We are Way Over the Edge Right Now

By Greg Hunter’s USAWatchdog.com

Last Friday, I wrote a piece called Could America be Pushed over the Economic Edge?It was about how Libya, Japan or even covert economic warfare (from America’s enemies) could push the U.S. into another financial meltdown.  I received a one sentence email from my friend Jim Sinclair that said, “We are way over the edge right now.” His message gave me a sinking feeling.  Mr. Sinclair is a world renowned gold expert, but in order to trade that market, you must be extremely knowledgeable in many aspects of economics and politics.  Almost everything affects the price of gold.  War, government, oil, debt, money creation, the Fed and many other variables can dictate how much the yellow metal costs.  Gold is probably the single most difficult market to trade, and Sinclair is the Yoda of gold traders (except much better looking.)

Last week on his website JSMineset.com, Mr. Sinclair outlined “why” we are already way over the edge right now and why gold is going much higher in price.  Here are a few of his reasons that I picked out from his bullet pointed post:  “You must realize that the economic and political damage is already done.  You must realize that the mountain of OTC derivative paper is not going away. . . . You must realize that this means the mountain of OTC derivative weapons of mass financial destruction can only grow. . . .You must realize that it is not whether or not QE will continue, it is what it already has done to the Western economies that much higher gold prices will reflect. . . .You must realize the monumental change in the Middle East is NOT positive for the West in any manner, shape or form. . . . You must realize that it is the currency that breaks, not the country.” (Click here for the entire Jim Sinclair post.)

This is not some far-fetched assessment of the U.S. economy because at least one Fed banker is also sounding alarm bells.  CNBC reported last week, The United States is on a fiscal path towards insolvency and policymakers are at a ‘tipping point,’ a Federal Reserve official said on Tuesday.  ‘If we continue down on the path on which the fiscal authorities put us, we will become insolvent, the question is when,’ Dallas Federal Reserve Bank President Richard Fisher said in a question and answer session after delivering a speech at the University of Frankfurt.”  (Click here to read the entire CNBC story.) There is absolutely no way a top Federal Reserve banker says this without it being common knowledge in his circle of power–no way.  This tells me the Fed realizes the economy is much worse than what anyone would admit

For some real world confirmation of a cliff diving economy, I turn to John Williams, founder of Shadowstats.com. In his latest report, Williams says, “Both existing and new home sales moved sharply lower in February 2011, down 9.6% and 16.9% on a monthly basis . . . Foreclosure activity remained an intensifying distorting factor for home sales, with “distressed” activity accounting for an estimated 39% of existing sales in the NAR’s February reporting, the highest portion seen since Spring 2009, and up from 37% in January.” Four out of every 10 homes sold are foreclosures!  That is not a healthy housing market or sign of a recovering economy.  There was a record one million homes foreclosed upon in 2010, and experts predict another record breaking year in 2011.  Williams is predicting an “intensifying double-dip recession and a rapidly escalating inflation problem.”

To regular readers of sites like this one, the economic problems we face are not surprising.  But for every informed person, there are probably hundreds that have no idea how bad the economy really is.  As an example, one new reader wrote me last week and said, “We are indeed going through some of the craziest times I can ever remember and although things are crazy, do you really believe we will all NOT get through this as a society?  How can the entire country go under?” The answer to the first question is some will get through this a lot better than others.  Those people include folks that have little to no debt and have a well-diversified portfolio that includes physical precious metals as the ultimate form of insurance against financial calamity.  As for the second question: “How can the entire country go under?” I refer back to what Jim Sinclair said earlier, “You must realize that it is the currency that breaks, not the country.” If you can grasp the enormity of that one simple sentence, you have all the information you need to protect your wealth.

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  1. Jeff

    If anyone truly wants to understand the significant role that derivatives played in the global financial crisis, google Michael Greenberger’s testimony to Congress (July 10, 2010 if I remember correctly); it is an excellent 21 page overview of what really happened.

    Also, read the Grahm-Leach-Bliley Act of 1999 and the Commodity Futures Modernization Act of 2000, and ask yourself why….

    Then read the Dodd-Frank Act and you will start to understand how significantly inadequate it really is.

    • Greg

      You are so right on this point. I didn’t get into the derivative question in depth here but it is a monster problem. the Bank of International Settlements says OTC derivatives are $600 trillion others say the number is twice that amount. Either way, it is an enormous ball of unregulated debt with no guarantees transparency and NO PUBLIC MARKET. Thank you for your information and comment.

      • Head is out of the sand here

        If I had to sum it all up. I would say the united states as a nation is going through foreclosure and it’s owners (the government ) are going to be evicted. Ooops I guess they were unable to balance their check book and now look what happened

  2. Reader

    When a currency breaks, it means that the POWER of that currency is PERMANENTLY reduced. Americans will find the simplest things to be very expensive, unaffordable, etc. It becomes ugh… the new Normal.

    • Greg

      Thank you Reader.

  3. Treadingwater

    What about those of us that are young and haven’t created any wealth yet?

    • Greg

      Start dollar cost averaging silver coins and work your way up to gold coins as a savings instrument. You still need cash and other investments but precious metals should be a core you hold.

      • sky

        http://www.youtube.com/MarcChabotYT another commieblaster.com artical Socialist International’s actual plans for a global governance.

      • Anonymous

        Buying gold/silver is a good idea, but there’s one huge concern that many are missing here..
        I live in CA and I am seeing increasing number of thefts, especially in the houses of Asians (since they relatively carry more gold) and apart from gold/silver, items like TVs, laptops, other electronic equipment are also being stolen.
        I am sure without a doubt that once this double-dip starts and when people who can afford start buying gold/silver, I am sure crimes also increase a lot. Those people have to live in fear basically expecting a stranger in their house everytime they return to their house from outside.
        Storing the gold/silver in Banks in Lockers is working for now, but if the economy goes that down, rather no value for currency, I somehow feel that the government/banks will enforce some restrictions as to how much gold/silver each account holder should be able to deposit..

