Peter Schiff

US consumers will cut spending and rebuild savings as their home equity evaporates, pushing the US economy into a recession.

“And what's going to happen is the American consumer is basically going to stop consuming and start rebuilding his savings, especially when he sees his home equity evaporate. And when you have the economy 70 percent consumption, you can't address those imbalances without a recession.”

Said on

1 August 2006 · CNBC broadcast, August 2006 (exact day not given), as aired in NPR's All Things Considered segment

Source

The Man Who Predicted The Economic Meltdown · NPR

Should come true

No date given

How sure they sounded

what's going to happen is; you can't ... without a recession

Categories

Economy

Importance

4 of 5 · Forecast of the US recession at the core of the 2007-09 global financial crisis.

Outcome

Accurate Happened 1 December 2007.

The NBER dates a US recession from December 2007 to June 2009. It followed the collapse in home prices and household equity, and household spending fell during it. NPR noted in 2008 that events played out much as Schiff had said.

Evidence:

• https://www.nber.org/research/data/us-business-cycle-expansions-and-contractions
• https://www.npr.org/transcripts/97801606