water, food, tools
have value. Everything else
is subject to the market and
can become worthless depending
on the market.
You could offer me silver for $0.20
an ounce or solar panels for $0.60
a watt( about the same amount of silver)
I’d take the panels.
More liberal tears please
Liberals want collapse to happen, then they can replace capitalism with socialism.
“Free market generally works as cost of production +10% net as a reward for your efforts.”
I gotta disagree.
Actual costs vary for different industries, products, and services and a 10% profit margin is just not enough to sustain any of which I know. If you are only making 10% for your energy you may as well make your effort a hobby, because any unforeseen hitch will eliminate your margin. 😉
I was talking with some jewelers the other day. They said there price mark-up is 600%.
Durango,
I was generalizing.
I wasted 2 years as a business major,
before switching to computer science.
Most businesses do NOT earn
10% on the dollar. It is often
very less.
You have to remember that my claim of 10%
profit has already included employee
compensation this includes owners.
Safeway, a nation wide store makes about a 1%
profit, but it’s owners/shareholders are making
lots of money.
Quit listening to Democrats!
Rellik is right. I was in the food industry…1-2 % profit but large turnover.
Jim I know that it is customary to claim that grocery stores make only 1-2%. This is not true. It was never true, and it is ever less true now. That can be easily determined by comparison shopping.
When the same product at two different stores sell at distinctly different prices, the margins are different and that margin itself has many variables associated with product cost within any particular organization.
Yes some items that move quickly have low margins but there are many items sold inside a grocery store today that have much larger profit margins, so overall, grocery stores have a higher margin than 1-2%
NO BUSINESS CAN REMAIN SOLVENT WITH A 1-2% PROFIT MARGIN. MOST BUSINESSES, PARTICULARLY GROCERY STORES, HAVE STOCKHOLDERS THAT REQUIRE A MUCH BETTER RETURN ON CAPITAL THAN THAT. 1-2% DOES DO NOT CUT IT.
Still don’t believe me? Check the EPS on a given grocery chain store, like Kroger’s for example. 🙂
Back when diesel was $4 a gallon I was driving truck. And the economy stagnated. No freight moved except from the ports and container yards out into the heartland. Nothing was heading the other direction. Today the trucks get to haul freight both ways. No deadhead empty trucks looking for a return load. And the trains and river barges are also hauling freight. The steel mills are reopening & expanding. Canada can no longer export lumber to the USA and only pay a 3% tariff and charge USA products 25%. The USA lumber industry will benefit and lowes and home depot will not raise the price of a 2×4. They simply will not make a great excessive profit.
OG,
I spent most my life in lumber country.
My SIL was a logger as a faller and choker setter.
My uncle was a millwright in a sawmill, my neighbors
worked in a plywood mill.
I own 4 chainsaws.
As far as I know I’ve never bought Canadian lumber.
Georgia, Wa state, Oregon, Kentucky, Filipino, and Thai
lumber yes, Canadian, no. Never seen it and I know
which companies do the work. I build wood boats as
a hobby.
C Bean lumber Co and Georgia Pacific & Weihauser have large holdings in south Arkansas. They shut down their plywood mills in Arkansas. Because of imported Canadian wood. I still own my chain saws and pulpwood truck.
I have bought plenty of lumber from Lowes with the Canadian maple leaf stamped on it.
I wouldnt count on that, it seems your understanding of corporate economics is lacking…..
Nail,
What did I get wrong?
I just look at the mill stamps
on the lumber I buy.
I don’t know where you live. But imported lumber from Canada is sold in the USA.
When prices go up 10%+ a year
and the GNP only grows 3% to 4%
by Definition, The economy is Contracting.
The economy has been in a state of Shrinkage since 2008/9,
possibly since 9-11.
All you need to figure it out is honest cost & price numbers.
The American media does a great job of pushing MOPE – Management of Perceptions Economics.
People know, if their Salary goes up 10% a year, and prices go up 10% a year, they are running to stay in place.
But the American public has trouble putting it together about the economy in general.
There’s also a HERD INSTINCT, Americans are terrified of going against the Herd and simply Telling the Truth.
True Roger…”Telling the Truth”…aka, “The Emperor Has No Clothes”
Anyone who does their own grocery shopping and pays attention to a budget can say that the cost of living is far different than what is publicized in media. Or Gov stats.
People used to get various bonuses depending on the industry they’re in. Now it’s all rigged so no matter what you do or how hard you work, you don’t get the profit-sharing, stellar work awards, or even the Christmas turkey/ham.
Sometimes you’re lucky to even get a 1-2% salary raise. My last job decided to reclassify me to a lower grade and then cut my salary–no change in duties though.
Seems like bankers and politicians are the only ones happy about the economy.
