Contact us
CALL US NOW 1-888-GOLD-160
(1-888-465-3160)

Peter Schiff: The Bubble Keeps Getting Bigger (Video)

  by    0   0

Peter Schiff recently appeared on The Street with Scott Gamm to talk about the stock market. Peter’s analysis was simple and succinct.

Well, the bubble keeps getting bigger.”

As he has in past interviews, Peter noted Pres. Trump identified the stock market as a “big fat ugly bubble” as a candidate.

He was right then. He’s wrong now because he denies it’s a bubble because he’s now the president. And so it’s his bubble, and he’d rather it be a bull market.”

Peter called current US stock market valuations “extreme.” He said investor complacency is also extreme.

I mean, investors are willing to pay very high prices and have very little worry that the stock market is going to go down. People have very short memories. We’ve had two major 50% declines in the stock market this century – since 2000. So, we’ve had the market cut in half twice and it could easily happen again. Yet nobody seems concerned.”

So, what accounts for this complacency? Why aren’t investors considering the possibility the stock market could once again come crashing down?

I think one of the reasons is because the last two times the market went down, the Fed was able to bail out investors who bet on one bubble by inflating a bigger one. So, a lot of investors may have been conditioned to believe that even if the market implodes, if they hold on, they’ll get their money back. But you know, the third time may not be the charm.”

Peter’s assertion isn’t mere speculation. After the dot-com bubble burst, the central bank pumped up a housing bubble. After the housing bubble burst and set off the Great Recession, the Federal Reserve went to work again, dropping interest rates to zero and launching three rounds of quantitative easing. As Yahoo Finance reported last year, analysis shows that 93% of the entire stock market move since 2008 was caused by Federal Reserve policy.

Peter said he’s not so sure the Fed can pull off a repeat performance.

It’s possible the Fed can’t blow a bubble big enough to bail out investors this time.”

Gamm pointed out that a lot of companies, including Apple, Microsoft, Roku, and Amazon are doing very well due to technology trends. Peter sees a different source for their success.

Well, they’re really benefitting from all the cheap money that’s been coming out of the Federal Reserve. So yes, it’s very easy for companies to do well when you have interest rates at historic lows.  Let’s see how well these companies perform when interest rates normalize. I mean, that is the key. It’s like yes, they’re doing well on life support. But let’s unplug all those gadgets and let’s see how they do. I think if rates were allowed to normalize – you know, what is that Warren Buffet used to say? “When the tide goes out we see who’s swimming naked.” Well, I think there are a lot of people swimming naked, and you just don’t know that because of all the water that the Fed has been sprinkling into the markets. But eventually, the tide is going to go out and it’s not going to be pretty.”

Gamm asked Peter if he thinks that tide will go out in the next year. Peter said there really isn’t any way to know for sure.

I think Donald Trump has nominated somebody who will try to do his best to keep the air in the bubble. But you know, at some point the market forces will overwhelm the Fed. The market will go down. And if it doesn’t go down, the dollar will collapse instead. Either way, you’re going to see the real value of US stocks come way down, whether it happens nominally or not. And I have a feeling if the Fed prints enough money to prevent the market from going down dramatically, then the real loss will be even bigger because of the implosion of the US dollar.”

Peter and Gamm also touched on a couple of other interesting topics during the interview, including antitrust regulators calling for a spin-off CNN before AT&T’s acquisition of Time Warner can close, and the volatility of Bitcoin.

WhyBuyGoldNowBanner.070815.590

Get Peter Schiff’s latest gold market analysis – click here for a free subscription to his exclusive monthly Gold Videocast.
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

Peter Schiff: Stock Market Pushed by “Irrational Exuberance” (Video)

So what are we to make of the continuing stock market climb? Peter Schiff summed it up succinctly in a recent interview on Fox Business. Well look, I think it’s a bubble.” Related

READ MORE →

Ron Paul on the Stock Market: Delusions and the Madness of Crowds (Video)

Stock markets continue to surge higher on a seemingly endless upward trajectory. On Tuesday, the Dow Jones crossed the 23,000 mark for a time and closed just below that threshold at 22,997. It almost seems like this can go on forever, but Ron Paul said it would eventually come to an end during an interview on […]

READ MORE →

Peter Schiff: 2008 Was Just the Opening Act (Video)

On Sept. 22, Peter Schiff spoke at the Nexus Conference in Aspen, Colorado, and argued that the financial crisis in 2008 was just the opening act. The real crisis will result from the way the government and the Federal Reserve responded to the 2008 crash. I don’t think 2008 was the crisis. I think that […]

READ MORE →

“Commodities King” Says Bull Run Will Continue; Now Is the Time to Buy Gold (Video)

Last December, Dennis Gartman called gold the top commodity to own in 2017. He followed up in March, swearing he wasn’t a “gold bug,” but then advising “buy gold.” Now the man known as the “commodities king” says keep buying gold. In an interview on CNBC’s Futures Now, Gartman declared the bull run isn’t over […]

READ MORE →

Founder of World’s Biggest Hedge Fund Says You Need to Own Gold (Video)

The founder of the world’s biggest hedge fund says every investor should own some gold. Business Insider CEO Henry Blodget recently interviewed Ray Dalio, the founder of Bridgewater Associates. You recommend that most portfolios should contain some gold.” Dalio’s didn’t even hesitate. Yeah. Of course.” Related

READ MORE →

Comments are closed.

Free Newsletter & Notification of Special Deals
RSS Feed
LINKEDIN
YouTube Channel
YouTube Channel
Google+
Google+
https://schiffgold.com/videos/peter-schiff-bubble-keeps-getting-bigger-video
Call Now