Peter Schiff: We’d Be Lucky to Escape With Just a Recession
Peter Schiff recently appeared on Real America with Dan Ball to talk about the weakening US dollar, the less-than-stellar jobs report, and the trajectory of the economy.
Peter kicked off the interview with a startling statement when Dan said whether it’s oil, de-dollarization, or President Biden’s horrible economic policies, everything is pointing toward a recession this year.
We’d be very lucky to escape with just a recession. I think this is a depression. We’re probably already in it. It’s just going to get worse.”
As far as the March jobs report, Peter pointed out that one of the reasons the numbers weren’t worse is governments created around 50,000 jobs, while private sector job creation was well below estimates. And the problem with government jobs is the taxpayers get the bill.
Most of these bureaucrats aren’t producing anything. In fact, they’re making the rest of us less productive. We need private sector jobs to pay for themselves and that add to our productivity, not more government jobs that require taxpayer funding and diminish our collective productivity.”
Peter said the real threat is foreigners pulling the rug out from under the US economy. By abandoning the dollar.
That’s what makes this dysfunctional economy that we have possible. We have a trillion-dollar-a-year trade deficit. That means we import a trillion dollars-a-year worth of stuff that we didn’t make. And the only reason we can do it is because foreigners will take the paper that we print for all the stuff that they produce. But if they don’t want to do that anymore, then how is our economy going to function without all this stuff? Because we certainly don’t have the factories to produce it.”
Dan brought up the fact that mainstream journalists keep talking about the strong job market despite all of the layoffs, especially in the tech sector. Peter said it’s the good jobs that are being eliminated.
Look at the jobs that weren’t created by government. The number one is ‘leisure and hospitality.’ These are restaurants and hotels. And of course, a lot of these are people returning from their COVID absences. But these are low-paying jobs. In fact, many of the jobs that are being created are part-time jobs for the people who lost their good full-time jobs. The people who are getting laid off from these tech companies are getting two or three jobs waiting tables or working in hotels, and somehow the economy is stronger because, on a number basis, we have more jobs. But the quality of those jobs has gone down. And most people who have two or three lousy jobs — they would rather have one good-paying job. But unfortunately, they no longer have that option.”
Peter reiterated that we are in the early stages of another financial crisis that will ultimately be worse than 2008.
We have a much bigger problem today than we had then, and the consequence is a much larger financial crisis now than the one we had then. It’s going to end, I believe, with an all-out US dollar currency and sovereign debt crisis. And then, inflation is going to explode through the roof.”
Peter noted that many more banks would have failed if the government hadn’t bailed them out. In fact, the collapse of Silicon Valley Bank and Signature Bank was just the tip of the iceberg.
Unfortunately, they’re not going to let them fail. They’re going to print a bunch of money and create inflation instead. So, instead of losing your money at the bank because your bank fails, your bank won’t fail. It’s going to get bailed out. But your money that’s at the bank is going to lose its value. So, yeah, you can go to your bank and take out your money, but then take it to the grocery store or gas station — you’re not going to buy very much.”
So, can this ship be righted to avoid some of the worst pain?
Peter said there is nothing we can do to avert this. We’re going to have to suffer the consequences of decades of bad policy.
The only way that we can minimize the pain, accelerate the healing of the economy and rebuild something viable is if the government gets completely out of the way. We need a massive reduction in the size of government. Government needs to cut spending across the board and repeal all sorts of rules and regulations to liberate the economy – unshackle it from government taxation and regulation so we can dig ourselves out of this ditch that decades of central planning and central banking have placed us in.”