Peter Schiff: U.S. Facing Sovereign Debt Crisis, Not Another 2008

In an interview with Kitco News’ Jeremy Szafron, Peter Schiff warns that the U.S. isn’t heading for another 2008-style banking bust—it’s heading into a sovereign debt and dollar confidence crisis.

He argues the Fed is set to cut rates into rising inflation, foreign demand for Treasurys is fading, central banks are quietly driving the gold/silver bull market, and retail buyers haven’t even arrived yet.

Watch the full Peter Schiff interview below:

Market Setup: “A Great Repricing”

Markets aren’t just volatile—they’re repricing. Jeremy Szafron opened the Kitco interview by noting gold pushing toward $3,700, silver hitting $42 (its highest since 2011), and the dollar weakening into the Fed’s latest decision. Schiff calls this action the front edge of a tectonic shift: investors are finally starting to reckon with decades of monetary mistakes.

For context, he reminded viewers that exactly 17 years earlier—September 2008—the Fed misread the signals, held rates steady, and hours later scrambled to rescue AIG. Schiff suggests history isn’t repeating, but it is rhyming: once again, the Fed is on the brink of policy error under political pressure.

“This may be the Fed’s biggest error yet. Cutting rates into rising inflation won’t bring relief—it will push long-term rates higher and accelerate the dollar’s decline.” —Peter Schiff

Why This Isn’t 2008 (It’s a Sovereign Debt & Dollar Confidence Crisis)

Schiff argues that anyone expecting a repeat of the 2008 banking meltdown is missing the bigger picture. Back then, the crisis was about private credit—mortgages that went bad and banks that held them. This time, he warns, the stress is shifting to public credit: U.S. sovereign debt itself.

The key difference, he says, is confidence. In 2008, markets still trusted the U.S. dollar and Treasury bonds as the safe harbor. Today, that trust is cracking. Washington’s deficits are larger than ever, the debt rollover schedule is relentless, and with the Fed poised to return to quantitative easing, Schiff sees the government running out of real buyers for its paper.

“This isn’t going to be about a loss of confidence in private credit. It’s going to be about a loss of confidence in the U.S. government—and in the dollar itself.” —Peter Schiff

He allows that a technical default isn’t impossible, but thinks the more likely scenario is a default by debasement: paying bondholders back in dollars worth far less than the ones they lent. In his words, the Fed won’t just be the “buyer of last resort” for Treasurys—it will become the buyer of only resort.

Related: Rich Jacoby and Joe Pags Discuss the US Economy and Protecting Wealth with Gold

Banking Fragility on Top

Schiff also points out that the banking sector is more fragile than it looks:

• The “too big to fail” institutions of 2008 are even bigger today.
• They’re loaded with long-term, low-yielding debt that looks fine on paper—until depositors demand cash.
• A large-scale run could threaten even household names, forcing Washington to step in with rescues that collide directly with the stability of the dollar.

In short: while 2008 was a mortgage and bank crisis, Schiff sees the next phase as a sovereign debt and currency crisis—the kind that reshapes global finance and reorders reserve holdings.

Who’s Driving the Bull: Central Banks vs. Retail

Schiff emphasizes that the current rally in gold and silver isn’t being powered by retail buyers at all. Instead, it’s central banks around the world that are reshaping the market.

Central Banks on Auto-Buy

According to Schiff, foreign central banks have been dumping Treasurys and dollars while steadily adding gold. This is less about speculation and more about survival: they earn dollars through trade but no longer want to hold them as reserves. Instead, they’ve been “voting with their feet” and shifting into hard assets. As the price of gold rises, laggard banks face pressure to catch up—creating a feedback loop of demand that is largely price-agnostic.

Retail: Still on the Sidelines

Contrast that with U.S. retail investors, where Schiff says demand is muted:

• Stacker sales at gold and silver dealers remain well below the 2020 surge.
• Many potential buyers are distracted by tech stock gains and the new market highs in the NASDAQ.
• Conservative-leaning savers who typically buy gold when worried are feeling a false sense of optimism under Trump.
• And after a decade where every test of the $2,000 level ended in pullbacks, people have been conditioned to wait—nervous about buying at new highs.

