Money manager Peter Schiff, the CEO and chief global strategist of Euro Pacific Capital Inc., was one of the few warning of the impending financial market collapse in 2008, and now he’s warning of an impending calamity even worse than the Great Recession.

According to a recent article on, Schiff believed the markets wouldn’t allow the Federal Reserve to reflate the bubbles in the housing and stock markets after the Great Recession, a belief that ended up being wrong.


“I was kind of a fixture on financial cable TV giving these warnings. My thought was the bubble would burst, and I knew that it would. Once the housing bubble burst and we had this financial crisis, I knew it would follow along with the Great Recession. I thought the Federal Reserve would try the best it could to reflate the bubbles in the stock markets and housing markets.

“But my thought was that their efforts would fail. The markets would not allow it and that a dollar collapse would intervene and would prevent new debt from being issued to fully reflate those bubbles. I was actually wrong. They didn’t just try to reflate the bubbles, they actually succeeded in blowing them bigger than ever.”

And now a decade later, Schiff is sounding the alarm again, though this time he expects the collapse to be even worse.

The problem is now we are on the precipice of a much bigger crisis than before. The next time, if they try to reflate those bubbles, which they will, it will be a spectacular failure because the markets are now prepared for the opposite. Everybody, right now, assumes the Fed is going to be able to keep raising rates. They assume they are going to shrink its balance sheet and that we have this booming economy that will never bust. When the Fed has to reverse course abruptly, acknowledge the underlying weakness that everybody has been oblivious to and they start cutting rates and launching another round of quantitative easing (money printing), I think the dollar is going to fall through the floor.

“I think the inflationary fires that are already burning pretty hot are going to ignite. It’s not going to be like 2008 where the dollar went up and consumer prices inched down a little bit. I think the dollar is going to tank and consumer prices are going to soar, and it’s going to be stagflation. When the markets get a whiff of that, they are not going to like the way it smells. It is going to create a dollar crisis. I think the Fed has put itself between a rock and a hard place. There is no way out this time … . This time, you really have to be positioned because this time is going to be the end of it. This is not going to be a hat trick or third time is a charm when it comes to reflating these bubbles.”

So what is Schiff’s solution to help you protect yourself and your nest egg? The old standby: gold.

“People are going to be dumping their dollars and buying gold … . If you understood what the Fed was doing, you would be buying gold, but most people don’t understand. You can look at what has happened to gold prices in terms of other currencies, such as emerging markets. Obviously, gold prices in those countries measured in those currencies have gone up dramatically. So, gold has acted as a store of value and a store of purchasing power in every country where the currency has come down. The same thing is going to hold true of the United States … . We could do a reset. We could go back to sound money. We could go back on a gold standard, and we could devalue the dollar officially. I don’t know exactly how high the price of gold would have to be, $10,000 per ounce, $20,000 per ounce, who knows, but there is a price where we could go back to a gold standard. If we want to stay on a gold standard, that means the government would have to live within its means. That’s why governments hate gold standards because it provides discipline to government.”