Inflation Finally Rears Its Head – Ep. 228

The Peter Schiff Show Podcast

Peter Schiff

News, Business, Investing, Business News, Politics

4.6 • 5.9K Ratings

🗓️ 17 February 2017

⏱️ 30 minutes

🔗️ Recording | iTunes | RSS

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Summary

* We had a very significant day in the currency and gold markets yesterday
* We had some good follow through today that really buttresses the point that I want to make
* We got some economic news that was released yesterday that would have been considered bullish for the dollar and bearish for gold
* By most people, other than me, who trade currencies and who trade gold
* But the fact that gold did not sell off or the dollar did not rally was very significant
* The news was the CPI and Retail Sales
* First of all, Retail Sales came out stronger than expected, they were looking for a gain of .1% and we got a gain of .4%
* They actually revised the prior month's gain from +.6% to +.1%
* Now a lot of the gain in retail sales, though has to do with the fact that prices are higher
* Retail sales are not adjusted for inflation
* Prices are going up
* Retail sales may be going up, particularly things like gasoline
* It's not just the price of gas that's going up; everything is going up
* The CPI came out at the same time as Retail Sales and that is the bigger number
* We got a .6% rise in consumer prices
* That's versus the expected .3%
* Even the core - you take out food and energy - we were up .3% there versus an estimate of .2%
* Year over year CPI 2.5% that's the official number
* Obviously prices are going up a lot faster than that but according to the government they're going up at 2.5%
* Even if you take out food and energy and just look at the core, year over year the change is 2.3%
* Now remember the Fed is saying their target is 2%
* When Janet Yellen testified this week she said that she's confident this week that we're going to hit her objective
* Well, we've already surpassed her objective
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Transcript

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0:00.0	We had a very significant day in the currency and gold markets yesterday.
0:05.9	In fact, I almost recorded the podcast yesterday, but maybe it's even better today because we had
0:11.0	some good follow-through today, and it really buttresses the point that I want to make.
0:16.9	And what happened was we got some economic news that was released yesterday that would have been
0:23.6	considered bullish for the dollar and bearish for gold.
0:29.0	By most of the people, or pretty much all of the people, probably other than me, who trade currencies
0:35.7	and who trade gold, but the fact that gold did not sell off or the dollar did not rally was
0:43.2	very significant. Now, the news that we got was the CPI and retail sales. First of all, I go over
0:50.6	retail sales. They came out at the same time, but retail sales came out stronger than expected.
0:55.5	They were looking for a gain of 0.1, and we got a gain of 0.4, and they actually revised
1:01.6	prior months gain from 0.6 to up 1. Now, a lot of the gain in retail sales, though, has to do
1:08.7	with the fact that prices are higher, because retail sales are not adjusted for inflation.
1:13.7	So if prices are going up, that means retail sales may be going up, particularly up like you look
1:19.6	at things for gasoline, right? Gas prices, people buy about the same amount of gas, whether the price
1:24.8	goes up or not. And so if gas prices go up, then that is going to contribute to higher retail sales.
1:30.3	But it's not just the price of gas that's going up. The price of everything is going up.
1:34.9	The CPI came out at the same time as retail sales, and that, I think, is the bigger number.
1:42.0	We got a 0.6% rise in consumer prices. That's versus the 0.3% that had been expected.
1:51.4	And even the core, if you take out food and energy, we were up 0.3 there, versus an estimate of 0.2.
1:59.2	Year over year, CPI is now up 2.5%. Now, that's the official number. Obviously,
2:07.5	prices are going up a lot faster than that, but according to the government, they're going up at
2:12.4	2.5%. Even if you take out food and energy and just look at the core, year over year, the change is
	...

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