Jobs Missed. Bonds Fell Anyway. Schiff Already Named the Crisis.
Peter Schiff opened his latest show with the line he has been running for months.
The economy is heading into a storm that creates a bond crisis, and this is probably the largest of all bond bear markets. Debt is $40 trillion. Before you know it, he said, it is $50 trillion, and the country is paying 5 percent on that stock.
“As long as the stock market ignores bond weakness, there is no reason for bond prices to stop falling. And there is no reason for interest rates to stop rising. So they will continue to grow until something breaks.”
September payrolls were the news the bond bulls wanted. Forecast was 85,000. The print was 29,000, under even the lowest estimate of 40,000. July was revised back to negative 10,000. August was cut to 133,000. Unemployment rose to 4.2 percent.
Private payrolls added 46,000 against a 75,000 guess. Average hourly earnings rose 0.1 percent, the smallest monthly gain in more than five years, while August CPI rose 0.4 percent. Prices, on that month, rose four times as fast as wages.
“We got everything the bond bulls wanted. Yet the bond market has gone down. If the bond market can’t turn around even with good news, what happens when bad news comes? It will change from a slow decline to a rapid decline.”
He called it the Hemingway bankruptcy. Slowly, then all at once. The slow part is now. The 10 year closed the week at 5.28 percent and the 30 year at 5.63 percent, which he called classic bear market action, even as the odds of an October hike fell. Personal income rose 0.2 percent. Spending rose 0.9 percent. The savings rate is 4.1 percent. The August trade deficit was $132.6 billion, the fourth worst on record. Tariffs, he said, have not cut imports. Importers are paying them.
Stocks ignored it. The Nasdaq hit an intraday record while 147 stocks made new 52 week lows against 38 new highs, breadth he compared to 1999 and 1973. President Trump said inflation will pay off the debt. Schiff called that a sell signal for bondholders. Gold was near $4,140, silver at $60.37. He told listeners to buy the dip, with support near $4,000 and $60. Mortgage rates, he thinks, can reach 8 percent this month. AI capital spending is propping up GDP. The data, in his telling, is stagflation.
This is the tape he described on the SilverTrade Insider. That interview is here: https://www.youtube.com/watch?v=e44YjaKwgkY.
He said then that if the Fed does not monetize the debt, the country gets a worse financial crisis than 2008, and that Kevin Warsh will do what Powell, Yellen, Bernanke, and Greenspan did.
“If you don’t choose inflation, you choose something else. What you choose is a major stock market crash, a decline in real estate, and a financial crisis.”
Talk is cheap. M2 was already at a record. The debt was already approaching $40 trillion. Real rates, not the speech, are what matter for gold and silver. On that show he called the silver chart a real new bull market. The old high near $50 broke, the spike over $120 pulled back, and the metal held the low 60s. Sixty, he said, was the more likely floor. Gold’s floor was $4,000 to $4,100.
The October 2 show is that floor getting tested while the bond market refuses the good news. Jobs missed. Wages stalled. Tariffs failed. Bonds fell anyway. The monetization he said the Fed would choose has not arrived. The yields he said would force it are already here.
Buy the dip, he said, because the slow part of the bankruptcy does not stay slow.
