Economist Peter Schiff has warned about the optimism of the "Trump boom," pointing out the potential economic risks and broken promises he sees ahead.
Peter Schiff's warning on the 'Trump Boom': Key trades and broken promises
Economist and gold supporter Peter Schiff, president of the precious metals trading company Schiffgold, harshly criticized the economic approach of elected President Donald Trump on social media platform X this week, highlighting what he sees as risks in current financial activities and several unfulfilled promises.
Schiff argues that the optimism surrounding the "Trump-inspired economic boom" is misplaced, citing underlying economic weaknesses that could undermine this positive outlook. According to him, tax cuts may happen, but corresponding spending cuts are almost certain not to occur. The gold supporter claims:
There will certainly be large tax cuts. Those are easy promises to keep. But spending cut promises will not be fulfilled. This means that the already large budget deficit will soar.
Schiff further warns that uncontrolled deficits could push the Federal Reserve to re-engage in quantitative easing (QE), leading to rising inflation. For those concerned about inflationary pressures, Schiff suggests that "Trump's best trade right now is to buy gold and gold mining stocks when prices are down," viewing gold as a stable asset in an unstable economic context.
Supporters of gold also express skepticism about the recent enthusiasm for bitcoin, arguing that "this currency is rising despite the dollar surging and bond yields skyrocketing, as speculators bet that Trump will be the Bitcoin president." He predicts:
That is one of many promises that Trump will break.
In Schiff's view, the popularity of bitcoin reflects short-term speculative confidence rather than long-term safety, a sentiment he finds misguided. Reflecting on the broader economic context, Schiff points out: "The U.S. economy has been in a bubble since Greenspan's era in the 1990s. Every president since then has relied on increasingly larger bubbles to take credit for artificial economic growth. Trump's plan is to pump more air and hope the bubble doesn't burst until his term ends."
Schiff believes that the focus on bubble-driven growth for short-term gains will likely lead to a deeper recession later, making long-term stability harder to achieve.