If this clown is related to the democRAT from ca i dont care what he has to say
Actually Schiff’s father Irwin died in a Federal Prison because he had the courage to stand up to the IRS. Irwin was a persistent anti-tax activist.
“Among the arguments raised over the years by Schiff:
That the Internal Revenue Service, in enforcing the income tax, seeks to impose a tax not authorized by the taxing clauses of the United States Constitution;”
Of course the US gov. is so immoral I’m not sure why anyone would send them $$ except under coercion.
I know one Gold Miner who did a great job avoiding the IRS’ pick-pocketing hand. Took all his earnings in kind and built a stack of 500+ ounces, which will be transferred quietly to his children upon his death, sans taxation.
the irs is not part of the government-
it is puerto rican corporation
when one writes a check payable to irs the funds actually go to (((them)))
Silver must be very plentiful to remain at such a low price compared to gold. Don’t know how much total silver was used in coinage over the decades. Let’s go back to silver coins and dump these worthless slugs. Trump is portrayed as opposing the Fed, that’s comical.
If I say it’s all coming to an end everyday for the next twenty years iam bound to get it write once
Firearms are uniquely affordable.
Check out Palmetto State Armory, for Lowers & 20 inch uppers.
Daytona Tactical & CBC Industries for uppers with 24 inch bull barrels.
The lack of understanding of financialization is key to misperception about the economy. At present, we have a bifarcated economy: a flourishing financialized sector and a low-wage, insecure sector.
The financialized sector includes the tech companies who rely on BS financing from the markets and fabricated data and profit models. The economy is stage managed by various central banks in concert with the financial services sector. They receive effectively free money created by the central banks and then take this money and do things with it.
Economies are nothing more than perception these days and thus it is all about coming up with a narrative and shoving it down people’s throats. Because the economy is ‘floaty’ it is possible to jerk it up and down, and through a series of ‘pump and dumps’, to extract wealth out of the economy and draw more and more money upwards and into the hands of a few. An oligarchy, of which Trump is just one player, rules over this charade.
If you look at society today, it resembles more and more pre-revolutionary France. The filthy masses, many of whom are now crapping in the streets, become a mad rabble of all ethnicities and races squabbling with each other. The oligarchy elite cruise around the planet going to their functions and to their resort towns to party and ensure all the free money and insider opportunities stay with each other.
“…a flourishing financialized sector and a low-wage, insecure sector.”
Yes, the FIRE and service sector of the economy is around 79%. Manufacturing and construction is 20%. Agriculture is 1%.
China is 46%, 44%, and 10% respectively.
The US doesn’t make much useful stuff as a percentage of GDP anymore (except financial fraud). The GDP goes up because the FIRE sector (debt is growth) continually expands as the rest of the economy that actually produces things of value, shrinks.
The parasites are killing off the producers.
When you get too many people that can’t or won’t produce, electing politicians to mandate transferring the wealth (socialism) from the producers to the non-producers, you end up reaching a tipping point…(I.e, when the producers aren’t doing much better than the non-producers). Then the producers quit producing…..and the whole dammed thing collapses. That’s where we are today. The proverbial straw that breaks the camels back is imminent. I believe Peter Schiff is exactly right. Even he says that he is surprised it has held up this long. But, the party is coming to an end. Only God above knows the day and hour. tick-tock-tick-tock.!!!!!
You cannot have a healthy American economy without ending Free Trade as we are not competing on a level playing field.
What’s vital is to help our fellow Americans to succeed…first, before we think about about helping other nations.
It’s not good enough to have jobs if the amounts are so low that effectively they cannot afford a middle class life. The globalists and especially Obama ennacted ruinous policies that severely limit economic progress.
Genuine freedom is always linked to better economic power for the People. You cannot have political freedom without less debt. The globalists ruined the industrial base and now everyone is trying to go to get university degrees. That cannot ever work as not everyone is wired to graduate. And stupid teachers encourage students to lengthen their time at the university with international study and acquiring essentially worthless degrees.
We have lots of educated millenials unable to find jobs in their field of study. Formerly these would have taken entry level management jobs in industry. But these longer exist.
In the early seventies, a blue collar guy would become a foreman regardless of possessing a university degree. Many would slowly work up the chain in various manufacturing positions, then become craftsmen, then finally a foreman within the craftsman program.
The globalists have totally ruined that process.
For many millennials, it actually would be better to not attend university unless they are very disciplined and become registered nurses. At least there you are all but guaranteed a job and career.
Instead millennials could slowly acquire wealth by working in their own low level businesses, move to the rural regions, and finally become homesteaders. If families would switch to country living, with many generations living on the farm, then some economic normalcy might be attained.
I see little chance of a millennial taking a job in an urban center and owning a home. Sure they have an easier time getting a job,but will be doomed to always rent. They will have so much in bills that they willbe unable to acquire the down payment to even consider a home mortgage.
