Wednesday, 13 Feb 2013 08:21 AM

By Dan Weil

The United States will win the global currency war, and the economy will “implode” as a result, says Peter Schiff, CEO of Euro Pacific Capital.

Central banks around the world are easing monetary policy, which often pushes a currency lower.

“There is a currency war going on. The irony of a currency war, which makes it different from other wars, is the object is to kill itself,” Schiff said at a conference Monday, CNBC reports.

“Unfortunately, I think the U.S. is going to win the currency war.”

A currency war kills by sparking inflation in countries that depress their currencies. “Anybody who believes there is no inflation [in the United States] isn’t shopping,” Schiff said.

The consumer price index rose 1.7 percent last year, but official inflation numbers are “a total fraud,” Schiff said. “Consumer prices in the U.S. are moving up much faster than indicated by the CPI. It is manipulated. It is deliberately designed to mask inflation, not report it.”

Schiff has been a consistent critic of the Federal Reserve’s massive easing program.

“The Fed knows that the U.S. economy is not recovering,” he noted. “It simply is being kept from collapse by artificially low interest rates and quantitative easing. As that support goes, the economy will implode.”

Gross domestic product (GDP) shrank 0.1 percent in the fourth quarter.

“We’re broke. We owe trillions. Look at our budget deficit, look at the debt-to-GDP [ratio], the unfunded liabilities,” Schiff added. “If we were in the eurozone, they would kick us out.”

Bert Dohmen, editor of the Wellington Letter, agrees with Schiff.

“We are already in a recession,” he told Newsmax TV in an exclusive interview. “We got into a recession last year. If you factor in the actual rate of inflation instead of the phony CPI or GDP deflator that the government uses, the economy has been in a recession overall.”

The GDP price deflator gained 1.3 percent in the fourth quarter.

“If you calculate the CPI now as it was calculated in 1980, then inflation is actually around 9 percent,” Dohmen said.

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