Peter Schiff is correct in his prediction

that another financial shock is

imminent
Peter Schiff, for accurately predicting the 2008/2009 crash.
That is, because in his opinion, the financial crisis wasnt the REAL crash It was only a
tremor before the big one hits.
Armageddon is inevitable, says Peter.
So will 2015 be the year when we finally run out of fools willing to lend to us?
http://www.wallstreetdaily.com/2014/12/31/peter-schiff-financial-crisis-interview/
Schiff also maintains that we are in a far worse position because we currently hold much more
debt than we did seven years ago. He analogizes U.S. financial strategy in accruing debt with
countries like China and Russia to a huge Ponzi scheme. Our foreign creditors are on to the fact
that it may be impossible for us to make good on that debt and have no desire to be part of a freemoney-to-the-US scheme.
Schiff contends another major problem is that the US dollar is currently overvalued. Many
countries are taking advantage of this high valuation by making moves to get rid of their United
States dollars. As the worlds reserve currency, this overvaluation also creates instability
internationally.
The only reason the U.S. hasnt collided with economic disaster yet is, in Schiffs opinion, the
currency speculators. However, no matter what the speculators do, the dollar will eventually fall,
as much as 30%. In a worst case scenario, the end result could be hyperinflation, wiping out most
of the value of the dollar.
Schiff also reminded listeners that the dollar itself does not hold any intrinsic value. Its value is
entirely contingent upon peoples confidence in it. Once people lose confidence in the dollar, its
value will evaporate and will be worthless to purchase anything with, so political leaders do what
they can to reinforce faith in it. A case in point is Obamas State of the Union address where he
falsely claimed that the economy had recovered. According to Schiff, these false reports that the
economy has recovered are being used to prop up confidence in the dollar.
There are numerous indicators that the US economy is in serious trouble. At the beginning of this
year several companies (Walmart, Macys, and Finish Line) all reported numerous store closures
and massive layoffs. Walmart alone is expected to layoff 10,000 people. Other companies that do
not have physical stores such as Yahoo and Johnson and Johnson have also announced layoffs
that will affect thousands of more people. Finally, the percentage of adults in the labor force is at

the lowest level in 40 years while wage gains for most workers has been a nonexistent. These are
all indicators that the U.S. economy is in troubled waters.
What is Peter Schiffs advice for U.S. investors? To protect against the imminent collapse, they
should immediately divest themselves from the U.S. stock market and sink their money in
international markets, gold and silver stocks, and other commodities.
Only time will tell whether Schiff has accurately predicted yet another financial catastrophe for
the United States. One thing is sure: if hes right about an imminent Second Great Depression,
this nation and probably the world at large will experience an era of unprecedented political
instability.
Read more at http://joemiller.us/2016/01/peter-schiff-claims-something-worse-than-the-greatdepression-is-imminent-and-theres-no-way-out/#1he6UPPpm3k6v3EQ.99

Less than a decade ago, the world economy sank into the Great Recession: the deepest and most
widespread downturn since the Great Depression of the 1920s and '30s. Since the stock market
crashed in 2008, recovery has been long and slow, marked by persistent bumps in the road along
the way. Nonetheless, an economic recovery has, indeed, taken place. The S&P 500 index rose
more than 92% over the past five years until market volatility kicked in during the second half of
2015. So far in 2016, the S&P 500 is down almost 9% since the start of the year. U.S.
unemployment has dropped from nearly 10% at the height of the Great Recession to 4.9% today.
A lot of this apparent growth, however, has been fueled by government bailouts,
loose monetary policy and huge injections of capital in the form of quantitative
easing. The problem is that expansion cannot continue forever, fueled only by
cheap money and central bank support. Ultimately, the underlying fundamentals of
an economy must catch up with the stimulus to create real growth. Because the real
economy has lagged in many ways, it might be the case that we are on the verge of
another global recession. Here are some signs that a recession may be on the
horizon.

The European Situation

The sovereign debt crisis that followed the Great Recession in Europe has been a persistent issue,
and Europe represents a significant part of the world economy. The European Central Bank
(ECB) has also taken the extraordinary measure of implementing quantitative easing in the
Eurozone to stimulate growth. The so-called PIIGS nations (Portugal, Ireland, Italy, Greece &
Spain) have been bailed out repeatedly by the European Union and the IMF, with mandatory

austerity measures imposed on their populations. Not only has austerity been unpopular, such
measures may have also restricted growth by reducing aggregate demand and keeping the debt
burdens in these nations high.

