Peter Schiff: PPI Says Inflation is Back | SchiffGold

On Sunday’s podcast, Peter breaks down the latest economic headlines and explains why the official PPI numbers, released last week, are hiding a worsening reality. He connects bad jobs revisions, distorted inflation measures, and reckless trade moves to a policy mix that will fan inflation while weakening American industry.

He opens by revisiting last week’s surprising jobs reversal and his prior warnings that the headline numbers were unreliable:

Remember last week we got the really bad jobs numbers? We got the July jobs number which was way below estimates, but worse than that they went back and they downwardly revised May and June significantly, almost wiped out all of the job creation for those two months. It was the biggest back to back monthly downward revision in over 50 years and I had been warning about it. It’s not like I was surprised by the revisions; I expected them, they may have been even bigger than what I was anticipating, but I knew the initial numbers were no good.

He then doubles down on a familiar theme: the statistical machinery is built to flatter policy, not deliver truth. Peter says the public is being systematically misled by official measures:

The fraud is the methodology to compute the numbers; that’s what I’ve been talking about for years on this podcast — that you can’t trust the data because the data was designed to be wrong, but it was actually designed to make bad economies look good. It was designed to benefit whichever party is in power, so regardless of whether you’re a Democrat or Republican the unemployment numbers are too low. The real rate of unemployment is much higher than what the government reports; that was true under Biden, that was true under Trump, before it was true under Obama, it was true under Bush, it was true under Clinton. They’ve been doing this for a long time; same thing with inflation.

From that data skepticism Peter moves to a policy prescription he thinks is being missed: the Fed should be raising rates, not cutting them. He points out the disconnect between soft growth and resurging price pressures, citing CPI and PPI dynamics:

The data that we got this week proves what I’ve been saying that the Fed should be hiking; the conversation should not be about when is the Fed going to cut but when is the Fed going to hike because rates are too low. That’s why the inflation fire is coming roaring back. Before we got the really bad news on producer prices we got news that the markets actually celebrated on consumer prices; the July CPI came out earlier in the week and the reason people celebrated is that it wasn’t worse than expected. … The rug got pulled out from under that celebration when we got the PPI numbers which were a shocker — it came out at 0.9%, almost one whole percent.

Peter also takes aim at the latest tariff maneuvers, arguing they amount to unauthorized taxes on exports and are justified by contrived emergencies. He points to deals involving major tech firms and a strained interpretation of reciprocity as evidence of overreach:

The Constitution authorizes tariffs; what it doesn’t authorize is taxes on imports. Trump is actually doing that with these deals he’s made with Nvidia and AMD where they’re paying the government 50% of their export revenue to China on certain products; that is a de facto export tax, and not only does the federal government not have the authority to do that under Article I Section 8, but Article I Section 9 actually says that the federal government cannot tax exports from any state. 

Even as policy and data mislead investors, Peter points out a clear signal from the market: precious metals and miners are outperforming, and the market is waking up to persistent upside in gold:

The dollar went down, bonds went down, and gold was down a little bit while silver was up. … But what was more encouraging to me was the action in the mining stocks because both the GDX and the GDXJ hit new 52‑week highs this week. In fact the GDXJ hit a new 52‑week high on Friday; both of those indexes are up 65% on the year. This is the best performing sector in the Trump economy.

For more of Peter’s analysis, check out last Friday’s SchiffGold Friday Gold Wrap!

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