America Heading Towards a Collapse Worse Than 2008 AND Europe! Says Peter Schiff

http://finance.yahoo.com/blogs/break...155504860.html

According to CEO and Chief Global Strategist of Euro Pacific Capital Peter Schiff, the U.S. economy is heading for an economic crash that will make 2008 look like a walk in the park. Stimulus programs can delay this day of reckoning, but only for so long and only at the expense of making the eventual meltdown much, much worse.

Schiff, who famously warned investors about the housing and financial crisis in his 2007 book Crash Proof, says the Fed's palliative efforts during the housing meltdown have made the next crisis inevitable.

"We've got a much bigger collapse coming, and not just of the markets but of the economy," Schiff says in the attached clip. "It's like what you're seeing in Europe right now, only worse."

In this nightmare scenario detailed in The Real Crash: America's Coming Bankruptcy, the current economic pause is actually the beginning of a material slowdown or recession into year end. At that point, the Federal Reserve will unleash a third round of Quantitative Easing — weakening the dollar without jump-starting the economy. As a result of dollar weakness, import prices rise, pressing the margins of corporate America. Lower margins lead to heavy layoffs, sending millions of workers into unemployment during a time when they can least afford it. Banks fail, housing collapses, and taxes are raised in a futile effort to give the tapped-out government the capital to try yet more futile stimulus.

"That's when it really is going to get interesting, because that's when we hit our real fiscal cliff, when we're going to have to slash — and I mean slash — government spending," says Schiff.

Those cuts will not be at all unlike the draconian austerity measures in Greece, with programs like Social Security and Medicare being dramatically cut or possibly disappearing entirely. The easiest way to put it, is that everything you don't think could possibly happen in America will come to be.

"Alternatively, we can bail everybody out, pretend we can print our way out of a crisis, and, instead, we have runaway inflation, or hyper-inflation, which is going to be far worse than the collapse we would have if we did the right thing and just let everything implode," he offers.

So what should investors do to protect themselves? Schiff has three suggestions:

1. Get Out of Treasuries

The U.S. dollar is going to get trashed in Schiff's scenario. Locking in a yield on a government 10-year bond of 1.5% is a paltry return in the first place. Should inflation tick up to even 5%, a level much lower than that seen in the early 1980s, bond owners would have 3.5% less buying power at the end of every year. If they go to sell the bond, they'll only find buyers at a much lower price than what they paid.

2. Own the Right Stocks

With bonds and the dollar bearing the brunt of the pain, Schiff says stocks will outperform dramatically, provided you own the right ones. Exporters and multi-national corporations will benefit from a weak dollar. Better still would be to buy foreign stocks and avoid the U.S. entirely.

3. Buy Silver and Gold

Schiff says the recent weakness in these precious metals is just a pause as we wait for the other shoe to drop. Most of those on Main Street haven't even taken positions yet in gold or silver. Once they start dropping bonds and looking for a place to hide, the price of these metals will soar.

Are you preparing for a major U.S. market and economic meltdown? Let us know your thoughts on our Facebook page.

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Peter Schiff operates on the broken clock assumption.


A broken clock is correct twice a day.

how accurate is your clock?

This sounds like F2B.

Sky is falling, buy gold!

Production is coming back to the US. The FED can print but as long as production can catch up, it won't be too bad. The danger is the Fed might get too overly zealous. The most serious issue is probably the budget. Can't run 1T deficit every year.

Does his new hat come with a tin foil or aluminum foil hat?

He says to buy gold and silver, dump treasuries and buy stocks ?

Isn't that contradictory ?
Generally, if people are dumping stocks because they lose confidence in our govt and gold rises because it is an investment based on fear, why does hie think stocks would rise ?

He said to stay away from US stocks. Certain exporters overseas will be the winners.

Its funny how some of you act like you know more then one of the smartest economists we've ever seen . He knew the collapse was coming in 2007, in 2002, and other mainstream economists were laughing at him. Well sure enough he was right, and now the laughers are asking him his opinions. I trust Peter Schiff 1000% over every other media economist on CNN and FOX, telling you that the economy is on the road to recovery...lol yah ok. Have fun

Originally Posted by ROOFLESS

He said to stay away from US stocks. Certain exporters overseas will be the winners.

Its funny how some of you act like you know more then one of the smartest economists we've ever seen . He knew the collapse was coming in 2007, in 2002, and other mainstream economists were laughing at him. Well sure enough he was right, and now the laughers are asking him his opinions. I trust Peter Schiff 1000% over every other media economist on CNN and FOX, telling you that the economy is on the road to recovery...lol yah ok. Have fun

lol

You seriously think he has been correct in every prediction?


