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

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Economist Peter Schiff expects many more banks to fail, warning that no one’s money is safe at any bank. He pointed out: When the Fed sets interest rates too low and prints a lot of money, it triggers massive inflation, creates huge economic imbalances that lead to financial crises and depressions when the bubbles burst.

Peter Schiff on the tsunami of inflation, financial crises, depressions and bank failures

Economist and gold bug Peter Schiff discussed the US banking crisis and the direction the US economy is heading in an interview last week on One America News Network.

Citing the mess the Fed has created by keeping interest rates so low for so long, Schiff explained that this allows banks to load up on low-yielding and overvalued long-term debt, Treasuries, [and] mortgages. Additionally, he pointed out that the government and regulators are pushing banks “towards these securities with favorable accounting treatment for government securities or anything backed by the US government. He warned:

Many more banks will fail. This is just the reality.

Commenting on the Federal Deposit Insurance Corporation (FDIC) considering how it might change coverage for regional banks after the failure of several major banks, Schiff suggested: How about abolishing the FDIC and letting the free market handle banking . We would have a much stronger banking system if depositors knew that their deposits could be lost to a bank that was reckless and took a lot of risk, and then those banks would be under competitive pressure not to take that kind of risk.

Noting that the source of the US banking crisis is that we socialized the banking sector, Schiff detailed: We also socialized interest rates because the Federal Reserve is like a Polit Bureau. They simply choose an interest rate rather than letting the market discover the appropriate rate. The economist said:

When the Fed sets interest rates too low and prints a lot of money to make it possible, it triggers massive inflation, creates huge economic imbalances that result in financial crises and depressions when the bubbles burst. This is where we are now.

Schiff added: I think the Fed is going to have to trigger so much inflation to try to prop up all these banks, and the US government, which is also insolvent. This will trigger runaway inflation. This is the real problem. He warned:

Nobody’s money is safe in any bank because even if your bank doesn’t go bankrupt, it will be bailed out by inflation. So you may not lose your money, but your money will definitely lose its purchasing power.

Regarding the Federal Reserve’s 25 basis point interest rate hike at its latest Federal Open Market Committee (FOMC) meeting, Schiff said bringing inflation down was not enough. , but that was enough to create more problems for the banks and anyone else who has debt that they need to repay.

He explained that many businesses and individuals, especially those with commercial real estate, took out short-term loans at very low rates a few years ago. As these loans come due, they cannot afford higher payments. They have less income and now their interest costs are going up, Schiff explained. In addition, many companies that have borrowed in the junk bond market will not be able to afford to service their debt at the new rates once those bonds mature, he noted, noting:

Thus, the essence of this financial crisis, which has just begun, concerns our future. We were just at the tip of a huge iceberg right now.

As for where people should put their money, Schiff advised, “Get out of the dollar. Get out of the banks and into something real, be it gold, silver, foreign stocks. You have to look for a port in the storm because it’s a tsunami of inflation.

What do you think of economist Peter Schiff’s warning? Let us know in the comments section below.

Kevin Helms

An economics student from Austria, Kevin discovered Bitcoin in 2011 and has been an evangelist ever since. His interests include Bitcoin security, open source systems, network effects, and the intersection between economics and cryptography.

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