Peter Schiff predicted years ago that the dollar will eventually sink, as the currency of the largest economy in the world is forced to pay for decades of over consumption.
Reading Peter's 2006 book "Crash Proof" is like reading a history of what happen in the crash of 08. Every detail of the subprime housing bubble inflated by years of low interest rates from Allan Greenspan led to the housing crash that started in 07 and the stock market crash of 08 was written before it happen. The only part of Peter's book that has not come to past is beginning to unravel before our eyes - the bond market crash.
In the last few months, the bond market has started to show some troubling signs and the dollar is dropping faster then ever before. Up until a few months ago, the bond market has been strong as the demand for safety has kept many investors invested in the bond market.
But now that the global economy is starting to show that it has not been as devastated as badly as everyone thought by the US recession, investors are moving trillions into foreign investments with more promising futures.
The US economy is in shambles, consumer are broke and inflation is about to run wild as trillions of new dollars start to circulate.
A collapsing bond market means higher interest rates. Higher rates will decimate anyone with any debt, whether they are individuals, companies or governments.
President Obama likes to believe the recession is only a temporary problem and that the US is 'abundantly' rich with wealth beyond any other nation. This is nothing more than presidential optimisum. The real econonmy cannot support the over consumption of the past decade, funded by credit expansion and massive debt.
The bond market crash that is just getting started is about to take the wind out of any hope of economic recovery. Interest rates have already begun climbing, which will further depress the housing market and push oil and gold prices up. Then, inflation will terrorize the economy with unstable prices. The true terrorists are in Washinton leading the nation to bankruptcy.
The recession is far from over, the housing market crash of 07, stock market crash of 08 and now the bond market crash of 09 – what could be worse?
If the government does not change directions quickly and stop increasing the money supply while expanding credit we could see a currency crisis in 2010.