Buckle-Up And Prepare For A Bumpy Economic Ride

ecoPeter Schiff, a best selling author, investment broker and CEO of Euro Pacific Capital has dire predictions for the U.S. economy.

While those on the left called him a scare monger and Doctor Doom, Business Week and other business journals reported he “more or less accurately predicted the 2007-2010 financial crisis.” He also predicted the subprime mortgage bubble burst, nearly a year before the real estate market crashed.

In his latest book The Real Crash: How To save Yourself and Your Country, Schiff writes that when the 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.”

The government denies there’s inflation, but consumers know better.  The real cost of living – food, energy, basic necessities  – is rising rapidly as people’s paychecks are diminishing in purchasing power.

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. Schiff says we’re heading for a worse economic crisis than we had in 2007.

The Fed knows that the economy is not recovering.  It is being kept from collapse by artificially low-interest rates and quantitative easing and when that support goes, the economy will implode.  “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.

The government’s phony signs of an economic recovery  stems from a lethal concoction of our $17.2 trillion federal debt and the Fed’s never ending money printing.

The market gains experienced recently are giving investors a false sense of security.  It isn’t that the market is gaining, it’s that our money is losing value.  Eventually interest rates will rise and when they do, Schiff says that the stock market will tank and bonds dip to nothing

Massive  new tax hikes will be imposed and programs and entitlements will be cut to the bone.    “The crisis is imminent.  I don’t think Obama is going to finish his second term without the bottom dropping out. . .We’re broke.  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.

The Bank for International Settlements (BIS) says the global public and private debt reached $100 trillion in mid 2013.  Since 2007, credit outstanding (unpaid) has grown by more than $30 trillion.  Using data compiled by the Fed, the U.S. share (taxpayer’s share) of that $100 trillion is almost three-fifths, with about $58 trillion unpaid at the end of the second quarter, 2013.   The U.S. economy makes up 23% of the global economy but owes 58% of the total global debt!    We have an eye-popping debt to GDP ratio of 345% compared to the rest of the world.

“Today we’re the world’s greatest debtor nation.  Companies, homeowners and banks are so highly leveraged, rising interest rates will be devastating.    All we can do now is prepare for the crash.  If we brace ourselves properly and control the impact, we will survive it.”


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