Peter Schiff: ‘We Are Setting Ourselves Up For The Next Big Crisis’

Peter Schiff, President and Chief Global Strategist of Euro Pacific Capital, recently discussed the growing chatter about a U.S. economic recovery in a March 18, 2012, entry on The Schiff Report YouTube video blog. In “Don’t believe the hype — the U.S. economy is not recovering, it’s getting sicker,” Schiff told viewers:

Well, the truth is, if the economy really were recovering along the lines that the Fed suggests, they wouldn’t have extended their commitment to keep interest rates at 0 through late 2014. If the economy were improving, why would the Fed have to keep it on life support? Again, the Fed knows the economy is not improving, it knows it’s a phony recovery that’s contingent on low interest rates, and that’s why it is keeping them there. But it’s not going to be able to keep them there.

He added later on in the video segment:

The data points that we’ve been getting do not point to an improving U.S. economy. We are not resolving any of the imbalances that underlie our economy. The structural imbalances that led to the housing bubble, that led to the financial crisis, are being exacerbated, not alleviated. Everything the Fed has done, everything the government has done, is making our economy worse, not better. And the data points show that. Again, sure, temporarily, when you’re inflating a bubble, you can create some phony jobs, you can create some excess consumer spending, and government spending. You can create the appearance of prosperity. But all you have to do is look beneath the surface, and you can see that the real economy is not prosperous, it is in decay, it is deteriorating, and we are setting ourselves up for the next big crisis. And that’s the crisis that the Fed is not even concerned about, is not even worried about, nobody is talking about it, but we’re talking about it here.

“Don’t believe the hype — the U.S economy is not recovering, it’s getting sicker.”
YouTube Video

The host of The Peter Schiff Show also talked about inflation:

But even the government’s numbers- the headline number- was up 4/10 of 1 percent, which would annualize out to an annual rate of 5 percent, over 5 percent inflation. I think the true rate of inflation is more double that 5 percent level. Closer to 10 percent.

And Schiff, who’s also the CEO of Euro Pacific Precious Metals, also shared his views on different assets. From the video:

But the market that is on the verge of collapse is the bond market and the dollar. And in order to prevent that from happening, the Fed is going to print a lot of money, and that will put a floor beneath asset prices. But it will basically put a rocket ship [chuckling] beneath gold prices, and it will sink the dollar.

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