President and chief global strategist for Euro Pacific Capital, Peter Schiff is one of the harshest critics of US central bank the Federal Reserve, says Hard Assets Investor.

In this interview – originally published on IndexUniverse.com – the vociferous Dollar bear asks what excuse the Fed will need for its next dose of quantitative easing.

Olivier Ludwig, managing editor IndexUniverse: On this side of the Atlantic, with the Fed, what's your outlook? Do you see a QE3?

Peter Schiff, president Euro Pacific Capital: I think QE3 is going to happen – if it's not already here in disguise. They will officially acknowledge it. The government just revised downward its estimate for third-quarter growth from 2.5% to 2%. I think we're relapsing into recession because we never really fixed our problems – we just added more debt and more government.

I think the Fed will be looking at oil prices, which will be well over $100 a barrel shortly. We'll be seeing record-high Gasoline prices seasonally, and probably we'll see Heating Oil prices the highest they've ever been in the wintertime.

The Fed will unfortunately react to this thinking: "Oh no! We need cheaper money because higher energy prices are going to be a drag on the economy." But, of course, the higher energy prices result from all the cheap money.

So I think we're going to see more easing and more pain, which means higher gas prices, higher food prices and a weaker Dollar.

Ludwig:When you take in the market craziness lately – up 200; down 300; up 100; down 200 – what's the best game plan? Is it all about precious metals and commodities?

Schiff: Well, Gold Prices are going to keep on rising; commodities prices are going to keep rising – all a result of a falling Dollar.

And if we see some really big cuts in European spending, that's going to really clobber the Dollar, as a lot of the money that's been going out of the Euro and into the Dollar starts going the other way. And if the Europeans pull this off and get some of those cuts, some of these central banks – China and Japan – are going to want to buy Euros and dump Dollars.

Ludwig: What do you make of all this talk of China slowing down, struggling with a real estate bubble in eastern China? And it looks like demand for things like Copper is falling.

Schiff: The problem over there is the Dollar. They're trying to prop up the Dollar so that they can keep exporting to a group of people that can't afford to buy their products. That's what's screwing up the Asian economies – the subsidies to the US

They have to come to terms with the fact that we're broke and we're not a good customer. And they have to stop propping up our currency and allow their own citizens to enjoy a stronger currency to consume their own production. But as long as the world is trying to sell merchandise to Americans, it's going to create problems. We're poor. We can't afford all this stuff. So they have to lend us some money and that creates a lot of problems