        • Greg

          Thank you Anonymous, M Smith and Bruce.

    • Reader

      You can work for the old who did’nt either… 😉

  4. markm

    Hey Greg,

    Good Article, thanks.

    Rationalizing is a serious human condition. Rationalizing away the fact that we are in a double-dip is not going to fix the problem.

    Welcome to Keynesian economics orchestrated by professors.


    • Greg

      Academia has played a big part in hoodwinking the public. Most of these economic elites should be ashamed. Thanks man!!

      • FamilyForce6

        Greg, this is an excellent point. The top economic schools in the country are run by professors on the dole of the “too big to fails”. Roger Wiegand sums up the problems of our current college system- most teaching is done by grad students while professors are encouraged to pursue reasearch and get published. My oldest is 2 years away from graduating high school and I have serious reservations about the worth of a college education.

        • Greg

          Thank you FamilyForce6.
          I wouldn’t rule out college. It has been proven, college grads do better in the job market than non grads. If your child was petroleum engineer, they would have a job for life, but they got to want to do that. However, you do make a valid point about the “professors on the dole of the too big to fails!” Just a thought, not trying to tell you how to raise your kids.

        • mile

          maybe the doctors who do “successful” surgurys that kill people soon after on other peoples time of accountability and the drug companys and hospitals who profit immensely from those will only teach financially losing methods as there will be more no profits made with cures………..not……………….

  5. William Ripskull

    Greg, you’re always one of my favorite reads, always on the mark. Have your reader read “When Money Dies” by Adam Fergusson. Somebody (maybe you?) recommended it and its definitely worth the time to read and understand. Its a pretty in-depth description of the (hyper)inflation of the Weimar Republic and how it literally wiped out the middle class of Germany, bringing extreme societal changes, leading to the “good times” of the Hitler years. The numerous parallels to today is what makes it scary.

    I appreciate everything you do. Keep up the good work!

    • Greg

      Thank you William Ripskull. “When Money Dies” is a must read for anyone!!!

  6. Tom H

    Finally, someone stops talking about what’s going to happen, gives us a slap in the face, and says, “We’re here, all this stuff IS happening.”

    Now the question is, what are we going to do about it?

    There are many things we could do to take our country back, unfortunately, most will get you labeled a terrorist.

    You rock Greg!

    • Greg

      Thanks for weighing in my friend!!

    • slingshot

      What are WE going to do about it? That is a positive sentence with the active word, WE. You and thousands of others are Patriots and NOT terrorists. We can not do anything now for the government is corrupt and laws are written to protect them and we obey the law. We must prepare and wait for their efforts to enslave us to be their downfall. I am not afraid anymore to speak out. The ballot box has failed! Again, I stand upon my soap box. Should the cartridge box be withdrawn, I will give all.

      Hang in there, TOM H.

      • Reader

        UNLESS congress is given a clear message STOP THE BS OR ELSE, nothing will change.

        The federal income tax on ALL US CITIZENS must be eliminated permanently and the Debt Game/FOREIGN INTEREST PAYMENTS has to stop.


      • Tom H

        Slingshot, thanks. It is really not myself I am worried about, but my children. When the carteidge box comes out, I will be right beside you. Hangin’ in and preparing Slingshot.

  7. Mungo

    Another spot on column Greg. I often use your site as a way to ease friends and family into the reality that is upon us. From there, getting them to prepare and research other sites on preparing is far easier. Your plain, no nonsense style is a perfect transition for those who would otherwise look away from these realities. For that sir, I thank you very much. We are indeed far past the point of no return. God bless you and yours, and Gob Bless these United States of America, we will need it.


    • Greg

      Thank you Mungo.
      I try to write the site so the general public can grasp what is happening. I am happy to see the site helping people. Thank you for your feedback.

      • slingshot

        This site is on the “Cutting Edge”. Not “Over the Edge”

  8. slingshot

    We will not know till we get there and most do not want to know what happens when we do. Remarkable, is it not? For the life of me I have tried to reason on whether it is stupidity or just a death wish for those that can, do nothing to dull the impact of what faces the country. Each day more people find themselves in dire straits by having their car repocessed, home foreclosed and even the loss of employment. Others just watch what happens around them. Having rode the crest of the wave in good times, they will feel the crushing weight of water come down upon them. Good Time Charlie, the Life Guard (Credit), sits on the beach.

    Keep up the good work, Greg.

    Everybody sing! I love my, I love my, I love my MTV.
    by Dire Straits

    • Greg

      You are on fire my friend. Loved the visual and MTV reference.

    • Empire

      It’s actually “I WANT my MTV” – I’ll cut you some slack though for the good comment. 🙂

    • Head is out of the sand here

      I’d say slingshot has the correct analogy and if I might add, United we stand devided we fall. This is something the U.S. needs to keep in mind. Even if it is just the working poor of the U.S.

  9. M SMITH

    Greg, I follow Jim closely & his advise is priceless. He’s correct,we are past the tipping point. The corruption is wide spread through out our government & as many will find out when the whole social system crashes as the currency debases to a worthless piece of paper. There are are so many not even aware of whats lies a head or preparing.

    For any one that does not know that Geithner,Summers & Rubin did not know of the dangers of what they were doing, there is documents where they were warned. They are posted at http://www.Scribd.com/kzuur58, if you would like to see these docs!!

    Thanks Greg for the special things you have done for so many, you will be well rewarded!

    • Greg

      M Smith,
      Thank you for your comment and adding valuable information to this post!!

