Peter Schiff Warns Americans Are More Worried Now Than During 9/11, 2008 Crash And COVID — Calls Trump’s ‘Greatest Economy’ Ever Claim ‘Pure Fiction’

Schiff pointed to the latest consumer sentiment data, which showed sentiment falling to 46.3 in October from 48.1 in September.

• Schiff argued that voters are increasingly blaming the Trump administration for economic conditions rather than continuing to blame former President Joe Biden.
• He said the strength of financial markets is masking the pressure being felt by households without substantial investments.
• Schiff pointed to rising loan delinquencies and debt-to-income ratios as signs that consumers are struggling despite the strong stock market.

Americans are more worried about their finances than at any point in the University of Michigan’s 75-year consumer survey, according to economist Peter Schiff, who says the data directly contradicts President Donald Trump’s claims that the U.S. economy is the strongest in history.

Schiff pointed to the latest consumer sentiment data, which showed sentiment falling to 46.3 in October from 48.1 in September, while one-year inflation expectations rose to 4.7%, from 4.6% in September.

Schiff Says Americans Have Never Been This Worried

The biggest warning, according to Schiff, came from the survey’s current conditions index, which hit a record low.

“Not once during these 75 years were Americans as worried about their personal finances as they are right now,” Schiff said.

That period includes the Korean War, the Cuban Missile Crisis, the Vietnam War, the 1970s oil crisis, the Gulf War, 9/11, the 2008 financial crisis and the COVID-19 pandemic.

“Yet throughout all of that, all that bad stuff, the consumer wasn't as worried as he is today,” he said. Schiff argued that the data is particularly difficult to reconcile with Trump’s repeated claims that the economy is booming.

“Donald Trump says the economy has never been better in history. So apparently, even though we have the greatest economy we've ever had, consumers are more worried about their own personal economic circumstances than they've ever been,” he added.

“The idea that we have a great economy is pure fiction.”

Schiff also argued that voters are increasingly blaming the Trump administration for economic conditions rather than continuing to blame former President Joe Biden.

Schiff Says ‘Families Are Struggling’ Despite Record Stock Prices

Schiff said the strength of financial markets is masking the pressure being felt by households without substantial investments.

He pointed to rising loan delinquencies and debt-to-income ratios as signs that consumers are struggling despite the strong stock market.

“If times were good, people's incomes would be rising. Their debt would be falling relative to those rising incomes,” Schiff said. “But the fact that the debts are rising, it's because incomes are not rising. Families are struggling.”

At the same time, Schiff noted that older Americans have benefited significantly from rising asset prices.

“Why are these retirees that don't even have jobs? Why are they getting so rich? Because they own stocks,” he said.

Schiff argued that the same monetary policies that have pushed asset prices higher have also contributed to rising living costs.

“Yes, Trump is right about that. We got a bull market. We have record high stock prices. But it's the same bad monetary and economic policies that are driving the cost of living up and that are undermining the economy that are also responsible for inflated asset prices,” he added.

Schiff Warns Higher Rates Are The New Normal

Schiff's biggest concern is what happens when elevated interest rates collide with America’s enormous debt burden. He argued that investors have become conditioned to believe that the ultra-low rates seen after the 2008 financial crisis were normal.

“People are delusional when they think that what we're seeing now is the aberration. No, we've been living in the aberration,” Schiff said.

He believes the economy is now moving back toward historically higher rates, which creates a serious problem for the U.S., he argued, because government debt is far higher than it was during previous periods of elevated rates.

“We are in a position where we have high debt and high interest rates. In fact, we have higher debt than we've ever had and we may end up with higher interest rates than we've ever had,” Schiff explained.

Schiff therefore expects Treasury yields to remain under pressure even as many investors continue to bet that rates will eventually fall back toward the levels seen over the past decade.

“We are normalizing right now with rates going up,” Schiff said.

During the after-hours session on Friday, the SPDR S&P 500 ETF (SPY), which tracks the S&P 500 index, was flat; the Invesco QQQ Trust ETF (QQQ) edged up by 0.01%; and the SPDR Dow Jones Industrial Average ETF Trust (DIA) rose 0.02%. Retail sentiment on Stocktwits toward the S&P 500 ETF was in the ‘bullish’ territory at the time of writing.

The iShares 20+ Year Treasury Bond ETF (TLT) gained 0.14% on Friday, while the iShares 7-10 Year Treasury Bond ETF (IEF) slipped 0.06%.

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