‘We’re going to have to have a severe recession if we’re ever going to build a viable economy’: Here’s why one market expert says the US is doomed to default on its debt no matter what
Peter Schiff, the outspoken CEO and president of Euro Pacific Capital, thinks the gargantuan amount of debt the US is carrying is primed to default.
He calls repayment “impossible” and sees this mess ending in either an “honest” or “dishonest” default.
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For one reason or another, the towering amount of debt the US has racked up over the years seems to be of little concern to market participants and politicians alike.
Currently, that figure tops $22 trillion — and is growing fast. What’s more, as modern monetary theory continues to gradually inch its way towards the limelight, some are even questioning if it matters at all.
Peter Schiff, the outspoken CEO and president of Euro Pacific Capital, is passionately on the other side of that debate — and he thinks that the US’ frivolous spending and money-printing is going to culminate in a cataclysmic scenario.
“The economy is getting sicker,” he said on Off the Chain, a digital assets podcast. “And that’s what the central banks are doing when they cut rates and they print money — they’re actually making the underlying economy sicker, even though it doesn’t look sicker because they’re just measuring the spending that goes on and they’re ignoring the debt that’s behind it.”
But that debt is important. After all, it eventually has to be repaid.
In Schiff’s opinion, the Federal Reserve’s affinity for printing money is going to result in runaway inflation — and as a result, he expects a massive exodus from the greenback.
“If the inflation rate is 4% or 5%, compounding — and you’re getting 0% interest on your dollars — that’s a one way ticket to a disaster,” he said. “I think inflation is going to break out all around the world.”
Put briefly, Schiff thinks …read more
Source:: Business Insider