Renowned market analyst Peter Schiff said in his recent podcast that Americans just don’t want the truth. Schiff says that it is very likely that we are already in a recession and no one wants to accept that or even deal with it.
“Nobody wants to deal with the truth; because you know how grim the reality is? Because if you have to accept the fact that this economy is going into recession, then you have to accept a lot of unpleasant things that nobody wants to admit,” Schiff was quoted during his podcast, according to Schiff Gold.
The stock market got a nice bump on Monday with the news that there was a “truce” in the trade war. That lasted all of one day. The markets tanked on Tuesday as investors realized the “truce” really didn’t mean anything. The Dow Jones plunged 799 points, a 3.1% drop. The S&P 500 declined 3.2%, while the Nasdaq was down 3.8%. As one news outlet put it, “investors are quickly realizing that the US-China trade war is not over. The tariffs already put in place remain. And new tariffs could be implemented if the two sides fail to make progress.” –Schiff Gold
“The market is saying it thinks sometime two or three years from now, the Fed is going to be cutting rates because the economy is going to be in a recession,” said Schiff. “And so people think yields will be lower three years from now then they are today because they think the economy will be into a recession at some point in the future.”
Schiff added that there is a good possibility that we are actually in a recession right now.
“In fact, we may even be in a recession now. We don’t know yet. We won’t know yet until the government goes back and revises all the numbers. But that is what they will do because if you look at what is going on beneath all the headlines, the real economic data is weak. I don’t care that the unemployment rate is still low. The unemployment rate can spike higher very quickly.”
Schiff says most people are still in denial about the economy and the downturn too.
“What has happened in the last week is very, very bullish for the price of gold, and the price of gold is not catching much of a bid. I think again, the main reason for this is because nobody gets it. People still think this is a bull market. They’re not worried about the decline. They think it’s just a buying opportunity. It’s just a correction. They still think the economy is good. Even though the bond market doesn’t, even though the yield curve is inverting in the front end of the curve, people are dismissing that.
They’re dismissing the housing data; they’re dismissing the build in the crude inventories. They’re not looking at any of the real data because nobody wants to believe it. Everybody still wants to believe all the hype — that this economy is great, that this economy is booming. Nobody wants to deal with the truth; because you know how grim the reality is? Because if you have to accept the fact that this economy is going into recession, then you have to accept a lot of unpleasant things that nobody wants to admit.” –Peter Schiff