Investment guru Peter Schiff warns the recent volatile stock-market gyrations are really omens that there is much more investor pain ahead that will ultimately end in financial catastrophe when the economic bubble finally pops.
Schiff also warns the U.S. dollar is going to become one of the casualties of the coming crash, RT.com reported, citing Seeking Alpha.
The veteran stock broker says the dollar will tumble when investors realize the U.S. economy isn’t nearly as strong as they used to believe.
“Of course, that is the real reason that the markets continue to fall… the Fed is continuing to threaten the markets with higher interest rates,” the strategist said, as quoted by Seeking Alpha.
“When you’re in a bear market, and I think there’s a very good chance we are in a bear market, you don’t need an excuse for the market to go down. The market just goes down,” Schiff said in one of his recent podcasts.
“It's just that when people don't know they're in a bear market, they're always looking for excuses. They can't accept reality," he said.
“If you don’t know you’re in a bubble, you don’t see the pins. I’ve been calling this bubble for a long time and finally, it’s pin, pin, pin, right? And nobody sees it,” he said.
Schiff isn't alone is his bear-market warnings.
Morgan Stanley reportedly thinks the October stock selloff is turning into a bear market.
"The rolling bear market continues to make progress and there is growing evidence that it is morphing into a proper cyclical bear market," Morgan Stanley writes, CNBC reported.
Morgan Stanley's top stock strategist is concerned that actions by the Federal Reserve are drying up liquidity more than most investors predicted.
"We think the evidence is building and the message from Mr. Market is clear: the consensus outlook for earnings growth is too rosy next year," wrote Michael Wilson, the bank's chief equity strategist.
Some corporate officials have warned that 2019 could be troublesome because of higher borrowing costs brought on by rate hikes and an uncertain future because of the China trade tariff squabble.
"The markets seem to agree and have been quietly revolting all year," Wilson added. "We don't think the revolts will stop until central banks pause or at least signal they are concerned. With the Fed having to respond to still strong economic data and the desire to remain apolitical, we think it could take another 200 S&P points making 2,450 a reasonable downside target to consider."
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