  10. Stan H

    The domestic financial situation is beginning to resemble that of France of the 1780’s. At that time France was in a deep deficit situation that was no longer controllable. This started to impact on the common man’s ability to buy necessities. I am grateful that there are no violent demonstrations here, but they are taking place in other countries in the Arab world and in some instances in Europe. There people are refusing to undergo any draconian austerity arrangements. What got France into a revolution – besides too many costly foreign entanglements – was the economic burden was unfairly placed on the masses while the privileged classes got too much favoritism. This is happening here in the US. Large corporations have near monopolies and they go overseas to have their product manufactured. As a result too many people here are unemployed or under-employed. The workers overseas are not paying taxes and neither are the unemployed here. In fact, they are sucking money from the Treasury in the form of entitlements. The US as well as other countries have had these issues in the past and have dealt with them. The important thing is to look after the common good and not what is best for the special interests.

  11. Dan McCartney

    Like Mungo said in his post just above mine, I too use your writings to help educate my family and friends on what has been going on right under their nose and what is coming smack dab in front of us. Greg, you assist us in so many ways; thank you for all you do. Not only are your articles exceptionally well written and clear, but your readers who reply are common sense, backbone of America people who have their eyes on the horizon and their sniffers on high alert.

    Greg, do you know if there would ever be a way that you could help your readers connect with one another if they wanted to? These people who post after your essays are the kind of people I need to be friends with; any way of enabling us to hook up? Always grateful, Dan McCartney, Toledo, Ohio, [email protected]

    • Greg

      Thank you for your kind words. I am very happy to hear this site helps people get to some kind of financial high ground. I will post your comment with your email in tact.

  12. Lucdog


    In early February, over 150 US State Dept emissaries were called home to WashingtonDC for secret meetings. The news came and went quickly on internet journals. Many thought meetings were convened to discuss the growing Arab world upheaval. Instead, my sources report that the USGovt wanted to canvass opinions and coordinate feedback, if not to simply float a trial balloon on an historically unprecedented idea. The USGovt is trying to end the USDollar, to retire it, and to replace it in a fresh start after forcing a stern devaluation on all US$-based assets in conversion. The Boyz are printing $100 billion per month. So why not print $5 to $6 trillion and pay off all creditors with fresh colored toilet paper? The plan would call for all foreign creditors to be paid off, and all US-based depositors converted, both parties suffering devaluations. They would all be betrayed under the conceived plan, handed a hefty 30% instant devaluation that would accompany the birth to the new Republic Dollar by name, backed 80% by gold and 20% by silver. My guess is that Gold & Silver would be revalued at $7000 and $250, or $5000 and $175, something like that.

    The old US$-based USTreasury Bond debt would be paid off with Printing Pre$$ toxic effluent output. The new US Republic Dollar would be backed by precious metals finally, in a return to the Gold Standard. The entire concept does not receive solid confirmation, but rather numerous repetitions from the same secondary source, and reports on support mechanisms working feverishly to enable its enactment. The story does receive an echo from Bob Chapman. The plan is very unclear about the status of old US$-based stock and bond and property assets, but my belief is they would be devaluated in hidden manner, to minimize public objection and to enable acceptance. It is also unclear the status of old US$-based debt obligations like home loans and car loans and business loans, but my belief is they would be converted in like kind. Recall that the world rejected the Amero concept for a omnibus North American currency before, largely because the United States could not dictate terms of contracts across the world, like between Chile and Europe on copper or between China and Brazil on sugar cane or between Canada and China on industrial metals.

    My thinking has many parts, best summarized with a caption heading NO WAY IN HELL but summarized in three reasons.

    1) The USGovt does not own enough Gold & Silver to back a new currency, even at higher precious metal prices.

    2) The USGovt is the debtor nation, and debtors never dictate the terms of liquidation and restructure. The creditors do.

    3) The USGovt has huge deficits, and the USEconomy has huge deficits, each not to be funded since creditor nations would halt all new credit to the US after they are handed forced devaluations on the instant payoff and devaluation.

    The USGovt and USBankers cannot possibly dictate the terms of a new USDollar since they are bankrupt, since they are guilty of multi-$trillion bond fraud, and since the USGovt and USEconomy are both deeply insolvent with ongoing massive deficits. The defaulting debtor does not dictate terms to the creditors, even if the debtor is dominated by global banker elite. The wild card in such a deal would be nuclear weapons and an eager CIA to deliver terrorist attacks surreptitiously to any creditor nation seeming uncooperative. Instead, somehow, unsure how, the global elite bankers eat some crow, mixed with toxic bread & butter, and are demoted on the global stage of power, secret pacts with China notwithstanding.

    With a new US Republic Dollar, the deficits would cripple the United States immediately. The USGovt deficit would force the United States to find and hand over many tons of Gold & Silver every quarter and year, without fail or exception or forgiveness, since no more scheister paper repayment in settlement. The US lacks the base monetary metal from which to continue the outsized and worsening deficits. The USEconomic deficit would force the US into insolvency immediately. The result would be that right away, the US would forfeit massive amounts of Gold & Silver that it does not own to settle trade gaps. Perhaps massive hidden Syndicate Gold supply would come to the table, taken as counter-party from Wall Street shorts that destroyed those shell corporate entities. My position has been stated before, that a new hard currency behind the US financial system would result in rapid insolvency and ruin, since the old systemic insolvency would instantly cripple any new launched monetary initiative. Thus the US never proposes one like the new Republic Dollar. Other foreign nations that would use the new Republic Dollar would generate large surpluses, and therefore make possible grand demands for US forfeited Gold & Silver. A new gold-backed US$ currency would force an immediate Black Hole inside the US system. The new system would promote in fast return exactly the same grotesque imbalances in a grand degradation. The United States could not expect to be given renewed credit after betraying the world’s major creditors with the USTreasury Bond devaluations and liquidations, not in this real world.

