Peter Schiff joins Dennis Kneale and others on CNBC July 24, 2009.
There’s probably more legs in this move. I wouldn’t be surprised to see the Dow get up to 10,000. I don’t think that means anything about the economy. You had a 55% drop in the Dow, markets don’t go in a straight line, you’re gonna get bounces. But you know, a lot of the real value in of that advance is being taken away by weakness in the dollar. The dollar index closed at a new low for the move this week.
Â I own stocks. I own foreign stocks. I am not trying to give short-term predictions. Long-term, this is a bear market. Look at all of the bear market rallies we had during the 1970’s.
A great exchange between bulls and bears. Dennis Kneale, the host of the show, continues to keep the blinders on when the discussion of economic fundamentals comes up. Yes the stock market is rallying, but somehow, Dennis Kneale is unable to understand the fact the the economy and the stock market are two different things.
Whether or not the market rally continues, the end-game here will be a total collapse of either 1) the financial markets or 2) the buying power of the dollar. Of course, we may have both scenarios play out. In any case, the last place you want to be holding assets is in US equities or bond markets for the long-term. In my opinion, we more than likely have not seen the bottom yet.
Peter Schiff on CNBC July 24, 2009 (Part 1 of 2):
Peter Schiff on CNBC July 24, 2009 (Part 2 of 2):
This is a global crisis. The markets are coupled. To think that the US market will tank and not BRIC and the emerging markets is foolhardy. That’s why Schiff’s fund did so poorly during the Nov-March disaster and will do poorly in the next bear correction.
Agreed, Ralph. Decoupling has not occured and will not occur any time soon. I have maintained that we will need to see a complete collapse of the financial markets as we know it (globally) before we see decoupling in Asia.
Asia has blown a new bubble in their financial markets, just as we have here in the US. By late 2010, the bubbles will probably have burst and a paradigm shift in how the economies of the world work will have begun. Decoupling will take quite some time — we are not there yet.
Mr. Schiff’s gold and silver investments are now doing quite well, and Iwould guess they will continue to outperform global equities markets. Even in a crash, i think gold/silver will quickly recover and ‘decouple’ from equities. But for those holding Asian stocks, especially those dependent on exports and international business relationships, there will be hell to pay.
In my opinion, it is better to sit in cash right now, or gold/silver assets, then to play equities anywhere — unless you are a short-term trader.