The Chinese Bubble Has Begun to Pop

The Chinese economy has grown by an extraordinary amount over the past few decades. Chinese
GDP is second in the world only to the United States, and many economists believe that it is only
a matter of time before China will overtake the United States.
China's government, however, imposes capital controls in order to keep its money within its
borders. Therefore, as the Chinese middle class has grown, they have few options when it comes
to investing their new wealth. As a result, Chinese stocks and real estate, two of the places where
Chinese people can invest, became increasingly expensive, with the hallmarks of a bubble
forming. At one point last year, the Chinese stock market had an average P/E ratio higher than
the rest of the world's, with the Chinese technology sector showing bubble-like valuations of
more than 220 times earnings on average. To put that in perspective, the tech-heavy NASDAQ
market had an average P/E of 150 times before the dot-com bubble burst. The Chinese stock
markets have been experiencing a correction, with the government taking such cautionary
measures as curbing short selling. Most recently, in an attempt to curb volatility, China
implemented circuit breakers that would halt all trading on the country's stock exchanges if
losses fell to 7%.
Meanwhile, the real estate boom has led to overproduction of building resulting in so-called
ghost cities, entire urban landscapes where nobody lives. When the market sees that the
oversupply cannot meet demand, prices may collapse in the Chinese housing market.
If the Chinese economy slips into recession, it is likely to drag down the rest of the world as
well.

The Unemployment Picture is not as Rosy as it Seems

The U.S. unemployment rate fell to 4.9% in January, the lowest level since the crisis began. But
that so-called headline unemployment rate does not include discouraged workers who have taken
on temporary or part-time work to make ends meet. When accounting for that part of population
(called the U6 unemployment figure), the unemployment rate jumps to 10.5%. There has been a
steady decline in the labor force participation rate, which measures how many people in the
potential workforce are actually working, to levels not seen since the 1970s. Since even the U6
unemployment rate accounts for those in the workforce, the actual unemployment rate when
accounting for the declines in the workforce participation rate is much higher.

Even for those working, the real wage has remained fairly stagnant. The real wage accounts for
the effects of inflation, and a stagnant real wage can indicate a weak economy that isn't showing
real economic growth.

The Bottom Line

We may be on the verge of another global recession. Patterns in economic data are showing signs
of weakness, and the troubles persisting in Europe or the bubble bursting in China may be the
trigger that sends the economy over the edge. Unlike in 2008, when central banks were able to
lower interest rates and expand their balance sheets, central banks now have much less elbow
room to enact loose monetary policy to prevent a recession from happening. Recessions are a
normal part of the macroeconomic cycles that the world experiences, and happen from time to
time. The last recession was already seven years ago. Signs may show that the next is right
around the corner.
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The S&P 500 has begun 2016 with its worst performance ever. This has prompted Wall Street
apologists to come out in full force and try to explain why the chaos in global currencies and
equities will not be a repeat of 2008. Nor do they want investors to believe this environment is
commensurate with the dot-com bubble bursting. They claim the current turmoil in China is not
even comparable to the 1997 Asian debt crisis.
Indeed, the unscrupulous individuals that dominate financial institutions and governments
seldom predict a down-tick on Wall Street, so don't expect them to warn of the impending global
recession and market mayhem.
But a recession has occurred in the U.S. about every five years, on average, since the end of
WWII; and it has been seven years since the last one we are overdue.

Most importantly, the average market drop during the peak to trough of the last 6 recessions has
been 37 percent. That would take the S&P 500 down to 1,300; if this next recession were to be
just of the average variety.
But this one will be worse.
The market will drop 20% in 2016: Pento

<p>Likelihood of US recession</p> <p>Discussing the U.S. economy and potential spillover

from emerging markets, with Tom Porcelli, RBC chief U.S. economist.</p>
The S&P 500 has begun 2016 with its worst performance ever. This has prompted Wall Street
apologists to come out in full force and try to explain why the chaos in global currencies and
equities will not be a repeat of 2008. Nor do they want investors to believe this environment is
commensurate with the dot-com bubble bursting. They claim the current turmoil in China is not
even comparable to the 1997 Asian debt crisis.
Indeed, the unscrupulous individuals that dominate financial institutions and governments
seldom predict a down-tick on Wall Street, so don't expect them to warn of the impending global
recession and market mayhem.
But a recession has occurred in the U.S. about every five years, on average, since the end of
WWII; and it has been seven years since the last one we are overdue.

