Last week, President Trump tweeted the rug out from under stimulus when he announced that negotiations were going to be cut off until after the election. The markets immediately tanked. But Trump quickly reversed course. As Peter Schiff explained in his podcast, the president is now in the process of out-Democrating the Democrats on the stimulus issue. Peter said the Republicans lost the argument the moment they conceded stimulus is “good” for the economy. Peter said the fact that the markets tanked the moment Trump tweeted that there would be no stimulus until after the election came as no surprise. As he put it, the markets know who butters their bread.
The Fed has already said they’re not printing more money until the government sells more bonds. In other words, the Fed is on hold with additional monetary stimulus until Congress comes through with additional fiscal stimulus so that the Fed has more bonds to monetize.”
When the markets fell on Trump’s initial tweet, Peter said the markets could well continue to tank unless the Fed came to the rescue or Trump called uncle. Well, Trump called uncle. He threw out an olive branch to Nancy Pelosi saying he was still willing to consider a smaller stimulus, including another round of$1,200 checks, $25 billion in airline relief and paycheck protection program funds. That kickstarted negotiations again and the Republicans quickly began to bid themselves up.
Trump economic advisor Larry Kudlow talked up the strong recovery on the one hand while simultaneously arguing for more stimulus. He said the president was willing to consider up to $1.8 trillion. Keep in mind, he initially started at $1 trillion.
The fact that we need all this artificial support is an admission that the economy is weak. That’s why it needs all this help. You can’t say we’ve got this really strong economy, but then say it needs a government crutch in order to support it. I mean, either the economy is strong, in which case it doesn’t need stimulus, or it’s weak and it needs stimulus.”
Source: Peter Schiff | SchiffGold
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