    Lastly, the new Nordic Euro currency would have to be subjugated under the new Republic Dollar. Such a development could only happen under some very scummy power sharing agreement with Russia and China and Germany. Then again, they might make a decision under nuclear threat. Any new Chinese Yuan currency with a hard asset backing would also have to be subordinated under the new Republic Dollar also. Those agreeing to subjugation under continued Anglo banker rule must accept $trillions in losses from USTreasury Bonds, USAgency Mortgage Bonds, even US Corporate Bonds during the devaluation process. The surplus nations, those blessed by huge surpluses, huge reserve savings, robust industry, and absent debts are planning the new Nordic Euro currency, a gold-backed currency. My belief is that as the Nordic Euro comes closer to its anticipated June 2011 launch, enormously important negotiations, hidden battles, important posturing, and desperate ploys will be put forth. The new Republic Dollar seems fanciful and totally impractical, surely such a desperate ploy to be shot down, unless a nuclear threat is delivered.

    My best banker source, with solid international experience over 30 years, dismissed the idea as a wet dream by Anglo criminals to gain forgiveness, or rather to dictate forgiveness. This sage generous veteran claims the next phase will unfold very differently, with the foreign group called the Eastern Alliance pulling the rug from under the criminal Americans and British bankers, who operate a syndicate and display an evil streak. They are plainly nazis with nice wrappers. Neocon meant fascist nazi, for those naive in the crowd. The coming arrival of the gold-backed New Nordic Euro is causing a rush to duplicate it. The United States and Great Britain will either maintain a control position within a huge global slavery fascist brutal regime (featuring genocide), or else the US will descend into the Third World with a dead currency which must bid for the good useful currency in order to secure supplies. My belief is that the US$ in current form will be rejected within 18 months, globally, for crude oil and global trade settlement. My belief is that the USEconomy will suffer profound price inflation in the coming two years. My belief is that a new Republic Dollar would fall on its face before launch, but after presentation. A payoff of USTreasury Bonds with soon retired toxic paper with promise of deep devaluation would have immediate consequences of grave proportion, like the US being totally isolated from global commerce. The other name for that place is the Third World, marred by huge price inflation and credit cut off.


    In continuation of the new Republic Dollar theme, and the urgently needed transition to some currency vehicle in a viable fashion, my solid reliable banker source sent this note. He wrote, “It is not going to happen the way any US bankers would choose or direct. It is is unfortunate and regrettable that the USA has begun and is about to commit financial and political suicide. Today’s USA power establishment is incompetent, delusional, and outright evil. It is less the criminal foreign policy and all the wars the US prosecutes. It is the treason the US power elites commit in regards to exploiting and betraying its own citizens. They can try whatever they like. They are done, finished. The engrained problem is too big for anyone or any group or any institution to fix. It is not about the price of Gold or Silver. Price is irrelevant. It is about purchasing power of Gold & Silver that has not really changed over the last 60 to 80 years. Take a look at Libya, a similar scenario that you will see unfolding on a larger scale. By comparison, the USA has its own Gadhaffis. We shall have a commodity based money regime and a non-monetary trade system called barter. Back to basics. It is as simple as that. That is what comes in the future. An entire new system has been in the works for almost two years, much planning, much development, an equitable system that has no place for freeloader or deadbeat nations. It will be a very accountable system, a fair system. Nations that do not participate will not have a supply chain. It is that simple.”


    • Greg

      I think this is Jim Willie content from Goldenjackass.com. Please tell me this is not from his paid newsletter. I’ll put it up this time but you have to confirm where you got this content next time. Thank you.

      • Reader

        LOL. Looks like the newsletter to me.

  13. Tom


    I wouldn’t put too much money on Mr. Sinclair’s statement that the currency breaks and not the country. He seems to be an honest, decent guy, but there are simply too many factors involved for anyone to make a bold statement like that. He was wrong about gold trading at or above $1,650 by January 11 this year. He could be wrong about this too.

    • Greg

      You are correct that Sinclair was wrong about gold trading at $1,650 by January 2011 but you have to keep in mind, he first made that call in December of 2002. I think gold was trading around $350 per troy ounce. In January of 2011 gold was trading just above $1360 per troy ounce. That is on hell of a call anyway you look at it. If Sinclair is wrong, he won’t be wrong bu much. I would not bet against Sinclair, he is the real deal!! I have to disclose he is a friend of mind but he has a proven track record that spans decades. Peace my friend.

      • Tom

        It was in fact a good call, Greg, despite its failure. If he had kept it to a few close associates in the gold sphere who would have vouched for him afterward, I’ll bet we would be looking backwards at that target today.

        My point about the country is this – a mere twenty-five years ago it was virtually inconceivable that our country and its currency would be in the utter mess they’re in right now. Now that the dollar seems to be irreversibly headed for the crapper, the popular belief seems to be: ok, we’ll toss the dollar over the side, but there’s no way the whole country can go that route. I don’t buy it. It’s like the frog and the boiling water. If we don’t get the pot-smoking rats from Woodstock and the big, fat money-grubbing wharf rats from Wall Street out of the Federal government I don’t think it holds together. If it does, most normal people are probably not going to want to live here anyway. The rat from Kenya most certainly needs to go too.

  14. Bud Wood

    It is somewhat surprising that the economy (and currency) have plummeted so quickly. Probably the economy has been maintained by “just in time” salary transfusions along with the bubble of home prices.

    Several years ago, it seemed that “we” were living on the edge. Now, when those supports of regular salaries and home prices have proven to be illusory, we are over the edge and are sliding down on the slippery slope. My guess is that the ultimate answer will be a break up of the USA union simply because it is no longer viable. Most rational people may agree that smaller is better.

    • Greg

      You may be right, but I believe the country will not break apart, it is the dollar that will die. Thank you for your comment.

