Dear Reader,
Consumer confidence just crashed to its lowest level in 12 years.
The Conference Board index hit 81.9 in September. Down 6.7 points from August. Wall Street expected 89.2. They missed it by almost a full seven points.
Inside today's issue:
- The number Wall Street buried: The Conference Board's Expectations Index is now at 63.6. That's the third straight monthly drop. Anything below 80 historically signals a recession within 12 months.
- Jobs are vanishing in silence: JOLTS data shows job openings fell another 256,000 in August to 7.079 million. The third monthly decline in four months. Real wages are losing ground to inflation.
- What this tells you about gold and hard assets: When confidence collapses, the paper promises start looking hollow. History is very clear on what comes next.
- Larry Benedict — Oil Skimming: Larry Benedict just released a new presentation on a strategy called "Oil Skimming." It's worth a look. (Brownstone Research)
THE SOFT LANDING THAT WASN'T
The experts have been telling you a story for two years now.
"Soft landing." "Resilient consumer." "The economy is strong."
Yesterday, real Americans gave their answer. Confidence at 81.9. The lowest reading since November 2014. Twelve years of progress wiped out in a single month.
"Consumer appraisals of current business conditions became negative for the first time since September 2024."
Negative. For the first time in two years. That's not a blip. That's a turn.
Here is what they buried in the footnotes:
- The Expectations Index — the forward-looking number — collapsed to 63.6. Third consecutive monthly decline. Below 80 historically precedes a recession.
- Consumers now expect 6.1% inflation. That's up from August. They are not calming down. They are getting angrier.
- The University of Michigan's September sentiment reading: 48.1. Down 7% from August. The second lowest on record.
- JOLTS: 7.079 million job openings in August. Down 256,000 from July. Professional services: down 119,000. That's not a rounding error.
I have been watching confidence cycles for 50 years.
In the 1970s, confidence broke before the oil shock became "official." In 2007, it broke before the banks started failing. The people always know before the economists admit it.
And here is the thing that worries me more than the headline number.
The government's own pharmaceutical tariffs hit today. September 30th. One hundred percent tariffs on patented drug imports from non-exempt companies. Canada retaliating with import bans. Section 338 proclamations signed this week.
That inflation number consumers are expecting at 6.1%? They haven't seen the drug prices yet.
There is one question nobody at CNBC is asking this morning.
If confidence is already at a 12-year low BEFORE the tariff impact hits supply chains and medicine cabinets, where does it go in Q1 2027?
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WHAT YOU CAN CONTROL
Here is the answer to that question. Confidence does not collapse gradually. It breaks.
In 1971, Nixon closed the gold window. Confidence in the dollar broke.Gold went from $35 to $800 in nine years.
In 2008, confidence in banks broke. Gold went from $800 to $1,900.
The pattern is not subtle.
When people lose faith in the paper story, they go looking for something real. Gold. Silver. Real estate that generates income. Assets that don't depend on a government promise or a banker's balance sheet.
The soft landing is over. The story changed yesterday. The question is whether you changed with it.
To your freedom,
Robert Kiyosaki
Author, Rich Dad Poor Dad
P.S. Every insider in Washington has September 30th circled. That's the day Washington has to act. If you've been meaning to watch my drone briefing, do it before then. Watch now.