Economist Peter Schiff has warned that a complete separation of the Chinese and U.S. economies would be “a disaster for America, but a boon for China.” He explained: “Americans would be stuck with fewer goods and higher prices, while the Chinese would be rewarded with more goods and lower prices.”
Peter Schiff on U.S.-China Decoupling
Economist and gold bug Peter Schiff shared his thoughts on the U.S. economy and the dire consequences of the U.S. decoupling from China in several posts on social media platform X Friday.
Commenting on the remarks by Treasury Secretary Janet Yellen stating that a “full separation” of the U.S. and China economies “would be economically disastrous” for both countries as well as for the world, Schiff argued:
Janet Yellen is only half right. A complete separation of the Chinese and American economies would be a disaster for America, but a boon for China.
“Americans would be stuck with fewer goods and higher prices, while the Chinese would be rewarded with more goods and lower prices,” Schiff explained. “We can’t make stuff, that’s the problem. All China has to do is consume what they make. That’s easy.”
Yellen’s statements were made on Thursday during a bilateral meeting with China’s Vice Premier He Lifeng. Emphasizing that “the United States has no desire to decouple from China,” the Treasury Secretary stated: “We seek a healthy economic relationship with China that benefits both countries over time. When we have concerns about specific economic practices, such as those that prevent American firms and workers from competing on a level playing field, we will communicate them directly.”
This was not the first time Schiff sounded the alarm about the harmful effects of the U.S. decoupling from China. “We can’t afford to decouple because you have to recognize that China is both our biggest supplier and our biggest banker. The Chinese loan us the money to buy the stuff that they produce that we can’t, and our entire standard of living rests on the support of China,” the gold bug said in September.
Schiff also regularly warns about the collapse of the U.S. economy and the dollar. “We are getting very close to a crash in Treasuries,” he cautioned last month. “The dollar will tank, taking the U.S. economy and the American standard of living down with it.” He also predicted a deep recession, an inflationary depression, and the collapse of the USD demand. In September, he warned of the biggest bond market crash and an “unprecedented” financial crisis.
Do you agree with Peter Schiff that the U.S. decoupling from China would be a disaster for America but a boon for China? Let us know in the comments section below.