Noted economist and gold bull Peter Schiff, who has been sounding out doomsday predictions for the economy and markets, late Thursday weighed in on the state of the economy under President Joe Biden and his two predecessors.
What Happened: Referring to new House Speaker Mike Johnson’s (R-La.) assertion that under former President Donald Trump, the U.S. had the “greatest economy in the history of the world.”
Schiff said “That’s pure B.S.”
The economist added that Trump inherited a “bubble economy” from his predecessor, President Barack Obama.
The bubble got bigger under Trump’s watch and it finally popped under Biden’s presidency, he added.
Why It’s Important: Schiff may not be way off the mark in his comments about the economy. Obama became the president just after the Financial Crisis of 2007-08. The stimulatory measures put in place to reinvigorate an economy that went into a recession led to price bubbles in several asset classes.
Amid the recession, GDP rose a little under 1% during the first term of Obama’s presidency and the growth accelerated to 2.3% during his second term that ran from Jan. 2013-Jan. 2017.
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When Trump became the president in January 2017, the economy had a fairly good run as the growth momentum continued. The COVID-19 pandemic came as a dampener, dragging the economy into a recession in early 2020.
Real GDP Chart courtesy of St. Louis Fed
As Biden took office in January 2021, he inherited an economy that was stimulated heavily and inflation began to rear its ugly head in the process.
Although economic indicators such as consumer spending and job growth remained resilient during his tenure, inflation-fighting by the Fed has left the economy nursing the wounds of anemic residential and commercial real estate markets and a struggling banking sector.
Economists warn that the lagging impact of the successive rate hikes implemented by the Fed since March 2022 to rein in inflation would return to haunt the economy.
The SPDR S&P 500 ETF Trust SPY, an exchange-traded fund that tracks the performance of the broader S&P 500 Index, traded up 0.55% to $414.81, according to Benzinga Pro data.
Read Next: How Biden’s Economy Compares To Trump, Obama And Why He’s Less Popular Than His Predecessors
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