Politics
Peter Schiff: Congress Is the Real Threat, Not Protests
Rep. Nancy Pelosi immediately seized on the opportunity that Trump handed her and called for a vote in the House on the bigger stimulus.
Somewhat lost in the chaos of the DC protests was the fact that Democrats won both Georgia Senate runoff races. That effectively gives the Democrats control of both houses of Congress. In his podcast, Peter Schiff made the case that Congress is the real threat to America, not the protesters who broke into the Capitol building.
Peter said he thinks that Trump’s threat to veto the spending bill unless Congress upped the stimulus checks to $2,000 was a key reason the Democrats won.
That put Senate Republicans in an untenable position where they were the only thing standing between voters and a $2,000 check.”
Rep. Nancy Pelosi immediately seized on the opportunity that Trump handed her and called for a vote in the House on the bigger stimulus. But Sen. Mitch McConnell blocked the move.
That opened up a great window of opportunity for president-elect Joe Biden because he was basically able to frame the Georgia election as a referendum on those checks. Biden actually bribed the electorate, the voters, by basically saying, ‘Hey, if you want your $2,000 check, you need to vote Democrat. If you vote Republican and the Senate stays in Republican hands, you’re not going to get your $2,000 because those greedy Republicans won’t sign on to the legislation.’”
So Georgians voted Democrat. And they’re almost certainly going to get $2,000
But what is that $2,000 going to buy? Probably not very much.”
The bottom line is now the Democrats are going to be able to get a lot of things done that they wouldn’t have been able to do had the Senate stayed in Republican hands. You can almost certainly count on tax increases on corporations and “the rich,” and more regulations. As Peter put it, “Democrats will keep their promises when it comes to making government bigger and more expensive.”
None of this is good for the market. In fact, after the presidential election, the markets rallied on the belief that the Republicans would hold the Senate and serve as a firewall against an all-out Democratic Party agenda. And yet the stock market rallied again after it became clear that the Democrats would take the Senate. The Dow was up 437 points and set a record. The S&P 500 set another record. And the Russell 2000 was up by nearly 4%. This despite protesters storming into the US Capitol building.
Why was the market up? This is clearly bad news. The only thing that a Congress controlled by the Democrats means is corporate earnings will almost certainly be lower with higher taxes and more regulations, and the economy will be weaker than it would have been had the Republicans been in a position to hinder the Biden agenda.
But as Peter put it, “Who gives a damn?” The only thing that matters to this market is that there will be more spending and bigger deficits. And that means the Federal Reserve will have to print more money to finance the deficits.
That is the reason the stock market is up. It is money printing. It is inflation that is driving the stock market.”
Meanwhile, Treasuries got clobbered. The yield on the 10-year rose back above 1%. That sounds low and it is in absolute terms. But compared to yields as low as 40 basis points earlier this year, 1% is a pretty big gain.
So, even though we’re low in relative terms, we’re much higher than we used to be. And what’s more important is the trend. We could see an explosive move up in interest rates. Now, the only reason we may not see an explosive move up in interest rates is because the Federal Reserve doesn’t let it happen. Because the Federal Reserve interferes in the bond market by printing even more money to buy even more bonds to prevent rates from rising.”
Inflation is driving this market. And the irony is that the Fed will have to create more inflation in order to prevent inflation from pushing interest rates up.
They’re literally fighting fire with fire. Bond prices are falling because investors are worried about inflation. And so the Fed creates more inflation to prevent bond prices from falling and now investors have even more to worry about. This is the Catch-22. This is the situation that’s going to unravel.”
So, why isn’t gold getting a big boost? It’s an inflation hedge.
Gold did have a strong rally on the first trading day of the year. But it was down in the aftermath of the Georgia Senate runoff. Peter said he thinks that is primarily a function of risk-on sentiment. Investors are focused on the surging stock market, not worrying about safe-haven. Rising interest rates may have also put some drag on the gold market. People often equate rising interest rates as bad for gold, especially if you think the Fed is about to hike short-term rates.
Traders are overlooking the fact that the Fed is not going to raise rates. It doesn’t matter what’s happening to inflation. The Fed’s not going to fight it. It doesn’t matter what’s going on with long-term rates. The Fed is not going to raise short-term rates. The other factor that the markets are overlooking is that even though long-term rates are rising, these are nominal rates. The inflation rate is rising faster than interest rates. So, even though nominal rates are rising, real rates are falling. That is bullish for gold.”
In this podcast, Peter also talked about some of the economic data that came out, and he offers some thoughts on bitcoin and the DC protests.
Politics
Biden Wants To Give Separated Illegal Immigrants $450,000 Per Person
The average amount sought through the courts is roughly $3.4 million per family, according to the report.
The Biden administration is mulling a plan to offer immigrant families separated during the Trump administration $450,000 per person in compensation, according to the Wall Street Journal, citing people familiar with the matter.
