Economist Peter Schiff Warns US Dollar Will Crash – Says ‘We’re Going To Default’ CryptoGlobe

Economist Peter Schiff has warned that the US dollar will collapse. Noting that the United States is “in a much bigger fiscal mess than Britain,” with a much bigger debt problem, Schiff pointed out, “Can we possibly pay off this debt? Of course not. Repaying the debt is impossible. So what will happen? We are going to default.

Peter Schiff discusses the collapse of the US dollar

Gold bug and economist Peter Schiff shared his outlook for the U.S. dollar in a podcast titled “When this sucker’s rally ends, the dollar will crash,” published Saturday. He explained that the United States has major problems that will lead to the collapse of the US dollar.

Referring to the situation in Britain, Schiff said the UK was concerned about rising debts. The country’s debt-to-GDP ratio is around 85% and former Prime Minister Liz Truss “has threatened to increase Britain’s debt to GDP even further”, the economist described, noting that “investors have rightly abandoned the pound”. However, he added, “They sold books for dollars…The irony is that they were buying dollars despite the fact that the United States has an even bigger debt problem.”

The U.S. national debt is now over $31 trillion, and the government ran a $1.38 trillion budget deficit in fiscal year 2022. Schiff explained that the debt-to-GDP ratio in the U.S. is actually higher at 125%. Taking into account public and local debt, the ratio climbs to 140%, he detailed, specifying:

We are in a much bigger budget mess than Britain. So to sell books and buy dollars because you fear Britain is in too much debt is jumping from the frying pan into the fire.

Schiff pointed out that it is ridiculous for people to buy US Treasuries as a safe haven, adding that it is also ridiculous to sell a country’s currency due to debt problems and buy dollars while that the United States is even more indebted.

“In the UK almost all the debt is at the national level. They don’t have the states like we do and they don’t have all the municipalities so we have so many levels of debt,” he said. Emphasizing that governments fund each other from the same tax base, he said:

These governments are trying to get blood from the same turnips. Because Americans are broke. We have no savings. So, can we possibly repay this debt? Of course not. Repaying the debt is impossible. So what will happen? We go by default.

Schiff sees 2 possible ways for the US to default

The Economist went on to say that there are “only two possible ways to default – the honest way and the dishonest way, but either one is a disaster if you own US Treasuries. “.

Schiff continued, “The honest way is just to admit we can’t pay and we’re in default. We restructure the debt and inform our creditors. However, he believes politicians lack the integrity to do so, noting:

They will take the exit of the cowards. They will print. They will inflate the debt… It’s crazy to believe that the Fed will succeed in bringing inflation down to 2%. It cannot succeed.

He further warned that as the Federal Reserve raises interest rates, the problem is getting worse. His statement echoes a warning he issued recently that Fed action could lead to stock market crashes, a massive financial crisis and a severe recession.

Schiff also tweeted on Wednesday: “The U.S. merchandise trade deficit unexpectedly jumped 5.7% in September as imports rose 0.8% and exports fell 1.5%. %, breaking a five-month streak of declining trade deficits. He concluded :

Now that the dollar is weakening, the future trade deficit will widen, causing the dollar to fall further.

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What do you think of Peter Schiff’s prediction of the collapse of the US dollar? Let us know in the comments section below.

Kevin Helms

An economics student from Austria, Kevin discovered Bitcoin in 2011 and has been an evangelist ever since. His interests include Bitcoin security, open source systems, network effects, and the intersection between economics and cryptography.

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