Peter Schiff, president of Euro Pacific Capital, appears on Countdown to the Closing Bell May 8, 2009.

The collapse has barely begun. We just started out. The events that that are going to set the collapse in motion have occurred.

It’s not really people rushing into stocks. I think they’re rushing out of cash.

We still have a pending commercial real estate collapse, a new collapse in residential real estate when ARM’s reset, and a credit card bubble coming down the pipe.

These stress tests are a joke. They were reverse engineered. There is no stress in these tests.

More news on the stress tests is coming out over the weekend, including reports that the Fed cut banks’ deficits after negotiations with the banks. One example of the ridiculousness of it all is that Citigroup’s original capital shortfall was reduced from $35 Billion to $5.5 billion because Citi convinced the Fed’s that they have future capital boosting impacts that will give them more available cash.

 The stress tests did not put any real stress on the banks, and we will exceed the worst-case scenrios in unemployment and GDP growth by the end of this year. In the worst case scenario, the FED estimates the banks will need an additional $600 Billion to recapitalize.

What happens if the economy turns out to be in worse shape than the worst-case scenario?

Watch Peter Schiff on Countdown to the Closing Bell May 8, 2009