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Peter Schiff: “Stocks are being owned by a lot of leveraged players in the market, You have something like 6,000 hedge funds; and a lot of time they use the word, “hedge fund” and there’s not a lot of hedging going on. There’s a lot of risk-taking going on a lot of leverage. When people borrow money to buy assets, it creates the potential for the types of declines we’re seeing. Liquidity causes people to exit their positions and when everyone is trying to sell the same assets at the same time you will see substantial declines in prices to accommodate the selling, and that’s what we’re having.”
“Certainly rising interest rates and higher inflation are bad news for home builders, and these stocks are falling. Gold benefits substantially from inflation. The fact that gold and home builders are falling together shows it’s not the fundamentals – it’s more the liquidity concerns. The market action in the past week or two has created a lot of opportunities in assets that are only falling as a function of liquidity. Those would be commodity-related assets, mining related, oil and gas, foreign currency investments.”
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Peter Schiff is an American investment broker, author, financial commentator, and was a candidate in the 2010 Republican primary for the US Senate.
Video © and provided by Peter Schiff.
Peter Schiff is an American investment broker, author, financial commentator, and was a candidate in the 2010 Republican primary for the US Senate.
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