The US dollar will experience "one of its worst years ever" in 2023, according to economist Peter Schiff, while warning that inflation is "about to get much worse". ". He also shared his predictions for the worst performing areas of the stock market this year.
Economist Peter Schiff's Economic Prediction for 2023
Economist and gold bug Peter Schiff shared some predictions for the US economy, the dollar and the stock market in 2023 in a series of articles. tweets on Friday.
He began to explain:
“The US Dollar Index had a strong year, but ended the year at a 6-month low, down 10% from its November high.
This weakness is likely to continue into 2023, as the dollar will have one of its worst years ever. If I'm right, inflation is about to get much worse."
Schiff also disagreed with Wharton University finance professor Jeremy Siegel after he shared his economic views on CNBC last week.
“Jeremy Siegel is wrong. Siegel thinks falling property prices mean the threat of inflation has passed. That's falling asset prices. Consumer prices will continue to rise, including for home ownership-related things like rent, mortgage interest, insurance, taxes, utilities and maintenance.”
Regarding the stock market, Schiff predicts:
“The worst sectors of the stock market in 2022 will likely be the worst sectors in 2023.”
Schiff has repeatedly warned about the US economy and the collapse of the dollar. In October, he warned of a growing national debt that the US could not pay.
“We will default. We have more debt now than we did in 2008…so it will be a much bigger crisis when defaults start.”
The economist also predicted that the recent actions of the US Federal Reserve could lead to a market crash, a major financial crisis and a severe recession.
IMF warns of a difficult year
The International Monetary Fund (IMF) has warned that 2023 will be a tougher year for most of the world economy as the economies of the US, EU and China are all decelerating. IMF Managing Director Kristalina Georgieva said:
“We think a third of the world economy will fall into a recession… Even in countries that don't have a recession, hundreds of millions of people will feel like they're in a recession.”
IMF Managing Director Kristalina Georgieva shared some of the organization's predictions about the US, EU, China and the world economy in an interview with CBS that aired on Sunday.
“This is what we will see in 2023. For most of the world economy, this will be a difficult year, even more so than the past year. Why? Because the three major economies of the US, EU, and China are all decelerating at the same time.
America is the most resilient, can avoid recession. We see the labor market as still quite strong. However, this is a mixed luck because if the labor market is very strong, the US Federal Reserve (Fed) may have to keep interest rate policy tighter for longer to reduce inflation.
The EU has been heavily affected by the war in Ukraine. Half of the European Union will be in recession next year. China's growth will slow this year."
Furthermore, the head of the IMF said:
“Next year will be a difficult year for China. And that causes a negative trend globally.
When we look at emerging markets in developing economies, the picture is even worse. Why? Because above all, they are affected by high interest rates and the rising dollar. For economies with such highs, devastation is inevitable.”
Regarding China in particular, Georgieva describes:
“In the short term, that is bad news. China's growth slows down significantly in 2022 because of its resolute anti-Covid policy. For the first time in 40 years, China's growth in 2022 will likely be equal to or below global growth. This has never happened before."
Emphasizing the hope that the US economy "will not fall into a recession despite all these risks", the IMF managing director shared:
“We think a third of the world economy will be in recession… Even countries that don't have a recession, hundreds of millions of people will feel like it.”
"The world has changed dramatically," added Georgieva, noting "it's a world with more shocking events." These shocks include Covid, the Russo-Ukrainian war and the cost of living crisis.
“My message is don't think we're going back to the pre-Covid era. More uncertainty, more overlapping crises await us… We must fasten our seat belts and act in a more proactive, preventive manner,” she concluded.