Economists warn: The 2026 financial crisis will far surpass 2008

Source: Yellow Original Title: The economist who sounded the alarm before 2008 now warns of a much greater crisis

Original Link: Economist Peter Schiff claims that this year will face a financial crisis more severe than the 2008 financial crisis. He believes that the understanding of U.S. economic policies and their impact on global capital dynamics is fundamentally flawed, risking a collapse of confidence.

In a post on X, Schiff stated that the next recession will differ from the 2008 recession in one key aspect: this time, it will not be global.

" The main difference between the 2026 financial crisis and the 2008 financial crisis, besides being much more severe, is that it will not be global," Schiff wrote. He added that other economies might benefit because “the burden of maintaining the U.S. consumer economy will be lifted.”

Schiff directly links the risk to U.S. trade and economic policy stances under Trump’s leadership, accusing the government of misunderstanding who ultimately finances U.S. consumption.

“A old saying goes: ‘Don’t bite the hand that feeds you,’” Schiff wrote. “Trump not only bit the hand that has been feeding America but also completely severed it.”

Decline in dollar demand

His warning reflects concerns among prominent investors about capital flows and confidence in U.S. assets.

At the World Economic Forum in Davos, billionaire investor Ray Dalio stated that escalating trade disputes could lead to what he describes as “capital wars,” where foreign investors reconsider whether to continue holding U.S. debt.

“On the other side of the trade deficit and trade war is capital and capital wars,” Dalio said. He warned that declining demand for U.S. Treasuries would pose a serious challenge as deficits increase.

Dalio reviewed history, noting that during periods of geopolitical and economic conflict, even allies tend to reduce exposure to others’ debt and shift toward physical assets.

He recommended diversification and emphasized gold as an effective hedge during financial stress, suggesting that gold should comprise 5% to 15% of an investment portfolio.

Market behavior has already begun to reflect these tensions.

This week, U.S. Treasury prices fell as investors assessed Washington’s new tariff threats, including proposals related to the Greenland dispute, reigniting concerns over broader trade conflicts with Europe.

Deep institutional trust crisis era

At Davos, BlackRock CEO Larry Fink framed this moment as a phase of erosion of institutional trust.

He stated that global institutions are now facing a “deep trust crisis” and argued that established systems must rebuild credibility to remain effective.