Economist who predicted 2008 financial crisis says ‘US economy is about to shut down’

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Economic and financial experts are predicting what will happen next following recent price hikes and general inflation that have impacted the United States economy.

In light of recent market volatility across a range of asset classes, Peter Schiff, a globally respected economics and finance expert, caught on Twitter on May 9 to express his thoughts on the current situation.

Schiff warned that the United States economy is on the verge of collapsing again, but this time with more severe effects than those seen during the Covid epidemic, which caused millions of lost lives. jobs.

“The entire US economy is about to shut down again, but this time it won’t be a dress rehearsal like with Covid19. It will be the real thing. We won’t be asking businesses to shut down, they will have no choice but to close.Tens of millions of people will be laid off from jobs that will never come back!

In 2008, Schiff came to national attention as one of the few analysts who successfully predicted the financial crisis months in advance.

Schiff expects Bitcoin and Nasdaq correlation to crash

Notably, Schiff is also well known in the crypto space for his thoughts on Bitcoin, as he does not believe in cryptocurrency. His position is that Bitcoin is backed by nothing but the people who buy it, which undermines its value.

With US inflation at its highest level in 40 years, there has been a lot of talk about Bitcoin as an inflation hedge. The depreciated value of the dollar is cited as one of the main reasons why investors want to invest in cryptocurrency, often described as “digital gold” due to its limited supply.

However, the US dollar index hit its highest level in 20 years on Monday, May 9, despite runaway inflation. Meanwhile, $280 billion has surpassed Bitcoin’s market capitalization since the start of 2022.

“There is a lot of talk about the strong correlation between Bitcoin and NASDAQ, especially the more speculative names in this index, such as those held by $ARKK. I think this correlation may break down as NASDAQ has a bearish rally while Bitcoin continues to fall!

Similarly, billionaire ex-hedge fund manager Mike Novogratz thinks this correlation will break down and anticipates “more pain to come” in both markets.

Ethereum’s loss of support could impact Bitcoin

Additionally, Schiff also pointed out that Ethereum’s breakout support could also have more implications for Bitcoin which could see it fall below $30,000.

It remains to be seen whether the economist will still be right in fourteen years; there are many things at play, so investors will be watching the markets closely in the coming weeks to see how they react.

Disclaimer: The content of this site should not be considered investment advice. The investment is speculative. When you invest, your capital is at risk.

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