Most importantly, the average market drop during the peak to trough of the last 6 recessions has
been 37 percent. That would take the S&P 500 down to 1,300; if this next recession were to be
just of the average variety.
But this one will be worse.

The market will drop 20% in 2016: Pento

A major contributor for this imminent recession is the fallout from a faltering Chinese economy.
The megalomaniac communist government has increased debt 28 times since the year 2000.
Taking that total north of 300 percent of GDP in a very short period of time for the primary
purpose of building a massive unproductive fixed asset bubble that adds little to GDP.
Now that this debt bubble is unwinding, growth in China is going offline. The renminbi's falling
value, cascading Shanghai equity prices (down 40 percent since June 2014) and plummeting rail
freight volumes (down 10.5 percent year over year), all clearly illustrate that China is not
growing at the promulgated 7 percent, but rather isn't growing at all. The problem is that China

accounted for 34 percent of global growth, and the nation's multiplier effect on emerging markets
takes that number to over 50 percent.
Therefore, expect more stress on multinational corporate earnings as global growth continues to
slow. But the debt debacle in China is not the primary catalyst for the next recession in the
United States. It is the fact that equity prices and real estate values can no longer be supported by
incomes and GDP. And now that the Federal Reserve's quantitative easing and zero interest-rate
policy have ended, these asset prices are succumbing to the gravitational forces of deflation. The
median home price to income ratio is currently 4.1; whereas the average ratio is just 2.6.
China IS fixing its economy

Therefore, despite record low mortgage rates, first-time homebuyers can no longer afford to
make the down payment. And without first-time home buyers, existing home owners can't move
up.
Likewise, the total value of stocks has now become dangerously detached from the anemic state
of the underlying economy. The long-term average of the market cap-to-GDP ratio is around 75,
but it is currently 110. The rebound in GDP coming out of the Great Recession was artificially
engendered by the Fed's wealth effect. Now, the re-engineered bubble in stocks and real estate is
reversing and should cause a severe contraction in consumer spending.
Nevertheless, the solace offered by Wall Street is that another 2008-style deflation and
depression is impossible because banks are now better capitalized. However, banks may find
they are less capitalized than regulators now believe because much of their assets are in Treasury
debt and consumer loans that should be significantly underwater after the next recession brings
unprecedented fiscal strain to both the public and private sectors.
But most importantly, even if one were to concede financial institutions are less leveraged; the
startling truth is that businesses, the federal government and the Federal Reserve have taken on a
humongous amount of additional debt since 2007. Even household debt has increased back to its
2007 record of $14.1 trillion. Specifically, business debt during that time frame has grown from
$10.1 trillion, to $12.6 trillion; the total national debt boomed from $9.2 trillion, to $18.9 trillion;
and the Fed's balance sheet has exploded from $880 billion to $4.5 trillion.
Banks may be better off today than they were leading up to the Great Recession but the
government and Fed's balance sheets have become insolvent in the wake of their inane effort to
borrow and print the economy back to health. As a result, the federal government's debt has now
soared to nearly 600 percent of total revenue. And the Fed has spent the last eight years
leveraging up its balance sheet 77-to-1 in its goal to peg short-term interest rates at zero percent.

Oil credit crunch may be worse than housing crisis

Therefore, this inevitable, and by all accounts brutal upcoming recession, will coincide with two
unprecedented and extremely dangerous conditions that should make the next downturn worse
than 2008.
First, the Fed will not be able to lower interest rates and provide any debt-service relief for the
economy. In the wake of the Great Recession, former Fed Chair Ben Bernanke took the
overnight interbank lending rate down to zero percent from 5.25 percent and printed $3.7 trillion.
The Fed bought longer-term debt in order to push mortgages and nearly every other form of debt
to record lows.
The best the Fed can do now is to take away its 0.25 percent rate hike made in December.
Second, the federal government increased the amount of publicly-traded debt by $8.5 trillion (an
increase of 170 percent), and ran $1.5 trillion deficits to try to boost consumption through
transfer payments. Another such ramp up in deficits and debt, which are a normal function of
recessions after revenue collapses, would cause an interest-rate spike that would turn this next
recession into a devastating depression.
It is my belief that, in order to avoid the surging cost of debt-service payments on both the public
and private-sector level, the Fed will feel compelled to launch a massive and unlimited round of
bond purchases. However, not only are interest rates already at historic lows, but faith in the
ability of central banks to provide sustainable GDP growth will have already been destroyed,
given their failed eight-year experiment in QE.
Therefore, the ability of government to save the markets and the economy this time around will
be extremely difficult, if not impossible. Look for chaos in currency, bond and equity markets on
an international scale throughout 2016. Indeed, it already has begun.
http://www.cnbc.com/2016/01/15/a-recession-worse-than-2008-is-comingcommentary.html

