Peter Schiff: We’re Heading for a U.S. Dollar Collapse

US Dollar CollapseThink the U.S. Economy is Safe? This Will Change Your Mind

The Federal Reserve’s reckless monetary policies have damaged the global economy and risk sparking a U.S. dollar collapse in 2015. At least, that’s the opinion of famed market commentator Peter Schiff.

During a speech at the Jackson Hole Summit in August, the renowned economic analyst reiterated many of his previous messages regarding a looming stock market crash and possible economic collapse. The Fed, Schiff argues, has created an asset price bubble which has swallowed up the capital that the economy needs to have a real recovery. (Source: Peter Schiff at Jackson Hole Summit: The Monetary Roach Motel, YouTube, September 24, 2015.)

“The Fed wants to pretend that the economy is strong enough to withstand higher interest rates, but it doesn’t want to actually raise interest rates and prove that it’s not. It’s like if you woke up and you’re in a hospital bed. You know, you’re breathing off of a ventilator, and eating out of a tube coming out of your body. You ask your doctor what’s going on and he says, ‘You’re fine. You’re in perfect health.’

Obviously, if the economy needs zero percent interest rates, it can’t be healthy. You can’t have a healthy economy with zero percent interest rates. It’s a bubble. In fact, the very monetary policy that inflated these bubbles, in real estate and in stocks, is the very policy which deprived the real economy of the resources it needed to actually recover.”

Essentially advocating for fiscal shock therapy, Schiff explained that the current monetary policy set by the Federal Reserve must be derailed, despite its difficulties, and likened it to a roach motel. This is a metaphor used to describe a business model where it is easy to begin using a certain service but far more difficult to stop, for one technical reason or another.

“I said after they launched the very first round of quantitative easing that they had checked us into a monetary roach motel. That there was no way out. Once they went down this line, that we were in it for the duration. You live by QE, and you die by QE. I said we would have more QEs than Rocky movies. I think they had six of those and each one got progressively worse. I think QE4 is going to be even worse than the last rounds. Ultimately, where we are heading is a dollar crisis.”

Schiff maintains that the current monetary policy essentially equates to perpetually kicking a can down the road, which is clearly impossible. Sooner or later, he says, we will be facing an economic catastrophe of epic proportions. It’s best, then, to deal with it now, while it’s relatively manageable as opposed to later when it might very well lead to a complete stock market crash and economic collapse.

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