Billionaire Sprott Says World To Witness A Frightening Collapse

"Today billionaire Eric Sprott warned King World News that the world is in for a massive and frightening collapse.  He also startled KWN when he revealed what his biggest fear is when the mega-collapse takes place.  This is the second of three interviews with the Canadian billionaire that will be released today.  Below is what Sprott, who is Chairman of Sprott Asset Management, had to say in part II of this remarkably powerful interview series.

Eric King:  “Ron Rosen has been watching these markets for almost 60 years now, but he told KWN in an interview very recently that the stock market was going to have a massive collapse -- he was talking (about a) 66% (decline).  And (he also said) that gold and silver were going to skyrocket.  Since then we’ve seen the Dow plunge 500 points, gold move up about $80, and silver has risen $2.60.  This environment that you see going forward, is that a scenario that could play out as Rosen describes?”  

 

Sprott:  “Well, Eric, I guess I would start out with my fundamental conclusion about the financial system in the world.  It’s obvious to me that the U.S. government is broke.  That’s the easiest calculation in the world to make....

 

“You can use the Department of the Treasury’s own numbers, when they report the GAAP deficits for the year.  Last year it was $6.5 trillion, and that takes the increase in present value of known obligations.  So we have a $17 trillion economy, with a $6.5 trillion deficit which will continue to rise.  Unfunded obligations, based on various estimates, are always somewhere between $40 to $80 trillion -- with a $17 trillion economy that already runs a cash deficit of around $1 trillion a year.

 

I analogize between Detroit and the United States.  We all knew Detroit was broke 10 years ago, but nobody did anything about it.  We all waited the 10 years and then, finally, of course what happens is instead of the pensioners having to take a 10% or 20% cut, they have to take a 75% cut.

That’s what I fear is going to happen in the U.S. -- that we keep delaying, and delaying the obvious, and then someday there is going to be something that happens, and of course the cuts that people with have to exist with in Medicare, social security, government pension checks, will be way bigger than it had to be because nobody did anything about it in the meantime.

Where we are going is so obvious.  So, do I think the market could go down 66%?  Yes.  I’ve always thought the whole (stock) market was a bit of a Ponzi scheme, (the same) as we know that bonds are a Ponzi scheme.  And I think the price of gold being driven down is another Ponzi scheme to make fiat currencies look good.  I don’t have a target like that (66% decline in stocks), but do I see it as a possibility?  Yes I do.”   

 

at http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/8/23_Billionaire_Sprott_Says_World_To_Witness_A_Frightening_Collapse.html