Peter Schiff left a stark warning at the end of the year: “2024 could be a horrible year for the dollar.”
Here are 3 big reasons why Peter thinks inflation might rise even higher this year.
1. The Fed wants to boost Biden’s reelection
The Fed is deeply influenced by political dynamics and, with the 2024 presidential election around the corner, it’s already maneuvering to align with the political incumbent.
“I think that the Fed is going to be doing everything it can to try to reelect Biden or whoever may run if Biden does not… The Fed chairman always wants to play ball with whichever Administration is in power.”
This has less to do with blatant political bias and more to do with self-preservation.
The President plays a decisive role in appointing the Fed chair. Given this, Jerome Powell is incentivized to prioritize monetary policies that could boost a Biden reelection. And that’s exactly what we’re seeing.
The Fed already announced considerably lower interest rates in 2024 through 2025, strategically timed for this year’s US election.
Peter predicts that the Fed will continue its dovish, inflationary policies through the end of this election year.
2. US Economic “Strength” Rides on Inflation
The perceived strength of the US economy is largely illusory, a facade created by inflationary policies rather than genuine economic growth.
Peter explains that higher stock market indexes and other financial indicators in 2023 reflect investor expectations of inflationary Fed stimulus rather than genuine economic progress:
“Investors are anticipating a big bond rally. That’s what they think. The Fed is going to going to go back to zero or close to it back to quantitative easing. And so they’re factoring all this in. They’re pricing this easing cycle into the markets now. They’re betting on it.”
Rather than ruin the bets of the broader economy and suffer a massive stock market collapse, the Fed would rather keep monetary policy loose. Congress, too, would prefer to maintain high budgets than risk losing reelection.
This all drives up inflation, which Peter dubs as “the only magic trick they have.”
3. U.S. Trade Deficits Contribute
Peter links the dollar’s weakening to recent large U.S. trade deficits. A cheap dollar will mean higher commodity prices and even higher trade deficits, which in turn will undermine the dollar further.
Peter explains:
There’s no way that inflation is going to come down in an environment where the dollar is that weak, because that’s going to really push up commodity prices. That’s going to push up our trade deficit… These big trade deficits are going to weigh heavily on the dollar.”
We’re entering a classic scenario where a depreciating currency contributes to domestic inflation. Trade deficits are not just a symptom of economic issues but also a causative factor in the declining value of the dollar.
As long as the U.S. continues to run these deficits, the pressure on the dollar will persist.
Meanwhile, investors are flocking to other safe haven assets, like the Swiss Franc.
In 2023, the Franc was up a whopping 10%:
That is a very negative sign for the dollar for 2024 and a positive sign for gold because people are buying the Swiss frank as a safe haven. Gold is an even safer haven than the Swiss franc, but the fact that the Swiss franc is gaining so much on the dollar is an indication that people are leery of the dollar.”
Economist Peter Schiff Warns of 'Tragic Ending' and US Dollar Collapse — Says 'Day of Reckoning Is at Hand'
Economist Peter Schiff has warned that the U.S. economy is headed for a tragic ending. “We're going to have a dollar crisis and a sovereign debt crisis,” he stressed, cautioning that the Federal Reserve is “going to print money until the dollar collapses.” He added: “I think that day of reckoning is at hand.”
Peter Schiff Foresees 'Tragic Ending'
Economist and gold bug Peter Schiff issued more dire warnings about the U.S. economy and the U.S. dollar in an interview on First TV last week.
Schiff explained that the current inflation we are experiencing has its origin in the 2008 financial crisis. “What the government did in response to that crisis — QE1, QE2, QE3 — all of that, plus what we did during Covid, 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,” the economist explained.
Noting that the U.S. is running annual budget deficits of around $2 trillion and its national debt continues to increase, he cautioned:
This is going to lead to much higher inflation in the future than what we’ve experienced in the past … I think inflation is going to be a much bigger problem in 2024 than it was in 2023.
“Interest rates are a price. And it’s an important price for a lot of companies, just like labor, and rent, and raw materials, companies borrow money to conduct their business, to make capital investments, to expand. A lot of these companies have taken up debt over the years and now the cost of servicing that debt has risen sharply,” the gold bug continued.
Schiff also warned about the collapse of the USD. “You can already see the world is trying to divest itself of the dollar. There’s a big movement to look for alternatives to the U.S. dollar. They’re there and that’s happening,” he emphasized, predicting: “As our trading partners move away from the dollar, the dollar is going to fall very fast. Prices are going to rise much faster than they have been and at some point, it’s going to spiral out of control.”
