Peter Schiff: ‘We Have Destroyed the Economic Foundations of This Country’
The February jobs report was nothing short of atrocious with just 20,000 jobs created and first-quarter GDP estimates are down significantly, two loud alarm signals that the economy isn’t as great as we’ve been led to believe.
And yet no one is worried, economist Peter Schiff says on his latest podcast.
On top of that, most of the focus seems to be on expectations that a new trade deal with China is going to send the economy soaring again.
“Clueless” is the word Schiff used to describe most analysts who’ve come to that conclusion.
On top of a poor month for job creation, Dow Transports also declined for 11 straight days last week, which hasn’t happened since 1971. The last time transports fell 10 straight days was in 2009 amid the great recession.
That decline, February’s poor job numbers and first-quarter GDP estimates below 1 percent all are pieces of the greater economic puzzle.
“Everybody is just ignoring these numbers because they are just blindly optimistic. Either they think it’s going to be this great trade deal, or just because they’re so convinced,” Schiff said on his latest podcast. “Everybody — Republicans, in particular — have convinced themselves that this is a great economy, this is a booming economy and it’s their fault. It’s more wishful thinking.”
Schiff also notes that wages are up somewhat, which sounds like good news until you take in all the facts. For example, Whole Foods recently committed to a $15 minimum wage for all of its employees.
Great news, right? Wrong.
In addition to raising it’s minimum wage, it also slashed hours so employees are actually taking home less pay. Next up, Schiff says, are layoffs.
“Because as it becomes more expensive to keep your workers, well, then you fire your workers,” he said. “I mean, employers will look for ways to reduce their overhead. Wages could be going up, but that doesn’t mean employment is going up. Employment can be going down as wages are going up, and so what good is a higher wage if you’re not earning it?”
Schiff, a precious metals expert, and he said gold will be going much higher than its recent rally.
“The reason it hasn’t already gone higher is because people still don’t understand the situation that we are in,” he said. “In fact, I don’t think I’ve ever seen people more clueless, more oblivious to a problem than they are now.
“We had an orgy on debt. We have destroyed the economic foundations of this country. We have hollowed out our industrial base. There have been real problems that have been growing beneath the surface as a result of these budget deficits and trade deficits that everybody has been ignoring because they are focusing on the wrong thing.”