"INFLATION Is Gonna Get Much WORST in 90 Days" - Peter Schiff

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01. uh what zero represents is Joe Biden's understanding of the U.S economy because he has no clue what's going on you can't brag about the fact that we had one lone month where high prices didn't get any higher it's not like they went down they just didn't go up but if people were struggling with high prices their struggle didn't get any easier in the month of July it remained the same what would have been good is if prices could have come down but they didn't come down and in fact the only reason that the headline number didn't go up was because we finally got some relief at the pump gas prices came down but a lot of other prices food prices keep going up rents keep going up in fact you mentioned the core which doesn't include energy was up 0.3 on the month so if you annualize that multiply it by 12 that's still a pretty decent sized number yes it's not quite as huge as the numbers we've been getting but there's always going to be an ebb and flow in these numbers I mean how many times last year did all these analysts including people at in the government claim that we had Peak inflation I mean I got sick and tired of hearing Peak inflation back in 2021 I had to keep saying we're nowhere near the peak and the same thing applies today yes we may have hit a temporary Peak maybe it'll take a few more months before we see a year-over-year increase that's higher than the 9.1 that we got in June but there's no doubt in my mind that we will get a higher number than 9.1 we are nowhere near done with this inflation problem it is going to be here for years and years and years probably the remainder of this decade and probably then some and you know so just looking at one-off month where you know we didn't get a big rise and having this premature victory dance I think is an insult to the American public as they keep telling us this is a very unique recession in fact most people don't even want to admit that we have one okay but you know look at the recessions of the 1970s you had Rising prices there you know during stagflation and that's what my forecast is remember last year I was predicting the U.S economy would be in recession in the first half of 2022 and very few people had that right but I also predicted that inflation wasn't transitory that it would get stronger as the economy got weaker and that is exactly what happened now the reason that I believe that inflation is going to kick into a higher gear as this recession that we are in gets worse is because I believe Powell is going to Pivot ultimately and he is going to give up his fight against inflation in order to fight a different Foe and that is going to be a recession and Rising unemployment and potentially a financial crisis either one that has already happened or one that is rapidly approaching and so I think Powell is going to choose what he believes to be the lesser of the two evils and I think he's going to pick fighting recession and propping up financial markets and monetizing government debt so the treasury doesn't have to default I think the FED is going to pick that over inflation and so unlike the pivot that we got with volcker back in 1982 where volcker Piggott pivoted after a victory in his fight against inflation Hal is going to Pivot despite defeat inflation is going to win and so when we go back to zero percent interest rates or whatever we do and when we go to qe5 which is going to be launched I don't think the FED is going to shrink its balance sheet very much it's going to shrink it less than it did last time it tried to do it which is an impossible task given the bubble that it's in it's inflated I think when the FED goes back to stimulus and creating inflation when inflation is maybe double or triple or quadruple that two percent Target the markets are going to react very differently than how they reacted in the past because in the past the Fed was able to justify all this cheap money because they said we don't have enough inflation we're still below Target well when they go back to this stimulus when inflation is triple or more their target the markets aren't going to buy it and so I think all the inflation that they are going to have to uh create in order to stimulate the economy out of this recession is going to ignite a powder keg we already have an inflation problem and Powell's going to pour all this gasoline on it and so we're going to see inflation moving up to a much higher level even though it's already very high in fact it's probably double what the government claims in the CPI if you want to know what's actually happening in prices you've got double what the government tells you and that's more accurate well I don't care how the politicians want to redefine it it is what it is and so you know I I'm I'm not going to change the meaning of a word uh just to deny that we're not in something that that we're in uh but Mike the point of that tweet is you have all these keynesians uh that somehow believe that inflation is caused by economic growth they also think it's caused by too many people working they think there's a trade-off between unemployment and inflation they think if there's not enough people unemployed you're going to have more inflation and a way to get rid of inflation is to put people out of work all of this is Keynesian nonsense inflation is not caused by the private sector it's not caused by growth it's not caused by people working the only people working that cause inflation are the people at the FED who are running the printing presses or pushing all the buttons that are creating all the money that's where inflation comes from and they crate inflation in order to monetize U.S government debt so the federal government runs a big budget deficit the federal reserve prints up money to buy those bonds and that inflation enters the economy it's got nothing to do uh with growth or people working as a matter of fact in a real economy the stronger the growth the lower prices because what is economic growth it means increased output it means more goods and services are being produced well if you increase the supply of something then you decrease the price so a productive economy that's producing more stuff means that the price of that stuff is lower the same thing with people working if more people are employed productively their productive output is increasing the supply of goods and services make keeping the prices down if you slow down real economic growth if you force people out of work you're going to have less Supply we're not going to make as much stuff we're not going to be offering as many services and so therefore the prices of those goods and services all else being equal are going to go up Oh wrong no you never that Supply creates demand so if people are producing and putting goods and services into the economy well now they have uh the ability to share in that production they've earned money helping to create stuff and now they could spend that money to buy the stuff that they created and so the demand that comes from real production doesn't cause prices to go up the only kind of demand that causes prices to go up is when the government just prints money and gives it to people and so that money is not a function of production people didn't earn that money producing they just were sent the money by the government I mean that's what happened during covid to a a huge degree you had people who had jobs and were working to help make stuff they went home they weren't working at all they weren't making anything but now the government sent them money they weren't earning money because they worked they were being paid not to work but the worst part about it was many people were paid two or three times not to work than what they earned when they were working so now these people who weren't working at all had all this money to go and buy stuff but they didn't help produce any stuff that's what pushed up prices because you had all this fake demand and no Supply you see the the proper monetary policy response to the pandemic if everybody was going to stop working the FED should have Shrunk the money supply not expanded it the US government should have cut spending not spent more that would have balanced out supply and demand but instead we had the worst combination of monetary and fiscal policy probably in the history of the country in the face of collapsing Supply you know we flooded the economy with phony demand and so we're only we're experiencing now I think just the beginning of those consequences we've got a long way to go uh which is why the idea that inflation has peaked is nonsense