Peter Schiff: Don't Trust The Rebound Yet

Via SchiffGold.com,

In his latest podcast, Peter reviews April’s surprising turnaround in the stock market, explores the myths of tariff-driven economic patriotism, and exposes the contradictions in US currency policies. He also shares his skepticism about the delayed economic impacts of tariffs and comments on the intersection of political influence and wealth in Washington’s culture.

Peter starts by describing last week’s dramatic reversal in the stock market, with particular focus on the technology-heavy Nasdaq index:

Well, you know, when the month of April started out, we were on track for probably one of the worst Aprils in the stock market. Certainly the worst since 2020, the COVID April, but it may have been worse than that. You know, following liberation day on April, April 2nd. But over the past two weeks or so, we’ve had a complete reversal of that decline.

And in fact, the Nasdaq, which I think was down the most other than the Russell 2000, since I think post liberation day during the month of April, the Nasdaq was down more during that month, the Nasdaq actually recovered all of its losses and closed positive on the month.

Despite this rebound, Peter urges listeners to remain cautious. He suggests that investors may want to seek opportunities elsewhere—especially given the false optimism driving recent gains:

But maybe there’ll be some selling in May. And if you’re smart, you’ll go away. Or at least go to foreign markets, go to other investments that have a lot more potential than the stock market. But I think what really powered the gains was the appearance of a de-escalation of the trade war, and some optimism that maybe it’s not going to be as bad as we thought. When of course, it’s actually going to be worse than they thought.

They didn’t realize how bad it was going to be. But now they think it’s not going to be as bad as they thought because of a lot of the rhetoric coming mostly from the Trump administration.

He then highlights the hypocrisy surrounding the US’s stance on currency values—a policy area where double standards seem almost the norm. Peter finds it illogical that US officials simultaneously complain about foreign currency “manipulation” while touting a strong dollar policy at home:

Bessent keeps talking about foreign exchange, which is also one of the hypocrisies, because I saw him interviewed.

He specifically said, ‘One of the ways that the world is cheating us is by undervaluing their currency, that their currencies are too low.’ So in other words, they’re helping to make the dollar stronger, and that’s how they’re cheating. But in the same interview, almost like one sentence away, he was asked about the strong dollar policy, and he said, ‘Oh, absolutely, we have a strong dollar policy.’ Okay, well, if we have a strong dollar policy, and he not only said that we have a strong dollar policy, he said he wants the strong dollar.

According to Peter, the genuine economic effects of tariffs are still waiting in the wings. Businesses stocked up on goods before new tariffs were implemented, muting the pain for now—but the tidal wave is coming:

So all of this is going to have an impact. I mean, right now, I remember a lot of businesses were front running these tariffs, so they still have inventory to sell, because they ordered this stuff before the tariffs hit. Now they’re not ordering it now, so the economic data that we’re getting now hasn’t been impacted. … But so we haven’t really seen the impact. I mean, we initially saw some impact in the stock market and maybe in consumer confidence, but the real economy hasn’t really felt the sting of these tariffs.

To close, Peter turns to the issue of political access and the price tag attached to it in today’s Washington, commenting on the President’s son opening a private club to cater to Washington elites:

The cost to join this club is half a million dollars. That’s the entry ticket. And it’s basically, you know, I don’t know, it’s like a restaurant, you know, you go for lunch, you go have a drink. I’m not sure if they have some tennis courts in the back or a gym or something. I’m not really sure what you get for your 500 grand. … They’re saying the way they’re advertising this is, ‘Hey, this is a way to get access to the Trump cabinet because the cabinet members– they’re going to hang out at this club.’

If you missed it, be sure to check out Peter’s latest interview on the Young and Profiting channel!