'We're going to have to have a severe recession if we're ever going to build a viable economy': Here’s why one market expert says the US is doomed to default on its debt no matter what
, the outspoken CEO and president of Euro Pacific Capital, is passionately on the other side of that debate — and he thinks that the US' frivolous spending and money-printing is going to culminate in a cataclysmic scenario. , a digital assets podcast.
"If the inflation rate is 4% or 5%, compounding — and you're getting 0% interest on your dollars — that's a one way ticket to a disaster," he said. "I think inflation is going to break out all around the world."If he's right, these inflationary pressures will have to be suppressed through the raising of interest rates. There's only one problem: The market can't handle higher rates.
"That's why the Fed is back doing QE," he said. "There's just not enough private demand for all the debt the government is selling."With all of that under consideration, Schiff sees two possible ways that this mess will play out: An honest default or a dishonest default. In direct contrast to this method is something he calls a dishonest default scenario. Schiff describes this method as just printing money, but according to him, that will result in hyper inflation. Not the outcome that anyone is looking for.
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