Economist Peter Schiff is sounding the alarm on the American economy, warning that the United States is standing at the edge of what he calls the “biggest economic crisis” of modern times. His warning comes at a moment when gold and silver prices are surging to record and near-record highs.
In a post shared on X, Schiff wrote, “The US economy is teetering on the brink of the biggest economic crisis of our lifetimes. Gold and silver prices skyrocketing to new highs will ultimately pull the rug out from under the US dollar and Treasuries, sending consumer prices, bond yields, and unemployment soaring.”
For Schiff and other critics of US economic policy, the rally in precious metals is not a sign of strength, but a warning signal that investors are quietly losing faith in the foundations of the world’s largest economy.
Gold prices surge
Gold prices have climbed sharply in recent months, driven by a weakening US dollar, and a tense global political backdrop. As of December 17, 2025 at 05:04 AM ET, gold was trading at $4,331.38 per ounce, while silver, platinum, and other precious metals also touched fresh peaks.
The latest push higher came after a US jobs report showed the unemployment rate rising from September, stressing on the fact that Fed may be forced to ease policy to support growth again. Spot gold traded near $4,310 an ounce during the session, while US gold futures settled around $4,332.
America’s debt problem
Behind the surge in gold lies a deeper concern: America’s rapidly growing debt burden. According to an AP report published in October, the US government’s gross national debt has crossed $38 trillion, explaining the pace at which borrowing continues to accelerate. History offers uncomfortable parallels. Periods of heavy government borrowing have often weakened confidence in fiat currencies and strained central banks, according to Bloomberg. In such moments, investors tend to move toward assets like gold and silver, which are viewed as having intrinsic value and a proven ability to hold purchasing power during fiscal stress.
When gold prices become a warning sign
Gold is traditionally seen as a safe haven, some economists argue that its explosive rise should be read as a signal of deeper trouble rather than comfort. “There’s no way you can interpret these exploding gold prices as a good sign — they’re a warning sign,” Paolo Pasquariello, a professor of finance at the University of Michigan, told ABC News.
“There’s clearly a case to be made that these high gold prices are a leading indicator of troublesome times ahead for the US economy.”
Schiff’s argument follows the same logic. He believes that soaring demand for gold and silver explains a gradual erosion of trust in the US dollar.
As investors move away from dollar-denominated assets, US Treasuries become less attractive, forcing yields higher to draw buyers. Those higher yields then ripple through the economy, pushing up borrowing costs for households and businesses and ultimately weighing on jobs.
Concerns over rising yields
A sustained loss of confidence in US Treasuries could have serious consequences. Rising bond yields increase the government’s cost of servicing its debt and lift interest rates across the economy, from home loans and car loans to corporate borrowing.
At the same time, a weaker dollar makes imports more expensive, adding pressure to consumer prices. As inflation eats into purchasing power and economic growth slows, companies may be forced to scale back hiring or cut jobs altogether.
Recent labour data already hints at that strain. The US unemployment rate rose to 4.6% in November, its highest level since 2021, as uncertainty linked to President Donald Trump’s trade policies weighed on the job market.
Although hiring recovered modestly, with non-farm payrolls rising by 64,000 jobs in November, the rebound followed a steep loss of 105,000 jobs in October.
The earlier decline was driven largely by government spending cuts and federal job losses during the shutdown, as thousands of employees accepted deferred buyouts under the administration’s push to shrink the federal workforce.
Geopolitics another factor
Global tensions are adding another layer of support to gold prices. The metal has also been lifted by developments in Venezuela, where President Donald Trump ordered a blockade of sanctioned oil tankers and stepped up pressure on President Nicolas Maduro amid a military buildup and threats of land strikes.
“The tensions seem to be gradually ratcheting up,” said David Wilson, senior commodities strategist at BNP Paribas. He pointed out that inflation pressures, stress in US equity markets, and slowing global growth are all unfolding at the same time, predicting that gold could climb to $5,000 next year.
Analysts say the rally explains a broad pullback from government debt and paper currencies, combined with heavy buying by central banks.
Ray Dalio, founder of hedge fund Bridgewater Associates, has also urged investors to hold gold as protection against potential market turmoil, warning of deep internal divisions in the US and the risk of severe economic and social stress. To sum it up, the surge in gold and silver prices, America’s swelling debt, signs of labour market weakness, and rising geopolitical tensions form a troubling picture.