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Peter Schiff, JP Morgan & Citibank: U.S. Economy Is Steamrolling Toward A Recession

Tuesday, December 8, 2015 14:04
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In the following video, Peter says what he has been saying for a few years now, only it appears people might finally be starting to pay attention.

He begins the conversation where I used to begin many of my conversations about the future of the U.S economy as far back as far back as 2012. See some of my 3-4 year old predictions right here. Of course I’m referring to trade deficits.

Years ago, a $75 Billion dollar trade deficit was front page news. Today, a $500 BILLION trade deficit isn’t even in the paper, much less the front page. THAT is because the “media” isn’t concerned with news. They are concerned with propaganda.

Public servants lie with impunity, and in a “normal” world, an informed citizenry would know better. Unfortunately, with plenty of help from the liberal indoctrination centers known as public schools, most wouldn’t know critical thinking if it came up and bit them in the ass.

The same can be said for The U.S. Constitution, now that teachers have the “option” to decide if they want to teach The Constitution or not.

How disgusting is that? Is it any wonder why earlier this week, when the Chinese Yuan Ascended to World Reserve Status and Left the “U.S. Dollar in Dust,” it went unnoticed? Sadly, few even know what that means. 

As Peter says, lets get something straight: Anything that serves to weaken our U.S. Dollar’s strength on the world market is going to work out very bad for us in the long run, which is exactly what the Yuan will do.

I used to talk about it in terms of losing the Reserve Status, and in the video below, Peter chooses to talk about the problem in terms of the trade imbalance, but the result is the same: Mad Max conditions are not out of the question. 


Right now, our trade balances are so lopsided it looks like a cartoon. Well, what does that mean? Taking China for example, It means MILLIONS of employees work for $1-$3 Dollars per day, in awful conditions, only to make products for Americans and then give over 1/2 that money back to the government in taxes, so that China has money to lend the U.S. to keep living beyond our means. 

QUESTION – How long do think is left before the people building the iPhones figure out if they keep all their money, and don’t lend any of it to the irresponsible idiot Americans who are living above their means, then maybe THEY could enjoy the fruits of the their labor? 

ANSWER: NOT LONG! It’s happening now. As I’ve mentioned in, Peter Schiff and “The 4 Harbingers Of Stock Market Doom,” 23 countries have already left the Dollar already. As it stands, there are 31 countries with Chinese Yuan exchange facilities so that those countries can avoid the Dollar all together in international trade. When the system finally implodes, and it will, people can expect to lose up to 70% of their life savings.

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In economic reports come out, all we hear about are the numbers that are cooked and falsified. If there is really no inflation, ask a mother of 5 (someone who shops for a large family) to be a designated set of items today, and hold the receipt.

Then ask her to do the same in 6 months, and tell me with a straight face there’s no inflation. Good luck. We hear nonsense about inflation is 0% and unemployment is at 4.9 in the most robust of robust recoveries… uh… the one with ONE THIRD the nation out of work. No one ever talks about the suicidal trade imbalance. Let’s see what happens:

To oversimplify using Peter’s example: The more and more countries that move away from settling trade in the Dollar (and there are a TON), that means the less need they have to hold U.S. Treasuries. The more countries that sell treasuries, the more supply, less demand, and the prices drop. They become worth far less, and our Dollar CRASHES. What comes next I’ve said no less 75-100 times. Peter has said it close to as many. 

We have somewhere around a $500 BILLION trade deficit with China every year, give or take a bit. What do you suppose happens when we can no longer print money to get out of trouble? How much of the $500 can Americans purchase? DIDLY SQUAT! Who can the Americans go to for more loans to keep our lavish spending style? Uh, there is a reason we are losing the Reserve Status. We’re bankrupt. Would you give loans to a bankrupt person who kept going to Ruth’ Chris for diner with the money’s you’ve lent them rather than pay their bills? I didn’t think so. 

So, we can’t give an IOU, can’t borrow money, can’t print our way out, so why don’t we just make whatever products we need ourselves? How about because we only have the capacity to produce about 11% of what we consume. Guess who the new SuperPowers will be?

Countries that PRODUCE THINGS that others want… countries like the U.S. with our “service economy” are screwed. Here’s the best part: Since our leaders are utter buffoons, they’ve even allowed what very tiny manufacturing we DO still have to get sold to the Chinese.

That means when we’re all broke and starving, we can pay the Chinese to use the factories that used to be ours, but Barak was too busy scouting places for a new windmill. 

Once that inevitable culmination of events hits, and the demand by Americans vastly outweighs what we can buy just to sustain ourselves, THAT is when you will see scarcity like never before, and neighbor going after neighbor for food… to stay alive.

Have you ever seen baron grocery store shelves? You might want to start warming up to the idea and prepare NOW! It’s happening! 

Peter goes into so much more with Alex, but I‘ll let you hear for yourself. The last think I’ll say is this, because it is totally in keeping with the article below.

Our manufacturing sector is already in a recession, the non-manufacturing is soon to follow. Citigroup gives the U.S. a 65% chance of a MAJOR recession in 2016, and that’s just the beginning.





Michael Synder writes:

As we approach the end of 2015, researchers at both JP Morgan and Citigroup agree that the probability that the U.S. economy will soon plunge into recession is rising.  Just last week, a member of the U.S. House of Representatives asked Janet Yellen about Citigroup’s assessment that there is a 65 percent chance that the United States will experience an economic recession in 2016.  You can read her answer below.  And just a few days ago, JP Morgan economists Michael Feroli, Daniel Silver, Jesse Edgerton, and Robert Mellman released a report in which they declared that “the probability of recession within three years” has risen to “an eye-catching 76%”

“Our longer-run indicators, however, continue to suggest an elevated risk that the expansion is nearing its end, and our preferred model now puts the probability of recession within three years at an eye-catching 76%.”

