Nouriel Roubini (aka, Dr. Doom), Jeremy Grantham, Marc Faber and other notable market and economic watchers have been raising eyebrows with their dire predictions about the inevitable collapse of the dollar, the global financial system, etc.
As if that were not enough, former Senator Ron Paul, acting as a representative of Stansberry Research, has been declaring the same on TV. Even Pat Boone has been suggesting that our money is not safe in banks and we should buy gold.
Some of these doomsayers have been making these predictions for years. However, it seems that the doom-and-gloom message is becoming more frequent. Is the global financial system about to collapse? Is the dollar going to fall off the cliff? Are the major banks in trouble?
Currency Warning and Derivative Sinkhole
According to self-made billionaire Eric Sprott of Sprott Asset Management, the earthquake has already occurred and the tsunami is on the way. Sprott, a graduate of Carleton University in Ottawa, Canada, whose business school was named for him, raised concerns recently over the collapse of the Brazilian real. He remarked, “It’s a disaster when a currency falls by 30%.” The real is actually down more than 47% YTD versus the U.S. dollar.
His other concern centers on the derivatives market. Derivatives are investments which are based on another source, such as options and futures. His concern?