Peter Schiff talked politics in his latest podcast and raised a sobering question: Could the US be on the path toward a socialist administration?
Peter noted that we are long overdue for a recession. There are plenty of signs a major economic downturn could be lurking right around the corner, including stock market weakness. And as we reported today, US Treasury yield curves are flattening. The average global yield curve has inverted. Inverting yield curves are a strong predictor of recession.
This is bad news for President Trump, who has taken credit for the “great” economy and strong stock market. Peter said the president has set himself up as the fall-guy when the crash happens. Meanwhile, the Democratic Party is drifting further left.
From a political point of view, this is going to be terrible for Trump and the Republicans because you really want to get the recession out of the way really early in your term, so that by the time there’s an election, you’re already out of the recession and you can claim credit for the growth. The problem is Trump claimed credit for the economy before the recession.”
Of course, the looming recession isn’t Trump’s fault. Peter said he thinks the US economy would have already been in recession if Hillary had won. Trump’s win boosted confidence and bought the economy some time. But Peter said that by launching a trade war, the president has given the Democrats an easy political layup.
We were going to have it [the recession] anyway. It’s not that the trade war caused it. We were going to have it whether we fought the trade war or not. Now maybe the trade war is going to make it worse. That I don’t know, because it was already going to be horrific, with or without the trade war. But having launched the trade war before the recession begins makes it very easy for Democrats to blame Trump for the recession by saying ‘You caused it with a trade war. You inherited a great economy and you screwed it all up.’”
As Peter said, that’s going to be a difficult a difficult argument for Republicans to win, especially because they’ve spent so much time taking false credit for a victory they haven’t won – declaring, “We have the greatest economy in the history of the country.” The GOP can’t blame Obama anymore because it already took credit for solving the problems.
Trump has already said he has made America great again. So, whatever problems he inherited, he’s already claimed he solved them, which means if we have any new problems, they’re brand new. They’re problems that started under Trump and he is going to take the blame. All of the Republicans are going to take the blame. This is going to be a political disaster.”
Peter said a congressional primary in New York could indicate just how big the disaster might be. A genuine socialist beat a 10-term incumbent member of Democratic Party congressional leadership. Alexandria Ocasio-Cortez really has no political experience other than serving as a Bernie Sanders volunteer and being a member of the Democratic Socialists of America. The organization calls for “the abolition of capitalism” with an economy run by the workers or the state. Peter said she may even be to the left of Bernie.
This signals a strong shift to the left in the Democratic Party. And it was already pretty far to the left.
This is the beginning, and it’s not just that you’re going to see these socialist candidates winning in the primaries. But in order to fend off future challenges from the left, the incumbent Democrats that are already there are going to have to move left in anticipation of these challenges.”
Now, you might just blow this off as Democratic Party infighting, but Peter said there is a bigger problem.
The Democrats may be the minority party now, but they are going to be the majority party by 2021, and they’re going to have the White House as well if I’m correct on what I think is going to happen to the US economy. And I’m pretty sure I am correct. I’m pretty sure that by the time voters step into the booth in 2020, we will still be in recession, and it’s all going to be blamed on Republicans and Trump, and it’s going to be the socialists who are going to be saying, ‘Vote for us because we’re the party of change. We’re going to make America great again by making America socialist.’”
Ultimately, Peter said Republicans have put the nails in their own coffin by branding this bubble economy as their own.