  15. Robot Trader

    Sorry, but Mr. Sinclair has been way wrong on his forecasts. Price action in the retail stocks suggest that the market is pricing in an epic consumer spending boom. Consumer discretionary stocks have vastly outperformed gold stocks the last two years. In fact, many gold stocks are trading at the same price as 2006, when gold was at $700. Sinclair’s TRE is an example, as it has lagged terribly.

    If anyone thinks the market is going to roll over and we are still in a bear market, just look at PCLN, LULU, BIDU, AAPL, etc., which are trading very well.

    Many stocks like TZOO, a travel and leisure stock, is up 600% in just 6 months.

    If Mr. Sinclair’s forecast was correct, Newmont Mining should be the stock trading up towards $500/share, not Priceline.

    • Greg

      Robot Trader,
      You left out one big reason for the increase in stock prices and that simply is QE1, QE2 and the $12.3 billion the Fed injected in bailout money. This is not organic growth, but growth provided by the Fed printing press. Consumer spending boom? Not from the 22% of folks that are unemployed and underemployed. Where are the jobs? States and Feds going to add more government jobs? Are they going to give big raises? Not a chance. I always appreciate all views and as I always say, “good men can disagree.” Thank you for your comment. I would not bet against Mr. Sinclair on the gold price,it along with silver are way up. Also where would the stock market be without the phony accounting allowed by FASB? Where would the stock market be without the government providing 90% of the mortgages? Where would the stock market be without 0% interest rates? What could go wrong? Tread lightly my friend.

  16. lostinmissouri

    Way over the edge right now! Can you say “Willie Coyote”? Yikes!

    I search your site, and Jim Sinclair’s, everyday. Thank you Greg, for your eye opening posts. Please keep it up, as long as people will listen, some of us, may still have a chance, to grab a limb, on the way down.

  17. Peter

    Having grasped the enormity of your comments as well as comments from Mr. Sinclair and others – one has to ask a simple question. What is the anticipated end game? Can it be as simple as “kick the can as long as possible?” There has to be and end point, right …..?

    • Greg

      Yes Peter, and I don’t know exactly what that will be but you are going to have to protect your wealth from inflation and probably hyperinflation before it is all over. That’s for sure. Thank you for your comment.

  18. Admitted Noobie

    Greg, I am fairly new to your site but I have been addicted as I go through the archives and try to learn/understand and act on this information. In one site, you have provided service that a lot of us younger folk find it hard to even understand.

    I am not sure I even understand what the final sentence means: currency breaks, not the country. Surely it means US$ is not reserve currency, but in addition to making things very expensive here, how does life change here? Japan after 10 years of NO GROWTH and now an earthquake goes on …. we are the USoA !!! I don’t get it – that’s why I wonder if I am just panicking or I am not understanding.

    Please help. Much appreciated.

    • Greg

      Admitted Noobie,
      The dollar will be devalued and possibly replaced is the simple answer. The one thing you will be able to count on is inflation so plan your finances for at least that.

      • Art Barnes

        Admitted Noobie, you don’t cease to exist just because a currency loses its value – a country simply reduces itself to a third world economy of some type. Regular people just start reducing their life styles, for example, instead of a three car family you have one. Instead of steak you buy chicken. Going to the movies or dinner might be a real celebration or spurge of sorts. Go deep into Mexico or central america and see how the people are living there and that will give you some idea of how people live where there is no affluent economy. People still live but they live poorly. Note: not only do they live poorly but the poorer they are the more they are oppressed by their governments. The poorer a country is the more control the central government has over them; alot of African countries come to mind presently and in the past. Bloodshed usually follows in time when the people get fed up and rise up.

  19. Michael V

    What do you think interest rates will do in a double dip recession? Will the Fed do something to get rates back to the 4% range on a 30 year fixed mortgage?

    • Greg

      Rates are bound to rise I just don’t know when. Rates should be much higher right now, but the Fed is artificially suppressing rates with $75 billion a month of printed money to buy Treasuries. Thanks for the question.

  20. M SMITH

    Greg, fed members are feeding the MSM with bull crap that QE2 may end early, causing PMs to drop like flies in a bug sprayer, its all lies & folks don’t get scared by this noise by fed members trying to help the bullion banks,JPM,HSBC from getting slaughtered with massive shorts! Don’t fall for the banksters lies, hold your PMs close! This was posted at http://www.zerohedge.com to warn PMs holders to do not fall for this crapola!

    • Greg

      M Smith,
      You are correct, and Jim Rickards and many other experts back up your assertion!

  21. Dave

    Well done Greg!
    I am sticking to gold, silver and oil. I have stuck to this for the past five years despite the snide remarks from many that I know.
    I do not live in America but I believe that no country will be left untouched by the financial debacle that awaits us all.
    Your column is so spot on but very few are listening, once again you are right, we will someday look back and realize that we were indeed over the edge but were unable to see it or believe it !

    Many thanks to you and Jim Sinclair. Keep up the good work.

    • Greg

      Thank you Dave for your comment and support. What country do you live in?

      • Dave

        I live in Canada

        • Greg

          I love Canada, thank you.

  22. Art Barnes

    I believe we are over the tipping point and that is why the powers that be won’t make any changes, they know it won’t work. It’s kind of like getting terminal cancer from smoking, why stop now! That is the way I see it. Also, the majority of the american people now stand for nothing now except sports, fictional movies, porn, greed, drugs, profits, booze, & fat food. They are so used to being the pampered babies, personally consumed with their own self indulgence that there is no hope for change – and the powers that be know it. They will, in the end, be the “frog in the pot” who won’t leap out when the water starts boiling. God help us; of course, this blog & its bloggers excepted from the above, but they are not enough to keep the tide from rushing in and consuming the middle class and making them the working poor.

