Gold bug and economist Peter Schiff says there are two possible outcomes of the Federal Reserve’s action on the U.S. economy. One outcome leads to “a massive financial crisis and severe recession” as stocks, bonds, and real estate crash. In the second outcome, “the world will run away from the dollar,” the economist stressed.
Peter Schiff: U.S. Economy: There are Two Outcomes
Gold bug and economist Peter Schiff continued to share his view on the U.S. economy and the Federal Reserve’s efforts to bring down inflation this week. Regarding where the U.S. economy is headed, he tweeted Saturday that “There are two possible outcomes.” Describing one of the outcomes, he detailed:
Inflation is returned to 2% by the Fed. Stocks, bonds, and real estate all crash, ushering in a massive financial crisis and severe recession that includes government defaults & spending cuts.
Let’s now discuss the second. wrote: “Or the Fed pivots before inflation returns to 2%. The opposite to what happened after 2008’s financial crisis will happen if the Fed pivots. This time instead of running toward the dollar, the world will run away from the dollar.”
Also see Schiff tweeted Friday: “Everyone knows about the high inflation of the 1970s that didn’t end until Volcker got serious in the early 1980s. The average CPI increase over the 10 years 1982-1992 was 4.43 percent. The Fed didn’t get inflation back down to 2% until after the 2008 financial crisis.”
Gold bug often comments on U.S. economies on social media. In September, he cautioned: “Inflation is here to stay, and will get much worse despite rate hikes, due to over a decade of inflationary monetary and fiscal policy. This is very bearish for the dollar and bullish for gold.” Schiff noted: “The days of sub-2% inflation are gone.”
Moreover, he emphasized in August that the U.S. is facing a “massive financial crisis” that “is going to be a much bigger crisis when the defaults start.” In May, he warned about an economic downturn in the U.S. that “will be much worse than the Great Recession.”
Schiff recently settled with Puerto Rico’s financial regulator and agreed to liquidate his Euro Pacific Bank without admitting to any legal wrongdoing.
Are you in agreement with Peter Schiff regarding the U.S. economic situation? What do you believe is the most likely outcome? Comment below to let us know your thoughts.
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