Schiff: "The Next Crisis Is Not Going To Look At All Like 2008"

Peter Schiff is an economist who served as an advisor to Ron Paul in 2008 and even made a run for Senate on his own at one point. He’s well-known in the "Austrian" as well as the libertarian economic community, but is perhaps best known for his belief that our next coming crisis is going to be "an order of magnitude larger than the crisis in 2008", only this one, the Federal Reserve is not going to be able to print their way out of, Schiff predicts in his most recent interview.

"What the Fed is worried about is a repeat of the 2008 financial crisis. What they don't realize is the next crisis is not going to look like the 2008 crisis," Schiff said.

He makes the why the dollar going up in 2008 helped the Fed bail everyone out, and why it's going to be impossible for the Fed to do the same thing when the dollar collapses during the next recession. Schiff also explains that a loss of confidence in the dollar as the world's reserve currency could see interest rates move much higher, resulting in the U.S. defaulting on its debt. 

Despite getting the 2008 housing crisis right, Schiff's appearances in the mainstream financial media have declined precipitously due to his bearish outlook. As an alternative, he has created a substantial voice for himself on his YouTube channel, which boasts hundreds of thousands of subscribers. 

On Saturday, August 4, Peter Schiff appeared on the Quoth the Raven podcast to talk about a multitude of topics, including:

  • Why the mainstream media doesn’t have him on anymore, despite predicting the 2008 financial crisis production dead-on
  • Why the government should have let more banks fail in 2008
  • Why he believes that a socialist will be elected in 2020 and why a libertarian may actually have a chance in 2024
  • Why he believes the price of gold will be appreciating drastically in the years to come
  • Why people are going to want to own commodities and emerging markets and get out of dollar denominated assets in the United States
  • Why the Fed "stress tests" are rigged
  • Why macroeconomic data shouldn't be relied upon
  • How inflation will hit when newly printed money finally exits the capital markets

On the podcast, Schiff also notes how wrong the media and economists were in 2008, an accusation he himself has been the target of in recent years:

"It's a total double standard because it shows you their way of thinking. If you look at all of these experts that were completely wrong now that we're 10 years from the financial crisis...by 2007, the bubble had burst...even after it was so completely obvious. I was predicting it. They didn't figure it out until everything imploded..."

"I was going on television in mid 2008 saying 'we're in recession' and they were saying 'you're crazy, there's no recession in sight...'"

You can listen to the full podcast here:

In the podcast, Schiff also talks how Keynesian and Austrian economic theory differ, how inflation has an effect on the middle class, the politics of Trump's economic policy, and the recent volatility in tech stocks and tons more.

Peter's YouTube channel can be found here, meanwhile for those looking for some of the best alternative podcasts around, check out QTR's work at the following link.

Comments

boostedhorse Sun, 08/05/2018 - 14:08 Permalink

WRONG. What loss of confidence in the dollar? Who is going to lose confidence exactly and why? If you're going to say debt I'm going to laugh my ass off. It's certainly not china, nor russia, so who is it going to be? If rates rose to 4-5%, even retail investors would buy it then so there's no shortage of demand and never will be.

Free This boostedhorse Sun, 08/05/2018 - 14:15 Permalink

Duh, what now? What two crises are the same? Schiff, another broken record, consult Jacob fool.

We all know what is coming down the pike, but no one knows what it is going to look like or what ultimately causes it! And it won't just be America falling, the whole world falls! It is a GIANT SQUID!!!!

Tired of these false prophetic fools!

In reply to by boostedhorse

BigCumulusClouds beemasters Sun, 08/05/2018 - 16:46 Permalink

Schiff has been right, and he will be right again. A lot of people think he’s bearish on stocks, but he is not. He recognizes that stocks  offer protection from inflation, at least until the bubble bursts. As long as the Japs and the Europeans keep their printing presses going, that money will flow into US markets to keep the bubble growing. It may not crash before 2020. Regardless, they better have sufficient gold and silver stored in Fort Knox to stop hyperinflation. 

