Amid the wide-reaching crisis that has already crashed several large banks and put more at risk, the CEO of Euro Pacific Asset Management, Peter Schiff, has compared the current situation to the 2008 financial crisis and described it as a ‘sequel’ that is going to be worse than its predecessor – the Great Recession.
Schiff was commenting on his earlier tweet, in which he stated that Credit Suisse was a victim of the Swiss central bank’s negative interest rate policy and the Swiss would “pick up the tab with higher inflation” but also noted that inflation would be much higher in the United States in an interview with OANN’s Dan Ball streamed on March 22.
Great Recession’s (worse) sequel?
Explaining his views, the American stockbroker said that the U.S. Federal Reserve had “created another financial crisis (…), and the media is reluctant to call this a financial crisis. They keep saying it’s a banking crisis.” As Schiff further pointed out:
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“The financial crisis of 2008 was a banking crisis. Nobody wants to say what it is because they don’t want to invoke memories and comparisons to 2008, but this is a sequel 2008, and like all sequels, this one’s going to be worse.”
He also stressed that the reason behind the 2008 crisis was that “from 2002 through 2005-ish, the Federal Reserve held interest rates at 1%, and that gave birth to adjustable rate mortgages, zero doc loans, nothing down, and the era of cheap money. We inflated the housing bubble, and a lot of these real estate loans (…) went bad when the Fed eventually normalized rates, and they got them back up around 5%, and then we had the financial crisis.”
Banks in worse shape than in 2008
According to Schiff, the government cut that crisis short with quantitative easing (QE) and 0% interest rates, “but now we’ve had 0% percent rates for more than a decade, the Fed has made far more monetary policy mistakes since the 2008 financial crisis then prior, and so it has inflated a much bigger credit bubble.”
“Now the banks are in far worse shape than they were in 2008, especially the ‘too big to fail’ banks that we bailed out and are now much bigger than they were back then and even more insolvent, so as a result of what the Fed has done after the 2008 financial crisis, this new financial crisis that’s just got started will be much worse.”
Interestingly, the finance commentator and a long-term Bitcoin (BTC) critic earlier projected a rapid devaluation of the U.S. dollar and that it would lead the world to transit from fiat to digital assets in the future but that Bitcoin would not be one of them, as Finbold reported on March 20.
Watch the entire video below:
