Economist Peter Schiff Says Fed Policies Significantly Harm Economy — Warns of More Inflation

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Economist Peter Schiff has warned that the Federal Reserve has gotten its policies wrong for 20 years, which has “significantly harmed the economy and made dire consequences inevitable.” Emphasizing that the Fed cannot win its fight against inflation, he stressed: “The markets are confident that the Fed is going to pull this off. It’s not going to happen. The markets are completely wrong.”

Peter Schiff Says ‘We’re Going to Have More Inflation’

Economist and gold bug Peter Schiff issued more warnings about the U.S. economy over the past week in a series of posts on the X platform and on the Peter Schiff Show. Emphasizing “how badly the Fed has screwed up monetary policy,” Schiff wrote Monday:

Not only have they gotten it wrong for 20 years, but their policies have significantly harmed the economy and made dire consequences inevitable.

He explained that many people are wrong in thinking that the Federal Reserve can beat inflation and guide the U.S. economy to a soft landing, asserting that the central bank cannot win.

Referencing the Federal Reserve Bank of Atlanta revising its estimate for real GDP growth (seasonally adjusted annual rate) in the third quarter using the GDPnow model to 5.8% on Aug. 16, Schiff exclaimed: “5.8%, that isn’t landing at all. That’s the plane still up there in the air. You’re not landing at 5.8%. You’re not even close to the runway.”

He stressed: “Now, a lot of people would think if the economy is this strong, well, the Fed can’t cut. In fact, the Fed has to hike.” Schiff cautioned:

We’re going to have more inflation. Because you still have all these Keynesians out there who think that inflation is a byproduct of economic growth, and if we’re going to have this booming economy, well, then we’re going to have the trade-off of higher inflation.

The economist continued: “As if slowing the economy is what’s going to bring down inflation. It’s not. The truth is if they really want to bring down inflation, the consequence is going to be that the economy weakens. It has to, because we have a bubble economy that is based on debt. Everybody is loaded up with debt and it’s all based on excess consumption. The American economy is about spending more than you earn. We have elevated that to an art form.”

Schiff, who owns Schiffgold, a precious metals dealer specializing in gold and silver bullion, proceeded to comment on the price of gold. “The only thing that’s keeping gold from exploding is this idea that the Fed is going to succeed in bringing inflation back to 2% and a soft landing.” The economist concluded:

The markets are confident that the Fed is going to pull this off. It’s not going to happen. The markets are completely wrong. And so gold is priced for something that is not going to happen.

Do you agree with economist Peter Schiff regarding the U.S. economy? Let us know in the comments section below.