Economist Peter Schiff Says ‘Nobody’s Money Is Safe in Any Bank’ — Warns of Financial Crises, Depressions – Economics Bitcoin News

Economist Peter Schiff expects a lot more banks to fail, warning that “nobody’s money is safe in any bank.” He stressed: “When the Fed sets interest rates too low and prints a lot of money … it unleashes massive inflation, creates tremendous economic imbalances that result in financial crises and depressions when the bubbles burst.”

Peter Schiff on Inflation Tsunami, Financial Crises, Depressions, and Bank Failures

Economist and gold bug Peter Schiff discussed the U.S. banking crisis and where the U.S. economy is headed in an interview last week on One America News Network.

Citing “the mess that the Fed made by keeping interest rates so low for so long,” Schiff explained that it enabled banks to load up on “low yielding, overpriced long-term debt, treasuries, [and] mortgages.” Moreover, he stressed that the government and regulators push banks “into these securities with favorable accounting treatment for government securities or anything guaranteed by the U.S. government.” He warned:

A lot more banks are going to fail. This is just the reality.

Commenting on the Federal Deposit Insurance Corporation (FDIC) contemplating how they might tweak the coverage for regional banks after several major banks failed, Schiff suggested: “How about abolishing the FDIC and let the free market handle banking. We’d have a much more solid bank system if depositors knew that their deposits could be lost at a bank that was reckless and took a lot of risks, and then those banks would be under competitive pressure not to take those kinds of risks.”

Noting that the source of the U.S. banking crisis is that “We socialized the banking industry,” Schiff detailed: “We’ve also socialized interest rates because the Federal Reserve is like a Polit Bureau. They just pick an interest rate rather than allowing the market to discover the appropriate rate.” The economist opined:

When the Fed sets interest rates too low and prints a lot of money in order to make that possible, it unleashes massive inflation, creates tremendous economic imbalances that result in financial crises and depressions when the bubbles burst. That’s where we are right now.

Schiff added: “I think the Fed is going to have to unleash so much inflation to try to prop up all these banks, and the U.S. government, which is also insolvent. That is going to unleash runaway inflation. That is the real problem.” He cautioned:

Nobody’s money is safe in any bank, because…