Economist Peter Schiff is predicting that the US would be in a difficult situation soon, with the Federal Reserve eventually surrendering to the fight against inflation in order to face a more daunting challenge – a full economic collapse, another financial disaster, or a sovereign debt crisis.
Peter Schiff Warns About Financial Collapse
In an interview with USAWatchdog on Saturday, gold bug and economist Peter Schiff shared his gloomy outlook about the future of the US economy. Citing the latest financial data, such as the Personal Consumption Expenditures Price Index, which was 0.6% higher in January, Schiff commented: “The days of declining inflation are in the rear-view mirror. And now we’re going to see accelerating inflation as measured by these government indices.”
Schiff highlighted the Federal Reserve’s inability to contain inflation. He declared: “If the Fed can’t stop inflation, I don’t think they can. But they’ll have to fight harder than they have. Interest rates will need to go up higher than people think.”
We also need to see a big contraction in consumer credit. We want credit standards to go up so consumers can’t keep spending. People are spending money. They’re racking up more credit card debt. That’s inflationary… We need consumers to stop spending.
The economist urged for reductions in federal spending. He further stated: “We need major cuts in government spending. The government can’t just keep giving money away, it also has to provide money for people to spend. Eventually, they’ll force the Fed back into quantitative easing.”
Schiff believes that the Fed will eventually give up its struggle against inflation, as it will have to face something it fears much more – a total economic collapse, another financial disaster, or a sovereign debt crisis.
The Fed may even be compelled to cut Social Security and Medicare rather than just illegally cutting them and creating inflation.
The economist has previously warned that the Fed’s actions may result in a more extreme financial crisis and recession than the central bank acknowledges. His recent predictions have also suggested that inflation will intensify and the US dollar will crash.
What do you think about Peter Schiff’s financial collapse prediction? Let us know in the comments section.
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