Stock Market: In Bubbles You Have To Make An Important Decision

Bubbles force you to make an important decision. You either look like a fool before they pop or you look like a fool after they pop. That`s it. And why do I say you have to look like a fool before they pop? Because you are the guy saying it is a bubble, saying it is irrational and you are the one that is not buying the stocks and as the bubble gets bigger and bigger the people that spotted the bubble look like they are fools because they are out of the action, they are not making the money that everybody else is making.

Then of course, the bubble bursts and all the people that thought they were so smart, end up looking really foolish because they lost all their money.

Related stocks: Facebook (FB), Tesla Motors (TSLA), Netflix (NFLX), Twitter (TWTR), Amazon (AMZN), LinkedIn Corp (LNKD)

Peter Schiff is an American businessman, investment broker and financial commentator. Schiff is the CEO and chief global strategist of Euro Pacific Capital Inc.

Stock Market: The Whole Market Is A Gigantic Bubble

I would agree that I do not think the Nasdaq, or technology in particular is as overvalued now, as it was then, certainly compared to the rest of the market. But I think the market in general, not just the Nasdaq or technology, but the Dow Jones Industrials, the S&P 500 Index, I think the whole market is a gigantic bubble and I think the Federal Reserve has supplied a more air into the bubble this time than it did 15 years ago, because it needed to. I mean, it did not really need to, but to create the illusion of prosperity, it was forced to.

I think the U.S. Economy is much more screwed up now than it was 15 years ago, that it required a lot more air to inflate a bubble and there still are going to be dramatic consequences for investors and for the economy, if and when this bubble does in fact burst. And the only way it won`t burst is if the Federal Reserve decides it is really to big to burst and so it prints endless amounts of money.

Peter Schiff is an American businessman, investment broker and financial commentator. Schiff is the CEO and chief global strategist of Euro Pacific Capital Inc.

Nasdaq: We Have All These Artificial Props

The Nasdaq would not be here if not for QE, the nasdaq would not be here without zero percent interest rates. It would`t be here without unprecedented stock buybacks fueled by cheap money. We have all these artificial props that have lifted up the market and there is no way to sustain the market without these props. The Federal Reserve is talking about normalizing interest rates, shrinking its balance sheet, it cannot do that without pricking this bubble and collapsing the market. Now, maybe they won`t do that, maybe they will launch QE4. That is what I think they are going to do and maybe the market will not collapse, but when that happens, the dollar will. The dollar is being propped up by the idea that the Federal Reserve is going to hike rates.

Peter Schiff is an American businessman, investment broker and financial commentator. Schiff is the CEO and chief global strategist of Euro Pacific Capital Inc.