Two years later, he was right.

In 2008, the U.S. National Bureau of Economic Research announced that America is officially in recession. He attributes this to the way the American people have handled their finances through out the years, saying that there had been too much borrowing and spending going on while no production and savings are being made. “Rather than the recession being resisted, it should really be embraced because the disease is all these debt-finance consumption. The cure is that we stop consuming and start saving and producing again. And that’s a recession,” says Schiff in a CNBC interview in August 2006.

It’s a clear warning that the Americans did not heed. Most of his peers seemed to be in denial by saying that America is only experiencing a financial slowdown and not recession. The government, on the other hand, seemed to have made it worse by granting bailouts, wherein more money is being loaned for more spending.

Now, the worst is yet to come. He warns that U.S. is now heading for a depression that will call for an economic restructuring. There’s nothing much Americans could do now but sit through the pain, change their lifestyles and improve their finances by saving again.