    • Oldcoot

      You are so correct Art. Values and responsibility are retained by only a few of the young, and about 50% of oldsters like me. Too many people have become shallow by living in the good times. My wife had another stroke today and is in the hospital. I have terminal cancer and a huge aortic aneurism, either or both of which will finish my guilts and worries. What are my guilts???? What I’ve left behind for my children and grandchildren. I worry for them while they worry more about getting the latest cellphone. They will be hit very hard very soon.

      Why do we so soon get old, and so late get smart?


    As usual, a great column. I like to compare the present economy to Wile E Coyote, who runs off the cliff, everything is A-OK, that is, until he looks down. As a population we haven’t yet looked down; you and I do, as well as the rest of the metals community. A few other investors, quite a good number of farmers and small business owners and a lot of the older folks who went through the depression (precious few of them left)–these people know something is haywire. Most of them haven’t a clue of the enormity of the problem.
    Every thing that can be wrong with the economy is loused up. The Federal debt crisis caused by to-hell-and-gone overspending for decades; and that crisis enabled by the Fed’s willingness to print. World wide debt is similar to our own. The only countries without debt have a Tyrannical Dictator or Sharia Law! On top of this is maddening levels of consumer debt, then an overarching debacle called derivatives. My best guess on that notional amount is just north of 1 Quadrillion. I’ve been asked “How bad will it be if it all collapses? As bad as the Great Depression?” I tell them, “No. As bad as the Dark Ages!”

    • Greg

      Thank you for your on target comment. Yes, the Great Depression will look tame and many do not see this coming! Sad.

  24. george

    Thank you again for another spot on column. I agree that we are over the edge, way over. Every where one looks there is another issue spiraling out of control. Congress is paralyzed and afraid to do anything. We have a $3 trillion budget of which about half is borrowed. 3000 billion dollars! These people can’t even agree on $6 billion in cuts. Is everybody in Washington on a mind altering drug? They didn’t have any problem finding a billion or so for a 3rd war. Now we have 3 wars we can’t afford. I don’t know that we can survive 2 more years of Obama’s hope and change! Do you think we are so far over the edge that we can control the outcome or we are just along for the ride to the end?

    By the way, I heard you on Coast last night and you were excellent.

  25. Art Barnes

    Solving debt problems with more debt is insanity – but the government and its side kick the Fed is doing just that (as a national policy).

  26. PatriotRider

    I partially agree with Jim Sinclair…

    The currency will die, but the country’s existing political system will be ripped apart. The country and people will survive, but not the politicians and the bankers.

    • Greg

      You may be right my friend!

  27. slingshot

    “Another fine mess you got me into!” Oliver to Stan.

    As we calculate the damage done to our country over the years by those in power, driven by greed, we as a nation will have to accept respondsibility for our actions. We have acted hastily uninformed and blatantly lethargic, assisted by complacency, and as nature abhors a vacuum, so do politicians and they filled those spaces with hypocrisy and tryanny, that may ultimatly destroy this nation.
    How does a nation that is stumbling, regain its balance? How does a nation go from freedom’s protector to invader? How did our nation go from the wealthiest to dead broke? Why has our industrial base vanished? Why does our government feed us flawed statistics and why do we continue to let them do so?
    We as a nation have lost our integrity and substituted our identity. Although we have welcomed many and their cultures we have sacrificed much upon the alter of political correctness and thus strayed far from our founding priciples.
    Just what is an American today? What does he stand for? If you can not answer these two questions then why are we sending our young men and women of the military into harms way?
    It is most unsettling that hostile nations laugh at us and our nation continues down a reckless path, turning the democratic experiment of over two hundred thirty four years into a juggernaut for socialism.
    Even Bernacke stated that this financial path is “unsubstainable”. Many have left it to just that, never looking past the word. A blip and nothing more.
    In the future we will learn much about our Constitution. Freedom of Speech. The right to bear arms. Search and seizure. States rights. We will feel the impact of Martial Law, Habeus Corpus and Posse Comitatus.
    It is inevitable for when the currency fails, so does the empire and as all failing governments they will fight to hold on to power.
    I do expect a new currency. Suspension of the Constitution. Confiscation of all guns and as in 1933, ownership of precious metals against the law.
    Only time will tell.

    • Art Barnes

      Slingshot, you state a great case for why were over the tipping point – frankly, a point of no return. Where it will end is unknown. For sure it won’t end pretty for the middle class. Two many years of believing the great lie that the ballot box will solve all problems is my guess, the government dividing us by state and by political party, when in fact we are all the same; just pawns of the greed of the elite’s game. This citizen will not get in the box car and head for the sign to the showers. Who will be there with me is the real question as to only time will tell.

    • Denarius

      Greg’s posts are half the reason I read here;
      the other half is a comment like this one.
      Thank you, [b]slingshot[/b].

  28. nm

    Also where would the stock market be without the phony accounting allowed by FASB?

    I thought the FASB phony accounting rules only applied to banks? or are other companies at the stock market also manipulating their account under this new “rule”?

  29. Jay

    “The United States is on a fiscal path towards insolvency and policymakers are at a ‘tipping point,’ a Federal Reserve official said on Tuesday. ‘If we continue down on the path on which the fiscal authorities put us, we will become insolvent, the question is when,’ Dallas Federal Reserve Bank President Richard Fisher said in a question and answer session after delivering a speech at the University of Frankfurt.”

    He ought to know since the FED is the one that put us there.

    • Art Barnes


  30. John

    You seem a calm and reasonable voice in uncalm and unreasonable times. I believe this country(USA) was intentionally destroyed by global elitists. Do you agree? I am not calm and reasonable.

    • Greg

      Hang in there John.

