Call it the Mother of all leading economic indicators.
News that Netflix is hiking monthly rates for its ubiquitous streaming service by 16% is a harbinger of a broader economic crash triggered by incoming president Donald Trump’s economic policies, says a controversial US economist credited with predicting the 2008 global financial meltdown.
According to Peter Schiff, an American stockbroker, financial commentator and radio host who goes by the nickname ‘Dr. Doom’ — and otherwise supports the 47th president — Netflix’s across the board price hikes are a signal of broader inflationary pressures that will inevitably come to a head under Trump’s tariff policies.
“The lull in the inflation storm is over. The consequences of inflationary monetary policy that finally showed up under Biden will kick into a higher gear under Trump,” he wrote on Twitter (“X”).
Schiff is co-founder of Echelon Wealth Partners in Canada (formerly Euro Pacific Canada). He is nonetheless a controversial figure, even by American standards.
His father, Irwin Schiff was a prominent figure in the US tax protestor movement who died in federal prison in October 2015 while serving a 13-year sentence for tax evasion.
The younger Schiff later stated that while he had come to find his father's intellectual case "compelling,” he was disinclined to follow his methods and his "idealism."
"The problem with my father is that he's not practical. He was always going to lose" he said at the time. Four days after the death of his father, Schiff accused the Federal Bureau of Prisons (BOP) of inhumane treatment — a cause coincidentally dear to the 47th president’s heart.
On Wednesday, present BOP director Colette Peters resigned amid Trump’s vow to implement “drastic reforms” to the Justice Department.
What does this have to do with Netflix?
On Wednesday, the streaming pioneer reported fourth quarter 2024 revenues of USD$10.25 billion while adding 18.91 million new subscribers — bringing its membership base to more than 300 million people worldwide.
According to economists, it underscores the difference between discretionary spending on things like travel, consumer electronics and entertainment and daily necessities like toilet paper and toothpaste — and taxes, debt and groceries.
Though he considers himself a Trump supporter, Schiff has been a vocal critic of Trump’s tariffs which he says will inexorably widen the gap between the two, to the inevitable detriment of American companies like Netflix that provide them.
“Tariffs don't cause inflation. All else being equal, they will cause the price of some goods to rise, causing the price of other goods to fall. That's bad news for American service providers, whose incomes will fall,” he said.
And in that regard, he strongly disagrees with Trump.
“Trump’s take on trade deficits is all wrong,” he wrote on Instagram.
“(He) said we have a huge trade deficit with Canada as if somehow that’s harming the United States — it’s actually helping the United States. It’s unfortunate that we’re not productive enough to get by without all those Canadian products,” Schiff explained.
“Donald Trump specifically said we don’t need any Canadian cars, we don’t need any Canadian timber — of course we do! I mean, we build houses, we drive cars. I mean, if we didn’t have access to Canadian lumber or Canadian cars or any of the other things that we import from Canada… what does Donald Trump think would happen to the price of all that stuff? It would go way up,” he argued.