McCarthy's 8% spending cut and border wall proposal faced opposition from ultra-conservative GOP members. Lacking support, he dared hardliners to oust him. The added demand to defund the Trump probe and block Ukraine aid, along with the "motion to vacate" rule, complicates his position. A potential compromise with Democrats could be viewed as a GOP defeat, while external factors like energy issues and UAW strikes intensify the challenges.
The US national debt skyrocketed by $1.58 trillion since the debt ceiling was raised, reaching a concerning $33.04 trillion. The bulk of this, $26.2 trillion, is in marketable securities traded globally. Interest rates on these debts are at their highest since 2011, and the overall debt has ballooned 120% since September 2011. The recent $2.2 trillion surge in just a year points to reckless deficit spending, amplifying inflation fears. With interest payments eating up 36.2% of specific tax revenues, the US is on a precarious fiscal path.
After the August CPI data came out, Paul Krugman declared that the inflation war was over. The Biden administration and the Fed won the fight. In his podcast, Peter Schiff said he actually agrees with Krugman, at least in part. The inflation war is over. But who really won?
Are you feeling the pinch of skyrocketing home prices and soaring rents? You're not alone.
Gold prices rose on Monday due to a slight drop in the U.S. dollar, with investors anticipating central bank meetings this week. By 1:46 p.m. EDT, spot gold increased by 0.4% to $1,932.4025 per ounce. With the Federal Reserve expected to maintain interest rates, the U.S. dollar declined by 0.2%. Traders predict a 99% chance that the Fed will keep rates between 5.25% to 5.5%. Chinese gold prices reached record levels last week due to the yuan's depreciation.
China's gold and silver prices in Shanghai consistently surpass Western benchmarks, indicating a resistance to Western price suppression efforts. In September 2023, Shanghai's gold price was $100 per ounce higher than the West's. Similarly, Shanghai's silver prices are significantly higher.
China's higher precious metal prices signal to BRICS and other gold/silver producers the benefits of breaking away from Western-imposed prices and challenging the USD's global dominance.
Gold prices have significantly risen, with a kilogram in Saudi Arabia now worth 233,604.13 riyals. This surge is attributed to geopolitical tensions, global economic shifts, and changing investor sentiments. Historically, gold has been a trusted asset during uncertain times, and its recent spike in Saudi Arabia may influence the broader global economic landscape.
The nonprofit watchdog, Better Markets, recently shed light on the alarming corruption in the U.S. financial sector. Professor Anat Admati starkly summarized it: "Corruption has become the system." JPMorgan Chase stands out as a prime example, notorious for its "London Whale" scandal and other malpractices. The bank's unchecked behavior underscores the systemic failures of regulation, allowing such entities to dangerously grow without consequences.
U.S. homebuilder confidence dipped to 45 in September amid a 152% rise in mortgage rates. The index's drop, which followed a 6-point decrease in August, indicates growing caution. Concurrently, the Federal Reserve's balance sheet surpasses $8 trillion due to Covid-related measures.
Gold is showing strength against the US dollar. Despite recent dollar gains, the momentum is waning, suggesting a favorable turn for gold. As the dollar weakens, significant gold buying is anticipated, driving its price upwards. Speculators are expected to reverse their bearish stance, further boosting gold. Achieving new record highs will attract more investments, amplifying gold's ascent.
Argentine candidate Javier Milei champions dollarization, but 170 experts label it a "mirage," insufficient for Argentina's fiscal woes. While it might temper inflation, as in Ecuador, Argentina's deep-seated issues, influenced by populist policies and sovereign defaults, persist. Dollarization isn't a catch-all solution.
The Fed's Overnight Reverse Repurchase agreements (ON RRPs) have dropped 45% to $1.40 trillion. Institutions, mainly U.S. money market funds, use RRPs to park cash at a 5.3% interest rate. However, many are now favoring Treasury bills for slightly better rates. This, alongside other shifts, indicates notable changes in the Fed's balance sheet and overall financial liquidity. Physical currency in circulation has dipped, and the Treasury's account at the Fed stands at $537 billion.
Central banks globally are set to announce rate decisions, with many still in the rate-hiking phase. The full impact of these hikes on markets and the economy hasn't been felt yet. The Global Financial Tightness Indicator (GFTI) suggests a potential decline in US manufacturing, which heavily influences global stock markets. Although stricter monetary policies might challenge risk assets in the medium term, the current excess liquidity remains supportive of stocks in the short term.
The United Auto Workers went on strike against the Big Three US automakers in Detroit last week. Peter Schiff went on Real America with Dan Ball to talk about the strike and how it might impact the US economy.Peter put the strike in the context of the current inflationary and high interest rate environment, and talked about how it might impact the broader US economy.
Biden's administration faces criticism for policies impacting the middle class. Several economic indicators suggest potential challenges:
1. Economic Index: Continuous drop for 16 months.
2. Consumer Confidence: Approaching recession-levels.
3. Consumer Spending: Shift towards essentials.
4. Credit Card Debt: Surpassed $1 trillion with rising delinquencies.
5. Tighter Lending: Banks hesitant to provide loans.
6. Corporate Debt: $1.8 trillion due soon, posing growth challenges.
7. Manufacturing: Continuous decline due to weak demand.
8. Global Risks: Economic slowdown, especially in China.
9. Yield Curve: Remains inverted, historically a recession signal.
10. Inflation: Remains high despite Federal Reserve's efforts.
Oil prices near $95 a barrel, up 10% this year, driven by strong demand and OPEC+ supply cuts, especially from Saudi Arabia and Russia. This rise may intensify global inflation concerns. Experts suggest prices might touch $100 a barrel soon, while diesel's soaring cost indicates a supply shortage.
Federal Reserve losses exceeded $100 billion due to higher interest payouts than earnings from bonds and services. Experts anticipate these losses could double. The surge in losses follows the Fed's decision to raise interest rates from near-zero in March 2022 to the current 5.25%-5.50%. To mitigate further losses, the Fed is reducing its balance sheet by offloading bonds. Despite the current financial situation, the Fed asserts its capability to execute its monetary policy.
Under Bidenomics, the Big Three auto companies and the UAW face challenges, with the auto sector declining by -7.60% in Q2 due to rising electrification costs. As gas prices surge by 70% and food CPI increases by 20%, the UAW's demand for a $20 hourly raise might barely cover these inflations. Their 32-hour workweek proposal mirrors European models.
"Dynamic" or "surge" pricing adjusts prices according to supply and demand, a strategy used by airlines since the 1980s. Now, with AI and algorithms, sectors like e-commerce are quickly adopting it; Amazon updates its prices approximately every 10 minutes. As technology progresses and inflation pressures margins, a broader range of industries will likely adopt this method. Evidence suggests dynamic pricing can boost revenues; airlines saw a 1-4% increase compared to traditional pricing.
After the August CPI report showed price inflation heating up again thanks to rising gasoline prices, Peter Schiff appeared with Jesse Kelly on First TV to answer the question: are we heading? Peter said this story is going to have a tragic ending.