Schiff: America is on a 'race to the bottom'

With Tuesday's stunning announcement that the People's Bank of China would devalue the Chinese yuan about 2 percent against the U.S. dollar, China became the latest nation to join the global currency war. But according to outspoken market pundit Peter Schiff, China's too late, because the U.S. already has the inside track in the battle to debase its currency.

"America is going to win the currency war," Schiff said Tuesday on CNBC's "Futures Now." "I think we're going to win, but right now you have a dollar bubble."

The dollar bubble claims fly in the face of how the U.S. common currency has performed this year. The dollar index is up more than 7 percent year to date.

But according to the Euro Pacific Capital CEO, the Federal Reserve will hold off on raising rates as long as possible, and over time, that will cause the dollar to collapse.

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While the Fed has discussed plans to raise interest rates this year as early as September, Schiff believes that the Fed will instead implement another round of quantitative easing.

"They are going to do QE4, they're going to do QE5, they're going to do QE's indefinitely until a currency crisis ends the party and they can't do it anymore. And that crisis is going to come," Schiff said. "That is what the drug addicts on Wall Street want. They want another fix, and I think the pushers are going to provide it, unfortunately."

To be sure, Schiff has made several other bold predictions, some of which, like his accurate call on the housing crisis in 2007, have come true. Others, like his claim that gold would go to $5,000, have not.

Still, Schiff remains resolute that the dollar will soon see its day of reckoning.

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"You have all these currency speculators that have been fooled by the Fed's monetary magic," Schiff said. "[They] are betting the wrong way, and when they figure it out I think the bottom is going to drop out of the dollar."

By Schiff's reasoning, the U.S. economy is doomed.

"This economy will be in recession if the Fed raises rates, and it'll be in recession even if they don't raise rates," he said.