Schiff, who famously warned investors about the housing and financial crisis in his 2007 book Crash Proof, says the Fed’s palliative efforts during the housing meltdown have made the next crisis inevitable.

The picture Mr Schiff paints is depressingly clear and plausible. It might be different this time, then again probably not. Holding real assets like gold and silver and staying out of the US dollar are his main recommendations… (Ed Note: scroll Down for his Top 3 Recommendations).

According to Euro Pacific Capital‘s CEO Schiff, the U.S. economy is heading for an economic crash that will make 2008 look like a walk in the park. Stimulus programs can delay this day of reckoning, but only for so long and only at the expense of making the eventual meltdown much, much worse.

The LIBOR scandal that has engulfed London’s financial and political elites is entering its third week and picking up steam on this side of the Atlantic.

Among the latest developments:

• The NY Times reports the Justice Department’s criminal division is “building cases against several financial institutions and their employees.”
• State Attorneys General in New York and Connecticut are investigating whether states incurred losses because of LIBOR manipulation which “could lead to a wider multi-state enforcement action,” The WSJ reports.
• Top officials of the British version of the SEC, the Financial Services Authority, will testify before Parliament on why regulators failed to respond to concerns about LIBOR rigging going back to 2008. Congress is set to hold similarly themed hearings later this week and Fed chairman Ben Bernanke is almost certain to be asked about the matter when he testifies on Capitol Hill Tuesday and Wednesday.

Comment via Richard Russell of Dow Theory Letters:

“This is probably a good time to re-post a chart of GDOW, which is the Global Dow, an equal-weighted index of 150 blue chip stocks from around the world. GDOW provides a good insight as to the health of the world’s stock markets. The GDOW index is now in a head & shoulders formation with support at 1700. Support at 1700 better hold! If GDOW breaks below 1700, I think it will signal a world recession or depression. .Listening to the financial news, it all seems to be about four matters: (1) US unemployment (2) the state of China’s finances (3) whether the Fed will pull the QE3 trigger or not and (4) the Libor mess.

In the accompanying video, taped Friday, I discuss the scandal with former New York Governor and Wall Street prosecutor Eliot Spitzer.

“LIBOR is huge,” Spitzer says. “This is about as big as it gets in the financial world. [LIBOR] goes to the heart of every piece of debt that’s issued to consumers — your auto loan, your credit card debt.” (click on photo or HERE to view the entire interview)

also:

Cenk Uygur discusses how Barclay’s LIBOR scandal effects you, and how it effects the bankers that caused the scandal. Cenk also discusses the recent news that Tim Geithner knew about the scandal in 2007 and choose not to take any action. Tell us in the comment section below what you think about the LIBOR scandal.

With last week’s powerful finishing stroke, the U.S. stock market continued to thumb its nose at reality, rampaging higher on economic news that seems to be getting worse by the day. Around mid-week, readers of the Wall Street Journal could have glimpsed a perfect storm gathering on the horizon. Numerous articles spread across two inside pages summed up a darkening global economic picture. We learned that China’s economy is decelerating at a rapid pace, Europe’s is dead on arrival despite blather about further stimulus, and even a lean and muscular Brazil has cut interest rates to get in step with increasingly desperate central banks around the world. In the U.S., a carefully spun recovery story was starting to unravel just in time for the election with warnings that Q2 earnings are going to stink. It would appear that the jobless “recovery” is finally starting to take its toll on consumer spending. Henry Ford was right after all:business prospers only when companies are hiring workers and paying them well. Meanwhile, so much for the notion that a lean, mean manufacturing sector is going to lead America back to prosperity. In fact, perhaps for lack of products to sell the world, the U.S. trade deficit has begun to grow anew. This problem barely gets a mention in the news these days, presumably because other problems, most particularly stagnant U.S. incomes, falling consumer confidence and intractable unemployment seem more immediate and potentially fatal.

Through it all, and despite a global picture that is as grim as any we can recall, the Dow Industrials finished the week with a 204-point upstroke that was as blithe as it was bizarre. Bearish as we’ve been, we saw it coming. The night before, under the headline “Big Dow Rally Ahead?” Rick’s Picks alluded to a technical picture suggesting that U.S. stocks were poised for a powerful surge – one that could add 500 points to the Dow. With Friday’s explosion, we are already 40% of the way there. Although our gut feeling until very recently was that U.S. stocks would collapse this summer, the charts are telling a different story – and we have eheded them. In particular, our key bellwether, Apple, appeared to be getting traction for a run-up to new all-time highs. If so, it seems not merely likely but practically certain that the company’s shares will lead the broad averages higher. [Click here for a trial subscription that will give you real-time access to our analysis of the stock.] Hard to believe that stocks could embark on a major bull leg, considering the worsening economic picture. Some might infer that it is impossible for the broad averages to collapse, given the tidal swell of funny money that has been unleashed on financial assets by the central banks. It is a gaseous cloud, as far as we’re concerned, and therefore vulnerable to instantaneous collapse. Traders eager to ride the Dow to our target 300 points above current levels should take note of this, with an eye toward the fire escape.

***

Trading stocks, options and commodities in these treacherous times calls for great patience and skill. Click here if you’d like to see how Rick’s Picks approaches the challenge.

STOCKS – ACTION ALERT- BULL (Into the Fall)

Things aren’t looking too good in ‘River City’ (from ‘Music Man’ fame). I previously told you that I was looking for the upside gap in the S&P 500 around 1335 to be filled and that coupled with a Leibovit Negative Volume Reversal turned me cautious late last week. At that time I recommended a double-inverse ETF play for Platinum subscribers. It appears jumping back on a BUY (BULL) signal (June 29) from my previous SELL signal was premature. If the S&P 500 cannot find support here in the 1330s, I’m afraid we’re looking a possible retest or break under the June 4 low at 1266.74. Volume is negative.

Yesterday, San Bernardino (without a lot of fanfare) announced it was going to seek bankruptcy protection – the third California city to do so in the past month. Do you think the average person on the street cares or even the so-called sophisticated Wall Street trader or investor? There is an eerie complacency out there. It’s really scary. Could another ‘Flash Crash’ be lurking around the corner? If the banks can be bailed out, why not municipalities? That must be the mentality. Bernanke and gang released the minutes of the recent Fed meeting and it showed little urgency for a QE3. The problem, of course, is that QE3 or QE10 won’t solve the problem. All it will do is put more cash into the hands of the bankster vermin and drive stock prices higher. It will do little or nothing to solve the huge debt bubble and certainly won’t help the arrogant sense of entitlement that exists in the this country and the Western world. Until we’re ready to follow the path of Iceland and disavow the banks and the debt and, yes, that means bond holders and creditors will lose money, others will lose their homes, but until that occurs fiscal Armageddon remains waiting for us around the corner. We’re seeing it the bankruptcy of American cities. We’re saw it at MF Global and now at PFG. We’re seeing it in frustration of our young people who can’t find jobs, we’re seeing it in the eyes of the baby-boomers and elderly who see much of what they’ve worked for and earned being taken from them. Pumping the Dow Industrials to new highs will make the fat cats feel better, but will do little to help our nation.

 Mark Leibovit’s Gold Letter, # 1 Gold Timer for 10 year period & #2 Gold Timer for 2011

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