Again, a broken clock is right twice a day, afterall. He definitely has his merits, but proclaiming him some sort of economic luminary is quite a stretch.

Originally Posted by evolved

lol

You seriously think he has been correct in every prediction?


Again, a broken clock is right twice a day, afterall. He definitely has his merits, but proclaiming him some sort of economic luminary is quite a stretch.

Hes not a short term guy. He looks at what the gov is doing it's policies of today, and how it will pan out over the course of 3-10 years. Anyone who listened to him about gold and silver 5-10 years ago is 200% richer today. Everything he says about the economy is bang on. Read his books and then come tell me Im wrong.

If you talk doom and gloom long enough, you'll be right eventually. AKA the broken clock reference.

In 2009, he said gold was going to go to $5000+. Didn't happen.
Between 2006-2009, he said U.S. will see hyper-inflation. Didn't happen
In 2007, he said interest rates were going to rise, the dollar would collapse. Didn't happen
He recommended moving investments to foreign equities to decouple from the America disaster, but the foreign equities actually fell much harder than the U.S.


We can go on and on.

The guy has a point on certain things, but no one is 100% "bang on". He's right on half the stuff and wrong on the other half. That's really no better than flipping a coin to decide which way you're going to go. He's here to create headlines and sell books. Take it with a grain of salt.

Originally Posted by Amoeba

If you talk doom and gloom long enough, you'll be right eventually. AKA the broken clock reference.

In 2009, he said gold was going to go to $5000+. Didn't happen.
Between 2006-2009, he said U.S. will see hyper-inflation. Didn't happen
In 2007, he said interest rates were going to rise, the dollar would collapse. Didn't happen
He recommended moving investments to foreign equities to decouple from the America disaster, but the foreign equities actually fell much harder than the U.S.

But, he'll be right EVENTUALLY!!!


Gimme a break, lol

Yeah, and he'll use the sneaky excuse "I was a little off on when it happened, but see I was right!"

Here is another buy that operates on the broken clock assumption......

Marc Faber..



http://www.moneynews.com/Economy/Fab...1/31/id/488273



Home | Economy
Tags: Faber | central | banks | punish
Marc Faber: Central Banks Will Be 'Punished'
Thursday, 31 Jan 2013 11:24 AM
By Michelle Smith

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Central bankers continue playing Mr. Fix-It with monetary easing despite abundant warnings of the dangers. But the day of reckoning approaches warns Marc Faber, author of the Gloom, Boom & Doom report.

"I believe that markets will punish central banks at some stage through an accident," he tells CNBC.

Monetary policies developed by central bankers, such as those in the United States and the European Union, are supposed to heal ailing economies. What these programs actually do is create distortions in the market, Faber explains.

Editor's Note: Economist Unapologetically Calls Out Bernanke, Obama for Mishandling Economy. See What They Did

"When you print money, money doesn't flow evenly in an economy. It flows to some people or some sectors first, and in this case it flowed into equities and until about five months ago bonds," he notes.

"Either the bond market will collapse, bonds have actually been very weak considering the unlimited quantitative easing of the Fed. The other thing is that stocks could go into a bubble stage," he adds.

Peter Schiff, founder of Euro Pacific Capital has also warned that governments' intervention in the bond markets creates distortions that are setting the stage for a catastrophe - one that could overshadow the financial crisis of 2008.

Schiff is credited for predicting the bubble that led to that crisis and last year he told Forbes, that this next blow-up could be seen as soon as 2013.

"The more you delay it, the bigger it will be," he said.

"All of the people who were 100 percent wrong [about the 2008 financial crisis] are saying that everything is OK. I am telling them, they didn't solve the problem and are making it some much worse," he added.

A lot of pain stands to be delivered if the forecasts of bears such as Faber and Schiff are correct.

Financial turmoil has driven enormous amounts of scared money into bonds. And, risk-averse retail investors who had largely abandoned the stock market are now returning to again plunge into equities.

Bloomberg says data from asset tracker EPFR Global shows Americans stuffed some $39 billion into equity funds just since the start of the new year.

Faber says stocks have gotten expensive. He points to the performance in markets that not too long ago were the prime drivers of fear such Greece, Portugal and Italy. They have seen double-digit gains, he says and in Asia, many markets have soared 250 percent from the lows.

"For the first time in four years, since the lows of 2009, I love this market because the higher it goes, the more likely we have a nice crash, a big time crash," he tells CNBC.

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