Will the good times keep on rolling or will the party come to an end? According to Peter Schiff, the United States economic recovery will soon cease and then head into a recession causing the Federal Reserve to relaunch another edition of quantitative easing.
Speaking in an interview with Newsmax last week, Schiff explained the strength of the U.S. economy and the falling oil prices will eventually reverse. The bestselling author of “Crash Proof” has repeatedly iterated this stance before.
“The U.S. economy is headed to a recession, which means we’re going to get more QE [quantitative easing], not a rate hike; the dollar is going to turn around; and oil prices are headed back higher,” said Schiff. “All the money printing from the Fed is going to help stimulate the global economy and that will feed the demand for oil worldwide.”
Although the general consensus on Wall Street has been that the U.S. central bank will raise interest rates in the middle of next year, there are already hints coming from the mouths of Fed officials that this may not actually happen (SEE: Economists are constantly wrong about Federal Reserve interest rate hikes).
Schiff averred that what’s really causing the drop in oil prices is the “global economic slowdown, the relative strength of the dollar and the belief that the dollar is going to keep rising.” This makes sense considering three of the 10 largest economies of the world have headed back into a recession, and the emerging markets have experienced a downward trend.
However, he does believe this trend of diminishing oil prices is a reprieve since price inflation is rampant, something the federal government or the Fed don’t want to admit to the general public (SEE: Chart: Price inflation in double digits since 2008 economic collapse).
This is a downside, though, says Schiff. And that’s the impact on the U.S. energy industry.
“It [energy] has been one of the lone bright spots in an otherwise a dismal economic landscape, and oil prices at $60 a barrel, even where they are now, is not good news for the U.S. oil industry,” Schiff added. “You would have to look for some cutbacks in production and some layoffs in those sectors, which would provide some downward pressure on the economy as well.”
The economic statistics being reported are so seriously inaccurate a to be useless. This would become the fourth collapse of the federal reserve system, Actual inflation has eliminated any real profit on the higher stock prices due to this inflation. The 1957 100 federal reserve now is now worth 3.48 in purchasing power. It has no intrinsic value and has nothing to back it up. There have been three previous terminations of the federal reserve system caused by inflation and loss of purchasing power. This next collapse would include default itself on the debt
Inflation does not create demand. Fiat currency does not create larger demand. The economy is crumbling.