Best of the Week
Most Popular
1. US Housing Market Real Estate Crash The Next Shoe To Drop – Part II - Chris_Vermeulen
2.The Coronavirus Greatest Economic Depression in History? - Nadeem_Walayat
3.US Real Estate Housing Market Crash Is The Next Shoe To Drop - Chris_Vermeulen
4.Coronavirus Stock Market Trend Implications and AI Mega-trend Stocks Buying Levels - Nadeem_Walayat
5. Are Coronavirus Death Statistics Exaggerated? Worse than Seasonal Flu or Not?- Nadeem_Walayat
6.Coronavirus Stock Market Trend Implications, Global Recession and AI Stocks Buying Levels - Nadeem_Walayat
7.US Fourth Turning Accelerating Towards Debt Climax - James_Quinn
8.Dow Stock Market Trend Analysis and Forecast - Nadeem_Walayat
9.Britain's FAKE Coronavirus Death Statistics Exposed - Nadeem_Walayat
10.Commodity Markets Crash Catastrophe Charts - Rambus_Chartology
Last 7 days
Tech Stocks Trending Towards the Quantum AI EXPLOSION! - 9th Jul 20
Gold and Silver Seasonal Trend Analysis - 9th Jul 20
Facebook and IBM Tech Stocks for Machine Learning Mega-Trend Investing 2020 - 9th Jul 20
LandRover Discovery Sport Service Blues, How Long Before Oil Change is Actually Due? - 9th Jul 20
Following the Gold Stock Leaders as the Fed Prints - 9th Jul 20
Gold RESET Breakout on 10 Reasons - 9th Jul 20
Fintech facilitating huge growth in online gambling - 9th Jul 20
Online Creative Software Development Service Conceptual Approach - 9th Jul 20
Coronavirus Pandemic UK and US Second Waves, and the Influenza Doomsday Scenario - 8th Jul 20
States “On the Cusp of Losing Control” and the Impact on the Economy - 8th Jul 20
Gold During Covid-19 Pandemic and Beyond - 8th Jul 20
UK Holidays 2020 - Driving on Cornwall's Narrow Roads to Bude Caravan Holiday Resort - 8th Jul 20
Five Reasons Covid Will Change SEO - 8th Jul 20
What Makes Internet Packages Different? - 8th Jul 20
Saudi Arabia Eyes Total Dominance In Oil And Gas Markets - 7th Jul 20
These Are the Times That Call for Gold - 7th Jul 20
A Reason to be "Extra-Attentive" to Stock Market Sentiment Measures - 7th Jul 20
The Beatings Will Continue Until the Economy Improves - 6th Jul 20
The Corona Economic Depression Is Here - 6th Jul 20
Stock Market Short-term Peaking - 6th Jul 20
Gold’s Major Reversal to Create the “Handle” - 5th July 20
Gold Market Manipulation And The Federal Reserve - 5th July 20
Overclockers UK Custom Build PC Review - 1. Ordering / Stock Issues - 5th July 20
How to Bond With Your Budgie / Parakeet With Morning Song and Dance - 5th July 20
Silver Price Trend Forecast Summer 2020 - 3rd Jul 20
Silver Market Is at a Critical Juncture - 3rd Jul 20
Gold Stocks Breakout Not Confirmed Yet - 3rd Jul 20
Coronavirus Strikes Back. But Force Is Strong With Gold - 3rd Jul 20
Stock Market Russell 2000 Gaps Present Real Targets - 3rd Jul 20
Johnson & Johnson (JNJ) Big Pharma Stock for Machine Learning Life Extension Investing - 2nd Jul 20
All Eyes on Markets to Get a Refreshed Outlook - 2nd Jul 20
The Darkening Clouds on the Stock Market S&P 500 Horizon - 2nd Jul 20
US Fourth Turning Reaches Boiling Point as America Bends its Knee - 2nd Jul 20
After 2nd Quarter Economic Carnage, the Quest for Philippine Recovery - 2nd Jul 20
Gold Completes Another Washout Rotation – Here We Go - 2nd Jul 20
Roosevelt 2.0 and ‘here, hold my beer' - 2nd Jul 20
U.S. Dollar: When Almost Everyone Is Bearish... - 1st Jul 20
Politicians Prepare New Money Drops as US Dollar Weakens - 1st Jul 20
Gold Stocks Still Undervalued - 1st Jul 20
High Premiums in Physical Gold Market: Scam or Supply Crisis? - 1st Jul 20
US Stock Markets Enter Parabolic Price Move - 1st Jul 20
In The Year 2025 If Fiat Currency Can Survive - 30th Jun 20
Gold Likes the IMF Predicting a Deeper Recession - 30th Jun 20
Silver Is Still Cheap For Now - 30th Jun 20
More Stock Market Selling Ahead - 30th Jun 20
Trending Ecommerce Sites in 2020 - 30th Jun 20
Stock Market S&P 500 Approaching the Precipice - 29th Jun 20
APPLE Tech Stock for Investing to Profit from the Machine Learning Mega trend - 29th Jun 20
Student / Gamer Custom System Build June 2020 Proving Impossible - Overclockers UK - 29th Jun 20
US Dollar with Ney and Gann Angles - 29th Jun 20
Europe's Banking Sector: When (and Why) the Rout Really Began - 29th Jun 20
Will People Accept Rampant Inflation? Hell, No! - 29th Jun 20
Gold & Silver Begin The Move To New All-Time Highs - 29th Jun 20
US Stock Market Enters Parabolic Price Move – Be Prepared - 29th Jun 20
Meet BlackRock, the New Great Vampire Squid - 28th Jun 20
Stock Market S&P 500 Approaching a Defining Moment - 28th Jun 20

