Contact us
CALL US NOW 1-888-GOLD-160

Peter Schiff: Divided Government Would Not Be Bullish for the Stock Market

  by    0   0

In a recent podcast, Peter Schiff talked about the “Trump tariff put” – this idea that the president will be able to call off the trade war to rescue the market should it start to fall. Peter called that idea nonsense.

It is the type of wishful thinking, the type of just ignoring all of the bad news, whistling past the graveyard, the type of mentality that you have in a bull market where everything is good news and there is nothing to worry about.”

In his most recent podcast, Peter tackled another similar myth – that a divided government will be bullish for the market.

There is a strong possibility the Democrats will take control of the House in November. They could even win the Senate.

One thing that could push the elections over the edge is a drop in the stock market between now and then. Peter said that’s certainly a possibility. After all, the bond market is weak and the dollar has been trading on the low end of its recent range – even after trade tensions ratcheted up again early this week.

That shows me there is some vulnerability here in both the bond market and the dollar that ultimately could spill over into the stock market. That could happen before the midterm elections. And of course, since Trump is claiming so much credit for the rise in the stock market and using that rise to validate his policies, to prove the efficacy of his policies … If the stock market is falling as voters are going into the polls, then the more recent performance could be what is more important than the absolute performance since Trump took office. And who knows? The market could crash at any moment.”

And of course, the whole Brett Kavanaugh Supreme Court nomination fiasco could hurt GOP candidates at the polls.

So, there is certainly a strong possibility that the Democrats could gain control of at least one house of Congress. Oddly, some pundits are saying this would actually be bullish for the stock market.

The stock market bulls are saying that if we have divided government that this is historically positive for the markets, and therefore it will be yet another positive for this stock market.”

Peter said, “This is a bunch of nonsense.”

Now he conceded that historically, divided government has probably been good for the stock market. After all, divided government means you’re less likely to see progress in legislation. Since laws are generally harmful, the fewer laws Congress passes, the better off we are. But Peter said the hope that we have now is that there will be continued deregulation.

Obviously, if we lose control of the Congress, if the Democrats take control of Congress, if you were hopeful that we would have more deregulation, then your divided government will put a stop to that. So, if divided government stops government from getting smaller – if that was ever going to happen – then it is not a good thing.”

Here’s the thing. The booming stock market is supposedly built on the success of the Trump agenda. His ability to continue pushing that agenda forward will be severely curtailed if Democrats control even one house of Congress.

Nothing that Trump wants to do will get through Congress, so if you’ve been betting that it would then the Republicans losing control of Congress is definitely a bad thing … Why would losing a Republican Congress that is thought to be supportive of business and a pro-business agenda, why would losing control of Congress to the Democrats – to socialist Democrats – why is that bullish for stocks? How could you possibly think that is bullish for stocks? If you think what we have now is bullish, and now we lose a chunk of that, that just shows you that it doesn’t matter what happens. These analysts are always going to say it’s bullish. No matter what happens, it’s bullish for stocks because stocks are going up because we don’t want to even fathom the possibility that something that could happen would be negative for stocks.”


Get Peter Schiff’s most important Gold headlines once per week – click here – for a free subscription to his exclusive weekly email updates.
Interested in learning how to buy gold and buy silver?
Call 1-888-GOLD-160 and speak with a Precious Metals Specialist today!

Related Posts

Student Loan Bubble Blows Up Another $32.9 Billion in Q3

American consumer debt pushed to a new record of $4.15 trillion in September. Part of that equation – the continued surge in the levels of student loan debt. Student loan balances jumped by $32.9 billion in the third quarter this year, pushing total outstanding student loan debt to a new record of $1.64 trillion. Student […]


Gold Mine Output Has Flatlined

Gold mine output has flatlined over the last several years and that trend appears to be continuing in 2019. In fact, some analysts believe we may be at or near “peak gold.” According to the World Gold Council’s Gold Demand Trends Q3 report, gold mine output fell slightly with total mine production coming in at […]


The Gold Market Is Strong With the Potential for Growth

Gold is the third-most consistently bought investment globally. This was just one of many findings in the World Gold Council’s recently released consumer research report that revealed a strong global gold market with the potential for future growth. Globally, there are clear perceptions of gold as a safe, durable, traditional store of value. As an investment, […]


ETF Gold Holdings Hit Another Record High

Gold continued to flow into ETFs after breaking a record in September. Gold-backed funds took in another 44.4 tons of metal in October, pushing global holdings to another record of 2,900 tons, according to the latest data by the World Gold Council. The previous record for ETF gold holdings was set back in 2012 when […]


Consumer Debt Sets Another Record But Borrowing Pace Slowing

Consumer debt set another record in September, but the pace of borrowing appears to be slowing. This could signal trouble for an economy built on American consumers spending money they don’t have. Total consumer debt grew by $9.5 billion in September, according to the most recent data released by the Federal Reserve. That represents an […]


Comments are closed.

Call Now