The conflict which has existed for several days between Hamas and the State of Israel could have significant repercussions on the United States economy. American economist Peter Schiff warns and takes the opposite view from analysts who think that the United States could benefit from such a situation.
Attack on Israel does not bode well for the United States
While the American Federal Reserve planned to increase its interest rates by 25 basis points, economist Peter Schiff called for an exit from the dollar. The expert believed that the financial institution was wrong about the prospects of recession in the American economy.
Concerning the latter in particular, Peter Schiff stepped up to warn those who think that they could be positive for America with the situation in the Middle East. In fact, not at all, thinks the specialist.
According to him, the Israel-Hamas war is about to escalate into something serious. He warned that the consequences of the latter would be considerable for the stability of the region and the world in general.
In this context, Peter Schiff refutes the idea that this war could stimulate any economic growth for the United States in particular. This, he says, is a mistaken idea, perpetuated by misguided Keynesian economists.
Israel-Hamas war, the “beginning of a bad situation” for the United States?
Comparing the recent attack on Israel to the September 11 attacks, Peter Schiff believes that this would be the “beginning of a bad situation” for the United States. At least, from an economic point of view.
According to the economist, any conflict in the Middle East would inexorably drag the United States into a financial quagmire. This would imply an increase in deficits, fiscal stimulus measures, inflation and as well as an increase in liquidity injection policies.
The combined action of all these factors would exacerbate the country’s economic vulnerabilities. “We cannot afford peace, let alone war”declared the economist, emphasizing the current fragility of the American economy.
In this worrying climate, Peter Schiff does not expect the Fed to raise further interest rates. On the contrary, he thinks that the institution could even consider reducing these rates, the dynamics of which are particularly followed by the crypto industry.
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