Economist Peter Schiff has criticized Federal Reserve Chairman Jerome Powell’s statements made during his recent appearances before Congress. Schiff disagreed with Powell’s acknowledgment of the growing balance sheet, arguing that the balance sheet will continue to expand with every economic or financial problem. He also disagreed with Powell’s claim that a strong labor market is driving the economy, stating that a weak economy and falling wages are leading workers to seek multiple jobs. Schiff further criticized Powell’s explanation that high inflation is due to the global pandemic, instead pointing to artificially low interest rates, quantitative easing, and government deficit spending as the main factors. He also criticized Powell’s dismissal of the Federal Reserve’s losses on its bond portfolio as “just paper losses,” emphasizing that these losses are real and become obligations of taxpayers. Schiff expressed his belief that the U.S. banking system is insolvent due to Fed monetary policy and government interference. He disagreed with Senator Elizabeth Warren’s assertion that the banking system is broken due to a lack of government regulation, arguing that there is actually too much regulation. Schiff called for the removal of government and Fed involvement in the banking system to allow for free market forces. He disagreed with Powell’s view that increased government spending stimulates the economy, stating that it actually stifles the economy and leads to inflation. Schiff criticized Powell for not following the advice of former Fed Chair Paul Volcker to cut spending or raise taxes and warned that Powell’s misunderstanding of economics makes him unfit for his role. Lastly, Schiff disagreed with Powell’s belief that the U.S. dollar’s reserve currency status is a consequence of America’s economic dominance, arguing that it is actually the main support of that dominance and that once the dollar’s reserve status is lost, U.S. economic dominance will collapse.
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