Economist Peter Schiff expects a lot more banks to fail, warning that “nobody’s money is safe in any bank.” He stressed: “When the Fed sets interest rates too low and prints a lot of money … it unleashes massive inflation, creates tremendous economic imbalances that result in financial crises and depressions when the bubbles burst.”

In an interview last week on One America News Network, Schiff discussed the U.S. banking crisis and where the U.S. economy is headed. He said the mess the Fed made by keeping interest rates so low for so long enabled banks to load up on low yielding, overpriced long-term debt, treasuries, and mortgages. Moreover, the government and regulators push banks into these securities with favorable accounting treatment for government securities or anything guaranteed by the U.S. government.

Schiff suggested abolishing the FDIC and let the free market handle banking. He also noted that socializing the banking industry and socializing interest rates because the Federal Reserve is like a Polit Bureau is the source of the U.S. banking crisis.

When the Fed sets interest rates too low and prints a lot of money in order to make that possible, it unleashes massive inflation, creates tremendous economic imbalances that result in financial crises and depressions when the bubbles burst, he said.

Schiff advised people to get out of the dollar, get out of banks, and get into something real, whether it’s gold, silver, foreign stocks. He warned that the bulk of this financial crisis, which just got started, is in our future, and noted that the Fed is going to have to unleash so much inflation to try to prop up all these banks, and the U.S. government, which is also insolvent.

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