Peter Schiff Warns to Prepare for Economic Collapse
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Peter Schiff, the chief economist at Euro Pacific Capital, warns that the world needs to prepare for a “dramatic collapse” of the economy.
"Interest rates are going substantially higher from here,” he told Gerald Celente, publisher of the Trends Journal, in an interview streamed Friday. “They’re still much too low. We’re now kind of approaching three percent yields on U.S. treasuries, we’re not quite there yet.”
Schiff pointed out that real inflation in the U.S. is at about 16 percent not the eight percent – which the “government admits”– and that the Fed continues to “fuel the inflation fire” by holding interest rates artificially low.
"We’re going to be in recession soon, but inflation is only going to get worse,” Schiff said.
He said the next financial crisis will be more painful than in 2008 because it will likely occur alongside massive inflation.
Schiff said the White House is blaming the Russian invasion of Ukraine for the spike in inflation, and now the subsequent sanctions on Russia are driving it higher. But he challenges that theory.
“We’re creating the inflation ourselves – it’s the U.S. Federal Reserve – and I don’t condone what Putin is doing but I do think the sanctions are going to backfire,” he said. Schiff also noted that the Russian ruble is now worth more against the U.S. dollar than before the sanctions were imposed.
He said India, China, and Russia do not need the U.S. and these sanctions have sped up the fall of the dollar as the world’s reserve currency.
“The best currency to own would be not a currency at all, but real money, which is gold…gold and silver I think will continue to retain and, in fact, even increase in purchasing power over time,” he said.
RISE OF CHINA
Agreeing with my forecast that the 20th Century was the American century and the 21st Century will be the Chinese century, Schiff said it is “obvious that the baton is being passed” and China will become the dominant force in the world’s economy due to economic freedoms Beijing has encouraged.
“I’m not upset that the Chinese have gained economic freedom, I mean, that’s great. I’m just upset that Americans have lost it. The whole world should be more free, but that means we need less government,” he said. “But unfortunately governments tend to be like cancer. Whenever you have a government it just grows and grows and grows – and like a cancer, it does more and more damage the larger it gets.”
And the cancer that is spreading is much greater than just economic, it is socio-economic and geopolitical.