US economy was an ‘ENORMOUS BUBBLE’ before Covid-19 & pandemic is just the pin – Peter Schiff to Joe Rogan

The only thing that spreads faster than coronavirus is ignorance about economics and finance, says veteran stock broker Peter Schiff. According to him, the pandemic just sped up the crash of the already deflating bubble.

In the latest episode of Joe Rogan’s podcast, Schiff, the CEO and chief global strategist at Euro Pacific Capital, talked about the current state of the US economy and its condition just before the outbreak.

“US President Donald Trump is claiming that we had a great economy that just got screwed up by the pandemic when we had to shut it down,” he said. “But we didn’t. We had an enormous bubble, and there is nothing great about it other than the size of the bubble.”

Schiff explained that “the reason it collapsed so quickly was because what happened was Covid-19 was a pin that pricked that bubble.”

In fact, the bubble was already deflating before the pandemic, the strategist said. “It started to deflate in the fourth quarter of 2019. That’s when the Federal Reserve hiked the interest rates and then started cutting them again, started doing quantitative easing again. And then Covid-19 came.”

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Schiff pointed out that when Federal Reserve Chairman Jerome Powell started hiking interest rates and shrinking the balance sheet, that was the right thing to do, though President Trump had criticized him.

“We need higher interest rates which, unfortunately, means the stock market will go down, but that’s just the reality. We are addicted to cheap money like a drug addict is addicted to heroin, but then the solution is more heroin to stay high.”

Trump wanted the stock market at record highs, “and we just put more air into the bubble,” Schiff said.

For more stories on economy & finance visit RT’s business section

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