Economist Schiff: Obama’s Re-Election Means Debt & Currency Crisis
Peter Schiff, CEO of Euro Pacific Capital, isn’t particularly optimistic about the financial impact President Barack Obama’s re-election will have on the economy.
"If Obama thinks that [President George W.] Bush dealt him a weak hand, wait until we see how much weaker the hand is going to be that Obama deals his successor," Schiff tells Yahoo.
"We're going to be in much worse shape.''
The financial crisis was near its peak when Obama took over from George W. Bush in January 2009.
Under Obama, Schiff expects to see a huge buildup of government debt — to $20 trillion in two years from $16 trillion currently.
"I think what's going to happen is going to be a currency crisis, a sovereign debt crisis,” he says. “It's going to be the same thing that is happening in Europe, [including] Greece, but it's going to be a lot worse."
This crisis will be accompanied by higher unemployment, higher inflation, higher food and energy prices and higher interest rates, Schiff maintains.
It’s probably no surprise, then, that he thinks "the stock market is correct in going down" in the two sessions since Election Day — 3.6 percent for the Standard & Poor’s 500 Index.
Former Labor Secretary Robert Reich thinks Obama should focus on increasing employment rather than cutting the budget deficit.
“The deficit is a problem only in proportion to the overall size of the economy,” he writes on The Huffington Post. “If the economy grows faster than its current 2 percent rate, the deficit shrinks in proportion.”