Economic Collapse: Peter Schiff Says U.S. Headed for Deep Recession

RecessionPeter Schiff Sounds the Alarm Bells

Peter Schiff, CEO and chief global strategist for Euro Pacific Capital, thinks the current U.S. economic recovery is the stuff of fantasy. In a recent interview on CNBC’s Street Signs, Schiff said there is no recovery and that the U.S. economy is already in a recession and headed for economic collapse.

“The stock market, I believe is already in a bear market, and in fact, I think the U.S. economy is in a recession right now and I think this recession is going to last longer and it’s going to be even deeper than the great recession of 2008–2009 so we’re going to have to rename that recession because this one is going to be greater,” Schiff said. (Source: “Great Recession of ’09 Will Need New Name After This Greater Recession,” YouTube, February 4, 2016.)

Despite a recent positive job report from the U.S. Department of Labor that saw 151,000 jobs added in January to the U.S. economy and unemployment decrease to 4.9%, Schiff says the numbers aren’t telling the real story. Schiff believes that jobs are being created because Americans now have two or three part-time jobs and goods producing full-time jobs are being replaced with service-sector jobs—low-paying and temporary part-time jobs.

“This has been a decimation in the U.S. economy and people are just looking at some of these superficial numbers and not looking beneath the surface to see what a disaster the Fed has made of this economy,”  Schiff said. “They took all the problems we had in 2008 and made them much worse.” (Source: Ibid.)

Schiff added that debt under the Obama Administration has doubled, ballooning to $19.0 trillion, and that the Federal Reserve now has a huge balance sheet full of toxic debt, with no signs to show for it in the economy.

“The U.S. is supposedly the only example that quantitative easing actually works. But it didn’t work,” Schiff explained. “It was a complete failure, but everyone wants to pretend it was a success so they want to pretend that we are going to raise rates. We’re not.” (Source: Ibid.)

On the contrary, Schiff predicts that interest rates will become negative and go lower than Europe or Japan. He said the Federal Reserve will “back up the truck” with a new round of quantitative easing that will be bigger than the previous round.

So how does the U.S. economy get out of this mess? Schiff believes that U.S. interest rates need to be raised and that governments need to balance their budgets by adopting tighter fiscal policy.