Peter Schiff, widely known as "Dr. Doom" for accurately predicting the 2008 subprime mortgage crisis, has once again seen his forecast of gold surpassing $5,000 validated by the market. In a recent interview, Schiff issued a stark warning that a compound crisis, far exceeding the scale of the 2008 downturn, is brewing.
A steadfast adherent of the Austrian School of Economics, Schiff has long advocated using precious metals and overseas assets to hedge against U.S. dollar risks. With over three decades of experience on Wall Street, he began his career at Shearson Lehman Brothers after graduating from the University of California, Berkeley, with a degree in finance and accounting in 1987. He later joined Euro Pacific Capital as president in 1996, eventually becoming its CEO. His accurate foresight during the 2008 financial crisis led to his appointment as an economic advisor to Ron Paul's presidential campaign.
In the interview, Schiff elaborated on his perspective of the impending crisis, as well as topics including the new Federal Reserve Chair and cryptocurrencies.
When asked about the significant rise in gold prices, which recently approached $5,600 per ounce, Schiff identified the core driver as central banks globally shifting from dollar-denominated assets to gold. He noted that sustained gold purchases by central banks from 2024 to 2025 have been the primary factor behind the price increase. Recently, private investment demand has also begun to recover, a trend particularly evident in the silver market, where price movements have lagged behind gold—an unusual divergence from their typical correlation.
Schiff attributed this trend to the expanding U.S. fiscal deficit and the election of Donald Trump, arguing that growing recognition that the Trump administration and Republican-led government will not take meaningful steps to reduce the deficit will inevitably lead to severe inflation and dollar devaluation. Central banks worldwide are eager to mitigate this risk, as foreign governments are increasingly unwilling to hold substantial dollar assets and bear potential losses, while also growing weary of U.S. dominance and perceived heavy-handedness. He pointed to the Biden administration's use of sanctions and weaponization of the dollar, a trend he believes has intensified under Trump, who has even threatened military action against allies. According to Schiff, the U.S. has alienated the global community, with tariff policies further exacerbating tensions by fostering narratives that other nations are taking advantage of America, when in reality, Schiff contends, the opposite is true.
Regarding whether the current gold rally is fully priced in or just beginning, Schiff asserted that the uptrend will persist for many years. He believes gold is undergoing a repricing process and will gradually replace the U.S. dollar as the new anchor of the global monetary system. The current dollar-centric reserve system is broken and has caused significant harm; replacing it with a genuine hard currency like gold would create a fairer and more effective system. Schiff views a $6,000 gold price as a reasonable forecast, noting that a 20% rise from current levels is modest compared to last year’s 65% surge. He even suggested gold could reach $7,000, with further upside potential.
On the timeline for gold replacing the dollar, Schiff described it as an ongoing transition with no fixed duration, largely dependent on actions by other nations, particularly China. He proposed that backing currencies with gold or ensuring convertibility could facilitate gold-denominated trade settlements. Gold, he emphasized, is not merely a currency but real money, and it has already surpassed U.S. Treasuries in status, though not yet in total reserve volume—a shift he expects soon. The proportion of gold in global foreign exchange reserves will continue rising, driven not only by central bank purchases but also by the appreciating value of existing gold holdings, while the value of dollar reserves remains relatively static.
Schiff reiterated his warning of a U.S. financial crisis in 2026, potentially more severe than 2008. He explained that the impending crisis is a convergence of a dollar crisis and a sovereign debt crisis, with the sharp rise in gold prices serving as a key precursor. He highlighted the dollar index hitting a four-year low and the USD/CHF rate reaching record lows as indicators of dollar weakness that could spill over into the Treasury market.
Comparing the coming crisis to 2008, Schiff noted that current U.S. fiscal conditions are far worse, with significantly higher debt levels and policy missteps exacerbating economic instability. The crisis represents a loss of confidence in the U.S. government's ability to meet fiscal obligations without resorting to inflation, fundamentally differing from the subprime crisis in scale and nature. Unlike 2008, when confidence in the dollar and Treasuries allowed the government to bail out banks and citizens, a collapse in Treasury demand would leave the U.S. government powerless to mitigate the crisis.
Schiff predicted that despite Trump's rhetoric about reshoring manufacturing, few factories have actually returned to the U.S., leading to potential goods shortages, soaring prices, and persistently high interest rates.
On the nomination of Kevin Warsh as the next Federal Reserve Chair, Schiff expressed skepticism, suggesting Warsh would act as a puppet for Trump. He dismissed media portrayals of Warsh as an inflation hawk likely to implement tight monetary policy, arguing that Trump desires a Fed chair willing to print money and lower rates. Schiff believes Trump selected Warsh due to an implicit understanding that he would comply with Trump's directives, unlike Jerome Powell, whom Trump criticized for not adhering to his demands. Schiff speculated that the administration is attempting to build artificial credibility for the Fed so that future rate cuts appear economically justified rather than politically motivated.
Regarding recent volatility in the cryptocurrency market, with Bitcoin nearing the $60,000 support level, Schiff rejected predictions from former Goldman Sachs executives of a rebound, citing conflicts of interest. He characterized cryptocurrencies as a massive bubble with no intrinsic value, labeling them a decentralized Ponzi or pyramid scheme. Schiff criticized the U.S. government for permitting misallocation of resources into the crypto sector, which he believes will ultimately harm the economy.