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25 Feb, 2020 12:55

US economy a gigantic bubble & coronavirus could be the pin, Peter Schiff tells Boom Bust

US economy a gigantic bubble & coronavirus could be the pin, Peter Schiff tells Boom Bust

As global markets plunged this week, mainstream media blamed the coronavirus outbreak. RT's Boom Bust tries to find out if there are deeper problems behind the stock collapse.

Peter Schiff, the CEO and chief global strategist at Euro Pacific Capital, joins the show to discuss whether the US Federal Reserve will commit to cutting rates all the way down to zero to avert pandemic fears and possibly going negative.

"Whether they commit to moving to zero or not, that's exactly what they are going to do," Schiff says.

According to Schiff, "the bond market is telegraphing right now that we are going to have several more rate cuts, I think between now and the end of the year."

It's not that this is an appropriate policy, the veteran stock broker says, adding: "The Fed should not be cutting interest rates but that's what they are going to do because it's the only thing they can do."

That is not going to cure coronavirus or the economy, it's simply going to make US economy sicker, Schiff notes.

"The US economy is in gigantic bubble and maybe the coronavirus is going to be the pin."

However, there are much deeper problems than the coronavirus, as the markets are generally very overvalued, according to Schiff.

"If we had a healthier economy we could better withstand... But the bigger problem is that the Fed's cure is actually worse than this disease," he says.

For more stories on economy & finance visit RT's business section