Economic analyst and gold bug Peter Schiff is warning that another “Great Recession” will grip the United States and that when it does, it is going to jeopardize President Donald Trump’s reelection efforts.
According to a report by Fox Business, Schiff, the CEO of Euro Pacific Capital says that the United States economy is heading into a free fall that will be worse than the Great Recession of 2008. The economic forecaster is predicting the Federal Reserve (the central bank) will cut interest rates to zero and launch quantitative easing, a monetary policy where the central bank purchases Treasuries from financial institutions to stimulate the economy. “The dollar is going to go through the floor and it’s going to take the bond market with it and the next crisis, it’s not subprime mortgages, it’s going to be in the Treasury market,” he said on Wednesday. “There’s no way out and it’s a political disaster for Trump because the recession is going to start before he finishes this term, which means he won’t have a second term” Schiff added.
This is not the first time Schiff has warned about Trump’s reelection chances. The president’s best hope is that any recession holds off until after the 2020 election.
Schiff has been warning of a recession for a while now, and he has a gloomy outlook for the world’s future when it comes to the centralized planning and elimination of free trade and free societies. His warnings appear to be falling on deaf ears, however, as we still have people actually defending the trade war and tariffs which have been levied on the already cash-strapped American consumer.
Schiff’s comments come after the Dow Jones Industrial Average plummeted 800 points, marking the worst drop of the year and the fourth-largest daily point drop in history. The yield on the 10-year U.S. Treasury bond fell below the yield on the 2-year U.S. Treasury for the first time since the Great Recession, worsening global recession fears.
“As we move into this recession, consumer prices are going to rise even faster and once the dollar starts to fall that’s going to push consumer prices up even more,” he said saying we will see major inflation and a complete devaluation of the dollar.
Unfortunately, the risks of another recession continue to rise and some analysts say there’s nothing the government or the Fed can do to stop it this time. Especially considering both the government and the Fed are to blame for every recession in history. “You have a little bit of panic going on here about the state of the economy and the bond market is reflecting that,” said Richard Bernstein, founder of investment firm RBAdvisors. “The bond market is telling you that growth is slowing and the economy may be a lot sicker than people believe.”