Following the Federal Reserve’s rate hike on Wednesday, economist Peter Schiff has had a lot to say since the Federal Reserve raised interest rates by half a percentage point. Schiff continues to believe we are in a recession, saying, “It’s going to be a lot worse than the Great Recession that followed the 2008 financial crisis.”

Peter Schiff says: “The Fed can’t win a battle against inflation without triggering a recession”

While many analysts were shocked by the Federal Reserve’s move as it was the biggest rate hike since 2000, a report from schiffgold.com says the hike was hardly “aggressive” and resembled a “weak bounce that looks more like shadow boxing.” .” Additionally, the report explains that Powell’s comment this week included some “subtle changes” that suggest “some economic turmoil may be on the horizon.”

Peter Schiff doesn’t believe the Fed can overcome the current inflationary pressures America is struggling with today. “Not only can the Fed not win a battle against inflation without triggering a recession, it also cannot without triggering a far worse financial crisis than that of 2008,” Schiff said explained on Thursday. “Worse, a war on inflation cannot be won if there are any bailouts or stimulus to ease the pain,” the economist added.

Schiff’s comments come the day after the Fed hiked the federal funds rate to 3/4 percent to 1 percent. After the rate hike, the stock market made a big leap and fully recovered from the previous day’s losses. Then, on Thursday, stock markets shook, and the Dow Jones Industrial Average had its worst day since 2000. All major stock indexes suffered on Thursday, and cryptocurrency markets saw similar declines.

“If you think the stock market is weak, now imagine what will happen when investors finally realize what’s ahead,” Schiff said tweeted on Thursday afternoon. “There are only two options. The Fed is doing what it takes to fight inflation and create a far worse financial crisis than 2008, or the Fed will let inflation run away.” Schiff continued:

The Fed caused the 2008 financial crisis by keeping interest rates too low. Then it swept its chaos under a rug of inflation. Now that the inflation chickens it released are coming home to settle, it must create an even bigger financial crisis to clean up an even bigger mess.

Schiff criticizes Paul Krugman, Fed tapering includes monthly caps

Schiff is not alone in believing that inflation cannot be tamed, as many economists and analysts share the same view. The author of the best-selling book, Rich Dad Poor Dad, Robert Kiyosaki recently said that hyperinflation and depression are here. Noted hedge fund manager Michael Burry tweeted in April that the “Fed has no intention of fighting inflation.” While Schiff criticized the Federal Reserve, he also railed against American economist and public intellectual Paul Krugman.

“Back in 2009 [Paul Krugman] foolishly claiming QE will not create inflation,” Schiff said called. “Aside from the fact that QE is inflation, Krugman was quick to accept that he didn’t understand the lag between inflation and rising consumer prices. CPI is poised to explode higher.” Additionally, schiffgold.com writer Michael Maharrey also scoffed at the Fed’s recent tapering announcement. Maharrey went on to explain how the Fed plans to reduce Federal Reserve holdings of securities over time.

“As for the nuts and bolts of balance sheet shrinking,” Maharrey said, “the central bank will allow up to $30 billion and August.” That’s a total of $45 billion per month. In September, the Fed plans to increase the pace to $95 billion per month, with the balance sheet losing $60 billion in Treasuries and $35 billion in mortgage-backed securities.”

tags in this story

2008 Financial Crisis, Central Banks, Crypto, Dow Jones, Economic Downturn, Fed, Fed Chair, Fed Tapering, Federal Reserve, Gold, Great Recession, Inflation, Inflationary Pressures, Jerome Powell, MBS, Money Supply, Paul Krugman, Peter Schiff, QE, Rate Hike, Ship, Ship Gold, Stocks, Fed, US Economy, US Treasuries, Wall Street

What do you think of Peter Schiff’s recent comment about the Fed fighting inflation and raising interest rates? Let us know what you think about this topic in the comment section below.

Jamie Redman

Jamie Redman is the news director at Bitcoin.com News and a Florida-based financial technology journalist. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for bitcoin, open source code and decentralized applications. Since September 2015, Redman has written more than 5,000 articles for Bitcoin.com News about today’s emerging disruptive protocols.




photo credit: Shutterstock, Pixabay, WikiCommons

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