We're going to see a huge contraction in GDP regardless of what we do. Our economy is more than 70 percent consumption, and we're consuming too much. That's part of the problem.
We have to consume less so we can start saving more. We have to transition from (a) a bubble economy based on excessive consumer credit and spending to (b) a stable, vibrant economy based on under-consumption, savings, capital investment, and production.
That transition is going to necessitate a large, one-time downward adjustment in our GDP. Then we can right the ship. Then we can get out of this hole and start building the economy back up again. But the government refuses to allow this to happen, and therein lies our biggest problem.
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Peter Schiff`s comments on the economy, stock markets, politics and gold. Schiff is the renowned writer of the bestseller Crash Proof: How to Profit from the Coming Economic Collapse.