'The bond market is the mother of all bubbles right now. When it bursts the losses will dwarf the combined lossess of the stockmarket bubble and the real estate bubble,' he said.
Both Schiff and Faber think Obama's government face an unenviable task.
'The problem is there is no way for the government to pay this money back, apart from through horrendous tax increases, which could never be accomplished,' Schiff said. 'Or else the government has to tell people on medicare or social security that they cannot get their cheques as the government is not able to pay its interest. And it is not just paying interest - it is also not being able to roll over short term debt; they will have to retire the principal. So there will be massive inflation.'
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