Via Hot Air come two videos that should be watched by those interested in the nature of this year’s economic crisis, the severity of it, and the potential consequences.

One of the videos stars Peter Schiff, former adviser to, among others, Congressman Ron Paul.

Back in 2006, Schiff was warning investors, the public, pundits and politicians that a severe economic crisis would hit in 2007 or 2008, which would start with sub-prime mortgages, which would then hit mortgages and real estate in general, and which would proceed to do tremendous damage to the U.S. economy as a whole. In the end, the only truly strong economy left standing, after years of a severe recession, potentially worse than the Great Depression, would be China, which would take America’s place as the number one economy in the world with regards to impact, influence and strength.

Back in 2006, Schiff argued that financial institutions were weak, and that the housing bubble would break, taking the entire economy with it. His fellow experts said he was overly negative, and encouraged people to buy stocks from financial institutions. Schiff argued they should not buy those stocks for these institutions would be in tremendous trouble within one, maximum two years time.

Then in 2007, Schiff argued that the recession would truly hit everyone at the end of 2008, especially around November it would “be clear to everyone,” Schiff said, that America’s economy is in trouble. He argued that tax increases would likely be forthcoming in the years ahead, because local, state and federal governments would try to get as much money as they could in order to save what could possibly be saved.

And the main problem? “Phony wealth.” The U.S. became big, the U.S. economy became big in recent years by borrowing money, he warned in 2006 and 2007. The irrevocable result? A major collapse. U.S. wealth did not increase due to more production, etc. but by rising stock markets which rose only because people lived on borrowed money.

Note that Schiff warned against “artificial loaning standards,” and that the other “experts” laughed. They laughed then. But who was right?

Watch it:

Most fascinating to me is how the other “experts” reacted, while every single thing Schiff said has already come to pass. The others were talking about how “the worst is over,” Schiff said “the worst is yet to come.” Who was right? Schiff was talking serious, trying to warn people, the others laughed him off stage. But who was right?

The experts even told people to buy Merrill Lynch stocks. Merrill Lynch. One expert calling the stocks of financial institutions “cheap.” Schiff’s response: “Stay away from the financials, they are toxic. They are not cheap, they are expensive…” They asked him whether he had heart problems due to his negativity. But who has heart problems now?

Schiff is the president of Euro Pacific Capital. You can read more about his views on the U.S. economy there. What he is arguing, and has argued for years, is that this crisis will be very severe indeed, and that it will fundamentally change the U.S. economy. Note that he continues to believe that the best way to deal with this crisis is for the government to cut spending. Stop borrowing, stop pumping the economy up artificially. Let it fall back to healthy standards.

The other video is of yet another ‘negative’ expert who warned about a major recession for years. He now says that the crisis will be worse than the Great Depression.

My advise: take these two men very, very serious. Listen to what they say, and act on it. Buy stocks in gold, etc., stop living on borrowed money. Don’t spend more than you produce, and demand the government to do the same.