America’s ‘debt bomb will explode,’ says strategist Peter Schiff

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Low interest rates have helped defuse U.S. debt problems so far, but that won’t last long, strategist Peter Schiff told CNBC.

Schiff, chairman and chief executive of Euro Pacific Capital, said on Thursday that “the debt bomb is going to explode.”

“I think the [Federal Reserve] gonna try to pump its way out of this problem, but it’s gonna pump its way to a bigger one,” Schiff said on “alley of cries.”

He said low interest rates have allowed the United States to service its debt, but it is almost impossible to pay it off. Schiff said that as interest rates rise and inflation rises, creditors will demand a higher premium.

Schiff’s comments come as the United States is in a few weeks to cross the bar of 20,000 billion dollars of total outstanding public debt.

On Thursday, Schiff also tackled infrastructure spending, which President donald trump pledged to increase during his tenure. Schiff said that would not help the economy.

“You don’t help the economy by spending money,” he said. “To the extent that we have to fix our infrastructure, that’s a cost we have to bear.”

He continued: ‘The fact that this is creating jobs is not a good thing because we are diverting resources that we could otherwise have used more productively to make necessary repairs to our infrastructure.’

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