Goldman Sachs is making bold statement about emerging markets</p> <p>Goldman Sachs says
emerging markets could prove to be the third wave of the global financial crisis.</p>

Emerging markets aren't just suffering through another market routit's a third wave of the
global financial crisis, Goldman Sachs said.
"Increased uncertainty about the fallout from weaker emerging market economies, lower
commodity prices and potentially higher U.S. interest rates are raising fresh concerns about the
sustainability of asset price rises, marking a new wave in the Global Financial Crisis," Goldman
said
The emerging market wave, coinciding with the collapse in commodity prices,
follows the U.S. stage, which marked the fallout from the housing crash, and the
European stage, when the U.S. crisis spread to the continent's sovereign debt, the
bank said.

Asia's mighty market bounceback

Concerns that the U.S. Federal Reserve would raise interest rates for the first time in nine years
spurred a massive outflow of funds from emerging markets, including Asia's, recently. But the
Fed meeting on September 16-17 surprised markets by leaving rates unchanged and many
analysts moved their forecasts for the next hike back into next year.
That's helped to stabilize hard-hit markets and currencies, but some analysts expect that's just a
temporary reprieve.
One of the reasons Goldman is concerned about emerging markets is that lower interest rates
globally have fueled credit growth and a debt buildup, especially in China, and that's likely to
impede future economic growth.

<p>Goldman Sachs is making bold statement about emerging markets</p> <p>Goldman Sachs
says emerging markets could prove to be the third wave of the global financial crisis.</p>
Emerging markets aren't just suffering through another market routit's a third wave of the
global financial crisis, Goldman Sachs said.
"Increased uncertainty about the fallout from weaker emerging market economies, lower
commodity prices and potentially higher U.S. interest rates are raising fresh concerns about the
sustainability of asset price rises, marking a new wave in the Global Financial Crisis," Goldman
said in a note dated last week.

The emerging market wave, coinciding with the collapse in commodity prices, follows the U.S.
stage, which marked the fallout from the housing crash, and the European stage, when the U.S.
crisis spread to the continent's sovereign debt, the bank said.
Read More Asia's mighty market bounceback
Concerns that the U.S. Federal Reserve would raise interest rates for the first time in nine years
spurred a massive outflow of funds from emerging markets, including Asia's, recently. But the
Fed meeting on September 16-17 surprised markets by leaving rates unchanged and many
analysts moved their forecasts for the next hike back into next year.
That's helped to stabilize hard-hit markets and currencies, but some analysts expect that's just a
temporary reprieve.
One of the reasons Goldman is concerned about emerging markets is that lower interest rates
globally have fueled credit growth and a debt buildup, especially in China, and that's likely to
impede future economic growth.

Goldman noted that downgrades for emerging market economic and earnings outlooks have
spurred fears of a "secular stagnation" of permanently low interest rates and fading equity
returns. But it added that those fears are overdone.
"Much of the weakness in emerging markets and China is likely to reflect rebalancing of
economic growth, rather than structural impairment," it said. "While the adjustment is likely to
take time (as it did in the U.S. and European Waves), it should lead to an unwinding of economic
imbalances in time, providing the platform for 'normalization' in economic activity, profits and
interest rates."
Emerging markets are 'completely unhinged'

"The fundamental shift in relative performance away from emerging-market to developed-market

equity markets, and from producers (and capex beneficiaries) to consumers is likely to continue,"
it said.
Some aren't as certain that there will be an economic recovery in emerging markets.

The segment's trend growth rate has been declining, exacerbated by a lack of structural reforms
over the past 10 years, Deutsche Asset and Wealth Management said in its October outlook note.

"The ultra-expansionary monetary policy of the developed economies prompted many investors
to invest in emerging markets in part because they offered an interest-rate advantage," Deutsche
said. "In reality, however, this favorable financing environment simply helped emerging markets
to veil their growing economic weakness."
But with the easy-money environment spurring over-investment, emerging market companies
face not just higher debt, but also potentially burdensome interest payments amid slim economic
growth, Deutsche Asset said.
"The risk of credit defaults and bankruptcy is likely to rise," it said. "The combination of high
investment rates, rising debt and declining growth has made emerging markets much more
vulnerable than before."