Economist Peter Schiff has warned that the Federal Reserve is wrong about its recession outlook, advising everyone to get out of the U.S. dollar. He stressed that the U.S. currency is being destroyed, emphasizing that it is losing purchasing power. “Rather than fighting inflation, the Fed fueled the fire,” Schiff claimed.

Peter Schiff Warns U.S. Dollar Is Being Destroyed

Economist and gold bug Peter Schiff issued multiple warnings on Wednesday following the Federal Reserve’s announcement of a 25 basis point interest rate hike.

Responding to Fed Chair Jerome Powell’s statement that the Fed is no longer forecasting a recession for the U.S. economy, Schiff said on Fox Business Wednesday:

The Fed is wrong on its recession outlook. We’re going to have a recession. In fact, it’s going to be a severe one … Inflation is going to get worse, not better.

“The real rate of inflation, regardless of how the government wants to misreport it … is higher than five percent,” the economist insisted.

Commenting on Powell’s statement regarding rate cuts, Schiff tweeted: “Powell just admitted that the Fed will start cutting rates long before inflation gets down to 2%. That’s a big admission that’s bullish for gold and bearish for the dollar and Treasuries.”

The gold bug also pointed out that after the rate hike announcement, the Dow Jones Industrial Average “finished higher for the 13th day in a row, its longest winning streak since 1987.” He detailed: “We all know how that year turned out. Investors ignored rising interest rates, a falling dollar, and rising budget and trade deficits until suddenly all that bad news mattered.” In a follow-up tweet on Thursday, Schiff opined: “Despite yesterday’s Fed rate hike, financial conditions in the U.S. have eased. The dollar and bond yields are down and stocks are up. Easier conditions have already pushed oil prices near $80, with more upside to come. Rather than fighting inflation, the Fed fueled the fire.”

Discussing what investments are best in the current environment, Schiff advised: “You don’t want to own any Treasuries, even short-term. You want to own real money, which would be gold, [and] you want dividend-paying stocks that are not in dollars — that are outside the United States.” He emphasized:

You’ve got to get out of the dollar because that’s what being destroyed. That’s what’s losing purchasing power.

“You want to be in anything that’s inflation sensitive,” he continued. “That’s basic materials, that’s energy, that’s agriculture … You want to be in investments that are going to benefit from the market being surprised by inflation being much higher than they expect and long-term interest rates being much higher than they expect.”

This was not the first time Schiff has advised everyone to get out of the U.S. dollar. In April, he made a similar recommendation, warning that the USD’s reserve currency status is in jeopardy. Earlier this month, the gold bug said the Federal Reserve has already lost the inflation fight but the markets have not figured that out yet. He also warned that all banks will fail. Last month, the economist said the U.S. dollar will decline far more than Treasury Secretary Janet Yellen has warned, noting that Fed Chair Powell is “clearly worried” about a financial crisis.

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