Posted on 06/01/2013 5:33:19 PM PDT by lbryce
Schiff: 2/3 of America to Lose Everything Because of This Crisis A record breaking stock market is distorting a frightening reality: The U.S. is being eaten alive by a horrific cancer that will ultimately destroy the economy and impoverish the vast majority of its citizens.
That's according to Peter Schiff, the best-selling author and CEO of Euro Pacific Capital, who delivered his harsh warning to investors in a recent interview on Fox Business.
"I think we are heading for a worse economic crisis than we had in 2007," Schiff said. "You're going to have a collapse in the dollar...a huge spike in interest rates... and our whole economy, which is built on the foundation of cheap money, is going to topple when you pull the rug out from under it."
Schiff says that, despite "phony" signs of an economic recovery, the cancer destroying America stems from a lethal concoction of our $16 trillion federal debt and the Fed's never ending money printing.
Currently, Bernanke and company is buying $1 trillion of Treasury and mortgage bonds a year. That's about $85 billion per month against a budget deficit that is about the same level.
According to Schiff, these numbers are unsustainable. And the Fed has no credible "exit strategy."
Eventually interest rates will rise... and when they do, Schiff says, stocks will tank and bonds dip to nothing. Massive new tax hikes will be imposed and programs and entitlements will be cut to the bone.
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"The crisis is imminent," Schiff said. "I don't think Obama is going to finish his second term without the bottom dropping out. And stock market investors are oblivious to the problems."
"We're broke, Schiff added. "We owe trillions. Look at our budget deficit; look at the debt to GDP ratio, the unfunded liabilities. If we were in the Eurozone, they would kick us out."
Schiff points out that the market gains experienced recently, with the Dow first topping 14,000 on its way to setting record highs, are giving investors a false sense of security.
"It's not that the stock market is gaining value... it's that our money is losing value. And so if you have a debased currency... a devalued currency, the price of everything goes up. Stocks are no exception," he said.
"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."
Should American seniors who've been paying taxes their whole lives bear the price of Washington's folly? See the shocking facts by clicking on the video.
A noted economist, Schiff has been a fierce critic of the Fed and its policies for years. And his warnings have proven to be prophetic.
In August 2006, when the Dow was hitting new highs nearly every day, Schiff said in an interview: "The United States is like the Titanic, and I'm here with the lifeboat trying to get people to leave the ship... I see a real financial crisis coming for the United States."
Just over a year later, the meltdown that became the Great Recession began, just as Schiff predicted.
He also predicted the subprime mortgage bubble burst, nearly a year before the real estate market fully crashed.
His recent warnings, however, have been even more alarming. Will they also prove to be true?
In his most recent book, "The Real Crash" How to Save Yourself and Your Country", Schiff writes that when the "real crash" comes," it will be worse than the Great Depression.
Unemployment will skyrocket, credit will dry up, and worse, the dollar will collapse completely, "wiping out all savings and sending consumer prices into the stratosphere."
Get a copy of Peter Schiff's new book here, courtesy of Money Morning. Limited copies available. Click here to get yours.
Schiff estimates this "cancer" could consume a trillion dollars from consumers this year.
"Today we're the world's greatest debtor nation. Companies, homeowners and banks are so highly leveraged, rising interest rates will be devastating."
According to polls, the average American is indeed sensing danger. A recent survey found that 61% of Americans believe a catastrophe is looming - yet only 15% feel prepared for such a deeply troubling event.
Is Devastation The Ultimate Cure?
Despite its bleak outlook, Schiff's book has become a real wake-up call for millions of readers.
While Schiff's predictions can be grim, he also offers step-by-step solutions that average Americans can follow to protect their wealth, investments and savings.
According to Schiff, "the crash and what follows" can be beneficial. But only for those who understand beforehand what is happening and have time to prepare for the devastation.
"All we can do now is prepare for the crash," Schiff said. "If we brace ourselves properly and control the impact, we will survive it."
Editor's Note: This sovereign currency and debt crisis is just a small part of the disease that's attacking America from within. When interest rates rise - and they will rise soon - it could cost Americans $1 trillion this year. But it doesn't have to affect you. For a limited time, Money Morning is supplying readers with a free copy of Peter Schiff's new book "The Real Crash" How to Save Yourself and Your Country. Learn the steps you can take to prepare your wealth, investments and way of life for this looming catastrophe. Go here to secure a copy.
The guys who are running Funny Money aren't even particularly worried about the financial disaster they yawn their way through this.
In one way or another they've got their a**es covered, having stashed silver gold bullion, firearms, ammo, underground homes, all the staples they think will be enough for them to survive, what have you once the bottom begins falling out.
They're so bad making believe their scared thy couldn't act their way out of a paper bag.
They've got the scare-mongering down to a science, the opening title about Obama not surviving is the best scare tactic I've yet seen, heard. But notice how they don't want to overdo, when after getting you hooked on Obama's shortened presidency, (Whooo, scary), they immediately switch gears.
They're thinking, sure we want to scare them, but, like, we don't want to scare them to death because otherwise, once they're dead, how are they going to buy the bullion we need to having them continue buying???
I've seen, read them prophesizing the end, some better than others all but this chewed up rag, Money Honey or something, couldn't, not even for a nano second get me to sh*t my pants once. Is the Big Debacle really going to happen, depending on certain scenarios, a good probability exists.
