Economist Peter Schiff has warned of “the greatest economic disaster” in US history. He stressed that we are on the cusp of a financial crisis and “it’s going to be much bigger than the last one.” In addition, he said that the US dollar is being devalued to finance bank bailouts.
Peter Schiff predicts the “greatest economic disaster” in US history
Gold fanatic and economist Peter Schiff shared his warnings about the US economy, the banking crisis and where inflation is headed on NTD News on Monday. Commenting on Federal Reserve Chairman Jerome Powell’s claim that the US banking system is sound and resilient, Schiff exclaimed: “It’s not sound at all. It’s a house of cards that is starting to collapse.”
Schiff explained: “Thanks to the mistakes the Fed has made since the 2008 crisis, we now have a much bigger bubble. The Federal Reserve caused the bubble that led to the financial crisis of 2008, and then inflated a bigger bubble to try to disguise those mistakes and kick the can down the road so we didn’t have to deal with all the consequences of fixing all those mistakes. .” The economist opined:
Of course, we just compounded the problem with bigger bugs, and now the US economy is about to suffer the biggest economic disaster in its history.
Schiff sees the recent collapses of major banks, including Silicon Valley Bank and Signature Bank, as the start of the next financial crisis. “That is exactly what is happening now. It is a banking crisis, and the banks are financiers. I think people are reluctant to call it a financial crisis because they don’t want to evoke memories of 2008 and they don’t want to make comparisons. They don’t want to acknowledge that,” she opined, warning:
They are dismissing all early signs of a major financial crisis. But make no mistake, we are on the cusp of one. And it’s going to be much bigger than the previous one.
According to the economist, banks are ill-equipped to handle a combination of a significant economic downturn and rising inflation. “So if we have high inflation and a recession at the same time, the banks are going to fail,” he said.
As inflation decreases the value of the US dollar, people will look to withdraw their money from banks, as they will not be able to offer an interest rate that can make up for the loss, Schiff described, warning:
Of course, when people want to get their money out of banks, the money isn’t there. So the only way people can get their money is if the Federal Reserve prints it. But if the Fed prints it, it just further destroys the value. Thus accelerating the momentum of spiraling inflation… The dollar is being devalued to finance bank bailouts.
Noting that the Federal Reserve increased its balance sheet by nearly $400 billion in a two-week span, Schiff warned: “That’s inflation. And so when you do that, you destroy the value of all the money that’s already in circulation. So Americans are going to pay, not because they are taxpayers, but because they own US dollars and earn US dollars. Everyone’s paycheck will be reduced in value due to bank bailouts.” The golden bug pointed out:
These bailouts are jeopardizing everyone’s bank deposits, even banks that are solvent.
“Now the risk is inflation. So it doesn’t matter if your bank goes bankrupt. You’re still going to lose. In the event that your bank fails, you lose your money. But now, because the government won’t let banks fail, everyone with a bank account will lose purchasing power,” Schiff concluded.
Do you agree with Peter Schiff? Let us know in the comments section.
image credits: Shutterstock, Pixabay, Wiki Commons
Disclaimer: This article is for informational purposes only. It is not a direct offer or a solicitation of an offer to buy or sell, or a recommendation or endorsement of any product, service or company. bitcoin.com does not provide investment, tax, legal or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.
