Additional Coverage:
- Economist who predicted the 2008 financial crisis says a far ‘bigger’ one could hit the US soon (marketrealist.com)
Economist Who Called 2008 Crisis Now Warns of a “Bigger” Economic Storm Brewing
An economist famous for accurately predicting the 2008 financial crisis is now sounding the alarm, warning that an even more significant economic downturn could be on the horizon for the United States. Peter Schiff, a prominent American stockbroker and economist, recently told Fox Business that current economic indicators point to a crisis that could make the Great Recession seem like a “Sunday School Picnic.”
Speaking on “The Claman Countdown,” Schiff highlighted the escalating prices of gold and silver against a backdrop of a weakening U.S. dollar as critical warning signs. He suggested this impending crisis could hit as early as this year or next.
“We are headed for a U.S. dollar crisis and a sovereign debt crisis,” Schiff stated, attributing the surge in gold prices to the dollar’s record lows. He further elaborated that central banks worldwide are reportedly accumulating gold to bolster their own currencies, simultaneously divesting from U.S. dollars and Treasuries.
When challenged by the host regarding strong figures in income, inflation, and productivity, Schiff countered that these numbers are likely skewed and subject to revision. “Inflation is going to be much more pernicious over the next few years than it was when Biden was president, unfortunately.
That’s what gold and silver are telling you. They are a warning,” he asserted.
He drew parallels to 2007, when the subprime market collapse foreshadowed the larger crisis, a warning he says was dismissed by mainstream economists and the Federal Reserve at the time.
Schiff also criticized former President Donald Trump’s trade policies, arguing they were misguided and would contribute to the dollar’s decline. He contended that the U.S. economy’s reliance on global trade and foreign lending is crucial, stating, “The world economy doesn’t work because of us – our economy works because of the world.”
The economist painted a picture of a dysfunctional, consumer-based credit economy built on the dollar’s status as a reserve currency. He warned that the world is now “pulling the rug” by accumulating gold and moving away from the dollar.
“The dollar’s going to collapse. The dollar is going to be replaced by gold,” Schiff predicted, suggesting there will be “no floor on the dollar,” and therefore “no ceiling on gold prices.”
Unlike the 2008 crisis, Schiff believes the next downturn will be uniquely American. “The biggest difference between the crisis that we’re about to have, and the one we had back then, is this one is all in America. It’s not going to be exported to the rest of the world,” he explained, adding that the rest of the world might even benefit from an American financial crisis.