  31. Young Derrick


    I read your articles and Jim’s site everyday; I love them and they are truly addicting and inspiring. My father turned me on to Jim’s mineset and movies such as “Inside Job” and “Collapse” amongst others. Unfortunately, I am new, similar to “Admitted Noobie” above and would also like to act upon the future crisis that others are foreseeing. Fortunately, I am a college student graduating in May with no debt. I have a substantial savings from working throughout high school and college and would not like to see my hard work go to waste. I am highly interested in investing in precious metals such as gold and silver. My problem is I am not sure if I should go the futures contracts route or the real deal (physical metal). What is your recommendation? If I purchased the physical metal, do you suggest bars (5-10oz +), or coins as form of payment (1oz and less)? So far I have my eyes set on Kitco.com’s precious metal store – mostly Canadian Gold and Silver Maples (1oz) since they are .9999 pure. I believe the dollar is on the verge of collapse and would like to act on this before it’s too late. Any advice you have would be much appreciated!


    • Young Derrick

      Sorry Greg,

      I didn’t see your article about buying gold and silver:


      EXCELLENT ARTICLE!!! Exactly what I was looking for.

      Thanks again,

    • Greg

      You are doing the right thing. Keep doing it!! Thank you for the comment and support!!!

  32. Nick

    I don’t believe, in the case of the US, that this is as simple as the currency, and this is what truly frightens me.
    Our economic system has been broken by very poor business tactics, assisted by abysmal government intervention, and disastrous immigration policy.
    We have destroyed the potential of true entrepreneurs with regulations favoring big business, and then delivered the death blow by promoting ‘fair trade’.
    In the midst of higher unemployment the government took the exact opposite position necessary by increasing the number of work visas instead of lowering and canceling existing visas.
    All indicators used to promote the notion of a recovery are done by pointing at the financial sector. Pure fiction that encourages the dangerous idea that we don’t need to revive our dying nation.

    • Greg

      Thank you Nick for the great analysis.

  33. M SMITH

    More news from the front lines!
    George Soros & his socialist elites, plus 200 or so progressives from around the world are having a meeting April,8-11,2011. It will be held at the famous Bretton Woods retreat, the main theme can be found here. http://economics.org/initiatives/conferences/bretton-woods. It has a list of speakers,where they coming from & much more. Soros has been a huge supporter of Obama & just what the hell he’s up to is not good & we should know what goes on. He has bankrupted many nations working as a agent of the Rothschild cartel & the Rothschild’s can be trace to most problem the USA has been in after they took control of the US monetary system with the federal reserve & its taxing powers over the people.

    Did Soros have his hand in the uprisings in the MENA NATIONS? Here are some videos from France that should get your attention. http://www.youtube.com/embed/A3YQANdvvbY. A mate(Jr)from the Navy sent me this youtube clip after reading Greg’s article. Jr is worried about what has happen to our nation also. Jr is attending economics collage classes where he said, as the oldest in class, the youth come to him after class to ask questions, because the professor & Jr are always debating the professors keynesian set in stone views. Jr being Jr has set these young folks afire to get to the truth. Thank GOD for sites like Greg’s & the Mises on line free content & the youth taking responsibility for themselves!

    • Greg

      M Smith,
      Thank you for the comment ans especially for the information and links!!!

  34. Jon Balocco


    Awesome article as always… You know, now turning 50, I never ever paid attention to the economy until the early 2000’s. I was a Coast-To-Coast fan since the mid 90’s and started to pay attention in the early 2000’s to the “economic guests” they featured.

    I remember probably one of the most renown guys out there. A Mr. Don McIlvaney of the McIlvaney Inteligence Advisor..Have you ever heard of him ?

    His predictions have been spot on since the 80’s. I remember in August 2003, he came on Coast-To-Coast (C2C) -(and I still have the recording on cassette tape of that broadcast). He said the following:

    “Write this in blood, the next financial bubble/catastrophe/collapse will be in the housing market”…

    I thought NO WAY !!!!!

    Boy was he a futurist..2003 was the beginning of the “exponential ramp up” in the home valuations of the housing market and that ramp peaked in early-mid 2006, then started to nose dive by 2007 into 2008.

    He came on C2C later in early 2008 (Pre-Lehman Bros) and said that the derivatives bubble was somewhere between 800 trillion and 1 quadrillion….

    Again, I thought No Way !!!!

    At this point all you can say is, that the Jetliner called the “Amero-can-economy” that was cruising at 35,000 feet has had it’s wings come off and is heading towards the ground at 650 MPH and it has 5 seconds until impact.

    • Greg

      McIlvaney is correct on the OTC derivatives and it is especially scary when you consider there is no regulation (or very little) no guarantees, no standards and ZERO public market. No public market means no price discovery. If there was a public market then you would find out these many different kinds of derivatives would be worth a whole lot less that they were sold for. Many would be worthless it there was true price discovery. Let’s just say %10 of these OTC Derivatives are sour. That would mean $80 trillion if we used the lowest number provided by Mr. McIlvaney. You know more than 10% is sour. Can you see what kind of a cluster$#@#$% this is? This is a problem that cannot not be fixed without a total crash. The Fed and the rest of the world are printing money like made to forestall the crash. Thank you for the comment!

      • Chris

        Does McIlvaney still do interviews on tv or radio?

        • Greg

          I don’t know the answer. Sorry.

  35. Roderick Pagnossin

    Mr Sinclair’s price prediction was probably understating the real price of what gold prices would be today if the iron handed controllers of our markets would not have manipulated markets so many times to push up the paper dollar and to push down the price of gold.

    If the Presidents team called the “handcuffs on the markets” enforcers were not forcing money to pool into a phoney stock market bounce this inflationary spiral would be much worse by now. Since manipulation has been front and center for a long time now the economy will suffer even more. Gold and silver will not stop rising and inflation will continue higher thanks to the moronic leadership in government and from the Federal Reserve.