Without home ownership as a genuine possibility, achieving the middle class is honestly an impossibility regardless of salary.
Obama ruined American heathcare and now who can afford it? Nothing is more important than eating right and exercise because otherwise you will eventually have outrageous health issues. The greatest tax is now health insurance.
Everyone should realize the states are bankrupt. The governments realized the only way to keep people employed with the loss of the industrial base…was by hiring more government workers. Well there is no logical way to pay for all of these state pensions! There sure is inadequate state revenues. This problem is waiting to explode as people retire and realize they will not only be unable to live on their meagre pension but worse, no cost of living pension increases will be forth coming. This alone will severly harm the urban areas in the near future.
By grandparents owning a country farm, and their adult children running it and a repair business out of the property, then their millennial children can work at the farm and business. At least they can learn ancestral skills and survive. For most of the history of the USA, this is how our ancestors made it work. They did not work for others to acquire pensions. Few attended universities unless becoming physicians.
Robotics and automation will cause a massive sea change in the next decade. Many jobs will be eliminated. Your best bet is to learn ancestral skills to help yourself succeed and temper your expectation with frugality. The days of iphones and lattes and bellyaching about boomers is nonsense and futile.
If any material is backing the greenback, it’s the spoils of war. We dictate the financial status of s-hole countries.
For the average person the system will only get worse. Starting in the 1970s, the US economy switched fully from being a national economy to a global economy. It then backed that up with the petro dollar which was backed up by the Arabs. From that point forward, the only consideration was how to use that system to accumulate global wealth. When Clinton fully de-regulated the financial sector at the end of the 1990s, that was the death of American manufacturing and the ability of the American worker to acquire a salary higher than their equivalent elsewhere in the global economy. In practice this has meant the standard of living in China has rapidly increased, while the American standard of living has rapidly decreased – all of this was papered over with debt.
US tax funds were then used to provide foreign aid and loans and grants to other countries to improve their infrastructure so they could export. This meant each year a new country would come online with low-wage workers and low-cost professions (engineers, doctors, scientists, computer geeks etc.). This meant the US was flooded with both cheap goods and cheap professionals and low-wage workers (cheap goods from China etc., cheap people from India etc.). This has brought down the cost of doing business while also shrinking the amount of wealth that is required to hire labor. In short, this has meant vast profits for anyone who owns a large business or is an investor.
The only way to tip the balance back in favour for average Americans is to remove the burdon of debt and high taxes while also cutting the cost of healthcare and education. It is these ‘albatrosses’ that are hanging around people’s necks and making it very hard to compete with foreigners. There is no choice but to compete. Those who think America can avoid this by throwing up walls etc. does not understand how wealth is created – it is created through trade.
Americans themselves need to change their lifestyles and expectations. No more monster homes, no more driving around all day, get fit and healthy and eat right. In short, live more like your families did in the 1950s.
While working class wages were stagnant for the last 20 years, the stock market hit multiple record highs. The uber-wealthy saw 10% increases in their spending power every year, while the working class saw their spending power drop every year due to inflation, and yet our government and financial experts claimed the economy was improving. Perhaps we need to remove the progressive tax model and tax people based on the source of their income. If you earn it yourself, such as by wages, you pay a flat rate of 5%, no matter how much you make. If you make your money based on someone else’s work, such as stocks, interest, and bonds, you pay 20%, no matter how much or little you make. Remove all the loopholes and deductions, and the working class will still be better off than they are under our present system.
There are problems in what you are proposing.
First, it’s just more taxes and politicians have proven to be ill suited to spend tax dollars. Whatever they get in revenues will only be a fraction as deficit spending always happens.
Second, the only way that the present retirees had enough money to live on was being frugal while YOUNG and saving their money in investments. If one was smart and allocated some of that into no load mutual funds with a little risk, then ten percent annual gains were possible. Over time a modest investment was reinvested instead of taking the profit. Thus an average blue
collar worker who used that strategy could live comfortably in their retirement while his neighbors, who lived beyond their means when young, are now working in their retirement at Walmart!
Third, in some cases, these same retirees are why millennials can live at their parent’s and grandparent’s homes. That investment income is how they are able to supplement these millennials as the retirees presumed they would be merely providing for two old codgers, but instead might be supporting FOUR or more if the millennials have children!
Four, one method was to resist spending an extra hundred or two hundred dollars a month, and instead apply that to the principal on one’s home mortgage. That meant shaving years off one’s loans and thus being free and clear sooner. And by not moving around uselessly, but staying put, then when one retiree eventually HAD to go to a nursing home, their house is sold to pay for it as it is monsterously expensive in assisted living.
Your proposal would harm frugal pragmatic middle income workers turned retirees who did what they were supposed to, and likely the extreme rich you intend to TAX would evade it by legal loopholes.