Is US economy going to collapse?

My friend, Sanjay Goel, has been warning about the falling dollar!  He rightly says that while the Americans are busy about Iraq and Religious nonsense, it is the falling dollar that they are un-aware of.. when THAT is exactly what they should be looking at!  Tonight I tuned into Glenn Beck’s program.  Not the most watchable person but today on his program he had these two guys and BOTH were talking of how they see a bad scenario for the US Dollar.  The way out – buy Euro or Dollars… for that is what Warren Buffet has been doing!

The Housing market will collapse in the coming days and months.. banks will go broke, as people will start taking money out as is happening in London reminiscent of some 1930’s scenes when the banks collapsed!  The power of US will go down.. as the market drops, and the prices in the US of things go up!  Bankruptcies may just shoot up with such a squeeze!

So, what do you think?  Here is a portion from the article of Peter Schiff, one of Beck’s guests.

At issue is the belief that a nation can grow and prosper by borrowing from abroad in order to consume imported goods. To consume at the pace that it has, America exchanges income producing assets, such as companies or property, or interest bearing IOUs, such as Treasury notes or mortgage-backed bonds, for foreign made clothes, toys and electronics. Economists call these transactions “growth”. But rather than discovering a new path to prosperity, America has simply stumbled on a short cut to financial ruin.

For years America has convinced the emerging market countries that their prosperity is a function of our consumption. It is argued that their export oriented economies would falter if not for the insatiable American willingness to consume (a “virtue” that is assumed to be uniquely American). As the dollar falls into the abyss, this myth will be shattered.

My forecast is that over the next two to three years the U.S. Dollar index will fall to 40; half of its current value. As this happens, much of America’s economic power will be transferred abroad.