Saturday, October 20, 2018

Peter Schiff: The Recession Is Obviously Coming

The Dow Jones fell 831 points Wednesday, a decline of more than 3%. Meanwhile, the S&P 500 charted its biggest daily decline since February and the Nasdaq Composite dropped 4.08 percent. This follows on the heels of a 200-point drop in the Dow last week after the 10-year US Treasury yield hit the highest level since 2011.

In a podcast last week, Peter Schiff said rising interest rates could serve as the pin that pricks the stock market bubble. In his most recent podcast, Peter said the stock market rout seems to confirm his feeling and warned a recession will follow.

Peter noted that the biggest losers of the day were the tech stocks. These have been the companies driving the recent market boom. Nvidia was down over 9%. Amazon fell 7.3%. Netflix plunged 10% on the day.

Despite the massive selloff, the mainstream still seems pretty complacent. A White House official said, “This is a bull market correction. It’s probably healthy. This will pass and the US economy remains strong.” Everybody is saying this is just a normal correction in a normal bull market. But as Peter said, this isn’t a “normal” market.

This bull market is already the longest bull market ever. So, based on duration, it ain’t normal. Also, based on all the stimulus that was required to create it — all the quantitative easing, the years of 0% interest rates — there is nothing normal about this bull market. If anything, it’s a bubble.”

And if it’s not a normal bull market, why would it have a normal correction? On the contrary, it seems more logical to think that a massive selloff in an abnormal bull market might be the beginning of a bear market.

Since it’s long overdue, why would you just assume that it’s a correction when we’re so overdue for a bear market?”

Peter conceded you could have said the same thing back in February when we saw a similar big market selloff. Everybody said that was a correction and it appears they were correct. The market went on to make new highs. But as Peter noted, those highs were based on a small segment of stocks. Peter said as of now, about 25% of the S&P 500 is in a bear market defined as a 20% or more decline.

So even though we had a rally from that big drop in February, it was not really that broad. It was led by a small section of the market. It was not healthy. But beneath the surface, we were seeing a deterioration. And from my vantage point, what we’re seeing now is a lot more ominous than what we saw in February. And to me, it looks a lot more like this is the beginning of the bear market that is so overdue. It is not simply a correction.”

It’s really impossible to know whether a given selloff is the beginning of a bear market or a mere correction. With all the euphoria that takes hold during a bull run, people are always optimistic. They always believe it’s “just a correction.”

Bull markets end. That means that sometimes corrections turn into bear markets. You don’t know that a correction is a bear market until you’re in the bear market.”

In the last couple of bear markets, the Federal Reserve has been able to ride in and save the day. Peter said he doesn’t think the central bank will be able to do it this time around.

Peter noted that despite the stock market selloff, the bond market was weak and the dollar was actually slightly down. Gold was up a bit, although not significantly. But Peter said a big move in gold is coming.

If you can’t hide in bonds and you can’t hide in the dollar, where are you going to hide? … Really, the only safe haven left standing is going to be gold. And that’s the only asset nobody owns.”

But at this point, people still aren’t worried. They really haven’t started buying gold. Complacency still rules the market. People still think the economy is strong.

The economy is not strong. It was never strong. It was just a bigger bubble … The recession is obviously coming. I mean, come on. We’re long overdue for that as well. And now the rest of the market is rolling over … There is nothing beneath this market. This is a huge bubble. The air is coming out. Interest rates are going to keep going up. And if the Fed tries to save the market by altering its policy … I mean it could end up being like waving a flag at a bull, or in this case a bear.”

Make sure you listen to the whole podcast. Peter breaks down what will happen if the Fed does lower rate. In a nutshell, it will crush the dollar.

- Source, Schiff Gold

Friday, October 12, 2018

The Hike that Breaks the Market’s Back

Peter Schiff discusses how the FED appears to be willing to bring the market to its knees. Rising interest rates run the risk of destroying and crippling the markets. 

Perhaps, as I have pointed out many times before, this is how they plan to remove Trump from office.

Regardless, the markets are responding and they are not happy with having the "punch bowl" removed.

- Video Source, Peter Schiff

Friday, October 5, 2018

Peter Schiff: We're On The Precipice Of A Much Bigger Crisis Than The Last One

Money manager Peter Schiff was in a small group warning of a coming financial meltdown that happened in 2008.

Schiff says, “I was kind of a fixture on financial cable TV giving these warnings. My thought was the bubble would burst, and I knew that it would..."

