Peter Schiff Warns: "The Whole Economy Has Imploded... Collapse Is Coming"

Tyler Durden's picture

Submitted by Mac Slavo via,

Back before 2008 Peter Schiff was harshly criticized and laughed at for his predictions about a coming economic collapse. Among other things Schiff warned that consumer spending had hit a wall, stocks were overpriced and lax credit lending practices would lead to a detonation of the banking system. Rather than heed the warnings, the biggest names in mainstream media tried to discredit him for not toeing the official narrative. Shortly thereafter, of course, Schiff was vindicated and much of the doom he had forecast came to pass.

Today, Schiff continues to argue that the economy is on a downhill trajectory and this time there’ll be no stopping it. All of the emergency measures implemented by the government following the Crash of 2008 were merely temporary stop-gaps. The light at the end of the tunnel being touted by officials as recovery, Schiff has famously said, is actually an oncoming train. And if the forecast he laid out in his latest interview is as accurate as those he shared in 2007, then the the train is about to derail.

We’re broke. We’re basically living off of debt. We’ve had a huge transformation of the American economy. Look at all the Americans now on food stamps, on disability, on unemployment.


The whole economy has imploded… the bottom hasn’t dropped out yet because we’re able to go deeper into debt. But the collapse is coming.

Fundamentally, America is worse off now than it was pre-crash. With the national debt rising unabated and money being printed out of thin air without reprieve, it is only a matter of time.

Schiff notes that while government statistics claim Americans are saving again and consumers seem to be spending, the average Joe Sixpack actually has a negative net worth. But most people don’t even realize what’s happening:

I read a statistic… The average American has less than a $5000 net worth… it’s pathetic… we’re basically broke… but in fact it’s much less… If you actually took the national debt and broke it down per capita, the average American has a negative net worth because the government has borrowed in his name more than the average American is able to save.



What’s happening is pretty much what we would anticipate. I don’t see from the data any real economic recovery, certainly not in the United States.


We’re spending more money, but it’s not because we’re generating more wealth. We’re generating more debt. We’re using that borrowed money to consume and so temporarily it feels that we’re wealthier because we get to spend all that money… but we have to come to terms with paying the bill.


The bills are going to come due. Right now interest rates are being kept at zero which makes it possible to service the debt even though it’s impossible to repay it… at least we can service it. But once interest rates go up then we can’t even service it let alone repay it.


And then the party is going to come to an end.

The problem, of course, is that no one with any real influence over public perception, like our elected officials or the media, will do anything about it. They’ll continue the party until it comes to an abrupt and irreversible end, and anyone who goes against the official narrative will be branded a lunatic gloom and doomer or extremist.

But vilifying those who are blaring the warning sirens will do nothing to change the end result:

We’re going to have a crisis… There are always going to be people who say ‘well, you’re a stopped clocked… you keep predicting doom and eventually it happens’… but you have to back and listen to why… Why are they saying it?


If you look back at things that I’ve said and the things that Ron Paul has said… This is why it’s happening… it’s not like we’re just saying negative things to be negative and then when something negative happens we can claim credit for it happening.


If you look back at the events it bears out that we’re right… unfortunately our opinions are in the minority… and you have governments that have a vested interest in ignoring these opinions because they don’t want to change because they’re at the root cause of the problem. But they don’t want to acknowledge their role in creating the problem. They don’t want to acknowledge that the problem is more government and that we need less government because that’s not how they stay in power. They promise something for nothing… they promise that government is the solution for your problems, not the cause of your problems.


They’re never going to acknowledge people like Ron Paul for what they’re saying… but they’ll try to discredit you by saying ‘well, you’ve been saying this for years and nothing bad has happened.’


But look around. A lot of bad stuff has happened. We just haven’t had the final and complete collapse. But what good is it when that happens? Now it’s too late to do anything about it.

