According to a report by Fox Business, Schiff, the CEO of Euro Pacific Capital says that the United States economy is heading into a free fall that will be worse than the Great Recession of 2008. The economic forecaster is predicting the Federal Reserve (the central bank) will cut interest rates to zero and launch quantitative easing, a monetary policy where the central bank purchases Treasuries from financial institutions to stimulate the economy.
"The dollar is going to go through the floor and it's going to take the bond market with it and the next crisis, it's not subprime mortgages, it's going to be in the Treasury market," he said on Wednesday.
"There's no way out and it's a political disaster for Trump because the recession is going to start before he finishes this term, which means he won't have a second term" Schiff added.
This is not the first time Schiff has warned about Trump's reelection chances. The president's best hope is that any recession holds off until after the 2020 election.
"It's a bubble. Powell doesn't seem to understand that. He seems to think the economy is doing OK. It's not. The economy today is in worse shape than it was before it collapsed in 2008. The Fed inflated a much bigger bubble this time than it did last time. And yes, the longer we succeed in kicking the can down the road, the greater the imbalances grow as a result of this bubble, and the more painful it is when the air comes out. And that's what's going to happen. And what's going to be so much worse about the coming recession is that it's going to be inflationary. We're going to have stagflation except it's going to be a recession, not just stagnation, and the inflation rate is going to be far higher than it was the last time we had stagflation, which was in the 1970s."