Peter Schiff explains in this clip from a recent interview.

Consumption economies are bubble economies."

A vibrant, healthy economy needs production.

Because you cannot consume what is not first produced. Since our economy is so weak and we're unable to produce the things that we're consuming, America relies on strong international economies that are able to produce what we consume."

The question is how long will the rest of the world subsidize America's standard of living? How long will other countries prop up a dysfunctional, weakening US economy by supplying it with goods it cannot produce for itself?

And then the dollar crashes and that's the end of this game. Because to the extent that we can only spend our dollars on the things that we produce ourselves, that's where it hits the fan, because we're not producing things.  And then price increases are going to explode in a much more visible manner."