The reality is that the American economy is on its last leg. Black Friday sales were pitiful, some of the world’s leading companies are warning of recession, and U.S. national debt will soon surpass $20 Trillion.

Just as was the case before the Crash of 2008, all of the signs are there. And just like before, the stock market continues to hover near all-time highs.

If you’ve been paying attention you know what happens next.

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-.-'s picture

This can be understood as:


The unicorn was found and captured; it was really a mule with a carrot on his head.

DaddyO's picture

The Unicorn is more talented than you think...


Haus-Targaryen's picture


You are a gentleman and a scholar.  However -- this super bubble has another couple years to go.  We'll get another dose of QE and perhaps NIRP before this thing goes full-on-retard.  Shoot, we might even get bank account confiscations.  

This will get worse before it gets better.  The "getting worse" part will take another few years.  

IridiumRebel's picture

Yep we got a little more Hell to pay.....

ratso's picture

Another alarmist bunch of crap.  

brockhardman's picture

This is the same thing CNBC says about Peter.  And then he proves them to be useful idiots.  Expect more of the same here.  What bubble are you expecting to pop first?  Because if you do not have one, you need an "alarmist bunch of crap".

coinhead's picture
coinhead (not verified) brockhardman Dec 7, 2015 12:47 PM

Peter Schiff was wrong (about Bitcoin)

clooney_art's picture

It has imploded and I am now seeing zombies roaming in the streets. Help Help Help !!


The old economy exploded a while back and Yellen's New economy has already imploded ?? Does not compute.

coinhead's picture
coinhead (not verified) clooney_art Dec 7, 2015 12:51 PM

It doesn't matter what happens to Main St., copper, silver, oil, natgas, gold, nickel, zinc.... as long as there is billion dollar FANG stocks.

Syrin's picture

This is RACISS HATE SPEECH !!   Where's my safe zone ?!?!?!

Keyser's picture

The only difference between a hero and a zero in the finacial markets game is timing... 

Spigot's picture

Just watch commodities, oil and the US$ index. That is all you need to know

Save_America1st's picture

I listen to Schiff's youtube podcasts as soon as he posts them.  Usually posts one every couple days or so.  Some of the best informed, straight forward commentary you'll get about what the fuck is really going on.  Highly recommended if you haven't added Schiff to your daily routine of who to listen to regarding the economy and these fake-ass so-called "markets" and the crimes of the FedRes.


Mr.Sono's picture

Peter, thanks for getting us ready for shit storm.

dlmaniac's picture

Schiff has a terrible record on timing the market moves.

DisasterCapitalist's picture

That which cannot continue forever will eventually stop. Way too many variables at play to even pretend at the timing. A friend of mine was at a furniture store last weekend and bought some very nice stuff. The salesman asked how many months of financing my friend wanted. Friend replied that cash was fine. The salesman was speechless.

WayBehind's picture

No bubble burst this time. It will be a slow bleeding death ...

pelican's picture

It seems like a no brainer the party for most of the country is over with the exception being NY/DC and maybe a few more.  Over sixteen years of stupidity, greed, and corruption did this country in.  Wall Street was so smart that they figured out how to suck every dime out of every person and every small business.  The money they didn't get the government took the rest to give to large corporations and absurd military adventure which has become a job program.

Fuck it.  Why am I wasting my time.  I am going to go read a book


A Nanny Moose's picture

Quite literally, once the currency wars turn into shooting wars. Considering San Bernardino, and Paris, this may already be the case.

stacking12321's picture

san bernadino and paris have nothing to do with wars - they are distractions, not real, they are an effort by the owners to consolidate their power in response to a made-up "emergency".

also, there is no pink floyd without roger waters.


Still Losing Money's picture

what are you talking about, he has called 12 of the last 5 recessions/bear markets

Ace in the hole's picture

Very well said.  And this guy has been pushing gold for 7 years.  What a horrible place to put money.  Eventually, he will be right, but this guy has cost a lot of people, a lot of money.  COuld he have predicted all of this QE?  No, who could?  Even Yellen doesn't know when it will end.   But predicting when it ends is the whole enchilada.  And this guy is just trying to creat fear to sell you gold.  

