Peter Schiff recently appeared on RT News with Rick Sanchez. Peter said both an economic and a political crisis is looming, and Americans need to get ready.

Sanchez started out the interview noting that the extreme levels of household debt. As we’ve reported US consumer debt is approaching $4 trillion. When you include mortgages in the equation, Americans are some $15 trillion in debt. But Peter said household debt is just the tip of an even more massive debt iceberg.

“Everybody is loaded up with debt. And it’s not like we began this monetary experiment without much debt. We had a lot of debt in 2008. In fact, the financial crisis was about debt. It was about our inability to pay the debt that we had. But instead of addressing the problem and allowing the debt to be paid down, the Federal Reserve led us down the primrose path into much deeper debt by keeping interest rates at zero and holding them there for so long. The Federal Reserve actually encouraged an overly-indebted nation to borrow even more money. So now, it’s all facets of American society that are leveraged to the hilt — individuals, corporations, the federal governments, the state and local governments. So, everybody is loaded up with debt. And guess what; interest rates are now finally rising, and that means the cost of servicing that debt is going up. And this is going to be a problem just like an adjustable rate mortgage was a big problem in 2008 when these things were resetting; people couldn’t afford to pay. Well, the same thing’s going to happen on a national scale. Rates are going up, and we’re too broke to pay.”

So, can we avoid the coming crash? Peter said at this point, it’s impossible. In fact, because the Federal Reserve and the government managed to keep the bubble going for so long, the crash is going to be even bigger.

“I mean, the sooner we face that reality the better. But no politician wants to face that reality. They want to pretend everything is great.”

Sanchez brought up the tax cuts. Peter said they actually made things worse – at least in terms of the debt. Less revenue means bigger deficits and more borrowing.

“What we need is smaller government. But nobody wants to shrink government, including Donald Trump, who is now the defender of Social Security and Medicare. He wants to launch another nuclear arms race and start a space force. So, it’s all about spending more money. So, Trump wants to spend more money and cut taxes at the same time. I mean, that’s completely reckless.”

Peter said people need to get ready. They’re not only in for an economic crisis, but a political crisis as well.

“The Republicans are going to take the blame and socialism is going to be seen as the solution. And it’s going to make the problems that much worse when it’s implemented — you know, in 2021. So what you’ve got to do is get out of US dollar assets. The dollar is going to be the biggest casualty, along with the American standard of living.”

Peter said investors should look to foreign assets. And of course, gold.

“Look at the price of gold, up another eight bucks today, but it’s still about $1,230. Gold is going to new highs. It was at $1,900 in 2011, it’s going to go much higher this time. Get invested in some gold.”

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