Money & Markets - Peter Schiff: "There Are Bubbles Everywhere and They're All Going to Pop"

November 19, 2019

Article by JT Crowe in Money & Markets

The S&P 500, Dow and Nasdaq all closed at new record highs yet again Monday as the record long bull market continues to defy odds amid gloomy economic numbers, including the Atlanta Federal Reserve’s recent 4th quarter 0.4% GDP revision downward.

On his latest podcast, economist Peter Schiff again said the reason the market is continuing to rise is because of the Federal Reserve’s continued quantitative easing, which it says is not QE, to which those in the know are calling BS.

So the Fed’s “not QE” (wink, wink) is in turn inflating all sorts of new bubbles, which are going to pop at some point, according to Schiff, leaving investors holding the bag.

“When Obama was president, we had a rising stock market and a falling unemployment rate, and basically for the same reasons we have a rising stock market and a falling unemployment rate now. The stock market was going up because of the Fed, because of artificially low interest rates and quantitative easing. Well, that’s exactly why it’s going up now — artificially low interest rates and quantitative easing.”

Schiff then pointed out something we’ve mentioned here on Money and Markets a number of times — that the market seemingly rises and falls on every word uttered about the trade war between the U.S. and China.

“As long as the White House can goose the stock market by pretending there’s a trade deal, well, then they’re going to keep pretending,” he said.

“These are warning signs. If you think popping bubbles are going to be contained to the IPO market or to the pot stocks, no,” he said. “All of the bubbles are going to pop, including the total bubble in the U.S. stock market overall — not just in these sectors, but the entire market is in a bubble. In fact, the bond market is in a bubble, the dollar is in a bubble. There are bubbles everywhere and they’re all going to pop.”

Schiff then discussed the growing talk of negative interest rates, particularly by Trump, who again on Tuesday tweeted that the U.S. should have the lowest rates of all, which means negative.

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