The economist concluded:
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.
“I think that day of reckoning is at hand. I don’t know that it’s tomorrow, but it’s coming sometime soon,” he clarified.
Last week, Schiff similarly warned about a massive crisis and a rush to get out of the U.S. dollar. He has repeatedly cautioned that a U.S. dollar collapse is inevitable. In July, he advised everyone to get out of the dollar now, emphasizing that the Federal Reserve is wrong about its recession outlook. Last month, he said the U.S. economy will experience a “full-blown financial crisis” before the Fed reaches its inflation target.
What do you think about the warning by economist Peter Schiff? Let us know in the comments section below.
The sun might be shining as late summer provides a small dose of light relief, but the bad news never seems too far away these days. With a rather bleak looking winter on the horizon, people are understandably concerned about the ramifications of the ever increasing inflation we’re seeing, which is why I’ve fast tracked today’s guest back into the London Real hotseat.
Peter Schiff is an economist, author, financial commentator, and host of The Peter Schiff Show podcast. His accurate forecasts have made him one of the most sought-after commentators when it comes to matters of the economy.
The last time Peter joined me on the show we discussed the potentially catastrophic consequences of the coronavirus pandemic and how it would cause an unparalleled economic downturn that will result in hyperinflation and a world where the cost of food increases faster than the price of stocks!
Alas, here we are.
As government spending continues to drive the narrative we are seeing unprecedented inflation and a cost of living crisis that is driving many to despair. Peter has spent recent months telling all who listen, that in actual fact, we are already deep into a recession and a financial crisis far worse than the one he correctly predicted in 2008, is very much on the cards.
Peter argues the Federal Reserve has flooded the economy with money. Money printing, or quantitative easing as it’s subtly referred to, has increased demand while decreasing supply. For Peter, that is why you’re seeing this huge increase in consumer prices right now.
“Printing money is merely taxation in another form. Rather than robbing citizens of their money, a government robs their money of its purchasing power.”
Peter’s career began at Shearson Lehman Brothers in the early 90s, before he co-founded Euro Pacific Capital where he continues to serve as CEO and Chief Global Strategist. Euro Pacific Capital’s investment strategy focuses on long-term wealth savings in the face of a declining US dollar with an emphasis on emerging market and commodity-focused investments.
Alongside this, Peter started SchiffGold in 2010 and serves as Honorary Chairman, having long reasoned that investors should allocate 10-20% of their portfolios to precious physical metals, as the safest hedge amid a collapsing world economy. In fact, Peter has become one of the loudest voices in the buy gold brigade, and it’ll perhaps be little surprise to many that in conjunction with this investment philosophy he is one of cryptocurrency’s most outspoken critics.
It was back in 2006 however, that Peter really made the headlines after being one of the very few economic forecasters on the mainstream networks to correctly predict the 2008 financial crisis. His expertise and sound understanding of money, economic theory, and international investing make him the go-to analyst on media outlets around the world from The Wall Street Journal and The New York Times, to CNBC, CNN, and Fox News.
He has spent time in the political arena, first serving as an economic advisor for Ron Paul’s 2008 presidential campaign and later running for the United States Senate in Connecticut in 2010, as a Republican, where his libertarian leanings made a case for change.
As an author, Peter has penned five bestselling books including the searing wake-up call Crash Proof: How to Profit From the Coming Economic Collapse, while his podcast The Peter Schiff Show gives daily updates on everything money related, from investments to government policy.
This interview might be one of the most important I’ve recorded for a while, as the warnings it contains will help all of you to better understand exactly why a world that relies so heavily on the US dollar, is on the brink of economic chaos.
Peter is a fantastic guy, who despite some often divisive opinions is right far more than he’s wrong. He looks at the wider picture and is passionate about his work. For him, we are sleepwalking our way to another disaster, one that probably can’t be reversed anytime soon, however, there are ways to hedge against such outcomes and we’ll certainly explore those in today’s episode.
For the last 11 years I’ve worked tirelessly to ensure that London Real upholds the values for which it was created. We care passionately about Freedom of Speech, the power and need for independent broadcasting and most importantly serving you, the community that has stood by us through thick and thin.
As we continue to grow, we want to make sure that you get the chance to own a slice of the pie and therefore ensure we maintain the calibre of guests you so enjoy, from the world’s greatest thinkers to financial wizards, philosophers and influencers. There is still time to be a part of our future so sign up now at invest.londonreal.tv and own a part of London Real forever.
Download clips
A number of clips from this exclusive interview are now available to download, share and repost. Spread the word: grab these clips today!