On Friday, Peter dropped another episode of the Peter Schiff Show. He comments on an IMF conference in Europe, the newsworthy BRICS conference held in Russia, and the latest political proposals made in the presidential race, namely Donald Trump floating the idea of replacing income taxes with tariffs and Kamala Harris taking aim at subscription services.
First, Peter addresses the turbulence in mining stocks. Newmont suffered a major blow after missing earnings, and the sector in general was down this week:
“Even though gold was positive on the week, gold stocks got crushed. The GDX, which is the seniors, the biggest index, was down 5.3% on the week. … But the reason was Newmont Mining, the biggest gold company in the world and the only gold company in the S&P 500, which reported earnings after the bell on Wednesday. Newmont closed the day down 14%.
Despite this, Peter is optimistic that Newmont is still a valuable company. They slightly missed profit forecasts, but are setting new earnings records and matched revenue expectations:
“It was actually the best quarter in five years. And if you compare the quarter to the same quarter a year ago, they earned six times as much money—way more than the prior quarter. They’re still on a path to make the most money in the history of Newmont Mining, and they’re still going to have a record year for earnings. The reason the stock got killed was because they missed. They were supposed to earn 86 cents on the quarter, and they earned 81 cents—less than a 6% miss. The revenues were about in line.”
Turning to the aforementioned IMF conference, Peter lambasts Janet Yellen, who is deluded enough to think the country is in a sound fiscal position:
“[Yellen] is the secretary of the debt, not the secretary of the treasury, because we don’t have any treasury—the treasury is bare. All we got is debt. She’s basically in charge of managing the debt and getting people to buy it. What’s your plan? How are you going to convince people to buy this stuff? Janet Yellen’s response was, ‘We’re just going to make sure that we stay on a sound fiscal path.’ How do we stay on a path that we’re not even on? We left soundness decades ago. We can’t stay on anything.”
Donald Trump recently expressed openness to abolishing the income tax. Peter is likewise open to this policy, but would want Trump to slash spending accordingly:
“I would love nothing more than to go back to that tax system, but we have to do it honestly, which means we have to cancel a lot of government. We have to eliminate agencies and departments. We have to really shrink the government in order to get back to the freedom and prosperity that we had at that time, which we could have again. I think it’s very unlikely, given the politics.”
Finally, Peter turns to the major geopolitical news of the week: the BRICS summit. After adding four new members (Iran, Ethiopia, Egypt, and the UAE), the leaders of BRICS met in Russia to plan a gradual move away from the dollar. When the US continually erodes the value of the dollar and wields it against geopolitical rivals, it does make sense to consider alternative currencies:
“First of all, it makes no sense. Why should two countries that don’t use dollars transact in the dollar? Just pick one of the currencies that’s involved. You’ve got two countries that have currencies. Why involve the United States, a third party, who’s not even involved in the transaction? Why use our dollars? Use the currencies that you’re actually transacting in. And so that is the goal, for the BRICS nations to phase out the use of the US dollar and use their own currencies.”
Peter recently attended the New Orleans Investment Conference, where he appeared on the Market Misbehavior podcast with David Keller. Check it out!
Tyler Durden
Fri, 11/01/2024 – 14:00
