Peter Schiff: Trump Effect on the Stock Market

Peter Schiff discusses the exploding stock market and where he sees things going from here. He talks about the irrational exuberance coming from Wall Street and how they are ignoring the facts staring them in the face. He sees long term pain coming our way.

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Peter Schiff: Trump Effect on the Stock Market

AMTV interviews Peter Schiff about the recent discussion by the FED to raise interest rates and crash the economy as Donald Trump enters office. Will Trump be set up by the elites? Will he be the fall guy for the greatest crash in our modern times?

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Peter Schiff urges investors to be cautious about Donald Trump’s ‘Midnight in America’

It is safe to say that much of the contrarian community is jubilant that Hillary Clinton did not win last week’s presidential election. However, it is also safe to say that the contrarian community is cautious about the upcoming Donald Trump administration since it isn’t looking too promising at the moment.

One of these people who are concerned about a Trump White House is Peter Schiff, president and CEO of Euro Pacific Capital.

Writing in an op-ed piece last week entitled “Midnight in America,” Schiff averred that just because the American people did not fall for the evil, vile and corrupt Clinton, it “does not mean that we are now on the path to recovery.” Schiff conceded that Trump is unlikely to continue on with the status quo, but noted that the next four years seem to be uncertain.

Indeed, Obamacare will be altered and an array of regulations will be dismantled, but, when it comes to the meat and potatoes, “it’s anybody’s guess.”

“He has said that he wants to lower taxes and reduce regulations, which are needed goals, but he has said nothing about the hard work of reducing spending or reining in our country’s runaway national debt. Trump has openly admitted that his business successes have been based on his ability to go deep into debt, and then to emerge, Phoenix-like, on the back of good deal-making, marketing, and braggadocio. He probably thinks he can do the same on the national level. But there the rules are much different,” Schiff wrote.

“It is unlikely that he understands the chemicals he will be playing with, nor is it likely that he will rely on the opinions of those who do. It’s clear that his only solution is that we ‘grow our way out of debt.’ This is a gambler’s mentality that is likely integral to his DNA. It didn’t work for him in Atlantic City, and it won’t work for him now.”

He added that Trump doesn’t understand how the living standards of millions of Americans have been “subsidized by our trade deficits.” Schiff further noted that it isn’t the trade deals that have caused the loss of millions of jobs. Instead, it’s that U.S. manufacturers can’t compete in a nation and in a world with enormous costs and regulations. He also explained that the U.S. has been able to access and consume cheap foreign goods.

Right now, trade deficits are a problem for creditors and not the U.S. However, he warns, they will become a gigantic issue for the U.S. if creditors make the ultimate decision “to cut us off.”

A trade war may not bring back jobs, Schiff purports, but they will boost prices and cut back choices of U.S. consumers.

“For now we should celebrate that the election of 2016 shows that the American public knows that they have been misled, that they are mad as hell, and that they refuse to take it any longer,” he opined. “But as bleak as the picture Trump painted of the current state of the U.S. economy, it was not bleak enough. Before things can actually get better, they must first be allowed to get much worse. Decades of government promises to supply voters with benefits taxpayers can’t afford must be broken, starting with many of the promises Trump made himself to get elected. Rising consumer prices and long-term interest rates can bring this decades-old party to a catastrophic end.”

In the end, according to Schiff, Ronald Reagan was the last GOP president to promise change and make good on his famous “Morning in America” pledge (lower taxes and regulations), but he failed in one area: cutting spending. Even though, Schiff says, Trump never promised to slash spending, he will have to when interest rates start going up and the national economy worsens.

“Reagan’s morning now looks more like Trump’s midnight,” Schiff concluded.

- Source, Economic Collapse News

Are liberal arts degrees worthless? Peter Schiff thinks so

Liberal arts graduates are constantly teased because they spent $50,000 on a women’s arts degree or a sociology degree instead of something tangible, instead of a real marketable skill.

In today’s global economy, the supply and demand of the labor market suggests that the world needs more software developers and computer engineers – or even people who can count backwards without a calculator – than those who have studied how white people are racist and men are sexist for four years.

Peter Schiff, CEO and president of Euro Pacific Capital, is one of those who people who believes liberal arts degrees are worthless. He explains the problem in this video below that is a couple of years old.

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Peter Schiff on the Problems with Trump's Fiscal Plan

You see, Trump is proposing to collapse the current seven tax brackets into three brackets of 12%, 25%, and 33%. The current seven brackets range from 10% to 39.6%, according to the Tax Policy Center.



