Economist Petrov goes on to say, "Unfortunately, the depth and length of the crisis are currently being discounted. At the moment, the crisis is in its initial phases." Analyst Christopher Laird would agree. He writes, "The U.S. accumulates $9 trillion of national debt in 240 years, and in a mere year and a half, adds another $8 trillion? And for what? The credit markets are still frozen solid." He continues, "Over $1000 trillion of leveraged markets are unwinding, and if you add up all the central bank efforts to loosen credit markets and do bank bailouts, it adds up to roughly 15 to 20 $ trillion. Well, $20 trillion is not near enough to stop $1000 trillion of markets deleveraging. So, the efforts are doomed to fail."

James Quinn conveys this worrisome message. "There are $50 trillion of credit default swaps still outstanding. The hundreds of billions in taxpayer funds that have been poured into AIG have been used to pay out CDSs [credit default swaps]. According to the brilliant bank analyst, Chris Whalen, at least $15 trillion of these CDSs will need to be paid out. All the Central Banks in the world cannot create that much paper out of thin air."

Quinn continued, "Colossal amounts of credit card debt and auto loans will be defaulting in 2009. Consumers currently owe $2.6 trillion of consumer debt, up from $2.1 trillion in 2004, or a 24% increase….With 3 million more job losses in 2009, the credit card losses will be much greater than $100 billion. JP Morgan, Bank of America, and Citigroup will sidle up to the taxpayer trough again due to these unforeseen losses. Nationwide, an estimated $575 billion in new and used auto loans are written every year by auto manufacturers, banks, credit unions and other lenders…..With the average length of auto loans exceeding 5 years and the tremendous downturn, there are millions of consumers underwater with their car loans…..It is quite clear that consumers are collapsing. The toxic combination of reduced spending and mass layoffs will bring down the last remaining pillar of the economy, commercial real estate…..After the coming horrific holiday sales, weak heavily indebted retailers will be filing for bankruptcy en mass. Mall owners that had expanded hastily with generous amounts of debt in the last few years will see rents dry up and their debt payments will choke them to death…..Office occupancy will decline and rental income will tank."

There’s more! Newsletter editor Greg McCoach warns, "The latest forecast for the annual U.S. Federal budget deficit in 2009 for more than US$3 TRILLION! That is over $2 TRILLION more than last years budget deficit that we used to complain about."

Investment manager Puru Saxena expresses his view. "It is worth remembering that our world’s financial system has been hijacked by money-printers. Whether it is the Federal Reserve, Bank of England or the European Central Bank – they are all creating money ‘out of thin air’ and inflating the supply of paper currencies…..Whilst paper currencies (cash) regained some purchasing power in the past few months due to forced liquidation in the asset markets, there is no chance that they will maintain their value over the medium to long-term. History is littered with numerous paper currencies which became totally worthless and I suspect many of the current ones will also disappear."

None of this information and advice bodes well for the dollar. Newsletter editor Ron Struthers writes, "The fundamentals of the US$ are in the worst shape they have ever been and once the short term effect of de-leveraging has run its course, the dollar is going down, big time." Newsletter analyst Boris Sobolev concurs, "If the Fed continues, as declared, to support interest rates at artificially low levels by the way of debt monetization, a major down-leg in the US dollar is inevitable."

Editor Clive Maund warns, "Watching investors fleeing into the perceived safety of US Treasuries is akin to watching people board the Titanic in the movie – you know that they are doomed. This is because the United States is totally bankrupt – more than bankrupt in fact, since its debts are physically impossible to repay in any circumstances and what we are witnessing now is the cowards way out – the creation of money in whatever quantity is necessary to prevent total gridlock…..This has one inevitable outcome – hyperinflation, which, incidentally, can take hold even in conditions of deepening recession/depression."

Olivier Garret writes this for Casey Research, "How will our country repay its debts? The current bailout represents 62% of our GDP. Our current deficit of almost $11 trillion may exceed our GDP next year…..our government will need to attract trillions of dollars annually to fund its programs and commitments. The foreigners who have financed our irresponsible spending for many years will no longer be able to afford it, let alone finance more of our reckless behavior…..Once this inflationary cycle starts, foreigners will realize that their investment in T-bills are depreciating rapidly. There will be a massive exodus that will put more pressure on the dollar and on interest rates."

What’s an investor to do? How do you protect yourself? After the Treasury gave Citigroup $300 billion, one of the bank’s financial analysts wrote these words. "Gold is poised for a dramatic surge and could blast through $2,000 an ounce by the end of 2009 as central banks flood the world’s monetary system with liquidity." Although silver isn’t mentioned, it should be clear that the reasons for a rise in gold will also boost silver, probably even more so.

Finally, editor Ned Schmidt predicts, "With the Federal Reserve committed to unlimited creation of dollars and Obama committed to unlimited government spending, the U.S. dollar’s value could become the Dog of 2009…..Obama will be like a gift falling from the sky to gold [and silver] investors."