“I’ve been telling people not to wait for a pullback, because it won’t be big enough. The longer you wait to buy the high, the higher the high you’ll end up buying.” —Peter Schiff

In Schiff’s view, the public hasn’t arrived yet. When it does, the rally will look entirely different: volatile, euphoric, and retail-driven.

Right now, he insists, we’re still early—because the strongest hands in the world, central banks, are quietly accumulating while everyday Americans sit on the sidelines.

Related: How to Buy Physical Gold and Silver with Your 401(k)

Funding the Beast: Shrinking Foreign Appetite for Treasurys

Beyond inflation itself, Schiff points to the financing math as the ticking time bomb. Washington isn’t just running record deficits—it’s also rolling over an enormous stock of existing debt on short maturities. That means the Treasury needs to sell trillions in new paper each year just to refinance what’s coming due, on top of the fresh borrowing for annual deficits.

Foreign Buyers Stepping Back

Historically, foreign central banks soaked up much of this supply. But Schiff highlights a shift:

• China’s Treasury holdings have fallen to the lowest levels since 2009.
• Japan remains the largest holder, but their share is shrinking in proportion to the ballooning U.S. debt stock.
• FX losses have made Treasurys less attractive: a 10% dollar decline more than wipes out coupon gains for overseas holders.

No Easy Substitutes

The result is a dangerous funding gap. With foreign buyers stepping back and central banks actively diversifying into gold, the Treasury must rely more heavily on domestic institutions and ultimately the Fed itself. But that path leads straight to the cycle Schiff warns about: higher long-term rates, more QE, and a dollar crisis.

“It’s enormous what we have to finance—and the world just doesn’t want to do it.” —Peter Schiff

Physical vs. Miners: Where Schiff Sees the Edge Now

For years, Schiff has urged savers to hold physical gold and silver as insurance against monetary mismanagement. But in this interview, he stressed that mining stocks may offer even greater upside in the current environment.

Why Miners Look Attractive

Back in April, when gold had already crossed $3,000, Schiff pointed out that miners were still trading at levels more consistent with $2,000 gold.

That disconnect, he argued, made them one of the most undervalued corners of the market. Since then, many mining stocks have doubled, yet he still sees them as cheap relative to today’s $3,700 spot price—let alone where he thinks gold is heading.

• Producers: The big established miners are throwing off record cash flows at current margins, with P/Es far below market averages.
• Developers: Smaller companies with proven reserves (but not yet producing) represent prime M&A targets for majors seeking to replenish their books without risky exploration.
• ETFs: Despite strong performance, funds like GDX and GDXJ have seen net outflows, suggesting institutional investors are still underweight—a contrarian bullish sign.

Related: Rich Dad Author Sounds the Alarm - Buy Gold and Silver

Physical Still Matters

That doesn’t mean Schiff is abandoning bullion. He continues to advocate owning gold and silver outright as a monetary hedge, especially for those worried about systemic risk or capital controls.

But he views miners as the place where leverage to the price is most obvious—offering returns that could outpace bullion if the secular bull market continues.

“Even at $3,700 gold, I don’t think gold stocks have caught up to $3,000 gold yet.” —Peter Schiff

Silver’s “Express Train” Case to $100

Gold may be setting records, but Schiff says silver is the real sleeper trade. At $42 an ounce, silver just hit its highest level since 2011—yet it remains far below its inflation-adjusted peaks.

Cheap Relative to Gold

The gold-to-silver ratio tells the story. Even if gold rises to $4,000 and silver reaches $50, the ratio would still sit around 80-to-1—well above historical norms where silver tends to trade much closer to gold. Schiff argues that this makes silver “cheap,” especially as monetary demand spills over from gold.

The Breakout Trigger

Schiff believes that once silver clears $50, the move to $100 could come quickly:

• The $50 level has acted as a ceiling since 1980 and again in 2011.
• A clean break above it would unleash pent-up demand and trigger momentum buying.
• He expects the sprint from $50 to $100 to be faster than the grind from $30 to $50.