The good news is that the economists at JP Morgan believe that a recession will probably not hit us within the next six months.  But due to steadily weakening economic conditions, they are convinced that one is almost certain to strike within the next few years

“When we first wrote, only manufacturing sentiment was signaling an above-average probability of imminent recession,” they said. “But recent weakening in the Richmond Fed services survey and the ISM nonmanufacturing index have now pushed the nonmanufacturing sentiment probability up somewhat as well.”

In the short term, the note says that the 6-month likelihood is only 5%, but within a year it stands at 23%, in two years 48%, and in three years the “eye-popping” 76%.

To be honest, I believe that this assessment is far too optimistic, and it appears that researchers at Citigroup agree with me.  According to them, there is a 65 percent chance that the U.S. economy will plunge into recession by the end of next year.  Last week, Janet Yellen was asked about this during testimony before Congress

In testimony before Congress’ Joint Economic Committee, Yellen was asked by Rep. Pat Tiberi about a piece of research released by Citigroup’s rates strategy team Monday.

Specifically, Tiberi, an Ohio Republican, wanted to know what Yellen made of Citi’s conclusion that there is a 65 percent chance of a U.S. recession in 2016.

“The economists said that they would assign about a 65 percent likelihood of a recession in the United States in 2016. Now, 65 percent sounds high to me, but I’m not an economist and I’m not the Fed chair. But zero risk might be too low as well. So what would you assign a risk level of a recession next year?” Tiberi asked.

So how did Yellen respond?

Her answer was about what you would expect

“I absolutely wouldn’t see it as anything approaching 65 percent,” the central banker said.

This reminds me so much of what former Federal Reserve Chairman Ben Bernanke said when he was asked a similar question back in 2008

“The Federal Reserve is not currently forecasting a recession.”

Later on, when the official numbers finally came out and all the revisions were done, we learned that the U.S. economy was already in a recession when he made that statement.

And when it is all said and done this time around, I believe that history will show that a new global recession had already started when Janet Yellen made her statement.

But don’t just take my word for it.  British banking giant HSBC is the largest bank in the western world, and they recently announced that the global economy has already entered a “dollar recession“.  According to HSBC, total global trade has fallen 8.4 percent so far this year, and global GDP expressed in U.S. dollars is down 3.4 percent.

If their figures are correct, a new global recession has definitely begun.

And without a doubt, we have already seen a tremendous amount of global financial turmoil.  This is something that I highlighted in my recent article entitled “27 Major Global Stocks Markets That Have Already Crashed By Double Digit Percentages In 2015“.  When Zero Hedge republished my article, several excellent charts were added that really illustrate how bad things have gotten, and I wanted to share a couple of them with you.  Of the 93 largest stock market indexes in the world, an astounding 47 of them (more than half) are down at least 10 percent year to date.  This first chart shows which ones fall into that category…

Chart 1



Another chart that was added to the article by Zero Hedge shows how decoupled U.S. stocks have become from global stocks overall.  As you can see, U.S. stocks are not too far from recent highs at the moment, but global stocks overall are solidly in bear market territory…

Chart 2

Since mid-2015, trillions of dollars of stock market wealth has been wiped out globally.

Let that sink in for a moment.

The debate is over.  The “major financial collapse” that so many warned was imminent has actually happened.

It is just that U.S. stocks have not gotten the memo yet.  Up to this point they have defied gravity, but at some point U.S. stocks and world stocks will converge once again.

And if you want to see many of the reasons why U.S. stocks will soon take a big tumble, just check out this article.  There is no way that U.S. stocks will be able to defy the underlying economic fundamentals that are pummeling other global markets for much longer.  Just like in 2008, a global stock market slide that starts elsewhere will eventually hit the United States.  It is just a matter of time.

But once again, even though U.S. stocks are doing okay for the moment, that doesn’t negate the fact that more than half of all major global stock indexes are down by double digit percentages year to date.

We have not seen numbers like this since the great stock market crash of 2008, and it seems abundantly clear to me that the great financial shaking that so many warned was coming in 2015 is already happening.

And if JP Morgan and Citigroup are correct, what we have seen so far is just a preview of some very troubling times ahead.



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Peter Schiff: Higher Spending During Holidays Does Not Fix Screwed Economy

Peter Schiff and “If The Economy Is Fine, Why Are So Many Large Retailers Imploding?”

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Peter Schiff: Did the Fed’s Luck Run Out On Friday the 13th?

Peter Schiff and “The 4 Harbingers Of Stock Market Doom”

Peter Schiff and Reagan Advisor: Complete Economic Collapse Immediately Ahead

Peter Schiff: Warning! Economic Storm Clouds Ready to Rain

Peter Schiff: Death of the US Dollar Is Imminent; Fed Out of Options

Peter Schiff: 11 Trillion In Global Stock Losses and Awful Jobs Report

Peter Schiff: “The Fed Admits Rates Could Stay at Zero Forever”

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Peter Schiff Explains Why Financial Bubbles Are Ready to Pop

Peter Schiff: Everybody Is Preparing for Wrong Outcome in US Economy

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Peter Schiff On China’s Currency Devaluation and the Federal Reserve Board

Peter Schiff: Greece Was a Sideshow. Americans Need to Worry About Starving

Peter Schiff: China and Switzerland is Killing U.S. Dollar








The Last Great Stand

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