The financial media are obsessed with whether or not the Federal Reserve is going to remove the word “patient” from its policy statement concerning an interest rate hike. CNBC asked Peter Schiff for his take, and he told them that the Fed’s statement is meaningless — the Fed can’t raise rates without pushing the United States economy into recession. The host and floor traders insisted that this bubble economy is different, and Peter agreed. This time around, low oil prices aren’t translating into strong consumer spending and the government is in far more debt than the last time it successfully raised rates. He fully expects another round of quantitative easing in the next year.

Video Length: 00:06:32

Follow Peter’s comments below:

“I don’t know how they [the Federal Reserve] are going to word the statement. They may very well take away the word ‘patient’. It doesn’t mean they’re going to be any less patient than they were when the word was there. Wall Street is looking for the Fed to take that away because the Fed wants to maintain the pretense that it’s actually going to raise rates. I don’t think that’s going to happen at all. I think the Fed is more likely to raise QE4 than to raise interest rates, but they don’t want to admit that, so they have to continue to play this word game…

“Well. they don’t have to, but they will [go to QE4]. They’re going to launch QE4 for the same reason they launched QE3, 2, and 1. They’re going to try to stimulate the economy. Now that they’ve stopped QE, the air is coming out of this bubble. The US economy is rapidly de-accelerating. I think without QE4 we’ll be back in recession. Now the Fed should allow that recession. It’s going to be horrible, and it will be a worse financial crisis than in 2008, but they won’t do it. They will go back to the well and launch QE4, and now the question is, will they be able to bluff their way to QE5…?

“Well, it [the sky] hasn’t fallen yet. Again, I’m not saying that the sky is falling, but I agree that the US economy is in a lot of trouble and that we haven’t recovered from anything. Thanks to the Fed, the US economy is sicker than ever. It doesn’t surprise me that the people who are so clueless about this nation’s problems — they think the Fed’s solved the problem. They don’t understand the problems. If they understood them, they would have been warning about the 2008 financial crisis like I was. They were oblivious to that crisis because they didn’t understand what the problem was, and they still don’t understand it because they think the Fed solved it when all the Fed did was make it much worse. Unfortunately, there is a much bigger crisis looming on the horizon and people are just as oblivious to that one. You can call me whatever you want, but I know what you’re going to call me after it happens. I think I’m going to be proven right once again…

“There is no way for me to tell [when the crisis will hit] because I don’t know how much longer people can be irrational. Certainly the foreign exchange markets believe the US economy is recovering and believe the Fed is going to raise rates. Neither of those was true. We’re not doing that. We’re going to have to do QE4. The economy is not recovering. Look at the data. Even the data that’s been coming out– look at what happened to day with the housing numbers. We’re getting data points that haven’t looked this bad since 2008, 2009, yet somehow we’re saying that we’re finally at liftoff…

“The consumer doesn’t have more money in his pocket because even though oil prices are down, his paycheck is down even more. Meanwhile, the cost of living is still going up despite the drop in oil prices. Haven’t you seen the recent retail spending numbers, how they’re collapsing even with the recent drop in oil prices? This is one of the first time that low oil prices haven’t helped the consumer because the consumer is in such bad shape now that it’s barely making a difference…

“We’re very near recession right now. You have to ask yourself this: if the economic data is so weak with the interest rates at zero, why is the Fed going to risk raising rates and really pushing an economy that’s teetering on the brink of recession into recession…

“A quarter point [rate raise] in and of itself wouldn’t [bring the economy to recession]. It’s just the trajectory that that indicates. Once the Fed starts going in that direction, the market starts factoring in additional quarter-point rate hikes. But the difference between rate hikes in the past and rate hikes now is that we’ve never had so much debt. The debt is very expensive, so the cost to the economy is a rate hike is going to be so much more dramatic now than at any time in the past. It’s like we have a much bigger addiction to cheap money, and the withdrawal symptoms if we lose that cheap money will be much greater than they were in the past. And we saw how bad it was in 2008. We ain’t seen nothin’ yet compared to what it’s going to be like if the Fed tries to take away the punch bowl…”