Will Sunny Money be around to continue trying to pump up the bullion bubble one last time and then make out like bandits? If Obama's leaving in mid-term he's already won.
Invest in companies that produce pretty shiny objects. It’s the only thing America cares about.
Just look around.
BTTT
I agree with Schiff that if the Fed ever stops QE, the whole house of cards will collapse. However, there is zero incentive for the Fed to stop QE. To appear “responsible”, Bernanke make make obligatory noises like they might, but I doubt it will happen.
Why? First, there is no pressure to stop because all the other central banks are doing it—they are all in the same boat. Second, the consequence of stopping QE is unthinkable because there just isn’t enough $$ in the world to finance our debt. That is why the Fed has to create it out of thin air. Without QE, there would be a spike in interest rates, which would cause the System to crash. That, in turn, would cause social disorder as people’s EBT cards would stop working and disability checks would be cut. It would be painful and bloody.
Currently, the vast majority of Americans rely on the Government almost directly or indirectly, for the livlihood. You can deny it, but its true. Many people who aren’t Government employees work for Government contractors. Even independent business men rely on customers who rely on government checks.
In short, there is no exit strategy because there are no magic answers. We’ve painted ourselves into a corner. So the QE party will continue because its the path of least resistance.
Since I can not get the book......What is Peter saying to do to protect oneself
The Chinese are making the Yuan a world currency. When they hit critical mass, we will either have to fund 100% of our deficit with QE or raise bond rates.
Ammo could become the new currency, in addition to precious metals.
Bernake (sp) is leaving soon and it's expected the billions buying treasury notes and bonds every month will stop. If it stops, the dominoes all fall down. I expect it to happen.
ping
This is the loot and pillage phase that followed a quiet, but successful coup d'état that still hasn't awakened the sleeping giant.
Sun Tzu smiles approvingly at their success, then busts out laughing at US.
Forget gold & silver.
Invest in lead & brass (ammo), firearms (you don’t own it if you can’t defend it), food, water, TP, cash (small bills & coin) and other survival hardware.
Two weeks ago, with my wealth mgr, I converted all mutual funds and stocks in my IRA portfolio into a “cash position” with the IRA, so no taxes, but since 0scumbag’s EPA is going to ill the Keystone XL, I sold all Canadian/US Cos’ shale oil/gas holdings, since Buffett’s RR will handle the transport instead of a pipeline.
My mgr and I are waiting for the bubble to burst, to buy certain stocks critical to critical times. We have a short “watch list”.
I follow Schiff and Celente. Both predicted currency crisis but it has not happen yet because the combined coordination of national central banks and major international banks have been able to stave off the crisis, buy time for the economy to recover. Problem is the economy has not recovered, China is slowing down, Europe in depression and God knows where Japan will end up when she double down on her QE.
IMHO Schiff got the macro situation correct on the US currency but he does not have full grasp of the timeline because of massive central bank and large bank coordination/manipulation to avoid collapse. This is actually a blessing in disguise because it allows more Americans to learn about the situation and do their best to prepare. The drop in metal prices allow me to buy and stack some more, buy more prepper supplies.
Yuan will take time to take hold because most of the world institutions are geared to handle US dollars and US dollars are widely used. China will take her time to chip away the usage of dollars and establish her alternative Yuan system. It is possible by the end of the 21st Century the world may have two Reserve Currencies.
Problem is the economy has not recovered,
.....
Go to Texas oil fields in the permian basin and Eagle Ford, and you’ll find the kind of economic activity that frightens bears.
oh that economic activity also will keep the US economy from rolling over too. the economy won’t be strong. but it won’t go belly up.
I have always thought, that in a collapse, that lead will be valuable than gold. I still feel that way.
It is possible by the end of the 21st Century the world may have two Reserve Currencies.
I think the world moves much faster than that now. I'd say 20 years, and I'm not sure the dollar will be one.
Even most of the CNBC pundits realize that QE is what’s keeping the stock market up. Everyone loves bad economic news because that means Ben won’t taper QE. As Kramer says it’s a “bipolor market” (I can’t believe I’m quoting him). If (when)interest rates rise the pmts would take a lot more out of the budget making less money for wealth distribution. They will look to take the savings of the “evil rich” (i.e. anybody that managed to save anything).
Investing in gold, silver and the like are all good in an economy such as being described, but for the average Joe-six-pack there is not much one can do.
Skyrocketing consumer prices due to a collapse in the dollar will decimate folks savings almost overnight once the rubber band snaps back. Even gold and silver will be of little help, that is unless you’ve socked away large amounts of it.
On the bright side, those sitting on the sidelines of the stock market, singing...whoa always me, I’ve missed this market run up will actually be in better shape than most.
If investors hold majority cash positions, they can possibly avoid a coming market crash. As interest rates begin to rise, so also comes the rise in rates on certificates of deposits.
The biggie for most...unemployment. W/O the ability to generate income, many mortgages will go into default, leaving folks homeless.
Very scary indeed.
The bond buying won’t stop. They will risk the “possibility” of Wiemar inflation over the guaranteed panic/collapse result of no bond buying/money printing.
QE is here until the hyper inflation hits. Only God knows what they will do when it does.
A corrupted banking and monetary system has the capability to destroy productive economic activity.
Even the rebirth of US oil production could be crushed by a banking collapse.
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