Guest Post by Peter Schiff
The stock market continued its yo-yo ways on Friday. After three straight days of healthy gains, the Dow Jones Industrials fell 572 points to end the week, closing below 24,000. The Nasdaq also plunged, dropping 161 points.
Peter Schiff has been saying for weeks this is a bear market. Well, now even Pres. Trump has said investors may see some short-term pain in the stock market. But the president says it will all be worth it because we will get long-term gain, referring to the benefits we’ll reap when we win the trade war. In his most recent podcast, Peter said that’s not how it’s going to play out.
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We’re going to have short-term pain and then the pain is going to get worse in the long-run.”
The big problem is, nobody is really ready for any pain at all.
Peter said this is pain for no reason because these policies are a mistake. Not that some short-term pain wouldn’t be beneficial. But policymakers aren’t willing to take the real steps necessary to reap long-term benefits – cut government spending, cut entitlements, cut defense spending, and shut down government agencies and government departments.
There would be some short-term pain that would deliver some long-term gain. How about if the Fed normalizes interest rates and lets the bubbles collapse, lets people lose money, lets the markets restructure? That is short-term pain for long-term gain. That is what a real free-market recession is like. Let the government get out of the way. Let the central bankers get out of the way, and let the free market correct the imbalances and create a good foundation where we can build a lasting, sustainable, viable recovery.”
But Peter says that’s not what Pres. Trump is all about. He’s about avoiding the short-term pain by kicking the can down the road.
Peter also noted that even while stocks are falling, there is no flight to the dollar. When stocks fell in 2008, people ran to the dollar, but this time, the greenback is not a safe haven. He said the dollar is consolidating for its next big leg down. It’s the opposite for gold.
Gold is getting ready to blow through the roof.”
But right now, people are still complacent. They still believe the fundamentals are good. Peter repeated something he said in a previous podcast – in a sense they are right. The fundamentals haven’t changed. They were lousy when the market was going up and they are lousy as the market is coming down. But the key thing to understand is that the fundamentals are actually getting worse.
This is a time bomb. The debt keeps going up. Every day we’re closer to the crisis. Every day there is more and more debt, right? And so, every day that goes by, we’re one day closer to the debt imploding.”
Peter went on to break down the most recent jobs report and highlighted some other bad economic news that didn’t get much play in the mainstream media.
He also talked about what will happen if the Fed doesn’t follow through with interest rate normalization. The market certainly isn’t prepared for that.
Normally the markets are forward-looking. They discount things that they think are going to happen. Well, if you don’t think something is going to happen, how can it be discounted? So, it’s when the markets are blindsided, when they’re surprised, that’s when you see the biggest moves because they didn’t get discounted in advance. You can’t buy the rumor and sell the fact if you’ve never bought the rumor because you don’t know there’s a rumor or you don’t believe it. So when the fact happens, nobody is positioned for it. Nobody is prepared for it. And that’s where we are in the gold market. That’s where we are in the gold stock market, in the bond market, in the US stock market. Nobody is prepared for any of the things that are going to happen because nobody believes that they are going to happen.”
Kick the can down the road? Check.
Gold about to go through roof? Check.
Did I read this article in 2008?
I heard Peter Schiff on the Joe Rogan podcast a while back. Schiff was extolling the virtues of how great it was to live in Puerto Rico. And then a hurricane came through the island. I wonder how living in PR is going for him now?
You’re going to be doing a lot of doobie-rolling when you’re living in a van down by the river.
i’m not an expert on investing but many investment “experts” are losing their reputations–
not necessarily because they’re wrong by historical or fundamental standards but because the markets are no match for the electronic printing press–
It’s obvious what’s coming–the economy will collapse, the markets will tank, and gold will rise–but when? For that we rely on experts like Schiff, but they haven’t a clue when this will happen. That doesn’t stop them from making the same predictions year after year. Eventually they’ll be right, but meanwhile, anyone who listened to them has lost a lot of money. If the so-called experts can’t tell us when–and they can’t–they’re useless.
The conundrum is if you listen him you lose out on a lot of money but if you don’t you lose it all. I am listening.
I remember seeing Schiff for the first time…sometime in 2006…its was either CNN or Fox and he was being introduced as Dr. Doom. They were almost laughing at him as he was predicting the coming crash. He was a little early…but way ahead of the herd and his peers. He was right and I owe him as he was one of the few pundits who got it right and I listened. Having escaped the Dot Com bubble by the hair of my chinny chin chini I was wary. My investment/hedging “exact timing” has never been good but my go LONG MACRO strategies have paid off.
Now, he was wrong about the getting back into stocks timing (me too) and I didn’t until 2012 (with just my toe in the water – never went past my aging ankle) considering where it has gone…but to me it seems all the markets are rigged (for now). However, I believe he will be right again (eventually) about the PAIN once again during the inevitable…GREAT RESET. It will make U.S. long for the days of the GREAT RECESSION.
I love the fact that the greatest financial bubble in the history of the world will have such a calm PC label…THE GREAT RESET! How about we call it like it will be for those who are clueless or currently helpless or both…say the GREAT TPW RESET…The not so great Terminal Poverty Wipeout?
Advisers told Yellow Hair to wait; somebody should’a told South Carolina, Bobby Lee, Napoleon, Hitler and Trump we better think about this shit. I may die sitting here on this sack of gold but this old Officer ain’t wasting powder before it’s time. At least Mrs Chief would get it and not the back stabbing cut throat bloody knives in NYC.
Schiff has been wrong for the last ten years. The market commentators are drowning in bearishness…it’s all so obvious we’re heading for collapse. But guess what, check the thirty year chart on the Dow…it’s forming a bull flag. Why? I haven’t got a clue, but it is.
Eventually all predictions will turn out at least mostly right, everything happens in cycles.
If you predict the same thing long enough that point of the cycle will eventually come again, but the rest of the cycle will come again as well so it doesn’t really make any difference what you predict if you just stay consistent long enough.
We are not in a natural cycle…we are in a massive, never before seen or dreamed of (actually its a nightmare) international debt/derivative/fiat/credit unnatural interest rate massive Everything Bubble.
The 20 or so families with their demonic hands on the pump (that they own) will not stop pumping.
Above average people with uncommon sense and a knowledge of economic & political history will do all they can to prepare within the realities of their personal life stage and situation…some of it beyond their control.
Everyone else is somewhere on the learning curve with most of the masses hopeless, helpless and clueless. (Many are in my own family…no matter what I say).