In reply to by beemasters

brushhog BigCumulusClouds Sun, 08/05/2018 - 17:51 Permalink

Schiff has a great grasp of Austrian economics. I think he has been right and probably will be right again about some things. However, when I listen to him I hear one big flaw in his logic that I think destroys his predictions time and again...he assumes that there are 'fundamental' market forces that will eventually show up and have their day. He talks about the "tsunami" of debt and US dollars that are going to hit the US and destroy the dollar. He may be right, but I lean towards the belief that the whole thing is already captured and rigged by a global collusion between almost every world power on earth.

There is no "US" reserve currency or "US" system. Its a global collusion between all major nations throughout Europe and Asia. Those dollars will be absorbed with one phone call. The debt can never be defaulted on because they will agree to parse it out and absorb that too. Its an agreed upon game where each nation/trading block has its role and they all play along. Its already a global, one world banking system. Free market forces on the global scale no longer exist. The only way the US goes down is for the entire modern, world banking system to collapse and in a world of floating fiat currencies, that is a very very long and difficult thing to happen.

 

In reply to by BigCumulusClouds

Oldwood brushhog Sun, 08/05/2018 - 22:22 Permalink

The economy is not money, it's people.

The 2008 crash occurred because our financial system was over-leveraged, but was precipitated by the election of Obama, which put a massive chill on most businesses in America...and the world. Socialism kills economies, and those who actually work and produce goods and services know it. While trends were declining in 07, it was not until Obama took the lead that it started dropping like a rock.

If Trump loses his republican majority in this next election, we will likely see a collapse. The left is even more radical and communist that with Obama and Business will pull back and sit on their remaining wealth under their threat.

Economy is people, our mood and expectations. Money isn't real and will change "value" with our change in perspective.

In reply to by brushhog

mkkby infotechsailor Sun, 08/05/2018 - 17:27 Permalink

He's been predicting an imminent crash and hyperinflation for 10 years.  That's just flat out WRONG.  A stopped clock gets it right once in a while, but this douche bag never does.

Now he's saying he predicted the financial crisis, but that is a lie.  In 08 he was predicting gold to the moon and hyperinflation.  I LOLed then, and I do now.  What retards like him don't understand is each time there is a global crisis, safe haven money flows into US assets.  That is an important point to understand because it is what causes the recovery.  You buy at the bottom with confidence that a river of foreign money is gonna come in and sweep you along.

In reply to by infotechsailor

mug StackShinyStuff Sun, 08/05/2018 - 14:59 Permalink

You're living in the MSM world if you don't believe that the next crises will have a compounded effect than that of 2008. Firstly govt learned nothing and allow the same players to do the same damage to society, middle class is eroding, homelessness is increasing and states around the world are the only ones buying stock with stolen money from the taxpayer. Remember every financial collapse is planned, and the purpose is evident

In reply to by StackShinyStuff

crazytechnician Free This Sun, 08/05/2018 - 19:14 Permalink

He will be wrong until he is right. That may perhaps not be in our lifetime. But he is correct. However the dollar has already collapsed 97% of it's value since 1913. So the last 3% may take a few more decades to reach zero. Just enough time to for bitcoin cash BCH to take over.

In reply to by Free This

Jaymorpheus boostedhorse Sun, 08/05/2018 - 14:24 Permalink

 I agree. There are no alternatives that will be in a position to handle trillions upon trillions of investments, let alone, few or none have the assets, or legal system to support this tidal wave of "value".

Just for instance, envision that you had to sell $500mln or $2bln dollars (an odd lot for some pension funds/ hedge funds/mutual funds) and buy any xyz currency. What would you invest in?

 

Japanese companies or bonds? European companies or bonds? Russian companies or bonds? Gold? Chinese buildings, companies or bonds?   Your going to plough all that into Swissy? Aussie? Sterling? NorKrona?

Folks, please, the alternatives are far and few between. As much as i think the fiat situation is abysmal, what are the alternatives. And before anyone pipes up cryptos, understand the amounts of value that needs to be transferred. 

 

It will happen someday, and fiats will die (watch Venezuela, Argentina, Rand, and Tur Lira for examples) but right now, i just cant see it happening to USA, and it will happen to the other G7's before USA. 

In reply to by boostedhorse

SDShack Jaymorpheus Sun, 08/05/2018 - 17:20 Permalink

100% correct, plus add the fact that the USSA Security State only exists to protect the Petro$. The USSA Security State will sacrifice EVERYONE and EVERYTHING else first before letting the Petro$ fail. It's not trade wars that are going on now. They were fought in the 90's. It's currency wars going on now, and the USSA Security State is going All-In to protect the Petro$. If they don't, everything collapses and they know it. Better to let everyone else collapse first, so the Petro$ is the last dirty rag standing.