Market Oracle FREE Newsletter

AI Stocks 2020-2035 15 Year Trend Forecast

Americans Going Out with a Bang, Using Credit Cards They Can’t Pay Back

Interest-Rates / US Debt Sep 14, 2010 - 03:03 AM GMT

By: Mac_Slavo

Interest-Rates

Best Financial Markets Analysis ArticlePeter Schiff joins the CNBC talking heads panel on Fast Money September 8, 2010. (Video follows excerpts and commentary)

As usual, Schiff is a bull on gold and precious metals commenting that silver “is going a lot higher.” Though he didn’t have a specific number in mind, he sees a likely and continued uptrend that can reach levels much higher than where it is today. “I think silver is going to go, ultimately, fifty dollars an ounce, a hundred dollars an ounce, who knows how high it can go?” forecasts Schiff.


When asked what sort of time frame he expects for silver to reach these levels, Schiff’s response closely mirrors our own view on when we can expect a significant move in precious metals and other essential commodities like food and energy:

It could happen very soon. It all depends, I think, on when you really have a collapse in the dollar. I think the dollar index, which is trading a little bit above 80, I think it’s headed down to 40. Whether it gets there in two years, three years, I don’t know. It just depends on when the world wakes up and figures out what’s going on. I mean the United States right now is completely powerless to prevent runaway inflation.

It is our view that not only have the major powers in the world like China, Russia and Europe woken up, but they are very well aware of what is going on. The Europeans, whose banks are closely allied with those in the United States may get slammed just as hard as US banks. And the Dollar and the Euro could very well see the same fate over the course of the next decade, which, in our view, would essentially be a complete destruction of their value in terms of buying power.

The Chinese and Russians, who are not as exposed to US and European financial problems from the banking side, are likely biding their time. We often hear that we have global collaboration in geo-politics, economies and finances, but make no mistake, China and Russia have no interest in seeing America succeed. At some point in the future, the Chinese are going to pull the plug on buying our Treasuries - their purchases are already down 10% year-over-year as of July 2010 - and when this happens we can expect other countries to follow. There will be a rush to the exits by Central Banks and institutional investors across the world as everyone holding any kind of US paper is going to be selling.

It is at this time that the US  “bailout bubble,” a term coined by trend forecaster Gerald Celente, or as financier George Soros refers to it, ” the super bubble,” will burst. Interest rates will sky rocket and the US dollar will collapse.

Why would China do this if they know that this would have a significant negative impact on their own economy? Because they are patient, that’s why. The Chinese powers-that-be are willing to take a short-term, multi-year hit to their economy, no matter how badly their people are affected if the end result will be a downfall of the world’s current super power. If you haven’t guessed by now, this is a global war being fought on multiple fronts over many generations.

The Chinese know where we’re headed, as do the powers that be here in the US, as we described in our recent article assessing Timothy Geithner’s recent comments to the Wall Street Journal.

In fact, not only do those in the top echelons of government and finance understand what is happening, according Peter Schiff it is clear that even consumers know the end game:

You definitely want to stay away from Mastercard - any company that’s leveraged to the US consumer. Remember, one of the reasons so many Americans are using Mastercard is because they’re putting their food on it, they’re putting their basic necessities on it.

I think a lot of Americans are so willing to use their credit cards because they’re so far in debt, they know they’re broke, and they might as well go out with a bang. A lot of people have no intention of paying back the money that they’re using whether it’s Visa or Mastercard.

As above, so below. It’s clear that maxing out debt on all levels is the strategy of the day (decade?) in America. The government is spending so much money, and pulling forward so much time and energy yield from our children, grandchildren and great-grandchildren that it is simply impossible to ever pay back our national debt without inflating the dollar. In other words, it is a mathematical impossibility for us to ever pay back what we owe in real US dollar terms. The only way to do it is to print more money and pay off debt with dollars that are worth less.

US consumers, already getting hit hard with permanent job losses that are never coming back, wage decreases, and depreciating real estate prices, understand that with their current debt load, most will never be able to pay back the money they owe. So, instead of defaulting on their debt with available credit remaining on their cards, they’ve decided to max out those cards before they stop paying.

This author has personally witnessed two separate instances of just this phenomenon. A close friend and Citibank credit card holder recently saw a rate increase from roughly 10% to 29.99% on their existing balance. Already running on a tight budget, his payment increased from a monthly $150 per month to over $400 per month. Our friend, rather than simply stopping his payments because he was no longer able to afford them, promptly took his Citibank card to a local outdoor goods store, purchased several thousand dollars worth of guns, ammunition, and camping gear. He never made another payment. That’s a $20,000 delinquency on Citibank’s books - and that debt will never be collected. We can talk about the ethics and morality of this move, but that is irrelevant at this point. Tens of thousands, perhaps millions, of Americans are doing exactly the same thing with credit cards and home loans.

Eventually, the US government itself will follow. This is the reason for why we recommend hard assets - because your paper currency will be worthless.

Watch Peter Schiff on CNBC:

By Mac Slavo
http://www.shtfplan.com/

Mac Slavo is a small business owner and independent investor focusing on global strategies to protect, preserve and increase wealth during times of economic distress and uncertainty. To read our commentary, news reports and strategies, please visit www.SHTFplan.com

© 2010 Copyright Mac Slavo - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules