* Hi everybody, this is Peter Schiff and I am recording this on Friday, January 8, and Wall Street just finished the worst opening week to a new year in the history of the stock market

* The Dow Jones was down another 1% on Friday to finish the week better than 1,000 points - it was a 6% decline on the week

* Now there have been weeks that have been down more than 6% in the history of the stock market, in fact we had one about 4 years ago, but we've never had a week this bad in the first week of January

* Now, the financial media is coming up with all sorts of excuses to blame this big decline on

* On Monday, they were blaming the sell-off on the rumors that North Korea tested a hydrogen bomb

* But for most of the week, they were blaming the sell-off of the U.S. stock market on the sell-off in China, despite the fact that China rallied on Friday and we sold off

* The Chinese market was down about 10% on the week, despite the Friday rally

* The U.S. stock market is not falling because of the Chinese stock market. The Chinese stock market and the U.S. stock market are falling for the same reason

* It's not that one is causing the other, they're both going down and the reason they're falling is because the Federal Reserve raised interest rates in December and they are threatening to raise them at least 4 more times, according to the most recent minutes.

* The belief that the Fed is going to keep raising rates is putting pressure on the Chinese currency, the Yuan, to decline along with a lot of other currencies that have already fallen substantially against the dollar, on the anticipation of higher interest rates

* It's the weakness in the Chinese currency that is pulling down the Chinese market, but it's all because of the Fed - but that's the same reason we're going down

* If you remember, all year I was saying that I didn't think the Fed was going to raise rates at all in 2015, and the reasons were:

* I thought thee economy would not be able to handle it - the Fed always claimed that they were data dependent and I thought they were hiding behind that, but I though they could use the weak data, which had been coming all year, as cover for not raising rates - in fact, that was their cover until they backed themselves into a corner because they had promised to raise rates by the end of the year and a refusal to raise rates would be an admission that the economy was weaker than forecasted

* I also said I didn't think the market could handle a rate hike.  It had stopped rising based on the absence of QE, but if the Fed actually increased rates, the air would come out of the bubble a lot faster

* So with the economy going down and the stock market going down, I thought the next thing they would do is reduce rates back to zero and launch QE4 and would look like complete fools

* So by not raising rates, they would look like a lesser fool by acknowledging that the economy needed additional stimulus

* We may already be in a recession

* The Atlanta Fed has already downgraded their forecast for 2015 Q4 to just .8%

* I think by the time we get the first estimate on the 29th the month, we could actually have a negative number for the fourth quarter

* If you look at all the data that's coming in, and I'll get to that in a minute, we can easily have a negative first quarter of 2016, and we're in recession

* If the economy is in recession, and we are in or close to a bear market in stocks, and without the Fed, there's nothing to stop this market from falling, the Fed will have to come to the rescue of both the economy and the market with QE

* But if you remember, a lot of analysts were very sanguine about the market's ability to handle a rate hike, but here we are, the Fed raised rates just a few weeks ago, and the Dow has dropped better than 1,

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