Peter Schiff sees an economy on edge imploding on the weight of its debt.
Speaking from his sunny residence in Puerto Rico, the permabear painted a dire picture of the economy, characterised by excessive debt, dubious monetary policies, and misplaced optimism generated from record-breaking endless new highs in stocks.
Permabear, Peter Schiff sees an economy on edge and views the stock bull market with scepticism
But since the 2008 financial crisis, the Great Recession 2009-2010 and the Lockdows of 2020, astute traders and investors have realised that these markets are no longer driven by fundamentals, macroeconomics, or price discovery, and don’t resemble reality.
For over a decade, asset prices have been a function of central bank liquidity. If you doubt that, look at what happened during the 2020s lockdowns when the greatest bull market played out, a backdrop of central bank M2 currency creation taking a moonshot.
The Fed’s three trillion dollar virus rescue inflated markets to record highs as the economy resembled the Great Depression, with people being furloughed and small businesses forced to close.
Markets have become the central bank’s perpetual motion machine, and when monetary policymakers want markets to move higher, they inject it with more liquidity.


“Permabear, Peter Schiff sees an economy on edge and views the stock bull market with scepticism”
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What could be driving this melt-up into 2025 in asset prices as the economy melts down is capital flows out of debt assets
The 2023 treasury bond market crash was a Minsky moment. Perhaps we are witnessing the next stage of the melt-up in asset prices, which is not driven by central bank liquidity, but rather a breakdown in confidence in monetary policy and fiat currency as investors move away from debt assets. When cash is trash nobody wants to hold long maturity bonds.
There are several modern-day examples where the economy was in a dire situation. Venezuela and Nigeria, and the stock market melted up.
In both examples, confidence in the central bank-issued currency triggered a stock bull rally as investors ditched the rapidly declining purchasing power of the fiat currency for tangible assets.
Venezuela was the best-performing stock market in 2012, with a 300% increase, as a wave of government spending by anti-capitalist Chávez triggered inflation.

“There are several modern-day examples where the economy was in a dire situation. Venezuela and Nigeria, and the stock market melted up”
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Peter Schiff sees an economy on edge, believing the market is already expensive
He observed, highlighting that the optimism factored in is misplaced and warned of an impending reckoning, exacerbated by years of deficit spending and inflationary policies. “We have a $36.2 trillion debt that’ll soon reach $40 trillion. This is unsustainable.”
“The market is already expensive. It’s hard to see a parabolic upside when optimism is misplaced.
The markets are expecting good things to happen that aren’t going to happen,” said Peter Schiff
“Bitcoin is not a reserve asset; it’s a speculative tool with concentrated risk”
– Peter Schiff
What if markets crash up instead of down as Peter Schiff sees an economy on edge?
Peter Schiff notes inflation as an integral part of the system.
“Higher inflation is baked in, but that’s not good for the dollar.
The markets are wrong to think it is.” His scepticism extends to the Fed, which he accused of sacrificing long-term economic health for short-term stability. “The Fed is a one-trick pony. Its solution to every problem is to inflate, mask the problem, and hope it goes away,” he said.
Perma gold bull Peter Schiff continues to be a gold advocate and dismisses Bitcoin as being a speculative bubble
He thinks Bitcoin is not a rival to gold.
“It’s not digital gold; it’s not digital anything.” Contrasting it with gold, Schiff argued, “Gold has intrinsic value and has been a store of wealth for millennia. Bitcoin has failed to be money for 15 years.”
That is because the bellwether cryptocurrency is not a rival to fiat currency but is more a store of value, similar to the precious metals.
Peter Schiff was also sceptical about Michael Saylor’s proposal for the US government to sell its gold reserves to buy Bitcoin, Schiff called it “a horrible idea” and dismissed Saylor’s comments as “self-serving.” He continued, “Bitcoin is not a reserve asset; it’s a speculative tool with concentrated risk.”
Peter Schiff was also sceptical about the speculative frenzy surrounding Bitcoin ETFs and institutional purchases: “Bitcoin ETFs and MicroStrategy have cornered 8% of Bitcoin’s total supply. That’s a bubble waiting to burst.”
“Bitcoin ETFs and MicroStrategy have already cornered 8% of Bitcoin’s supply. That’s concentration risk in a speculative bubble,” Schiff said. “Michael Saylor’s proposal for the U.S. to sell its gold for Bitcoin is not just a bad idea—it’s delusional. It’s putting all your eggs in one highly speculative basket,” he added.
“People are working harder for less real income, drowning in debt, and paying 25% interest on credit cards. That is the reality behind the so-called recovery”
– Peter Schiff
Peter Schiff then highlighted the deteriorating state of the US economy
“People are working harder for less real income, drowning in debt, and paying 25% interest on credit cards. That is the reality behind the so-called recovery.” He lambasted the bipartisan reluctance to address deficits: “Trump promised to cut deficits but signed every debt-busting bill put on his desk. Nothing will change under his leadership,” he said.
Peter Schiff sees an economy on edge and an ongoing crisis in bonds
He thinks currency debasement causes the price of debt collateral to go down.
However, a counter view is that this can’t, and won’t, be allowed to happen.
Peter Schiff seeks safety in commodities as the currency debasement continues. He has advocated getting out of the $USD, US equities markets and speculative US real estate.
This is based on the unsustainable US debt levels that will eventually keep other nations from buying the debt, which is already happening.
Foreign-owned debt is considerably less than ten years ago.
He believes higher interest rates are required to control inflation, but doing so makes servicing the debt more difficult.
Moreover, since foreigners are buying less debt, he thinks more printing will be required to make payments, further debasing the currency and sending commodity prices and other tangible assessments even higher.