Economic Collapse Will Happen No Matter Who Wins Election

Our incumbent President says that things are getting better, jobs are being created, and America is on the road to recovery. His opponent, Governor Mitt Romney, says the opposite, but claims he has a plan that will turn things around and bring prosperity back.

According to free market proponent Peter Schiff, it doesn’t matter who wins, because the crunch is coming – and it’s going to become apparent during the next President’s administration.

He [Mitt Romney] is not going to prevent the crisis. 

We’re headed for a real economic collapse regardless of who wins this election. 

The government has over-promised. There are gigantic Ponzi schemes. They do not work. Meanwhile, the only reason the economy has not collapsed is because interest rates are artificially low. the Fed cannot keep interest rates low indefinitely, and when interest rates go up the party is over. And then we’re not going to have a choice anymore.

We’re going to have to finally deal with these problems or destroy our currency, and that is a real economic crisis that is going to make 2008 look like a walk in the park. 

[The crunch] is going to happen in the next administration.

We can’t fix these problems by repealing Obamacare and cutting taxes. We have structural problems that underline the U.S. economy that are very deep that require real free market reforms, and unfortunately none of the major candidates are even talking about that right now.

Peter Schiff was ahead of the collapse of 2008, warning clients of his firm Euro Pacific Capital that global equities would crash as a result of fraud, unservicable debt levels and a failed monetary policy. After the crash he, like many others, urged Congress to address the fundamental problems within the US economy, including fiscal, monetary and economic policy reform.

He and the American citizenry were ignored as Washington not only didn’t listen, but engaged in exactly the opposite of what should have been done.

Four years on we’re worse off than ever before, with more money having been borrowed from foreign creditors and stolen by the government from taxpayers under the guise of bailing out essential financial and manufacturing sectors of the global economy.

We’re in too deep folks. At this point, it cannot be stopped.

Trillions of dollars are owed, and as a country we have no way to make good on that debt.

Confidence in the US dollar will soon be lost, and when that happens we will experience a collapse in the United States and the global economy unlike any that has ever been witnessed in the history of the world.

Historians will write about this era for centuries to come, just as they write of Rome today.

Mac Slavo

The Dollar Will Collapse

The dollar and the U.S. bond market are headed for a collapse as the U.S. Federal Reserve loses the ability to service the nation’s debt with “artificially low” interest rates.

As far as I am concerned, U.S. Treasurys are junk bonds. And the only reason that the U.S. government can pay the interest on the debt, and I say ‘pay’ in quotes because we never pay our bills. We borrow the money so we pretend to pay, but the only reason we can do it is because the Fed has got interest rates so artificially low.”

The Fed has been keeping rates on benchmark 10-year Treasurys low by purchasing bonds via quantitative easing (QE), and this will ultimately be the U.S. economy’s undoing. Unfortunately, we are going to get more QE than Rocky movies, because the only thing keeping this phony economy going is this QE. And the minute you take it away, it’s going to collapse.

Fed officials warned that the U.S. could be heading for a “fiscal cliff” at the end of the year if mandated tax increases and spending cuts are implemented. On the same day, fund manager Bill Gross, who runs the world’s biggest bond fund, told CNBC that the U.S. will face a downgrade of its triple-A debt rating if it did not fix its fiscal situation.

"It’s not just $15 trillion in terms of current debt,” Gross said. “It’s probably three to four times that in terms of Medicare, Medicaid, of Social Security, in terms of the present value.”

“So unless the U.S. begins to make some inroads, and that’s called the structural deficit that the (Congressional Budget Office) and the (International Monetary Fund) basically identified as perhaps six to seven to eight percent, greater than any country other than Japan and the U.K. Until we address that structural deficit, then yes, we're headed to double-A territory,” he said.

Euro Pacific’s Schiff predicts weakness in the U.S. dollar, which will put pressure on commodity prices and fuel inflation. This will in turn force the Fed to raise interest rates, he added.

“The Fed will not do it; the Fed knows the only thing propping up our phony economy is zero percent interest rates and quantitative easing. And I think when the market figures this out, it’s going to put even more pressure on the dollar,” he said.

Schiff is a well-known bear who predicted in 2008 that the dollar will collapse amid hyperinflation. That did not happen, and the dollar strengthened against most major currencies by the end of 2009.

Andrew Economos, managing director and head of sovereign and institutional strategy at JPMorgan Asset Management, said what the Fed is trying to do is “buy time” by keeping credit cheap and encouraging banks to lend.

So far it's not working.