Every day I log on and see where the news takes me. Occasionally this process is surprising, as in the midst of turmoil in the Middle East or other expected news, we'll come across a flurry of news stories that hit on another prophetic theme and today is one of those days.
For anyone who follows the news closely - it is painfully obvious that the world's financial system is on the verge of collapse. The EU's problems have been well described and this situation is hanging by a thread despite what the MSM may be telling you.
The U.S. is arguably worse as the only thing keeping it alive is the constant printing of money "out of thin air" with no basis and no backing. This simply cannot be sustained.
We know from Revelation 6 that there will be a collapse of epic proportions. It will take an entire day's worth of wages just to buy a meal. We also know that the entire world's economy will be run by the antichrist and the false prophet and the 'currency' will include mandatory receiving of the 'mark of the beast'.
Is it possible that this scenario will be precipitated by a global economic collapse?
Jim Rogers has a two-word message for U.S. investors: "Be careful."
"The U.S. is the largest debtor nation in the history of the world," Rogers told CNBC.com Wednesday night by phone from Singapore. "We may well have a big, big rally in the U.S. stock market, but it's not based on reality. I would encourage investors to know you're in a fool's paradise, be careful, and when people start singing praises, say, 'I've been to this party before, and I know know it's time to leave.'"
For Rogers, the author of "Street Smarts: Adventures on the Road and in the Markets," it is only a matter of time until the U.S. stock market runs into devastating problems due to the Fed's quantitative easing program and the prevalence of similar stimulative programs around the world.
"First of all, throughout American history, we've always had slowdowns every four to six years. That means that sometime in the next couple of years—three years, maximum—we are going to have problems again, caused by whatever reason," Rogers said. "For instance, there was 2001 and 2002, and then 2007 and 2009 was much worse. Well, the next time it's going to be worse still, because the level of debt is so, so, so much higher. Every country is increasing its debt at the same time."
"This is the first time in recorded history that we have every major central bank in the world printing money, so the world is floating on an artificial sea of liquidity. Well, the artificial sea is going to disappear someday, and when it does, the catastrophe will be even worse. Yes, it's coming," Rogers reiterated, adding: "If I was smart enough to tell you when it's going to happen, I would get rich."
Indeed, dismissal of the government shutdown as a threat to markets has turned to dismay over the potential of a debt default that could have far worse consequences.
Damage from a U.S. credit default would be more than bad public relations—it could affect everyone from bankers to pensioners to holders of supposedly sacrosanct money market funds.
Consequently, stocks sold off sharply and the Treasury Department warned of the dire consequences that might result from a full-blown debt default.
Picking up on that message, Bove said the situation could be more dramatic: A Depression that would cause severe and lasting economic damage.
"The devastation to the United States would be so severe that it would take decades to recover from the Depression caused by a default and the attendant dumping of trillions of dollars of U.S. Treasury securities on the global financial markets," said Bove, vice president of equity research at Rafferty Capital Markets.
Though Bove is known for expressing strong and sometimes alarmist assertions, he is not alone in his default warnings.
In a public statement, the Treasury Department said default would be "unprecedented and has the potential to be catastrophic."
...with warnings that previous shutdowns may not serve as accurate templates for the current standoff.
Tensions are now mounting that the faultlines exposed by the shutdown will also affect negotiations over America’s self-imposed $16.7 trillion borrowing limit.
Congress has until October 17 to agree a deal to extend the debt ceiling, or face an unprecented default on US sovereign debt, which could in turn trigger another global recession.
Banking sources told the Daily Telegraph that they had learned many lessons from a similar game of political brinkmanship in August 2011, when budget negotiations and concerns over the eurozone crisis triggered a sharp drop in stock prices around the world.
The market turmoil induced panic among customers, who made a run on banks to withdraw their cash.
“That was the fire drill, but that’s also what happens around ‘disasters’ such as hurricanes or earthquakes," one source said. "We all have that disaster playbook on the shelf.“
The dollar fell again Thursday against the euro and the yen as the US government shutdown ground through its third day with no end in sight.
Worries mounted that the political paralysis in Washington would lead to the government being forced to default on its obligations.
With it appearing that the issue of raising the country's borrowing limit would be rolled into the fight over the budget, the Treasury warned that not raising the debt limit by October 17 would force it to default on its obligations.
That "could have a catastrophic effect on not just financial markets but also on job creation, consumer spending and economic growth," the Treasury said
The euro rose to $1.3618 at 2100 GMT, compared with $1.3580 late Wednesday.
The dollar fell to 97.27 yen from 97.34 yen, while the euro rose to 132.49 yen from 132.21 yen.
The following is presented by Lorimer Wilson, editor of www.FinancialArticleSummariesToday.com andwww.munKNEE.com and the Market Intelligence Report newsletter (sample here – register here). The excerpts may have been edited ([ ]), abridged (…) and/or reformatted (some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. This paragraph must be included in any article re-posting to avoid copyright infringement.
“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.
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.
“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.”
“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.”
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.
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.
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.”
“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.”
We must understand that none of the fundamental problems leading up to the 2007/2008 financial crisis have been resolved.
If anything, it’s gotten worse.
Our politicians will not change, and therefore, will change nothing in Washington. Wall Street is as corrupt as ever. Our central bank continues to devalue our currency. There is no end in sight for these people. They will continue on this unsustainable path until we as a country finally hit the proverbial brick wall.
As Peter Schiff notes, the destruction to life as we know it in America and the world is imminent. It’s going to be severe.
So much so that the government has been simulating the collapse of our financial system, the collapse of our society and the potential for widespread violence.