The payments – part of an inter-agency solution to several lawsuits filed on behalf of separated parents and children claiming lasting psychological trauma could amount to nearly $1 million per family, though ‘the final numbers could shift,’ according to the report.
According to sources, most of the families crossing into the US from Mexico included one parent and one child. Depending on circumstances, many families could get smaller payouts.
The American Civil Liberties Union, which represents families in one of the lawsuits, has identified about 5,500 children separated at the border over the course of the Trump administration, citing figures provided to it by the government. The number of families eligible under the potential settlement is expected to be smaller, the people said, as government officials aren’t sure how many will come forward. Around 940 claims have so far been filed by the families, the people said. -WSJ
In total, the potential payout could reach $1 billion or more.
Throughout the Trump administration, thousands of children were separated from their parents (and coyotes paid to bring them into the country) after they had crossed illegally into the country from Mexico. The lawsuits allege some of the children suffered various ailments – including malnutrition, heat exhaustion, and were kept in freezing cold rooms with little medical attention. Some claim lasting mental health problems due to the trauma of being without their parents for several months.
The average amount sought through the courts is roughly $3.4 million per family, according to the report.
“President Biden has agreed that the family separation policy is a historic moral stain on our nation that must be fully remedied,” said ACLU deputy director, Lee Gelernt. “That remedy must include not only meaningful monetary compensation, but a pathway to remain in the country.”
Senate Republicans slammed the plan on Thursday afternoon following the WSJ‘s report.
“The Biden administration’s promises of citizenship and entitlement programs have already caused the worst border crisis in history—a huge cash reward will make it even worse,” said Sen. Tom Cotton (R-AR).
The discussions about the payouts have taken place over the past few months among a group of dozens of private lawyers representing the families and government lawyers. Some government lawyers have viewed the payouts as excessive for people who had violated the law by crossing the border, the people said. One government lawyer threatened to remove his name from the case out of disagreement with the potential settlement offer, the people said. -WSJ
“It is a complicated, complex piece of litigation” – trying to resolve hundreds of separate lawsuits at the same time, and “sometimes even more complex to try the cases” said Margo Schlanger, who ran the civil-rights office during the Obama administration at the Department of Homeland Security and now teaches at the University of Michigan law school.
What will the reparations crowd think of this?
Politics
White House To America: ‘We’re Coming Door To Door…With Shots!’
Will CDC soon recommend a nation-wide re-count of Covid deaths?
White House spokesperson Jen Psaki said at the daily press conference yesterday that President Biden’s strategy to get everyone a Covid shot – whether they want it or not – is to start going “door-to-door” to those not yet jabbed. So…they have a list? Also today: bomb-maker Raytheon goes “woke.” Capitol Hill Cops set up shop in California. Will CDC soon recommend a nation-wide re-count of Covid deaths?
Politics
Half A Million Illegals Crossed Since Harris Named Border ‘Czar’
By the time June’s figures are reported in the coming days, the combined number is expected to be over half a million, more than the entire population of Miami, Florida or Cleveland, Ohio.
According to U.S. Customs and Border Protection figures, around 500,000 illegal immigrants have crossed the southern border since Kamala Harris was named border ‘czar’.
The Washington Free Beacon reported the findings, noting that only three months has passed since Harris took on the responsibility, and that the half a million figure is just those that have been apprehended.
The CBP says around 180,000 immigrants are being caught per month. In April agents arrested 178,854 illegal immigrants, the highest monthly figure for 21 years. That figure was then surpassed in May as agents apprehended 180,034 illegals.
By the time June’s figures are reported in the coming days, the combined number is expected to be over half a million, more than the entire population of Miami, Florida or Cleveland, Ohio.
Harris only bothered to visit the border when President Trump announced he was making a trip. Even then Harris visited El Paso, some 1000 miles away from where the crisis is taking place.
Previous to this, Harris lied and claimed she had been to the border, telling NBC’s Lester Holt “This whole thing about the border. We’ve been to the border. We’ve been to the border.”
When Holt pushed back and said she had not, Harris snapped “I—and I haven’t been to Europe. And I mean, I don’t—I don’t understand the point that you’re making,” then again laughed maniacally:
On Tuesday, Republican Senator Ron Johnson argued that Harris’ trip to El Paso was designed to distract the media and keep them away from the real crisis hit areas of the border.
“They took her to a point in the border where she wouldn’t see the crisis and so the press wouldn’t report on the crisis,” Johnson said.
The Senator added, “You just simply can’t understand what this administration is doing. We literally are apprehending now about 6,000 people per day. That’s I mean, that’s a large caravan every day being processed, some of them being returned, others are being dispersed. But this crisis is not going away. It’s just under everybody’s radar because the press isn’t covering it.”
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