Peter Schiff has long held a dim view of the U.S. economy, and a cynical take on the bull market in equities. But even though he thinks stocks are a bad bet, Schiff would still never get short, because he thinks U.S. dollars are an even worse bet.

"Although I don't think there's a lot more upside in the stock market, I'm not looking for a collapse. But what I am looking for is a dollar collapse, so that even if the market continues to move higher, it's nominal highs only. It's not real highs adjusted for a loss of purchasing power in the dollar," Schiff said on Thursday's episode of "Futures Now."

The CEO of Euro Pacific Capital says that Fed stimulus will end up destroying the value of the dollar.

"As the Fed has to print more and more money to keep these asset bubbles inflated, it will diminish the value of the dollar," Schiff said.

So even though the Fed reduced QE once again on Wednesday, and Fed Chair Janet Yellen said that the fed funds rate could be increased sooner than many expect, Schiff doesn't believe the Fed will back away from stimulus.

"I do not believe that the Fed is going to take away the punch bowl. They're going to keep spiking the punch bowl until the patient dies of an overdose of drugs. That's what's going to happen. The economy's going to completely pass out at some point and it's not going to matter how much stimulus the Fed gives us."

(Read more: Peter Schiff and Mark Dow do battle on gold)

That theory about the Fed and the dollar explains why Schiff would never get short.

"Being short the stock market is like being long the U.S. dollar," Schiff said. "I don't want to borrow U.S. dollars in order to short U.S. stocks, so I don't have short positions, and I haven't had them."

But Schiff doesn't believe that stocks will provide an adequate hedge against a crashing dollar.

Investors "need to be buying gold, other commodities, need to be investing abroad, to get a real hedge against inflation. Because I don't think the stock market is going to be a perfect hedge."

It is worth noting that Schiff's prior calls that Fed stimulus would spike inflation, and that the Fed would not pull back on its quantitative easing program, have not been borne out thus far.

—By CNBC's Alex Rosenberg. Follow him on Twitter: @CNBCAlex.

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