Peter Schiff warns of $34T crisis as tariffs and inflation collide

Economist Peter Schiff predicts a financial collapse surpassing the 2008 crisis, driven by converging pressures from tariffs, inflation, and Federal Reserve policies.

“The same blindness and missteps from 2008 are happening again,” stated Schiff, speaking on social media platform X, as he criticised leaders and financial media for ignoring economic red flags.

Schiff argues that new tariffs will disrupt trade flows, reduce imports, and trigger domestic price surges.

“More money chasing fewer goods means higher prices,” he warned, noting that rising import costs will inflate demand for U.S.-made products, further driving inflation.

Reduced trade deficits could also diminish foreign investment in Treasury bonds, pushing long-term interest rates upward.

The economist highlighted how middle-class tax cuts and federal deficits will exacerbate the crisis.

“Higher consumer prices and interest rates will weaken the economy, widening budget gaps,” he said, adding that fiscal policies risk fueling demand for scarce goods.

Schiff also criticised the Fed’s likely response, arguing that monetary easing amid inflation would “throw gasoline on an already burning fire,” weakening the dollar and intensifying import costs.

Schiff’s warnings align with his longstanding concerns over the $34 trillion national debt and consumer credit card debt, which hit record highs in 2024.

He emphasised that inflation expectations, now at 5.4%, could erode purchasing power if the dollar falters.

“Once the dollar breaks down, inflation will accelerate beyond Wall Street’s worst fears,” he cautioned.

Nobel laureate Paul Krugman compared current inflation to Reagan-era levels, while entrepreneur Mark Cuban defended Biden administration policies.

Schiff, however, insists the crisis is “mathematically guaranteed,” urging preparedness.

“This won’t be 1970s stagflation—it’ll be much worse,” he said, predicting a gold price surge as investors seek refuge.

Recent consumer sentiment improvements contrast with Schiff’s outlook.

Despite rising gold prices and market momentum, he warns that policymakers are repeating past mistakes.

“The Fed will try to solve problems caused by low rates with more low rates,” he stated, referencing unsustainable debt practices.

As tariffs take effect and inflation persists, Schiff advises proactive measures to safeguard wealth.

“There’s no rush like a gold rush,” he quipped, underscoring the urgency of hedging against a potential dollar collapse.

With economic signals flashing red, his warnings highlight a precarious junction for U.S. fiscal stability.