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Peter Schiff: There Is Everything to Worry About

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Last Friday, all three major stock markets hit new record highs ignoring the storm clouds on the horizon. In his latest podcast, Peter Schiff said this reminds him of 1987.

The stock market is rising despite the fact that there are very, very negative factors that are building, that are hiding in plain sight, that everybody is ignoring.”

When it comes to the economy, most people aren’t worried about anything when there is everything to worry about.

Peter highlighted a number of ominous signs, including rising inflation, as evidenced by the surging price of oil, the tanking dollar, and warning signs in the bond market with reports China plans to quit buying US Treasuries. Peter says it’s the perfect setup for a 1987-style crash that nobody sees coming. Of course, they should see it coming.

That’s going to be the crazy part. When it’s going to happen, everybody is going to say, ‘Well, nobody could have possibly seen this coming. How could anybody have possibly known this was going to happen?’ I mean, this is the most obvious crisis ever, yet of course, yeah, they’re oblivious.”

Meanwhile, the markets are priced for perfection. So, what will the Federal Reserve do when the air starts to come out? They are going to try to stop it.

Let’s say the Dow drops 1,000 or 2,000 points.

Now the Fed has to come out and stop the carnage, right? They don’t want to let it continue. So they’ve got to fess up, ‘Oh, you know, we’re not going to hike … then the dollar implodes.”

So, if the Fed has to launch another round of QE and buy up bonds, how is that going to happen? It will have to print money, because would you want to own the dollar?

The president is talking about, ‘Why do we let all these immigrants in from these shithole countries?’  Well, I think our creditors are going to think about the same thing. I mean, why should they flush their hard-earned money down this shithole? Why do they want to flush their money down the US toilet? Which is what it is when it comes to lending money to the US government. So, that could be very scary – if the Fed announces it is going to buy bonds and bonds tank anyway. That is the beginning of the end.”

Peter said he doesn’t know if it will all unravel that quickly or not, but the stage is certainly set.

Peter went on to point out that oil stocks are surging right now. A lot of people are getting into oil as the price rises. But the price of gold is also rising and there isn’t nearly the same level of interest in gold stocks. Why not?

When they see the price of gold going up, they’re like, ‘Well, why is the price of gold going up? I mean, what’s the point. The economy is great. There’s no inflation. The Fed is raising rates. Nobody’s buying gold. If it’s going up, it’s just going to go down.’ And so nobody sees the urgency to buy gold stocks the way they see the urgency to maybe buy oil stocks. But this is because they’re wrong. They think there is nothing to worry about. There is everything to worry about. There are so many things – there have probably never been more things to worry about. And the crazy thing is people aren’t worried about any of them. It’s probably because of the mania, because of the bubble. When you get into that mentality, nothing worries you.”

The fact is, people just don’t understand their predicament.

Everybody thinks the economy is in great shape because they think the Fed solved the problem. No, they didn’t. They made the problem much worse! They made the problem that they created worse. But the people who think they solved it are the same people who didn’t understand it before. And they got blindsided in ’08 and they’re going to get blindsided again because they never learned from their mistakes.”

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