Herd Redirection Committee's picture

So are your ounces going rusty or something?  Cost people money?  You mean USD?

Isn't that the point of buying physical gold, to get away from the USD???

Or are you one of those "I am looking to make USD profits on my gold" types?  The more sensible stackers want to give their gold to their kids 20 years from now, others want to sell it when the new gold-backed currency is inevitably announced.

But you...

rbg81's picture

Exactly.  It does not take a genius to tell you this will end badly.  The big question is:  WHEN?  Frankly, back in 2012, I thought we'd be in hyperinflation by now.  In fact, silly me, I thought energy stocks were the place to be.  I still think that commodities and energy will be back in vogue, but in the meantime, sticking by my convictions has been fuking painful.  Meanwhile, my brother (who majored in philosophy of pussy in college) has made me look like a jackass with his AMZN stock.  He always snickers when I point out the P/E ratio is insane.  But of course its impossible to argue with success.

SpinDrift's picture

I've had this conversation many times with my close friend; all we ended up with after the Yamazaki 18 was gone was "if you can't wrap your head around the reality of the madness you've no place entering into the club."   It's why I will always suck and will end up "working for a living" - I simply lack the consruct required to enter the market matrix and actually flow with it - and thus like you, sticking to my convictions has been...not immediatly finanically rewarding.  

However, while I could invest in the suite of military-industrial complex companies who really profit from, and to a degree help foster the continuation of, perpetual war, I don't want to.  No judgement, I just don't want it, and will probably never arrive at the palce where I can swim in the rip tide of madness and be good with it.   So I have learned several trades, worked hard, and tempered my appetites; that has afforded me comfort, and on the world stage, being comfortable IS being wealthy.  

I'll never forget a rich guy coming to me when I was working as a junior admin SE at a startup - "hey, I am thinking of of buying one of these mobile phone companies that make those ring tone things....what do you think?"   Said I thought it was bullshit but he'd probably make a mint from it.  Turns out it was, he did, I didn't - just not me.

On an unrelated note, as for the "price of gold" - what difference does it really make?   Buy it if you can, put it away somewhere, keep your mouth shut and go about your business.   I've never looked at it like an investment - more like a tool that one hopes never to need to use, but will gladly use it if required.

Long on smog,

~ SD

rbg81's picture

The one silver lining of owning a lot of these stocks (esp energy) is that they pay good dividends.  So you get paid to take take the wild ride and it helps if you don't look at your account balance (which I do anyway).  The other thing about dividends, is that all bets are off if oil goes below $30/barrel, but I digress.  Even so, I know two things will eventually happen:

1.  The Saudis will kill off the competition, and/or themselves, and oil will start rising again.
2.  Eventually, other countries will get tired of taking US dollars for real goods that are created out of thin air and backed by Jack Squat

But, again, the question is: When?  Luckily, I am wealthy enough that I can afford to be patient.  And I do own some speculative mutual funds, which have done well.  Overall, I'm fairly well diversified, but it hurts my pride that the investments I'm most intellectually partial to have tanked.

redpill's picture

I like Peter Schiff a lot, and I think he'll eventually be right, but he's been repeating himself for years now.   I think he underestimates the ability of central banks to keep the music playing.


Hint: Try playing Monopoly with a 5 year old and let them be the banker.


LowerSlowerDelaware_LSD's picture
LowerSlowerDelaware_LSD (not verified) redpill Dec 7, 2015 1:12 PM

Yeah... I'm pretty much there as well.  Peter is incredibly sharp when if comes to almost everything business/economics.  Then the Fed comes in and throws everything off.  We are no longer in an economic situation.  We're in a Central Planning situation - which always ends badly but nobody knows when.

quintago's picture

The only way to get rid of all this debt is a war. Anything else is salad dressing.

redpill's picture

Ok but it's hard to argue with a good balsamic vinaigrette

IridiumRebel's picture

redpill, you have been missed

gimme soma dat's picture

Tip:  Mix balsamic vinagrette with ranch dressing.  It sounds weird, but I swear it's delicious. 

