While traders worry whether Greece will default on its loans to creditors, noted columnist Peter Schiff believes investors should be more worried about a U.S. economic collapse in 2015.
During an interview on Tuesday, July 7th with NewsMax, the CEO of Euro Pacific Capital discussed the Greek crisis and the implications of the meltdown in the eurozone. (Source: newsmax.com, July 7, 2015.)
The consequences of Greece exiting the eurozone, in his view, will be more severe from the austerity package. “The Greeks don’t want to accept cuts to their pensions,” he said, “But if they end up getting their pensions in drachma instead of euros, those pension payments will be worth a lot less.”
When he was asked about the impact of the Greece debt crisis on the global economy, Schiff said Greece “should be a lesson.” He blames politicians when they promise more than taxpayers can afford to pay.
However, it’s not Greece that really scares Schiff. With respect to the impact of high debt and its effects on the U.S. economy, he adds, “They’re going to come due in America and unfortunately there’s a lot more bills that we can’t pay.”
He explains that the Federal Reserve’s monetary policy is to blame for high debt in the U.S. Schiff mentions that the problem is the Fed’s so-called monetary policy—or quantitative easing: “central bank monetizes government debt by creating money out of thin air and spending it into circulation.”
He concluded by saying the only way that the U.S. government is able to pay its financial obligation is to print more money. This could eventually cause a dramatic depreciation in the value of the dollar.