In this week's episode, Peter discusses the dismal numbers released Thursday and Friday, the horrible tax policies, and the appalling lack of transparency from our government.
Stagflation has returned to the economy, as this week's GDP and PCE figures reveal. United States The measure of GDP growth for the first quarter was only 1.6%, much lower than forecast. To make matters worse, PCE (Personal Consumption Expenditure) the price index has become hotter than expectedremaining stable at 2.8%.
Peter has been predicting stagflation for some time, and now that it's here, he sees mining stocks as an opportunity:
“That's one of the reasons why I'm so overweight in mining stocks, besides the valuation, is that if there's stagflation, the economic environment is not better. Because you have inflation that the Fed can't fight, because you have a weak economy. The Fed is therefore reluctant to raise rates, as this would further weaken the economy. … In addition, the weakness of the economy is widening budget deficits. And that means a weaker dollar, more money printing, more inflation. The best possible economic scenario for gold stocks is therefore stagflation, which is of course the worst economic scenario for the economy.
High consumer spending is particularly alarming, given that these numbers are likely conservative and underestimate the true extent of inflation in the economy:
“Why are people spending more? Well, because things cost more. That's why they spend more. They don't buy more. And even though these numbers are supposed to be adjusted for inflation, they aren't because you know the government's numbers don't accurately capture the true magnitude of inflation.
The savings rate also fell from last month, from 3.6% to 3.2%. Savings are a great economic indicator, as Peter explains:
“This is, I think, the lowest savings rate in a few years. So this is not good news: Americans must deplete their savings. This is bad news. When the economy is doing well, you save more. This is when you add to your rainy day fund. You need to tap into it when times are tough and you are struggling. And that's exactly what the Americans are doing. They are struggling and are dipping into their savings to get by.
Instead of tackling the Fed's disastrous monetary policy, the Biden administration is trying to raise taxes on wealthy Americans, which ultimately means raising taxes on everyone:
“They only promise to tax the rich, right? Millionaires and billionaires. Of course, that's what they always say. That's what they said in 1916 when they got the income tax or the 16th Amendment. It was just to tax Carnegie, Rockefeller, Vanderbilt. They were going to cut taxes on the middle class, right? If we just allow this tiny 4% tax, that's the maximum bracket. … Next thing you knew, the 4% rate was like 70, 80%. And then, around the time of World War II, there was withholding tax and almost everyone paid income tax. »
Peter addresses recent wealth tax proposals for the ultra-richhighlighting how they are both illegal and counterproductive:
“This would be very destructive for the economy, for wealth creation, for production and for employment. It would therefore be a complete economic disaster in addition to being unconstitutional. So I mean, the good news is these are just talking points for the election. So this won't actually happen. Now, that could happen if Biden wins the election and the Democrats get the House and Senate. So, this could actually happen. But for now it just shows where they are and they are throwing red meat at their base, which is fundamentally socialist.”
At the end of this episode, Peter gives us an update on his FOIA request for the closure of his bank in Puerto Rico. After the government essentially refuses to release any relevant information about his case, Peter explains how corrupt and shady this whole affair is:
“I have the right to see this information, but they don’t want me to see it. I think because it reveals the commission of a crime. And so, you know, the IRS can commit a crime and then cover it up. Because they are the government, right? They pursue citizens for committing crimes, but then they get away with murder. They commit crimes as much as they want because they're the cops, right? And they are the ones who make the rules.
Be sure to check Peter's recent interview with Anthony Crudelein which they discuss the traditional value of gold, the role of Bitcoin in the economy, and the perpetual inflation that defines today's economy.
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