Economist Peter Schiff Says ‘Nobody’s Money Is Safe in Any Bank’ — Warns of Financial Crises, Depressions

Economist Peter Schiff expects much more banks to fail, warning that “nobody’s money is safe in any bank.” He harassed: “When the Fed sets interest rates too low and prints a lot of money … it unleashes massive inflation, creates tremendous economic imbalances that result in financial crises and depressions when the bubbles burst.”

Peter Schiff on Inflation Tsunami, Financial Crises, Depressions, and Bank Failures

Economist and gold bug Peter Schiff mentioned the U.S. banking disaster and the place the U.S. economic system is headed in an interview final week on One America News Network.

Citing “the mess that the Fed made by keeping interest rates so low for so long,” Schiff defined that it enabled banks to load up on “low yielding, overpriced long-term debt, treasuries, [and] mortgages.” Moreover, he harassed that the federal government and regulators push banks “into these securities with favorable accounting remedy for presidency securities or something assured by the U.S. authorities.” He warned:

Much more banks are going to fail. This is simply the fact.

Commenting on the Federal Deposit Insurance Corporation (FDIC) considering how they could tweak the protection for regional banks after a number of main banks failed, Schiff prompt: “How about abolishing the FDIC and let the free market handle banking. We’d have a much more solid bank system if depositors knew that their deposits could be lost at a bank that was reckless and took a lot of risks, and then those banks would be under competitive pressure not to take those kinds of risks.”

Noting that the supply of the U.S. banking disaster is that “We socialized the banking industry,” Schiff detailed: “We’ve also socialized interest rates because the Federal Reserve is like a Polit Bureau. They just pick an interest rate rather than allowing the market to discover the appropriate rate.” The economist opined:

When the Fed units rates of interest too low and prints some huge cash with a purpose to make that doable, it unleashes large inflation, creates large financial imbalances that lead to monetary crises and depressions when the bubbles burst. That’s the place we’re proper now.

Schiff added: “I think the Fed is going to have to unleash so much inflation to try to prop up all these banks, and the U.S. government, which is also insolvent. That is going to unleash runaway inflation. That is the real problem.” He cautioned:

Nobody’s cash is secure in any financial institution, as a result of even when your financial institution doesn’t fail, it’s going to be bailed out by way of inflation. So, you won’t lose your cash, however your cash will certainly lose its buying energy.

Regarding the Federal Reserve elevating rates of interest by 25 foundation factors at their newest Federal Open Market Committee (FOMC) assembly, Schiff acknowledged that it isn’t sufficient to carry down inflation however “it is enough to create more problems for the banks and anybody else that has debt that they have to service.”

He defined that numerous corporations and other people, notably those that personal business actual property, took out short-term loans at very low charges a number of years in the past. As these loans mature, they can’t afford greater funds. “They have less revenue, and now their interest expenses are rising,” Schiff described. In addition, many corporations that borrowed within the junk bond market are usually not going to have the ability to afford to service their debt on the new charges as soon as these bonds mature, he famous, emphasizing:

So, the majority of this monetary disaster, which simply bought began, is in our future. We’re simply on the tip of an enormous iceberg proper now.

Regarding the place folks ought to put their cash, Schiff suggested: “Get out of the dollar. Get out of banks, and get into something real, whether it’s gold, silver, foreign stocks. You have to look for a port in the storm because this is an inflation tsunami.”

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