Stock markets have settled down after an awful couple of weeks earlier this month. On Feb. 5, the Dow Jones suffered its largest-ever drop in terms of points. It was down 1,600 at one point and ultimately lost 1,175.21 points, a 4.6% drop that day. At one point during that week, the Dow was off 10% in correction territory. But everything is calm now and most of the mainstream is once again feeling bullish and optimistic.
Peter Schiff spoke at the Vancouver Resource Investment Conference 2018 last month before the market tanked. But his message remains relevant in the aftermath of the plunge and the subsequent recovery because the dynamics in the market remain pretty much the same. Conditions are still ripe for a 1987-style market crash.
Investors have not been this optimistic…since 1987. They are even more optimistic than they were at the height of the technology bubble, the dot-com bubble, the new era. Of course, 1987 didn’t end well, right? We had a stock market crash, and there’s a lot about what’s happening today that reminds me about what was happening in ’87.”
During a podcast last week, Peter Schiff asked a key question: Who is going to buy all of this US debt?
The US Treasury Department plans to auction off around $1.4 trillion in Treasuries this year. And it won’t end there. The department expects that pace of borrowing to continue over the next several years.
That’s a lot of bonds. Who will buy them? Because the biggest purchasers of US debt aren’t in a buying mood.
The SchiffGold Friday Gold Wrap podcast combines a succinct summary of the week’s precious metals news coupled with thoughtful analysis. You can subscribe to the podcast on iTunes.
The bears were running on Wall Street again Thursday, as the Dow Jones suffered another steep tumble. After a record drop of 1,175 points Tuesday and a rebound Wednesday, the Dow shed another 1,333 points.
The Dow Jones dropped 6.5% in four days. That’s the steepest decline in any week since October 2008. The S&P 500 has shed 6.6% of its value this week, its second-worst drop since 2008. The NASDAQ has also tanked, giving up all of its 2018 gains.
As Peter Schiff put it in his most recent podcast, “This market is looking ugly.”
It was interesting watching people on the left side of the political spectrum become practically giddy as the stock market tanked on Monday. It seems they couldn’t wait to pin the collapse on Donald Trump.
Of course, the president has set himself up to take the fall by constantly taking credit for this bubble economy. But as Peter said during an interview with Stock Pulse during the Vancouver Resouce Investment Conference. the only thing you can blame Trump and the Republicans for is doing what everybody else did – pretend government can give Americans a free lunch.
It turns out Friday’s 666-point Dow Jones plunge was just a prelude. On Monday, the Dow suffered its largest-ever drop in terms of points. It was down 1,600 at one point and ultimately lost 1,175.21 points, a 4.6% decline. According to Reuters, declines for the benchmark S&P 500 index and the Dow Jones Industrial Average were the biggest single-day percentage drops since August 2011. Monday’s crash ranks in the top-20 of all time Dow Jones drops in percentage terms.
Peter Schiff actually predicted a Monday crash in his podcast last Friday. Yesterday, he took to the microphone again, noting that even with the precipitous fall in the stock markets, the mainstream “fake financial news” remains clueless.
They call it the business “cycle” for a reason. Cycles repeat.
As Peter Schiff pointed out in a recent podcast, the financial crisis was triggered by rising interest rates on the debt that had been accumulated in the years prior as a result of the Federal Reserve keeping interest rates at 1% for a year-and-a-half and then slowly raising them back up over the course of another year-and-a-half.
Friday, the Dow Jones fell more than 600 points. It was the third big drop in a week. Most analysts mention nervousness about sharply rising bond yields as one of the reasons for the selloff. And what do rising bond yields reflect? Rising interest rates. So, are we seeing the beginning of the next big downturn in the business cycle?
The SchiffGold Friday Gold Wrap podcast combines a succinct summary of the week’s precious metals news coupled with thoughtful analysis. You can subscribe to the podcast on iTunes.
The Dow Jones suffered its biggest one-day drop since August on Tuesday, falling 363 points. The Dow has lost 540 points in two days, the biggest decline since September 2016.
According to analysts quoted by CNN, fear of a tanking bond market is one of the main factors behind the stock market dip.
The bond market has been selling off lately. That’s raising fears that the era of extremely low bond rates — which has been very good to the stock market — could soon be over.”
Peter Schiff recently attended the Vancouver Resource Investment Conference. While he was there, he did an interview with Daniela Cambone of Kitco News.
Peter and Cambone talked gold, and Peter said he thinks the yellow metal is set to soar, despite the sentiment that Federal Reserve Rate hikes will hold gold down.
Gold has not really rallied. It’s been going up, right? But it’s been creeping higher. Now, everybody expected it to fall. Everybody believed that as soon as the Fed hiked rates, gold’s gonna tank. And it didn’t tank. It rallied.”
