The Mother Of All Fiscal Catastrophes?
In 1998, the U.S. treasury and the federal reserve facilitated a $3.6B bailout of the Long Term Capital Management Fund (LTCM) hedge fund by 16 Wall St. banks. No taxpayer funds were used in the bailout.
Ten years later, in 2008, the U.S. treasury bailed out a slew of Wall St. institutions with 100s of billions of dollars in U.S. taxpayer money.
Famous doom-and-gloomers James Rickards and Peter Schiff predict that the next financial crisis, which will be the mother of all global fiscal catastrophes, will require that the U.S. government be bailed out by the International Monetary Fund. In this black swan scenario, the U.S. dollar will be replaced by the IMF’s SDR (Special Drawing Rights) as the world’s reserve currency and America’s reign as the world’s greatest superpower will come to an end.
I’m not convinced that Rickards and Schiff are right, but they do make a somewhat compelling case – enough so that it makes me feel “uncomfortable” whenever I see or hear them speak about it. Even if you think they are both batshit crazy, you might want to think of adding a touch of gold, silver, Bitcoin, or some other cryptocurrency to your portfolio…. just in case America fails to become great again.