With the Dow having its worst session in years over fears of a looming recession and central banks worldwide cutting interest rates, Boom Bust looks at where the global economy is heading and the actual basis for rates cut.

The real trouble with the global economy is not that interest rates are high, but the amount of debt, according to Peter Schiff, CEO of Euro Pacific Capital.

“All the rate cuts globally are not going to help the situation. The problem is not that interest rates are too high, it’s because the amount of debt is too high. And the reason for it is that central banks are keeping interest rates too low,” Schiff said, adding that further lowering the rates “does not solve the problem – it actually makes the problem bigger – and encourages even more debt,” therefore “it is counterproductive.”

The expert noted that despite China struggling through US sanctions and Germany announcing a possible recession, it is the US that’s “in the worst shape.”

“[The US] is on the way to finishing the Great Recession started in 2008 with larger problems than back then. The back half of this recession will be far more severe than the front half,” Schiff emphasized.

For more stories on economy & finance visit RT's business section