Peter Schiff Warns US Headed for Recession Deeper Than the Great Depression

Economist and gold advocate Peter Schiff issued a dire warning on April 18 during an interview on the Schwab Network, cautioning that U.S. economic policies are setting the stage for a catastrophic downturn.

Economist and gold advocate Peter Schiff has issued a stark warning, predicting that the U.S. is headed for a recession deeper than the Great Depression due to soaring debt, rising inflation, and systemic banking risks. In an interview on April 18 with the Schwab Network, Schiff placed the blame on tariffs implemented by President Donald Trump's administration.

"The recession that Trump inherited is already much worse and is going to get much worse as a result of these misguided tariffs," Schiff stated.

According to Schiff, unless the tariffs are removed and the administration backs down, the situation will deteriorate into a historical downturn.

"This is going to be the worst recession since the Great Depression. It may be worse than the Great Depression. It depends on the mistakes that we make during this recession. It’ll certainly be worse than 2008–2009, the Great Recession, and it’s probably going to include a financial crisis that will be worse than the 2008 financial crisis," the economist asserted.

Schiff also dismissed recent employment data as a sign of economic growth, arguing that the labor gains are deceptive. He claimed all jobs created last year were part-time positions filled by individuals who could no longer cover expenses with a single job.

The gold advocate added that many Americans are juggling multiple jobs and maxed-out credit cards not to improve their lifestyles, but to make ends meet.

In his view, tariffs will worsen inflation by driving up the cost of imported goods, leading to a collapse in retail spending.

"There’s going to be massive layoffs, bankruptcies, in the retail sector, a lot of defaults," he said.

Schiff expressed major concern over capital flight from U.S. financial assets, which he said is pushing up interest rates. He believes this, in combination with surging prices, could lead to an "inflationary recession."

The economist highlighted the U.S. economy’s dependence on imports and the potential repercussions if they cease.

Schiff explained that previous monetary policy pushed inflation outward while keeping domestic asset prices in check, but he believes that trend is now reversing. As inflation moves from Wall Street to Main Street, it will affect both low- and high-income groups, he said.

Commenting on Trump's policies, Schiff said: "He’s doing it even worse than I thought he would."

Predicting a sharp drop in the dollar if the Federal Reserve resumes quantitative easing, the gold advocate explained: "It’s going to be an even bigger decline but, for the dollar, the worst thing that can happen is the Fed steps in and goes back to QE to bail out the economy, to bail out the bond market, to stop this coming financial crisis. If the Fed does that, the dollar is going to implode, so it could drop another 20%-30% very quickly."

Schiff further warned:

Our entire banking system is insolvent … Every single bank in this country will fail if we have a recession with rising interest rates and that’s exactly what we’re going to have.