Peter Schiff's Predictions of the Great Economic Crisis

financial crisis because what the government did in response to that crisis qe1 QE2 qe3 all of that plus you know what we did during coid that is the source of all this inflation and it's going to continue to get worse as long as we continue to run these massive deficits we're running a $2 trillion a year and Rising debt and and this is going to lead to much higher inflation in the future than what we've experienced in the past and I think that the decline in the CPI is over we bottomed out two months ago at 3% year-over-year now we're at 3.7% and rising and I think inflation is going to be a much bigger problem in 2024 than it was in 2023 okay Peter my my issue with all this well I have many issues with all this is it seems like it's an inevitable death spiral because they're not going to stop spending none of these idiots Republicans Or democrats can stop spending so they're going to keep printing money they're going to keep spending money so inflation keeps going up and CPI keeps getting worse and that means interest rates am I getting anything wrong here how does this turn around no and in fact the spiral actually is worse because the increasing interest rates actually contribute to the rise in the CPI because interest rates are a price and it's a very uh important price for a lot of companies just like labor and rents and raw materials companies borrow money uh to conduct their business to make Capital Investments to expand a lot of these companies have taken on debt over the years and now the cost of servicing that debt has risen sharply I think it will continue to rise and so businesses need to pass on these higher interest rates to their customers in the form of higher consumer prices so every time the FED raises rates it put more upward pressure on the CPI and people make less money we know now the household income fell by 2.3% 2022 that's the lowest since 2010 so not only is everything more expensive people are making less so Peter how does this end how does this story end let's assume they're not going to change their behavior that's a very safe assumption what does this bubble pop look like when it comes is it going to be like 2008 well you know this the the story is going to have a tragic ending unfortunately we're going to have a dollar crisis and a sovereign debt crisis the FED is going to print money until the dollar collapses and I think that that Day of Reckoning is is at hand I mean I don't know that it's tomorrow but it's coming sometime soon because you can already see the world is trying to divest itself of the dollar you know there's a big movement to look for alternatives to the US dollar and they're there and that's and that's happening and we've been able to get away with creating all this inflation because we've been able to export our inflation to our trading partners who have replaced the money we print with the goods that they produce and that's kept a lid on in consumer prices but as our trading partners move away from the dollar the dollar is going to fall very fast prices are going to rise uh much faster than they have been and at some point it's going to spiral out of control especially the debt because we have so much debt and as the interest on that debt really Rises then it puts even more pressure on the FED to print even more money to buy more bonds to put some kind of cap on how high interest rates go and it just accelerates the cycle because what's driving everybody out of dollars and out of bonds is inflation and If the Fed has to create even more inflation to stop interest rates from rising it just creates an even more powerful