Washington – Since the world has failed to learn any lessons from the recession of 2008, another dangerous economic crisis looms large and the failure of the US dollar will result in a situation which will be much worse than the earlier crisis, warned economist and a veteran investor Peter Schiff.
Schiff claimed that the root cause of the new financial crisis will be the huge debt over the US economy. Schiff is known as the economist and investor who had raised an alarm about the economic crisis that had pushed the whole world, including the United States into a recession, a decade ago. Therefore, this warning issued by him holds much significance.
The world was hit by a severe recession in 2008 due to the ‘Subprime mortgage crisis’ in the United States. Peter Schiff said that the global economy has still not rectified the mistakes of 2008 and warned of an impending economic crisis. ‘The too big to fail banks which were saved from collapsing completely, are now both bigger than ever and more exposed than ever to rising rates and recession. So the systemic risks to the economy are greater now than they were in 2008,’ warned Schiff.
‘Citing moral responsibility the government made the mistake of bailing out the banks that should have been allowed to fail’, claimed Schiff. ‘Unfortunately, no lessons were learnt from the previous crisis. We repeated and expanded all the mistakes that caused the last crisis, ensuring the next one will be much worse,’ was the serious warning issued by Schiff.
US economists have warned that an even worse monetary and fiscal policy adopted since the last crisis guarantees the next crisis to be much grimmer. Peter Schiff also adds that the new financial crisis will have the government as the cause which will take everyone by surprise. At the same time, the new financial crisis will be a bit different as compared to the previous one.
‘Treasury debt will be the focal point of the next crisis, and the dollar will collapse while the gold prices will soar. The ensuing recession will be much worse as consumer prices will also rise sharply,’ warned Schiff.
A few months ago, Schiff had claimed that the trade war will be harmful to the United States and the US dollar would collapse.