No Lessons Learned: Next Financial Crisis to be Much Worse with US Dollar Collapse – Peter Schiff

Meanwhile, as the Americas criticize and threaten Venezuela over its financial collapse, the USA itself is very vulnerable to financial meltdown.

© Dado Ruvic / Reuters

A decade after the global financial crisis, the world is facing another crash even bigger than the one in 2008, according to veteran stock broker Peter Schiff, CEO of Euro Pacific Capital.

“The too big to fail banks are now both bigger than ever, and more exposed than ever to rising rates and recession. So the systemic risks to the economy are greater now than they were in 2008,” said Schiff.

Such banks should have been allowed to fail a decade ago, he says. “The moral hazard associated with the government having made the mistake of bailing out banks that should have been allowed to fail. Unfortunately, no lessons were learned from the last crisis. We repeated, and expanded all the mistakes that caused the last crisis, ensuring the next one will be much worse,” he said.

According to the investor, all the problems that caused the 2008 financial crisis loom even larger now. “The even worse monetary and fiscal policy since the last crisis guarantees the next one will be much worse. The crisis will be similar in that government will be the cause, everyone will be caught by surprise, and capitalism will be the scapegoat, but it will be much different in that it will be much worse,” Schiff said.

However, the nature of the next crisis would be different, Schiff predicts. While the 2008 crisis was centered around mortgage debt, dollar rise and gold fall, the new one would be about the US Treasury debt crisis. “Treasury debt will be the focal point of the next crisis, and the dollar will collapse and gold prices will soar. The ensuing recession will be much worse as consumer prices will also rise sharply.”

America's spectacular debt leaves them vulnerable to countries that are not necessarily close friends. Saudi Arabia and China control considerable amounts of American debt. We treat the kingdom very well, but remember who was behind 911 - these people are not our friends. China is being bullied by the US, justifiably, perhaps, but there are also areas of potential serious military and political dispute. China is closer to Russia than it is the USA. What happens if those countries conspire to bring about rapid interest rate increases? Will America follow Venezuela's hyper-inflation pattern? It's a little disconcerting.

In Canada, the Liberal government is spending like a drunken sailor, rapidly increasing the national debt and leaving us far more vulnerable to financial collapse than we need to be. 

Venezuelans Vote in Election Expected to Keep Maduro in Power

Corruption is Everywhere - Definitely in Venezuelan politics

By Sam Howard (UPI) 

Venezuelans will vote Sunday in an election that's drawn ire from the international community.

President Nicolas Maduro, of the ruling United Socialist Party, is expected to secure his second six-year term in an election that was pushed back from late April to give his opposition more time to campaign. But the main opposition coalition has discouraged its supporters from casting ballots and Bloomberg reported the United Nations won't certify the election and the United States won't recognize its winner.

The election Sunday is "not legitimate," U.S. Secretary of State Heather Nauert said Sunday on Twitter. "The United States stands with democratic nations around the world in support of the Venezuelan people and their sovereign right to elect their representatives through free and fair elections."

Candidates running against Maduro include former state governor Henri Falcon and pastor Javier Bertucci.

Venezuela, which is already struggling under hyper-inflation and food shortages, could be hit by more sanctions following Maduro's expected victory, VOA News reported. On Friday, the U.S. Treasury Department sanctioned four Venezuelans and three South Florida companies with ties to Venezuela.

The list included José David Cabello Rondón, who leads the country's tax administration and his brother, Diosdado Cabello Rondón, who is the first-vice president of the United Socialist Party. A Treasury Department release said he is "referred to as the second most powerful man in Venezuela -- after Maduro."

It said Diosdado Cabello Rondón has abused his government positions "in furtherance of his illicit and corrupt activities to control and direct government agencies and military officials in Venezuela."

U.S. Ambassador to the U.N. Nikki Haley called for Maduro to resign earlier this month, according to a McClatchy D.C. report.

"For the safety and the security of all people in Latin America, it is time for Maduro to go," Haley said.