Peter Schiff Warns Fed Action Could Lead to Market Crashes

Fed action could lead to a Massive Financial Crisis, Severe Recession
Fed didn’t get inflation back down to 2%
Schiff recently settled with Puerto Rico’s financial regulator

According to Gold Bug and economist Peter Schiff, the Federal Reserve’s action on the U.S. economy could lead to two outcomes. As stocks, bonds, and real estate all plummet, one outcome results in a massive financial crisis and severe recession.

The economist emphasized that “the world will run away from the dollar” in the second outcome.

Peter Schiff on the American Economy: Two Possible Results This week, Gold bug and economist Peter Schiff maintained their discussion of the U.S. economy and the Federal

The world will run away from the dollar – Schiff

Reserve’s efforts to reduce inflation. He tweeted on Saturday that there are two possible outcomes” in reference to the direction in which the American economy is headed.

He described one of the outcomes as follows Inflation is brought back to 2% thanks to the Fed’s success. Real estate, bonds, and stocks all plummet, ushering in a massive financial crisis and severe recession that includes spending reductions and defaults by the government.

He then wrote that Continuing to discuss the second outcome: Or, the Fed changes course before inflation reaches 2%.

Inflation will soar if the Fed pivots, either to prevent a financial crisis or to respond to one, in the opposite direction of what occurred following the 2008 financial crisis. The world will run away from the dollar this time, rather than toward it.

Friday, Schiff also tweeted that everyone is aware of the 1970s’ high inflation, which did not end until Volcker became serious in the early 1980s.

However, from 1982 to 1992, the average annual increase in CPI was 4.43 percent. After the financial crisis of 2008, the Federal Reserve was unable to bring inflation back down to 2%.

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The days of sub-2% inflation are gone

He warned in September, saying, Due to over a decade of inflationary monetary and fiscal policy, inflation is here to stay and will get much worse despite rate increases.

Both gold and the dollar benefit greatly from this. Schiff remarked, The days of inflation below 2% are over. In addition, in August, he emphasized that the United States is experiencing a massive financial crisis that will be a much bigger crisis when the defaults start.

He warned in May that the United States’ economic downturn will be much worse than the Great Recession. Schiff recently agreed to liquidate his Euro Pacific Bank without admitting any wrongdoing to the financial regulator in Puerto Rico.