We are a society that has lived beyond its means for a long time. In the last five years, it has gone off the deep end.  Americans are relying on foreigners more and more to produce goods, rather than producing them themselves.

The fact that Peter Schiff’s predictions and theories haven’t fully played out yet makes his new book even more intriguing. His new book not only describes why the US economy is on the verge of collapse, but also serves as a financial survival guide. He views the United States as a house of cards with problems brought on by growing federal, personal, and corporate debt; a lack of savings and a weakening dollar. As a candidate for senate in the state of Connecticut, Peter now aims to educate our very own government on its destructive policies.

A few of his major themes are listed below:

• Highlights measures you can take to protect yourself-as well as profit-during these difficult times
• Offers an insightful examination of the structural weaknesses underlying the economic meltdown
• Outlines a plan that will allow you to preserve wealth and protect the purchasing power of your savings

This video serves as proof of Peter’s ability to forecast market direction. Most importantly it demonstrates his ability to understand exactly what caused the market meltdown. Schiff is currently running for a senate seat in Connecticut and begs the question, "how will the same people who got us in to this mess be able to get us out of it?"  His predictions are downright scary and usually go against mainstream media and well known rivals. Schiff’s uncanny ability to forecast our economy thus far makes his future predictions worthy of our attention.


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Dollar Devaluation and Inflation

Although prices haven’t immediately risen, inflation is alive and well. By nature inflation is caused by an increase of the money supply or a large change in supply and demand for goods.  Simply stated, increasing money supply  always causes inflation because the underlying currency is devalued. Currency devaluation is very negative, despite what you might have been told. Devaluation through inflation steals from people who save their money. At the same time debtors are rewarded since the debt owed is  devalued. Worse yet, inflation and devaluation discourage savings and encourage spending. Hence the reason, both tactics are used during weak economic periods of time.  This key point also explains why Ben Bernanke has chosen to trash the dollar – the average US consumer is heavily saturated in debt.

Free Report: Get a Complete US Dollar Analysis Today!

US Dollar Carry Trade Beginning

Up until recent months the Japanese Yen was the currency of choice for the Carry Trade. For those who don’t already know, a carry trade exists when one country has much lower interest rates than other countries. The country with low interest rates buys up currency and assets of other countries with higher interest rates in order to achieve a better return.  With the recent decrease in US interest rates the Yen Carry Trade is unwinding and the new US Carry Trade is starting.  Now countries like Japan are selling the US dollar and buying back stronger currencies and assets. This unwinding process will put even more pressure on the US Dollar.

Trapped Inside a Box

Nothing has changed from a fiscal perspective in relation to the federal reserve. While the Obama administration boasts a policy of change, nothing has changed for the federal reserve. Ben Bernanke is well on his way to an unprecedented dollar destruction with Alan Greenspan at a distant second. Current policies could easily result in the most sever dollar destruction in history. With the economy still being fragile despite massive stimulus and spending, further dollar dilution will surely be on the way. After all, the federal reserve is trapped inside a box. If they let interest rates linger this low for long periods of time hyper-inflation will occur. If the fed tightens monetary policy to defend the dollar, the economy will go into a deflationary recession. We know this scenario won’t occur since Bernanke once stated that he would rather drop money from helicopters than suffer another deflationary depression. In either scenario bad consequences exist for the economy.

Consequences of Inflation

• Increased money supply is always inflationary
• Inflation steals value from existing currency
• Inflation helps debtors – hurts savers
• Commodity prices increase
• Middle Class and Poor Lose
• Upper Class Wins

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