Home > miscellaneous > The Mother Of All Fiscal Catastrophes?

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.

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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.

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  1. Ken
    November 26, 2016 at 10:50 am

    As extreme as your views might be, and I am not smart enough to know, I fear that you may be on to something. I think the US Dollar is at serious risk. The Dollar is a proxy for the confidence in the US Government, and if that should fail, we are headed to a steep decline. The $20T debt (and rising) may move us to the tipping point. The Trump Administration (with the help of the LEFT) wants to borrow and spend more money for infrastructure improvements. We may relive the Weimar Republic. The debt cannot be repaid, the value of the Dollar is being propped up by the Fed and backed by nothing, and the economic divide is getting wider and wider. The Welfare Mentality, as humane as it may be, is not sustainable and there is a shrinking pool of people supporting a growing number of non-productive people. At a minimum, there will be a huge reset, or adjustment that will look like a Great Depression. When? Not sure, but probably within the next 10 years. But maybe I am just a raving old man – I am sure that has something to do with it.

    • November 26, 2016 at 10:54 am

      I’m a raving old man too 🙂

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