Peter Schiff Warns the US Economy Is Unraveling Fast, with Soaring Debt, Rising Inflation, and Systemic Banking Risks Pointing to a Recession

Economist and gold advocate Peter Schiff issued a dire warning on April 18 during an interview on the Schwab Network, cautioning that U.S. economic policies are setting the stage for a catastrophic downturn.

Economist and gold advocate Peter Schiff issued a dire warning on Monday during an interview on the Schwab Network, saying he believes the U.S. is headed for a recession that could be worse than the Great Depression.

Schiff made the stark predictions as he discussed the economic impact of tariffs, which he slammed as a "stupid idea."

The economist was discussing the bleak employment and economic outlook for the U.S. as a result of what he described as "tariffs, tariffs, tariffs."

Pointing out that the recession President Donald Trump inherited from his predecessor is already "much worse" and is going to get "much worse" as a result of these "misguided tariffs," Schiff said: "This is going to be the worst recession since the Great Depression. It may be worse than the Great Depression. It depends on the mistakes that we make during this recession. It’ll certainly be worse than 2008-2009, the Great Recession, and it’s probably going to include a financial crisis that will be worse than the 2008 financial crisis."

Discussing recent employment data, which some economists have highlighted as a sign of continued economic growth, Schiff argued that the labor gains were a product of rising distress among Americans, who are juggling multiple jobs and racking up credit card debt just to make ends meet.

However, he stated that all the jobs created last year were part-time positions filled by individuals who could no longer pay their household expenses with a single job.

"So, they went out and got a second job, but they couldn’t really make ends meet with two part-time jobs either, so they started charging everything on their credit cards. And when they couldn’t pay their credit card bills, they got a third job," explained Schiff.

According to the gold advocate, many Americans are now working multiple jobs and have maxed-out credit cards, not to improve their lifestyles but simply to survive economically.

But Schiff claimed that tariffs will worsen inflation by increasing the price of imported goods, leading to a collapse in retail spending, followed by "massive layoffs, bankruptcies, in the retail sector, a lot of defaults."

Another major concern highlighted by Schiff is the ongoing capital flight from U.S. financial assets, which he said is driving up interest rates.

This escalation, combined with the surging prices due to tariffs, could precipitate an “inflationary recession,” according to the economist, who elaborated that without imports, the U.S. economy would crumble within a few weeks.

However, he pointed out that the U.S. is becoming increasingly reliant on goods and services from other countries, and this is a direct consequence of the administration’s economic policies, which have been pushing inflation and capital out of the U.S. financial markets.

Schiff further explained that a previous trend saw monetary policy pushing inflation abroad while preserving asset prices domestically. But he noted that this pattern is now reversing.

As inflation moves from Wall Street to Main Street, it will affect both low- and high-income groups, impacting their purchasing power and ability to maintain their standard of living, the economist warned.

"He’s doing it even worse than I thought he would," said Schiff of Trump's handling of the economy.

The economist predicts that if the Federal Reserve resumes quantitative easing, it will spark a rapid drop of 20%-30% in the dollar.

"It’s going to be an even bigger decline but, for the dollar, the worst thing that can happen is the Fed steps in and goes back to QE to bail out the economy, to bail out the bond market, to stop this coming financial crisis. If the Fed does that, the dollar is going to implode, so it could drop another 20%-30% very quickly," Schiff stated.

"Our entire banking system is insolvent … Every single bank in this country will fail if we have a recession with rising interest rates and that’s exactly what we’re going to have."