    Gold would be way higher if the central bankers were not allowed to steal the nations wealth with cooked books and mark to market accounting fraud. Gold would be past $1,650 today. The next phrase for gold now is a moonshot price rise and people will wish they bought gold at $1,160.

    Can the looney tunes for American markets get any crazier? Yes.. how about this one.. now we are seeing dummy banks being set up. Moving all the bankrupted trash loans to a second bank and keeping the performing loans at the preferred banks. Is this for some kind of loss that will concur onto taxpayers again?.

    If that was Willie posting here your readership is going to continue to skyrocket.

    Greg, the online reporting you do with your factual presentation and the courage to lay out the truths is making a real difference to many of us. The caliber of your reporting is a testament to what is really important to you. Just saying I am sure you could make alot more money acting like a parrot of the status quo like most journalists do.

    Thank you for keeping us informed on so many different topics!


    • Greg

      GREAT points! Thank you for making them here.

  36. Bob

    Grow potatoes and paint them gold. I going to try an get me one of those government contracts, selling potatoes to the Army boys. I figure if I peel them potatoes before deliver. Those Army boys won’t need to stop policing the world in to order. Crazyyyyyyyyyyyyyyyyyyyyyyyyy

  37. James M Nunes

    The double dip recession is going to turn into a depression. It’s a trick or fraud of high finance and monopoly capitalism. The elite politicians, bankers and industrialist are all in collusion. It’s called constructive fraud. We are under an oligarchy ruled by plutocrats. They hide under a corporation which is a vehicle to commit fraud. A corporation is not a live person. It is a ficticious entity. The coporate lawyers are their surogates. If you wan’t someone to blame for this financial and economic crisis, look no further than Washingto D.C. to the 2/3 majority of congress that voted for NAFTA and Gatt and to deregulate the banks. Depression are scietifically created by the banks. It is not a phenomena. The only way the system is going to change is to throw the bums out that are in Washington. The people that suppose to represent us have sold us out to special interest.

  38. Chris

    I heard Mr. Sinclair on Kingworldnews.com last week. Eric King did a fairly long interview with him. Sinclair knows his stuff and tells it like it is.

    Contrary to popular belief, the U.S. financial crisis is not over but continuing to unfold. Endless bailouts and stimulus packages have made the situation worse along with corrupt politicians and banksters. The Federal Reserve and Wall Street, not the White House, are calling the shots on the U.S. economy.

    • Greg

      Listen to Sinclair. He has been one of the most accurate people on the Internet. By the way, he runs his website out of his own pocket because he wants to inform the public. If you check his site there is no advertising or any fees. He sells an occasional book or video but I am sure he is barely covering his costs if that. Sinclair is a good man!!!!

  39. Pat the rat

    The dollar goess down ,gold goes up, silver goes up commodity prices goes up. The people that are betting taht a whole a lot of more people are going to fail win! Things are going to get harder? I get it!

  40. dart

    With that 40% of existing home sales being foreclosures, remember that in most ALL cases the bank looses great sums (often $100,000+) on the short sale. My question is how much can the banking community take? How many good standing banks are left to absorb the troubled banks? For every great buy out there now in land and buildings, some bank looses more $$$!

  41. GTRrocker

    I read all of this doom and gloom about our economy, and then I look outside and hear birds chirping. I think this is a mess we created by trying to live too well with too much. A life of simplicity seems eally glamorous right about now.

  42. Kevin

    The USD is a much used currency in many developing countries, from Africa, to Haiti and even Asia in remittance and a second currency, much as black market or laundering. For example in Sierra Leone the $$$ s the preferred currency with a large Lebanese business community, they even restrict denominations, i.e. $1, $5, $10, bills are not accepted, even in the banks, and if you do try to exchange you will get half the true market value.

    In terms of the billions outside the US, is this depicted in the forecasts, or is this an undisclosed figure and how does that affect the current issue?

    One last question, China and its drive to buy mineral assets/mines in Africa, is China better understanding the dilemma, and securing its future, I know much is for iron ore and its development, but huge focus is on Gold.

  43. Faisal Ozair

    Hello Greg…
    I am a student of Islamic Eschatology. There is a prophecy by prophet and Messenger Muhammad (s.a.w.s):

    Abu Bakr ibn Abi Maryam reported that he heard the Messenger of Allah, may Allah bless him and grant him peace, say: “A time is certainly coming over mankind in which there will be nothing [left] which will be of use save a dinar and a dirham.”
    (The Musnad of Imam Ahmad ibn Hanbal)

    Nb: In Arabic Dinar means Gold Coin and Dirham means Silver Coin

    My question is ” Is there any chance that this may also reffer to Currency Dinar and Dirham?” This idea has come to me since most country having currency Dinar like Libya, Iraq, Kuwait or country with currency Dirham Like U.A.E, Qatar(1/100 of Qatari Riyal) are among the few country which has the largest petroleum reserve atleast of what is left..

    Your Expertise will be of great help.


    • Greg

      This is a great question, but I do not have the answer. Thank you for asking it here.

  44. Angry American

    I would have to say the best currency to stock up on right now are canned goods and ammunition.

    Anyways, I am a recent college grad, working two jobs, working on my Masters. I have about 60K in college debt. How screwed am I?

  45. marc

    Hi greg,

    im a newby on this,

    what does it mean when we say, we need to buy gold? ive beed seeing this a lot in my readings. thanks .

    • Greg

      It means to buy physical metal and hold it. I am not talking about stock or ETF’s, but gold and silver coins. I do not sell gold or silver but I think it should be a part of every-one’s portfolio. Here’s a how to that you can find on the front page of the site under my picture: https://usawatchdog.com/how-to-buy-gold-and-silver/ I hope this helps.

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