“The real deal is the Federal Reserve. That’s what everybody cares about," he told Yahoo.

"Perversely, to the extent that we have a difficult international situation, that may give the Fed the excuse it needs to postpone the taper and rate increases. That’s what the [stock] market wants. That’s the only thing driving this market."

Editor’s Note: New Warning - Stocks on Verge of Major Collapse

The Fed has kept its federal funds rate target at a record low of zero to 0.25 percent since December 2008.

"The biggest wild card could be the dollar," Schiff said. "We're flexing a lot of muscle that we don’t have. We're irritating a lot of people that we need to suck up to."

"We're creating extra incentive for people to move away from the dollar," he added. "That could ultimately be the biggest problem for the [stock] market. A big drop in the dollar and acceleration of inflation would put pressure on the Fed to raise rates."

And if rates rise, stocks would fall, Schiff noted.

News of the Russian incursion helped the dollar strengthen Thursday, sending the currency to a nearly 11-month high against the euro. "The situation now is lurching in a more worrisome direction," Richard Franulovich, senior currency strategist at Westpac Banking Corp., told Reuters. 

The euro traded at $1.3174 early Friday morning in New York.

Editor’s Note: New Warning - Stocks on Verge of Major Collapse

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