But as Peter Schiff said in his most recent podcast, nobody actually realizes when a bear market starts. When they finally do figure it out, it's too late. During the last two bear markets, the Federal Reserve has saved the day by re-inflating the bubbles. But Peter said the monetary magic isn't going to work this time around.
Peter had a feeling October was going to be a bad month. After the last Federal Reserve rate increase, he did a podcast and said it could be the hike that breaks the camel's back. He said he just didn't understand how the markets could ignore the rate increases, what was going on more generally with interest rates, the trade war, and the overseas markets that had already tanked.
It didn't make sense that the US markets could continue to defy gravity in the face of overwhelming negative evidence that was taking place. And it seemed to me that if the market was going to break, October was a pretty good time for that to happen, given the history we've had with October."
Peter said he doesn't see any indication that we've hit bottom, and yet, the market still appears to be complacent. Just look at the price of gold.
The price of gold is still creeping higher, but if there was more fear out there, if people were worried about the market, they would buying gold."
Peter said if you watch the financial news shows, everybody is saying there's nothing to worry about.
Which is exactly what they were saying before the 2008 financial crisis."
He pointed out that when bear markets begin, nobody realizes it's a bear market. A bear market is defined as a 20% decline. So, until stocks hit that level, it's not a bear. The pundits tell you to buy the dip.
So, whenever a bear market begins, all the perma-bulls say, 'It's a correction, buy.' Then, once the market is down 20% and we're in a bear market, then they say, 'Well, you know, it's too late to sell now.
We've already had the bear market. Now it's time to buy more because we're about to have another bull market. So in other words, you never sell. You just hold forever and hope."
- Source, Seeking Alpha
