Famous economist Peter Schiff makes a rather pessimistic forecast for the current banking crisis. The prominent gold investor has put forward a scenario that goes beyond the 2008 financial crisis.
Peter Schiff states that after the bank failures, the Fed gave up its fight against inflation. The famous investor points out that every rescued bank will come out of the pockets of US citizens as inflation.
Schiff reported that the banking crisis was caused by government intervention and will only get worse:
“The government introduced many new banking regulations after the 2008 financial crisis. We made sure that what happened now would never happen again. But one reason we experienced the 2008 financial crisis was because there was so much government intervention. Therefore, the current crisis will only get worse.”
According to Schiff, a former bank owner, the market response to the current banking crisis is unlike 2008. The famous gold investor reported that the inflation environment, unlike the past, brought gold to the fore. The head of Schiff Gold points out that the Fed’s move to QE to bail the bank is starting to take its toll:
“This time is different. When the 2008 Financial Crisis began, the dollar rose and gold fell. This time it’s the opposite because investors realized that high inflation that should have hit ten years ago will hit even harder now!”