Peter Schiff Warns 'Final Stages' Of Economic Collapse Are Here — 'We May Not Make It Through This Republican Administration'

In a recent podcast, Schiff warned that the country could face a crisis sooner than many expect, extending his warning to the current Republican administration.

• Schiff argued that the Federal Reserve has effectively lost its fight against inflation because the government cannot afford the interest rates that might be needed to bring price pressures under control.
• He pointed to the federal government's borrowing and spending as central to the problem, arguing that policymakers have backed themselves into a corner.
• Schiff also pushed back against the idea that higher grocery and living costs are simply the result of businesses charging consumers more.

Peter Schiff has warned that the U.S. economy is approaching the “final stages” of a collapse, arguing that Washington’s mounting debt and spending have left the Federal Reserve with little room to contain inflation.

In a recent podcast, the economist said the country could face a crisis sooner than many expect, extending his warning to the current Republican administration.

Schiff Has A Dire Warning For US Economy

The economist issued a dire warning for the U.S. economy, saying that it may not make it through in time for the next administration, or even the current one.

“We may not make it through the next Democratic administration. We may not even make it through this Republican administration,” Schiff said, warning that the U.S. could be nearing the end of its current economic cycle.

Schiff argued that the Federal Reserve has effectively lost its fight against inflation because the government cannot afford the interest rates that might be needed to bring price pressures under control.

He pointed to the federal government's borrowing and spending as central to the problem, arguing that policymakers have backed themselves into a corner, which is, raising rates enough to tame inflation would make the government's debt burden increasingly difficult to manage.

“The Fed has lost the war,” Schiff said, contending that the central bank lacks the freedom to pursue the aggressive monetary tightening that inflation would otherwise require.

Schiff Says Government Spending Is Driving The Affordability Crisis

Schiff also pushed back against the idea that higher grocery and living costs are simply the result of businesses charging consumers more. He argued that government spending and the resulting loss of purchasing power are at the heart of the affordability problem.

“We're not really paying more for food, we're paying more for government. What's not affordable is government,” he warned.

Schiff’s comments came after October inflation data showed consumer prices rising 0.4% from the previous month, above economists’ expectations of 0.3%, according to a consensus estimate compiled by MarketWatch. Core CPI, which excludes food and energy, increased 0.3%, also above the expected 0.2%.

Schiff argued that the inflation figures underscored the limits of the Fed's approach, warning that the U.S. could face a deeper economic reckoning as government spending and debt continue to mount.

During the after-hours session on Friday, the SPDR S&P 500 ETF (SPY), which tracks the S&P 500 index, fell 0.63%; the Invesco QQQ Trust ETF (QQQ) declined 0.83%; and the SPDR Dow Jones Industrial Average ETF Trust (DIA) was lower by 0.37%. Retail sentiment on Stocktwits toward the S&P 500 ETF was in the ‘extremely bullish’ territory at the time of writing.

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