"Once the housing bubble burst and we had this financial crisis, I knew it would follow along with the Great Recession. I thought the Federal Reserve would try the best it could to reflate the bubbles in the stock markets and housing markets. 

But my thought was that their efforts would fail. The markets would not allow it and that a dollar collapse would intervene and would prevent new debt from being issued to fully reflate those bubbles. I was actually wrong. They didn’t just try to reflate the bubbles, they actually succeeded in blowing them bigger than ever.”

Ten years later, Schiff is warning of another financial calamity bigger than the last one.

Schiff says, “The problem is now we are on the precipice of a much bigger crisis than before..."

"The next time, if they try to reflate those bubbles, which they will, it will be a spectacular failure because the markets are now prepared for the opposite. Everybody, right now, assumes the Fed is going to be able to keep raising rates. They assume they are going to shrink its balance sheet and that we have this booming economy that will never bust.

When the Fed has to reverse course abruptly, acknowledge the underlying weakness that everybody has been oblivious to and they start cutting rates and launching another round of quantitative easing (money printing), I think the dollar is going to fall through the floor. I think the inflationary fires that are already burning pretty hot are going to ignite. It’s not going to be like 2008 where the dollar went up and consumer prices inched down a little bit. I think the dollar is going to tank and consumer prices are going to soar, and it’s going to be stagflation. When the markets get a whiff of that, they are not going to like the way it smells.

It is going to create a dollar crisis. I think the Fed has put itself between a rock and a hard place. There is no way out this time... This time, you really have to be positioned because this time is going to be the end of it. This is not going to be a hat trick or third time is a charm when it comes to reflating these bubbles.”

On gold, Schiff contends, “People are going to be dumping their dollars and buying gold..."

"If you understood what the Fed was doing, you would be buying gold, but most people don’t understand. You can look at what has happened to gold prices in terms of other currencies, such as emerging markets. Obviously, gold prices in those countries measured in those currencies have gone up dramatically. So, gold has acted as a store of value and a store of purchasing power in every country where the currency has come down.

The same thing is going to hold true of the United States...We could do a reset. We could go back to sound money. We could go back on a gold standard, and we could devalue the dollar officially. I don’t know exactly how high the price of gold would have to be, $10,000 per ounce, $20,000 per ounce, who knows, but there is a price where we could go back to a gold standard. If we want to stay on a gold standard, that means the government would have to live within its means. That’s why governments hate gold standards because it provides discipline to government."

Join Greg Hunter as he goes One-on-One with Peter Schiff, founder of Euro Pacific Capital and Schiff Gold.

- Source, USA Watchdog

Monday, September 24, 2018

Peter Schiff: Out Of The Frying Pan And Into The Fire

"The irony of it is people who are worried about large deficits, unsustainable current account deficits, and interest rates being artificially low, and stoking runaway inflation, the people who are worried about those things and who are selling lira are buying US dollars. 

Well, that is jumping out of the frying pan into the fire, because whatever people are worried about happening in Turkey, it's going to happen in spades in the United States."

- Source, Peter Schiff

Monday, September 17, 2018

Peter Schiff: The Latest Jobs Report Was Anything But Strong

"So, we actually fired people in the month of August from manufacturing. 

So much for the manufacturing revolution. So much for how the tariffs are working and we're bringing our jobs back and American manufacturers are bringing back the jobs. 

Three thousand pink slips sent out in the month of August. So, this is bad news. If you're trying to hang your hat on the revival of American industry, of American manufacturing, we lost 3,000 jobs."

- Source, Seeking Alpha

Friday, September 14, 2018

Peter Schiff: Out Of The Frying Pan And Into The Fire

"All of the criticism that is being leveled against Turkey - that their deficits are too big, that they have a current account deficit, they're keeping interest rates artificially low, they're keeping interest rates below the rate of inflation - all of that criticism can be applied to the United States."

- Source, Peter Schiff

Thursday, September 6, 2018

Peter Schiff: Heading Toward A Bigger Crisis And The Same People Are Even More Clueless

"We're seeing a lot of warning signs people should be worried about, but again they're dismissing them, much the way they did 10 years ago You know, we're getting close to the 10-year anniversary of the 2008 financial crisis. Remember, the whole thing started in August of 2008. Here we are August 2018, 10 years later. I think we're heading for an even bigger crisis and the same people are even more clueless."

- Source, Peter Schiff

Tuesday, August 28, 2018