Economist Peter Schiff Warns the Fed Could Be Fighting ‘Complete Economic Collapse’

Economist Peter Schiff has predicted that the U.S. Federal Reserve will eventually throw in the towel in its fight against inflation to counter “something it fears even more, which is a total economic collapse, another financial crisis, or a sovereign debt crisis.” He emphasized: “In the mirror of the review, there are months of declining inflation,” stressing that now “we will see an acceleration in inflation.”

Peter Schiff on potential economic collapse

Economist and gold specialist Peter Schiff shared some dire warnings about where the US economy is heading and the implications of the Federal Reserve’s fight against inflation in an interview with Greg Hunter on the USAWatchdog show published on Saturday.

Referring to recent economic data, including the personal consumption price index, which rose 0.6% in January, Schiff said: “In the mirror of the review, we see months of declining inflation. And now we’re going to see inflation pick up as measured by these government indexes.”

Arguing that the Fed’s fight against inflation is completely ineffective, the economist opined:

If the Fed is serious about fighting inflation, which I don’t believe, but if it were serious, then it would have to fight much harder than it does now. The stakes should rise much more than anyone thinks.

However, according to Schiff, higher interest rates alone will not be enough. “We should also see a big reduction in consumer credit. We need to see credit standards rise so that consumers can’t keep spending,” he said. “People are spending money. They get into credit card debt. It’s inflationary… We need consumers to stop spending.” The economist emphasized that people should work, produce and save, not spend.

Moreover, Schiff stressed that the federal government needs to get the spending problem under control. He detailed:

We need significant cuts in government spending. The government can’t just give people money to spend because that’s what pushes up those prices. And eventually they will force the Fed to return to quantitative easing.

Schiff predicted that the Fed would eventually turn in the towel in its fight against inflation, adding:

Because he has to fight what he fears even more, namely a complete economic collapse, another financial crisis or a sovereign debt crisis.

He also warned that the Fed could even force the US government to consider legally cutting Social Security and Medicare, “instead of just cutting it illegally and creating inflation.”

The economist has previously warned that the Fed’s actions could trigger a financial crisis and a much more severe recession than the central bank admits. He also recently predicted that inflation is about to get much worse and the US dollar will collapse.

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