Peter Schiff: It’s the Biggest Bubble Ever
The S&P 500 charted its best August since 1986. Both the Nasdaq and the S&P 500 made new highs last month. Peter talked about the surging stock market in his podcast, saying that it is the biggest bubble ever. And despite what people seem to think, there will be consequences.
September is historically the weakest month for US stocks, but Peter said he thinks this year might be an exception to the rule.
It seems at this point there’s no reason to believe that this inflation-driven rally is going to peter out any time soon. Now, I wouldn’t be surprised if it did, but I’m just not willing to be that it will.”
Peter noted two stocks in particular that exemplify the surging stock market — Apple and Tesla. Apple is the most valuable company in the world based on market cap. Meanwhile, Tesla is the most valuable car company. Its market cap exceeds Toyota, Honda, Nissan, Daimler, BMW, GM and Ford combined. Peter said he doesn’t think anybody buying Tesla stock is really concerned about whether the company’s sales warrant that kind of stock valuation.
I don’t think anybody who’s buying Tesla stock even thinks about that, even cares about that. I mean, I don’t even know if they care that its an auto company. As far as I’m concerned, Tesla’s just a symbol. It’s just four letters. That’s all it is. It’s just numbers and letters. The letters are the symbol and the number is the price, and it’s a game and everybody keeps buying. And no one really cares about the underlying company or whether or not it can possibly be this profitable.”
This is indicative of the entire stock market right now. It’s not about actual companies or the economy. It’s being driven by Federal Reserve stimulus.