Economist and gold researcher Peter Schiff warned of a financial crisis and recession far more severe than the Federal Reserve acknowledges. “The economy is not only going to weaken, but it’s going to weaken much more than the markets are expecting,” Schiff said.
Peter Schiff’s warning
Economist Peter Schiff has raised concerns about the U.S. economy on several occasions this week. Commenting on the Federal Reserve’s efforts to curb inflation, he said:
The reality is that inflation is not going to weaken. It is going to get stronger. Not only is the economy going to weaken, it’s going to weaken much more than the markets expect.
“The real cause of inflation is the U.S. government and the Federal Reserve acting in concert, with the U.S. government spending money it doesn’t have, and then the Federal Reserve printing the money for the government to spend – that’s why we have inflation” he explained.
In an interview with Fox Business on Wednesday, Peter Schiff commented on Federal Reserve Chairman Jerome Powell’s speech that disinflation “has begun“but that it will take time. Peter Schiff argued, “This disinflation is transitory. Maybe he doesn’t realize it yet, but it is.“
Pointing out that the government has continued to spend billions of dollars each month, Peter Schiff said that if the Fed chairman thinks that a slowing economy will cool inflation, he would be wrong. The gold bug opined:
This will actually fuel the fire of inflation. The real risk is that we will end up with a financial crisis and a recession much worse than the Fed acknowledges.
“And then the Fed tries to prop up the economy to try to stimulate or fight the financial crisis by creating even more inflation” he warned.
This was not the first time Peter Schiff has expressed concern about the U.S. economy. Late last year, he said that inflation was about to get worse and that the U.S. dollar was in for one of the worst years in its history. In October of last year, he said the dollar would collapse and the U.S. would default on its debt. He also predicted that the Federal Reserve’s action could lead to stock market crashes, a massive financial crisis and a severe recession.