Nasdaq: Worst Monthly Decline Since The Financial Crisis

We still have three trading days left in the month of October and the Nasdaq is on pace to its worst monthly decline since the 2008 financial crisis and yet everybody thinks there's no problem!

Stock Market: The Downtrend Is Intact

Some of the highlights from the Peter Schiff Podcast, ep. 402.

Peter mentioned that the Russell 2000 Index is already in correction territory,

"The Russell 2000 is actually down about 14 percent from its highs so it's now officially in a correction."

Peter also mentioned that yesterday's rally had all the characteristics of a short covering rally and that the down trend in stocks in very likely still intact,

"To me this looked like a classic reversal Tuesday type of rally, one of the reversal Tuesday's where you gap way down and then just rally throughout the day The rally did not produce a positive close so it was not a technically significant rally. In fact, I think the downtrend is intact. To me, it looked like a lot of short-covering was going."

Financials are an example of weakness in the U.S. stock market,

"If you look at the financials for example all those stocks continued to go down closing in the red rallied off the lows but no substantial rallies."

The Box That The Federal Reserve Has Placed Itself In

That's exactly the choice that the Federal Reserve is going to have to make. Next time they're going to have to raise interest rates into a weak economy. 

In fact, they're gonna have to raise interest rates into a financial crisis, into a depression and if they don't do it we're gonna have something even worse, we're going to have hyperinflation. 

That is the box that unfortunately the Federal Reserve has placed itself in based on years and years of this monetary policy.