Peter Schiff recently called the stock market the biggest bubble ever. But he says he should have qualified that by saying it’s the biggest stock market bubble ever. There is an even bigger bubble floating out there — the dollar bubble. Peter talked about that in his podcast.
Tuesday was another bad day for the US stock market. The worst carnage was in the NASDAQ. It fell 4% on the day and entered correction territory, meaning it’s dropped 10% off its high. And that happened in just three trading days. As Peter Schiff said in his podcast last Friday, the stock market bubble may have popped. He reiterated that point on Tuesday’s podcast.
The air could easily be coming out of the stock market bubble. We’re down 10% on the NASDAQ in three days — three trading days. How do you know we won’t be down another 10% in the next three trading days? You don’t. Now, it could come back. Yeah, of course, the stock market could come back. I’m not short the US stock market. And there’s one reason I’m not short the US stock market and that’s the Fed. The Fed has got the market’s back. The Fed is the market’s friend. In fact, the Fed is the market’s only friend. The Fed is the only thing the market’s got going for it.”
The question is will the Fed be able to prop the stock market up higher? Peter said ultimately there is a lot of risk in this market because you’re just betting on the Fed saving it. Of course, that’s been a good bet so far.
But as they like to say in the investment world, ‘Past performance is no indication of future success.’”
There are some politics involved as well. Will the Fed be willing to let the market drop significantly between now and the election, giving a big boost of Joe Biden’s chances? Or will they print all the money necessary to keep air flowing into the bubble?
Source: SchiffGold
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