Peter Schiff, founder of precious metals trader SchiffGold, recently expressed his views on the U.S. economy and Federal Reserve policies on his Podcast and X platform accounts. He believes that decades of Federal Reserve policies have made economic recession inevitable. It is suggested that the Federal Reserve should raise interest rates rather than lower interest rates. Even if this will trigger a market crash, it is a necessary crash to correct the economy:
The right thing to do is to raise interest rates further and let things develop naturally. Of course, the stock market will crash. Real estate will collapse. We're going to have a hard landing. This will be a recession.
Refers to the need to correct the economic collapse
Peter Schiff emphasized that although this kind of collapse is unwelcome, it is necessary to restore economic stability. He described "If you don't want to have this necessary collapse, then the Fed should not make a deal with the devil, because the devil will eventually come to collect." "Bonds", but he also admitted that market sentiment is becoming more and more convinced that interest rates will be cut, and this expectation has begun to affect market psychology.
The U.S. CPI increased by 2.9% year-on-year in July, the lowest growth rate since the beginning of 2021. However, Peter Schiff wrote an article this week that the low inflation data is due to the sharp drop in second-hand car prices, but other prices are rising. He further found that The push issued a warning about the U.S. economic situation, with housing starts and building permits unexpectedly collapsing in July, signaling an impending recession.
Peter Schiff also said:
Investors are buying stocks because they believe the economy is strong and expect the Fed to cut interest rates anyway. They are right about the rate cut but wrong about the economy. It is not the economy that is strong, but inflation. When the Fed When interest rates are cut, inflation will become stronger.
Peter Schiff also highlighted concerns about the rising cost of the national debt, saying that interest on the national debt is now the third largest spending item in the federal budget. By the end of 2025, he expects debt interest to exceed Social Security spending. By the end of 2026, it should exceed Health insurance expenditures have become the largest single expenditure by the federal government.
Bitcoin is not suitable as a reserve asset
In addition, Peter Schiff, who has always been negative about Bitcoin, has once again expressed criticism of Bitcoin. He mentioned in a recent podcast that Bitcoin’s recent performance proves that it is not suitable to be a reserve asset:
When everything is going down, Bitcoin is going down the most. How can you use a reserve asset that has fallen more than the asset you are hedging?
