Economist Peter Schiff forecasts a financial crisis worse than 2008. Says “future rate hikes now make no sense”

Economist Peter Schiff has warned that the current financial crisis will be worse than 2008. “Future rate hikes now make no sense,” he stressed, adding that any effect will be more than offset by the Fed’s quantitative easing.

Peter Schiff Financial Crisis Warning

Economist and gold lover Peter Schiff shared his perspective on the US economy in a series of tweets this week. He explained that when the government “imposed many new banking regulations after the 2008 financial crisis, we were assured that what is happening now will never happen again.” However, he argued:

One reason we had the 2008 financial crisis was too much government regulation. That is why this crisis will be worse.

“This time it is different. When the 2008 financial crisis began, the dollar rose and gold fell. This time it’s the other way around… That’s because investors are realizing that the high inflation that should have hit ten years ago will now be even stronger!” the economist opined.

“The Fed caused the financial crises of 2008 and 2023,” Schiff said, saying he forecast both because he “understood the consequences of Fed policy mistakes.” She added that she “began to predict the current financial crisis in 2009”, but at the time she did not know “how long it would take to arrive”.

Schiff further explained that the Fed’s quantitative easing (QE) is back. “Last week, the Federal Reserve’s balance sheet increased by $300 billion, ending 4 months of QT. [quantitative tightening] in a week. By the end of the month, the balance could hit a new high. Rate hikes don’t matter. Inflation is going much higher, thanks to bank bailouts,” he detailed. His comment followed the Federal Reserve and US government revealing failed moves to bail out Silicon Valley Bank and signature bank last Sunday.

The economist continued:

The Fed was waging a two-front war against inflation, rate hikes, and QT. The Fed has now reversed the fire and is doing aggressive QE. If QT was designed to reduce inflation, QE would increase it. Future rate hikes no longer make sense, as any effect will be more than offset by QE.

“As I’ve warned for years, the only way the Fed can get anywhere near its 2% inflation target is to allow a financial crisis worse than 2008 to run its natural course, without bailouts for banks or their customers,” he said. . recent references rescues of the major banks, concluded: “The Fed opted for bailouts and gave up on the fight against inflation.”

Do you agree with Peter Schiff? Let us know in the comments section.

kevin helms

Kevin, an Austrian economics student, found Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open source systems, network effects, and the intersection of economics and cryptography.