The news that OPEC is cutting back supplies of crude oil is a "very big deal" at a time when the Federal Reserve is trying to bring down inflation because the supply of money to buy oil will go up, Peter Schiff, the CEO and chief global strategist of Euro Pacific Capital, said in an interview with Newsmax on Sunday.
"This is complicating those efforts, especially given the fact that we're in the midst of another financial crisis," Schiff told Newsmax's "Wake Up America." 'The Fed has already gone back to quantitative easing to bail out the banks, so we're printing more money, but we're not producing as much oil."
Further, the world is starting to divest itself of U.S. dollars, Schiff said, "which of course will put more upward pressure on the price of oil."
The United States is losing its energy independence at a time when it needs to be able to produce everything, Schiff added.
"We're dependent on the rest of the world for everything that we consume because we no longer have the industrial capacity that we once enjoyed because of the policies that have been pursued," he said. "For decades we have had too much regulation. We have too high taxes and too much government spending, and we're not producing what Americans consume. We rely on the rest of the world."
The "only reason," the United States can do that is because the dollar remains the reserve currency, said Schiff, but he warned that "we may lose that privilege over the next several years, maybe even over the next few months. Who knows?"
There has been talk about other countries trying to replace the U.S. dollar as their reserve currency, and that will hurt the United States "substantially," he added.
"Once they start moving in that direction, the pendulum is going to continue to swing," Schiff said. "There are all sorts of reasons why the world should want to divest of dollars and no longer depend on the U.S. dollar as a reserve currency."
The Biden administration has given another reason for countries to divest themselves of the U.S. dollar by imposing economic sanctions on Russia, said Schiff.
That "really highlighted how dangerous it is to allow the United States to enjoy this privilege, and so we have scared the world into divesting of dollars, something they should have done anyway because it was in their economic interest to have done so."
It also "conveys a huge privilege" to the United States when it's being paid by the rest of the world, as it "enables Americans to live beyond our means," said Schiff.
"We're able to consume all sorts of stuff that we did not produce," he said. "The only reason we could do that is because we could print money that costs us nothing and our trading partners will accept that instead of actual goods. If we lose that privilege, our standard of living is going to implode."
The solution lies in free market capitalism, said Schiff.
"We don't need more government solutions to government-created problems," he said. "The government has to get out of the way so that free market capitalism can clean up the mess that the government created."
About NEWSMAX TV:
NEWSMAX is the fastest-growing cable news channel in America!
Sandy Fitzgerald ✉
Sandy Fitzgerald has more than three decades in journalism and serves as a general assignment writer for Newsmax covering news, media, and politics.
© 2025 Newsmax. All rights reserved.