Peter Schiff: Trump Trade Revitalizes Market

And Kamala Harris' "Opportunity Economy" will be "disastrous".

By Peter Schiff

On Tuesday, Peter Schiff took to his podcast to cover the last week in news. In politics, sinking confidence in Vice President Harris has led to what Peter calls a “Trump trade,” where Donald Trump’s rising odds of winning in November create bullish sentiment on Wall Street. Peter also hits on campaign promises made by both Trump and Harris, discusses Bitcoin’s recent surge, and explains why the income tax’s creation was a classic bait-and-switch.

In Peter’s eyes, the market believes Trump will lift burdensome regulation from the backs of American business:

“You can see that the markets are starting to believe that Trump is going to win this race, and that’s bullish for the markets. I mean, what is Donald Trump promising? He’s promising to lower corporate tax rates—that’s good. He’s promising less regulation—that’s good. So, lower taxes, fewer regulations—that’s bullish for the market relative to what the markets would be encountering in a Kamala Harris administration. I think that’s what’s going on with the market.”

Bitcoin recently surged back to $67,000. Peter chalks this up to overall market sentiment, and notes that this is still within the cryptocurrency’s recent trading range:

“I do think it is part of the Trump trade because a lot of people in crypto believe that Donald Trump is very bullish for Bitcoin, and that if Trump wins, Bitcoin’s going to moon—that the U.S. government is going to be buying Bitcoin. Now, again, it’s not going to happen. In fact, Trump has made a lot of promises, and I’ve gone over some of those on the podcast. But one promise he did not make was to buy any Bitcoin.”

The market is feeling bullish, but that doesn’t mean the economy is in good shape. If it really was healthy, we wouldn’t need rate cuts:

“You’ve got this false narrative that’s been spreading around ever since that BS jobs report we talked about, that this economy is actually a lot stronger than people thought. So it’s the best of both worlds in that we’ve got an economy that’s growing—which is good for corporate earnings—but the Fed’s cutting rates anyway. So the market’s got its cake and is eating it too.”

On the campaign trail, Kamala Harris recently promised to give loans to black entrepreneurs. Peter points out how absurd and discriminatory this is:

“Imagine if Donald Trump came out with a plan saying, ‘I’m going to give $20,000 to white people who want to start businesses.’ You have to be white. Could you imagine the backlash he would get? But somehow Kamala Harris can have a program where you have to be black, only black people can get the money, and nobody says it’s a racist plan.”

Harris’s proposal is probably a response to her waning support among black Americans, who are starting to realize that they got a raw deal from the government:

“It’s refreshing to see this rebellion going on right now within the African-American community, because they know that they’ve been sold out by the Democratic Party. I mean, I’ve called the Democrats poverty pimps for years. They’ve entrapped blacks in poverty. All of these Great Society programs were deliberately fashioned to create dependency– to create dependency so you can get votes.”

In a tangent on the history of American taxes, Peter notes that tariffs were supposed to be replaced by the income tax. Adding additional tariffs on Americans already burdened by taxes is not wise, no matter which party does it:

“It’s not good that we have to pay tariffs again. I’ve pointed this out before: the reason we moved away from tariffs was because we created the income tax in 1913. The purpose of the income tax was to replace tariffs. Why? Because the average American voter paid tariffs and wasn’t going to pay the income tax—that was the bait and switch. Politicians told American voters, “We will stop the tariffs being paid by ordinary working Americans and replace that lost revenue by taxing the billionaires just one percent, two percent. They’re rich; they can afford it.” … And the voters bought it; they bought into it. Then the next thing they knew, they got slapped with income taxes.”

Kamala’s “Opportunity Agenda” Will Be Disastrous for African Americans

With Kamala Harris rapidly fading in polls among African-Americans, her campaign just released a desperate “Opportunity Agenda” for black men outlining policies that will have disastrous economic consequences. Ironically, the consequences of “forgivable loans” are likely to be the most damaging to the very same groups that she’s claiming to help.

A “forgivable loan” is another way of saying “free money.” Printing $20,000 and handing it out to black entrepreneurs is only going to push prices up for the things those entrepreneurs need. Meanwhile, banks that get to issue the loans do so with no risk, because it’s all backed by the Full Faith and Credit of you, the American taxpayer. 

The idea is to get “mission-driven lenders” to issue the loans. This slathers a gloppy layer of do-gooderism over the fact that, most likely, these loans will be issued by the usual State-favored megabanks. After all, they all have “Mission Statements,” so who’s to argue whether they’re “Mission-Driven” or not? They’re all part of a criminal banking cartel that enjoys an incredibly privileged position in terms of being inextricable from the US political structure, first in line at the low interest rate and QE money printer. 

Meanwhile, megabanks like Wells Fargo (owned by BlackRock, Fidelity, and Vanguard) have stolen far more houses and cars than any street thief ever could, preyed on Native Americans, opened millions of fraudulent accounts, violated international sanctions, aided money laundering, along with other offenses.

Having some guaranteed loans on the books also incentivizes malinvestment, encouraging banks to dump more money into risky bets in other areas. When you get some free money, you want to play with it. It’s just human nature.

Forgivable loans offered to a specific ethnic group even incentivizes discrimination against them. If loan officers know that African-Americans are getting forgivable loans courtesy of the federal government, they’re more likely to charge higher interest rates even to black entrepreneurs whose loans aren’t guaranteed. Meanwhile, the Fed’s inflationary policies cause the most pain to the lowest earners and the middle class. 

While bursts of “economic stimulus” like those of the 2008 and 2020 crises juiced the economy in the short or medium-term, we’re feeling the effects today in the form of drastically higher prices and a middle class that continues to vanish.

Federal Reserve Total Assets (Less Eliminations from Consolidation)

It all comes down to less competition in the marketplace, which inevitably leads to higher prices. No matter the context, nature or finance, humans respond to incentives, and markets are no different. That’s why no central authority can overcome the natural will of the market, no matter how hard it tries. In the long run, nature always wins.

Of course, the Harris campaign’s “proposal”  is a campaign season prop to buy votes, and wouldn’t be enforceable without an act of Congress. But it’s still a notable sign that the campaign is worried that being a black woman might not be enough for Harris to get back the black vote. While it favored Biden, African-American support faded continuously throughout the course of his administration. For his part, Trump is promising a utopia of his own, and is a fan of the money printer as long as he gets credit, even making a point to ensure his name would appear on the inflationary Covid stimulus checks. As Peter Schiff recently said on Kai Hoffman’s Soar Financially, “Trump is promising immediate results—positive, no pain, just gain.” But inflation is already baked into the cake.

“We have, you know, inflation that masquerades as growth…I think the economy is very weak, that’s why the Fed is cutting rates, and they’re going to cut them even more, and I think they’re going to go back to QE.”

Incumbent administrations love when the Fed juices the economy for them, since they can take the credit. Bit Kamala’s campaign season pandering to “help” African American entrepreneurs is going to create more of the inflation and discrimination that holds back disadvantaged groups in the first place.

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