Trump Administration

Peter Schiff: When Stock Bubble Pops, Trump ‘Going To Have To Take The Blame’

As I mentioned in that last post, the U.S. economic expansion is now the third-longest since World War Two.

And if the next recession hits on President Trump’s watch, a number of Americans will blame him for it.

The same goes for a stock market crash.

Peter Schiff, the CEO of Euro Pacific Capital, touched on this in a recent interview with the folks over at Financial Argument, “a daily show that will cover issues surrounding the economic collapse.” From their exchange posted on YouTube.com on November 26:

FA: I wanted to start off with the stock market. I mean, we’re seeing it continually move up. And before Trump was President, he was out there saying that there’s bubbles in the stock market, there’s bubbles in housing, there’s bubbles everywhere. Now that he’s President, he really doesn’t say this anymore. And he’s saying that the stock market’s going up because of me, and it’s fantastic. When you look at the stock market, does it make any sense whatsoever, and can actually Trump take credit for this?
SCHIFF: Well, first of all, there was a bubble before Trump was elected. Clearly. And Trump pointed that out himself. That was one of his talking points on his stump speeches. There was a big, fat ugly bubble in the stock market. And if Trump wants to take credit for the bubble getting bigger, I would agree. I think there has been a lot of optimism, a lot of enthusiasm, among investors. And that has resulted in higher stock prices. But I think where Trump is getting into trouble is by claiming that the stock market going up is no longer a bubble. That now this is just a real bull market that reflects the improvement of the fundamentals since he’s been elected. That’s not the case. This is simply more air into the same bubble. And this bubble is going to burst, and I think unfortunately now that Trump has branded it- just like it was one of his buildings, he’s put the big “Trump” marker on it- when this thing pops, he’s going to have to take the blame.

(Editor’s note: Bold added for emphasis)


“PETER SCHIFF- Worst Stock Market Crash of a Lifetime Ahead of Us 2017-2018”
YouTube Video

Schiff, who correctly-called the housing bust and economic crisis last decade, speculated on the Federal Reserve’s future moves and a coming recession. From the discussion:

FA: The Fed is keeping everything steady as she goes right now. They’re not raising interest rates. They’re slowly unwinding their balance sheet. Are they backed into a corner?
SCHIFF: They’re not slowing unwinding their balance sheet. They talked about slowly unwinding the balance sheet. But the balance sheet hasn’t unwound at all. It’s as high as it’s ever been. I think this is all a bunch of talk. There’s no way they’re going to be able to shrink that balance sheet in any significant way because it would drive interest rates up and weaken the economy and affect asset prices. In fact, I think the next major move in the Fed’s balance sheet is another big leg up when they have to launch the next round of quantitative easing. Obviously, the U.S. economy is going to go back into recession. I think we’d already be in recession had Trump not won the election. And I do think that the enthusiasm surrounding his victory and the optimism, I think, probably postponed the recession for a year or two. But, it’s going to hit, and then, how is the Fed going to respond? Well, we know. In fact, Donald Trump has appointed a new Fed chairman to follow Janet Yellen that he’s confident will do exactly what she did. Or exactly what Bernanke did. Which is slash interest rates, and print more money, and buy government bonds, and buy mortgages, or buy whatever they have to buy to keep everything from imploding.

Here’s what Schiff had to say about a potential economic crisis in 2018:

I do think we’re going to see a downturn. We could see a crisis, but chances are the crisis itself will happen later.

By Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

(Editor’s note: A qualified professional should be consulted prior to making a financial decision based on material found in this weblog. If this recommended course of action is not pursued, then it must be understood that the decision is the reader’s and the reader’s alone. Christopher E. Hill, the creator/Editor of this blog, is not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information presented on the site.)

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Peter Schiff: Invest Overseas, Buy Commodities To Avoid Either U.S. Stock, Dollar Plummet

Turning to “crash prophet” Peter Schiff this afternoon, the CEO of Euro Pacific Capital was recently interviewed by Scott Gamm of TheStreet. Schiff, who correctly-called the housing bust and economic crisis last decade, echoed colleague Jim Rogers in warning about a future bear market in U.S. stocks. From the exchange:

THESTREET: Peter, it’s been an incredible record run here. And the levels we’re seeing now even with this slight pullback were record highs not too long ago. So, what do you say?
SCHIFF: Well, the bubble keeps getting bigger. Donald Trump called it himself as a candidate. He said it was a big, fat, ugly bubble. He was right then. He’s wrong now because now he denies it’s a bubble because he’s now the President and so it’s his bubble. And so he’d rather it be a bull market. But the valuations here really are extreme. The complacency is also extreme. I mean, investors are willing to pay very high prices and have very little worry (chuckle) that the stock market is going to go down. And people have very short memories. I’ve mean, we’ve had two major 50 percent declines in the stock market this century, since 2000. So we’ve had the market cut in half twice and it can easily happen again, yet nobody seems concerned. And I think one of the reasons is because the last two times the market went down the Fed was able to bail out investors to 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 the third time might not be the charm. It’s possible that the Fed can’t blow a bubble big enough to bail out investors this time…
THESTREET: So do you think that tide kind of turns in the next year?
SCHIFF: Hey, I don’t know. There’s no way to know. I mean, I think Donald Trump has nominated somebody who will try and do his best to keep the air in the bubble- cut rates, QE 4. But 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. But either way, you’re going to see the real value of U.S. stocks come way down, whether it happens nominally or not. And I have a feeling that if the Fed prints enough money to prevent the market from going down dramatically, then the real losses will be even bigger because of the implosion of the U.S. dollar.

(Editor’s note: Bold added for emphasis)

When asked about advice for investors as to where to put their money right now if they’re worried about U.S. stocks, the author of The Real Crash: America’s Coming Bankruptcy – How to Save Yourself and Your Country told viewers:

People who are in the U.S. market are overlooking much better returns from much better valuation levels that are happening overseas. So I think people should take advantage of the overpriced U.S. stock market, the overpriced U.S. dollar, and sell, and move money abroad. Get into the international markets- developed and emerging. Get into the commodities space. Look at oil hitting a new two-year high again today. This is going on in commodities across the board. We are coming off of major bear markets. We’re in the infancy of new bull markets. And I think the dollar is about to get killed. This is the first year in many years now that the dollar is down. But I think it’s the first of many. I think the dollar could fall for the next 5 to 10 years in a major, major bear market taking the dollar to all-time record lows. And this will enable enormous profits for people who are invested outside the U.S. in the right currencies, the right assets, the right companies. That’s what I think we’re doing with our clients at Euro Pacific Capital and that’s certainly what I’m doing with my own money.


“Peter Schiff Slams Bitcoin, Federal Reserve and Antitrust Regulators”
YouTube Video

By Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

(Editor’s note: A qualified professional should be consulted prior to making a financial decision based on material found in this weblog. If this recommended course of action is not pursued, then it must be understood that the decision is the reader’s and the reader’s alone. Christopher E. Hill, the creator/Editor of this blog, is not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information presented on the site.)

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