In reply to by Jaymorpheus

mkkby SDShack Sun, 08/05/2018 - 17:38 Permalink

Jeeezus, people here are stupid.  STFU about this petro dollar nonsense.  That mattered for a short time after WWII when a new currency system was being implemented.  It has no relevance new.

I don't care if every barrel of oil traded in rubles and yuan.  It's only about $7 billion a day.  Do the math.  100 million barrels X $70 per barrel.  Daily f/x trading is about $3 trillion a day.  So explain how the fucking *petro* dollar make any fucking difference.

I really can't stand morons who just repeat what gold bug sites blather.  Think for yourself some day.

In reply to by SDShack

crazytechnician mkkby Sun, 08/05/2018 - 19:19 Permalink

Because oil is a tangeable asset that exists in the real world. Actual barrels of oil are being pumped out of the ground and being sold to consumers , supporting a global economy. You could get an FX trader to trade the same 1000 dollars back and forth a million times in one day , multiply that by 1000 traders and that makes FX a trillion dollar market , does not mean it actually transacts a trillion dollars of tangeable value , just the same small amount of money being transacted over and over again adding up into what appears to be a very large amount.

In reply to by mkkby

Jaymorpheus crazytechnician Sun, 08/12/2018 - 09:12 Permalink

Thank you Crazy for pointing out what is obvious.

This board has "its moments" and i don't begrudge millennials and young people for wanting to learn.

Seems few are humble, most trigger reactionary. Many haven't read history, or have traded bonds, FX (which I believe really opens one's eyes to geopolitics/macroeconomics more so than equities)

Advice to my children for college internships: One summer internship in Washington DC (to see how the sausage is made and laws are written by lawyers paid by K street special interest) , one summer internship in NYC/Wall Street, (to see how the top dogs control finance, how the libor, fx bond and credit markets work, and while nasty sometimes, can't argue with the global results, especially when viewing our brethren Deutsche Bank, BNP, Unicredit, etc) and one summer internship at a Fortune 500 manufacturer anywhere in the world (to see how widgets are made, the top, bottom and ROI lines are critical to survival)

 

In my opinion, if one does this...one will have invested wisely in their own "self" and will be prepared for the world and a job.  Naturally at University, get a liberal arts degree with a major that supports your "current" passion.  I say current bc kids will likely go thru 20 or 30 different rotations going forward. The world needs swift nimble thinkers, confident and knowledgable. 

In reply to by crazytechnician

thesmallwheel boostedhorse Sun, 08/05/2018 - 16:59 Permalink

The mainstream media doesn't have Schiff on anymore because "despite predicting the 2008 crash dead on", he has been wrong more often than right.

 

If you throw out 100 "the world is going to end" predictions, 1 of them will be right, even if you have a 1% accuracy rate.

 

That being said, the stock market is exhibiting "buy the dip" behavior. When this happens, stocks usually keep going up

 

https://bullmarkets.co/study-btd/

In reply to by boostedhorse

AGuy thesmallwheel Sun, 08/05/2018 - 17:19 Permalink

"he has been wrong more often than right."

yes and No. His timing has been way off, but his logic is sound: Debt is a huge problem and will lead to a bigger crisis.

My guess the crisis will come to a head during the 2020's. I think keeping a lid on the Debt will become increasing difficult, especially as entitlment & outlays soar. Plus Oil production will probably peak between 2020 and 2023. I am sure there will be a lot more QE to soften the blow, but Its probably not going to enough.

In reply to by thesmallwheel

BANKERS-WE ARE… Sun, 08/05/2018 - 14:10 Permalink

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Jack Oliver max2205 Sun, 08/05/2018 - 16:06 Permalink

Nobody has any idea of the REAL financial health of the Zio/US ! 

The FED refuses to be audited - so it will stumble on - until it causes mass hyperinflation in the food supply industry and mass deflation in the property sector ! 

All by design of course - (( They )) are not going to get their WAR - so economic collapse is a certainty !  

In reply to by max2205