Economist Peter Schiff Warns of Financial Crisis and ‘Much More Severe Recession’ Than the Fed Recognizes

Economist and gold specialist Peter Schiff has warned of a financial crisis and a much worse recession than the Federal Reserve admits. “The economy will not just weaken, but will weaken much more than markets expect,” the economist stressed.

Peter Schiff’s warning

Gold bug and economist Peter Schiff has expressed concern several times this week about the health of the US economy. Commenting on the Federal Reserve’s efforts to curb inflation, he said:

The reality is that inflation is not going to subside. It will intensify. The economy will not only weaken, but will weaken much more than markets expect.

“The real cause of inflation is that the US government and the Federal Reserve act in concert with each other, where the US government spends money it doesn’t have, and then the Federal Reserve prints money to spend the government – that’s why we have inflation.” he explained.

In an interview with Fox Business on Wednesday, Schiff commented on a speech by Federal Reserve Chairman Jerome Powell who said disinflation has “begun” but will take time. Schiff argued: “This disinflation is temporary. Maybe he doesn’t realize it yet, but it’s true.”

Stressing that the government continues to spend billions of dollars every month, Schiff said that if the Fed chairman believes that a slowdown in the economy will lead to lower inflation, then he is mistaken. The golden bug opined:

This will actually fuel the inflationary fire. The real risk is that we will end up with a financial crisis and a much more severe recession than the Fed admits.

“And then the Fed tries to prop up the economy to try to stimulate or fight the financial crisis by creating more inflation,” he warned.

This wasn’t the first time Schiff had voiced his concerns about the US economy. Late last year, he said that inflation was about to get much worse, and the US dollar would face one of its worst years ever. Last October, he said the dollar would collapse and the US would default on its debt. He also predicted that the actions of the Federal Reserve System could lead to market crashes, a massive financial crisis and a severe recession.

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