Authored by Mac Slavo via SHTFplan.com,

Economic analyst Peter Schiff, who accurately predicted the 2008 recession said recently that we are not in a bear market. Instead, “we’re in a house of cards that the Fed built.”

Schiff is referring to the Federal Reserve, the United States’ central bank that answers to no one, has no competition, and has been responsible for every depression and recession since its inception. Schiff, who is the chief executive of Euro Pacific Capital, a longtime gold bug and market pundit, has been putting the upcoming economic disaster squarely on the shoulders of the Fed -very much where that blame belongs.

“I’m watching the U.S. economy implode from the beach,” Schiff told MarketWatchduring a recent phone interview from a beach in Puerto Rico. “We’re in a lot of trouble,” he said.

Schiff has often been considered “polarizing” to Wall Street pundits because he calls the Fed out for their destruction of the economy and that’s just not something most want to hear. The prominent investor should be worthy of investors’ attention, however, because his prescient calls ahead of the 2008 financial crisis, which earned him plaudits as one of the few able to spot a global economic crisis emanating from the housing market, were correct as MarketWatch reported.

Schiff says that after a decade of “easy money” policies, such as money printing and low interest rates, the Fed has set up an economy unable to cope with a rise in rates.

Schiff added that the inflation that has taken hold in the lofty prices of stocks and other assets and predicts will gradually shift to higher prices for consumers, who are already feeling their wallets burn thanks to the trade war. The other big problem is that Americans are broke. Any interest rate hike could push debt-laden and cash-strapped Americans to the brink forcing them to choose which bills will get paid.

Meanwhile, the most recent reading showed that the 12-month rate of inflation was flat at 2% (as measured by Federal Reserve’s preferred PCE) or personal consumption expenditures, gauge. Yet most think it’s higher after noticing an uptick in their grocery bill for example. And as the interest rate goes up, servicing debt becomes more expensive, and that a huge concern for the heavily indebted American.

“Markets are starting to crack as this debt is getting more expensive to service,” Schiff said. “We built this gigantic bubble on this unprecedented amount of cheap money and quantitative easing, and now the hangover will be much worse,” Schiff said.

Schiff says it won’t matter what the Fed does Wednesday (policy makers hiked the rates as expected), with a rate increase of a quarter percentage point anticipated.

“I think what’s going to happen is the Fed is ultimately going to take rates back to zero,” he said.

Schiff says the problem is that the Fed and the vast majority of the American public (thanks to the propaganda spewed by the talking heads in the mainstream media) don’t realize just how bad the economy is and how close the everything bubble is to bursting.