Dual Drivers: Monetary + Industrial

Silver benefits from a two-pronged demand profile:

• Monetary: As “the poor man’s gold,” silver often surges when retail investors join the precious metals trade.
• Industrial: From solar panels to electronics, demand is rising, and there isn’t much above-ground supply.

“Silver is on an express train to $100. Once it breaks out, the move higher will be quick.” —Peter Schiff

Related: How to Buy Physical Gold and Silver with Your Retirement Savings

Policy & Political Risk: FX/Capital Controls, Nationalization, Confiscation Talk

Schiff doesn’t just see financial risks—he sees political risks that could amplify the crisis. When confidence in the dollar falters, he warns, the government’s instinct will be to tighten control rather than restore sound money.

Capital and FX Controls

If the dollar starts to freefall, Schiff expects Washington to reach for tools that have been used before in other crises:

• Banking holidays (like Roosevelt declared in 1933).
• Withdrawal limits (similar to Greece in 2015).
• Foreign exchange controls, restricting Americans from moving dollars into other currencies.

Nationalization Risk in Mining

Schiff also cautions about government encroachment in the mining sector. With gold and critical minerals increasingly labeled “strategic assets,” policymakers could be tempted to assert control over domestic production. But history shows that heavy-handed nationalization typically destroys industries rather than strengthens them.

“Whenever the government steps in, you short-circuit free-market signals—and you don’t get an optimal outcome.” —Peter Schiff

Confiscation Talk

Finally, he nods to a concern that always lingers in gold circles: the possibility of outright confiscation or forced sales of private bullion holdings in a panic. While Schiff doesn’t predict it outright, he acknowledges the political rhetoric could resurface, especially if retail demand spikes and Washington grows desperate for revenue or control.

What It Means for Savers

Schiff’s warnings aren’t just theoretical—they translate into practical implications for anyone trying to protect their wealth.

Inflation + Debt Spiral = Dollar Risk

If the Fed cuts rates into stubborn inflation, Schiff expects long-term rates to rise, forcing Washington back into QE and money printing. That path points directly to dollar debasement, meaning savers should focus less on the nominal value of their accounts and more on their purchasing power.

Gold and Silver as Core Hedges

He stresses that central banks have already made their move into gold—and retail investors risk being late to the party. For everyday Americans, that means:

• Physical metals for security and liquidity.
• Silver for catch-up potential once it clears historic resistance.
• Mining stocks for leveraged upside as producers mint cash and majors scoop up smaller developers.

Don’t Wait for Pullbacks

Schiff says the biggest mistake he hears from would-be buyers is hesitation. After years of conditioning, many believe gold will “always come back down.” He disagrees:

“The longer you wait to buy the high, the higher the high you’ll end up buying.”

Prepare for Policy Shocks

Finally, he warns savers to think ahead about operational risks:

• Could capital or FX controls interfere with access?
• Is your exposure spread across multiple jurisdictions or custodians?
• Do you own assets that can’t easily be frozen or diluted by policy?

Editor’s Note

Peter Schiff has been making the same core argument for years: Washington’s addiction to cheap money and endless deficits would one day collide with reality. Now, with gold setting records, silver breaking out, and the Fed preparing to cut into stubborn inflation, his warnings are harder to dismiss.

Whether you agree with his politics or not, Schiff’s message resonates with a familiar conservative instinct: hard money, limited government, and fiscal responsibility.

His critique isn’t just of the current administration or the Fed—it’s of the bipartisan policies that have hollowed out America’s balance sheet and put savers at risk.

For readers of this blog, the lesson is clear: don’t wait for a crisis headline to validate what central banks already know.

Protecting purchasing power in an era of runaway debt and policy missteps means owning real assets—and being ready for the policy shocks that tend to follow when governments get desperate.

Disclaimer

This article summarizes the views of Peter Schiff as shared in an interview with Kitco News. It is intended for informational purposes only and should not be taken as personalized investment advice.

Precious metals, mining stocks, and related assets carry risks and may not be suitable for all savers. Always perform your own due diligence and consult a licensed financial professional before making investment decisions.