Schiff, who serves as the CEO of Euro Pacific Capital, voiced his grim prediction for the outcome of US’ attempts to make others live by their rules as he sat down with RT’s Rick Sanchez. Beijing is not going to sit idly in this situation and its possible retaliation can undermine the American economy.

“I think this has much bigger and broader ramifications …I think long-term, this is going to undermine the dollar and its role as a reserve currency. And when that goes, so does the American standard of living because it’ll collapse,” the strategist told RT America.

There are several reasons for Washington to think twice before facing off against China, according to Schiff. First of all, the US is clearly in a bear market despite no one wanting to admit that fact. Otherwise the news on the Huawei’s Meng Wanzhou arrest would not have sent the markets south, the investor explained.

Secondly, the US is in a much weaker position compared to Beijing, and the huge trade deficit with China does not give Washington an upper hand.

“I think the fact that they [China] supply us with all this merchandise that our economy needs, and the fact that they hold a lot of our bonds and continue to lend us a lot of money so we can live beyond our means, they’re the ones, I think, that call the tunes and we have to dance to it.”

Also on rt.com Fed injecting ‘monetary heroin’ into economy created biggest bubble ever – Schiff to RT’s Boom BustThe analyst also reiterated his previous doomsday warning on what he calls the US economic “bubble.” He said that as US President Donald Trump inherited it and made it only bigger, the bubble is going to “pop on his watch” leading to dire political and economic consequences.

“We are headed for a much worse financial crisis than the one we experienced in ’08, and we are headed for a much greater recession than the one we lived through following that crisis – the one we call the ‘Great Recession.’” the veteran expert concluded.