On the most recent episode of the Peter Schiff Show, Peter delves into a week of fresh inflation data. He highlights the unstable foundations of the supposedly “strong” economy, critiques foreign central bank policies, and elucidates how inflation obscures the advantages of economic growth.
Commencing with alarming deficit figures for the 2025 fiscal year:
During the initial two fiscal months of 2025, as we are currently in that fiscal year, the budget deficit in those two months alone stood at six hundred and twenty-four billion dollars. That marks a 65% surge compared to the same two months a year ago. In fact, the first instance of the United States government running a six hundred and twenty-four billion dollar deficit for an entire year, not just for two months, but for a whole year, was in 2009, right after the 2008 financial crisis.
These statistics clash with the official narrative of a thriving economy. If that is indeed the case, why do the American people hold a different view?
If consumers were truly in the best shape ever, according to this Wall Street analyst, they would have supported Kamala. They wouldn’t have sought to remove her because things are supposedly so dire, and they would have hoped for Trump to bring about change. It’s akin to lying in a hospital bed, connected to various artificial life support systems, tubes in your mouth, tubes in your nose, intravenous blood transfusions, and asking the doctor, ‘What’s happening?’ ‘You are in excellent health, absolutely fit as a fiddle, except if we disconnect anything, you will perish.’
A recent inflation report released on Thursday, showing higher-than-anticipated inflation, practically necessitates rate hikes by the Fed. However, the market still anticipates that the Fed will decrease rates at its December meeting:
All these figures confirm that inflation is at its lowest point and is set to rise significantly, having never come close to 2%. Particularly when looking at the PPI (Producer Price Index), which serves as a leading indicator for the CPI, as businesses typically raise their prices first before passing on the increases to consumers. The projected increase in November producer prices was 0.3%, and the actual figure was 0.4%. This was double the increase from the previous month of 0.2%, indicating a rapid movement in the wrong direction.
Current forecasts indicate a probability of over 95% for the Fed to reduce rates again. Unfortunately, this aligns with the inflationary monetary policies being implemented across Europe and other regions of the world:
Nevertheless, the Fed is set to cut rates by another 25 basis points. Moreover, the ECB (European Central Bank) reduced rates by 25 basis points this week, while the Swiss National Bank opted for a substantial 50 basis point cut… Inflation is poised to make a significant comeback worldwide: in the Eurozone, Japan, and all the countries cutting rates, rates should not be decreased. Inflation will resurface more aggressively than ever, surpassing the levels witnessed in 2001, 2002.
Central banks deceive their citizens with inflation, distorting economic progress for their own policy objectives:
Let’s assume that, with all other factors being equal, the government does not introduce any inflation and productivity is so high that prices would have decreased by 5%. That would have been a significant economic boon. Now, the government introduces inflation, and instead of prices decreasing by 5%, they rise by 2%. One might argue that there is no inflation now because we are at the Fed’s 2% target. However, prices are now 7% higher than they would have been otherwise. We did not acquire all that inflation for free. The government deprived us of that increase in our standard of living. They nullified the benefits of those price reductions.
For a deeper analysis of last week’s economic data, listen to Joel’s insights on the SchiffGold Gold Wrap Podcast here.
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