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everybody is wrong I mean they're more wrong than they were in the summer of 2008 when everybody thought it was a Goldilocks economy and we were in the worst recession since the Great Depression remember that depression or that recession started in December of 2007 but the government didn't acknowledge its existence for a year it wasn't until December of '08 that the government said you know what we've actually been in a recession for an entire year and in fact it's the worst one since the Great depression so all the economic data that we've been spoon feeding the markets for the past year has been wrong and everybody who thought we had a good Economy based on that data uh was wrong in fact we were in a severe recession and we had a financial crisis I think the economy is worse now than it was then in this video Peter Schiff delivers a stark warning about the current state of the economy challenging prevailing optimism in the markets drawing parallels to the period preceding the 2008 great recession shiff presents a compelling narrative supported by historical insights and current economic indicators shift Begins by pointing out the widespread misconception about the strength of the economy emphasizing that economic data has often been misleading he recalls how the severity of the 2007 to 2008 recession was not acknowledged by the government until a year after it began highlighting the dangers of relying solely on official economic reports according to Schiff the econom economy is now in a worse State than it was before the 2008 recession he coins the term greater recession to describe the expected severity of the impending downturn shiff identifies persistent inflation High consumer borrowing and significant government spending as key factors contributing to the economic challenges ahead contrary to the belief that inflationary pressures are easing Schiff argues that inflation remains a significant threat he points to recent Consumer Price Index CPI data and Trends in commodity prices such as oil as evidence of ongoing inflationary pressures despite the Federal Reserves interest rate hikes consumer borrowing and spending continue unabated highlighting a disconnect between monetary policy measures and their intended effects shiff critiques the Federal Reserve strategy in handling inflation and economic growth suggesting that the central bank is in a dilemma while it needs to raise interest rates to combat inflation doing so risks triggering a severe recession due to the fragile state of the economy Schiff believes this predicament exposes the limitations of the Federal Reserves policy toolkit and warrants of the potential for a crash landing instead of a soft Landing moreover shiff argues that expansionary fiscal policies marked by high government spending and deficits are exacerbating the inflation problem rather than alleviating it he criticizes the government's failure to implement contractionary fiscal policies IES in response to inflationary pressures highlighting the contradictory nature of fiscal and monetary policies uh I think the recession that we're going to be living through uh and it's probably already begun is going to be far worse than the Great Recession so it's going to be a greater recession and what's going to compound the problem is going to be inflation which is not dead and buried as the markets believe it's alive and well and today's uh numbers from Jan AR CPI uh you know support that that view uh inflation is headed back up in fact if you annualize the core number that came out today it's 5% uh you know the the headline is running closer to 4% I think it was 3.7 if you annualize it but look at what's happening to oil prices uh they're moving back up uh bond yields are rising sharply again but I I I think the real key is is that the fed's rate hikes did nothing to reduce consumer borrowing or spending consumers continue to spend and borrow even though credit card interest rates are at an all-time record high they're above 20% credit card balances are at an all-time high consumers are not responding to higher interest rates by reducing their borrowing and spending and they're not saving more which is what they have to do uh savings is still falling and look at the government government budget deficits are rising in the face of rising interest rates so the government is not uh cutting back on its spending so the FED has done nothing to put out the inflation fire that it lit so the markets have got this thing totally wrong there is no soft Landing there's a crash landing in fact the markets don't even think there's going to be a landing they think we've avoided in recession altogether but we're going to have a severe recession depression if we're not already there and inflation is going get worse the entire time which is going to not only compound the severity of the recession but expose the the the the the paper tiger that the FED is because the FED is not going to be able to raise interest rates in the face of a resurgent inflation because the economy can't handle it I mean I think that's the main reason that pal pivoted it's not because he won the inflation fight it's because he realized that if he kept fighting uh the economy would be a collateral damage we'd have a financial crisis uh and everything would collapse beneath the weight of those rising Rising rates we've had an easy uh policy an inflationary policy the entire time the fed's been tightening I mean yes the FED has been less loose but I don't believe that less loose constitutes tight but the entire time the Fed was being less loose the government uh was loose I mean because you have an expansion Ary monetary policy even if you look at the Keynesian textbooks which you know are worthless but even according to KES if you have an inflation problem the government needs to raise taxes cut spending it needs to have some type of contractionary um fiscal policy the type of fiscal policy that we've been running for the entirety of the fed's inflation fight has been the classic Keynesian stimulative policy that you're supposed to run when your problem is recession and you're not concerned about inflation so these have been diametrically opposed policies and anytime pal gets asked about it or doesn't even get asked about it anymore if he's asked to comment about these you know government spending and budget deficits he says hey I can't talk about that that's not in my Lane he says I'm only concerned about monetary policy but he can't be because it the fiscal and monetary policy go hand in glove you can't be oblivious to the the spending because the reason that you know money supply growth or low interest rates the reason that uh causes prices to rise is because it it fuels demand and there's not enough Supply and so prices go up but government spending also fuels demand and so does credit I mean the entire time that Pal's been looking at interest rates he's been oblivious to the credit markets because credit Contin continues to expand and if you go back to the classic definition of inflation it's not just an expansion of the supply of money it's an expansion of supply of credit because you can buy without money if you have credit credit can also fuel demand and and and so we we've been spending and spending the only thing that really brought down the the CPI was a we had a huge Spike right so nothing goes in a straight line but it was the anticipation of the rate hikes that brought the dollar up the dollar gained about 30% against you know Global currencies that brought down import prices that brought down oil prices and that helped bring down headline number but that's a transitory effect I think oil prices have already bottomed that are turning back higher and and bond yields too bond yields came down uh that helped bring mortgage rates down but now they're going the other way bond yields are rising again uh and and so uh that's going to put more upward pressure on rents because now buying a home becomes that much less affordable uh so all all the factors are now operating in reverse and the markets are completely clueless they're positioned the wrong way so it we're in a very dangerous point for equities bonds everything because everybody is betting on an outcome that is not going to happen in conclusion shiff emphasizes the dangers of misplacing optimism in the markets and urges investors to reassess their positions he warns that the economy is heading for a severe downturn compounded by Rising inflation and ineffective policy responses shift's critique of a current economic landscape ERS scores the need for a more cautious and informed approach to investing in uncertain times if you found this analysis insightful consider subscribing to our channel for more updates and commentary on economic Trends your engagement and feedback are invaluable as we navigate the complexities of today's Financial landscape
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