Peter Schiff Says World Heading Toward Debt Crisis, Warns US Situation 'Particularly' Problematic: 'Currencies Are Going to Be Debased'

Economist Peter Schiff said the world is headed toward a major “debt crisis,” one that could force governments to default on their obligations.

Schiff’s Big Warning

In a Benzinga interview, Schiff said the issue could become “particularly problematic” for the U.S., though it would not be limited to any one country.

The total U.S. national debt has surpassed $40.29 trillion, while the federal budget deficit for fiscal year 2026 has already hit $1.97 trillion.

Schiff stated that the federal government could be “forced into default,” either on its debt or on commitments to private citizens, such as government pensions and social-assistance programs, including Medicare.

He expected yields on long-dated Treasuries to move sharply higher, potentially pushing the 30-year yield to 8%. As of this writing, yields were between 5.57% and 5.60%, hovering near their highest levels since 2002.

“There’s no way the government can keep those commitments and pay the bondholders,” the economist added. “It’s going to have to break the promise to one or both.”

Schiff Predicts Currencies Will Be Debased but…

Schiff warned that, in such a crisis, central banks would face "a lot of pressure" to print money—potentially eroding the dollar’s value.

“I think the currencies are going to be debased, because ultimately, I don’t think that governments have the courage to do the right thing,” he added.

Notably, Chris Kline, COO & Co-Founder at BitcoinIRA, told Benzinga earlier that such persistent Treasury stress could reinforce the debasement trade narrative for scarce assets, including Bitcoin (CRYPTO: BTC).

However, Schiff doesn’t think Bitcoin is headed much higher and said, “I think the people who are buying [BTC] now have very little chance of making much money, and a lot of chance of losing most of their money.” 

Price Action: As of this writing, BTC was trading at $83,566.91, up 0.10% in the last 24 hours, according to Benzinga Pro. 

Photo Courtesy: Peter Schiff