Peter Schiff

The U.S. economy "unexpectedly" lost 23K jobs in July, while June's gain was revised down to a mere 20K. The unemployment rate slipped a bit because more people left the labor force, as the participation rate fell to 61.4%, the lowest in 50 years excluding COVID. Stagflation!

Copper is trading above $6.70 a pound, hitting a new all-time high. This does not bode well, given the Fed’s decisions not to raise interest rates and to open up the monetary spigots even more to keep Japan from selling Treasuries. Talk is cheap. The Fed can’t afford to act.

Gold is up another $50, adding to today’s $170 gain and trading just below $4,300. Investors are starting to figure out that while Warsh is talking about fighting inflation, he is busy creating more of it by conducting dollar swaps to prevent Japan from selling U.S. Treasuries.

Nice breakout for precious metals. Gold is up $180, trading above $3,250 for the first time since June. Silver is up almost $3, trading above $62.25. The move began last night, but the weak July ADP jobs report was likely a catalyst for the explosive move this morning. Got gold?

In case you haven't noticed, this peace-inspired mega-rally hasn't lifted all boats. Despite the huge rise in risk assets, including mining stocks, Bitcoin is barely up. That doesn't bode well for Bitcoin's prospects during the next risk-asset selloff. The Bitcoin party is over.

@DrakeMallardhth @Geiger_Capital I recognize that in many respects it no longer matters. But it may matter in this case.

In the past week, @Saylor sold 1,638 Bitcoin & more than 3 million $MSTR shares to raise cash and buy back $STRC. This reduced Bitcoin YTD Yield to 3.5%, 74% below its May peak. STRC is now an albatross around MSTR’s neck, ensuring continued Bitcoin sales & common-stock dilution.

Coldcard wallet attack drains up to $89M in Bitcoin from 1,200+ addresses https://t.co/DkqjaGd28d #FoxBusiness This will only get worse as AI and quantum computing make hacking even easier.

Trump’s 33% approval rating is his lowest ever and, except for Nixon’s in the days just before he resigned in disgrace, the lowest of any second-term president since 1940. This is not consistent with a booming economy, but with one in which Americans are struggling to get by.

Trump claims the U.S. economy is booming like never before, yet serious credit-card delinquencies are at their highest rate since the aftermath of the 2008 financial crisis. This shows that Americans are struggling to pay their bills, which is consistent with bad, not good times.

$TLT, the 20-year U.S. Treasury ETF, is trading now below $82 for the first time since 2004. YTD, it’s down almost 7%, and it’s down over 52% from its 2020 all-time high. So much for U.S. Treasury bonds being risk-free. The losses are much greater when adjusted for inflation.

Trump used media coverage of his Cabinet meeting to repeat lies that U.S. companies are slashing prices, that we have the lowest drug prices in the world, that tariffs have made America rich, and that foreign companies are now producing their cars in the U.S. to avoid tariffs.

Bitcoin is breaking down today, with $MSTR leading the way, down 7% following @Saylor’s morning X post that Strategy’s “primary corporate objective” isn't to maximize shareholder value but “for $STRC to trade at $99–$100 over time.” In other words, MSTR shareholders are screwed.

The OCIF-appointed Trustee overseeing the liquidation of Euro Pacific Bank just made an important admission in a legal filing opposing my appeal of the district court’s dismissal of my civil-rights lawsuit. The Trustee wrote that my bank “was subject to a joint tax-enforcement investigation by the Internal Revenue Service (‘IRS’) and OCIF, conducted together with the Joint Chiefs of Global Tax Enforcement (‘J5’).” This statement, supported by the internal emails produced pursuant to my FOIA lawsuit, directly contradicts the official claims by both OCIF and the IRS that OCIF acted independently. Moreover, OCIF is a Puerto Rico’s banking regul…

Treasury yields continue to hit new highs as bond investors demand higher interest rates to offset the higher inflation Warsh has chosen to help the Fed create. The 10-year is at 4.73%, and the 30-year is at 5.26%. Stock market investors are ignoring this trend at their peril.

The BoJ’s decision to hold rates at 1%, with only the possibility of a quarter-point hike by year-end, ensures a weaker yen, rising inflation, and higher long-term interest rates, ultimately forcing the BoJ to hike much more in the future, with even more adverse consequences.

Warsh choosing inflation has taken pressure off the Japanese yen, which is up 2.5% today as the dollar exchange rate falls back below 160. If the yen rally continues and the short-term rate differential between the U.S. and Japan narrows, the yen carry trade can unwind quickly.

The Fed Just Chose Inflation... And the Bond Market Called Its Bluff https://t.co/zoBvEnEztP

Given Warsh's history and his public commitment to lowering annual CPI gains to 2%, the issue is not just that his actions don't match his words, but why he is so afraid to act. Investors should be very concerned about what Walsh is so worried about that he can't even discuss it!

The U.S. dollar is falling sharply, briefly trading below 100, and gold is up again, now trading above $4,100, the day after Warsh chose to continue the inflationary monetary policies of the past rather than adopt the more hawkish approach he had previously asserted he would.

Q2 GDP growth of 1.5% was weaker than expected. Worse, the GDP deflator surged 6.3%, the highest since Q2 2022. Consumer spending rose 3.2% as Americans borrowed to pay higher prices, especially for imports. This isn’t prosperity. It’s debt-fueled consumption masking stagflation.

The Fed Just Chose Inflation... And the Bond Market Called Its Bluff New Episode. https://t.co/zoBvEnEztP

Powell bragged about the Fed winning the inflation war without causing a recession. The reason the Fed didn’t cause a recession is that it surrendered as soon as banks started to fail. That’s why inflation never went away. Price increases merely tapered off before the next surge.

Bond yields rose sharply as investors lost confidence in Warsh’s actual commitment to 2% inflation. This was confirmed by gold’s resilience, as it didn’t sell off with bonds. Gold held $4K support nicely and rose on the day, reasserting its safe-haven and inflation-hedge status.

The 30-year Treasury yield is above 5.2% for the first time in twenty years. Warsh is afraid to raise rates due to the adverse consequences for markets & the economy. But his failure to raise rates will have similar consequences. We’re damned if he does and damned if he doesn’t.

It should be obvious by now that all Warsh is willing to do to lower inflation to 2% is talk about how committed he is to achieving that goal. But he does not want to actually do anything to lower inflation, as he is afraid of adverse consequences for the markets and the economy.

Warsh kept saying that, when it comes to inflation, he doesn't have a magic wand to reduce it to 2%. No one thinks he does. But the Fed does have two tools: interest rates and its balance sheet. So far, Warsh has refused to wave either one and offered no explanation as to why.

The current federal funds rate had been in place for more than five months before Warsh became chair. Since then, he’s had two opportunities to raise it but has failed to do so. That shows that, when it comes to policy, Warsh is no more committed to 2% inflation than Powell was.

For all of Warsh’s tough talk about the Fed’s newfound commitment to achieving the 2% inflation target it failed to hit under Powell, so far the Fed has done nothing differently with respect to interest rates or its balance sheet. It's business as usual.

The bond market is giving a thumbs-down to the Fed’s decision to choose inflation. The Fed may have held short-term interest rates steady, but the market is raising long-term rates as investors choose to sell Treasuries and buy gold.