Schiff thinks the U.S. is headed not just for a recession but rather a full-blown depression. On the upside, he believes the coming economic situation will look familiar.
"The Depression [in the wake of the financial crisis] was temporarily interrupted by a bunch of stimulus which ultimately weakened the economy further," says Schiff. He adds the government's likely knee-jerk response of stimulating is, "probably going to be the fatal dose, the lethal dose" prior to "a complete economic collapse."
Which is precisely why Schiff wasn't among those expecting a debt deal relief rally last Monday morning. The attention paid to the deal was a "massive victory for propaganda that would have done Goebbels proud" (yes, this Goebbels). Schiff believes the real crisis wasn't the debt ceiling but spending and debt, both of which were effectively worsened by the deal.
"The reckless thing to do was to raise the debt ceiling" he says. Exacerbating matters Schiff thinks the ceiling is going to have to be raised yet again before President Obama leaves office. Not that the chance for DC to spend more freely will help the economy. "The reason we can't grow the economy is because the government is in the way... There's no jobs because there's no recovery."
By way of a cheery goodbye Schiff concludes, "We're on a collision course for disaster. All we can do, all your viewers can do is brace for impact...Buy gold. Buy silver... Get as far away as you can from U.S. currency and the U.S. economy."