Gold Bull Peter Schiff warns this recession is just beginning

GDP fell 0.9% in the second quarter. This followed after a -1.6 GDP print in the first quarter. Historically, back-to-back contractions in GDP have been defined as a recession, but the Biden administration and its apologists I insist that we are not in a recession. Peter Schiff appeared on The Megyn Kelly Show to talk about the White House recession’s turnaround. He said that this recession is just beginning. The White House mantra is that two consecutive quarters of negative GDP is not the “technical” definition of a recession and that the economy is just entering “another phase of recovery.” Peter said, “I guess they believe that if you repeat a lie often enough, people will believe it.”

But imagine if Donald Trump had tried to do the same.

Do you think the media would agree with that?

Peter emphasized that two negative quarters is “just a low for a recession.”

We are going to have a negative third quarter. We are going to have a negative fourth quarter. We are going to see a contraction of GDP for years. This recession is just beginning.

And then comes the rise in unemployment.

People who point to the low unemployment rate and say that this means we’re not in a recession, that’s nonsense. Unemployment is a lagging indicator. The unemployment rate will increase as the recession continues.”

In addition, the labor market is not strong.

We have a very weak labor market. Real wages are collapsing. Wages have never fallen so much in real terms in history. That’s a weak job market. When you have a strong job market, workers can demand raises. They have power. They can go to their bosses and say, ‘I want more money or I’m going to quit and take another job.’ That is not happening. Workers are forced to work for pay cuts. In fact, many workers are taking second and third jobs because they can’t make ends meet at their main job. That is a weak labor market.”

Megyn read quotes from various Biden administration officials in the past saying that two quarters of negative GDP growth is the definition of a recession and then said the exact opposite in the last week. Peter said he is 59 years old and has never heard of a recession otherwise defined.

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Recession refers to whether GDP is expanding or contracting or not. It does not refer to the level of unemployment or the level of inflation. It’s specifically there to reference what’s going on with GDP. This is how they define economic growth. I mean, I have a lot of problems with GDP. But that is how the recession has been defined. Recovery is when GDP is expanding. Recession is when it is contracting. That is all!”

Megyn cited a report from the Office highlighting concerns about a “wage and price spiral” because wage increases of 5.1% in the first quarter beat expectations (despite failing to keep up with inflation). Peter called the spiral of wages and prices “another fiction” created by the government in the 1970s. It is essentially a way of blaming the private sector for inflation I think.

Inflation is not created by workers demanding raises. Do not believe the companies that raise prices. It is created by the government that expands the money supply. That is the literal definition of inflation. … When you inflate the money supply, prices go up. Wages are just another price. They are the price of labor.”

Peter pointed out that the salary figures are probably accurate, but the CPI is not. It is closer to 18% than 9%. That means real wages are collapsing. Meanwhile, the savings rate is at its lowest level since mid-2009. What was happening to the economy in mid-2009?

We were in the Great Recession. So the last time we had a savings rate that low, we were in a big recession. Why is the savings rate so low? Because the recession is forcing workers to dip into their savings to pay their bills because their wage increases aren’t enough.”


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