Back

Peter Schiff: The Economy May Already Be in Recession


  by SchiffGold  0   2

Recent data have many cheerful about the economy. But according to Peter in his latest podcast, the economy may already be in recession. Here are some of Peter’s biggest causes for concern:

The recipe for GDP growth is a recipe for disaster

The big factor driving the GDP was the increase in government spending. Well, where’s the government getting this money? It’s borrowing it! That’s not a recipe for economic growth that’s a recipe for disaster!”

Spending increases caused massive increases in national debt and liabilities.

The US national debt currently stands at $34.1 trillion. Total unfunded liabilities tower in the hundreds of trillions, mostly from Social Security and Medicare.

Peter states that this used to be a priority, but is no longer:

Back in the 1980s, 1990s we were still pretending we were going to do something about entitlements about Social Security, about Medicare, that there was going to be some effort to fix the problem before it blew up… Nobody at this point believes that we’re going to do anything about stopping the bomb from going off. In fact, it’s already gone off. We’ve already passed the point.”

Social Security is officially broke

Social Security trust funds are now liquidating their treasury holdings, putting a massive net drain on the US treasury. 

And it’s getting worse:

[The] drain is getting bigger every day as more people retire whether voluntarily or involuntarily and more people just drop out of the labor force and stop paying taxes.”

Peter explains that many roles are being replaced by AI and automation tools, which don’t help the Social Security fund:

They’re not going to be paying Social Security taxes. Computer programs don’t have to pay into FICA. This this is going to get bigger but given the fact that we have this huge hole in Social Security, we’re bleeding we’ve got a massive deficit that’s running out of control.”

Peter projects a total depletion of Social Security reserves within the next few years. 

Making matters worse, manufacturing has been in recession

This confounds the administration’s narrative of a healthy economy:

They keep talking about a “Manufacturing Renaissance.” They got the “r” right, except it’s a recession instead of a renaissance.”

The Fed Philly Manufacturing Index has been negative for 18 out of the past 20 months, a manufacturing dark age.

This all begs the question:

How can you talk about a great economy? How healthy can the economy be when a vitally important part, the goods-producing sector, has been in a recession for almost two years?”

There are signs of higher inflation to come

Peter points out that just this week, oil prices rose $5 a barrel and the M2 money supply increased a whopping $100 billion, a significant expansion.

Plus, the Fed won’t deny voters anything this election year.

Peter concludes:

I’m correct that inflation is going to be picking up, it’s going to be weakening the economy. We could see a more meaningful turnaround. Maybe we’ll even get the government to come back and officially acknowledge that we’re in a recession.”

401k IRA Rollover Free Report401k IRA Rollover Free Report

Get Peter Schiff’s key gold headlines in your inbox every week – click here – for a free subscription to his exclusive weekly email updates.

Call 1-888-GOLD-160 and speak with a Precious Metals Specialist today!


Source link

Wealthfargo
Wealthfargo

Leave a Reply

Your email address will not be published. Required fields are marked *

We use cookies to give you the best experience. Cookie Policy