Antifaschistische's picture

only if we invade and pillage a country that has 20 Trillion Dollars laying around....if not, the last time I checked...wars COST us a lot of money and will even accelerate our financial demise.

toady's picture

That's why I keep saying we gotta invade the Cayman islands. The. 001% have around 20 trillion stashed there. Just gotta make sure all communications are down or they'll xfer it out before the marines can confiscate all the 1's and 0's. 

JLee2027's picture

Not just Peter, just about everyone has underestimated the amount of time this has dragged on. John Williams (much respect) said there would be hyperinflation in 2014. The silver bugs have been predicting silver armageddon for a decade. Jim Sinclair expected it all to go belly in 2015. When I read that (in 2011 or so) I thought, what is he smoking? There is no way it survives until 2015...

RiderOnTheStorm's picture

I carry a couple $100 Trillion Zimbabwe notes in my wallet at all times just in case the Shit HitsThe Fan. . .

Bloodstool's picture

A "war on climate change" would be really, really, really great, wouldn't it?  Nobody gets hurt, bankers get richer, shyster "greenies" get slimier, and the pockets of the political pigs get fuller with the lobbying money from both!  Ain't it great to be an American?!


JLee2027's picture

Since the Government is apparently modifying the weather by geo-engineering (pushing the Jet Stream south in the USA to get warm weather), they are self-creating the need for a war on climate change.

MadVladtheconquerer's picture
MadVladtheconquerer (not verified) JLee2027 Dec 7, 2015 3:39 PM

Yaaaa, they actually have YUUUUUUUUGGGGGGGGGEEEEEEEE fans that can divert vast quantiites of air in any desired direction and this can

be maintained as long as the fans are switched to the 'on' configuration.  The concept was developed at MIT.  Most fans are stored at Area 51

until deployed.

grumpyoldgit's picture

"hey actually have YUUUUUUUUGGGGGGGGGEEEEEEEE fans that can divert vast quantiites of air in any desired direction"


you mean Jim Cramer?

slightlyskeptical's picture

War just delays the day of reckoning. Won't do anything about the debt but make it bigger.

Beltain's picture

Technically true but war also allows governments to change the rules as they see fit even for it's own citizens. Mandatory rationing, shortages, reduced financial payments of all kinds. They can even stetch these things out for years after the war has ended. My bet is a fair number of public pensioners might be really surprised at the powers a government in an official war can swing around.


FrankieGoesToHollywood's picture

That is funny.  Ive played with five year olds and the money/promises/deals they make to try to get you to keep playing are comical.

Never One Roach's picture

No one saw this massive manipulation of the markets lasting this long. However, Peter has been right and we are in fact seeing alot of pain in certain sectors that the Fed has lost control of like commodities, retial and energy where there's been yuuuuuuuuuuuuuuuuuuuuge job losses.


The housing market collapse and stawk market collapse are next.

The9thDoctor's picture

A broken clock is right twice a day, best describes Peter Schiff.

Housing and stocks are at all time highs and Peter Schiff totally missed it for the last 7 years. Gold is HALF of what it was 5 years ago, and Schiff totally missed that.

redpill is correct that central banks can kick the can indefinitely. Japan has been doing it since 1991, and a quarter century later they are still chugging along.

Subliminal messenger's picture

That's not entirely correct. His comments about housing were spot on and his timing was right. He has failed regarding timing about the USD and precious metals. I fully agree on that part.

However, the central banks can't kick the can indefinitely. The bond market in Japan hasn't imploded yet, but USD/JPY was below 80 3 years ago and it's at 123 today. That doesn't sound like successful kicking.