Financial Editor Schultz Sees An Apocalypse Now (Peter Brimelow)

  Commentary: Veteran editor declares 'A financial tsunami is upon us

  By Peter Brimelow -- MarketWatch

  Dec. 13, 2007 -- NEW YORK (MarketWatch) -- The Fed flops and Wall Street is worried. But one letter veteran has been here before, not that it makes him any cheerier.

  Occasionally, I get reader emails claiming that The International Harry Schultz Letter's Harry Schultz is dead. He himself insists in an email to me that he is still alive. But he must be well over 80 now, although he's always been mysterious about his age. I notice that that he's now listed as "editor emeritus," although the letter is still written in his characteristically quirky first-person voice.

  Alive or not, Schultz must feel like he's been resurrected. Systemic financial fears, dollar doubts, gold gains, seeping stagflation - a word Schultz claims he coined - all eerily replicate the 1970s, which he began as a derided crank and ended victorious over the financial establishment. (After which, significantly, he was notably quick to say the storm had passed).

  Shultz's latest letter, just in, is absolutely apocalyptical: "A financial tsunami is upon us," he says, caused by lax credit and complications introduced by Wall Street's derivatives craze.

  Among other interesting ideas raised by Schultz in his intense, somewhat terrifying introduction: recession, possibly depression; bank failures; exchange controls; housing prices down by 50%; credit card company failures; money market fund dangers; tripling of U.S. jobless numbers; federal bail-outs for Fannie Mae (FNM) and Freddie Mac (FRE).

  His advice, translated out of his shorthand style: "If you have not already done so, take immediate measures to safeguard your assets against the global derivative crisis ... Most urgent is close out time deposits, buy non-U.S. government bonds."

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