Economist Peter Schiff has warned that the current financial crisis will be worse than 2008. “Future rate hikes no longer make sense,” he stressed, adding that any effect will be more than offset by the Fed’s quantitative easing.
Peter Schiff Financial Crisis Warning
Economist and gold lover Peter Schiff shared his perspective on the US economy in a series of tweets this week. He explained that when the government “imposed many new banking regulations after the 2008 financial crisis, they assured us that what is happening now will never happen again.” However, he argued:
One reason we had the 2008 financial crisis was too much government regulation. That is why this crisis will be worse.
“This time it is different. When the 2008 financial crisis began, the dollar rose and gold fell. This time it’s the other way around… That’s because investors are realizing that the high inflation that should have hit ten years ago will now be even stronger!” the economist opined.
“The Federal Reserve caused the financial crisis of 2008 and 2023,” Schiff claimed, claiming that he forecast both because he “understood the consequences of the Federal Reserve’s policy mistakes.” He added that he “began to predict the current financial crisis in 2009”, but at the time he did not know “how long it would take to arrive”.
Schiff further explained that the Fed’s quantitative easing (QE) is back. “Last week, the Fed’s balance sheet increased by $300 billion, ending 4 months of QT (quantitative tightening) in one week. By the end of the month, the balance could hit a new high. Rate hikes don’t matter. Inflation is going much higher, thanks to the bank bailouts,” she detailed. His comment followed the Federal Reserve and US government unveiling measures to bail out failed Silicon Valley Bank and Signature Bank last Sunday.
The economist continued:
The Fed was waging a two-front war against inflation, rate hikes, and QT. The Fed has now reversed the fire and is doing aggressive QE. If QT was designed to reduce inflation, QE will increase it. Future rate hikes no longer make sense, as any effect will be more than offset by QE.
“As I have warned for years, the only way the Fed can get anywhere near its 2% inflation target is to allow a financial crisis worse than 2008 to run its natural course, without bailouts for banks or their customers,” he said. . Referring to the recent bailouts of major banks, he concluded: “The Fed chose bailouts and gave up on the fight against inflation.”
Do you agree with Peter Schiff? Let us know in the comments section.
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