America has turned into a consumption economy, according to veteran stockbroker Peter Schiff, who points out that economies can’t run on consumption because then they become “bubble economies.”
According to Schiff, a vibrant healthy economy needs production “Because you cannot consume what is not first produced.”
“Since our economy is so weak and we’re unable to produce the things that we’re consuming, America relies on strong international economies that are able to produce what we consume,” he said.
“How long will the rest of the world subsidize America’s standard of living?” the economist asked. “How long will other countries prop up a dysfunctional, weakening US economy by supplying it with goods it cannot produce for itself?”
He continued: “And then the dollar crashes and that’s the end of this game. Because to the extent that we can only spend our dollars on the things that we produce ourselves, that’s where it hits the fan, because we’re not producing things. And then price increases are going to explode in a much more visible manner.”
Schiff said this is already happening, as “Prices are going up all over and we want to pretend that, well, this is a one-time thing. It’s transitory. It’s because of supply shocks or shortages. No. It’s a surplus of money. That is the problem. And we’re creating even more.”
Money printing and shopping are driving the US economy, Schiff said, and Americans are sitting at home getting stimulus checks and spending the money but they’re not producing anything. “Americans are buying stuff that they didn’t produce. There’s no productivity related to this money printing. And so, we’re going to see a surge in prices.”
Source: RT