In addition to individual income tax reductions, Trump also proposed slashing the corporate tax rate to 15% from its current 35% to 39%.

These changes may seem beneficial for the U.S. economy and companies because consumers will have more money in their pockets, while companies should be able to afford staying in the states.

But Schiff predicts that reducing taxes will actually have negative consequences…

"If we try to cut taxes and raise spending, with the enormity of debt that we have, we will need more monetary stimuli than ever before," Schiff predicted to CNBCon Nov. 21.

For example, he noted that if tax rates were to be lowered, it would actually increase the use of quantitative easing and the Fed will have to reverse and cut interest rates.

Meanwhile, the Fed is expected to raise interest rates this month for the first time in a year, which Schiff predicts will be a huge problem when payments are due.

"Trump doesn't want to tackle, for political reasons, the real problems that are underlying: Americans are living beyond their means and have been for generations, and we have an enormous debt that is being held together by artificially low interest rates," Schiff said.

Not only will Trump's plan ignore the national debt, according to Schiff, but "it would also put upward pressure on inflation, which is already above the Fed's target," he added.

And he's right…

The Fed's target for inflation is 2%. The current year-to-date (YTD) rate of inflation is 2.20%, according to the Statistics Bureau on Nov. 20.

"For actual economic growth," Schiff said, "we're going to have to confront these problems."

It's yet to be determined if Trump's fiscal stimulus plan will have the impact that Schiff is predicting, but if a massive financial crisis does occur, it's vital to be prepared.

Here's how you can protect your money amid a financial crisis and even profit in the event of a stock market crash, starting right now…

- Source, Money Morning

Trumps Economic Plan Will Result in Massive Financial Crisis

Euro Pacific Capital CEO and well-known economist Peter Schiffpredicted to CNBC on Nov. 21 that President-elect Donald Trump's economic plan will result in a massivefinancial crisis – one even worse than that of 2008.

Schiff, who is known as "Dr. Doom" thanks to his history of accurately predicting market chaos, issued a stark warning about Donald Trump's presidency and the U.S. economy…

"Voting for Trump is not enough to recover the U.S. economy," Schiff said toCNBC on Nov. 21.

The financial commentator noted that he is bearish right now in part because of the massive U.S. national debt, which is expected to exceed $20 trillion in December, making it the highest in the world, according to U.S. News on Dec. 1.

But the main reason Schiff is predicting an immense financial crisis is because of President-elect Donald Trump's fiscal stimulus plans.

In fact, Schiff claimed there are "20 trillion reasons why [Trump's] fiscal stimulus can't work"…

- Source, Money Morning

How Donald Trump's economic plans will lead the Fed to reverse course on policy

Long-time Federal Reserve policy critic Peter Schiff has a new target, and it's none other than President-elect Donald Trump.

In a recent interview with CNBC's "Futures Now," the Euro Pacific Capital chief said that while themarkets have rallied since Trump's election victory, the very same economic issues that got him elected will be the exact same one's he'll find himself unable to solve.

As Schiff sees it, Trump pleased voters with his promise to cut taxes and increase spending in some key areas. However, his proposed policies will hurt the economy rather than make room for improvement.

"He doesn't want to tackle, for political reasons, the real problems that are underlying the economy," Schiff told CNBC.

Namely, the fund manager predicted that Trump's economic policies will exacerbate already-existing trade and fiscal deficits, and bring about inflation that the Fed will likely be pressured to solve. This may even involve going against the idea of a rate hike, which many had pegged at a more than 90 percent chance of occurring in December.

One of Trump's signature plans involves massive public spending on roads, bridges and other U.S. infrastructure. Meanwhile, economists nearly unanimously expect a tax cut that could rival the ones signed by former president George W. Bush.

"We're going to have to do even more quantitative easing (QE)," said Schiff, explaining that the central bank will have to return to its most potent weapon: Super-easy liquidity to pump-prime the economy.

"The Fed is going to have to reverse and cut interest rates, and it's not going to create economic growth, but it is going to put pressure on inflation that is already now above what the Fed supposedly says is its supposed target," he added.

In other words, Schiff believes that even if a December rate hike does happen, it's already "too little, too late" for the economy.

According to him, the Fed will still be faced with the question of how to finance the deficits that Schiff says will emerge, especially in light of the global bond rout that took place after the election.

The combination of outcomes from Trump's policies leads him to believe that a market "crisis" is on the way, and the crash could be even bigger than the one in 2008.

Stocks continued their post-election rally, with the Dow and small-cap stocks setting new record highs last week.

- Source CNBC