Economist and gold bug Peter Schiff usually has a lot to say, and last week Schiff explained during an interview that he believes the US will face a financial crisis worse than the “Great Recession” of 2008. Schiff explains that the United States has much more debt than it did then and insists that the U.S. economic recession “will be a much bigger crisis when the defaults start.”
Euro Pacific Asset Management Chief Market Strategist Says US Inflation Decline ‘Only Temporary’
As Peter Schiff detailed that he would liquidate his Euro Pacific Bank, the economist sat down to discuss the US economy with Kitco News anchor and producer David Lin. The day before he spoke with Lin, Schiff explained that while inflation appears to be cooling, he doesn’t think the trend will last. “Paradoxically, investors are selling dollars and buying gold with a smaller-than-expected increase in July as they believe the Fed will adopt less aggressive policy,” Schiff said. said on Twitter. “They are right to sell dollars and buy gold, but for the wrong reasons. The decline in inflation is only temporary.”
US productivity fell 4.6% in the second quarter after a 7.4% drop in the first quarter. Year-over-year productivity fell 2.5%, the biggest drop since the series began in 1948. As productivity falls, real wages must fall and consumer prices must rise. Government created #inflation it is making both problems worse.
— Peter Schiff (@PeterSchiff) August 9, 2022
While speaking to Kitco News issue, Schiff explained in more detail why he believes the US economic recession will be uglier than the economic collapse of 2008. Schiff says that if the Federal Reserve continues to raise interest rates, then a financial crisis is inevitable. “2008 was about bad debt,” he stressed the error of gold and the economist. “It was about people borrowing money and not being able to pay it back. The collateral for the loans was not good because it was real estate and prices fell. Well, we have a lot more debt now than we did in 2008… And so it’s going to be a much bigger crisis when the defaults start.”
This time, however, American financial giants will not be bailed out, Schiff noted. The economist commented:
When they fail, it will be much worse, except with too high inflation and the Fed fighting inflation. There is no TARP 2.0. All these banks will have to be allowed to fail.
Schiff says US inflation ‘will be here for years and years, and probably the rest of this decade’
Schiff’s comments follow the US Bureau of Labor Statistics’ July Consumer Price Index (CPI) report, which showed an 8.5% year-over-year increase. Following the CPI report, US President Joe Biden came under fire when he said the US economy had zero percent inflation in July. Biden’s comment followed the US government trying to redefine the technical definition of the word “recession”. “If you believe the official CPI, prices, which are already very high, did not increase during the month of July,” Schiff told the host of the Kitco show. Schiff added:
I don’t think it’s something to celebrate… It’s not like consumers are getting relief from the price drop. I have no doubt that we will get a figure higher than 9.1 percent. We are far from done with this inflation problem. It will be here for years and years, and probably the rest of this decade and then some.
Schiff’s comment on the official CPI numbers follows the post published on schiffgold.com the same day, which states that the Bureau of Labor Statistics’ CPI calculation uses a government formula which underestimates the real increase in prices. Also, statistics from shadowstats.com’s alternative inflation charts show that inflation is much higher than official reports.
Even multiple jobs don’t allow workers to keep up #inflation. Consumer credit in June rose a much-than-expected $40.1 billion, while credit card debt soared at an annualized rate of 16% as consumers took on more debt to be able to afford to buy basic necessities at a higher price.
— Peter Schiff (@PeterSchiff) August 5, 2022
Metrics of the Trulation index they also indicate a much higher inflation rate than the CPI, with data from August 14 at 9.41%. During Schiff’s interview with Lin, the economist said he expects a “massive financial crisis” and major problems with the US dollar. When the dollar fails, expect gold and silver values to soar.
“The dollar has rallied so far, in the early stages of this big inflation, because investors are deluded about the Fed’s ability to contain inflation and bring it back down to 2 percent,” Schiff concluded. “When they wake up to reality, that inflation will be well above 2 percent indefinitely, then the dollar will fall through the floor, and gold and silver will go through the roof.”
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2008, 2008 Financial Crisis, 8.5%, 9.1%, 9.1%, Consumer Price Index, CPI, Depression, Economist, Euro Pacific Asset Management, Euro Pacific Bank, Financial Crisis, Forecasts, Gold, Gold Bug, Great Recession, Joe Biden, macroeconomic data, Peter Schiff, Predictions, Recession, shadowstats.com, silver, inflation index, US Bureau of Labor Statistics, US economy, US government, US inflation, President of the USA, White House
What do you think of Peter Schiff’s economic views and forecasts? Do you think Schiff’s predictions are correct or do you think he will be wrong? Let us know what you think about this topic in the comments section below.
Jamie Redman is the head of news for Bitcoin.com News and a financial technology journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He is passionate about Bitcoin, open source code and decentralized applications. Since September 2015, Redman has written over 5,700 articles for Bitcoin.com News about the disruptive protocols emerging today.
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