Market Tanking After Fed Pricked Their Own Bubble

The downturn in the US stock market is a problem made in America by the Federal Reserve, argued Peter Schiff on the Daily Ledger. The only question now is when will the Fed restart quantitative easing to ensure the Democrats and Hillary Clinton don’t face the same problem Republicans encountered at the end of Bush’s presidency – a lost election thanks to a crumbling economy. Peter thinks they might wait until the US is “officially” in a recession, which could be as long as 7 months from now.

(Video length 00:07:10)

Highlights from the interview:

“I think not only are we in a bear market in stocks, I think we’re in a recession economically. You played the clip from President Obama’s State of the Union [Address]. When he talked about people peddling fiction, I thought he was talking about me. But I’m the one that’s selling reality. He’s peddling a bill of goods trying to pretend this recovery is real. Whatever it was, it’s over. I think the recession we’re in now is going to be longer and deeper than the Great Recession of 2008-2009. Of course, all bear markets begin as corrections. They don’t officially call it a bear market until it’s down 20%. The Russell 2000 is down 25%. The Dow Transports are down 30%. Many individual sectors and stocks are down a lot more than 20%. It sure feels like a bear market, even though officially Wall Street hasn’t declared it a bear market. But if the Fed doesn’t come up with QE4, which I think it’s going to do. I think it’s a mistake. They shouldn’t do it. They shouldn’t have done 1, 2, and 3. But the only way to stop an official bear market would be for the Fed to reverse course, reduce rates, and launch another round of QE…

“The auto market only did well because of another bubble. We had massive credit extended to un-creditworthy borrowers. I think that auto bubble has already bust. And I think we’re going to start to see a contraction in auto sales. I think we’re going to see a lot of layoffs this year in the automobile industry, in the parts industry. You already have huge inventories that dealers can already sell. So that bubble has burst. The housing market is also a problem. Home ownership is near a 50 year low. It’s mainly speculators who are buying out these houses to rent. But rents are going up, and I think a lot of people are going to lose their jobs in this recession. The jobs we have been creating, by and large, have been low-paying jobs…